##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 For the quarterly period ended March 31, 2007
  o
    
    Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
 For the transition period from  to
 Commission file number 1-11887
 CANYON RESOURCES CORPORATION
   
 þ o
  o o þ
 o þ




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##### 



CANYON RESOURCES CORPORATION
FORM 10-Q
For the Three Months ended March 31, 2007
 TABLE OF CONTENTS
 PART I FINANCIAL INFORMATIONItem 1. Financial Statements
    
    Page 1Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    Page 16Item 3. Quantitative and Qualitative Disclosures About
Market Risk
    
    Page 26Item 4. Controls and Procedures
    
    Page 27PART II OTHER INFORMATIONItem 1. Legal Proceedings
    
    Page 28Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds
    
    Page 28Item 3. Defaults Upon Senior Securities
    
    Page 28Item 4. Submission of Matters to a Vote of
Security Holders
    
    Page 28Item 5. Other Information
    
    Page 28Item 6. Exhibits
    
    Page 28SIGNATURES
    
    Page 29Certification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
  i




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##### Table of Contents



PART I FINANCIAL INFORMATION
 
 Item 1. Financial Statements
   Consolidated Balance Sheets
    
    Page 2Consolidated Statements of Operations
    
    Page 3Consolidated Statement of Changes in Stockholders Equity
    
    Page 4Consolidated Statements of Cash Flows
    
    Pages 5-6Notes to Interim Consolidated Financial Statements
    
    Pages 7-15Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    Page 16Item 3. Quantitative and Qualitative Disclosures About
Market Risk
    
    Page 26Item 4. Controls and Procedures
    
    Page 27
 1




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 March 31,
    
    
    December 31,2007
    
    
    2006ASSETSCash and cash equivalents
    
    $
    572,600
    
    
    $
    1,513,700Short term investments
    
    
    1,500,000
    
    
    
    2,500,000Accounts receivable
    
    
    38,300
    
    
    
    47,300Metal inventories
    
    
    85,100
    
    
    
    47,300Prepaid insurance
    
    
    76,900
    
    
    
    171,700Other current assets
    
    
    172,200
    
    
    
    146,800Total current assets
    
    
    2,445,100
    
    
    
    4,426,800Property, plant and mine development, net
    
    
    8,962,600
    
    
    
    8,719,800Restricted cash
    
    
    3,204,300
    
    
    
    3,431,300Other noncurrent assets
    
    
    251,200
    
    
    
    246,700Total assets
    
    $
    14,863,200
    
    
    $
    16,824,600LIABILITIES AND STOCKHOLDERS EQUITYAccounts payable
    
    $
    404,900
    
    
    $
    659,000Asset retirement obligations
    
    
    1,132,400
    
    
    
    1,180,100Payroll liabilities
    
    
    141,500
    
    
    
    171,700Legal settlement accrual
    
    
    206,200
    
    
    
    343,700Other current liabilities
    
    
    30,400
    
    
    
    37,800Total current liabilities
    
    
    1,915,400
    
    
    
    2,392,300Notes payable
    
    
    825,000
    
    
    
    825,000Capital leases
    
    
    61,100
    
    
    
    65,800Asset retirement obligations
    
    
    2,960,000
    
    
    
    3,021,400Total liabilities
    
    
    5,761,500
    
    
    
    6,304,500Commitments and contingencies (note 10)Common stock ($.01 par value) 100,000,000 shares authorized;
issued and outstanding: 44,161,800 at March 31, 2007,
and 44,161,800 at December 31, 2006
    
    
    441,600
    
    
    
    441,600Capital in excess of par value
    
    
    140,331,100
    
    
    
    140,266,900Retained deficit
    
    
    (131,671,000
    )
    
    
    (130,188,400
    )Total stockholders equity
    
    
    9,101,700
    
    
    
    10,520,100Total liabilities and stockholders equity
    
    $
    14,863,200
    
    
    $
    16,824,600
  2




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Three months ended March 31,2007
    
    
    2006REVENUESales
    
    $
    67,200
    
    
    $
    593,300EXPENSESCost of sales
    
    
    60,400
    
    
    
    453,600Depreciation, depletion and amortization
    
    
    11,100
    
    
    
    8,900Selling, general and administrative
    
    
    887,600
    
    
    
    867,800Exploration
    
    
    572,500
    
    
    
    309,100Accretion expense
    
    
    41,900
    
    
    
    50,800Loss on asset disposals
    
    
    35,100
    
    
    
    1,608,600
    
    
    
    1,690,200Operating loss
    
    
    (1,541,400
    )
    
    
    (1,096,900
    )OTHER INCOME (EXPENSE)Interest income
    
    
    73,800
    
    
    
    57,700Interest expense
    
    
    (15,200
    )
    
    
    (13,000
    )Gain on sale of securities
    
    
    
    
    
    
    816,000Loss on derivative instruments
    
    
    
    
    
    
    (145,900
    )Other
    
    
    200
    
    
    
    58,800
    
    
    
    714,800Net loss
    
    $
    (1,482,600
    )
    
    $
    (382,100
    )Basic and diluted net loss per share
    
    $
    (0.03
    )
    
    $
    (0.01
    )Basic and diluted weighted-average
shares outstanding
    
    
    44,161,800
    
    
    
    38,320,500
  3




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
 Common Stock
    
    
    Capital
    
    
    
    
    
    
    TotalNumber of
    
    
    At Par
    
    
    in Excess
    
    
    Retained
    
    
    StockholdersShares
    
    
    Value
    
    
    of Par Value
    
    
    Deficit
    
    
    EquityBalances, January 1, 2007
    
    
    44,161,800
    
    
    $
    441,600
    
    
    $
    140,266,900
    
    
    $
    (130,188,400
    )
    
    $
    10,520,100Share-based compensation
    
    
    
    
    
    
    
    
    
    
    64,200
    
    
    
    
    
    
    
    64,200Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,482,600
    )
    
    
    (1,482,600
    )Balances, March 31, 2007
    
    
    44,161,800
    
    
    $
    441,600
    
    
    $
    140,331,100
    
    
    $
    (131,671,000
    )
    
    $
    9,101,700
  4




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##### Table of Contents



CANYON RESOURCES CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Three months ended March 31,2007
    
    
    2006Cash flows from operating activities:Net loss
    
    $
    (1,482,600
    )
    
    $
    (382,100
    )Adjustments to reconcile net loss to net cash used in
operating activities:Depreciation, depletion and amortization
    
    
    11,100
    
    
    
    8,900Loss on asset dispositions
    
    
    35,100
    
    
    
    Gain on sale of securities
    
    
    
    
    
    
    (816,000
    )Share based compensation expense
    
    
    64,200
    
    
    
    100,300Loss on derivative instruments
    
    
    
    
    
    
    145,900Accretion of asset retirement obligation
    
    
    41,900
    
    
    
    50,800Changes in operating assets and liabilities:Decrease (increase) in accounts receivable
    
    
    9,000
    
    
    
    (3,300
    )(Increase) decrease in inventories
    
    
    (37,800
    )
    
    
    47,500Decrease (increase) in prepaid and other assets
    
    
    64,900
    
    
    
    (2,200
    )(Decrease) in accounts payable and accrued
liabilities
    
    
    (280,400
    )
    
    
    (231,000
    )(Decrease) in asset retirement obligations
    
    
    (151,000
    )
    
    
    (322,300
    )Decrease (increase) in restricted cash
    
    
    227,000
    
    
    
    (52,600
    )Total adjustments
    
    
    (16,000
    )
    
    
    (1,074,000
    )Net cash used in operating activities
    
    
    (1,498,600
    )
    
    
    (1,456,100
    )Cash flows from investing activities:Purchases and development of property and equipment
    
    
    (437,800
    )
    
    
    (447,100
    )Redemption of short term investments
    
    
    1,000,000
    
    
    
    Proceeds from sale of securities
    
    
    
    
    
    
    816,000Net cash provided by investing activities
    
    
    562,200
    
    
    
    368,900Cash flows from financing activities:Payments on capital lease obligations
    
    
    (4,700
    )
    
    
    (1,400
    )Net cash used in financing activities
    
    
    (4,700
    )
    
    
    (1,400
    )Net decrease in cash and cash equivalents
    
    
    (941,100
    )
    
    
    (1,088,600
    )Cash and cash equivalents, beginning of period
    
    
    1,513,700
    
    
    
    5,649,200Cash and cash equivalents, end of period
    
    $
    572,600
    
    
    $
    4,560,600
  5




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS, continued
 Supplemental disclosures of cash flow information:
 Three Months Ended March 31,2007
    
    2006Interest paid
    
    $
    15,200
    
    
    $
    13,000Income taxes paid
    
    $
    
    
    
    $
    
  6




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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 1. Nature of Operations and Liquidity:
         2. Basis of Presentation:
 Management Estimates and Assumptions:
 7




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Consolidation Principles:
 3. Restricted Cash:
  March 31,
    
    
    December 31,2007
    
    
    2006Kendall reclamation project
    
    $
    2,294,700
    
    
    $
    2,401,300Briggs Mine
    
    
    823,400
    
    
    
    442,900Seven-Up Pete Joint Venture
    
    
    52,500
    
    
    
    553,400Reward Project
    
    
    33,700
    
    
    
    33,7003,204,300
    
    
    
    3,431,300Current portion
    
    
    
    
    
    
    Noncurrent portion
    
    $
    3,204,300
    
    
    $
    3,431,300
     8




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##### Table of Contents



4. Metal Inventories:
   5. Property, Plant and Mine Development:
  As of March 31, 2007Depreciation
    
    
    Asset Value
    
    
    Accumulated
    
    
    Net BookMethod
    
    
    at Cost
    
    
    Depreciation
    
    
    ValueBuildings and equipment
    
    1 - 5 Years SL
    
    $
    5,984,300
    
    
    $
    4,040,600
    
    
    $
    1,943,700Mine development
    
    UOP(a)
    
    
    1,894,600
    
    
    
    
    
    
    
    1,894,600Mineral interest
    
    UOP
    
    
    8,745,900
    
    
    
    3,820,900
    
    
    
    4,925,000Asset retirement cost
    
    UOP
    
    
    199,300
    
    
    
    
    
    
    
    199,300$
    16,824,100
    
    
    $
    7,861,500
    
    
    $
    8,962,600
 
 (a)
    
    UOP is a depreciation method that calculates depreciation expense over the estimated proven
and probable reserves of the related property.
 As of December 31, 2006Depreciation
    
    
    Asset Value
    
    
    Accumulated
    
    
    Net BookMethod
    
    
    at Cost
    
    
    Depreciation
    
    
    ValueBuildings and equipment
    
    1 - 5 Years SL
    
    $
    6,004,800
    
    
    $
    4,047,200
    
    
    $
    1,957,600Mine development
    
    UOP(a)
    
    
    1,637,900
    
    
    
    
    
    
    
    1,637,900Mineral interest
    
    UOP
    
    
    8,745,900
    
    
    
    3,820,900
    
    
    
    4,925,000Asset retirement cost
    
    UOP
    
    
    199,300
    
    
    
    
    
    
    
    199,300$
    16,587,900
    
    
    $
    7,868,100
    
    
    $
    8,719,800
  6. Asset Retirement Obligations:
  Balance, December 31, 2006
    
    $
    4,201,500Settlement of liabilities
    
    
    (151,000
    )Accretion expense
    
    
    41,900Balance, March 31, 2007
    
    
    4,092,400Current portion
    
    
    1,132,400Noncurrent portion
    
    $
    2,960,000
 9




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7. Notes Payable:
  Balance, December 31, 2006
    
    $
    825,000Conversions / retirements
    
    
    Balance, March 31, 2007
    
    
    825,000Current portion
    
    
    Noncurrent portion
    
    $
    825,000
   8. Outstanding Warrants:
  Range of Exercise
    
    Shares Underlying
    
    
    Weighted Average
    
    
    Weighted AveragePrices
    
    Warrants Outstanding
    
    
    Remaining Contractual Life
    
    
    Exercise Price$0.50-$1.00
    
    
    281,000
    
    
    1.5 years
    
    $
    0.77$1.01-$1.50
    
    
    7,155,729
    
    
    1.7 years
    
    $
    1.30$1.51-$2.16
    
    
    2,199,836
    
    
    0.2 years
    
    $
    2.16Total/average
    
    
    9,636,565
    
    
    1.3 years
    
    $
    1.48
  9. Equity Transactions:
    10




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10. Commitments and Contingencies :
 (a)
    
    Kendall Mine ReclamationThe Kendall Mine operates under permits granted by the Montana DEQ. In February 2002, the
DEQ issued a decision that a comprehensive Environmental Impact Statement (EIS) was needed
for completion of remaining reclamation at Kendall. The Montana DEQ has yet to complete its
work on this EIS. The Companys estimate to achieve mine closure could be impacted by the
outcome of an agency decision following an EIS. The Company has deposited $2.1 million in
an interest bearing account with the DEQ for reclamation at the Kendall Mine which is
currently ongoing. The Company has spent approximately $11.5 million on Kendall mine
reclamation from 1991 through the first quarter ended March 31, 2007.(b)
    
    Briggs Mine Surety BondsThe Briggs Mine operates under permits granted by various agencies including BLM, Inyo
County, California, the California Department of Conservation, and the Lahontan Regional
Water Quality Control Board (Lahontan). The Company has posted cash and reclamation bonds
with these agencies in the amount of $4.3 million of which $4.2 million are reclamation
bonds supported by a surety. In March 2007, the Company posted a $0.1 million cash
reclamation bond with the County as an inflation adjustment. All surety bonds are subject to
annual review and adjustment.In 1999, in response to a demand for an increase in collateral by the surety company who
issued the above described bonds, the Company granted a security interest in 28,000 acres of
mineral interests in Montana. In addition, the Company agreed to make cash deposits with the
surety company totaling $1.5 million over a three year period at the rate of $0.5 million
per year, commencing June 30, 2001. The Company has made a $0.3 million deposit in March
2007, after the Company received notice from the surety that Canyon is in default of its
obligations under the collateral agreement. The Company continues to be in negotiations with
the surety regarding the timing and the form of collateral. The suretys request does not
represent an expense to the Company and the Company has the available cash and investments
to fund the request. If we funded the entire request in cash rather than with other
collateral, it could impact the timing and cost of any future financings. The Company is
reviewing its rights under the bond and collateral agreements and is in negotiations with
the surety to reach an acceptable rescheduling of the deposit requirements. If an acceptable
rescheduling cannot be agreed to, the surety company could seek to sue the Company to
deposit the collateral under the collateral agreement with the surety. In April 2004, the
Company ceased active mining at Briggs due to lack of development and began reclamation
activities. The Company has spent approximately $4.0 million on Briggs reclamation from 2004
through the first quarter ended March 31, 2007. The Company has not requested release of
liability for completion of certain reclamation tasks due to uncertainties related to the
potential re-start of Briggs that may re-disturb portions of past reclamation activities.(c)
    
    McDonald Gold ProjectPhelps Dodge, a wholly-owned subsidiary of Freeport-McMoRan Copper & Gold Inc., retains a
one-third interest in any proceeds which may be received from the currently active takings
lawsuit with the State of Montana. The Montana lawsuit was filed to recover value lost due
to changes in the mining law and the cancellation of mineral leases related to our
wholly-owned Seven-Up Pete Joint Ventures interest in the McDonald Gold Project.In April 2006, the Companys complaint under the takings lawsuit was dismissed in U.S.
District Court for the District of Montana and the Company filed a notice of appeal to the
U.S. Court of Appeals for the Ninth Circuit. Briefs have been submitted to the U.S. Court of
Appeals for the Ninth Circuit. In addition, the Company has filed a breach of contract
complaint against the State of Montana related to the termination of the McDonald Gold
Projects state mineral leases.
 11




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##### Table of Contents



(d)
    
    Kendall Mine LawsuitsIn October 2001, a plaintiff group including members of the Shammel, Ruckman and Harrell
families filed suit in the State of Montana District Court against the Company and its wholly-owned
subsidiary, CR Kendall Corporation. The complaint alleges violation of water rights,
property damage, trespass and negligence in connection with the operation of the Kendall
Mine and seeks unspecified damages and punitive damages. In February 2007, the Company
entered into a settlement and release agreement with eight of the twelve plaintiffs in this
suit. The Companys share of the settlement was $0.1 million and has a balance of $0.2
million recorded as a legal settlement accrual on the consolidated balance sheet as of March
31, 2007.In August 2002, a Preliminary Injunction was issued in Montana District Court on behalf of
the Kendall Mine plaintiff group in connection with the Companys auction of certain mineral
rights and fee lands unrelated to the CR Kendall Corporation or its operation, but also in
western Montana. In October 2002, the Court issued a Supplemental Order which sequesters any
proceeds realized from the auction until such time as the lawsuit is concluded. As of March
31, 2007, $0.2 million is held by the Court as required by the Order. The Companys share of
the above mentioned settlement was paid out of the funds held by the Court.
 11. Fair Value of Financial Instruments:
  Cash and Cash Equivalents, Receivables, Short-term Investments and Restricted Cash:
 Long-term Debt:
 12. Income Taxes:
 Accounting for Uncertainty in Income Taxes
 13. Share-Based Compensation:
   12




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2007
    
    2006Expected volatility
    
    
    
    
    

    50%Expected option term
    
    
    
    
    
    2.5-3.0 yearsWeighted-average risk-free interest rate
    
    
    
    
    

    4.3%-4.5%Forfeiture rate
    
    
    
    
    
    
    
 Stock Options
  2007
    
    
    2006Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    ExerciseNumber
    
    
    Price
    
    
    Number
    
    
    PriceOutstanding  beginning of the year
    
    
    2,580,526
    
    
    $
    1.30
    
    
    
    1,757,526
    
    
    $
    1.77Grants
    
    
    
    
    
    
    
    
    
    
    350,000
    
    
    $
    0.84Exercises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeitures
    
    
    
    
    
    
    
    
    
    
    (145,000
    )
    
    $
    1.94Expirations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding  end of the period
    
    
    2,580,526
    
    
    $
    1.30
    
    
    
    1,962,526
    
    
    $
    1.59Exercisable  end of the period
    
    
    2,095,526
    
    
    $
    1.38
    
    
    
    1,782,526
    
    
    $
    1.67
 13




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Stock Grants
  Weighted-Average
    
    
    TotalAmount
    
    
    Price
    
    
    Fair ValueNonvested  beginning of the year
    
    
    202,500
    
    
    $
    0.93
    
    
    $
    188,950Grants
    
    
    
    
    
    
    
    
    
    
    Vested
    
    
    
    
    
    
    
    
    
    
    Forfeitures
    
    
    
    
    
    
    
    
    
    
    Nonvested  end of period
    
    
    202,500
    
    
    $
    0.93
    
    
    $
    188,950
  14. Earnings per Share:
 Earnings per Share
 15. Recently Issued Financial Accounting Standards:
 The Fair Value Option for Financial Assets and
Financial Liabilities Fair Value Measurements.
 14




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Fair Value Measurements
 15




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ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Overview of the First Quarter 2007 and Future Outlook
 What did we spend cash on during the quarter?
  
    
    Selling, general and administrative spending amounted to approximately $0.8 million.o Includes holding costs at the Briggs Mine of $0.3 million.
    
    Exploration spending amounted to $0.6 million.
    
    $0.4 million was reclassed to restricted cash for funding an inflation adjustment to our
reclamation bonds and for additional bond collateral, offset by the return of $0.5 million
of restricted cash from the reduction of reclamation liabilities related to the former
McDonald Project.
    
    Asset retirement obligation spending amounted to $0.2 million primarily for the Kendall
Mine operations and continued leach pad dewatering at the Briggs Mine.
 What are our results of operation?
  What have we done to increase shareholder value?
       16




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How much property and mineralized material do we now control?
  Fee
    
    
    FeeProperty/Location
    
    Surface
    
    
    Mineral
    
    
    Patented (b)
    
    
    UnpatentedBriggs Mine  California
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    3,290Reward Project  Nevada
    
    
    
    
    
    
    
    
    
    
    220
    
    
    
    1,545Seven-Up Pete  Montana
    
    
    
    
    
    
    
    
    
    
    170
    
    
    
    1,440CR Nevada  Nevada
    
    
    560
    
    
    
    840
    
    
    
    
    
    
    
    8,040Industrial Minerals  Montana
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    210CR Montana  Montana
    
    
    
    
    
    
    901,167
    
    
    
    
    
    
    
    Converse JV  Wyoming (a)
    
    
    1,856
    
    
    
    
    
    
    
    
    
    
    
    3,051CR Kendall  Montana
    
    
    
    
    
    
    
    
    
    
    1,085
    
    
    
    Total acreage
    
    
    2,416
    
    
    
    902,007
    
    
    
    1,480
    
    
    
    17,576
 
 (a)
    
    Sand Creek JV lands not included in these totals.(b)
    
    Patented claims are owned fee simple which combine the surface and mineral estates.
  MineralizedMaterial
    
    
    Average Gold
    
    
    Cut-off GoldProperty/Location
    
    (Million Tons)
    
    
    Grade (opt)
    
    
    Grade (opt)Briggs Mine  Inyo County, California
    
    
    23.60
    
    
    
    0.023
    
    
    
    0.010Cecil R  satellite deposit
    
    
    5.75
    
    
    
    0.024
    
    
    
    0.015Mineral Hill  satellite deposit
    
    
    2.31
    
    
    
    0.035
    
    
    
    0.015Suitcase  satellite deposit
    
    
    0.33
    
    
    
    0.052
    
    
    
    0.01531.99
    
    
    
    0.024Reward Project  Beatty, Nevada
    
    
    12.74
    
    
    
    0.025
    
    
    
    0.010Seven-Up Pete  Lincoln, Montana
    
    
    17.00
    
    
    
    0.035
    
    
    
    0.020Total mineralized material
    
    
    61.73
    
    
    
    0.027
   How is the Briggs re-start going?
  17




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##### Table of Contents



What progress have we made on the Briggs satellite deposits?
    What progress have we made on the Reward Project?
   What are our plans for the Seven-Up Pete property?
  What is happening on our uranium joint ventures?
  18




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##### Table of Contents



What is the status of the Companys legal cases?
  (Seven-Up Pete
Venture, et al. v The State of Montana)
 19




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##### Table of Contents



Liquidity & Capital Resources
     Financing Transactions
     Debt
  20




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##### Table of Contents



Capital Expenditures
  Outstanding Warrants
  UnderlyingExpiration Date
    
    Shares
    
    
    Exercise PriceJune 1, 2007
    
    
    2,199,836
    
    
    $
    2.16August 31, 2007
    
    
    50,000
    
    
    $
    0.80March 14, 2008
    
    
    2,304,726
    
    
    $
    1.03December 1, 2008
    
    
    1,765,503
    
    
    $
    1.30December 1, 2008
    
    
    231,000
    
    
    $
    0.76June 1, 2009
    
    
    3,085,500
    
    
    $
    1.50Total/average
    
    
    9,636,565
    
    
    $
    1.48
 Surety Bonds
   Results of Operations  Three Months Ended 2007 versus 2006
  
    
    Negative variance of $0.1 million in gross margin from gold sales due to the reduction
in gold sales and production as a result of the depletion of gold ounces on the leach pad.
    
    Negative variance of $0.3 million in exploration costs due to increased drilling
activity at Briggs and Reward in the current quarter compared to last year.
    
    Negative variance of $0.8 million related to last years gain on sales of securities.
    
    Positive variance of $0.1 million related to last years fair market adjustment due to
the increase in warrant liabilities.
  21




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##### Table of Contents



Three Months Ended
    
    
    Three Months EndedMarch 31, 2007
    
    
    March 31, 2006Average
    
    
    
    
    
    
    
    
    
    
    AverageGold
    
    
    Price Per
    
    
    Revenue
    
    
    Gold
    
    
    Price Per
    
    
    RevenueOunces
    
    
    Oz.
    
    
    $000s
    
    
    Ounces
    
    
    Oz.
    
    
    $000sGold sales
    
    
    100
    
    
    $
    668
    
    
    $
    67
    
    
    
    1,045
    
    
    $
    567
    
    
    $
    593$
    67
    
    
    
    
    
    
    
    
    
    
    $
    593
   Contractual Obligations
  Payments due by PeriodLess than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 year
    
    
    1-3 years
    
    
    3-5 years
    
    
    5 yearsLong term debt obligations
    
    $
    825,000
    
    
    $
    
    
    
    $
    
    
    
    $
    825,000
    
    
    $
    Capital lease obligations
    
    
    80,800
    
    
    
    19,700
    
    
    
    61,100
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    404,000
    
    
    
    110,000
    
    
    
    294,000
    
    
    
    
    
    
    
    Purchase obligations
    
    
    240,900
    
    
    
    240,900
    
    
    
    
    
    
    
    
    
    
    
    Asset retirement obligations
    
    
    4,092,400
    
    
    
    1,132,400
    
    
    
    2,783,100
    
    
    
    106,000
    
    
    
    70,900Total
    
    $
    5,643,100
    
    
    $
    1,503,000
    
    
    $
    3,138,200
    
    
    $
    931,000
    
    
    $
    70,900
 Off-Balance Sheet Arrangements
  22




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##### Table of Contents



Critical Accounting Policies and Estimates
   Reserves and Mineralized Material:
   Impairments of Long-Lived Assets:
 Accounting for the Impairment or Disposal of
Long-Lived Assets
 23




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##### Table of Contents



Asset Retirement Obligations:
  Warrant Liability: Accounting for
Derivative Financial Instruments Indexed to, and Potentially Settled in, a Companys Own Stock Accounting for Registration Payment Arrangements Accounting for
Contingencies
 Stock-Based Compensation: Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees
  24




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##### Table of Contents



Income Taxes: Accounting for Uncertainty in Income Taxes
 Potential Litigation Liabilities:
 Other Matters
 Federal Legislation
  Dividends
  Recently Issued Accounting Standards
 The Fair Value Option for Financial Assets and
Financial Liabilities Fair Value Measurements.
 Fair Value Measurements
 25




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##### Table of Contents



ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Commodity Prices
    Interest Rates
  Foreign Currency
  26




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##### Table of Contents



ITEM 4 CONTROLS AND PROCEDURES
 DISCLOSURE CONTROLS AND PROCEDURES
   CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
   27




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##### Table of Contents



PART II OTHER INFORMATION
 
 Item 1. Legal Proceedings
  Item 1A. Risk Factors
  
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
 None
 
 Item 3.
    
    Defaults Upon Senior Securities
 None
 
 Item 4.
    
    Submission of Matters to Vote of Security Holders
 None
 
 Item 5.
    
    Other Information
 None
 
 Item 6.
    
    Exhibits
 4.1
    
    Rights Agreement, effective as of March 23, 2007, between the Company and
Computershare Trust Company, N.A., as Rights Agent, which includes the form of
Rights Certificate as Exhibit A and the Summary of Rights to Purchase Common Stock
as Exhibit B (filed as Exhibit 4.1 to the Companys Current Report on Form 8-K (File
No. 001-11887) on March 23, 2007, and incorporated by reference).31.1
    
    Certification of Chief Executive Officer pursuant to Rule
13(a)-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 200231.2
    
    Certification of Chief Financial Officer pursuant to Rule
13(a)-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 200232.1
    
    Certification of Chief Executive Officer pursuant to U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification of Chief Financial Officer pursuant to U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 28




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##### Table of Contents



SIGNATURES
  CANYON RESOURCES CORPORATIONDate:  May 9, 2007
    /s/ James K. B. HeskethJames K. B. HeskethPresident and Chief Executive Officer
(Principal Executive Officer) Date:   May 9, 2007
    /s/ David P. SuleskiDavid P. SuleskiChief Financial Officer, Treasurer and
Corporate Secretary
(Principal Financial and Accounting Officer) 29




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##### Table of Contents



EXHIBIT INDEX
 EXHIBITNUMBER
    
    DESCRIPTION4.1
    
    Rights Agreement, effective as of March 23, 2007, between the Company and Computershare
Trust Company, N.A., as Rights Agent, which includes the form of Rights Certificate as
Exhibit A and the Summary of Rights to Purchase Common Stock as Exhibit B (filed as Exhibit
4.1 to the Companys Current Report on Form 8-K (File No. 001-11887) on March 23, 2007, and
incorporated by reference).31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13(a)-14(a)/15d-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Rule 13(a)-14(a)/15d-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of Chief Executive Officer pursuant to U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification of Chief Financial Officer pursuant to U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002