SECURITIES AND EXCHANGE COMMISSION
Washington, DC
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: March 29, 1999
GOLDEN EAGLE INTERNATIONAL, INC.
--------------------------------
(Exact name of registrant as specified in its charter)
Colorado 0-23726 84-1116515
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(State of other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
4949 South Syracuse Street, Suite 300, Denver, Colorado 80237
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 694-6101
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Item 7. Financial Statements, Pro Forma Financials and Exhibits
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Exhibit: Letter to Shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: March 29, 1999 Golden Eagle International, Inc.
By: /s/ Terry C. Turner
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Terry C. Turner, President
2
Golden Eagle International, Inc.
4949 S. Syracuse St., Ste. 300 * Denver, CO 80237
(303) 694-6101 * (303) 762-2041 (fax)
26 March 1999
Dear Shareholder:
When I review Golden Eagle's calendar year of 1998, I am reminded of Charles
Dickens' opening line in A Tale of Two Cities: "It was the best of times, it was
the worst of times." During 1998, Golden Eagle experienced some of both. In
fact, since my last Shareholders' Letter, Golden Eagle has achieved a number of
its important objectives, but has also suffered some significant setbacks. Our
primary objective has been to increase the value of our Company for our
shareholders, so following are a review and discussion of those achievements and
setbacks in those efforts since my last letter:
1. Production Efforts through Year-end 1998.
For a full discussion of this topic, and all of the topics discussed in this
letter, please refer to Golden Eagle's Form 10-KSB Annual Reports, 10-QSB
Quarterly Reports and 8-K Current Reports, which are available on the SEC's
EDGAR Internet site at http://www.sec.gov, or are also available upon request,
at no charge, from Golden Eagle.
If you have been a shareholder for long, you have seen our press releases and
annual, quarterly and current reports during the past 18 months regarding our
attempts at reaching commercial production. We are not in commercial production
on our site at Cangalli, Bolivia, despite three attempts to bring open-pits
on-line. In all three attempts (the Cueva Playa bench terrace, the Cueva Playa
lower terrace, and the Cangalli tailings) we experienced significant problems
recovering the fine gold presented to the recovery plants. The losses because of
that inability to recover the very fine gold rendered the operations
uneconomical. Both the El Nino weather phenomenon, which resulted in an extreme
rainy season in the Cangalli area during the 4th Quarter of 1997 through the 2nd
Quarter of 1998, as well as a lack of financial liquidity, impeded our ability
to implement needed changes and acquire and install recommended expensive
additional equipment.
Despite the additional burden created by the adverse rainy season of de-watering
our nearly 1,000-ft deep shaft, we continued to explore and rehabilitate our
interior mine in the bottom of the Paleochannel at Cangalli. Those exploration
and rehabilitation operations have produced approximately 20,000 grams of gold
during 1997 and 1998. In the overall picture, this production is not very
significant. However, it has carried some of the costs of de-watering,
timbering, explosives and labor as deep mine maintenance and exploration
continues.
<PAGE>
2. Strategies for Increasing Value to the Shareholders: Exploration and
Confirmation of the Cangalli Gold Deposit.
In response to the production obstacles mentioned above, Golden Eagle's
management decided to focus its short-term resources on the exploration and
confirmation of the Cangalli gold deposit to make the company more attractive
for a favorable merger, acquisition or joint-venture. Golden Eagle's management
believes that one of the most important attributes of good management is the
ability to recognize its own strengths and weaknesses. We have demonstrated over
the years that in spite of substantial adversity and capital shortages, we have
been able to perfect and maintain our legal interest in the Cangalli gold
deposit and develop a sizable body of positive geological information. Those are
some of our strengths. We had also perceived that when entering the production
arena, if we were confronted with obstacles (as with the fine gold issue at
Cueva Playa), we did not have the economic strength to solve all of the
technical questions.
Our preference is to put the further development and mining of the Cangalli
deposit in the hands of experienced, well-financed partners. However, we cannot
guarantee that we can negotiate satisfactory terms with such a partner. To date,
we have not begun substantive discussions with any industry partner, and will
not be able to do so until more information is available to us. We are
proceeding on the course of continuing to explore and eventually develop the
property ourselves to the extent our limited financial resources allow, until,
and if, a suitable alternative becomes available. To attempt such an endeavor
again, when warranted and when adequate financing is available, we would
seriously consider adding personnel with extensive production experience to our
management team. The next two to four months should tell the tale on this
important matter. We will definitely keep you informed on any negotiations which
may develop through Current Reports on Form 8-K filed with the SEC.
Golden Eagle has received and reviewed a significant amount of information
regarding its Cangalli property and, in October 1998, contracted with Behre
Dolbear & Co., Inc. (BD&C), consultants to the minerals industry, requesting
that BD&C conduct its own initial evaluation of the Cangalli gold deposit.
BD&C's report on that initial evaluation is still pending; however, BD&C did
make a preliminary [verbal] report to Golden Eagle's management, upon concluding
its initial field work, that "its field geologists have confirmed the existence
of gold mineralization on the Company's Cangalli properties." (Form 8-K, Current
Report, dated November 13, 1998.)
3. The Concern Regarding Dilution.
Every shareholder in every company has a right to be concerned about dilution of
his or her interest through the issuance of additional shares in the company.
However, we believe that an analysis of the issuance of shares in Golden Eagle
during the last two years, and the resulting dilution, will illustrate why
management concluded that those share issuances were necessary, and resulted in
increased value to Golden Eagle's shareholders. For a complete discussion of
these issues, and all of the matters discussed in this letter, shareholders and
potential shareholders are advised to review Golden Eagle's Form 10-KSB Annual
Reports, Form 10-QSB Quarterly Reports, and Form 8-K Current Reports, which are
on file with the SEC's EDGAR on-line filing service, or can be obtained from
Golden Eagle, upon request, at no charge.
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Dilution, through the issuance of additional shares and warrants, is a fact of
corporate life; equity financing is beneficial to corporations, and the issuance
of options and warrants make equity (as well as debt) financing more attractive.
Moreover, debt financing is not readily available to undercapitalized companies
such as Golden Eagle.
Golden Eagle has never had a significant revenue stream to support it; Golden
Eagle's operations in the mining industry in Bolivia increase the risks
generally associated with small public companies which have not operated
profitably. The largest share issuances accomplished by Golden Eagle have all
been because of cash flow shortages and the need for capital for operations and
salaries.
a) Golden Eagle Mineral Holdings, Inc. ("GEMH"), a Colorado corporation
controlled by Mary Erickson, is one of Golden Eagle's most significant
shareholders. Ms. Erickson is Golden Eagle's Corporate Secretary and
Director. She has held the vast bulk of these shares for more than four
years, and has not personally profited from the sale of these shares
privately or publicly. She has pledged 13,500,000 of those shares to Frost
National Bank as collateral on a revolving $1 million line of credit issued
to Golden Eagle on March 28, 1997. None of her shares can be sold except in
strict compliance with the limitations of the federal securities laws,
including Rule 144. Also, as an affiliate, GEMH and Ms. Erickson are
subject to dribble out provisions which do not permit the public sale of
more than 1% of the Company's total outstanding shares in any one quarter,
and this only after full disclosure to the public of the intent to sell.
In October 1998, Golden Eagle issued options to acquire 5,000,000 shares
for $0.16 per share were issued to Ms. Erickson. The option price was 100%
of the closing price for Golden Eagle's common shares on the date the
options were granted, even though the options, if exercised currently,
would result in Rule 144 restricted stock being issued. The options were
granted in consideration of Ms. Erickson's continued efforts on behalf of
the Company, her willingness to defer her salary, and her financial
assistance to the Company. The shares underlying these options are counted
in the Company's outstanding shares, but they have not been issued, and
will not be issued, until the Company receives $800,000 from Ms. Erickson
as payment for the shares. Ms. Erickson does own the other shares discussed
above.
The initial issuance of shares to Ms. Erickson have been fully disclosed in
the Company's reports since November 1994. The Board of Directors believes
that the shares and options she holds are well-deserved as a result of a
number of factors. Ms. Erickson has served as Corporate Secretary or
President, as well as a Director, of Golden Eagle for more than four years.
During this time, although her salary has accrued on the books of the
Company, Golden Eagle has never been able to pay her any portion of her
salary. Despite this lack of any payment, she has worked loyally for Golden
Eagle International, at times greatly exceeding the standard 40-hour work
week. She has also played a critical role in interfacing with the Company's
accountants, paying its bills, making all of its travel arrangements,
overseeing the preparation of its consolidated audits, and performing the
essential functions of a Corporate Secretary.
<PAGE>
As a part of her efforts for Golden Eagle, Ms. Erickson convinced trusts
created for two of her family members (the "family trusts") to loan the
Company $1,077,207 during the past two years, of which $944,583 is
outstanding at December 31, 1998 and which has not been repaid since. These
family members have also guaranteed a $1,000,000 working capital loan from
Frost National Bank to the Company as described below. (It is important to
note that Ms. Erickson is in no way a beneficiary of these trusts).
In addition, Ms. Erickson has personally loaned the Company $563,187 over
the past 4 years, of which $268,975 is still outstanding at December 31,
1998 and which has not been repaid since.
I hope that I have made my point: Golden Eagle would not have survived, and
you, as shareholders, would not have the present value that you have, and
the potential of future value, without Mary Erickson and her family.
b) Golden Eagle issued 20,000,000 restricted shares were issued to the family
trusts on March 28, 1997, in exchange for their guarantee of a $1 million
line of credit with Frost National Bank of Houston, Texas and in exchange
for the family trusts agreeing to extend other existing loans previously
made to Golden Eagle. I was present in February 1997, during the
negotiations in Houston for this line of credit for the Company. At the
time Golden Eagle had more liabilities than it had cash, and Golden Eagle
was in desperate need for this financing. No other person, commercial
lender, or investor, would advance funds to Golden Eagle in its condition
at that time. Frost National Bank itself would not have advanced funds to
Golden Eagle without the guarantee proffered by the family trusts and Mr.
Erickson's pledge of collateral.
Golden Eagle was then, and continues to be, an undercapitalized, small
exploration and mining company, doing business in South America in a remote
location, trying to prove up, as economical, a gold deposit. All of these
risks, and others which are mentioned more fully in the Company's reports,
make Golden Eagle a very speculative, high-risk investment. These trusts
knowingly took those risks, but their trustees and attorneys also
negotiated commensurate terms, including the issuance of shares, as well as
the pledge of 13,500,000 of Ms. Erickson's shares (93% of her remaining
shareholdings), and Ms. Erickson's personal guarantee.
Golden Eagle issued an additional 5,000,000 restricted shares to the family
trusts in April 1997 in payment of accrued interest of $25,000 on two
overdue loans of $764,000, as well as the Trusts' agreement to renew and
extend those loans for three years. This arrangement was extremely
important relief for Golden Eagle during a critical period.
The shares owned by the family trusts are all "restricted" shares and
cannot be sold except in strict compliance with the limitations of Rule
144. Also, as an affiliate, the trusts are subject to dribble out
provisions which do not permit the public sale of more than 1% of the
Company's total outstanding shares in any one quarter, and only after full
disclosure to the public of the intent to sell. None of these shares have
been sold to date.
<PAGE>
c) Golden Eagle issued options to acquire 10,000,000 shares for $0.16 per
share to me, its president, in October 1998. The option price was 100% of
the closing price for Golden Eagle's common shares on the date the options
were granted even though the options, if exercised currently, would result
in Rule 144 restricted stock being issued. The options were granted in
consideration of my continued efforts on behalf of the Company, my
willingness to defer my salary, and my financial assistance to the Company.
These shares have not been issued, and will not be issued until the Company
receives $1.6 million in payment for those shares. If and when I ever
exercise these options and the underlying shares are ever issued, they
would also be regulated by Rule 144, and could not be publicly sold except
in strict compliance with the limitations of Rule 144. Also, as an
affiliate, dribble out provisions would not permit the sale by me of more
than 1% of the Company's total outstanding shares in any one quarter, and
this only after full disclosure to the public of my intent to sell.
d) During 1997, 4,000,000 shares were issued to Sabrina Martinez, an
independent contractor working for the Company in the area of investor
relations. Ms. Martinez had entered into an agreement with the Company in
1996 for compensation in shares. During the period since July 1996, she has
received less than $13,000 of cash compensation. If you have ever wanted
information over the telephone about Golden Eagle, then you have spoken to
Ms. Martinez. She has made some very substantial sacrifices to put in the
time necessary to maintain Golden Eagle's investor relations, and has dealt
with many of our shareholders and potential shareholders on a range of
issues. Ms. Martinez has worked countless hours over the past 2 years and 9
months, working all hours of the day, seven days a week, answering
questions and performing services to the investors. Ms. Martinez is the
cousin-in-law of the Company's corporate secretary, and the Company has
received inquiries about her status as an affiliate or related party. Ms.
Martinez does not possess, and is not given, inside information about the
Company, she does not participate in any decision-making activities on
behalf of the Company, and she is NOT an affiliate of the Company. It is my
opinion that Ms. Martinez has been invaluable to Golden Eagle during the
past three years.
e) All other share issuances were the product of convertible debenture loan
agreements with unrelated parties which were later exercised for shares, or
were straight share issues for services, equipment or machinery. In every
case, the loan proceeds, services, equipment or machinery were used for a
bona fide purpose in the Company's operations, debt service or debt
reductions as set out clearly in the audited financial statements for 1996
and 1997.
Dilution is, and will be, the necessary result of operations for Golden Eagle.
Management is of the opinion that this dilution must be kept to a minimum, but
never at the expense of ultimately increasing the Company's shareholders' value
in their shares. To illustrate the point, the total outstanding common stock in
Golden Eagle's Form 10-QSB, Quarterly Report, for the quarter ending September
30, 1998 (which by the way had to reflect the current total outstanding shares
as of December 15, 1998) shows 108,754,051 shares. This number takes into
account the 15,000,000 shares underlying options which were granted to Ms.
Erickson and me but which have not been exercised. In recent days the stock has
been trading with an average bid of approximately $0.25, which means that the
Company's "Market Capitalization" has been approximately $27 million.
<PAGE>
Golden Eagle's management is committed to using its best efforts to increase the
value of each shareholder's stake in the Company. There are many risks
associated with the continuing operations of Golden Eagle as discussed below,
but management is hopeful that its efforts will, in the long run, be successful.
4. Golden Eagle's Settlement of SEC Civil Action.
On March 4, 1999, the Honorable Zita L. Weinshienk, United States District Judge
for the District of Colorado, entered an order settling a civil action against
Golden Eagle, SEC v. Golden Eagle International, Inc., 98-Z-1020. The settlement
with Golden Eagle resulted from the consent by the Company to the entry of an
injunction enjoining the company from violating certain securities laws. Golden
Eagle was not assessed any monetary fine or penalty. Golden Eagle neither
admitted nor denied any allegation in the SEC's civil complaint in agreeing to
settle the matter. (Please see Form 8-K Current Report dated February 4, 1999
and Form 8-K Current Report dated March 18, 1999.)
Several other defendants remain in the SEC's civil action, however, settlement
negotiations are currently underway. As I stated in the February 4th press
release and 8-K Current Report:
"This is a very important day for Golden Eagle and its shareholders. The Company
steps out from under a shadow and resolves all questions raised by the staff of
the SEC. Golden Eagle's management is committed to timely and accurate
reporting, to seeing the Company through the current extremely low prices in the
minerals industry, and to the eventual development of its Cangalli, Bolivia,
gold prospect as described in Golden Eagle's annual report on Form 10-KSB and
subsequently-filed reports under the Securities Exchange Act of 1934."
5. Golden Eagle's President's Explanation Regarding the Press Release of May
22, 1998, Dealing with the Subject of the Paravicini Geological Report on
the Cangalli Gold Deposit.
One of the focuses of the SEC's action which Golden Eagle settled in March 1999
was a press release Golden Eagle issued on May 22, 1998.
However, I have been asked by a shareholder to give an explanation of why I
would allow the publication of the May 22, 1998 press release, and to address
some of the accusations that followed. I believe that is a fair request, but my
explanation only bears on my conduct - the Company's conduct is not at issue
since it has settled the matter with the SEC without admitting or denying
anything regarding these issues. Generally, the questions I have been asked can
be addressed as follows:
a) I did not allow the Company to claim the existence of any gold reserves or
resources in the May 22, 1998 press release. The press release reported
findings of an independent geophysicist and mining engineer (the
"Consultant"). In fact, in its press release, I required the following
caveat: "Golden Eagle cannot assure that the findings of Mr. Paravicini's
report are accurate due to the fact that the report was produced by an
independent consulting firm, which is responsible for its accuracy" (page
3, paragraph 7).
<PAGE>
b) I had read the Spanish draft version of the geological report before the
press release was issued (with the exception of the Conclusions, which were
still pending), and I had also discussed the findings and conclusions with
the Consultant.
c) In addition, posters to the Internet had contacted the Consultant in early
May 1998, before the report was given to Golden Eagle, and had attempted to
extract confidential information. When the Consultant was unwilling to give
additional information, secretaries, messengers and others were quizzed for
critical information. I had noted that the Internet postings and private
e-mails of posters began to be reflected in the volume and share price
moves in Golden Eagle's stock in early May 1998, prior to the issuance of
the press release. Furthermore, the Consultant had made it clear to me that
"either the results of the report are given through official channels, or
those results will come out through unofficial channels." I believed that
the unofficial release of information could be used to work a fraud on the
market and could result in uncontrolled manipulation and speculation.
Moreover, I submitted the press release to the Company's then-counsel for
his revision and approval. I was told that counsel stated that the press
release could be issued as long as all the information contained in the
release was accurate. As a result of my review of the Spanish draft of the
geological report and my discussions with the Consultant before the press
release was issued, as well as counsel's statements and the accuracy of the
information in the proposed release, I felt that the press release was a
reasonable summary of the report. Again, I believed that I was acting
reasonably and carefully to avoid any possible market manipulation.
d) Trading in Golden Eagle common stock in the over-the-counter market has
been extremely volatile - both before the issuance of the May 22, 1998,
press release, as well as afterwards, even to the present day. While no one
can accurately predict any market reaction, I do not believe that the
volatility in price and volume in the days after the May 22, 1998, press
release was significantly different than the price and volume volatility
before that press release, or in the months since. Notably, no person
affiliated with Golden Eagle attempted to purchase or sell shares in the
public market prior to, or after, the issuance of this press release.
e) Finally, Golden Eagle attempted to provide cautionary language in the May
22, 1998, press release and subsequently as well. These included the Form
8-K Current Reports on July 7, 1998, and July 24, 1998, reporting
management's concerns regarding the accuracy and completeness of the
Paravicini report. This was further explained in the September 25, 1998,
8-K Current Report which reported management's conclusion (after an
intensive review) that the techniques used by Mr. Paravicini were
insufficient to justify the calculations he had made, and the use of the
term "reserves" may have been an inaccurate characterization of the
mineralization found on the Golden Eagle properties in the Cangalli,
Bolivia. In fact, a review of the press reports in which I was interviewed
(USA Today, Wall Street Journal, The Denver Post, Rocky Mountain News,
etc.), will show that I repeatedly cautioned against any speculation on the
part of the investing public and stated that Golden Eagle was also moving
cautiously and reasonably to confirm the geological report.
<PAGE>
The SEC does not allege that I, or any Golden Eagle insider or affiliate,
received any monetary benefit from any price or volume increase. At the time of
the May 22 press release, I did not own a share of Golden Eagle stock, and had
no options to own any shares. In October, 1998, I received an option to purchase
shares in the Company, but have been unable to exercise that option because of
the exercise price. In addition, to my knowledge, no Golden Eagle insider or
affiliate sold any shares through that period.
6. Various Questions and Answers.
One shareholder has written with some questions, the answers to which all Golden
Eagle shareholders may be interested. Obviously, the express purpose of the
reporting requirements of the Securities Exchange Act of 1934 is to inform any
public company's shareholders, as well as the public-at-large, of any material
fact which may bear on that company's business. I would first refer any
shareholder, or potential shareholder, to Golden Eagle's Form 10-KSB Annual
Reports, Form 10-QSB Quarterly Reports, and Form 8-K Current Reports, all of
which are current and on file with the SEC's electronic filing service, EDGAR,
or may be obtained from the Company free of charge.
a) Golden Eagle's principal auditor is the firm of Oatley, Bystrom and Hansen,
in Greenwood Village, Colorado. This firm has audited Golden Eagle's
accounts for the past several years. In Bolivia, Golden Eagle uses the firm
of Berthin Amengual y Asociados to audit the accounts of our Bolivian
subsidiaries. Berthin Amengual y Asociados is formerly a member firm of
Ernst & Young and is now a member firm of the international accounting firm
of Pannell, Kerr, Forster.
b) Both the U.S. and Bolivian auditors must meet generally accepted auditing
standards as applied in the United States when performing audits on the
Company's business.
c) All share issuances are noted and specified in the Company's Annual Reports
on Form 10-KSB, and details regarding affiliate and related party
transactions are also explained in those reports, including any beneficial
interest which may exist. In addition, significant shareholders and
management must file Forms 3, 4 and 5 detailing their transactions in
shares of the Company's stock. These forms are on file with the SEC.
Whenever any significant shareholder or member of management desires to
sell any of their shares, forms relative to Rule 144 must also be filed
with the SEC, and are available through the EDGAR filing service.
d) The question has been raised about minority shareholder approval for share
issuances in the Company. Minority shareholder approval would be extremely
expensive to accomplish, would significantly delay the Company's ability to
take advantage of financing opportunities, and is not required by law or
regulation of the SEC or the over-the-counter market. Share issuances must
be justified by a reasonable business purpose in the opinion of the
Company's directors.
<PAGE>
e) The question has also been raised about the Company's Annual Shareholders'
Meeting. Golden Eagle intends to call a shareholders' meeting as soon as
prudent. It is management's current intention to hold an Annual
Shareholders' Meeting in Denver, Colorado during the 1999 calendar year. We
will notify the Company's shareholders of any meeting in accordance with
the Colorado law and the SEC's rules.
f) Some of the questions suggest that some shareholders have not received
copies of the Company's annual and quarterly reports, and may not have
access to the SEC's EDGAR reporting service. Specifically, we will send
those reports to those shareholders. However, any shareholder desiring a
copy of those reports should request them from the Company at the address
above.
7. Conclusion.
As I stated at the beginning of this letter, 1998 was a difficult year for
Golden Eagle from many different standpoints - but it also was a year in which
several key objectives were achieved. The minerals and mining industry is now
facing one of the worst downward cycles in the last several decades. However, in
1999, with Golden Eagle's resolution of the SEC civil action, the filing by a
broker-dealer of the Form 211 to move the Company from the Pink Sheets back onto
the OTC Bulletin Board, the issuance of additional geological reports, the
creation of Golden Eagle's new website (www.geii.com) which will be online
shortly; and other important strategies regarding exploration and mining to
enhance shareholder value, Golden Eagle's management expects 1999 to be some of
the "best of times".
We value and appreciate your continued support.
Sincerely,
/s/ Terry C. Turner
-------------------
Terry C. Turner
President
Golden Eagle's Risks
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Each shareholder should understand that an investment in Golden Eagle has been,
and continues to be, one of significant risk. We wish it were not so, but there
are a number of factors that make an investment in Golden Eagle one that should
not be undertaken by persons without an extremely high tolerance for risk. These
factors include:
* The Company's historical shortages of working capital. The Company has not
received any significant amount of revenues, and does not have sufficient
working capital or other financing to allow the Company to accomplish its
goals to expand its operations on its Cangalli property. Although the
Company believes that the property justifies additional investment, there
can be no assurance that the Company will be able to obtain the financing
it needs to maintain its interest in the property, or to continue
exploration activities.
<PAGE>
* The Company's common stock has been the subject of significant rumor and
innuendo published by unaffiliated parties on the Internet and in other
media. These rumors have had a significant impact on the market for the
Company's common stock. The Company does not, and legally cannot, respond
to each rumor, and must advise its shareholders and others interested in
the Company's common stock to investigate the source of any statement with
respect to the Company before relying on any such statement.
* The Company's management has limited experience in conducting mineral
exploration or development operations, and must rely on experts to advise
it properly.
* There is a significant amount of restricted stock overhanging the
over-the-counter market, although no person may sell restricted stock into
the over-the-counter market without first filing a Form 144 with the
Securities and Exchange Commission announcing his or her intention to make
such sales.
* The public market for the Company's common stock is extremely volatile both
as to price and volume. There can be no assurance that the public market
will continue or, if it does so continue, that the market will stabilize.
As noted throughout this letter, the future conduct of the business of the
Company and its response to issues raised by third parties are dependent upon a
number of factors, and there can be no assurance that Golden Eagle will be able
to conduct its operations as contemplated in this letter or in its reports filed
with the Securities and Exchange Commission. Certain statements contained in
this report using the terms "may," "expects to," and other terms denoting future
possibilities, are forward-looking statements. The accuracy of these statements
cannot be guaranteed as they are subject to a variety of risks which are beyond
the Company's ability to predict or control and which may cause actual results
to differ materially from the projections or estimates contained herein. These
risks include, but are not limited to, the risks described above, and the other
risks associated with start-up mineral exploration operations, and the
operations of a company with insufficient liquidity and no historical
profitability. It is important that each person reviewing information published
by or about the Company understands the significant risks attendant to the
operations of the Company and its subsidiaries. The Company disclaims any
obligation to update any forward-looking statement made herein.
