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: November 13, 1998
GOLDEN EAGLE INTERNATIONAL, INC.
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(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 5. Other Events
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Golden Eagle International, Inc. (referred to herein as "Golden Eagle" or
the "Company") has continued to pursue its plan of operations as announced in
its Form 8-K reporting an event of September 25, 1998. Most recently, Behre
Dolbear & Company ("BD&C"), an internationally-recognized consultant to the
minerals industry, has completed its first phase field evaluation of certain
designated target areas within the Company's properties in the Cangalli district
of Bolivia. The Company holds the right to mine these properties under an
agreement with the United Cangalli Cooperative, a Bolivian cooperative. BD&C has
advised Golden Eagle that its field geologists have confirmed the existence of
significant gold mineralization on the Company's Cangalli properties.
Golden Eagle retained BD&C after developing material reservations regarding
the May 1998 report by another independent consultant which had reached more
definitive conclusions. The work BD&C has performed to date confirms
management's initial conclusion that the Company focused on too broad an area
within the property and believes that a greater likelihood of success may be
realized were Golden Eagle to focus on smaller target areas for more extensive
sampling and analysis.
The BD&C work did support the existence of gold mineralization at various
locations on the property as announced by the Company in May. As a result of its
initial investigation, BD&C is now working with Golden Eagle's management to
identify target areas for more extensive sampling, with the intent of
identifying sufficient resources to be considered for possible future mines.
BD&C will focus on a number of pre-identified surface locations as well as
underground targets associated with the existing Cangalli mine.
BD&C has emphasized to management that it is not in a position, at this
time, to confirm third party estimates or to make its own estimates of existing
and/or potential reserves or resources, if any, which the property may contain.
Further work will have to be undertaken to determine the potential of the
property. This additional work will require a significant amount of additional
financing; currently the Company does not have such financing in place, and
there can be no assurance that it will be able to obtain such financing on
reasonable terms, if at all. The Company's ability to conduct its future
operations remains subject to the other risks which have been previously
disclosed, including the inexperience of management in large open-pit and
high-volume underground mining operations, the Company's lack of historical
profitability and historical working capital shortages, risks attendant with
operations in isolated regions of Bolivia, price and currency fluctuations,
environmental issues, and the concentration of the Company's efforts on a single
property.
Notwithstanding BD&C's initial findings, the Company has been advised by
the Securities and Exchange Commission that it will expand the civil action it
filed in May 1998 to include allegations that Golden Eagle and its president
violated Rule 10b-5 when the press release of May 22, 1998 was issued announcing
the Company's receipt of the May 1998 geologic report by the Company's
independent Bolivian consultant. The civil action is entitled "SEC vs. Golden
Eagle International, Inc.," No. 98-Z-1020 [D. Colo.]. The Company and its
management are continuing to discuss the resolution of these issues with the
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staff of the Securities and Exchange Commission, but have denied any wrongdoing
which may be actionable under the federal securities laws. In fact, the Company
believes that the information developed by BD&C supports the tenor of the May
22, 1998 press release.
The Company and its management are making every effort to pursue its plan
of operations and expects to continue to do so over the next several months at a
minimum. Although management has exerted its best efforts to meet each of the
Company's obligations, in many cases management was prevented from doing so by
circumstances which were not within their control. The Company's management has
served for more than the past year without receiving any significant
compensation; the principal shareholders of the Company have advanced funds and
have guaranteed loans to the Company to provide the necessary working capital.
There can be no assurance that these shareholders, or any other person, will
continue to be willing to advance funds to allow the Company to carry out its
plan of operations. Without such funds, the Company's ability to continue its
operations on any basis is in doubt.
As noted, 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. 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 this report
understands the significant risks attendant to the operations of the Company and
its subsidiaries. As noted, the future conduct of the business of the Company
and its subsidiaries is dependent upon a number of factors, and there can be no
assurance that any of these companies will be able to conduct its operations as
contemplated herein. The Company disclaims any obligation to update any
forward-looking statement made herein.
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: November 13, 1998 Golden Eagle International, Inc.
By: /s/ Terry C. Turner
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Terry C. Turner, President
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