Document:

Unassociated Document

    TERM
      SHEET

     

    

    This
      Term
      Sheet (the “Term Sheet”) dated as of the 2nd day of June 2007 (the “Effective
      Date”), confirms certain preliminary understandings between Platinum Diversified
      Mining Inc., a Cayman Islands corporation (“PDM”); and Golden Eagle
      International, Inc., a Colorado corporation (“Golden Eagle”), for (a) the
      purchase by PDM or an affiliate of PDM (the “Purchaser”) from Golden Eagle and
      certain of its subsidiaries and affiliates (collectively, the “Sellers”), or any
      of them, of the Buen Futuro mining concession and associated surface rights
      in
      eastern Bolivia (the “Buen Futuro Concession”), and the mining facilities,
      production facilities, buildings, inventories, machinery, equipment, contracts,
      permits, plans, reports, data, surveys, logs, documents and other tangible
      and
      intangible property and other assets related to the operations of Sellers
      pursuant to one or a series of transactions, including, but not limited to,
      the
      mining operations of Sellers related to the Buen Futuro Concession, but
      specifically excluding (i) the Gold Bar mill and plant located in Eureka,
      Nevada, United States (the “Gold Bar Mill”) and (ii) certain other assets (the
“Excluded Assets”) consisting of certain gold placer deposits and related
      facilities located on the Cangalli properties or the Precambrian properties
      in
      Bolivia operated by Sellers (the “Mining Assets”), and (b) the establishment of
      a joint venture in respect of six mining concessions and related surface rights
      (other than the Buen Futuro Concession) in eastern Bolivia that surround the
      Buen Futuro Concession and are contiguous to each other, but excluding the
      Gold
      Bar Mill and the Excluded Assets (the “Joint Venture Assets”), owned by any one
      or more of Sellers (collectively, the “Transaction”). Except as specifically set
      forth in the Binding Provisions (defined below) of this Term Sheet, PDM and
      Golden Eagle understand that (a) the matters set forth in this Term Sheet
      are preliminary in nature and do not contain all of the terms and conditions
      necessary for the consummation of the Transaction and (b) neither PDM nor
      Golden Eagle or any one or more of Sellers shall be bound by all or any portion
      of the Transaction unless and until each of PDM and Sellers (or any of them)
      agree upon and execute mutually satisfactory written and definitive documents
      with regard to the Transaction (the “Definitive Agreements”).

     

    I.  SUMMARY
      OF TRANSACTION

     

    PDM
      and
      Golden Eagle agree on the following preliminary, non-binding understandings
      with
      regard to the Transaction (the “Non-Binding Provisions”):

     

    
      	
              Transaction
                Structure:

            	
              Prior
                to the consummation of the Transaction, Golden Eagle will form a
                new
                Bolivian entity (the “Bolivian Purchase Entity”) and transfer the Mining
                Assets into the Bolivian Purchase Entity. In addition, PDM and Golden
                Eagle anticipate that the Joint Venture Assets will be transferred
                into a
                new Bolivian entity (the “Bolivian Joint Venture Entity”) in a manner
                mutually agreed between PDM and Golden Eagle. 

               

              PDM
                and Golden Eagle currently anticipate that the Transaction will be
                structured as a series of separate arrangements generally described
                as
                follows:

               

              a. Stock
                Purchase. Purchaser will purchase from Sellers, and Sellers will sell
                to Purchaser, 100% of the issued and outstanding shares of the Bolivian
                Purchase Entity. The Bolivian Purchase Entity will own only the Mining
                Assets free and clear of encumbrances (other than encumbrances mutually
                agreed between PDM and Golden Eagle), and will have no liabilities
                unless
                otherwise specifically agreed between PDM and Golden Eagle and set
                forth
                in the Definitive Agreements. Purchaser shall have no obligation
                to
                commence or continue any operations in respect of the Mining Assets
                owned
                by the Bolivian Purchase Entity.

            

    

     

     

    
      
         

      

      
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              b. Joint
                Venture. The Joint Venture Assets will be owned by the Bolivian Joint
                Venture Entity. The Bolivian Joint Venture Entity will own the Joint
                Venture Assets free and clear of encumbrances (other than encumbrances
                mutually agreed between PDM and Golden Eagle), and will have no
                liabilities unless otherwise specifically agreed between PDM and
                Golden
                Eagle and set forth in the Definitive Agreements. The Bolivian Joint
                Venture Entity will be owned by a joint venture to be owned 60% by
                PDM or
                its subsidiaries and affiliates and 40% by Golden Eagle or its
                subsidiaries and affiliates (the “Joint Venture”). The Joint Venture
                initially will be operated by a committee consisting of five persons,
                three of whom will be appointed by PDM and two of whom will be appointed
                by Golden Eagle (the “Management Committee”). The size and composition of
                the Management Committee will be modified from time to time to reflect
                any
                percentage ownership changes in the Joint Venture.

               

              c. Gold
                Bar Mill Option. Sellers (or any of them) will grant to Purchaser an
                option for the purchase of the Gold Bar Mill (the “Option”). The Option
                will remain effective for a period of two years after the closing
                of the
                portion of the Transaction relating to the Gold Bar Mill (the “Option
                Period”). Purchaser shall have the right to exercise the Option at any
                time during the Option Period.

            
	 	 
	
              Purchase,
                Sale and Contribution:

            	
              The
                purchase and sale of the Bolivian Purchase Entity, the transfer of
                the
                Joint Venture Assets to the Bolivian Joint Venture Entity and the
                formation of the Joint Venture and the Option in respect of the Gold
                Bar
                Mill, as set forth in the applicable Definitive Agreements, will
                be
                structured as follows:

               

              a. Bolivian
                Purchase Entity. Purchaser will purchase from Sellers, and Sellers
                will sell to Purchaser, 100% of the issued and outstanding shares
                of the
                Bolivian Purchase Entity. 

               

              b. Joint
                Venture Assets. Sellers (or any of them) will contribute the Joint
                Venture Assets to the Bolivian Joint Venture Entity to be held by
                the
                Joint Venture in exchange for its or their 40% ownership interest
                in the
                Joint Venture.

               

              c. Gold
                Bar Mill. In the event that Purchaser exercises the Option in respect
                of the Gold Bar Mill, Sellers (or any of them) will purchase the
                Gold Bar
                Mill free and clear of any and all encumbrances. Sellers (or any
                of them)
                will remove or cause to be removed all encumbrances from the Gold
                Bar Mill
                on or prior to the closing of the purchase and sale of the Gold Bar
                Mill
                pursuant to the Option.

            

    

     

     

    
      
         

      

      
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              Consideration:

            	
              The
                consideration to be paid by Purchaser for the all of the issued and
                outstanding shares in the Bolivian Purchase Entity, the interest
                of
                Purchaser in the Joint Venture, and the Option in respect of the
                Gold Bar
                Mill will be structured as follows as set forth in the applicable
                Definitive Agreements:

               

              a. Bolivian
                Purchase Entity. The final total consideration to be paid by Purchaser
                to Sellers for the purchase of all of the issued and outstanding
                shares in
                the Bolivian Purchase Entity will be determined as follows (the “Purchase
                Price”):

               

              i. Cash
                Payment. Upon the closing of the portion of the Transaction related
                to
                the purchase of all of the issued and outstanding shares of the Bolivian
                Purchase Entity, Purchaser will make a cash payment to Sellers (or
                any of
                them) of US$5,000,000.00 (the “Cash Payment”). 

               

              ii. PDM
                Shares. In addition to the Cash Payment, upon the closing of the
                portion of the Transaction related to the purchase of 100% of the
                issued
                and outstanding shares of the Bolivian Purchase Entity, PDM will
                issue to
                Sellers (or any of them) 1,000,000 ordinary shares in PDM valued
                at
                US$8.00 per share (the “PDM Purchase Price Shares”) and a warrant (the
                “Purchase Price Warrant”) to purchase 1,000,000 ordinary shares in PDM at
                an exercise price of US$8.00 per warrant share (the “Purchase Price
                Warrant Shares”). The Purchase Price Warrant will have a term of three
                years from the date of issue. The PDM Purchase Price Shares, the
                Purchase
                Price Warrant and the Purchase Price Warrant Shares will not be registered
                under the Securities Act of 1933, as amended (the “Securities Act”), but
                will be issued to Sellers under one or more exemptions from registration
                under the Securities Act. Sellers will not distribute all or any
                portion
                of the PDM Purchase Price Shares, the Purchase Price Warrant or the
                Purchase Price Warrant Shares to any other person or entity. The
                PDM
                Purchase Price Shares, the Purchase Price Warrant and the Purchase
                Price
                Warrant Shares will be subject to certain resale restrictions, and
                the
                Definitive Agreements will set forth the resale restrictions in respect
                of
                the PDM Purchase Price Shares, the Purchase Price Warrant and the
                Purchase
                Price Warrant Shares. Purchaser anticipates that the PDM Purchase
                Price
                Shares and the Purchase Price Warrant Shares will be tradable on
                the
                Alternative Investment Market of the London Stock Exchange plc (the
                “AIM”). The PDM Purchase Price Shares and the Purchase Price Warrant
                Shares will be subject to a 12-month lock-up period.

               

              iii. Production
                Payment. In addition to the Cash Payment, the Purchase Price Warrant
                and the PDM Purchase Price Shares, if and when Purchaser commences
                production in respect of the Mining Assets owned by the Bolivian
                Purchase
                Entity, the Sellers (or any of them) will be entitled to receive
                an amount
                (the “Production Payment”) equal to 40% of the net profits from the sale
                of minerals produced from the Mining Assets held by the Bolivian
                Purchase
                Entity, up to a maximum amount equal to the sum of (A) US$15,000,000.00
                and (B) 2,000,000 ordinary shares in PDM valued atUS$8.00 per share(the
                “PDM Production Payment Shares”). The calculation of the Production
                Payment and the terms of payment of the Production Payment by Purchaser
                to
                Sellers (or any of them) will be set out in the Definitive Agreements.
                The
                Production Payment initially will be paid 50% in cash and 50% in
                PDM
                Production Payment Shares. Once the cash portion or the PDM Production
                Payment Shares portion of the Production Payment has been exhausted,
                the
                Production Payment will be paid only in PDM Production Payment Shares
                or
                cash, as applicable, until the entire amount of the Production Payment
                has
                been paid. In addition, PDM will grant to the Sellers (or any of
                them) who
                or which receive PDM Production Payment Shares a warrant (the “Production
                Payment Warrant”) to purchase the number of PDM Production Payment Shares
                issued as part of the Production Payment, up to a maximum of 2,000,000
                ordinary shares of PDM valued at US$8.50 per share (the “Production
                Payment Warrant Shares”). Each Production Payment Warrant will have a term
                of three years from the date of issue. The PDM Production Payment
                Shares,
                the Production Payment Warrant and the Production Payment Warrant
                Shares
                will not be registered under the Securities Act, but will be issued
                to
                Sellers under one or more exemptions from registration under the
                Securities Act. Sellers will not distribute all or any portion of
                the PDM
                Production Payment Shares, the Production Payment Warrant or the
                Production Payment Warrant Shares to any other person or entity.
                The PDM
                Production Payment Shares, the Production Payment Warrant and the
                Production Payment Warrant Shares will be subject to certain resale
                restrictions, and the Definitive Agreements will set forth the resale
                restrictions in respect of the PDM Production Payment Shares, the
                Production Payment Warrant and the Production Payment Warrant Shares.
                Purchaser anticipates that the PDM Production Payment Shares and
                the
                Production Payment Warrant Shares will be tradable on the AIM. The
                PDM
                Production Payment Shares and the Production Payment Warrant Sharers
                may
                be subject to a lock-up period not to exceed 12 months, as set out
                in the
                Definitive Agreements.

            

    

     

     

    
      
         

      

      
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              The
                Purchase Price will be subject to customary adjustments, as may be
                established in the Definitive Agreements. PDM and Golden Eagle, for
                itself
                and the Sellers, agree that the Purchase Price, as adjusted, is full
                and
                fair compensation for the Mining Assets.

               

              b. Joint
                Venture Assets. Golden Eagle or its subsidiaries and affiliates will
                receive a 40% interest in the Joint Venture in exchange for the Joint
                Venture Assets contributed by Golden Eagle or its subsidiaries to
                the
                Bolivian Joint Venture Entity to be owned by the Joint Venture. PDM
                or its
                subsidiaries or affiliates will receive a 60% interest in the Joint
                Venture in exchange for the Purchase Price. As additional consideration,
                PDM or its subsidiaries and affiliates will pay the first US$5,000,000.00
                of costs and expenses incurred by the Joint Venture in respect of
                the
                exploration or exploitation of the Joint Venture Assets (the “Free Carry
                Amount”); provided,
                that PDM and its subsidiaries and affiliates shall have no obligation
                to
                incur any costs or expenses in respect of the exploration or exploitation
                of the Joint Venture Assets. Once PDM or its subsidiaries and affiliates
                have expended the Free Carry Amount, any additional amounts will
                be paid
                by PDM and its subsidiaries and affiliates and Golden Eagle and its
                subsidiaries and affiliates, as applicable, in proportion to its
                respective percentage ownership in the Joint Venture. Failure by
                PDM or
                its subsidiaries and affiliates, or Golden Eagle or its subsidiaries
                or
                affiliates, as applicable, to make its respective proportionate capital
                contributions will result in proportionate dilution of its percentage
                interest in the Joint Venture. In the event that the percentage interest
                of PDM and its subsidiaries and affiliates or Golden Eagle and its
                subsidiaries and affiliates, as applicable, in the Joint Venture
                falls
                below 20%, the interest of PDM and its subsidiaries and affiliates
                or
                Golden Eagle and its subsidiaries and affiliates, as applicable,
                in the
                Joint Venture automatically will convert into a ten percent net profits
                interest only.

               

              c. Gold
                Bar Mill. Pursuant to the terms of the Option, Purchaser will have the
                right to purchase the Gold Bar Mill for an amount equal to the
                demonstrated book value of the Gold Bar Mill, currently estimated
                at
                US$3,940,000.00 (the “Gold Bar Mill Purchase Price”). Upon the closing of
                the portion of the Transaction relating to the Option, Purchaser
                will pay
                to Seller US$500,000.00 (the “Option Fee”). The Option Fee is
                nonrefundable; provided,
                however,
                in the event that Purchaser exercises the Option, the Option Fee
                will be
                credited against the Gold Bar Mill Purchase Price. Sellers will not
                seek
                offers for the sale of the Gold Bar Mill during the period from the
                Effective Date through the termination of the Option Period (the
                “Non-Solicitation Period”); provided,
                however
                if
                during the Non-Solicitation Period, Sellers receive an unsolicited
                bona
                fide
                offer from an unaffiliated third party to purchase the Gold Bar Mill
                for
                an amount in excess of the Gold Bar Mill Purchase Price (an “Unsolicited
                Purchase Offer”), then Purchaser will have a right of first refusal (the
                “Right of First Refusal”) to purchase the Gold Bar Mill for an amount
                equal to 102% of such Unsolicited Purchase Offer (the “Unsolicited
                Purchase Offer Price”). In the event that Purchaser exercises the Right of
                First Refusal, the Option Fee, if already paid, will be credited
                against
                Unsolicited Purchase Offer Price. Any purchase by Purchaser of the
                Gold
                Bar Mill by Purchaser, whether pursuant to the Option or based on
                the
                exercise of the Right of First Refusal, will be completed only upon
                the
                close of the Transaction 

            
	 	 

    

     

    
      
         

      

      
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              Board
                Representation:

            	
              Upon,
                but only upon the consummation of all arrangements comprising the
                Transaction as set forth in the Definitive Agreements, Golden Eagle
                will
                receive the right to nominate one member to the board of directors
                of PDM
                and the current board of directors of PDM will recommend his
                election.

            
	 	 
	
              Employees:

            	
              Neither
                PDM nor Purchaser will have any obligation to retain any employees
                of
                Sellers. Any obligation of PDM or Purchaser in respect of employees
                of
                Sellers will be set forth in the Definitive Agreements.

            
	 	 
	
              Other
                Provisions:

            	
              The
                Definitive Agreements will contain additional terms and conditions
                standard to transactions of the type contemplated in this Term Sheet,
                including, as applicable, representations and warranties (including
                ownership of the Mining Assets, the Joint Venture Assets and the
                Gold Bar
                Mill; condition of the Mining Assets, the Joint Venture Assets and
                the
                Gold Bar Mill; adequacy of the Mining Assets, the Joint Venture Assets
                and
                the Gold Bar Mill for the operation of the Mining Assets, the Joint
                Venture Assets and the Gold Bar Mill in the ordinary course; compliance
                with laws; absence of litigation; authority to enter into Definitive
                Agreements (including approval of the shareholders of any of the
                Sellers);
                accuracy of financial statements; conduct of the business related
                to the
                Mining Assets, the Joint Venture Assets and the Gold Bar Mill in
                the
                ordinary course; environmental compliance; ownership of intellectual
                property; no infringement of the intellectual property rights of
                third
                parties; due incorporation, existence and good standing of Sellers,
                as
                applicable, in the state of its incorporation and the jurisdictions
                in
                which it does business; status of permits necessary for the operation
                of
                the Mining Assets, the Joint Venture Assets and the Gold Bar Mill;
                operation of the business comprising the Mining Assets, the Joint
                Venture
                Assets and the Gold Bar Mill in accordance with all applicable licenses,
                permits and other regulatory approvals; payment of taxes; benefit
                levels
                of affected employees; employee relations; enforceability of contracts;
                liabilities; insurance coverage; debt obligations and commitments;
                and no
                conflict with other obligations); indemnity provisions; no material
                adverse change; regulatory and contractual consents; non-compete
                provisions; and dispute resolution procedures. The Definitive Agreements
                will be governed by the laws of the State of Colorado. Any disputes
                arising under the Definitive Agreements will be subject to the
                jurisdiction of the state courts of Colorado and the federal courts
                of the
                United States, located in Denver, Colorado.

            
	 	 

    

     

    
      
         

      

      
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              Conditions
                to Closing:

            	
              Consummation
                of the Transaction will be subject to conditions to closing standard
                to
                transactions of this type, including: (a) no material adverse change
                in
                the assets, liabilities, or the financial or operating condition
                of the
                Mining Assets, the Joint Venture Assets and the Gold Bar Mill; (b)
                all
                approvals and consents shall have been obtained or waived, including
                all
                consents required by the AIM; (c) readmission of PDM to trading on
                the AIM
                upon completion of the Transaction; (d) all representations and warranties
                are correct on and as of the closing date; and (e) completion of
                due
                diligence to the satisfaction of Purchaser.

            
	 	 
	
              Closing
                Date:

            	
              PDM
                and Golden Eagle anticipate the execution of the Definitive Agreements
                on
                or before August 7, 2007. Subject to the completion or waiver of
                any
                conditions precedent to the closing of the Transaction, including
                approval
                of the Transaction by the PDM shareholders and the Golden Eagle
                shareholders, and readmission of PDM to trading on the AIM upon completion
                of the Transaction, PDM and Golden Eagle anticipate that the closing
                of
                the Transaction will occur on or before September 14, 2007 (the
                “Anticipated Closing Date”). The closing of the Transaction will occur
                upon the satisfaction or waiver of the conditions precedent set forth
                in
                the Definitive Agreements.

            

    

     

    II.  BINDING
      PROVISIONS

     

    In
      consideration of PDM and Golden Eagle entering into negotiations with regard
      to
      the Transaction, and the expenses to be incurred with regard to such
      negotiations, PDM and Golden Eagle agree that, upon execution of this Term
      Sheet, the following provisions shall be legally binding and enforceable as
      against PDM and Golden Eagle (the “Binding Provisions”):

     

    
      	
              Due
                Diligence:

            	
              In
                order to assist PDM in evaluating the proposed Transaction, Golden
                Eagle
                shall, and shall cause Sellers to, fully cooperate with and allow
                PDM and
                its legal counsel, auditors, accountants and other advisors full
                and
                complete access to Sellers and to the books and records, premises,
                tangible and intangible assets and operations of Sellers related
                to the
                Mining Assets, the Joint Venture Assets and the Gold Bar Mill, to
                enable
                PDM to perform its technical, legal and financial due diligence.
                Golden
                Eagle understands that these investigations will not affect the scope
                or
                validity of any of the representations and warranties to be made
                by
                Sellers in the Definitive Agreements in connection with the Transaction.
                PDM will begin its due diligence review within a reasonable period
                of time
                after the Effective Date, and will use commercially reasonable efforts
                to
                complete its due diligence review within 60 days after the Effective
                Date.
                PDM has no obligation to continue negotiations in respect of the
                Transaction if the due diligence evaluation, in its sole opinion,
                calls
                into question the feasibility of the Transaction.

               

              In
                order to assist Golden Eagle in evaluating the proposed Transaction,
                PDM
                shall, and shall cause Purchaser to, fully cooperate with and allow
                Golden
                Eagle and its legal counsel, auditors, accountants and other advisers
                access to the corporate and other books and records of PDM and the
                information filed by PDM with AIM.

            
	 	 
	
              Good
                Faith Negotiations:

            	
              Subject
                to the provisions of this Term Sheet, the parties shall negotiate
                in good
                faith toward the consummation of the Definitive Agreements. The parties
                will use good faith efforts to complete the negotiation of the Definitive
                Agreements on or before the Anticipated Closing Date. PDM will prepare
                the
                Definitive Agreements.

            
	 	 

    

     

    
      
         

      

      
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              Non-Solicitation
                and No-Shop Rule:

            	
              Following
                the execution of this Term Sheet and as an inducement to PDM to execute
                this Term Sheet, conduct due diligence and negotiate the Definitive
                Agreements, until the earlier of (a) the Anticipated Closing Date,
                and (b) the date of the execution of the Definitive Agreements, and
                (c) the termination of this Term Sheet upon not less than five (5)
                days’
                prior written notice from PDM to Golden Eagle (as applicable, the
“Term
                Sheet Termination Date”) Golden Eagle will, and will cause the Sellers and
                its and their respective officers, directors, employees, representatives
                and agents to, cease any and all discussions related to the sale
                of the
                Mining Assets, the Joint Venture Assets and the Gold Bar Mill, whether
                through the sale of assets, stock, membership interests, merger,
                consolidation or otherwise. In addition, Golden Eagle shall not,
                and shall
                cause the Sellers and any of its and their respective directors,
                officers,
                employees, agents or representatives not to (a) solicit or encourage,
                directly or indirectly, any inquiries, discussions or proposals for,
                (b) continue, propose or enter into any discussions or negotiations
                looking toward or (c) enter into any agreement or understanding
                providing for, the disposition of the Mining Assets or the Gold Bar
                Mill,
                or any assets or business comprising the Mining Assets, the Joint
                Venture
                Assets or the Gold Bar Mill, whether through the sale of assets,
                stock,
                membership interests, merger, consolidation or otherwise; nor shall
                any of
                such persons or entities provide any information to any person (other
                than
                to PDM and its agents and representatives) for the purpose of evaluating
                or determining whether to make or pursue any inquiries or proposals
                with
                respect to any such transactions. Notwithstanding the foregoing,
                Sellers
                may entertain an Unsolicited Purchase Offer for the Gold Bar Mill,
                subject
                to Purchaser’s Right of First Refusal.

            
	 	 
	
              Expenses:

            	
              Except
                as otherwise agreed in this Term Sheet, each of PDM, Golden Eagle,
                Sellers
                and Purchaser shall each bear its own fees and expenses, including,
                but
                not limited to, fees and disbursements of attorneys and financial
                or other
                advisors incurred in connection with the execution of this Term Sheet
                and
                the Definitive Agreements, and the transactions contemplated in this
                Term
                Sheet and the Definitive Agreements.

            
	 	 
	
              Entire
                Agreement:

            	
              These
                Binding Provisions constitute the entire binding agreement between
                the
                parties, superseding all prior oral or written agreements, understandings,
                representations and warranties, and courses of conduct and dealing
                between
                us on the subject matter hereof. Except as otherwise provided herein,
                the
                Binding Provisions may be amended or modified only by a writing executed
                by each of the parties hereto.

            
	 	 
	
              Non-Binding
                Provisions Not Enforceable:

            	
              The
                Non-Binding Provisions are not part of the Binding Provisions and
                therefore do not create or constitute any legally binding obligations
                between PDM, Purchaser, Golden Eagle and Sellers. Whether or not
                the
                Definitive Agreements are prepared, authorized, executed or delivered
                by
                the parties, neither PDM nor Golden Eagle shall have any liability
                to any
                other party to this Term Sheet or to Purchaser or Sellers based upon,
                arising from, or relating to the Non-Binding Provisions. No prior
                or
                subsequent course of conduct or dealing between the parties, oral
                communications or other actions not reduced to or reflected in a
                writing
                executed by the parties shall serve to modify the Binding Provisions,
                in
                any way or cause the Non-Binding Provisions or any provisions covering
                the
                same subject matter to become in any sense legally binding and
                enforceable.

            
	 	 

    

     

    
      
         

      

      
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              Governing
                Law:

            	
              The
                Binding Provisions shall be governed by and construed in accordance
                with
                the internal laws of the State of Colorado without regard to Colorado
                conflicts of law principles. PDM and Golden Eagle irrevocably submit
                to
                the jurisdiction of the state courts of Colorado and the federal
                courts of
                the United States located in Denver, Colorado, with regard to any
                dispute
                arising out of this Term Sheet or its interpretation.

            
	 	 
	
              Confidentiality
                and Public Statements:

            	
              a. PDM
                and Golden Eagle shall, and Golden Eagle shall cause the Sellers
                to,
                maintain in confidence all discussions with regard to the Transaction,
                including the existence and contents of this Term Sheet and all
                information about or relating to the proposed Transaction exchanged
                by a
                party in strict confidence, whether or not such information is marked
                or
                labeled in writing or identified orally as confidential or proprietary,
                all in accordance with the Confidentiality Agreement dated April
                23, 2007,
                between PDM and Golden Eagle.

               

              b. Except
                as and to the extent required by law, without the prior written consent
                of
                the other party, neither PDM nor Golden Eagle shall, and each shall
                direct
                their subsidiaries, affiliates, employees and representatives not
                to,
                directly or indirectly, make any public comment, statement or
                communication with respect to, or otherwise disclose or permit the
                disclosure of the nature of discussions regarding, the contemplated
                transactions between the parties or any of the terms, conditions
                or other
                aspects of the transaction proposed in this Term Sheet or any confidential
                information, except as agreed upon by the parties or already made
                public.

            
	 	 
	
              Termination:

            	
              The
                Binding Provisions of this Term Sheet and this Term Sheet shall terminate
                on the Term Sheet Termination Date. The termination of the Binding
                Provisions shall not affect the liability of a party for breach of
                any of
                the Binding Provisions prior to the termination. Upon
                termination of the Binding Provisions, neither party shall have any
                further obligations hereunder,
                except as stated in the Binding Provisions related to Expenses, Entire
                Agreement, Non-Binding Provisions Not Enforceable, Governing Law
                and
                Confidentiality and Public Statements, all of which shall survive
                any such
                termination.

            
	 	 
	
              Facsimile
                Signatures and Counterparts:

            	
              Any
                party to this Term Sheet may sign the Term Sheet and transmit the
                signed
                copy to the other party who agrees to accept it as if such document
                bore
                original signatures. This Term Sheet may be executed in one or more
                counterparts, each of which is deemed to be an original and all of
                which
                taken together constitute one and the same
                instrument.

            

    

    

    [Remainder
      of page intentionally left blank]

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    If
      you
      agree with the foregoing, please sign and date this Term Sheet in the space
      provided below to confirm the mutual agreements set forth in the Binding
      Provisions and return a signed copy to: Kevin W. Johnson, Holland & Hart
llp,
      555
      Seventeenth Street, Suite 3200, Denver, Colorado 80202, Facsimile No.: (303)
      713-6203.

     

    

    PLATINUM
      DIVERSIFIED MINING INC.

    
By:
      /s/
      Bobby E. Cooper

    Name:
      Bobby E. Cooper

    Title:
      President & CEO

    

    Acknowledged
      and agreed this 2nd day of June 2007:

     

    Golden
      Eagle International, Inc.

     

    By: /s/
      Terry
      C. Turner

    Name:
      Terry C. Turner

    Title: President
      & CEO

    

     

    
      
         

      

      
        9Unassociated Document

    

     

    CONSULTING,
      CONFIDENTIALITY AND 

    NON-DISCLOSURE
      AGREEMENT

    

    

    THIS
      AGREEMENT
      is
      entered into this 2nd
      day of
      June, 2007 by and between Golden
      Eagle International, Inc. (“GEII”), and
      its
      affiliated companies, with
      its
      principal place of business in Salt Lake City, Utah, and Santa Cruz, Bolivia;
      and Livstar
      Management Services Inc.,
      and its
      affiliated companies, with its principal place of business in Road Town,
      Tortola, British Virgin Islands (“Consultant”),
      and
      modifies an agreement between the same parties entered into on the
      18th
      of
      April, 2007.

    

    RECITALS:

    

    WHEREAS,
      GEII has
      the need currently, and has had the need in the recent past, of the professional
      consulting services of Consultant for exposure of GEII’s projects and general
      business to, and critical introductions to, investors, potential joint venture
      partners and others with the potential of purchasing GEII’s assets, or joint
      venturing with GEII, through the cash or equity payable to GEII, for the
      advancement and development of its projects; and, for other general financial,
      business and negotiating advice and assistance; however, Consultant is
      specifically prohibited from acting on GEII’s behalf as an agent, broker,
      dealer, or representative regarding GEII’s securities; and

    

    WHEREAS,
      GEII
      possesses certain properties, contracts, purchase agreements, contacts,
      information, data, processes, trade secrets, intellectual property, gold, copper
      and other mineral deposits, sites, claims, and other related items of a private,
      confidential and proprietary nature (“Disclosed Information”), which were
      unknown to Consultant prior to the disclosures made since March 1, 2007 prior
      to
      the signing of this Agreement, and subsequent thereto; and

    

    WHEREAS,
      all
      parties hereto are desirous of protecting the rights and confidentiality of
      GEII
      in the Disclosed Information mentioned above, and in observing all of the laws
      and regulations relative to fair disclosure of information; and

    

    WHEREAS,
      the
      parties are interested in seeing Consultant receive fair and equitable
      compensation for the services provided by Consultant, or to be provided by
      Consultant, to GEII, and Consultant is desirous of receiving from GEII the
      option to use any compensation received from GEII to purchase GEII’s common
      shares solely for the purpose of becoming a GEII shareholder. 

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    NOW
      THEREFORE,
      in
      consideration of mutual promises, the signing of this Agreement and the
      disclosure of the Disclosed Information, the sufficiency of which is hereby
      acknowledged, the parties agree and contract as follows:

    

    
      	
              1.

            	
              Consulting
                Services and Compensation:
                GEII agrees to pay Consultant the following compensation, as well
                as any
                out-of-pocket expenses Consultant may have incurred, or may incur,
                during
                its consultancy to GEII, within 30 days of the receipt by GEII of
                any
                amounts contemplated below, or within 30 days of any billing by
                Consultant, as fair and appropriate compensation for Consultant’s
                described services:

            

    

    

    
      	 	
              a.

            	
              Nine
                percent (9%) of the value, whether in cash, stock or the offset of
                cash or
                stock, of any and all amounts received by GEII for the sale or joint
                venture, whether through debt or equity, regarding any of GEII’s assets
                from any entity or individual introduced to GEII by Consultant, at
                the
                time that the amounts are received by GEII whether at closing or
                on an
                installment basis or a basis contingent on production or some other
                triggering event (“Consulting Services
                Fee”).

            

    

    

    
      	 	
              b.

            	
              An
                hourly rate of $100 for any business advice or consulting regarding
                any
                aspect of GEII’s business or operations or other matters relating to the
                sale or joint venturing of GEII’s assets (“Hourly
                Fee”).

            

    

    

    
      	 	
              c.

            	
              Consultant
                is specifically prohibited from acting on GEII’s behalf as an agent,
                broker, dealer or representative for the sale or placement of GEII’s
                securities. 

            

    

    

    
      	
              2.

            	
              Consultant’s
                Commitment to Purchase GEII’s Shares with Any Cash Paid to Consultant as a
                Consulting Services Fee:
                Consultant, as an accredited investor, agrees that it will purchase
                GEII’s
                restricted common shares with any cash paid to Consultant as a Consulting
                Services Fee, if and when those shares are available, or enter into
                a
                promissory note convertible to those common shares when available,
                with a
                term of 6 months from the moment that Consultant would be entitled
                to
                compensation, (after the expiration of which Consultant may elect,
                at its
                sole discretion, to accept the payment owed by GEII in cash), on
                the
                following basis:

            

    

    

    
      	 	
              a.

            	
              As
                to the Value of Any Amounts, in Cash or Stock, Given to GEII on Closing
                on
                the Purchase of Any of Its Assets or Commitment to Joint
                Venture.
                Common shares restricted pursuant to Rule 144, promulgated under
                the
                Securities Act of 1933, equal to the amount of the cash payment for
                a
                Consulting Services Fee owed by GEII to Consultant, times 75 percent
                (75%)
                of the average closing price of GEII’s common shares on the five trading
                days prior to the date on which GEII makes its public announcement
                that it
                has received a commitment from any entity or individual regarding
                any
                transaction contemplated under Paragraph 1 above; provided, however,
                that
                only those GEII shares that would be equal to the above formula for
                the
                cash compensation to which Consultant would be entitled as a Consulting
                Services Fee for the amount given at the time of closing shall be
                due and
                payable, and those shares shall not be due and payable to Consultant
                unless and until the transaction for which GEII has received the
                commitment, partially or completely, shall be consummated and a closing
                shall be held.

            

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
 

    
      	 	
              b.

            	
              As
                to the Value of Any Amounts, in Cash, Stock or an Offset to Cash
                or Stock,
                Given to GEII in Installment Payments or Production
                Payments.
                Common shares restricted pursuant to Rule 144, promulgated under
                the
                Securities Act of 1933, equal to the amount of cash payment owed
                by GEII
                to Consultant as a Consulting Services Fee on the installment or
                production payment, times 50 percent (50%) of the closing price of
                GEII’s
                common shares on the date that GEII receives any installment payment
                or
                production payment, from any entity or individual regarding any
                transaction contemplated under Paragraph 1 above; provided, however,
                that
                those GEII shares shall not be due and payable to Consultant unless
                and
                until the installment or production payments pursuant to the transaction
                for which GEII has received the commitment shall be received by
                GEII.

            

    

    

    
      	 	
              c.

            	
              GEII’s
                Requirements for Consultant to Purchase its Shares.
                Consultant’s exercise of the right to purchase GEII’s shares as described
                in Paragraphs 2(a) and 2(b) above will be contingent on the Consultant
                executing a subscription agreement acknowledging the restricted nature
                of
                the shares to be purchased, Consultant’s investment intent and
                Consultant’s investigation into GEII prior to exercising the right to
                purchase GEII’s shares, and making other representations normally
                contained in such a subscription agreement, including Consultant’s
                attestation to the accuracy and completeness of such
                representations.

            

    

    

    
      	 	
              d.

            	
              As
                to Cash Payable to Consultant.
                Consultant may require GEII to pay it in cash for any billable hours
                pursuant to Paragraph 1(b), as well as, and notwithstanding Paragraphs
                2(a) and 2(b) above, Consultant may demand partial payment up to
                $100,000
                in cash for any actual cash amount received at one time by GEII in
                excess
                of $3 million as compensation for the sale or joint venture of any
                GEII
                asset, which amount will be discounted from Consultant’s right to receive
                shares as set out in Paragraphs 2(a) and 2 (b) above.
                

            

    

    
      	 	 	 

    

    
      	
              3.
                

            	
              Access
                Through GEII:
                Consultant hereby expressly warrants and represents that it was initially
                introduced to the properties, contracts, purchase agreements, contacts,
                information, data, processes, trade secrets, intellectual property,
                gold
                and other minerals deposits, sites, claims, and other related items
                of a
                private, confidential and proprietary nature (“Disclosed Information”),
                which were unknown to it prior to the disclosure made prior to the
                signing
                of this Agreement, and subsequent thereto, by GEII; and that it will
                protect GEII’s interest and will consider GEII as the exclusive source of
                the Disclosed Information, and will further protect GEII’s interest as far
                as any future business relationship, or any other action, it may
                develop
                or may take in relation to the Disclosed Information, for a period
                of five
                years from the date of this
                Agreement.

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
 

    
      	
              4.

            	
              Non-Circumvention
                for Benefit:
                Consultant
                hereby agrees that neither it, nor any agent, employee, affiliated
                company, assign or other person known to it, will directly, indirectly
                or
                through any third party or intermediary, circumvent, or otherwise
                seek to
                influence, interfere with or gain any beneficial interest or other
                benefit, directly or indirectly in, to and from the Disclosed
                Information.

            

    

    

    
      	
              5.
                

            	
              Non-Disclosure
                and Regulation FD:
                Consultant
                hereby likewise agrees that it will not disclose, except if specifically
                authorized in writing by the President of GEII to do so, any Disclosed
                Information, or other information or opinions that it generates regarding
                GEII or the Disclosed Information, to any other person, firm or
                corporation, either directly or indirectly. It agrees that it has
                reviewed
                and understands Regulation FD (Fair Disclosure) promulgated by the
                SEC,
                and agrees to be bound to that Regulation in every regard with respect
                to
                GEII’s Disclosed Information, and that it will not act in the marketplace
                on any information so disclosed.

            

    

    

    
      	
              6.
                

            	
              Jurisdiction
                and Choice of Law:
                The parties agree that any dispute hereunder shall be governed by
                the laws
                of the State of Utah, which state shall have jurisdiction over the
                parties
                hereto. It is also agreed that any litigation in relation to this
                Agreement, or its enforcement, shall be brought only within the State
                or
                Federal courts located within Salt Lake County, State of Utah, and
                that
                the prevailing party may recover attorneys’ fees and costs of court. The
                parties agree that they are subject to service of process from such
                courts.

            

    

    

    
      	
              7.

            	
              No
                Amendment:
                This
                Agreement may not be amended except by a writing, signed by each
                of the
                parties, which writing sets forth as its express purpose the amendment
                of
                this Agreement.

            

    

    

    
      	
              8.

            	
              Agreement
                Term:
                The term of this Agreement is 1 year; provided, however, that for
                a
                five-year period after the expiration of this Agreement, any positive
                result, financial or other business-related transaction, or benefit,
                contemplated in Paragraph 1 above, naturally flowing to GEII from
                any of
                Consultant’s services provided during the one-year term of this Agreement,
                shall entitle Consultant to its Consulting Services Fee pursuant
                to
                Paragraph 1 above. 

            

    

    

    EXECUTED
      the day
      and year first written above.

     

    AGREED:

     

    GOLDEN
      EAGLE INTERNATIONAL, INC

     

    
      	
              BY:
                

            	
              /s/
                Terry C. Turner

            

    

    
      	 	
              Terry
                C. Turner, President & CEO

            

    

     

    LIVSTAR
      MANAGEMENT SERVICES, INC.

     

    
      	
              BY:
                

            	
              /s/David
                Lavigne

            

    

    
      	
               

            	
              Designated
                Agent

            

    

     

    
      
         

      

      
        4

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