Golden Eagle begins rehabilitation of C Zone gold mill

Golden Eagle International, Inc. has begun the rehabilitation of the site approved for construction of its C Zone gold mill in eastern Bolivia after that area sustained over 100 days of torrential rains since the Company’s successful public hearing to finalize its environmental permit on November 30 2007. Eastern Bolivia has been pummeled by 100-year rains due to the effects of the “La Nina” weather phenomenon in the southern Pacific Ocean that has caused flooding resulting in 73 deaths, 97,500 families affected, the loss of over 50% of Bolivia’s soy crop and more than $1 billion in damages to other crops, drowned cattle and washed out roads.

However, the rains are letting up and the Company has begun repairs to infrastructure such as roads, the C Zone open pit site, the C Zone plant platform and ramp, as well as tailings and fresh water impoundment ponds. Once the plant site has had a short period of dry weather, Golden Eagle’s field crew expects to begin pouring plant foundations.

In all of our years of involvement in eastern Bolivia, I have never seen the roads so completely destroyed by the rainy season as I did during my visit last week to the A and C Zone mine sites, stated Golden Eagle’s CEO, Terry Turner. While access has been limited, our field team has been assembling mill equipment and preparing to initiate our C Zone gold mill construction during any dry period. With a short period of rehabilitation of our infrastructure, we anticipate being ready to work day and night toward our goal of bringing our C Zone mill on-line and growing our processing up to 1,000 tpd. Within 6 months of commencing production, we believe that we can have that production up to 2,000 tpd. We project that once in production additional work on road drainages and other preventative measures should ensure that future rainy seasons will not present such a difficult challenge, he said.

The Company has estimated that the most sampled core area of its eluvial gold deposit in the C Zone contains 630,000 m3 (approximately 1.26 million tonnes) of mineralized material averaging gold grades in the range of 1 g/m3, but with a range as high as 1,400 mg/m3 and a cutoff grade of 100 mg/m3. (It is important to note that mineralized material is not the equivalent of proven and probable reserves, and does not assure a level of commercial extraction, but may be reclassified as production progresses.) Golden Eagle’s mine plan calls for the use of data gathered from 265 auger drilling and shaft-style pit sampling sites, as well as 10 months of confirmation pilot operations, to focus its initial mining on several high-grade areas well identified within the C Zone.