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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[ X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for quarter period ended

June 30, 2004

[ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from __________ to __________.

Commission file number 0-23726

GOLDEN EAGLE INTERNATIONAL, INC. 

(Exact name of Golden Eagle as specified in its charter)

12401 South 450 East, Building D1, Salt Lake City, UT 84020

(Address of principal executive offices) (Zip Code)

        Golden Eagle’s telephone number, including area code: (801) 619-9320

Securities registered pursuant to Section 12(b) of the Act: None Name of each exchange on which registered:


None

Securities registered pursuant to Section 12(g) of the Act:

$.0001 par value Common Stock

(Title of class)

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.

[ X ] Yes [ ] No

At August 12, 2004, there were 510,872,430 shares of common stock outstanding.

Transitional Small Business Disclosure Format:

[ ] Yes [ X ] No

TABLE OF CONTENTS

Part I- FINANCIAL INFORMATION

Part II - OTHER INFORMATION

Signatures
Certifications (Exhibits 31 and 32)
Goldbar Asset Purchase Agreement

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

        The unaudited Financial Statements for the six months ended June 30, 2004 are attached hereto and by reference incorporated herein. Please refer to pages F-1 through F-8 following the signature page.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

      Forward-Looking Statements and Risks

        As noted, the future conduct of Golden Eagle’s business and its response to issues raised by third parties are dependent upon a number of factors, and there can be no assurance that Golden Eagle will be able to conduct its operations as contemplated. Certain statements contained in this report using the terms “may,” “expects to,” “projects,” “believes,” “projects,” or “estimates,” and other terms denoting future possibilities, are forward-looking statements within the meaning of Section 27(A) of the Securities Act of 1933 and Section 21(B) of the Securities and Exchange Act of 1934. The accuracy of these statements cannot be guaranteed as they are subject to a variety of risks that are beyond Golden Eagle’s ability to predict or control and which may cause actual results to differ materially from the projections or estimates contained herein. These risks include, but are not limited to, the risks described in this and our other reports, and the other risks associated with start-up mineral operations in Bolivia, and operations with insufficient liquidity and no historical profitability. Certain of our previous projections have proven to be incorrect, and in some cases materially so. In addition, risks associated with an investment in Golden Eagle’s common stock may be found below under “Risk Factors” as well as by reviewing our annual reports filed on Form 10-K (and the more detailed risk factors contained therein), quarterly reports filed on Form 10-Q and current reports filed on Form 8-K, available at www.sec.gov, as well as through our website, www.geii.com. It is important that each person reviewing this report understands the significant risks attendant to Golden Eagle’s operations and that of its subsidiaries. Golden Eagle disclaims any obligation to update any forward-looking statement made herein.

      Company Classification and Discussion

        Under SEC Industry Guide 7, Golden Eagle International, Inc. is classified both as a production stage company (with respect to our Cangalli properties since we have been producing minerals from that property) and as a development stage company (with respect to our Precambrian properties since we are engaged in the preparation of mineral reserves for extraction, but we are not in the production stage with respect to Buen Futuro).

        Since our inception, we have been engaged in organizational activities, acquiring, developing, and operating gold, and other mineral properties and, starting in the fourth quarter 2002, mining gold bearing ore and producing gold for market. Presently, substantially all of our current operations are focused on two prospects in the Republic of Bolivia, which are wholly owned by us: the combined Cangalli/Tipuani gold properties (the “Cangalli properties”) and on our prospects in the Precambrian Shield area and the Buen Futuro mining concession of eastern Bolivia (the “Precambrian properties”).

        We own all right, title and interest in four mining claims, or concessions, in the Tipuani Valley acquired in November 1999 through July 2002. These concessions, known as the Cangalli properties, totaled 49,900 acres. We are not required to pay any royalty on these properties and are only required to pay annual concession fees to the Bolivian government of $0.40 per acre.

        During the first six months of 2004, we produced 64,238 grams or 2,065 troy ounces of gold until we temporarily ceased production activities in June 2004 (as described below). We produced 30,493 grams or 980 ounces of gold during the first quarter and 33,745 grams or 1,085 ounces during the second quarter. Our total production since inception is 302,324 grams or 9,720 ounces of gold from our Cangalli properties and our Cueva Playa processing plant. Until we temporarily ceased our production operations from the Cangalli properties, we were able to cover all production costs and overhead in Bolivia from gold sales; however, to date we have not achieved positive cash flow on a company-wide basis.

        On June 25, 2004 we announced that we temporarily ceased mining operations at our Cangalli mine and plant as a result of road blockades by local citizens protesting various government policies in Caranavi, Bolivia, a town half way between La Paz and our Cangalli mine. These protests have prevented the delivery of needed supplies and materials to the mine for operations. The same blockade, approximately 80 miles from Cangalli, also hampered the operations of the power sub-station in Guanay, Bolivia. This sub-station provides electricity to our Cangalli operation, and the power failures have halted all mining and processing activities.

        On this same date we also advised that recent events in Bolivia involving miners’ protests regarding the failure of pension programs for many mining companies and cooperatives have resulted in the intervention by the Ministry of Labor and INALCO, the governmental agency charged with regulating cooperatives, in the operations of the United Cangalli Gold Mining Cooperative, Ltd. (the “UCL”). This governmental intervention against the cooperative, and potential legal issues surrounding the ownership rights of the 5,000-acre mining concession that Golden Eagle purchased from the UCL, have led the Company to temporarily suspend operations at the Cangalli mine.

        Since this announcement, the roadblock at Caranavi has been lifted. However, we are still working with the Bolivian Ministry of Labor to resolve the pension issue with the UCL and as of the date of this filing we have not yet resumed mining operations.

        We do however, own an additional 44,900 acres in the Tipuani Gold District covering an 18-mile section of the ancient paleo-channel of the Tipuani River system that is not affected by the dispute between the United Cangalli Cooperative and the Bolivian government and we are investigating the possibility of moving the mine and plant to an alternate site on our property. The financial impact, if any, of these events on the Company cannot be determined at this time. However, abandonment of current facilities may cause us to write off portions of our investments in mining properties and development costs.

        Prior to the temporary suspension of operations, we had experienced considerable success with our TPS (Targeted Planar Subsidence) mining method during April and May. During April, we produced 25% more gold than we did during March. During May, we produced 49% more gold than we did in March with 90% of our production coming from our underground TPS operation. During May our TPS operations recovered a gold grade of 2.93 grams per tonne, which was approximately ten times greater than the gold recovery grade from our open pit mining operations and block caving operation.

        In June 2001, we acquired all right, title and interest in three mining concessions consisting of 125,000 acres located 162 miles north of Santa Cruz, Bolivia, in eastern Bolivia’s Precambrian Shield area, together with all proprietary exploration information pertaining to the properties. We are not required to pay a royalty on these properties, and can maintain them in perpetuity by paying annual claims fees to the Bolivian government of approximately $50,000, or $0.40 per acre.

        In June 2003, we acquired 100% of the Buen Futuro mining claim located in the center of Golden Eagle’s 125,000-acre landholding in the Precambrian Shield geological formation, including relevant reports, drill data, drill cores, reverse circulation cuttings, samples and geological maps. To maintain this claim we must pay annual claims fees of $1,000, or $0.40 per acre, as well as contractual obligations that are detailed below in our discussion of our contractual obligations regarding Buen Futuro.

        The Buen Futuro claim consists of 2,500 acres and contains at least three well-identified gold/copper mineralization. During December 2003, we completed the acquisition of the Cobra claim, an additional 22,500 acres of ground in the Ascension Gold-Copper Trend in eastern Bolivia’s Precambrian Shield. The Cobra claim has proven positive for gold and copper mineralization, as well as, near-surface gold oxide deposits. To maintain the property in perpetuity, we must pay annual claims fees to the Bolivian government of $9,000, or $0.40 per acre.

        We have subsequently reduced some of our previously held concessions in the Ascension Gold-Copper Trend, and our total landholdings in the Precambrian Shield now total 136,500 acres.

        During the first quarter of 2004, we estimated proven and probable reserves at our Cangalli and Buen Futuro properties of 97,860 troy ounces of gold and 82,000,000 pounds of copper. For a complete description of these reserves, please see our 10-K for the period ended December 31, 2003.

        On June 18, 2004, we entered a purchase agreement with Atlas Precious Metals, Inc. (Atlas) for the purchase of the Gold Bar mill and gold recovery plant located 27 miles northeast of Eureka, Nevada. The agreement called for us to issue 30 million shares of common stock, which we valued at $3.6 million dollars (or $.12 per share based on the market value on the transaction date). We intend to dismantle, ship and re-erect this plant on our Buen Futuro site in eastern Bolivia. We estimate that the costs to relocate the plant will be approximately $3.5 million, which funds we will need to raise before initiating the move. We believe that approximately eight months following our receipt of the necessary funding to finance the relocation of the Gold Bar plant we will be able to commence gold mining and milling operations at Buen Futuro and commence copper mining and milling operations two quarters thereafter. While we believe that we will obtain financing sufficient to commence gold and copper operations at Buen Futuro we can offer no guarantees that sufficient financing will be obtained.

      Liquidity and Capital Resources

        Working Capital Situation. Through June 30, 2004 and subsequently, Golden Eagle has had working capital deficits. Despite that, we have been able to finance our operations through private placement stock offerings and the sale of gold. In fact, from our inception through the second quarter of 2004 and subsequently, Golden Eagle’s current liabilities have exceeded current assets. This situation has created some difficulty for us in meeting our obligations. However, as of June 30, 2004, we were able to pay, or were in the process of arranging for the payment of, all salaries for employees of our Bolivian operations and U.S. operations, as well as our suppliers’ invoices and other operating expenses. At the time of this report we are current on all obligations.

        At June 30, 2004, Golden Eagle’s working capital deficit amounted to ($1,851,884) which has not materially changed from the working capital deficit of ($1,661,574) at December 31, 2003. We did not experience a larger increase to our working capital deficit because we have further reduced our negative cash flows from operations. There are numerous components of our current liabilities, which impact our working capital deficit. These components include:

        Our working capital situation remains as the most critical issue facing us, even if we are able to resume operations at Cangalli. We will continue our efforts to finance our working capital deficit, our negative cash flows from operations and investing activities through equity transactions with accredited investors and through long-term financing, although we can offer no assurance that we will be able to do so. Our revenues from gold production, which have exceeded the costs of extraction, are also a means of reducing our working capital deficit, although those proceeds have been, and will be for the foreseeable future, entirely reinvested in our Bolivian operations assuming that operations are recommenced. At the time of the suspension of operations at Cangalli and at our Cueva Playa plant, we held a sizeable inventory of gold. We intend to finance our scaled-back Bolivian operations from the proceeds of the sale of this gold. US administration costs have also been reduced or eliminated where possible and we intend to raise sufficient funds to continue US operations through equity transactions or debt where available.

        Capital Commitments. Golden Eagle has certain significant capital commitments. These commitments include:

        Following is a chart that sets out our contractual capital commitments discussed above:

        Without a significant amount of third party funding, it is unlikely we will be able to meet the foregoing commitments. We believe we will be able to negotiate various accommodations from our existing creditors and others to extend payment obligations. We also are working to develop new grant and funding sources, which may include funding from the US Trade Development Agency, the Export Import Bank and the Overseas Private Investment Corporation.

        Clearly, maintaining our properties and the existing production operations are high priorities for our cash expenditures. Golden Eagle has historically financed its operating losses, capital commitments, and cash flow requirements through gold production, short-term loans from affiliates, and occasionally, from non-affiliates. In addition, we also used our common stock directly to raise capital and to satisfy some of our obligations. The situation requiring the sale of Golden Eagle’s stock to raise working capital and pay current obligations has continued throughout the first two quarters of 2004 (See, Part II, Item 2, “Changes in Securities”). During the second quarter of 2004, we raised $318,200 from the sale of 4,943,810 shares of our common stock from accredited investors pursuant to exemptions from the securities registration requirements. Although we have been successful in obtaining funds to date, there can be no assurance we will be able to continue doing so. Our ability to finance our operations will, in the end, be dependent on our ability to generate additional positive cash flow from operations in amounts sufficient to support all of our financial obligations, of which there can be no assurance

        Revenues from our Bolivian operations. We have obtained liquidity for our Bolivian operations through sale of gold from our Cangalli, Bolivia gold mine. The following table provides information about the cash this production has provided, or that we anticipate the production will provide. We have used and plan to use sales of gold to defray the costs of our Bolivian operations. We have chosen not to expatriate cash from Bolivia at the present time because of the need for cash for our Bolivian operations.

        Our gold production at our Cangalli mine increased by nearly 11% from the first quarter 2004 to the second quarter 2004 as a result of the increase in our recovered grade from TPS mining. This increase in production occurred despite the fact that our Cangalli mine was in operation only two months during the quarter. On June 25, 2004, we announced we had temporarily ceased mining operations at our Cangalli mine and plant as a result of road blockades by local citizens protesting various government policies in Caranavi, Bolivia, a town half way between La Paz and the company’s Cangalli mine. The roadblocks prevented the delivery of needed supplies and materials to the mine for operations. The same blockade, approximately 80 miles from Cangalli, also hampered operations of the power sub-station in Guanay, Bolivia. This sub-station provides electricity to Golden Eagle’s Cangalli operation, and the power failures have halted all mining and processing activities.

        On this same date, we also advised that recent events in Bolivia involving miners’ protests regarding the failure of pension programs for many mining companies and cooperatives had resulted in the intervention by the Ministry of Labor and INALCO, the governmental agency charged with regulating cooperatives, into the operations of the United Cangalli Gold Mining Cooperative, Ltd. (UCL). This governmental intervention against the cooperative, and potential legal issues surrounding ownership rights of the 5,000-acre mining concession Golden Eagle purchased from the United Cangalli Cooperative, have led the company to temporarily suspend operations at the Cangalli mine.

        Since this announcement, the road block at Caranavi has been lifted, however, we are still working with the Bolivian Ministry of Labor to resolve the pension issue with the UCL and as of the date of this filing, we have not yet resumed mining operations.

        We do, however, own an additional 44,900 acres in the Tipuani Gold District covering an 18-mile section of the ancient paleo-channel of the Tipuani River system that is not affected by the dispute between the United Cangalli Cooperative and the Bolivian government and we are investigating the possibility of moving the mine and plant to an alternate site on our property. Abandonment of our current mine may cause us to write off certain mining properties and development costs.

        Prior to the temporary suspension of operations, we had experienced considerable success with our TPS (Targeted Planar Subsidence) mining method during April and May. During April we produced 25% more gold than we did during March. During May we produced 49% more gold than we did in March, with 90% of our production coming from our underground TPS operation. During May, our TPS operations recovered a gold grade of 2.93 grams per tonne, which was approximately ten times greater than the gold recovery grade from our open pit mining operations and block caving operation.

        During TPS operations, the pay streaks are mined along their geologic plane. Initially, this mining took place along a 25-meter work face, and as the work face advanced, the roof behind was allowed to collapse, or subside, in a controlled manner similar to longwalling now being used in the coal industry. We have determined the average grade (based on the pay streak sampling program that resulted in our estimate of proven and probable reserves in our Cangalli underground mine) is 3.73 grams of gold per tonne, which is almost exactly 10 times higher than the average grade that has historically been recovered thus far. We anticipate, that if we are able to achieve a higher grade, we will be able to increase our revenue per ounce. During the first two quarters of 2004, prior to our temporary cessation of operations, we experienced a shake out period on TPS production and we consistently achieved grades in the range of 3 grams per tonne. We have made significant progress in developing this mining method and steadily increased TPS production. Once we reinitiate operations, we expect to be able to process 375 tonnes per day through our plant from our initial 25-meter workface, and we plan to expand this face as we complete our shake out period. As we improve TPS mining techniques, we plan to decrease our mining in our open pit operation, which should decrease the impact of adverse weather in the future.

        While we cannot guarantee that we will be able to reinitiate operations at our Cueva Playa plant, we believe that we will be able to resolve this issue with the UCL and the Bolivian Ministry of Labor. Should we be unable to resolve this issue on reasonable terms, we intend to move our mill and plant to another site on the 44,900 acres that we control on which the UCL is not a factor.

        Any movement of the plant, or any further expansion of the Cangalli production capacity, and our ability to continue to operate more efficiently, will require a capital investment we do not currently have available. However, we believe, but cannot offer assurance, that sufficient funding will be obtained on commercially reasonable terms.

        Although we believe we will be able to generate a significant amount of additional revenues from mining gold from the Cangalli properties and eventually gold and copper on our Buen Futuro property, there can be no assurance these revenues will be sufficient to result in a positive cash flow from our operations. Our ability to generate significant net revenues from mining operations alone depends in part on our ability to finance substantial additional capital expenditures for the expansion of our TPS mining system and the construction and operation of our gold and copper mine and plant at Buen Futuro.

        Our ability to achieve maximum production and generate a positive cash flow is subject to a number of risks, certain of which are addressed below under, “Risk Factors”, and in the “Risk Factors” section of our annual report on Form 10-K.

        Our ability to use our capital stock and other securities to raise working capital and to pay our indebtedness is subject to extensive federal and state regulation. Although we have exerted our best efforts to comply with all applicable regulations, there can be no assurances we have been able to do so. To the extent there may be any non-compliance, we may incur certain liabilities. No such claims have, to our knowledge, been asserted to date.

           Assets. As of June 30, 2004, we had total assets of $7,140,905. These assets contained current assets including cash and prepaid expenses, which decreased to $476,835 as of June 30, 2004 from $609,793 as of December 31, 2003. The decrease was primarily attributable to the decrease in cash from $127,761 as of December 31, 2003, to $30,731 as of June 30, 2004.

        Fixed assets include mining equipment of $4,883,410, including $3,600,000 for the purchase of the Gold Bar Mill and plant. Upon completion of the financing of $3.5 million, we intend to move the plant from Nevada and reassemble it on our Buen Futuro claim in Bolivia. Also included in fixed assets are mine development costs of $511,473 and $1,708,897 for acquisition costs of our mining prospects; $149,880 for office equipment; and $122,577 in vehicles and aircraft. The aircraft is a single engine Mooney aircraft that is being utilized in Bolivia for transportation between our properties. The total book value of property and equipment is $7,376,236; less accumulated depreciation and depletion of $(712,166), resulting in total property and equipment net of accumulated depreciation of $6,664,070 as of June 30, 2004. Total fixed assets increased $3,865,242 from $3,510,994 as of December 31, 2003, primarily as a result of acquisition of the Gold Bar mill and plant.

        Stockholders’ Equity. As of June 30, 2004, our stockholders’ equity was $4,512,186, which is a 350% increase from our stockholders’ equity of $1,000,512 at December 31, 2003. The $3,511,674 net increase in stockholders’ equity was primarily the result of the $3,600,000 value of shares issued during the quarter resulting from the issuance of 30 million restricted shares of common stock for the purchase of the Gold Bar mill and plant.

      Results of Operations

        The following sets forth certain information regarding Golden Eagle’s results of operations during the six months ending June 30, 2004 compared with the same period in 2003.

        During the first six months of 2004, we generated $900,986 in revenues from gold sales. Revenues from gold sales increased approximately 2.3 times revenues generated during the first six months of 2003 of $384,436. Revenue generated during 2004 represents only five months of production compared to six months of production in 2003 as a result of the temporary shut down of the Cangalli mine and plant at the beginning of June 2004. In addition to the gold quantities sold during the period, we have accumulated a gold inventory of 33, 913 grams or 1,090 troy ounces with a book value of $301,763, which was calculated at the cost of producing the gold. Had this gold in inventory been sold on June 30, 2004 at 90% of the spot market price of $395.80 per troy ounce, we would have generated an additional $388,280 in revenue during the quarter.

        Prior to the temporary suspension of operations in the beginning of June, revenues from our mine production covered our production expenses and overhead in Bolivia. However, we have not yet operated profitably on a consolidated basis. We have taken steps to decrease our corporate expenses through the conversion of debentures, reduction of debt and the implementation of internal cost controls, which have, and we believe will continue to, improve our operating results. We are also taking steps to increase our production from the Cangalli properties, once production resumes, through the use of different mining methods as described above. While we believe that our efforts have and will continue to show improved results, we cannot guarantee that we will be able to resume production at Cangalli, and, if we are able to resume production, we cannot guarantee that improved cash flow from our Cangalli operation will necessarily result in overall profitability for our operations as a whole in the near future, if at all. We will need to achieve significantly greater revenues, which will require additional capital investment, to offset our continuing general, administrative, and exploration and development expenses.

        Our production costs increased to $528,542 for the six months ended June 30, 2004, compared to $453,244 for the same period of 2003. However, as a percentage of revenue, production costs decreased to 59% during the first six months of 2004 from 125% during the first six months of 2003 due to the increased price of gold sold and a reduction in our cost per ounce to produce.

        Production taxes increased to $88,046 during the first six months of 2004 from $20,500 during the same period in 2003. Production taxes, in prior periods included value-added tax in Bolivia which is charged by the Bolivian government at a rate of 13% of sales of gold within the country. Beginning in the second quarter, we began exporting our gold to international markets. By exporting the gold instead of selling on it the Bolivian market, we became subject to a complimentary mining tax of 4% of sales and an export tax of 4% of sales, payable to the Bolivian Government instead of the production tax of 13%. These taxes may be offset or reduced in the future by taxes paid for the purchase of supplies.

        Exploration and development costs were $201,770 during the six months ended June 30, 2004 compared to $200,000 during the same period 2003. Exploration and development costs during 2003 were partially the result of a write down of previously capitalized mine development costs at Cangalli. The exploration costs during 2004 resulted from exploration and development work done in conjunction with the determination of reserves at Cangalli and Buen Futuro and the infrastructure work performed at Buen Futuro in advance of the relocation of the Gold Bar mill and plant to the site.

        General administrative expenses decreased to $890,220 during the first six months of 2004 from $1,786,128 during the first six months of 2003. The decrease was a result of tighter cost controls implemented both in Bolivia and in the US corporate offices and a reduction in stock issued for services for public relations and other services.

        Depreciation and depletion increased to $168,833 during the first half of 2004 from $24,508 during the same period 2003. The increase was due to the amortization of additional costs in 2004.

        Interest expense during the first six months of 2004 decreased by to $89,043 from $1,202,798 during the first six months of 2003. This decrease was due to the conversion of debentures and some related party debt to common stock in 2003. By converting to stock, we eliminated a substantial amount of interest on the debentures and notes and we expect to save the company over $2,000,000 in interest during 2004 alone.

        We generated a net loss for the first six months of 2004 of ($1,065,180), or $(.002) per share, compared to a net loss during the same period in 2003 of ($3,302,675), or $(.012) per share. This substantial decrease in net loss is the result of additional revenue, the reduction of cost per ounce of gold produced and the reduction of general and administrative, as well as interest expenses. We anticipate our net loss would have been further reduced had we continued production through June. While we can offer no assurance we will reach profitability in the near future, we believe that if we are able to resume production in a timely manner that the steps we have taken to increase production and control costs may allow us to reach profitability within a reasonable amount of time. However, until we reach profitability, we will require additional financing, which we have described above and for which there is no assurance we will secure.

      Plan of Operations

        Given our working capital shortages and current world market conditions for commodities, we have set the following priorities for the use of any working capital that may become available:

        Since we currently have a limited amount of cash on hand and a working capital deficit, our ability to implement any or all of these planned strategies requires significant infusions of working and operating capital. We have successfully raised needed capital in the past; however, we cannot assure we will be successful in raising capital through a secondary offering, private placements or debt financing.

        In order to assist in financing our planned operations, we continue to seek joint venture partners or other industry participants who would be interested in joining with us in the development of our Tipuani Gold District or Precambrian prospects. We cannot, however, offer any assurance that any potential joint-venture partners will be interested in evaluating these prospects or in negotiating a relationship with us on reasonable or acceptable terms. Any industry participant who may choose to enter into a joint venture with Golden Eagle would likely initially require a significant interest in the project in exchange for the necessary investment.

        In summary, we do not have sufficient liquidity or all of the necessary capital resources to carry out any substantial portion of our objectives as set out above. However, we did obtain sufficient liquidity, for example, to complete our third-phase plant expansion, bringing our plant capacity at our Cangalli mine to 3,500 tons per day and initiate our TPS mining program. Based on our past experience, we expect to be able to accomplish all of our objectives above as, and if, sufficient operating funds come available. Our current financial and other challenges, together with the risks associated with exploring for and mining gold in Bolivia, and the current price volatility of gold, all combine and may make it more difficult for us to raise much needed funds on reasonable terms.

      Risk Factors Attendant To Golden Eagle’s Operations

        Our operations are subject to significant risks and uncertainties. In making any investment decision regarding our common stock, any shareholder or potential investor should carefully consider the following significant factors and the other factors described in this quarterly report. The risks associated with an investment in our stock include, but are not limited to;

        Prospective investors and current shareholders should also be aware of the following prospective developments with respect to our operations and the hurdles that we continue to face in successfully accomplishing our business objectives. As a result of foregoing factors and those listed below, we have not yet produced gold in commercial quantities on a profitable basis.

      Impact of Inflation and Changing Prices

        Golden Eagle has not experienced any material impact from the effects of inflation during the last three annual operating periods, 2001, 2002 or 2003, and was not impacted during the first six months of 2004. Bolivian inflation, while astronomical at times during the early 1980‘s, has been relatively stable at less than 10% since 1985, and less than 8% per annum during the last three years

      Critical Accounting Policies

        In August 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 143, Accounting for Asset Retirement Obligations. SFAS No. 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The provisions of SFAS No. 143 are effective for fiscal years beginning after June 15, 2002. We have evaluated the impact of this statement and have adopted this standard. To date we have not taken any expenses based on this policy; however, we anticipate we will in the future.

        We have adopted SFAS 144, “Accounting for the Impairment and Disposal of Long-Lived Assets,” which requires long-lived assets held and used to be reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We review for the impairment of long-lived assets whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. An impairment loss would be recognized when the estimated future cash flows are less than the carrying amount of the asset and would be calculated based on discounted cash flows.

        Stock based compensation; from time to time we issue shares of common stock as payment for services to consultants and employees. Any stock issued for this purpose is priced and accounted for at the actual closing market price on the day of issue. The total number of shares issued times the closing stock price is booked as an expense.

        Non-cash impact of share-for-share options exchange; Our Board of Directors may occasionally grant options to our officers. The vesting period for options granted is one year and a non-cash option expense is booked at the time the options are granted. At the time options are exercised, the grantee may exercise shares in a like-kind, share-for-share exchange for net stock issued to them at the market price of the stock on the date of the transaction. The price is multiplied by the total net number of shares that are received to come up with the compensation expense.

        Mineral exploration costs are expensed as incurred. Mine infrastructure development costs incurred prior to establishing proven and probably reserves are expensed. When it has been determined a mineral property can be economically developed, the costs incurred to develop such property, including costs to further delineate the ore body and remove overburden to initially expose the ore body, are capitalized as incurred and are amortized using the units-of-production (“UOP”) method over the estimated life of the ore body based on estimated recoverable ounces mined from proven and probable reserves. If no mineable ore body is discovered, such costs are expensed.

        To the extent development costs benefit the entire ore body, they are amortized over the estimated life of the ore body. Costs incurred to access specific ore blocks or areas that only provide benefit over the life of that area are amortized over the estimated life of that specific area. The capitalized cost basis, subject to depletion expense, are calculated on a formula based on the number of tons of ore that are expected to be mined against the total tons in proven and probable reserves and extrapolated to the number of tons in the area of influence of the mine.

        Mineral interests and other intangible assets include acquired mineral rights and royalty interests in production, development and exploration stage properties. The amount capitalized related to a mineral or royalty interest represents its fair value at the time it was acquired.

        Intangible assets related to mineral interests represent mineral rights for parcels of land not owned fee simple by us. Intangible assets represent mineral rights related to production, development or exploration stage properties, and the value of such intangible assets is primarily driven by the nature and amount of mineralized material believed to be contained, or potentially contained, in such properties. Production stage mineral interests represent interests in operating properties that contain proven and probable reserves. Development stage mineral interests represent interests in properties under development that contain proven and probable reserves. Exploration stage mineral interests represent interests in properties that are believed to potentially contain mineralized material consisting of (i) other mineralized material such as inferred material within pits; measured, indicated and inferred material with insufficient drill spacing to qualify as proven and probable reserves; and inferred material in close proximity to proven and probable reserves; (ii) around-mine exploration potential such as inferred material not immediately adjacent to existing reserves and mineralization but located within the immediate mine infrastructure; (iii) other mine-related exploration potential that is not part of measured, indicated or inferred material and is comprised mainly of material outside of the immediate mine area; or (iv) greenfields exploration potential that is not associated with any other production, development or exploration stage property, as described above.

        Intangible assets associated with production stage mineral and royalty interests are amortized over the life of the mine using the UOP method in order to match the amortization with the expected underlying future cash flows. As a result, intangible assets associated with development stage mineral interests are not amortized until such time as the underlying property is converted to the production stage. With respect to intangible assets associated with exploration stage mineral interests, (i) the excess of the carrying value over the residual value of intangible assets related to other mineralized material, around-mine exploration potential and other mine-related exploration potential is amortized on a straight-line basis over the period that the we expect to convert, develop or further explore the underlying properties (which period is generally equal to the applicable life of the mine); and (ii) the excess of the carrying value over underlying the residual value of intangible assets related to greenfields exploration potential is amortized on a straight-line basis over the period in which we expect to complete the exploration process.

        Residual values for exploration stage mineral interests represent the expected fair value of the interests at the time we plan to convert, develop, further explore or dispose of the interests. The residual values can range from zero to 100% of the gross carrying value of the respective exploration stage mineral interests. Residual values are determined for each individual property based on the fair value of the exploration stage mineral interest, and the nature of, and the Company’s relative confidence in, the mineralized material believed to be contained, or potentially contained, in the underlying property. Such values are based on (i) discounted cash flow analyses for those properties characterized as other mineralized material and around-mine exploration potential, and (ii) recent transactions involving similar properties for those properties characterized as other mine-related exploration potential and greenfields exploration potential. Based on its knowledge of the secondary market that exists for the purchase and sale of mineral properties, the Company believes that both methods result in a residual value that is representative of the amount that the Company could expect to receive if the property were sold to a third party. When an exploration stage mineral interest is converted to a development or production stage mineral interest, the residual value is reduced to zero for purposes of calculating UOP amortization.

      Effect of New Accounting Pronouncements

        The Emerging Issues Task Force (“EITF”) formed a committee (“Committee”) to evaluate certain mining industry accounting issues, including issues arising from the application of SFAS No. 141, “Business Combinations” (“SFAS No. 141”) and SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”) to business combinations within the mining industry, accounting for goodwill and other intangibles and the capitalization of costs after the commencement of production, including deferred stripping. The issues discussed also included whether mineral interests conveyed by leases represent tangible or intangible assets and the amortization of such assets. In March 2004, the EITF reached a consensus, subject to ratification by the Financial Accounting Standards Board (“FASB”), that mineral interests conveyed by leases should be considered tangible assets. The EITF also reached a consensus, subject to ratification by the FASB, on other mining related issues involving impairment and business combinations.

        On March 31, 2004, the FASB ratified the consensus of the EITF on other mining related issues involving impairment and business combinations. This did not have an impact on our financial statements since it did not change our accounting. The FASB also ratified the consensus of the EITF that mineral interests conveyed by leases should be considered tangible assets subject to the finalization of a FASB Staff Position (“FSP”) in this regard.

        On April 30, 2004, the FASB issued a FSP amending SFAS No. 141 and SFAS No. 142 to provide that certain mineral use rights are considered tangible assets and that mineral use rights should be accounted for based on their substance. The FSP is effective for the first reporting period beginning after April 29, 2004. We have adopted the FSP effective April 1, 2004. As a result, we have reclassified all of our mineral interests conveyed by leases from Mineral interests and intangible assets to Mining Properties in our balance sheets and have ceased amortizing exploration stage mineral interests prior to the commencement of production. The Committee is continuing its evaluation of mining industry accounting issues, which may have an impact on our accounting in the future.

        In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.” FASB No. 4 required all gains or losses from the retirement of debt to be classified as extraordinary items net of income taxes. The standard requires that gains and losses from the retirement of debt be classified as ordinary items unless they are unusual or infrequent or meet the specific criteria for treatment as an extraordinary item. This statement is effective January 1, 2003. We do not anticipate that the adoption of this statement will have a material effect on its financial position or results of operations.

        In July 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” This Statement addresses financial accounting and reporting for costs associated with exit or disposal activities. “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)". This Statement requires recognition of a liability for a cost associated with an exit or disposal activity when the liability is incurred, as opposed to when the entity commits to an exit plan. This plan is to be applied prospectively to exit or disposal activities initiated after December 31, 2002. We do not anticipate that the adoption of this statement will have a material effect on its financial position or results of operations. We have not yet determined the impact of the adoption of this statement.

        In December 2002, the FASB approved Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure — an amendment of FASB Statement No. 123” This amends Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (SFAS No. 123) to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation.  This statement also amends the disclosure requirements to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results.  It is effective for financial statements for fiscal years ending after December 15, 2002. We will continue to account for stock based compensation using the methods detailed in the stock-based compensation accounting policy. We do not anticipate that the adoption of this statement will have a material effect on its financial position or results of operations.

        In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement No. 133 on Derivative Instruments and Hedging Activities” (“SFAS No. 149”). SFAS No. 149 amends certain portions of SFAS No. 133 and is effective for all contracts entered into or modified after June 30, 2003 on a prospective basis. SFAS No. 149 is not expected to have a material effect on the results of operations or financial position of Golden Eagle because we currently have no derivatives or hedging contracts.

        In June 2003, the FASB approved SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity. SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. This Statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. We have adopted the provisions of SFAS No. 150 and applied these provisions to our Buen Futuro contract obligations.

      Going Concern Considerations

        The financial statements accompanying this report have been presented assuming Golden Eagle will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We had stockholders’ equity of $4,732,186 on June 30, 2004 and $1,000,512 on December 31, 2003, and have incurred substantial losses of ($37,382,646) since our inception. We presently have one producing plant and mine at which operations have been temporarily suspended. We will require significant additional financing to either relocate our existing mine and plant if we are unable to resume operations or to further develop the existing mine and plant, satisfy outstanding obligations, and to begin gold and copper production at Buen Futuro. Unless Golden Eagle successfully obtains suitable significant additional financing arrangements, or begins generating sufficient revenues from its mining operations, there is a concern about our ability to continue as a going concern. Our plans to address these matters include the use of private placements of our stock in reliance on exemptions to registration found in Sections 4(2) and 4(6) of the Securities Act of 1933, obtaining short-term loans, seeking suitable joint venture relationships, and by increasing the production levels at our existing operation and commencing mining operations at other claims owned by us or on properties to be acquired by us. Our financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

      Controls and Procedures

        As required by Rule 13a-15 under the Securities Exchange Act of 1934, within the 90 days prior to the filing date of this report, we carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Principal Financial and Accounting Officer. Following this inspection, these officers concluded that the Company’s disclosure controls and procedures are effective. There have been no significant changes in the Company’s internal controls or in other factors, which could significantly affect internal controls subsequent to the date the Company carried out its evaluation.

        Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Company reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and the Company’s Principal Financial Officer as appropriate, to allow timely decisions regarding required disclosure.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

        In January 2004, a lawsuit was initiated against Golden Eagle relating to stock transactions occurring in 1996 between a former officer and a stockbroker. The matter is filed in the District Court for the City and County of Denver, Colorado, and is entitled: Geiger v. Golden Eagle International, Inc. and Ronald A. Knittle, Civ. No. 03CV9390. On March 2, 2004, we filed a Motion to Dismiss plaintiff’s complaint in which we state that plaintiff’s claims are barred by the statute of limitations, or are barred based on the doctrine of issue preclusion because those issues were previously decided against the plaintiff by an administrative law judge in a case brought against Mr. Geiger and others by the SEC: In Re Kirby, Release No. 8174 Admin. Proc. File No. 3-9602 (2003). Golden Eagle does not believe that plaintiff’s complaint has merit. On April 14, 2004, the court granted in part Golden Eagle’s motion to dismiss the claims, leaving only a single remaining claim against Golden Eagle. Golden Eagle has filed its answer with the District Court denying all material allegations by the plaintiff. Golden Eagle intends to defend itself vigorously and believes that the Plaintiff will not prevail. Trial on this matter is expected to occur in the first half of 2005.

Item 2. Changes in Securities

        During the six months ending June 30, 2004, we used our common stock directly to raise capital and to satisfy some of our obligations. We issued a total of 10,290,532 restricted common shares for cash to unaffiliated, accredited investors, the majority of whom were existing shareholders, at between $.06 and $.11 per share, to raise $812,970. We also issued an additional 2,836,669 shares of common stock valued at $353,882, based on the prevailing market price, of $.093 to $.185 for our shares on the date of issuance, in exchange for services provided. During the second quarter we also issued 30,000,000 shares of our restricted common stock valued at $3,600,000 for the purchase of the Gold Bar mill and plant as previously described. These offers and sales were accomplished pursuant to the exemptions from registration found in Sections 4(2) and 4(6) of the Securities Act of 1933, as amended, and the rules there under, without general advertising or other form of public solicitation. Each of the investors represented to us that they were accredited investors and that they acquired the securities for investment purposes only and without a view toward further distribution. The funds received from these investors were used to satisfy a portion of Golden Eagle’s working capital obligations associated with its exploration, evaluation, plant construction and mine development activities in Bolivia. There was no underwriter involved in these transactions, and no commissions or underwriting discounts were paid.

        The following chart gives the above information in graphic form:

        As a subsequent event on August 10, 2004 we filed a Form S-8 registration statements with the Securities and Exchange Commission relating to the Golden Eagle International, Inc. 2004 Employee and Consultant Stock Compensation Plan. Under this filing we registered to issue up to 20,000,000 shares in the future under this plan.

Item 3. Defaults upon Senior Securities

      None.

Item 4. Submission of Matters to a Vote of Security Holders

      None.

Item 5. Other Information

      None.

Item 6. Exhibits and Reports on Form 8-K:

(a)     Exhibits required by Item 601 of Regulation SB

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Golden Eagle has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

        Pursuant to the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Golden Eagle and in the capacities and on the dates indicated.

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Golden Eagle International, Inc.
Notes to Consolidated Financial Statements
(Unaudited)

      Note A – Basis of Presentation

      Note B — Organization and Nature of Business

      Going Concern Considerations

      Reclassifications

      Note C — (Loss) Per Share

      Note D — Issuance of Common Stock

      Note E – Statement of Cash Flows Information and Supplemental Non-Cash Financing Activities

      Note F – Pronouncements

      Note G – Notes Payable

      Note H – Litigation

      Note I – Subsequent Events

      Note J – Contingencies

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