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: JUNE 26, 1997




                        GOLDEN EAGLE INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)




        Colorado                      0-23726                   84-1116515
     ---------------                ------------             ------------------
     (State of other                (Commission                (IRS Employer
     jurisdiction of                File Number)             Identification No.)
      incorporation)




          4949 South Syracuse Street, Suite 300, Denver, Colorado 80237
          -------------------------------------------------------------
              (Address of principal executive offices) (Zip Code)




       Registrant's telephone number, including area code: (303) 694-6101
                                                           ---------------


<PAGE>


Item 1. Changes in Control of Registrant
        --------------------------------

        None


Item 2. Acquisition or Disposition of Assets
        ------------------------------------

        None


Item 3. Bankruptcy or Receivership
        --------------------------

        None


Item 4. Changes in Registrant's Certifying Accountant
        ---------------------------------------------

        None


Item 5. Other Events
        ------------

        None


Item 6. Resignation of Directors
        ------------------------

        None


Item 7. Financial Statements, Pro Forma Financials and Exhibits
        -------------------------------------------------------

        Financials:             None.

        Exhibits:               Letter to Shareholders sent with copies of 1996
                                Form 10-KSB as an Annual Report.




                                   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:  June 26, 1997                        GOLDEN EAGLE INTERNATIONAL, INC.




                                            By:  /S/  MARY A. ERICKSON
                                                 -------------------------------
                                                 Mary A. Erickson, Secretary

                                        2




<PAGE>

                        Golden Eagle International, Inc.
                4949 S. Syracuse St., Ste. 300 , Denver, CO 80237
                      (303) 694-6101, (303) 694-6021 (fax)



                                  June 23, 1997


Dear Shareholder:

     I would like to  introduce  myself as well as update you on three  critical
points  regarding your ownership of shares in Golden Eagle  International,  Inc.
("the Company").

     First,  my name is Terry C. Turner.  I was appointed by the Company's Board
of Directors  as a Director,  President  and CEO on February 14, 1997.  For more
than a year prior to that  time,  from  January  1996  until my  appointment,  I
represented the Company in Bolivia as its attorney. The Company hired me at that
time  because I had the  distinction  of being  the only  attorney  residing  in
Bolivia who was  admitted to practice law in both the United  States  (Utah) and
Bolivia (first and only North American attorney admitted to practice law in that
country).  Also, I had 13 years of experience  working in Bolivian  mining--with
significant  experience  in the  Tipuani  Mining  District  where the  Company's
operations are located. During that period of representation,  I worked with the
Company's  management  in  Denver,  Colorado,  and  the  Company's  subsidiary's
management in La Paz,  Bolivia,  on important  legal and  administrative  issues
regarding contract negotiations and doing general business in Bolivia. My resume
is discussed  below in more detail,  or is available in the Company's  1996 Form
10-KSB Annual Report which should accompany this letter.  If you did not receive
a copy of the  Company's  Form 10-KSB,  please write or phone the Company at its
address above in Denver, Colorado, to request a copy.

     The  three  critical  points  on  which I would  like  to  update  you as a
shareholder  in the Company are the obvious three that every  shareholder  has a
right to know:

          1. Recent History: Where has the Company been?

          2. State of Operations: Where is the Company currently?

          3. Strategy for Growth: Where is the Company going?

     I have to ask you at the  outset  to  forgive  the  encyclopedic  nature my
response may appear to be in  answering  these three  questions - my  preference
would have been to have had our first  introduction  be a short,  courteous one.
However, the Company has accomplished some incredible things in the recent past,
is carrying out a  clearly-defined  operating  program  currently,  and has some
interesting strategic growth plans for the future; about all of which you have a
right to be informed.

     In addition,  the recent Bre-X scandal,  regarding a  Vancouver-based  gold
exploration  company,  has  rocked  the entire  mining  and  business  community
worldwide  and is on the mind and lips of every person with whom I speak in both
North and South America. It has brought to our attention the importance of every
serious  mining  company  taking more  vigorous  steps to  disclose  any and all
material  information to its  shareholders - and the public in general - so that
they may make informed investment  decisions.  Obviously,  all mining companies,
even the majors,  will now be held to a new,  higher standard of scrutiny by the
regulatory  agencies,  institutional  investors,  the investing public,  and the
mining  industry's  own  professionals.  The  Company's  Board of Directors  and
management  have  discussed  this fact at great length and believe that this new
scrutiny  will be positive for the  Company's  current and future  shareholders.
Golden  Eagle  International,  Inc. is  committed  to meeting  this new,  higher
standard of scrutiny.


<PAGE>

Letter to Shareholders
June 23, 1997
Page 2


         With regard to the above  discussion,  please take very careful note of
the following:

          This  letter  should  not be relied  upon by  itself to make  informed
          investment decisions.  Any and all investment decisions should also be
          based upon a full and complete review of the disclosures  contained in
          the Company's Form 10-QSB  Quarterly  Reports,  and Form 10-KSB Annual
          Reports,  in addition to discussions  with  independent  professionals
          after their  review of the reports  referred to above.  These  reports
          will be provided to any  interested  party,  upon  request,  and at no
          charge.

          To date,  the  Company  has  generated  no  revenue,  while  incurring
          significant  operating losses,  and is considered a "development stage
          company."

          This letter is not a  solicitation  to buy, nor an offer to sell,  any
          security.

          The intent of this  letter is to provide  the  Company's  shareholders
          with information  regarding the Company's  management's  assessment of
          the Company's recent and current  activities,  as well as management's
          strategic  planning for the future.  Management  may, or may not, have
          accurately assessed the Company's activities;  and may, or may not, be
          able  to  implement  its  strategic  planning  for  the  future.  Each
          shareholder,  or potential  shareholder,  must  evaluate  management's
          position based on the disclosures  contained in the Company's  reports
          referred to above.


I. Recent History: Where Has The Company Been?
   -------------------------------------------

     In 1994 and 1995 the Company experienced several failed attempts to acquire
gold and copper mining properties in North America. Those attempts are discussed
in detail in the Company's 1994, 1995 and 1996 Form 10-KSB Annual Reports.

     This letter will focus on the Company's  successful  negotiation  of mining
rights on 2,004 hectares (4,810 acres) of mining concessions owned by the United
Cangalli Gold Mining Cooperative, Ltd. ("United Cangalli") in Cangalli, Bolivia,
beginning in the latter months of 1995.

     The following is a comprehensive  historical explanation,  in chronological
order,  of  the  events  relating  to the  acquisition  of  the  mining  rights,
subsequent  operations in Bolivia,  and other  significant  events regarding the
Company:

     A.   Initial  Reconnaissance of the Cangalli Area Within the Tipuani Mining
          District and Pre-Feasibility Report.

          In October  1995,  the Company's  management  began  reviewing  mining
          opportunities  in Bolivia.  The Cangalli area had been  presented with
          strong credentials. Historically, the Cangalli area, which lies in the
          heart  of  the  Tipuani   Mining   District,   had  been  the  largest
          gold-producing  area in Bolivia.  Government  estimates,  and those of
          

<PAGE>

Letter to Shareholders
June 23, 1997
Page 3


          geologists  writing on the  subject(1), put the gold production of the
          Tipuani Mining  District during its known history at 1,000 metric tons
          (32,150,000 troy ounces ["ozt"]). (The Company's management was unable
          to verify these  estimates  as being  accurate and has not relied upon
          them,  but  believes  that  they  were  made in good  faith  after  an
          evaluation of all of the known records and information.)

          In late 1995, the Company  contracted an independent  consulting  firm
          from  Denver,  Colorado,  to  perform  a site  evaluation  and  gather
          sufficient information to make a recommendation to the Company's Board
          regarding  the site's  potential  feasibility  as an  exploration  and
          development  target. The consulting firm's initial report was positive
          and a full  pre-feasibility  report was commissioned by the Company in
          December 1995.

          The independent  consultant's  pre-feasibility report was presented to
          the Company in January  1996(2).  That report  evaluated  the Cangalli
          area very positively and calculated  potential  mineralization  at two
          points within the United Cangalli  concessions:  the open-pit prospect
          at  Chaco  and  the  Cangalli   Shaft   underground   workings.(3) The
          calculations for those two points were as follows:

                                                Potential Mineralization
                   Site Name                     in Troy Ounces of Gold
                   ---------                     ----------------------

                   Chaco                                109,996 ozt

                   Cangalli Shaft                     5,413,505 ozt

          The report indicated that these two sites were among at least 15 other
          gold-bearing  sites  within  the  United  Cangalli  concessions.  (The
          Company  cannot  assure  that this  report is  accurate,  nor that the
          mineralization  stated  can be  economically  mined.  The  report  was
          produced by an independent  consulting  firm which was responsible for
          its accuracy.  However, the Company's management did conclude that the
          report was a very strong indicator of a large,  gold-bearing  deposit,
          and a mineralized trend suggesting geological continuity.)

     B.   Letter of Intent, Formation of a New Subsidiary and Private Contract.

          After receiving the favorable  pre-feasibility  report,  the Company's
          management  negotiated  the terms of an  understanding  and  signed an
          initial  Letter of Intent  with the Board of  Directors  of the United
          Cangalli  Gold Mining  Cooperative  on January 19, 1996,  in Cangalli,
          Bolivia.  Within  days  management  had formed  Golden  Eagle  Bolivia
          Mining,  S.A.  ("GEBM"),  a  Bolivian  company  in which  the  Company
          initially  owned  a  74%  interest.  The  Company  later  acquired  an
          additional 19% from its Bolivian partners, to own a total of 93%.


---------------
(1)  Technical  Geological Report on the Gold Deposits at Cangalli,  Bolivia, G.
     Paravicini, M.A., Eng. April 1997; pp. 4, 9.
(2)  The Gold Deposits of the Tipuani Basin,  Bolivia, with Proposed Development
     and Mining of the Cangalli and Chaco Deposits; A.F. Trites; January 1996.
(3)  Id., pp. 21, 34.

<PAGE>

Letter to Shareholders
June 23, 1997
Page 4



          On January 25, 1996,  the officers of the  newly-formed  GEBM signed a
          private  contract with United Cangalli for exclusive  mining rights to
          the  2,004  hectares  (4,810  acres)  owned by  United  Cangalli.  The
          significant terms of that Contract were:

          i.   a 25-year term, with an option for an additional 25-year term;

          ii.  an 18% gross  royalty  on all gold  recovered  payable  to United
               Cangalli;

          iii. a  commitment  by GEBM to  rehabilitate  and operate the Cangalli
               Shaft;

          iv.  a  commitment  by GEBM to invest a minimum  of $3  million in the
               exploration and  development of the  concessions  within 420 days
               from the signing of the Contract;

          v.   a commitment by GEBM to loan,  interest-free,  $100,000 to United
               Cangalli  to  assist  in   satisfying   several  of  its  pending
               obligations,  with repayment to GEBM from United Cangalli's gross
               royalty on production;

          vi.  a commitment by GEBM to grant to United Cangalli, without further
               obligation of repayment, $100,000 to assist in satisfying pending
               obligations;

          vii. all ownership of equipment and machinery  brought on-site for the
               exploration and mining of the concessions  remains vested in GEBM
               until GEBM  either  withdraws  because of a lack of  feasibility,
               completes its 25-year term and elects not to exercise its option,
               or exercises its option and completes another 25-year term;

        viii.  a voluntary  commitment  on GEBM's part to cooperate  with United
               Cangalli,  and  the  Cangalli  village  leadership,   to  improve
               fundamental  health and medical  treatment in the area; to review
               and  improve  the  overall  sanitary  conditions  relative to the
               potable water and sewer  systems;  and to contribute to upgrading
               the standard of education in the village.

          I am  recounting  the history  behind the signing of the contract with
          United Cangalli,  and the contract's  significant  terms,  even though
          that information is contained in the Company's 1996 Form 10-KSB Annual
          Report,  because  I  believe  that  a  more  detailed  explanation  is
          warranted.

          First, I am often asked why this opportunity still existed in Bolivia,
          and why a small gold  exploration  and  mining  company  from  Denver,
          Colorado was the one to find it and secure the mining rights.

          I  believe  the  answer  is  found  in the  idiosyncracies  of  mining
          cooperatives in Bolivia.  The Tipuani Mining District had been labeled
          for  several  decades  as  "No  Man's  Land"  for  traditional  mining
          companies precisely because gold mining cooperatives owned such a high
          percentage of the mining  concessions.  The  cooperatives,  made up of
          between 15 to 118 members, with little or no administrative expertise,
          

<PAGE>

Letter to Shareholders
June 23, 1997
Page 5


          were judged to be  difficult  organizations  with which to work.  Each
          member  was  equal  to the  other  in rank,  vote  and  authority.  In
          addition,  world  politics  during the 60's,  70's and 80's  created a
          tendency  in  these  cooperatives   toward  socialism  and  away  from
          free-market concepts.

          When private mining companies did enter into joint-venture  agreements
          with  the   cooperatives,   the  terms  were  almost  always:  1)  the
          cooperative  received  50% of the gold  production  for putting in the
          property; 2) a 1- or 2-year contract term; and 3) the cooperative kept
          any equipment and  machinery at the  expiration of the short  contract
          term. Significantly, these private companies were not required to, and
          therefore  never did, invest anything back into the development of the
          community or its  infrastructure.  For that reason the Tipuani  Mining
          District  is still  extremely  underdeveloped  today  despite the many
          millions of ounces of gold which have been mined there.

          In late 1995,  the Company's  management -  principally  the Company's
          President at the time, Ronald A. Knittle,  and the Corporate Secretary
          and one of the  Directors,  Mary A.  Erickson - had the vision to see,
          and the  courage  to  pursue,  this  mining  opportunity  in  light of
          changing world and local politics which would allow  participation  by
          American private enterprise. They also knew that United Cangalli, even
          with 118  members,  was one of the oldest,  most  well-organized,  and
          stable cooperatives in the Tipuani Mining District.  However, the most
          important  point by far was their attitude toward the people of United
          Cangalli and the Cangalli village. Their voluntary commitment,  on the
          Company's  behalf,   to  include  contract   language   providing  for
          cooperation with the cooperative members to improve their daily living
          conditions,  and that of their families,  left United Cangalli's Board
          of  Directors  deeply  impressed,  and  resulted  in a  great  deal of
          flexibility on other significant contract terms.

          As an  example,  a  25-year  contract  period,  and an  option  for an
          additional 25-year period, are unheard of in the District.  Such terms
          allow the Company the ability to plan  exploration  and mining efforts
          well into the future.

          An 18% gross  royalty,  while high by North American  standards,  is a
          very modest royalty in the District.  In fact, if the property  proves
          up in accordance  with the initial reports and sampling  results,  the
          royalty will have been a small ongoing price to pay.

          Also, the negotiation of a minimal initial  investment on the loan and
          grant funds for United  Cangalli,  which pursuant to the contract have
          been  stretched  out over the  first  year  and into the  second,  was
          another reasonable feature of the contract.

          In  retrospect,  after 14 years of  experience  in Bolivia and several
          specific cases of negotiating  with  cooperatives,  I believe that the
          foregoing  analysis  is  the  answer  to  the  question  of  why  this
          opportunity  still existed,  and why the Company was able to seize the
          moment.

          If you ever have the opportunity to meet Mr. Knittle or Ms.  Erickson,
          you might want to thank  them for their  important  accomplishment  on
          behalf of the Company and its  shareholders.  Mr. Knittle is no longer
          with the  Company;  however,  Ms.  Erickson,  after  recently  serving
          several months as the Company's President, has accepted an appointment
          again as  Corporate  Secretary  and  continues  to serve as one of the
          Company's Directors.

<PAGE>

Letter to Shareholders
June 23, 1997
Page 6


     C.   Changes in Company Management During 1996.

          Ronald A. Knittle, who had served as a Director,  President and CEO of
          the Company since November 1994,  resigned from those positions in May
          1996.  As  stated  above,   Mr.  Knittle  was   instrumental   in  the
          negotiations  that resulted in the  acquisition of the United Cangalli
          mining rights.

          Mr.  Knittle  is now  working  independently  to address  the  serious
          medical,  health,  education  and  housing  needs in  Bolivia  that he
          experienced first-hand while working there.

          Ronald  Sparkman was  appointed  interim  President in May of 1996 and
          served until July 4, 1996.

          Mary A. Erickson,  then serving as Corporate Secretary,  was appointed
          as  President  on July 4,  1996  and  served  in that  capacity  until
          February  14,  1997.  She has again  assumed the position of Corporate
          Secretary.  Although it may seem to be a repetition  of the praise for
          Ms.  Erickson  already given above  regarding the  acquisition  of the
          mining  rights on the United  Cangalli  concessions,  I think that the
          Company's  shareholders  should be aware of Ms. Erickson's  additional
          contributions to the Company's welfare during her term as President.

          During some very critical  times in the key  development  stage of the
          Cangalli  properties,  Ms.  Erickson  was able to secure  loans to the
          Company, often only by providing her personal guarantee. To obtain the
          most recent bank line of credit of $1 million approved for the Company
          in the first quarter of 1997, Ms.  Erickson had to pledge the majority
          of her personal stock in the Company.

          However,  not even the pledge of her stock  equals the  investment  of
          time and personal energy that I watched her make to:

          i.   bring the Company's reporting requirements current;

          ii.  oversee,  long  distance,  the  re-negotiation,  improvement  and
               execution of a new contract with United Cangalli;

          iii. administer  the  formation of the  Company's  new  subsidiary  in
               Bolivia,  Eagle Mining of Bolivia,  Ltd,  eliminating a number of
               issues  bearing on GEBM and the  original  contract  with  United
               Cangalli;

          iv.  engineer a $1 million mining equipment acquisition in Bolivia for
               stock, leaving the Company's much-needed cash intact; and,

          v.   initiate a  comprehensive  exploration  program  on the  Cangalli
               concessions.

<PAGE>
Letter to Shareholders
June 23, 1997
Page 7



     D.   Workings in the Cangalli  Shaft Establish  Both  Lateral  Walls of the
          Paleo-Canal.

          On September 18, 1996,  the Company  issued a Form 8-K Current  Report
          indicating that the Company's  subsidiary had "reached the Paleo-canal
          inside its exploratory shaft on the Cangalli prospect in Bolivia." The
          Paleo-canal  is sometimes also referred to as the  Paleo-channel,  the
          Paleo-tipuani  or the Ancient  River Bed.  This ancient  course of the
          Tipuani  River was  filled  with the  conglomerate  material  known as
          Cangalli.  An independent mining engineer and geophysicist retained by
          the  Company  to  study  the  Cangalli   concessions   described   the
          Paleo-canal and its subsequent refilling as follows:

               "Over the Paleozoic  Basement lies the Cangalli  Formation of the
               late  Tertiary  Age-Miocene-Pliocene,  named after the village on
               the Tipuani River where this  conglomerate,  generally  hardened,
               forms  the  surrounding  hills  where  United  Cangalli  has  its
               concessions,   and  Golden  Eagle's   subsidiary  its  center  of
               operations.  The  thickness  of the  Cangalli  varies from 500 to
               2,500 m (1,640 ft. to 8,202 ft.)."(4)


          The importance of this event was the  confirmation of the subsidiary's
          mining labors directed  toward reaching the floor of the  Paleo-canal.
          For over 50 years,  miners in the Tipuani Mining  District have sought
          to reach the floor of the  Paleo-canal in various  locations along its
          course. The Company's consulting mining engineer/geophysicist explains
          why in his recent report:
          

               The ore grades  mined were usually very high - from a few tens of
               grams to many troy  ounces  per cubic  meter.  As much as 125 kg.
               (4,019 ozt) of coarse gold have been  recovered from as little as
               eight  m3  (10.5  y3) of  gravel  found in  a pocket  in a  small
               bedrock depression. This was based on information well-documented
               in the Aramayo Company  records.  This company also reported that
               in l944, at  Tujojahuira,  a single sample yielded 112 kg. (3,600
               ozt) of gold in 12 m(3) (15.7 y3) of material."(5)

     E.   Company Formed New Majority-Owned Operating Subsidiary.

          On October 2, 1996, the Company formed a new majority-owned  operating
          subsidiary,  Eagle Mining of Bolivia,  Ltda..  ("Eagle  Mining").  The
          Company  owns 84% of the new  subsidiary's  stock;  Mary A.  Erickson,
          former President and current  Corporate  Secretary and Director,  owns
          3%; and Rene Velasquez, Eagle Mining's President, owns 13%.

     F.   Company's Newly-Formed  Operating  Subsidiary  Entered  Into a  Public
          Contract with United Cangalli.

          In October of 1996,  Eagle Mining assumed GEBM's  contract  rights and
          renegotiated its contract with United  Cangalli.  The new contract was
          protocolized,  or  recorded,  with  the  Notary  of Mines in La Paz on
          November 11, 1996.  The new contract  provides for a gross  royalty of
          18% of the gold production for United Cangalli,  as it did previously.
          However, all other performance dates were changed so that Eagle Mining
          commited to complete first-phase  exploration and open one work front,
          in addition to the  Cangalli  shaft,  by April 20,  1997;  to open two
          additional work fronts by December 6, 1997; and to invest a minimum of
          $3 million in the project.

--------------  
(4)  Technical  Geological  Report on Gold  Deposits at  Cangalli,  Bolivia;  G.
     Paravicini, M.A., Eng,; April, 1997; p. 13.
(5)  Id., p.10.



<PAGE>

Letter to Shareholders
June 23, 1997
Page 8


          The  Company  has  recently  opened  an  additional  workfront  in the
          Cangalli open pit and is working toward its $3 million commitment.  To
          date,   the  Company  has  expended   substantial   sums  toward  this
          commitment,  including the acquisition of $1 million worth of recovery
          and other mining equipment.  With additional  funding sources obtained
          earlier this year through private stock purchases and the extension of
          a $1  million  line of  credit  from a Texas  bank,  we  believe  this
          commitment has, in large part, been met.

          In  addition,  Eagle Mining  committed  to provide to United  Cangalli
          $200,000  for  reduction  of  United  Cangalli's  prior   obligations;
          $100,000  in the form of a loan and  $100,000  in the form of a grant.
          Eagle Mining completed funding of the $100,000 loan to United Cangalli
          prior  to  year-end  1996,  and  as of  this  date  has  substantially
          completed the additional $100,000 grant.

     G.   Company's Management Commissioned an Additional Independent Geological
          Resource and Mining Feasibility Study of the Concessions Under
          Contract.

          In early  December 1996, the Company  commissioned  Guido  Paravicini,
          M.A., Eng., a Bolivian mining engineer and geophysicist,  to carry out
          the following tasks relative to the gold deposits at Cangalli,  in the
          Tipuani Mining District of Bolivia:

          i.   Review  the  geological  literature  and  studies  regarding  the
               region,   the  Tipuani  Mining  District,   and  the  local  area
               surrounding Cangalli;

          ii.  Conduct field studies of the local geology, along with conducting
               a  sufficiently-in-depth  sampling  program to verify the mineral
               resources and reserves on the claims owned by the United Cangalli
               Gold Mining  Cooperative,  which are controlled under contract by
               Golden Eagle's Bolivian subsidiary;

          iii. Recommend further exploration and confirmation work to be carried
               out and appropriate mining methods to be employed; and

          iv.  Verify  Golden  Eagle's  subsidiary's  rights to legally mine the
               claims under study.

          Mr. Paravicini holds a Bachelor's  Degree in Humanities  (Mathematics)
          from the University of Santiago,  Chile; a Bachelor's Degree in Mining
          Engineering  from the Technical  University of Oruro,  Bolivia;  and a
          Master's Degree in Geophysics from Washington University in St. Louis,
          Missouri.  In  addition,  he has  received  certificates  from  Havard
          University in Geology and  Geophysics;  Michigan  State  University in
          Communications; the United States Agency for International Development
          in Geophysics; the Japanese International Cooperation Agency in Mining
          & Metalurgy;  and a Diploma of Merit in Geology from the United States
          Geological Survey.

          Mr.  Paravicini was Chief  Exploration  Geologist for 19 years for the
          National Bolivian Mining Corporation ("Comibol")  specializing in gold
          and tin exploration.


<PAGE>

Letter to Shareholders
June 23, 1997
Page 9

          On January 20, 1997,  Mr.  Paravicini  issued a summary  report of his
          findings, "Summary Geological Report on the Gold Deposits at Cangalli,
          Bolivia". Subsequently,  Mr.  Paravicini  issued a full  report on his
          findings,  "Technical  Geological  Report  on  the  Gold  Deposits  at
          Cangalli,  Bolivia";  G. Paravicini;  April,  1997. This report's most
          significant finding stated:

               "The resources  previously  estimated for the  concessions  under
               Golden Eagle's  subsidiary's  control at Cangalli were calculated
               with a  conservative  average grade of .500 g/m3 (0.012  ozt/y3).
               This  calculation,  on the basis of the sampling program shown in
               this Report, will have to be increased by approximately 28 times,
               or to an average  grade of 14.049 g/m3 (0.34  ozt/y3).  Using the
               definitions  set out  above,  and the  overwhelming  evidence  of
               geologic continuity, it is this author's opinion that the portion
               of the Cangalli  claims that has been  studied,  which would have
               been in any event  less than half of the claims  under  contract,
               contains an Indicated  Resource of 60,771,704  ozt of gold and an
               Inferred Resource of 111,414,800 ozt of gold."(6)

          (The Company cannot assure that this report is accurate,  nor that the
          resources stated can be economically mined. The report was produced by
          an  independent  consulting  mining   engineer/geophysicist   who  was
          responsible for its accuracy.  However,  the Company's  management did
          conclude  that the  report  was a very  strong  indicator  of a large,
          gold-bearing  deposit,  and a mineralized trend suggesting  geological
          continuity.  Mr.  Paravicini  owns no stock or options in Golden Eagle
          and is paid a fee for his professional services.)


II.  State of Operations:  Where Is The Company Currently?
     -----------------------------------------------------

     Since  its  inception   Golden  Eagle   International,   Inc.  has  been  a
"development stage company".  In particular,  during the five quarters since the
Company's first Bolivian  subsidiary  signed a contract for the mining rights on
the United Cangalli  concessions,  January 25, 1996, the Company has been in the
mode of mine expansion and rehabilitation in the Cangalli Shaft, and exploration
and site development for an open pit prospect. The Company has now been informed
by the  managment of its  Bolivian  subsidiary,  Eagle  Mining of Bolivia,  Ltd.
("Eagle  Mining"),  that  full-scale  production will commence from the Cangalli
Shaft and from the Chaco open pit in the third quarter of 1997. The following is
a summary of some of the recent  events  which  have  occurred  in the first two
quarters of 1997:

     A.   Changes in Company Management During 1997.

          Terry  C.  Turner.  On  February  14,  1997,  the  Company's  Board of
          Directors appointed me, Terry C. Turner, 44, as a Director,  President
          and CEO. I received a B.A. in Political  Science and a B.A. in Spanish
          in 1977 from the  University of Utah. I received a Juris  Doctorate in
          1980 from Brigham  Young  University.  I am a member of the Utah State
          Bar and am admitted  to  practice  in the State and Federal  Courts of
          Utah, and the 10th Circuit Court of Appeals. I am also a member of the
          Bolivian  College of Lawyers  (Bolivian  Bar  Association)  and am the
          first American attorney admitted to practice law in Bolivia.



---------------------


(6)  Technical  Geological Report on the Gold Deposits at Cangalli,  Bolivia; G.
     Paravicini; April, 1997. p. 32.

<PAGE>

Letter to Shareholders
June 23, 1997
Page 10

          From 1980 to 1983 I practiced law with a firm in Salt Lake City, Utah.
          From 1983 to my  appointment  with Golden  Eagle I worked with several
          mining companies in Bolivia as an officer,  general counsel or outside
          counsel.  From January 1996 until my  appointment  with the Company in
          February 1997, I was corporate  counsel in Bolivia for the Company and
          its subsidiaries.  For more complete  information,  please consult the
          Biographical  Information  section of the Company's Form 10-KSB Annual
          Report for 1996.

          Mac DeLozier, 53, was appointed by the Company's Board of Directors as
          Executive  Vice  President  for  Bolivia  in May  1997.  Mr.  DeLozier
          graduated  from  Oklahoma  State  University  in 1966  with a B.A.  in
          History,  a B.A. in  Political  Science and a B.A. in  Languages.  Mr.
          DeLozier  began a 31-year  association  with  Bolivia  in 1966 when he
          joined the Peace Corps and was assigned to Bolivia. After serving five
          years in the Peace Corps, he entered a successful  18-year career as a
          cattle rancher in Bolivia's  Amazon  drainage.  Mr.  DeLozier has also
          managed a gold mine (1980-81),  served as the general purchasing agent
          for the American Embassy in Bolivia (1981-85),  and most recently, has
          been the  International  Sales  Representative  in Bolivia for Toyota,
          Chevrolet and Hyundai (1989-97).

     B.   Formation of a Technical Advisory Board.

          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  property,  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);  however,  his most recent corporate
          experience  contributes  most notably to Golden  Eagle's  future.  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.

          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.



<PAGE>

Letter to Shareholders
June 23, 1997
Page 11

          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 Corp 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.  Atwood has  already  made a site visit to the  Cangalli  property
          (June 4-10,  1997),  has reviewed the current  exploration  and mining
          underway,  and has made  recommendations  on the installation of a new
          fine gold recovery circuit.

     C.   $1 Million Line of Credit.

          During the first  quarter of 1997 the  Company was  approved  for a $1
          million  line of credit  by a bank in  Houston,  Texas.  The same bank
          issued a $240,000  bridge loan to the Company in February 1997. At the
          beginning of the second  quarter of 1997,  disbursements  were made to
          the  Company on the line of credit  and the  bridge  loan was paid off
          completely at that time.

     D.   Company's Regulatory Filings Current.

          The Company  filed with the  Securities  and Exchange  Commission  its
          required  Form  10-KSB  Annual  Report  for 1996  and its Form  10-QSB
          Quarterly Report for the first quarter of 1997 within their respective
          extension periods. In addition, all 1996 quarterly reports and amended
          1995 10- QSBs have been filed with the SEC.  The Company is current in
          all of its regulatory reporting  requirements and expects to remain so
          in the future, with timely filing on all subsequent reports.

     E.   Significant Equipment Purchases.

          The Company,  or its subsidiary,  Eagle Mining, has made the following
          significant equipment purchases:

          i.   $1 Million San Silvestre Acquisition.  On September 18, 1996, the
               Company  initiated the  acquisition of $1 million worth of mining
               equipment and a recovery plant located in Bolivia in exchange for
               $20,000  in  cash  and  convertible  debentures  which  could  be
               converted into the Company's  common stock.  The  transaction was
               closed  on  February   10,   1997.   The   Company   acquired  an
               electro-generator;  two large air  compressors;  two mine drills;
               ore cars;  mine rail; a jaw crusher;  a 4 x 4 ball mill; an apron
               feeder;  a  classifier;  a static  thickener;  a Reichert  spiral
               concentrator;  two centrifugal  bowl  concentrators;  a vibrating
               table concentrator;  various pumps; electrical panels and support
               equipment;  a conical ball mill; an amalgamator;  various sets of
               tools;   mine  ventilators  with  sleeves;   radios  and  support
               equipment; a mine hoist; and various mine supplies.


<PAGE>

Letter to Shareholders
June 23, 1997
Page 12


          ii.  Two Bulldozers.  In early April 1997,  Eagle Mining purchased two
               used  D85  Komatsu   bulldozers   in  excellent   condition   and
               transported  them on-site.  Since their arrival at the mine,  the
               two  bulldozers  have  been  improving  the   infrastructure   by
               repairing roads destroyed  during the rainy season which ended in
               April.  In addition,  the two bulldozers have opened up the Chaco
               open pit site,  preparing the pad location for the recovery plant
               and other necessary  infrastructure work, fulfilling the contract
               requirements.

          iii. Diamond Core Drill  Acquisition.  In early May 1997,  the Company
               purchased in Bolivia an Atlas Copco Diamec 252 Diamond Core Drill
               in  anticipation  of  beginning  its  reserve  confirmation  core
               drilling  schedule on the Cangalli  property.  A current  reserve
               confirmation  program,  which has been underway  since the end of
               April 1997,  is using the results  from 1,000  trench  samples to
               establish  six initial  target drill sites for a projected  2,000
               meters  (6,560  feet)  of  diamond  core   drilling.   These  six
               "perimeter"  holes will permit more detailed  geological  mapping
               and the projection of an in-fill drilling schedule.

     F.   The Floor of the Paleo-canal, Development Work and Projected
          Production During Third Quarter.

          The Company  announced the discovery of the  Paleo-canal  in September
          1996, and has been working on its floor since April 1997.  Drifts have
          now been cut up and down the length or strike of the canal  itself and
          the decline ramp leading from the consolidated  mine workings at Level
          -237 down to the floor  workings  (approximately  -280)  have now been
          widened to facilitate  production.  In addition, a mine hoist has been
          installed  at the  beginning  of the  decline  ramp  and rail has been
          installed to the canal floor.

          The combination of these mining factors,  and the initial results from
          ore  sampling  by  the  on-site  engineers  in  the  paystreak  on the
          Ordovician  Bedrock at both levels -237 and -280 (an average of 21.145
          g/m3 [0.52 ozt/y3] of gold in preliminary  sampling),(7) has led Eagle
          Mining's  management to project  production  from the Cangalli  Shaft,
          beginning in the third quarter 1997, of 54.4 kilograms  (1,700 ozt) of
          gold per month,  with an increase by the end of the fourth  quarter to
          81.6 kilograms (2,550 ozt) of gold per month. (This projection assumes
          production  of 25  days  per  month  at  100 m3  [180  tons]  per  day
          initially,  escalating  to 150 m3 [270 tons] per day by the end of the
          fourth quarter 1997. In addition, the subsidiary's  management assumes
          the installation of an improved gold recovery plant,  which is on-site
          and currently being  installed,  by the beginning of the third quarter
          1997.   Further,   sampling  yield  averages   rarely  are  consistent
          throughout a prospect's  volume of material,  and the Company will, in
          all probability,  experience substantially lesser yields in production
          as opposed to sampling yields.)



--------------
(7)  Technical  Geological Report on the Gold Deposits at Cangalli,  Bolivia; G.
     Paravicini; April, 1997. p.28.

<PAGE>


Letter to Shareholders
June 23, 1997
Page 13

          With a projected  sales price of $350 per ozt, gross sales would begin
          at $595,000 per month and rise to $893,000.  Production costs per troy
          ounce have still not been projected by Eagle  Mining's  management due
          to numerous undetermined factors. (Please note that the Company cannot
          guarantee that its subsidiary will reach its projections, nor that any
          net  revenues  would  result  from  any  gross  sales  amounts.  These
          projections assume operation and that no major operating  difficulties
          will be encountered.  However,  there is a probability  that operating
          difficulties  will be encountered  which could affect these estimates.
          Further,  these are internal  projections  and should not be used as a
          basis for making any investment decision.)


III.  Strategy for Growth:  Where Is The Company Going?
      ------------------------------------------------

     The  Company's  strategy  for  growth  could  be  summarized  in one  word:
diversification.  The Company's  Board and  management  have  concluded that the
Company must be growing in three areas,  and that the Company  cannot  afford to
"have all of its eggs in one basket" in any one of those areas:

     A. Exploration.

          i.   Potential  Mineralization.   The  Company's  most  recent  report
               indicates significant mineralization on the Cangalli concessions.
               Because the numbers are so large,  management  has chosen to view
               them  as  "a  very  strong  indicator  of a  large,  gold-bearing
               deposit,   and  a   mineralized   trend   suggesting   geological
               continuity." However, that statement is just the beginning.  That
               is why the  Company  immediately  requested  that Mr.  Paravicini
               assemble  a team  of  exploration  geologists  in  April  1997 to
               follow-up on his initial  findings with a program of 1,000 trench
               samples  and the  establishment  of six  perimeter  diamond  core
               drilling  sites.  Once  that  study  is  completed,  the  in-fill
               drilling  can begin,  until the  mineralization  projections  are
               proven up into resources or reserves.

          ii.  Two More Open Pit Sites.  The  Company is required by contract to
               open up two  additional  work  fronts by  December  6, 1997.  Our
               exploration  program,  while  accommodating  the "big picture" on
               proving up overall reserves, must also focus on providing smaller
               production targets for immediate development.

     B. Future Production Plans

          i.   The Cangalli  Shaft.  Production  will begin here within the next
               few weeks. Because of the higher production costs associated with
               underground mining, the goal will always be to move away from the
               shaft  toward  open pit,  bulk  mining if  circumstances  permit.
               However, the shaft has now reached its destination - the floor of
               the Paleo-canal - and we would like to see the production numbers
               meet everyone's expectations.

          ii.  Three Open Pits.  Three open pits,  or work fronts,  are required
               "to be opened" by the Company's subsidiary's contract with United
               Cangalli.  Currently,  the  Chaco  open  pit  is  "open"  and  is
               projected  to  begin   producing   during  third   quarter  1997.
               Obviously,  by December,  in the end of the fourth  quarter 1997,
               two more  sites  must be  "opened".  This is  actually a positive
               requirement  for the Company  since it meets our  diversification
               goals.


<PAGE>


Letter to Shareholders
June 23, 1997
Page 14

     C.   Property Acquisition.

          i.   Properties  Within the Area of Influence.  The Company  currently
               controls 2,004 hectares (4,810 acres) in Cangalli, Bolivia. It is
               not  management's  intention  to become  overly-preoccupied  with
               acquiring adjacent properties; however, several have been offered
               and it may be prudent to acquire a substantial  buffer or area of
               influence around our current control area.

          ii.  The Precambrian  Shield.  The Company has been  approached  about
               gold  properties in the  Precambrian  Shield in eastern  Bolivia.
               Currently,  there is a gold rush going on in that region. Several
               Vancouver-based  companies have fairly large landholdings and are
               publishing  very impressive  numbers.  Again, in keeping with the
               goal of  diversification,  Company  management  will  continue to
               evaluate these possibilities as they present themselves.

     As I said at the beginning,  please accept my apology for the  encyclopedic
nature of this letter.  I believe  that it is apparent  that so many things have
been  happening  that  one  long  discussion  was  necessary  to get us  back in
communication. From now on, I will keep it short and to the point.

     We are excited  about our project in Bolivia  and about the  prospects  for
Golden Eagle's future. Thank you for your continuing support.  Please contact me
with any questions or comments.

                                         Warmest regards,



                                         /S/  TERRY C. TURNER
                                         ---------------------------------------
                                         Terry C. Turner
                                         President & CEO

TCT/me
enclosure
[{"type": "8-K", "sequence": "1", "description": "FORM 8-K", "secsgml_size_bytes": 52094}]
{"company-data": {"conformed-name": "GOLDEN EAGLE INTERNATIONAL INC", "cik": "0000869531", "assigned-sic": "6199", "irs-number": "841116515", "state-of-incorporation": "CO", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-23726", "film-number": "97631945"}, "business-address": {"street1": "4949 S SYRACUSE ST", "street2": "STE 300", "city": "DENVER", "state": "CO", "zip": "80237", "phone": "3036946101"}, "mail-address": {"street1": "4949 S SYRACUSE ST", "street2": "STE 300", "city": "DENVER", "state": "CO", "zip": "80237"}, "former-company": {"former-conformed-name": "BENEFICIAL CAPITAL FINANCIAL SERVICES CORP", "date-changed": "19940329"}}
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: JUNE 26, 1997

                        GOLDEN EAGLE INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

        Colorado                      0-23726                   84-1116515
     ---------------                ------------             ------------------
     (State of other                (Commission                (IRS Employer
     jurisdiction of                File Number)             Identification No.)
      incorporation)

          4949 South Syracuse Street, Suite 300, Denver, Colorado 80237
          -------------------------------------------------------------
              (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (303) 694-6101
                                                           ---------------
Item 1. Changes in Control of Registrant
        --------------------------------

        None

Item 2. Acquisition or Disposition of Assets
        ------------------------------------

        None

Item 3. Bankruptcy or Receivership
        --------------------------

        None

Item 4. Changes in Registrant's Certifying Accountant
        ---------------------------------------------

        None

Item 5. Other Events
        ------------

        None

Item 6. Resignation of Directors
        ------------------------

        None

Item 7. Financial Statements, Pro Forma Financials and Exhibits
        -------------------------------------------------------

        Financials:             None.

        Exhibits:               Letter to Shareholders sent with copies of 1996
                                Form 10-KSB as an Annual Report.

                                   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:  June 26, 1997                        GOLDEN EAGLE INTERNATIONAL, INC.

                                            By:  /S/  MARY A. ERICKSON
                                                 -------------------------------
                                                 Mary A. Erickson, Secretary

                                        2
Golden Eagle International, Inc.
                4949 S. Syracuse St., Ste. 300 , Denver, CO 80237
                      (303) 694-6101, (303) 694-6021 (fax)

                                  June 23, 1997

Dear Shareholder:

     I would like to  introduce  myself as well as update you on three  critical
points  regarding your ownership of shares in Golden Eagle  International,  Inc.
("the Company").

     First,  my name is Terry C. Turner.  I was appointed by the Company's Board
of Directors  as a Director,  President  and CEO on February 14, 1997.  For more
than a year prior to that  time,  from  January  1996  until my  appointment,  I
represented the Company in Bolivia as its attorney. The Company hired me at that
time  because I had the  distinction  of being  the only  attorney  residing  in
Bolivia who was  admitted to practice law in both the United  States  (Utah) and
Bolivia (first and only North American attorney admitted to practice law in that
country).  Also, I had 13 years of experience  working in Bolivian  mining--with
significant  experience  in the  Tipuani  Mining  District  where the  Company's
operations are located. During that period of representation,  I worked with the
Company's  management  in  Denver,  Colorado,  and  the  Company's  subsidiary's
management in La Paz,  Bolivia,  on important  legal and  administrative  issues
regarding contract negotiations and doing general business in Bolivia. My resume
is discussed  below in more detail,  or is available in the Company's  1996 Form
10-KSB Annual Report which should accompany this letter.  If you did not receive
a copy of the  Company's  Form 10-KSB,  please write or phone the Company at its
address above in Denver, Colorado, to request a copy.

     The  three  critical  points  on  which I would  like  to  update  you as a
shareholder  in the Company are the obvious three that every  shareholder  has a
right to know:

          1. Recent History: Where has the Company been?

          2. State of Operations: Where is the Company currently?

          3. Strategy for Growth: Where is the Company going?

     I have to ask you at the  outset  to  forgive  the  encyclopedic  nature my
response may appear to be in  answering  these three  questions - my  preference
would have been to have had our first  introduction  be a short,  courteous one.
However, the Company has accomplished some incredible things in the recent past,
is carrying out a  clearly-defined  operating  program  currently,  and has some
interesting strategic growth plans for the future; about all of which you have a
right to be informed.

     In addition,  the recent Bre-X scandal,  regarding a  Vancouver-based  gold
exploration  company,  has  rocked  the entire  mining  and  business  community
worldwide  and is on the mind and lips of every person with whom I speak in both
North and South America. It has brought to our attention the importance of every
serious  mining  company  taking more  vigorous  steps to  disclose  any and all
material  information to its  shareholders - and the public in general - so that
they may make informed investment  decisions.  Obviously,  all mining companies,
even the majors,  will now be held to a new,  higher standard of scrutiny by the
regulatory  agencies,  institutional  investors,  the investing public,  and the
mining  industry's  own  professionals.  The  Company's  Board of Directors  and
management  have  discussed  this fact at great length and believe that this new
scrutiny  will be positive for the  Company's  current and future  shareholders.
Golden  Eagle  International,  Inc. is  committed  to meeting  this new,  higher
standard of scrutiny.
Letter to Shareholders
June 23, 1997
Page 2

         With regard to the above  discussion,  please take very careful note of
the following:

          This  letter  should  not be relied  upon by  itself to make  informed
          investment decisions.  Any and all investment decisions should also be
          based upon a full and complete review of the disclosures  contained in
          the Company's Form 10-QSB  Quarterly  Reports,  and Form 10-KSB Annual
          Reports,  in addition to discussions  with  independent  professionals
          after their  review of the reports  referred to above.  These  reports
          will be provided to any  interested  party,  upon  request,  and at no
          charge.

          To date,  the  Company  has  generated  no  revenue,  while  incurring
          significant  operating losses,  and is considered a "development stage
          company."

          This letter is not a  solicitation  to buy, nor an offer to sell,  any
          security.

          The intent of this  letter is to provide  the  Company's  shareholders
          with information  regarding the Company's  management's  assessment of
          the Company's recent and current  activities,  as well as management's
          strategic  planning for the future.  Management  may, or may not, have
          accurately assessed the Company's activities;  and may, or may not, be
          able  to  implement  its  strategic  planning  for  the  future.  Each
          shareholder,  or potential  shareholder,  must  evaluate  management's
          position based on the disclosures  contained in the Company's  reports
          referred to above.

I. Recent History: Where Has The Company Been?
   -------------------------------------------

     In 1994 and 1995 the Company experienced several failed attempts to acquire
gold and copper mining properties in North America. Those attempts are discussed
in detail in the Company's 1994, 1995 and 1996 Form 10-KSB Annual Reports.

     This letter will focus on the Company's  successful  negotiation  of mining
rights on 2,004 hectares (4,810 acres) of mining concessions owned by the United
Cangalli Gold Mining Cooperative, Ltd. ("United Cangalli") in Cangalli, Bolivia,
beginning in the latter months of 1995.

     The following is a comprehensive  historical explanation,  in chronological
order,  of  the  events  relating  to the  acquisition  of  the  mining  rights,
subsequent  operations in Bolivia,  and other  significant  events regarding the
Company:

     A.   Initial  Reconnaissance of the Cangalli Area Within the Tipuani Mining
          District and Pre-Feasibility Report.

          In October  1995,  the Company's  management  began  reviewing  mining
          opportunities  in Bolivia.  The Cangalli area had been  presented with
          strong credentials. Historically, the Cangalli area, which lies in the
          heart  of  the  Tipuani   Mining   District,   had  been  the  largest
          gold-producing  area in Bolivia.  Government  estimates,  and those of
Letter to Shareholders
June 23, 1997
Page 3

          geologists  writing on the  subject(1), put the gold production of the
          Tipuani Mining  District during its known history at 1,000 metric tons
          (32,150,000 troy ounces ["ozt"]). (The Company's management was unable
          to verify these  estimates  as being  accurate and has not relied upon
          them,  but  believes  that  they  were  made in good  faith  after  an
          evaluation of all of the known records and information.)

          In late 1995, the Company  contracted an independent  consulting  firm
          from  Denver,  Colorado,  to  perform  a site  evaluation  and  gather
          sufficient information to make a recommendation to the Company's Board
          regarding  the site's  potential  feasibility  as an  exploration  and
          development  target. The consulting firm's initial report was positive
          and a full  pre-feasibility  report was commissioned by the Company in
          December 1995.

          The independent  consultant's  pre-feasibility report was presented to
          the Company in January  1996(2).  That report  evaluated  the Cangalli
          area very positively and calculated  potential  mineralization  at two
          points within the United Cangalli  concessions:  the open-pit prospect
          at  Chaco  and  the  Cangalli   Shaft   underground   workings.(3) The
          calculations for those two points were as follows:

                                                Potential Mineralization
                   Site Name                     in Troy Ounces of Gold
                   ---------                     ----------------------

                   Chaco                                109,996 ozt

                   Cangalli Shaft                     5,413,505 ozt

          The report indicated that these two sites were among at least 15 other
          gold-bearing  sites  within  the  United  Cangalli  concessions.  (The
          Company  cannot  assure  that this  report is  accurate,  nor that the
          mineralization  stated  can be  economically  mined.  The  report  was
          produced by an independent  consulting  firm which was responsible for
          its accuracy.  However, the Company's management did conclude that the
          report was a very strong indicator of a large,  gold-bearing  deposit,
          and a mineralized trend suggesting geological continuity.)

     B.   Letter of Intent, Formation of a New Subsidiary and Private Contract.

          After receiving the favorable  pre-feasibility  report,  the Company's
          management  negotiated  the terms of an  understanding  and  signed an
          initial  Letter of Intent  with the Board of  Directors  of the United
          Cangalli  Gold Mining  Cooperative  on January 19, 1996,  in Cangalli,
          Bolivia.  Within  days  management  had formed  Golden  Eagle  Bolivia
          Mining,  S.A.  ("GEBM"),  a  Bolivian  company  in which  the  Company
          initially  owned  a  74%  interest.  The  Company  later  acquired  an
          additional 19% from its Bolivian partners, to own a total of 93%.

---------------
(1)  Technical  Geological Report on the Gold Deposits at Cangalli,  Bolivia, G.
     Paravicini, M.A., Eng. April 1997; pp. 4, 9.
(2)  The Gold Deposits of the Tipuani Basin,  Bolivia, with Proposed Development
     and Mining of the Cangalli and Chaco Deposits; A.F. Trites; January 1996.
(3)  Id., pp. 21, 34.
Letter to Shareholders
June 23, 1997
Page 4

          On January 25, 1996,  the officers of the  newly-formed  GEBM signed a
          private  contract with United Cangalli for exclusive  mining rights to
          the  2,004  hectares  (4,810  acres)  owned by  United  Cangalli.  The
          significant terms of that Contract were:

          i.   a 25-year term, with an option for an additional 25-year term;

          ii.  an 18% gross  royalty  on all gold  recovered  payable  to United
               Cangalli;

          iii. a  commitment  by GEBM to  rehabilitate  and operate the Cangalli
               Shaft;

          iv.  a  commitment  by GEBM to invest a minimum  of $3  million in the
               exploration and  development of the  concessions  within 420 days
               from the signing of the Contract;

          v.   a commitment by GEBM to loan,  interest-free,  $100,000 to United
               Cangalli  to  assist  in   satisfying   several  of  its  pending
               obligations,  with repayment to GEBM from United Cangalli's gross
               royalty on production;

          vi.  a commitment by GEBM to grant to United Cangalli, without further
               obligation of repayment, $100,000 to assist in satisfying pending
               obligations;

          vii. all ownership of equipment and machinery  brought on-site for the
               exploration and mining of the concessions  remains vested in GEBM
               until GEBM  either  withdraws  because of a lack of  feasibility,
               completes its 25-year term and elects not to exercise its option,
               or exercises its option and completes another 25-year term;

        viii.  a voluntary  commitment  on GEBM's part to cooperate  with United
               Cangalli,  and  the  Cangalli  village  leadership,   to  improve
               fundamental  health and medical  treatment in the area; to review
               and  improve  the  overall  sanitary  conditions  relative to the
               potable water and sewer  systems;  and to contribute to upgrading
               the standard of education in the village.

          I am  recounting  the history  behind the signing of the contract with
          United Cangalli,  and the contract's  significant  terms,  even though
          that information is contained in the Company's 1996 Form 10-KSB Annual
          Report,  because  I  believe  that  a  more  detailed  explanation  is
          warranted.

          First, I am often asked why this opportunity still existed in Bolivia,
          and why a small gold  exploration  and  mining  company  from  Denver,
          Colorado was the one to find it and secure the mining rights.

          I  believe  the  answer  is  found  in the  idiosyncracies  of  mining
          cooperatives in Bolivia.  The Tipuani Mining District had been labeled
          for  several  decades  as  "No  Man's  Land"  for  traditional  mining
          companies precisely because gold mining cooperatives owned such a high
          percentage of the mining  concessions.  The  cooperatives,  made up of
          between 15 to 118 members, with little or no administrative expertise,
Letter to Shareholders
June 23, 1997
Page 5

          were judged to be  difficult  organizations  with which to work.  Each
          member  was  equal  to the  other  in rank,  vote  and  authority.  In
          addition,  world  politics  during the 60's,  70's and 80's  created a
          tendency  in  these  cooperatives   toward  socialism  and  away  from
          free-market concepts.

          When private mining companies did enter into joint-venture  agreements
          with  the   cooperatives,   the  terms  were  almost  always:  1)  the
          cooperative  received  50% of the gold  production  for putting in the
          property; 2) a 1- or 2-year contract term; and 3) the cooperative kept
          any equipment and  machinery at the  expiration of the short  contract
          term. Significantly, these private companies were not required to, and
          therefore  never did, invest anything back into the development of the
          community or its  infrastructure.  For that reason the Tipuani  Mining
          District  is still  extremely  underdeveloped  today  despite the many
          millions of ounces of gold which have been mined there.

          In late 1995,  the Company's  management -  principally  the Company's
          President at the time, Ronald A. Knittle,  and the Corporate Secretary
          and one of the  Directors,  Mary A.  Erickson - had the vision to see,
          and the  courage  to  pursue,  this  mining  opportunity  in  light of
          changing world and local politics which would allow  participation  by
          American private enterprise. They also knew that United Cangalli, even
          with 118  members,  was one of the oldest,  most  well-organized,  and
          stable cooperatives in the Tipuani Mining District.  However, the most
          important  point by far was their attitude toward the people of United
          Cangalli and the Cangalli village. Their voluntary commitment,  on the
          Company's  behalf,   to  include  contract   language   providing  for
          cooperation with the cooperative members to improve their daily living
          conditions,  and that of their families,  left United Cangalli's Board
          of  Directors  deeply  impressed,  and  resulted  in a  great  deal of
          flexibility on other significant contract terms.

          As an  example,  a  25-year  contract  period,  and an  option  for an
          additional 25-year period, are unheard of in the District.  Such terms
          allow the Company the ability to plan  exploration  and mining efforts
          well into the future.

          An 18% gross  royalty,  while high by North American  standards,  is a
          very modest royalty in the District.  In fact, if the property  proves
          up in accordance  with the initial reports and sampling  results,  the
          royalty will have been a small ongoing price to pay.

          Also, the negotiation of a minimal initial  investment on the loan and
          grant funds for United  Cangalli,  which pursuant to the contract have
          been  stretched  out over the  first  year  and into the  second,  was
          another reasonable feature of the contract.

          In  retrospect,  after 14 years of  experience  in Bolivia and several
          specific cases of negotiating  with  cooperatives,  I believe that the
          foregoing  analysis  is  the  answer  to  the  question  of  why  this
          opportunity  still existed,  and why the Company was able to seize the
          moment.

          If you ever have the opportunity to meet Mr. Knittle or Ms.  Erickson,
          you might want to thank  them for their  important  accomplishment  on
          behalf of the Company and its  shareholders.  Mr. Knittle is no longer
          with the  Company;  however,  Ms.  Erickson,  after  recently  serving
          several months as the Company's President, has accepted an appointment
          again as  Corporate  Secretary  and  continues  to serve as one of the
          Company's Directors.
Letter to Shareholders
June 23, 1997
Page 6

     C.   Changes in Company Management During 1996.

          Ronald A. Knittle, who had served as a Director,  President and CEO of
          the Company since November 1994,  resigned from those positions in May
          1996.  As  stated  above,   Mr.  Knittle  was   instrumental   in  the
          negotiations  that resulted in the  acquisition of the United Cangalli
          mining rights.

          Mr.  Knittle  is now  working  independently  to address  the  serious
          medical,  health,  education  and  housing  needs in  Bolivia  that he
          experienced first-hand while working there.

          Ronald  Sparkman was  appointed  interim  President in May of 1996 and
          served until July 4, 1996.

          Mary A. Erickson,  then serving as Corporate Secretary,  was appointed
          as  President  on July 4,  1996  and  served  in that  capacity  until
          February  14,  1997.  She has again  assumed the position of Corporate
          Secretary.  Although it may seem to be a repetition  of the praise for
          Ms.  Erickson  already given above  regarding the  acquisition  of the
          mining  rights on the United  Cangalli  concessions,  I think that the
          Company's  shareholders  should be aware of Ms. Erickson's  additional
          contributions to the Company's welfare during her term as President.

          During some very critical  times in the key  development  stage of the
          Cangalli  properties,  Ms.  Erickson  was able to secure  loans to the
          Company, often only by providing her personal guarantee. To obtain the
          most recent bank line of credit of $1 million approved for the Company
          in the first quarter of 1997, Ms.  Erickson had to pledge the majority
          of her personal stock in the Company.

          However,  not even the pledge of her stock  equals the  investment  of
          time and personal energy that I watched her make to:

          i.   bring the Company's reporting requirements current;

          ii.  oversee,  long  distance,  the  re-negotiation,  improvement  and
               execution of a new contract with United Cangalli;

          iii. administer  the  formation of the  Company's  new  subsidiary  in
               Bolivia,  Eagle Mining of Bolivia,  Ltd,  eliminating a number of
               issues  bearing on GEBM and the  original  contract  with  United
               Cangalli;

          iv.  engineer a $1 million mining equipment acquisition in Bolivia for
               stock, leaving the Company's much-needed cash intact; and,

          v.   initiate a  comprehensive  exploration  program  on the  Cangalli
               concessions.
Letter to Shareholders
June 23, 1997
Page 7

     D.   Workings in the Cangalli  Shaft Establish  Both  Lateral  Walls of the
          Paleo-Canal.

          On September 18, 1996,  the Company  issued a Form 8-K Current  Report
          indicating that the Company's  subsidiary had "reached the Paleo-canal
          inside its exploratory shaft on the Cangalli prospect in Bolivia." The
          Paleo-canal  is sometimes also referred to as the  Paleo-channel,  the
          Paleo-tipuani  or the Ancient  River Bed.  This ancient  course of the
          Tipuani  River was  filled  with the  conglomerate  material  known as
          Cangalli.  An independent mining engineer and geophysicist retained by
          the  Company  to  study  the  Cangalli   concessions   described   the
          Paleo-canal and its subsequent refilling as follows:

               "Over the Paleozoic  Basement lies the Cangalli  Formation of the
               late  Tertiary  Age-Miocene-Pliocene,  named after the village on
               the Tipuani River where this  conglomerate,  generally  hardened,
               forms  the  surrounding  hills  where  United  Cangalli  has  its
               concessions,   and  Golden  Eagle's   subsidiary  its  center  of
               operations.  The  thickness  of the  Cangalli  varies from 500 to
               2,500 m (1,640 ft. to 8,202 ft.)."(4)

          The importance of this event was the  confirmation of the subsidiary's
          mining labors directed  toward reaching the floor of the  Paleo-canal.
          For over 50 years,  miners in the Tipuani Mining  District have sought
          to reach the floor of the  Paleo-canal in various  locations along its
          course. The Company's consulting mining engineer/geophysicist explains
          why in his recent report:
          

               The ore grades  mined were usually very high - from a few tens of
               grams to many troy  ounces  per cubic  meter.  As much as 125 kg.
               (4,019 ozt) of coarse gold have been  recovered from as little as
               eight  m3  (10.5  y3) of  gravel  found in  a pocket  in a  small
               bedrock depression. This was based on information well-documented
               in the Aramayo Company  records.  This company also reported that
               in l944, at  Tujojahuira,  a single sample yielded 112 kg. (3,600
               ozt) of gold in 12 m(3) (15.7 y3) of material."(5)

     E.   Company Formed New Majority-Owned Operating Subsidiary.

          On October 2, 1996, the Company formed a new majority-owned  operating
          subsidiary,  Eagle Mining of Bolivia,  Ltda..  ("Eagle  Mining").  The
          Company  owns 84% of the new  subsidiary's  stock;  Mary A.  Erickson,
          former President and current  Corporate  Secretary and Director,  owns
          3%; and Rene Velasquez, Eagle Mining's President, owns 13%.

     F.   Company's Newly-Formed  Operating  Subsidiary  Entered  Into a  Public
          Contract with United Cangalli.

          In October of 1996,  Eagle Mining assumed GEBM's  contract  rights and
          renegotiated its contract with United  Cangalli.  The new contract was
          protocolized,  or  recorded,  with  the  Notary  of Mines in La Paz on
          November 11, 1996.  The new contract  provides for a gross  royalty of
          18% of the gold production for United Cangalli,  as it did previously.
          However, all other performance dates were changed so that Eagle Mining
          commited to complete first-phase  exploration and open one work front,
          in addition to the  Cangalli  shaft,  by April 20,  1997;  to open two
          additional work fronts by December 6, 1997; and to invest a minimum of
          $3 million in the project.

--------------  
(4)  Technical  Geological  Report on Gold  Deposits at  Cangalli,  Bolivia;  G.
     Paravicini, M.A., Eng,; April, 1997; p. 13.
(5)  Id., p.10.
Letter to Shareholders
June 23, 1997
Page 8

          The  Company  has  recently  opened  an  additional  workfront  in the
          Cangalli open pit and is working toward its $3 million commitment.  To
          date,   the  Company  has  expended   substantial   sums  toward  this
          commitment,  including the acquisition of $1 million worth of recovery
          and other mining equipment.  With additional  funding sources obtained
          earlier this year through private stock purchases and the extension of
          a $1  million  line of  credit  from a Texas  bank,  we  believe  this
          commitment has, in large part, been met.

          In  addition,  Eagle Mining  committed  to provide to United  Cangalli
          $200,000  for  reduction  of  United  Cangalli's  prior   obligations;
          $100,000  in the form of a loan and  $100,000  in the form of a grant.
          Eagle Mining completed funding of the $100,000 loan to United Cangalli
          prior  to  year-end  1996,  and  as of  this  date  has  substantially
          completed the additional $100,000 grant.

     G.   Company's Management Commissioned an Additional Independent Geological
          Resource and Mining Feasibility Study of the Concessions Under
          Contract.

          In early  December 1996, the Company  commissioned  Guido  Paravicini,
          M.A., Eng., a Bolivian mining engineer and geophysicist,  to carry out
          the following tasks relative to the gold deposits at Cangalli,  in the
          Tipuani Mining District of Bolivia:

          i.   Review  the  geological  literature  and  studies  regarding  the
               region,   the  Tipuani  Mining  District,   and  the  local  area
               surrounding Cangalli;

          ii.  Conduct field studies of the local geology, along with conducting
               a  sufficiently-in-depth  sampling  program to verify the mineral
               resources and reserves on the claims owned by the United Cangalli
               Gold Mining  Cooperative,  which are controlled under contract by
               Golden Eagle's Bolivian subsidiary;

          iii. Recommend further exploration and confirmation work to be carried
               out and appropriate mining methods to be employed; and

          iv.  Verify  Golden  Eagle's  subsidiary's  rights to legally mine the
               claims under study.

          Mr. Paravicini holds a Bachelor's  Degree in Humanities  (Mathematics)
          from the University of Santiago,  Chile; a Bachelor's Degree in Mining
          Engineering  from the Technical  University of Oruro,  Bolivia;  and a
          Master's Degree in Geophysics from Washington University in St. Louis,
          Missouri.  In  addition,  he has  received  certificates  from  Havard
          University in Geology and  Geophysics;  Michigan  State  University in
          Communications; the United States Agency for International Development
          in Geophysics; the Japanese International Cooperation Agency in Mining
          & Metalurgy;  and a Diploma of Merit in Geology from the United States
          Geological Survey.

          Mr.  Paravicini was Chief  Exploration  Geologist for 19 years for the
          National Bolivian Mining Corporation ("Comibol")  specializing in gold
          and tin exploration.
Letter to Shareholders
June 23, 1997
Page 9

          On January 20, 1997,  Mr.  Paravicini  issued a summary  report of his
          findings, "Summary Geological Report on the Gold Deposits at Cangalli,
          Bolivia". Subsequently,  Mr.  Paravicini  issued a full  report on his
          findings,  "Technical  Geological  Report  on  the  Gold  Deposits  at
          Cangalli,  Bolivia";  G. Paravicini;  April,  1997. This report's most
          significant finding stated:

               "The resources  previously  estimated for the  concessions  under
               Golden Eagle's  subsidiary's  control at Cangalli were calculated
               with a  conservative  average grade of .500 g/m3 (0.012  ozt/y3).
               This  calculation,  on the basis of the sampling program shown in
               this Report, will have to be increased by approximately 28 times,
               or to an average  grade of 14.049 g/m3 (0.34  ozt/y3).  Using the
               definitions  set out  above,  and the  overwhelming  evidence  of
               geologic continuity, it is this author's opinion that the portion
               of the Cangalli  claims that has been  studied,  which would have
               been in any event  less than half of the claims  under  contract,
               contains an Indicated  Resource of 60,771,704  ozt of gold and an
               Inferred Resource of 111,414,800 ozt of gold."(6)

          (The Company cannot assure that this report is accurate,  nor that the
          resources stated can be economically mined. The report was produced by
          an  independent  consulting  mining   engineer/geophysicist   who  was
          responsible for its accuracy.  However,  the Company's  management did
          conclude  that the  report  was a very  strong  indicator  of a large,
          gold-bearing  deposit,  and a mineralized trend suggesting  geological
          continuity.  Mr.  Paravicini  owns no stock or options in Golden Eagle
          and is paid a fee for his professional services.)

II.  State of Operations:  Where Is The Company Currently?
     -----------------------------------------------------

     Since  its  inception   Golden  Eagle   International,   Inc.  has  been  a
"development stage company".  In particular,  during the five quarters since the
Company's first Bolivian  subsidiary  signed a contract for the mining rights on
the United Cangalli  concessions,  January 25, 1996, the Company has been in the
mode of mine expansion and rehabilitation in the Cangalli Shaft, and exploration
and site development for an open pit prospect. The Company has now been informed
by the  managment of its  Bolivian  subsidiary,  Eagle  Mining of Bolivia,  Ltd.
("Eagle  Mining"),  that  full-scale  production will commence from the Cangalli
Shaft and from the Chaco open pit in the third quarter of 1997. The following is
a summary of some of the recent  events  which  have  occurred  in the first two
quarters of 1997:

     A.   Changes in Company Management During 1997.

          Terry  C.  Turner.  On  February  14,  1997,  the  Company's  Board of
          Directors appointed me, Terry C. Turner, 44, as a Director,  President
          and CEO. I received a B.A. in Political  Science and a B.A. in Spanish
          in 1977 from the  University of Utah. I received a Juris  Doctorate in
          1980 from Brigham  Young  University.  I am a member of the Utah State
          Bar and am admitted  to  practice  in the State and Federal  Courts of
          Utah, and the 10th Circuit Court of Appeals. I am also a member of the
          Bolivian  College of Lawyers  (Bolivian  Bar  Association)  and am the
          first American attorney admitted to practice law in Bolivia.

---------------------

(6)  Technical  Geological Report on the Gold Deposits at Cangalli,  Bolivia; G.
     Paravicini; April, 1997. p. 32.
Letter to Shareholders
June 23, 1997
Page 10

          From 1980 to 1983 I practiced law with a firm in Salt Lake City, Utah.
          From 1983 to my  appointment  with Golden  Eagle I worked with several
          mining companies in Bolivia as an officer,  general counsel or outside
          counsel.  From January 1996 until my  appointment  with the Company in
          February 1997, I was corporate  counsel in Bolivia for the Company and
          its subsidiaries.  For more complete  information,  please consult the
          Biographical  Information  section of the Company's Form 10-KSB Annual
          Report for 1996.

          Mac DeLozier, 53, was appointed by the Company's Board of Directors as
          Executive  Vice  President  for  Bolivia  in May  1997.  Mr.  DeLozier
          graduated  from  Oklahoma  State  University  in 1966  with a B.A.  in
          History,  a B.A. in  Political  Science and a B.A. in  Languages.  Mr.
          DeLozier  began a 31-year  association  with  Bolivia  in 1966 when he
          joined the Peace Corps and was assigned to Bolivia. After serving five
          years in the Peace Corps, he entered a successful  18-year career as a
          cattle rancher in Bolivia's  Amazon  drainage.  Mr.  DeLozier has also
          managed a gold mine (1980-81),  served as the general purchasing agent
          for the American Embassy in Bolivia (1981-85),  and most recently, has
          been the  International  Sales  Representative  in Bolivia for Toyota,
          Chevrolet and Hyundai (1989-97).

     B.   Formation of a Technical Advisory Board.

          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  property,  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);  however,  his most recent corporate
          experience  contributes  most notably to Golden  Eagle's  future.  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.

          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.
Letter to Shareholders
June 23, 1997
Page 11

          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 Corp 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.  Atwood has  already  made a site visit to the  Cangalli  property
          (June 4-10,  1997),  has reviewed the current  exploration  and mining
          underway,  and has made  recommendations  on the installation of a new
          fine gold recovery circuit.

     C.   $1 Million Line of Credit.

          During the first  quarter of 1997 the  Company was  approved  for a $1
          million  line of credit  by a bank in  Houston,  Texas.  The same bank
          issued a $240,000  bridge loan to the Company in February 1997. At the
          beginning of the second  quarter of 1997,  disbursements  were made to
          the  Company on the line of credit  and the  bridge  loan was paid off
          completely at that time.

     D.   Company's Regulatory Filings Current.

          The Company  filed with the  Securities  and Exchange  Commission  its
          required  Form  10-KSB  Annual  Report  for 1996  and its Form  10-QSB
          Quarterly Report for the first quarter of 1997 within their respective
          extension periods. In addition, all 1996 quarterly reports and amended
          1995 10- QSBs have been filed with the SEC.  The Company is current in
          all of its regulatory reporting  requirements and expects to remain so
          in the future, with timely filing on all subsequent reports.

     E.   Significant Equipment Purchases.

          The Company,  or its subsidiary,  Eagle Mining, has made the following
          significant equipment purchases:

          i.   $1 Million San Silvestre Acquisition.  On September 18, 1996, the
               Company  initiated the  acquisition of $1 million worth of mining
               equipment and a recovery plant located in Bolivia in exchange for
               $20,000  in  cash  and  convertible  debentures  which  could  be
               converted into the Company's  common stock.  The  transaction was
               closed  on  February   10,   1997.   The   Company   acquired  an
               electro-generator;  two large air  compressors;  two mine drills;
               ore cars;  mine rail; a jaw crusher;  a 4 x 4 ball mill; an apron
               feeder;  a  classifier;  a static  thickener;  a Reichert  spiral
               concentrator;  two centrifugal  bowl  concentrators;  a vibrating
               table concentrator;  various pumps; electrical panels and support
               equipment;  a conical ball mill; an amalgamator;  various sets of
               tools;   mine  ventilators  with  sleeves;   radios  and  support
               equipment; a mine hoist; and various mine supplies.
Letter to Shareholders
June 23, 1997
Page 12

          ii.  Two Bulldozers.  In early April 1997,  Eagle Mining purchased two
               used  D85  Komatsu   bulldozers   in  excellent   condition   and
               transported  them on-site.  Since their arrival at the mine,  the
               two  bulldozers  have  been  improving  the   infrastructure   by
               repairing roads destroyed  during the rainy season which ended in
               April.  In addition,  the two bulldozers have opened up the Chaco
               open pit site,  preparing the pad location for the recovery plant
               and other necessary  infrastructure work, fulfilling the contract
               requirements.

          iii. Diamond Core Drill  Acquisition.  In early May 1997,  the Company
               purchased in Bolivia an Atlas Copco Diamec 252 Diamond Core Drill
               in  anticipation  of  beginning  its  reserve  confirmation  core
               drilling  schedule on the Cangalli  property.  A current  reserve
               confirmation  program,  which has been underway  since the end of
               April 1997,  is using the results  from 1,000  trench  samples to
               establish  six initial  target drill sites for a projected  2,000
               meters  (6,560  feet)  of  diamond  core   drilling.   These  six
               "perimeter"  holes will permit more detailed  geological  mapping
               and the projection of an in-fill drilling schedule.

     F.   The Floor of the Paleo-canal, Development Work and Projected
          Production During Third Quarter.

          The Company  announced the discovery of the  Paleo-canal  in September
          1996, and has been working on its floor since April 1997.  Drifts have
          now been cut up and down the length or strike of the canal  itself and
          the decline ramp leading from the consolidated  mine workings at Level
          -237 down to the floor  workings  (approximately  -280)  have now been
          widened to facilitate  production.  In addition, a mine hoist has been
          installed  at the  beginning  of the  decline  ramp  and rail has been
          installed to the canal floor.

          The combination of these mining factors,  and the initial results from
          ore  sampling  by  the  on-site  engineers  in  the  paystreak  on the
          Ordovician  Bedrock at both levels -237 and -280 (an average of 21.145
          g/m3 [0.52 ozt/y3] of gold in preliminary  sampling),(7) has led Eagle
          Mining's  management to project  production  from the Cangalli  Shaft,
          beginning in the third quarter 1997, of 54.4 kilograms  (1,700 ozt) of
          gold per month,  with an increase by the end of the fourth  quarter to
          81.6 kilograms (2,550 ozt) of gold per month. (This projection assumes
          production  of 25  days  per  month  at  100 m3  [180  tons]  per  day
          initially,  escalating  to 150 m3 [270 tons] per day by the end of the
          fourth quarter 1997. In addition, the subsidiary's  management assumes
          the installation of an improved gold recovery plant,  which is on-site
          and currently being  installed,  by the beginning of the third quarter
          1997.   Further,   sampling  yield  averages   rarely  are  consistent
          throughout a prospect's  volume of material,  and the Company will, in
          all probability,  experience substantially lesser yields in production
          as opposed to sampling yields.)

--------------
(7)  Technical  Geological Report on the Gold Deposits at Cangalli,  Bolivia; G.
     Paravicini; April, 1997. p.28.
Letter to Shareholders
June 23, 1997
Page 13

          With a projected  sales price of $350 per ozt, gross sales would begin
          at $595,000 per month and rise to $893,000.  Production costs per troy
          ounce have still not been projected by Eagle  Mining's  management due
          to numerous undetermined factors. (Please note that the Company cannot
          guarantee that its subsidiary will reach its projections, nor that any
          net  revenues  would  result  from  any  gross  sales  amounts.  These
          projections assume operation and that no major operating  difficulties
          will be encountered.  However,  there is a probability  that operating
          difficulties  will be encountered  which could affect these estimates.
          Further,  these are internal  projections  and should not be used as a
          basis for making any investment decision.)

III.  Strategy for Growth:  Where Is The Company Going?
      ------------------------------------------------

     The  Company's  strategy  for  growth  could  be  summarized  in one  word:
diversification.  The Company's  Board and  management  have  concluded that the
Company must be growing in three areas,  and that the Company  cannot  afford to
"have all of its eggs in one basket" in any one of those areas:

     A. Exploration.

          i.   Potential  Mineralization.   The  Company's  most  recent  report
               indicates significant mineralization on the Cangalli concessions.
               Because the numbers are so large,  management  has chosen to view
               them  as  "a  very  strong  indicator  of a  large,  gold-bearing
               deposit,   and  a   mineralized   trend   suggesting   geological
               continuity." However, that statement is just the beginning.  That
               is why the  Company  immediately  requested  that Mr.  Paravicini
               assemble  a team  of  exploration  geologists  in  April  1997 to
               follow-up on his initial  findings with a program of 1,000 trench
               samples  and the  establishment  of six  perimeter  diamond  core
               drilling  sites.  Once  that  study  is  completed,  the  in-fill
               drilling  can begin,  until the  mineralization  projections  are
               proven up into resources or reserves.

          ii.  Two More Open Pit Sites.  The  Company is required by contract to
               open up two  additional  work  fronts by  December  6, 1997.  Our
               exploration  program,  while  accommodating  the "big picture" on
               proving up overall reserves, must also focus on providing smaller
               production targets for immediate development.

     B. Future Production Plans

          i.   The Cangalli  Shaft.  Production  will begin here within the next
               few weeks. Because of the higher production costs associated with
               underground mining, the goal will always be to move away from the
               shaft  toward  open pit,  bulk  mining if  circumstances  permit.
               However, the shaft has now reached its destination - the floor of
               the Paleo-canal - and we would like to see the production numbers
               meet everyone's expectations.

          ii.  Three Open Pits.  Three open pits,  or work fronts,  are required
               "to be opened" by the Company's subsidiary's contract with United
               Cangalli.  Currently,  the  Chaco  open  pit  is  "open"  and  is
               projected  to  begin   producing   during  third   quarter  1997.
               Obviously,  by December,  in the end of the fourth  quarter 1997,
               two more  sites  must be  "opened".  This is  actually a positive
               requirement  for the Company  since it meets our  diversification
               goals.
Letter to Shareholders
June 23, 1997
Page 14

     C.   Property Acquisition.

          i.   Properties  Within the Area of Influence.  The Company  currently
               controls 2,004 hectares (4,810 acres) in Cangalli, Bolivia. It is
               not  management's  intention  to become  overly-preoccupied  with
               acquiring adjacent properties; however, several have been offered
               and it may be prudent to acquire a substantial  buffer or area of
               influence around our current control area.

          ii.  The Precambrian  Shield.  The Company has been  approached  about
               gold  properties in the  Precambrian  Shield in eastern  Bolivia.
               Currently,  there is a gold rush going on in that region. Several
               Vancouver-based  companies have fairly large landholdings and are
               publishing  very impressive  numbers.  Again, in keeping with the
               goal of  diversification,  Company  management  will  continue to
               evaluate these possibilities as they present themselves.

     As I said at the beginning,  please accept my apology for the  encyclopedic
nature of this letter.  I believe  that it is apparent  that so many things have
been  happening  that  one  long  discussion  was  necessary  to get us  back in
communication. From now on, I will keep it short and to the point.

     We are excited  about our project in Bolivia  and about the  prospects  for
Golden Eagle's future. Thank you for your continuing support.  Please contact me
with any questions or comments.

                                         Warmest regards,

                                         /S/  TERRY C. TURNER
                                         ---------------------------------------
                                         Terry C. Turner
                                         President & CEO

TCT/me
enclosure