Gary,
Here's a little historical background on the property from the company's 1997 SEC filings:
History of Prospective Mining Property in Bolivia
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More than ten thousand years ago, an ancient river flowed from the
Cordillera Real Mountains of the Andes to the tropical jungle area where it
converged with two other rivers. This ancient river, known today as the Tipuani
River, carried with it deposits of gold which were disbursed in its bed along
its length, from the head of the river to the convergence. As time passed, these
deposits were covered by other alluvial deposits as the valley filled with
material washed away from the surrounding mountains with each season's flooding
and erosion. The Tipuani River, containing significant amounts of alluvial gold
deposits, was for centuries one of the Incan Empire's sources of gold. Tipuani,
Bolivia is located just 2 km from Cangalli, Bolivia and the site of Registrant's
current exploration operations.
In 1562, Juan de Roda arrived at Roman Playa near Tipuani, Bolivia. This
was the first colonial expedition to the Tipuani River. Mining reached Chuqini
in 1580 and Tipuani in 1602. The Tipuani River was found to hold significant
deposits of gold from the surface down to the ancient riverbed, known as the
Paleocanal, up to 1,200 ft. below the surface.
Early in the 19th century the first attempts at large-scale mining were
made by Ildefonso Villamil. According to historical reports, Villamil produced
more than 150,000 ounces of gold from several areas upstream from Tipuani from
1813 to 1833 and again from 1850 to 1866. The first attempts at mechanization
were made with the use of water pumps in 1840 by J. Wheathey, an Irishman.
Heavy equipment was not introduced in the area until near the end of the
19th century. In 1898, the Incahuira Dredging Company brought machinery and a
dredge to the nearby Kaka River. It was the "Compania Aramayo de Minas" which
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conducted major mining activities between 1936 and 1949, putting the main
emphasis on the exploration and mining of the Old Channel of the Paleotipuani.
Since 1952 (following the nationalization of the mines and the forced return of
all gold concessions held by Aramayo to the State on November 7 of that year)
and until 1961, the gold placers of the Tipuani Valley were mined by groups
controlled by the National Mining Bank, which bought the gold. In 1961 the
government annulled all previous licenses and recognized the gold mining
cooperatives, which in 1963 formed the "Regional Federation of Gold-mining
Cooperatives", which are currently mining the placer deposits.
Current Status of Company Interests
-----------------------------------
In October 1995 the Registrant began reviewing potential mining
opportunities in Bolivia. A site visit to the Tipuani River Basin followed in
December, with representatives of the Registrant traveling to Cangalli,
approximately 2 km downriver from Tipuani. Included in the expedition was an
independent geologist hired to evaluate the Cangalli area. This consultant
reported that the area merited further study.
Based on this favorable report, along with other pre-existing reports on
the Tipuani area, the Registrant formed a majority-owned Bolivian subsidiary,
Golden Eagle Bolivia Mining S.A. ("GEBM") in January 1996, of which Registrant
initially owned 74% and later acquired an additional 19% from its Bolivian
partners, for a total of 93%.
On January 25, 1996, GEBM entered into an agreement with United Cangalli
Gold Mining Cooperative, Ltd. ("UCL"), a Bolivian cooperative, for the rights to
explore and mine an area consisting of 11 concessions along the Tipuani River,
covering an area of 2,004 hectares (4,810 acres) for a 25- year period with an
option for an additional 25 years. While binding according to the Company's
counsel in Bolivia, this contract was not "protocolized" (recorded) with the
Bolivian Notary of Mines.
Registrant's directors elected to form a new majority-owned Bolivian
subsidiary, Eagle Mining of Bolivia, Ltd. ("EMB"), in October 1996 to hold the
concession interests. Registrant owns 84% of EMB; Registrant's former president,
Mary A. Erickson, owns 3%; and Rene Velasquez owns 13%. EMB subsequently
assumed
GEBM's contract rights and proceeded to renegotiate the contract with UCL, which
was protocolized with the Notary of Mines in La Paz on November 11, 1996. The
new contract provides for a gross royalty interest of 18% in gold production to
UCL and commits EMB to complete first-phase exploration and open one work front,
in addition to the Cangalli shaft, by April 20, 1997; to open two additional
work fronts by December 6, 1997; and to invest a minimum of $3 million in the
project.
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