Golden Eagle in Ongoing Negotiations and Due Diligence Regarding Letter of Intent Offering $10 Million for the Purchase of Gold Bar Mill and Operating Agreement

4 minutes ago - Market Wire

As of 2:39 PM ET 11/3/09
Golden Eagle International, Inc. (OTCBB: MYNG) reported today that it is engaged in ongoing negotiations and due diligence regarding a Letter of Intent ("LOI"), announced October 13, 2009 in a press release, and in a Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission, offering $10 million for the purchase of the Company's Gold Bar mill. The offer was made by a private exploration and mining company with mining interests in Nevada and Utah. The Gold Bar mill is a 3,500 to 4,000 tpd CIP gold mill located 25 miles northwest of Eureka, Nevada that Golden Eagle has owned since 2004.

The terms of the LOI established a $1 million down payment to be made by October 30, 2009 (which payment was not made due to ongoing negotiations and due diligence), with $9 million deposited into escrow pending the completion of the permitting process (which deposit was also not made due to ongoing negotiations and due diligence). Due to the nature of the current negotiations, Golden Eagle considers the LOI to continue to be a valid offer pending the finalization of terms and conditions of an agreement.

Additionally, as part of the LOI Golden Eagle is negotiating a long-term operating agreement for the Gold Bar mill if and when it is sold.

Golden Eagle is carrying out due diligence regarding the offer, and further is cooperating with the potential purchaser on its due diligence with respect to the proposed transaction.

While Golden Eagle cannot guarantee that it will reach satisfactory terms regarding the sale of the Gold Bar mill, or for a long-term operating agreement, the Company is proceeding in good faith to seek mutually beneficial terms and conditions.

Company Awaits Hearing Date on Motion for Order to Restore Possession of Jerritt Canyon Mill to Golden Eagle in $40 Million Lawsuit

Golden Eagle also reported that final pleadings were filed with the Fourth District Court in Elko, Nevada, on October 28, 2009 and the Company is awaiting a hearing date on its motion asking for an order restoring the Company to possession of the Jerritt Canyon mill. (See, Golden Eagle's press release dated September 22, 2009.) Golden Eagle's motion is a step in its $40 million lawsuit against Yukon-Nevada Gold Corp. ("YNG") and its wholly owned subsidiary, Queenstake Resources USA, Inc. ("Queenstake"). The motion is based on the fact that Golden Eagle was given possession of the Jerritt Canyon mill as operator in early September 2008 and that its possessory right was illegally terminated with three hours notice on June 10, 2009 in violation of Nevada state law. The motion further alleges that YNG and Queenstake are guilty of forcible entry and forcible detainer in the abrupt and unreasonable manner in which Golden Eagle's possessory right to the Jerritt Canyon mill was terminated, and then that possessory right was further illegally interfered with through YNG and Queenstake's unlawful detention of the mill thereafter.

The Company is continuing its foreclosure proceedings on $2.23 million in mechanics' liens filed against YNG and Queenstake's Jerritt Canyon mill.

YNG and Queenstake have generally denied Golden Eagle's claims and are opposing the Company's motion for an order restoring its possession of the Jerritt Canyon mill.