UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB

(X )   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITES
       EXCHANGE ACT OF 1934

For the quarterly period ended              June 30, 1999
                               -----------------------------------------------

(  )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the transition period from   March 1, 1998       to   June 30, 1998
                               ----------------------    ----------------

Commission File number                      0-25989
                         ------------------------------------------------

                         PEPPERMILL CAPITAL CORPORATION
               --------------------------------------------------
               (Exact name of registrant as specified in charter)


             Nevada                                      98-0186841
 --------------------------------                   -------------------
(State or Other Jurisdiction of                        (I.R.S. Employer
Incorporation or Organization)                        Identification No.)

2500 - 1177 W. Hastings Street
Vancouver, B.C. Canada                                    V6E 2K3
--------------------------------------                  ------------
(Address of Principal Executive Offices)                 (Zip Code)

                                      1-604-684-3301
               ----------------------------------------------------
               Registrant's Telephone Number, Including Area Code

                                       N/A
       -------------------------------------------------------------------
      (Former name, address, and fiscal year, if changed since last report)

     Indicate  by check mark  whether the  registrant  (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
registrant was required to file such  reports),  Yes [X] No [ ] and ( ) has been
subject to filing requirements for the past 90 days. Yes [X] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the last practicable date.

             Class                          Outstanding as of June 30, 1999
  ------------------------------          -----------------------------------

   Common Stock, $0.001 per share                    11,239,700

<PAGE>

                                      INDEX

<TABLE>
<CAPTION>


                                                                                                       PAGE
PART 1.                                                                                               NUMBER
                                                                                                      ------
<S>                                                                                                     <C>
         ITEM 1.  Financial Statements (unaudited)................................ .............         3

                           Balance Sheet as at June 30, 1999....................................         4

                           Statement of Operations
                              For the three months ended June 30, 1999, for the
                                    Six  months  ended  June 30,  1999,  for the
                                    three Months  ended June 30,  1998,  for the
                                    six months  Ended June 30,  1998 and for the
                                    period   from   April  9,   1998   (Date  of
                                    incorporation) to  June 30, 1999...........................         5

                           Statement of Changes in Shareholders' Equity
                              For the period from April 9, 1998 (Date of
                                      Incorporation) to June 30, 1999..........................         6

                           Statement of Cash Flows
                               For  the three months  ended June 30,  1999,  for
                                    the six Months ended June 30, 1999,  for the
                                    three months Ended  June 30, 1998, for the six
                                    months ended June 30, 1998 and for the period
                                    from April 9, 1998 (Date of incorporation) to
                                    June 30, 1999.............................................          7

                           Notes to the Financial Statements..................................          8

         ITEM 2.  Plan of Operations..........................................................         11


PART 11           Signatures..................................................................         12

</TABLE>

                                       2
<PAGE>



                         PART 1 - FINANCIAL INFORMATION

--------------------------------------------------------------------------------
                          ITEM 1. FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


The  accompanying   balance  sheet  of  Peppermill  Capital   Corporation.   (an
exploration  stage company) at June 30, 1999 and the statement of operations and
statement of cash flow for the three  months  ended June 30,  1999,  for the six
months  ended June 30, 1999,  for the three months ended June 30, 1998,  for the
six months  ended June 30,  1998 and for the period  from April 9, 1998 (date of
incorporation)  to June 30, 1999 and the statement of  stockholders'  equity for
the period from April 9, 1998 (date of incorporation) to June 30, 1999 have been
prepared by the Company's management and they do not include all information and
notes to the financial statements  necessary for a complete  presentation of the
financial position, results of operations,  cash flows, and stockholders' equity
in conformity with generally accepted accounting  principles.  In the opinion of
management,  all adjustments considered necessary for a fair presentation of the
results of  operations  and  financial  position have been included and all such
adjustments are of a normal recurring nature.

Operating  results  for the quarter  ended June 30,  1999,  are not  necessarily
indicative of the results that can be expected for the year ending  December 31,
1999.

                                       3
<PAGE>



                         PEPPERMILL CAPITAL CORPORATION
                         (An Exploration Stage Company)

                                  BALANCE SHEET

                                  June 30, 1999

                      (Unaudited - Prepared by Management)

<TABLE>
<CAPTION>

                                                                  JUNE 30             DEC 31
                                                                   1999                1998
                                                                 -------             -------
<S>                                                              <C>                 <C>
   ASSETS

   CURRENT ASSETS


        Bank                                                     $ 1,168             $ 1,125
        NOTE RECEIVABLE                                               --              15,000
                                                                 -------             -------
                                                                   1,168              16,125
                                                                 -------             -------

   OTHER  ASSETS

        Mining claim - Note 3                                      2,129               2,129
                                                                 -------             -------
                                                                 $ 3,297             $18,254
                                                                 ========            ========

   LIABILITIES

         Accounts payable - related parties                      $ 6,800             $ 6,800
         Accounts payable and accrued liabilities                  3,601               1,316
                                                                 -------             -------
                                                                  10,401               8,116
                                                                 -------             -------

   STOCKHOLDERS' EQUITY

        Common stock
              200,000,000 shares authorized, at $0.001 par
              value, 11,239,700 shares issued and outstanding    11,240               11,240

        Capital in excess of par value                           21,930               21,930

        Deficit accumulated during the development stage        (40,274)             (23,032)
                                                                -------              -------
              Total Stockholders' Equity                         (7,104)              10,138
                                                                -------              -------
                                                                $ 3,297             $ 18,254
                                                                =======             ========


The accompanying notes are an integral part of these unaudited financial statements.

</TABLE>


                                       4
<PAGE>


                         PEPPERMILL CAPITAL CORPORATION
                         (An Exploration Stage Company)

                             STATEMENT OF OPERATIONS

       For the three months ended June 30, 1999, for the six months ended
        June 30, 1999, for the three months ended June 30, 1998, for the
               six months ended June 30, 1998 and for period from
               April 9, 1998 (Date of Inception) to June 30, 1999

                      (Unaudited - Prepared by Management)

<TABLE>
<CAPTION>

                                             FOR THE             FOR THE           FOR THE           FOR THE            FROM
                                              THREE               SIX              THREE              SIX             DATE OF
                                             MONTHS              MONTHS            MONTHS            MONTHS           INCEPTION
                                              ENDED              ENDED             ENDED              ENDED               TO
                                             JUNE 30,           JUNE 30,          JUNE 30,          JUNE 30,           JUNE 30,
                                               1999               1999              1998              1998              1999
                                               ----               ----              ----              ----              ----
<S>                                              <C>                 <C>                 <C>               <C>              <C>
SALES                                    $       --           $        --        $       --        $        --       $        --
                                         ------------         ------------        ----------       -----------       -----------

GENERAL  AND
ADMINISTRATIVE  EXPENSES:

     Accounting and audit                        350               1,550                 --                --             3,400
     Assessment work                              --                  --                 --                --             1,800
     Bank charges and interest                     1                   1                 30                30                59
     Consulting                                1,000               1,000                 --                --            10,000
     Filing fees -- Edgar system               1,068               1,068                 --                --             1,068
     Geological report                            --                                    618               618               618
     Incorporation costs written-off              --                  --                640               640               640
     Legal                                        --                  --                 --                --             2,500
     Office expenses                             189                 189                 60                60               977
     Salary                                   12,000              12,000                 --                --            12,000
     Transfer agent's fees                     1,435               1,435              1,285             1,285             4,212
     Travel                                       --                  --                 --                --             3,000
                                         -----------           ---------         ----------        ----------         ---------

NET LOSS                                 $    16,043          $   17,243         $    2,633        $    2,633         $  40,274
                                         ===========          ==========          =========        ==========         =========

NET LOSS PER
COMMON SHARE

     Basic                               $    0.001           $    0.002          $   0.001         $   0.001          $  0.004
                                         ==========           ==========          =========         =========          ========


AVERAGE OUTSTANDING
SHARES

     Basic                               11,239,700           11,239,700         1,866,428         1,866,428         9,487,987
                                         ==========           ==========         =========         =========         =========

               The  accompanying  notes are an integral part of these  unaudited financial statements.
</TABLE>

                                       5
<PAGE>



                         PEPPERMILL CAPITAL CORPORATION
                         (An Exploration Stage Company)

                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

              For the period from April 9, 1998 (Date of Inception)
                                to June 30, 1999

                      (Unaudited - Prepared by Management)

<TABLE>
<CAPTION>

                                                                                                   CAPITAL IN
                                                                       COMMON STOCK                 EXCESS OF         ACCUMULATED
                                                                    SHARES          AMOUNT          PAR VALUE           DEFICIT
                                                                    ------          ------          ---------           -------
<S>                                                                <C>             <C>               <C>                <C>
BALANCE APRIL 9, 1998 (date of inception)                                 --       $       --        $        --         $       --

Issuance of common shares for cash at
     $0.001 - June 6, 1998                                         4,000,000             4,000                --                 --

Issuance of common shares for cash at
     $0.001 - June 23, 1998                                        6,000,000             6,000                --                 --

Issuance of common shares for cash at
     $.001 - June 25, 1998                                         1,150,000             1,150

Issuance of common shares for cash at
     $0.10 - June 26, 1998                                             2,700                 3               267                 --

Issuance of common shares for cash at
     $0.25 - September 17, 1998                                       87,000                87            21,663                 --

Net operating loss for the period from
     April 9, 1998 to June 30, 1999                                       --                --                --            (40,274)
                                                                  ----------        ----------        ----------         ----------
BALANCE JUNE 30, 1999                                             11,239,700        $   11,240        $   21,930         $  (40,274)
                                                                  ==========        ==========        ==========         ==========

                  The accompanying notes are an integral part of these unaudited financial statements.

</TABLE>

                                       6
<PAGE>


                         PEPPERMILL CAPITAL CORPORATION
                         (An Exploration Stage Company)

                             STATEMENT OF CASH FLOWS

       For the three months ended June 30, 1999, for the six months ended
      June 30, 1999, for the three months ended June 30, 1998, for the six
               months ended June 30, 1998 and for the period from
               April 9, 1998 (Date of Inception) to June 30, 1999

                      (Unaudited - Prepared by Management)

<TABLE>
<CAPTION>

                                                          FOR THE     FOR THE      FOR THE       FOR THE        FROM
                                                           THREE        SIX         THREE          SIX        DATE OF
                                                           MONTHS      MONTHS       MONTHS        MONTHS     INCEPTION
                                                           ENDED       ENDED        ENDED         ENDED          TO
                                                          JUNE 30,    JUNE 30,     JUNE 30,      JUNE 30,      MARCH 31,
                                                            1999        1999         1998          1998        1999
                                                            ----        ----         ----         ----        ------
<S>                                                       <C>         <C>         <C>         <C>         <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:

Net loss                                                  $(16,043)   $(17,243)   $ (2,633)   $ (2,633)   $(40,274)

Adjustments to reconcile net loss
    to net cash provided by operating
     activities

     Due from a director                                    15,000      15,000          --          --       6,800
     Increase in accounts payable                            1,197       2,286          --          --       3,601
                                                          --------    --------    --------    --------    --------

          Net Cash from Operations                             154          43      (2,633)     (2,633)    (29,873)
                                                          --------    --------    --------    --------    --------

CASH FLOWS FROM
INVESTING ACTIVITIES:

Mineral claim                                                   --          --      (2,129)     (2,129)     (2,129)
                                                          --------    --------    --------    --------    --------


CASH FLOWS FROM
FINANCING ACTIVITIES:

 Proceeds from issuance of common
       stock                                                    --          --      11,420      11,420      33,170
                                                          --------    --------    --------    --------    --------

Net Increase in Cash                                           154          43       6,658       6,658       1,168

Cash at Beginning of Period                                  1,014       1,125          --          --          --
                                                          --------    --------    --------    --------    --------

CASH AT END OF PERIOD                                     $  1,168    $  1,168    $  6,658    $  6,658    $  1,168
                                                          ========    ========    ========    ========    ========


               The  accompanying  notes are an integral part of these  unaudited financial statements.
</TABLE>


                                       7
<PAGE>


                         PEPPERMILL CAPITAL CORPORATION
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                                  June 30, 1999

                      (Unaudited - Prepared by Management)


1.       ORGANIZATION

         The Company was  incorporated  under the laws of the State of Nevada on
         April 9, 1998 with the authorized  common shares of 200,000,000  shares
         at $0.001 par value.

         Since  its  inception  the  company  has  completed  two  Regulation  D
         offerings of 7,239,700 shares of its capital stock for cash.

         The  Company  is in the  exploration  stage and was  organized  for the
         purpose of engaging in the business of mineral development.


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Accounting Methods

         The Company  recognizes income and expenses based on the accrual method
         of accounting.

         Dividend Policy

         The  Company  has  not  yet  adopted  a  policy  regarding  payment  of
         dividends.

         Income Taxes

         The  Company's  year end is December  31. On  December  31,  1998,  the
         Company had a net operating  loss carry forward of $23,023.  The income
         tax  benefits  from the loss carry  forward has been fully  offset by a
         valuation reserve because the use of the future tax benefit is doubtful
         since the Company has no operations. The loss carry forward will expire
         in the year 2019.

         Loss per Share

         Loss per share  amounts  are  computed  based on the  weighted  average
         number of shares actually  outstanding  using the treasury stock method
         in accordance with FABS Statement No. 128.


                                       8

<PAGE>





                         PEPPERMILL CAPITAL CORPORATION
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                                  June 30, 1999

                      (Unaudited - Prepared by Management)


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

         Cash and Cash Equivalents

         The Company  considers all highly liquid  instruments  purchased with a
         maturity,  at the time of purchase,  of less than three  months,  to be
         cash equivalents.

         Foreign Currency Translation

         The translations of the Company completed in Canadian dollars have been
         translated to US dollars.  Assets and liabilities are translated at the
         year end  exchange  rates and the income and  expenses  at the  average
         rates of exchange prevailing during the period reported on.

         Amortization of Capitalized Mining Claim Costs

         The  Company  will  use  successful  efforts  method  to  amortize  the
         capitalized  costs of its mining claims which provides for capitalizing
         the purchase  price of the project and the  additional  costs  directly
         related to providing the properties,  and amortizing these amounts over
         the life of the  mineral  deposit.  All  other  costs are  expensed  as
         incurred. Unamortized capital costs will be expensed if the property is
         proven to be of no value.

         Financial Instruments

         The carrying amounts of financial instruments,  including cash, prepaid
         expenses and deferred offering costs are considered by management to be
         their standard fair values. These values are not necessarily indicative
         of the  amounts  that the  Company  could  realize in a current  market
         exchange.

         Estimates and Assumptions

         Management  uses  estimates  and  assumptions  in  preparing  financial
         statements in accordance with generally accepted accounting principles.
         Those  estimated  and  assumption  affect the  reported  amounts of the
         assets  and  liabilities,  the  disclosure  of  contingent  assets  and
         liabilities,  and the reported  revenues and expenses.  Actual  results
         could vary from the  estimates  that were  assumed in  preparing  these
         financial statements.


3.       MINING CLAIMS

         On June 18, 1998 the Company  acquired  mineral  claims  known as "Star
         Claims" consisting of 11 units located near the town of Merrit, British
         Columbia, for $2,129 with expiration dates in 1999. The units cover 587
         acres.


                                       9

<PAGE>




                         PEPPERMILL CAPITAL CORPORATION
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                                  June 30, 1999

                      (Unaudited - Prepared by Management)



4.       RELATED PARTY TRANSACTIONS

         Related parties acquired 36% of the common shares issued for cash.

         The  officers  and  directors  of the  Company  are  involved  in other
         business  activities  and they may, in the future,  become  involved in
         additional business ventures which also may require their attention. If
         specific business opportunities become available, such persons may face
         a conflict in  selecting  between the Company and their other  business
         interests.  The Company has  formulated no policy for the resolution of
         such conflicts.


5.       GOING CONCERN

         Continuation  of the  Company  as a going  concern  is  dependent  upon
         obtaining  additional working capital and the management of the Company
         has  developed  a  strategy,  which it believes  will  accomplish  this
         objective through  additional equity funding,  and long term financing,
         which will enable the Company to operate in the future.

         Management  recognizes  that,  if  it is  unable  to  raise  additional
         capital, the Company cannot operate in the future.


                                       10

<PAGE>

--------------------------------------------------------------------------------
                           ITEM 2. PLAN OF OPERATIONS
--------------------------------------------------------------------------------

The  Company's  management  will  concentrate  its  efforts  on the Star  Claims
property  near the town of Merritt,  British  Columbia  during  1999.  It is the
intention of management to  investigate  other mineral  properties in the future
but no effort has been made to date to  identify or to  negotiate  the terms for
acquiring additional mineral properties.  Continuation of the Company as a going
concern is dependent  upon  obtaining  additional  working  capital  either from
advances  from its officers  and/or  directors,  bank  financing or by way of an
issuance of its  capital  stock.  Until  financing  has been  arranged it is the
intention  of the  directors  and  officers  of the  Company  to pay for  future
expenses of the Company as short term loans.


Liquidity and Capital Resources

The Company will need  additional  working  capital to finance its activities on
the Semple mineral claims.


Results of Operations

The Company has had no operations during this reporting period.


                                       11

<PAGE>


                                   SIGNATURES


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                               PEPPERMILL CAPITAL CORPORATION
                                                           (Registrant)


      September 4, 1999                  /s/     "Michael Mitsiadis"
----------------------------             --------------------------------
           Date                      Michael Mitsiadis - President and Director



      September 4, 1999                 /s/    "Raymon Paquette"
----------------------------             --------------------------------
           Date                      Raymon Paquette - Secretary Treasurer and
                                                 Director
                                       12