UNITED STATES SECURITIES AND EXCHANGE COMMISSION LITIGATION RELEASE NO. 15983 / November 19, 1998 Securities and Exchange Commission v. Golden Eagle International, Inc., Ronald A. Knittle, Mary A. Erickson, Gregory G. Vernon, Timberline Consultants, Inc., and Terry C. Turner, Civil Action No. 98-Z-1020 (D. Colo.) On November 17, 1998, the Securities and Exchange Commission filed an amended complaint adding new fraud charges against Golden Eagle International, Inc., and naming Terry C. Turner, its current president, as a defendant. The new fraud charges are that Golden Eagle and Turner fraudulently claimed earlier this year that the company had found staggering gold reserves on its property in Bolivia. Golden Eagle is based in Denver and Turner resides in Salt Lake City and La Paz, Bolivia. The amended complaint alleges that Turner caused Golden Eagle to issue a press release on May 22, 1998, fraudulently claiming that the company's Bolivian property contained over 6 million ounces in "proven reserves" of gold. According to the amended complaint, Golden Eagle and Turner made these claims without reading a copy of a geologic report upon which the reserve claims purportedly were based. The amended complaint further alleges that Golden Eagle and Turner lacked a reasonable basis for additional claims in the May 22 press release that the Bolivian property contained huge amounts of additional "inferred [and] indicated resources." Finally, the amended complaint asserts that the fraudulent statements led to dramatic jumps in the price and volume for Golden Eagle stock, and that the price has declined after September 25, 1998, when Golden Eagle publicly admitted that it lacked sufficient basis for the reserve claims. The original complaint charged Golden Eagle, its former president, its former treasurer/secretary and a promoter with, among other things, having made false and misleading statements during 1994 and 1995 pertaining to Golden Eagle's efforts to operate a mining business in the United States (See Litigation Release 15733 issued May 7, 1998). Further, the Commission previously suspended trading in Golden Eagle's securities based upon concerns about the accuracy and adequacy of the information regarding the Bolivian gold (See Securities Exchange Act Release No. 40104 issued June 19, 1998). In addition to the relief sought in the original complaint, the amended complaint seeks injunctive relief and civil penalties against Turner for violations of the antifraud provisions of the federal securities laws: Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5. The amended complaint also eliminates Paul B. Vernon as a defendant because of his prior settlement of all charges (See Litigation Release 15862 issued August 28, 1998).