16
Registrant incurred interest expenses in 1997 of $184,204, as opposed to
1996 interest of $79,141. The increased amount of loans led to this 133%
increase. This increased interest cost will continue, and probably rise
significantly, in 1998 because of increased borrowings necessary to maintain
liquidity for operating purposes. During 1997, due to uncertainties regarding
the recoverability of Registrant's investment in the Bolivian prospect,
Registrant elected to write-down $873,462 of costs previously capitalized,
including $470,853 which were incurred in 1996. As of December 31, 1997,
capitalized costs related to the Bolivian prospect are principally $100,000 paid
for prospect acquisition rights and $813,529 for mining equipment.
On September 18, 1996, the Company initiated an agreement to purchase
certain mining equipment located in Bolivia from an individual for $20,000 cash
and convertible debentures totaling $1 million. Closing of the agreement was on
February 10, 1997. The debenture holder subsequently converted the debentures
into 2,993,161 shares of common stock as provided for in the agreement. All
voting rights associated with the stock issued were placed in a voting trust
with the Company's board of directors as trustee. The Company has recorded the
stock issued at $299,316 ($.10 per share), the estimated value of its stock at
the date of the transaction.
Registrant had a net loss for 1997 of ($5,963,554), compared to its net
loss in 1996 of ($2,058,742). Registrant anticipates that the trend of net
losses will continue in 1998, as it invests further in exploration on its
Cangalli prospect and in general and administrative expenses in the United
States and Bolivia, without generating significant revenues from those efforts.
Impact of Inflation and Changing Prices
---------------------------------------
Registrant has not experienced any impact from the effects of inflation
during the last three operating periods, 1995, 1996, or 1997. Bolivian
inflation, while astronomical at points during the early 1980's, has been
relatively stable, at less than 10% since 1985, and during the last three years
has been less than 8% per annum. Y2K Issues ----------
Registrant does not foresee any negative impacts as to its business as a
result of Year 2000 issues, other than those which may generally affect the
North and South American populations at large, such as banking disruptions,
power failure, inconveniences due to governmental slowdowns, and other similar
effects, if any. Registrant has attempted to analyze any potential, specific
impacts, but cannot guarantee that its business activities will not be impacted.
Generally, software available in South America is less likely to be Y2K
compliant, but Registrant does not believe that a requirement to replace its
existing hardware or software, if necessary, will materially affect Registrant.
Item 7. Financial Statements --------------------
Please refer to pages F-1 through F-23.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
----------------------------------------------------------------------
There were no disagreements with Registrant's accountants on any matters of
accounting principles, practices or financial statement disclosures during 1997
through the present. PART III
Item 9. Directors and Executive Officers of Registrant and Compliance with
Section 16(a) of the Exchange Act.
-----------------------------------------------------------------------
The following table sets forth certain information concerning the directors
and executive officers of Registrant (including its subsidiaries) as of December
31, 1997. These people continue to hold the stated positions as of October 20,
1998. 17
Name Age Position Term of Office
---- --- -------- --------------
Mary A. Erickson (1) 41 Secretary, Treasurer &
Director 11/8/94 to 7/4/96
President & Director 7/4/96 to 2/14/97
Secretary, Treasurer &
Director 2/14/97 to present
Terry C. Turner (1) 45 President, Chairman &
CEO 2/14/97 to present
Harlan M. (Mac) Delozier III 54 Executive Vice President 3/1/97 to present
Rene Velasquez 54 President & Director,
GEBM, EMB 3/15/96 to present
-----------
(1) Director, Eagle Mining of Bolivia, Ltd. and Golden Eagle Bolivia
Mining, S.A.
No arrangement exists between any of the above officers and directors
pursuant to which any one of those persons was elected to such office or
position.
Directors hold office until the next meeting of shareholders and until a
successor is elected and qualified, or until their resignation. Executive
officers are elected at annual meetings of the Board of Directors. Each such
officer holds office for one year or until a successor has been duly elected and
qualified or until death, resignation or removal. No director of Registrant is a
director of another company having securities registered under Section 12 of the
Securities Exchange Act of 1934 or a company registered under the Investment
Company Act of 1940. Biographical Information ------------------------
A brief summary of the business experience of each person who is currently
an officer or director of Registrant, and such person's service with Registrant,
is as follows:
Terry C. Turner is President and a director of Registrant, appointed to
such positions on February 14, 1997. Mr. Turner received a Bachelor of Arts in
Political Science (1977) and a Bachelor of Arts in Spanish (1977) from the
University of Utah. He received his Juris Doctorate in 1980 from Brigham Young
University. He is a member of the Utah State Bar Association and admitted to
practice in the State and Federal Courts of Utah and the 10th Circuit Court of
Appeals. He is also a member of the Bolivian College of Lawyers (Bolivian Bar
Association) and is the first American attorney admitted to practice law in
Bolivia.
From 1980-1983 Mr. Turner was a partner in Day, Barney and Tycksen,
Attorneys, in Salt Lake City, Utah, with practice emphasis in mining and natural
resources, international law, business, and litigation. From 1983 to 1989 Mr.
Turner was President of High Andes Mining Co., La Paz, Bolivia. From 1989 to
1991 he was General Counsel to Panworld Minerals International, Inc., a public
company with mineral prospects in North and South America. From 1991 to 1993 Mr.
Turner was General Counsel to Tipuani Development Company, S.A., La Paz,
Bolivia, a gold dredging company. From 1993 to 1995 he was Vice President and
General Counsel to Minas del Glaciar, S.A., La Paz, Bolivia, which was a mineral
exploration company. From 1995 to 1997 Mr. Turner was in private practice in La
Paz, Bolivia. From 1995 to date, Mr. Turner has also served as President and a
Director of Bolivian Copper Chemical Company, S.A., a Bolivian copper
exploration and mining company. During the entire period of 1983 through 1997
Mr. Turner has been affiliated with and "of counsel" to Cordero and Cordero, a
La Paz, Bolivia law firm, dealing with mineral and international law. From
18
January 1996 until his appointment with Registrant in February 1997, Mr. Turner
was corporate counsel in Bolivia for Registrant and its subsidiaries, Golden
Eagle Bolivia Mining, S.A. and Eagle Mining of Bolivia, Ltd. Mr. Turner was
awarded the Medal of Civic Merit by the Prefect (Governor) of the State of La
Paz, Bolivia, during 1997 for his work in promoting investment in the Bolivian
mining industry, and for his contribution to the progress within the La Paz
state. The Medal of Civic Merit is the highest honor which can be awarded by the
state government in Bolivia.
Mary A. Erickson is corporate Secretary, Treasurer, and a director of
Registrant, having served in such capacities since November 1994. She served as
President from July 4, 1996 to February 14, 1997. She is the sole shareholder of
Golden Eagle Mineral Holdings, Inc., one of Registrant's principal shareholders.
Prior to her association with Registrant, Ms. Erickson was an officer and
director of Timberline Consultants, Inc., an investor relations consulting firm,
from January 1991 until September 1, 1994. Ms. Erickson was awarded the Medal of
Civic Merit by the Prefect (Governor) of the State of La Paz, Bolivia, during
1997 for her work in promoting investment in the Bolivian mining industry, and
for her contribution to the progress within the La Paz state. The Medal of Civic
Merit is the highest honor which can be awarded by the state government in
Bolivia.
Harlan M. (Mac) Delozier III was appointed to the position of Executive
Vice President for Bolivian Operations for Golden Eagle International, Inc. on
March 1, 1997. Mr. Delozier is a 1966 graduate of Oklahoma State University,
where he received Bachelor of Arts degrees in Political Science, Foreign
Language and History. He served in the Peace Corps in Bolivia from 1966-1971 and
was a cattle rancher in Beni, Bolivia from 1972-1990. From 1976 to 1980 he was a
representative of Homeline/Textron in Bolivia, and from 1980-1981 was manager of
gold mining operations for Kerani, in the Murillo Province, La Paz, Bolivia.
From 1981 to 1985, Mr. Delozier was the purchasing agent for the U.S. Embassy
Commissary in La Paz, Bolivia and was an exporter for leather products to Chile
and Peru from 1986-1988. From 1989 until his appointment with Golden Eagle in
1997, Mr. Delozier was an international sales representative for Toyota,
Chevrolet, and Hyundai in Bolivia. From May 1997 to date, Mr. Delozier has also
served as Executive Vice President of Bolivian Copper Chemical Company, S.A., a
Bolivian copper exploration and mining company. (Registrant's Board of Directors
has received notice of, and approved of, Mr. Delozier's dual role. Additionally,
Registrant's Board has received full disclosure as to any conflicts of interest
which may develop from this relationship, and has instructed Mr. Delozier to
disclose any conflicts which may arise in the future.)
Rene Velasquez is President of Golden Eagle Bolivia Mining, S.A. and Eagle
Mining of Bolivia, Ltd. Mr. Velasquez graduated in 1979 from the Major
University of St. Andrews in La Paz, Bolivia with a degree in Economics. He had
previously served in the Bolivian Air Force between 1959 and 1963. He was a
member of the Customs Police from 1964 to 1966. In 1967 he formed the mining
company Minera Velasquez and began working in the Tipuani area from that time
through 1995, either as Minera Velasquez, Bolintex S.R.L., or Burgoa/Velasquez
Joint Venture. Mr. Velasquez was also head of collections for the Bolivian
Internal Revenue Service from 1978-1979. He has been an economic advisor to the
Mayor's Office of the City of La Paz (1992-1993), and economic advisor (1995)
for Canac, a Canadian consulting firm attempting to capitalize ENFE, Bolivia's
national railroad. From 1995 through his employment with GEBM he was General
Manager of CORDEPAZ, the development corporation for the State of La Paz.
Technical Advisory Board ------------------------
In addition to relying on its management, in May, 1997 the Company's Board
of Directors formed a Technical Advisory Board to assist the Company with the
evaluation, exploration and operation of its current Bolivian gold prospect, and
any future acquisitions. This Advisory Board will initially consist of three
members with broad backgrounds and extensive experience with major mining
companies. They are as follows:
Max S. Staheli. Mr. Staheli received a B.A. in Finance and an MBA from the
University of Utah. He has worked for KPMG Peat, Marwick & Co. in Honolulu,
Hawaii in the late 60's, and nine years as a manager with Atlantic Richfield Co.
(1973-82). Mr. Staheli spent the last 14 years with Barrick Gold Corporation,
most recently as their Controller of South American Operations headquartered in
Lima, Peru. Mr. Staheli developed and implemented administrative policies and
procedures for Barrick's launch into South America. He also successfully built
the corporate structure for Barrick's extensive exploration and development
program, which included Bolivia. Mr. Staheli was instrumental in the rapid
growth of Barrick Gold Corporation in the South Amercan market between 1994-96.
Mr. Staheli was awarded the Medal of Civic Merit by the Prefect (Governor) of
the State of La Paz, Bolivia, during 1997 for his work in promoting investment
in the Bolivian mining industry, and for his contribution to the progress within
the La Paz state. The Medal of Civic Merit is the highest honor which can be
awarded by the state government in Bolivia.
19
Donald M. Hausen, Ph.D. Dr. Hausen received a B.S. in Geology from Idaho
State College, an M.S. in Geology from the University of Oregon, and a Ph.D. in
Geology from Columbia University in New York. He has served as the Chairman of
the Process Mineralogy Commitee of the SME-AIME on several occasions. Dr. Hausen
is a member of the Mineralogic Society of America; Society of Economic
Geologists; CIM; Ore. Geol. Reviews (Editorial Advisory Board); and the
International Congress of Applied Mineralogy. Dr. Hausen has worked for the U.S.
Army Corps of Engineers, U.S. Bureau of Mines, Atomic Energy Commision, Union
Carbide Nuclear Company, Newmont Exploration Limited (Chief Mineralogist,
1964-87), and Newmont Metallurgical Services (Chief Mineralogist, 1987-90). Dr.
Hausen was awarded the Medal of Civic Merit by the Prefect (Governor) of the
State of La Paz, Bolivia, during 1997 for his work in promoting investment in
the Bolivian mining industry, and for his contribution to the progress within
the La Paz state. The Medal of Civic Merit is the highest honor which can be
awarded by the state government in Bolivia.
Ronald L Atwood, Ph.D. Dr. Atwood received a B.S. in Metallurgical
Engineering, and a Ph.D. in Metallurgy from the University of Utah. He has
published nine papers on various aspects of metallurgy. He holds numerous
patents in the field of extractive metallurgy. Dr. Atwood has been a professor
of metallurgy at Michigan Tech (1972-74) and the University of Idaho (1974-75).
Dr. Atwood has served on the board of Newmont Exploration, as well as Chief
Metallurgist for Foote Mineral (1975-82), Director of Research for Newmont Gold
(1986-87) and Newmont Metallurgical Services (1987-89), all divisions of Newmont
Mining. Dr. Atwood currently serves as Vice President of Bolivian Copper
Chemical Company, S.A., in La Paz, Bolivia, which has recently entered into an
agreement with an Australian resource company for the development of a large
copper deposit in Bolivia. Dr. Atwood was awarded the Medal of Civic Merit by
the Prefect (Governor) of the State of La Paz, Bolivia, during 1997 for his work
in promoting investment in the Bolivian mining industry, and for his
contribution to the progress within the La Paz state. The Medal of Civic Merit
is the highest honor which can be awarded by the state government in Bolivia.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
--------------------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires Registrant's officers and directors, and persons who
own more than 10% of a registered class of Registrant's equity securities, to
file reports of ownership and changes in ownership of equity securities of
Registrant with the Securities and Exchange Commission and NASDAQ. Officers,
directors and greater-than-ten-percent shareholders are required by Securities
and Exchange Commission regulations to furnish Registrant with copies of all
Section 16(a) filings.
Based solely on its review of the copies of the reports it received from
persons required to file, Registrant believes that during the period from
January 1, 1997 through 1998, all filing requirements applicable to its
officers, directors and greater-than-ten-percent shareholders were complied
with, except as follows:
Terry C. Turner became a director and executive officer of Registrant and
(therefore) subject to the Section 16(a) filing requirements in February 1997.
Mr. Turner filed his Form 3 in October, 1998.
Golden Eagle Mineral Holdings, Inc. ("GEMH"), an affiliate of Mary A.
Erickson, became subject to the Section 16(a) filing in November 1994. Ms.
Erickson became subject to the filing requirements at the same time. Although
they filed the initial Form 3 that was required and filed subsequent Forms 4,
the subsequent forms were not complete, and certain transactions occurred that
were not reported. In October 1998, GEMH and Ms. Erickson filed seven Forms 4
reporting events in November 1994, December 1994, May 1995, June 1995, October
1995, November 1996 (amending an earlier report), and December 1997.
Rene Velasquez became a Section 16(a) reporting person in June 1996 when
his position with Registrant's subsidiaries became equivalent to an executive
officer of Registrant. It is expected that this Form 3 will be filed on or
before November 10, 1998.
Mac Delozier became a Section 16(a) reporting person in March 1997. He
filed his Form 3 in October 1998. 20
The Herbert M. Seydler, Jr. Trust became subject to the reporting
requirements of Section 16(a) in June 1997 when it acquired, directly and
indirectly, 12,500,000 shares of Registrant's common stock, constituting more
than 10% of the outstanding stock at the time. He filed his Form 3 in November
1998.
The Betty Jane Seydler Trust became subject to the reporting requirements
of Section 16(a) in June 1997 when it acquired, directly and indirectly,
12,500,000 shares of Registrant's common stock, constituting more than 10% of
the outstanding stock at the time. This Form 3 was filed in November 1998.
Item 10. Executive Compensation ----------------------
Summary Compensation Table --------------------------
The following table sets forth information regarding compensation paid to
the chief executive officers of Golden Eagle International, Inc. for the year
ended December 31, 1997. No other person who is currently an executive officer
of Golden Eagle earned salary and bonus compensation exceeding $100,000 during
any of the last three years. The table below includes all compensation paid to
them by the Registrant and any subsidiary.
Annual Compensation Long Term Compensation
------------------------- --------------------------------
Awards Payout
------------------------ ------
Securities
Underlying All
Name and Restricted Options & LTIP Other
Position Year Salary Bonus Other Awards SAR's Payout Compensation
-----------------------------------------------------------------------------------------------------------------
Terry C. Turner 1997 $48,592(A) $0 $2,250 $0 $0 $0 $0
Chairman, President & Chief Executive Officer
Mary A. Erickson 1996 $0(B) $0 $0 $0 $0 $0 $0
Chief Executive
Officer 7-4-96 1997 $0 $0 $0 $0 $0 $0 $0
through 2-17-97; Secretary, Treasurer & Director
Rene Velasquez 1996 $0(C) $0 $0 $400,000(D) $0 $0 $0
President of
GEBM and 1997 $0 $0 $0 $200,000(E) $0 $0 $0
EMB-----------
(A) Mr. Turner has accrued salary at the rate of $200,000 per year since
February 17, 1997, although only $48,592 was paid in 1997 and no salary has
been paid in 1998. This accrued but unpaid salary is a liability of the
Registrant but bears no interest.
(B) Ms. Erickson has accrued salary at the rate of $50,400 per year through
July 1, 1997 and $150,000 per year thereafter. No salary has been paid to
Ms. Erickson since November 1994. This accrued but unpaid salary is a
liability of the Registrant but bears no interest.
(C) Mr. Velasquez has accrued salary at the rate of $60,000 per year since
March 15, 1996. No salary has been paid to Mr. Velasquez since that time.
This accrued but unpaid salary is a liability of the Registrant but bears
no interest.
(D) Registrant granted Mr. Velasquez 2,000,000 shares of restricted stock in
October 1996 valued at $.20 per share.
(E) Registrant granted Mr. Velasquez 2,000,000 shares of restricted stock in
May 1997 valued at $.10 per share.
There are no plans to pay bonuses or deferred compensation to employees of
the Company. However, its president and its secretary/treasurer have accrued
salary for the year ending December 31, 1997, in an aggregate amount of
$276,408, which sum will be paid to these individuals as Registrant is able. An
additional $341,667 has been accrued through October 31, 1998, for a total
cumulative unpaid salary of $717,489. |
