GOLDEN PHOENIX MINERALS (GPXM)

[Cousin IT]

On October 24, 2013, we filed a lawsuit in the Second Judicial District Court for the State of Nevada (Golden Phoenix Minerals, Inc. vs. David A. Caldwell, Tom Klein, et al., case number CV 13-02332) alleging breaches by the defendants of various contracts and duties owed by the defendants to the Company, together with claims for fraud and breach of contract, conspiracy and other claims, relating primarily to the facts and circumstances surrounding the transaction we entered into with Pinnacle as discussed above, and related business and financial transactions among the parties. Mr. Caldwell is a former Chief Executive Officer and former member of the Board of Directors of the Company. Mr. Klein is a former Chief Executive Officer and a current member of the Board of Directors of the Company. We subsequently entered into a settlement agreement with Mr. Klein and will remove him from this case. We intend to vigorously prosecute the case involving Mr. Caldwell to protect our legal and property rights and interests. Answers and counterclaims have been filed by the remaining defendants, alleging breach of contracts and related claims, all of which have been denied by the Company. The Company has filed an answer to the counterclaim. No discovery has commenced, and no trial date has been set. We will seek to consolidate this case with the Pinnacle case, including mediation of all claims of the parties.