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Gold/Mining/Energy : Golden Eagle Int. (MYNG) -- Ignore unavailable to you. Want to Upgrade?

To: Jaci Kidd who wrote (21421)	2/19/2000 9:38:00 AM
From: GC	Read Replies (1) \| Respond to of 34075

in the papers rockymountainnews.com Judge clears mining exec Gold statement ruled premature, not reckless By John Accola Denver Rocky Mountain News Staff Writer Stock watch Golden Eagle International, (MYNG: OTC BB) 22 cents, up 12 cents. A mining executive sued by the Securities and Exchange Commission for publicly announcing a multibillion-dollar gold find in Bolivia may have jumped the gun, but he wasn't reckless, a federal judge in Denver ruled Friday. In a blow to the SEC's stepped-up campaign to police companies making exaggerated claims, U.S. District Judge Zita Weinshienk said the president of Golden Eagle International acted reasonably in concluding a well-credentialed geologist's report of "world-class gold reserves" on the company's mining properties was accurate. SEC attorney Robert Fusfeld declined to comment on the judge's ruling, which cleared Golden Eagle president Terry C. Turner of violating federal securities laws when he issued a May 22, 1998, company news release over the Internet. The news release, citing a study by Bolivian geologist Guido Paravicini, triggered an increase in the Salt Lake City company's penny stock, from 12 cents a share to a high of almost 60 cents before the SEC suspended trading in June 1998. The SEC alleged Turner knowingly or recklessly issued a false announcement, which reported Paravicini's discovery of an estimated 236 million ounces of gold in a mining region the company controls in Cangalli, Bolivia. In a four-day trial, SEC attorneys argued Turner had not even thoroughly read Paravicini's final report, which was later criticized by other experts as deeply flawed. In September 1998, Golden Eagle reported in SEC filings there was insufficient basis to claim such staggering reserves, and the stock price sank to 25 cents a share. But even then, securities regulators maintained Turner continued to mislead investors because he didn't issue a news release retracting the company's initial claims. Weinshienk said the company's subsequent SEC filings gave sufficient "notice to the world" of the study's revised figures. But she strongly advised Turner, a mining lawyer, to either promptly remove the May 1998 press release from the company's Web site or issue a new one that the Cangalli study contained flawed calculations. In closing arguments Thursday, Fusfeld faulted Turner for testifying that the company continues to rely on the Paravicini report for purposes of future development of its South American mine holdings. Turner said the company's SEC filing in September 1998 was prompted strictly on the advice of lawyers and that he wasn't "backing off" from Paravicini's conclusions that there were vast gold reserves in the region. But after taking the case under review for a day, the judge flatly rejected the SEC's recommendations to fine Turner $50,000 and issue an injunction against him on the basis that he is likely to continue making exaggerated claims. "The court is persuaded that there will not be a problem in the future," Weinshienk said. "I'm sure he'll consult with his securities attorneys in the future." Weinshienk said the case was very difficult to decide, but that she was swayed by the impressive credentials of the geologists and mineral experts who testified in Turner's defense. The SEC offered only one rebuttal witness, an agency geologist whose expertise was questioned by Turner's Utah attorney, Mary Corporon. The judge chided Turner for his explanation that he felt compelled to announce the study a day after its completion because of rumors that were appearing on the Internet about the company's potential gold reserves. Turner blamed the SEC litigation on the company's slow efforts to aggressively mine for gold in Cangalli, about 60 miles northeast of La Paz. "It's been like a black cloud over the company," he said. Turner said the company will now begin to mine gold "on a very large scale." At the market's close Tuesday, before Weinshienk issued her ruling, Golden Eagle stock closed at 22 cents, up 12 cents. "Golden Eagle has a very bright future," Turner said. Contact John Accola at (303) 892-2666 or accolaj@ RockyMountainNews.com February 19, 2000