From Denver Rocky Mountain News, Feb 5, 1999
Golden Eagle says settlement near on civil fraud charges
by Al Lewis
Golden Eagle International Inc., which last year boasted of a multibillion-dollar gold find in Bolivia, on Thursday said it is nearing a settlement with U.S. securities regulators over civil fraud charges.
The Denver-based gold explorer said the settlement would not involve fines, penalties or admission of guilt. Meantime, Golden Eagle's chief executive officer, Terry C. Turner, and majority owners Mary A. Erickson and Ronald A. Knittle still are negotiating a settlement over what the SEC has termed exaggerated gold claims.
Reached at his office near La Pax, Bolivia, Turner said the proposed settlement would have little impact on the company, which has been struggling to accurately quantify its Bolivian gold find and attract a partner to mine it.
"We're restrained from violating certain sections of securities laws," turner said of the proposed settlement. "We're always happy to agree not to violate securities laws. That's something we try every day not to do."
Golden Eagle issued a press release saying the Denver regional office of the U.S. Securities and Exchange Commission has agreed to the proposed settlement. The proposal must be approved by the SEC in Washington and then filed with the U.S. District Court in Denver.
Bob Intartaglio, an investigator with the SEC, said the agency does ot comment on pending settlements.
"A settlement has not been approved by the commission and filed with the court," he said.
The SEC's biggest complaint against Golden Eagle is over a May 22 press release that claimed the company had discovered more than 6 million ounces of proven gold reserves and as much as 157 million ounces of "inferred reserves" in Bolivia.
The press release was issued just days after the SEC first initiated civil stock fraud charges against Golden Eagle, its executives and its public relations firm for allegedly making false claims in press releases about another gold find.
In October, Golden Eagle admitted in a filing with the SEC that its geologist's tests were insufficient to justify its claims. It then hired international consultant Behre Dolbear & Co. to re-evaluate its gold property in the Cangalli mining district near La Paz. Those test continue.
"We're still optimistic about our property," Turner said.
Despite its bold promises, Golden Eagle stock never left penny stock territory. It reached a high of 69 cents in July and now trades for less than a quarter.
In June, the SEC halted trading on the stock for more than two weeks, a move that likely prevented investors from driving the stock to new heights.
Observers likened the company's claims to those made by Bre-X Minerals Ltd., a Canadian venture that in 1997 became known for perpetrating the largest gold fraud ever. Bre-X claimed to have found between 70 million and 200 million ounces of gold in Indonesia. Its stock ran to new highs until the claim proved false.
Thought the boards would appreciate this information.
Regards,
Jack Simmons
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