We believe our wait is over! After experiencing over 100 days of what meteorologists are calling the "100-year rains" in eastern Bolivia that have impeded our progress on our C Zone gold mill build-out, we project that these torrential rains are finally letting up. We have begun rehabilitating all of our infrastructure at our C Zone mill site in preparation for pouring foundations for the mill itself. I will update our activities and projections below:

The C Zone Gold Project. As I have said to many of you in discussions on the phone, this is the project that has us excited about getting back into gold production in the short-term. Within the next couple of months we believe that we can bring our C Zone gold mill online processing 200 tpd during the short shake-out phase, gradually growing our production up to 1,000 tpd. Our ultimate goal at the C Zone is 2,000 tpd within 6 months from the date we initiate production.

Our engineers have worked on dozens of small projects during this current rainy season to map out a comprehensive plan for better drainage at our mill site, mine site and access roads to ensure that we can work on a normal basis during future rainy seasons.

Just for some background, our C Zone eluvial gold project, located 3 miles from our larger A Zone Buen Futuro VMS gold and copper project, has come a long way in the last year through a lot of hard work by our Bolivian management and field teams. We began a formal exploration program on the C Zone in May of 2006 that continued into 2007 in which we drilled 200 auger holes and dug 65 shaft-style pits. That work produced an estimate from just a core area of the C Zone of 20,255 troy ounces of gold contained in 630,000 m3 of mineralized material that ranged from 1.4 g/m3 to a cutoff grade of 100 mg/m3, and a final average grade of 1g/m3. After reviewing work performed by Knelson Concentrators in its labs in Canada in 2007 on samples from the C Zone, we believe that we can recover in excess of 80%, and our field work demonstrates recoveries approaching 90%.

In 2006 and 2007, for a period of 10 months, we operated a pilot plant to demonstrate the feasibility of the project and to ensure the use of the correct procedures for recovering the maximum amount of gold. We have constructed a new mine camp to provide room and board to the estimated 50 employees that will be working simultaneously in our C Zone gold mine and mill, as well as those needed for ongoing A Zone in-fill drilling and feasibility work.

The A Zone Buen Futuro VMS Gold & Copper Project.The A Zone hosts a series of gold/copper ore deposits resulting from volcanogenic massive sulfide (VMS) mineralization that can be mined using open-pit techniques from the surface. Over the past 10 years 44,000 feet of combined drilling and 8 miles of trenching have resulted in estimates on just 75 acres of our property of 172,000 troy ounces of gold in 4.36 million tonnes of mineralized material grading 1.23 g/t, and 265 million pounds of copper in 6.5 million tonnes of mineralized material grading 1.85%. The A Zone is our most promising project and offers the greatest potential for creating significant value for our shareholders. More importantly, the A Zone is the starting point for the development of a 21-mile gold and copper mineralized trend on our 213-square mile landholding that has been established using IP and HLEM magnetic surveys, as well as geochemical and geophysical testing.

1. Washington Group International. Washington Group, an integrated engineering, mining, construction and management company, with 23,000 employees worldwide and over $3 billion in revenues, contracted with us in 2007 to perform a due diligence study on our A Zone Buen Futuro project and its feasibility work to date. Washington Group has recently recommended moving to the second stage of their feasibility work with a limited in-fill drilling and trenching campaign "anticipated to expand" the A Zone gold and copper potential and to provide additional metallurgical samples for analysis in laboratories in the U.S. Washington Group is the contract miner on the San Critobal silver project in western Bolivia for Apex Silver, one of the world's largest silver producers. We believe that this association may result in finally getting the A Zone Buen Futuro project financed and into production.


2. Other Possibilities. Because of the spike in metals prices, particularly gold and copper, we have seen a lot of interest in our A Zone Buen Futuro project. There are no guarantees, but we continue to exchange confidential information with companies that are interested in discussing possible arrangements.

The Gold Bar Mill. This 3,500 to 4,500 ton-per-day CIP (carbon-in-pulp) gold mill that we purchased four years ago continues to be an important asset for us. We are still looking at three possible scenarios for this mill:

1. Dismantle, Ship and Re-Erect at the A Zone Buen Futuro Project. Washington Group is going to evaluate the mill once it finishes with its Buen Futuro analysis to advise us about using the Gold Bar mill at the A Zone Buen Futuro project.


2. Sale of the Mill. Several different groups have toured the mill with the idea of making an offer to purchase it. There have been no firm offers, but this is a concept that is in play.


3. Toll Refining at the Gold Bar Mill. There is currently a small gold rush going on in the area of the Gold Bar mill. We have been approached by groups wishing to see us rehabilitate our mill and use it to toll refine the oxide gold ore of others, or joint venture with one or more of these companies. We currently have two experts evaluating this approach. Again, we cannot guarantee an outcome here, but this is another concept that is in play at the moment.

Bolivia. On a final note, as you have seen from news accounts, and our press releases, Bolivia's President Evo Morales has settled any question about what his government intends to do regarding mining in Bolivia. In 2007 he signed a Presidential Decree guaranteeing the rights of current mining concession holders in Bolivia. Our 136,500-acre landholding in eastern Bolivia, as well as our 12,000-acre landholding in western Bolivia, is secure. We have to pay annual concession fees (patents), and there is some discussion that the Bolivian government will require exploration or development work on existing claims to preserve them, but whatever the requirements-we will meet them.

As we have discussed in our releases, there are bigger fish in Bolivian mining and other industries than Golden Eagle (Apex Silver, Cour d'Alene Mines, Newmont Mining, Sumitomo, Jindal Steel, Petrobras, Exxon/Mobil, Total Oil, BP Oil & Gas) who are expressing confidence in Bolivia's future through their commitments to multi-million and even multi-billion dollar investments over the next five years.

As you can see, Golden Eagle has a number of irons in the fire that can become productive assets for our Company. We appreciate your ongoing support and interest and invite any questions to me directly at: t.turner@geii.com.