##### 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 [X] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934  or [  ] Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 
 Commission file number 1-11887 CANYON RESOURCES CORPORATION (a Delaware Corporation) I.R.S. Employer Identification Number 84-0800747 14142 Denver West Parkway, Suite 250
Golden, CO 80401
(303) 278-8464  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), and (2) has been subject to such filing requirements
for the past 90 days. Yes [X] No [  ]Indicate by check mark whether registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act.) Yes [  ] No [X]Indicate the number of shares outstanding of each of the issuers
classes of common stock, as of the latest practicable date:
29,115,760 shares of the Companys Common Stock were outstanding as
of October 29, 2004.




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CANYON RESOURCES CORPORATION
FORM 10-Q
For the Three and Nine Months ended September 30, 2004 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 20Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    Page 28Item 4. Controls and Procedures
    
    Page 29PART II OTHER INFORMATIONItem 1. Legal Proceedings
    
    Page 31Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities
    
    Page 31Item 3. Defaults Upon Senior Securities
    
    Page 31Item 4. Submission of Matters to a Vote of Security Holders
    
    Page 31Item 5. Other Information
    
    Page 31SIGNATURES
    
    Page 34Certification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906




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PART I FINANCIAL INFORMATION 
 Item 1. Financial Statements The following unaudited consolidated financial statements have been
prepared by Canyon Resources Corporation (the Company) pursuant to the rules
and regulations of the Securities and Exchange Commission (SEC). Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such SEC rules and regulations. These consolidated financial statements should be read in conjunction with
the financial statements and accompanying notes included in the Companys
Amendment No. 2 to Form 10-K/A filed on October 25, 2004, for the year ended
December 31, 2003. The financial statements for the 3 months and 9 months ended September 30, 2003 have been restated. (See Note
14) Consolidated Balance Sheets
    
    Page 2Consolidated Statements of Operations
    
    Page 3Consolidated Statements of Cash Flows
    
    Page 4-5Consolidated Statement of Changes in Stockholders Equity
    
    Page 6Notes to Interim Consolidated Financial Statements
    
    Page 7-19Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    Page 20Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    Page 28Item 4. Controls and Procedures
    
    Page 29
 1




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
  September 30,
    
    December 31,2004
    
    2003ASSETSCash and cash equivalents
    
    $
    8,113,400
    
    
    $
    4,139,800Restricted cash
    
    
    272,000
    
    
    
    307,100Accounts receivable
    
    
    30,200
    
    
    
    128,200Metal inventories
    
    
    3,045,900
    
    
    
    4,238,200Materials and supplies
    
    
    33,600
    
    
    
    128,900Prepaid and other assets
    
    
    226,800
    
    
    
    561,100Total current assets
    
    
    11,721,900
    
    
    
    9,503,300Property and equipment, at costProducing properties
    
    
    6,453,600
    
    
    
    6,237,000Other
    
    
    941,900
    
    
    
    940,0007,395,500
    
    
    
    7,177,000Accumulated depreciation and depletion
    
    
    (5,932,900
    )
    
    
    (2,275,500
    )Net property and equipment
    
    
    1,462,600
    
    
    
    4,901,500Undeveloped mineral claims and leases, net
    
    
    14,027,500
    
    
    
    16,031,400Restricted cash
    
    
    2,834,100
    
    
    
    2,819,900Other assets
    
    
    247,300
    
    
    
    57,100Total Assets
    
    $
    30,293,400
    
    
    $
    33,313,200LIABILITIES AND STOCKHOLDERS EQUITYAccounts payable
    
    $
    897,600
    
    
    $
    2,138,200Notes payable  current
    
    
    2,496,100
    
    
    
    1,037,400Capital leases  current
    
    
    14,100
    
    
    
    20,400Asset retirement obligations
    
    
    2,153,300
    
    
    
    932,500Unrealized loss on derivative instruments
    
    
    
    
    
    
    147,200Other current liabilities
    
    
    347,200
    
    
    
    340,200Total current liabilities
    
    
    5,908,300
    
    
    
    4,615,900Notes payable  long term
    
    
    
    
    
    
    2,599,000Capital leases  long term
    
    
    24,200
    
    
    
    33,600Asset retirement obligations
    
    
    923,800
    
    
    
    3,371,200Total liabilities
    
    
    6,856,300
    
    
    
    10,619,700Commitments and contingencies (Note 11)Common stock ($.01 par value) 50,000,000 shares authorized;
issued and outstanding: 29,054,100 at September 30, 2004,
and 25,593,800 at December 31, 2003
    
    
    290,500
    
    
    
    255,900Capital in excess of par value
    
    
    127,356,500
    
    
    
    117,111,700Deferred compensation
    
    
    (52,500
    )
    
    
    (264,200
    )Retained deficit
    
    
    (104,157,400
    )
    
    
    (94,409,900
    )Total Stockholders Equity
    
    
    23,437,100
    
    
    
    22,693,500Total Liabilities and Stockholders Equity
    
    $
    30,293,400
    
    
    $
    33,313,200
 The accompanying notes are an integral part of these consolidated financial statements. 2




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
  Three months ended September 30,
    
    Nine months ended September 30,2004
    
    2003
    
    2004
    
    2003(Restated)
    
    
    
    
    
    (Restated)REVENUESales
    
    $
    2,279,900
    
    
    $
    3,208,700
    
    
    $
    9,843,800
    
    
    $
    10,458,400EXPENSESCost of sales
    
    
    2,305,700
    
    
    
    3,962,000
    
    
    
    8,748,600
    
    
    
    10,927,200Depreciation, depletion, & amortization
    
    
    1,149,400
    
    
    
    750,400
    
    
    
    4,677,700
    
    
    
    3,722,000Selling, general & administrative
    
    
    2,350,500
    
    
    
    607,300
    
    
    
    4,816,900
    
    
    
    1,598,900Exploration and development costs
    
    
    99,800
    
    
    
    465,300
    
    
    
    394,300
    
    
    
    869,600Accretion expense
    
    
    43,300
    
    
    
    46,500
    
    
    
    129,900
    
    
    
    139,600Asset retirement obligation
    
    
    
    
    
    
    
    
    
    
    935,200
    
    
    
    Impairment of long-lived assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,382,000Gain on asset disposals
    
    
    (230,000
    )
    
    
    (9,500
    )
    
    
    (229,200
    )
    
    
    (85,200
    )5,718,700
    
    
    
    5,822,000
    
    
    
    19,473,400
    
    
    
    20,554,100OTHER INCOME (EXPENSE)Interest income
    
    
    25,900
    
    
    
    11,600
    
    
    
    66,700
    
    
    
    27,300Interest expense
    
    
    (55,400
    )
    
    
    (108,700
    )
    
    
    (191,800
    )
    
    
    (280,700
    )Unrealized gain (loss) on derivative
instruments
    
    
    
    
    
    
    (185,400
    )
    
    
    147,200
    
    
    
    433,700Other
    
    
    
    
    
    
    
    
    
    
    (140,000
    )
    
    
    150,000(29,500
    )
    
    
    (282,500
    )
    
    
    (117,900
    )
    
    
    330,300Loss before cumulative effect of change
in accounting principle
    
    
    (3,468,300
    )
    
    
    (2,895,800
    )
    
    
    (9,747,500
    )
    
    
    (9,765,400
    )Cumulative effect of change in
accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,700
    )Net loss
    
    ($
    3,468,300
    )
    
    ($
    2,895,800
    )
    
    ($
    9,747,500
    )
    
    ($
    9,777,100
    )Basic and diluted net loss per share
    
    ($
    0.12
    )
    
    ($
    0.13
    )
    
    ($
    0.35
    )
    
    ($
    0.46
    )Weighted average shares outstanding
    
    
    28,557,500
    
    
    
    23,107,200
    
    
    
    27,640,400
    
    
    
    21,480,400
 The accompanying notes are an integral part of these consolidated financial statements. 3




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
  Nine months ended September 30,2004
    
    2003(Restated)Cash flows from operating activities:Net loss
    
    ($
    9,747,500
    )
    
    ($
    9,777,100
    )Adjustments to reconcile net loss to net cash used in
operating activities:Depreciation, depletion and amortization
    
    
    4,677,700
    
    
    
    3,722,000Amortization of financing costs
    
    
    
    
    
    
    12,200Cumulative effect of change in accounting principle
    
    
    
    
    
    
    11,700Amortization of beneficial conversion feature
    
    
    47,100
    
    
    
    65,800Impairment of inventory
    
    
    1,056,500
    
    
    
    1,636,300Impairment of long-lived assets
    
    
    
    
    
    
    3,382,000Gain on asset disposals
    
    
    (229,200
    )
    
    
    (85,200
    )Gain on derivative instruments
    
    
    (147,200
    )
    
    
    (433,700
    )Non-cash compensation expense
    
    
    607,300
    
    
    
    529,800Provision for asset retirement obligations
    
    
    935,200
    
    
    
    Accretion of asset retirement obligation
    
    
    129,900
    
    
    
    139,600Write off of prepaid expenses
    
    
    151,000
    
    
    
    Changes in operating assets and liabilities:Increase (decrease) in accounts receivable
    
    
    98,000
    
    
    
    (27,300
    )Decrease in inventories
    
    
    1,246,200
    
    
    
    213,700(Increase) decrease in prepaid and other assets
    
    
    (6,900
    )
    
    
    95,400(Decrease) increase in accounts payable and accrued liabilities
    
    
    (5,100
    )
    
    
    336,300Decrease in other liabilities
    
    
    (3,512,500
    )
    
    
    (112,600
    )Decrease (increase) in restricted cash
    
    
    20,900
    
    
    
    (386,200
    )Total adjustments
    
    
    5,068,900
    
    
    
    9,099,800Net cash used in operating activities
    
    
    (4,678,600
    )
    
    
    (677,300
    )Cash flows from investing activities:Purchases and development of property and equipment
    
    
    (407,700
    )
    
    
    (1,567,200
    )Proceeds from asset disposals
    
    
    379,200
    
    
    
    229,300Earnest money applied
    
    
    
    
    
    
    (27,600
    )Increase in restricted cash
    
    
    
    
    
    
    (59,600
    )Net cash used in investing activities
    
    
    (28,500
    )
    
    
    (1,425,100
    )Cash flows from financing activities:Issuance of stock
    
    
    9,733,800
    
    
    
    6,156,700Proceeds for stock to be issued
    
    
    
    
    
    
    245,000Proceeds from sale of debentures
    
    
    
    
    
    
    3,299,000Payments on debt
    
    
    (1,037,400
    )
    
    
    (2,046,700
    )Payments on capital lease obligations
    
    
    (15,700
    )
    
    
    (161,100
    )Net cash provided by financing activities
    
    
    8,680,700
    
    
    
    7,492,900Net increase in cash and cash equivalents
    
    
    3,973,600
    
    
    
    5,390,500Cash and cash equivalents, beginning of year
    
    
    4,139,800
    
    
    
    430,800Cash and cash equivalents, end of period
    
    $
    8,113,400
    
    
    $
    5,821,300
 The accompanying notes are an integral part of these consolidated financial statements. 4




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS, continued
(Unaudited) Supplemental disclosures of cash flow information:  1.
    
    The Company paid $144,700 of interest during the first nine months of
2004, and $202,700 during the corresponding period of 2003.2.
    
    The Company paid no income taxes during the first nine months of 2004 nor
the corresponding period of 2003. Supplemental schedule of noncash investing and financing activities:  1.
    
    The Company financed an equipment lease buy-out in the amount of
$1,582,800 during the first nine months of 2003.2.
    
    The Company issued 2,099,600 shares of common stock with a fair market
value of $1,952,600 to a creditor as payment for services during the first
nine months of 2003.3.
    
    The Company issued 110,400 shares of common stock with a fair market
value of $179,900 to an employee as compensation for services during the
first nine months of 2004. During the first nine months of 2003, the
Company issued 83,700 shares of common stock with a fair market value of
$110,200 to an employee as compensation for services.4.
    
    The Company issued 108,700 shares of common stock in connection with the
conversion of $150,000 of debenture principal during the first nine months
of 2004. The Company issued 434,800 shares of common stock in connection
with the conversion of $600,000 of debenture principal during the first
nine months of 2003.5.
    
    Non-cash stock compensation for the Companys stock option plans under
variable plan accounting was $427,400 and $419,600 during the first nine
months of 2004 and 2003, respectively. The accompanying notes are an integral part of these consolidated financial statements. 5




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
  Common Stock
    
    Capital in
    
    
    
    
    
    
    
    
    
    CommonNumber of
    
    At Par
    
    Excess of Par
    
    Deferred
    
    Retained
    
    ShareholdersShares
    
    Value
    
    Value
    
    Compensation
    
    Deficit
    
    EquityBalances, January 1, 2004,
    
    
    25,593,800
    
    
    $
    255,900
    
    
    $
    117,111,700
    
    
    ($
    264,200
    )
    
    ($
    94,409,900
    )
    
    $
    22,693,500Stock issued for cash
    
    
    1,631,000
    
    
    
    16,300
    
    
    
    7,111,000
    
    
    
    
    
    
    
    
    
    
    
    7,127,300Exercise of warrants
    
    
    1,447,700
    
    
    
    14,500
    
    
    
    2,411,800
    
    
    
    
    
    
    
    
    
    
    
    2,426,300Exercise of stock options
    
    
    162,500
    
    
    
    1,600
    
    
    
    178,600
    
    
    
    
    
    
    
    
    
    
    
    180,200Other stock issued
    
    
    110,400
    
    
    
    1,100
    
    
    
    178,800
    
    
    
    
    
    
    
    
    
    
    
    179,900Other equity changes(1)
    
    
    
    
    
    
    
    
    
    
    215,700
    
    
    
    211,700
    
    
    
    
    
    
    
    427,400Debenture conversion
    
    
    108,700
    
    
    
    1,100
    
    
    
    148,900
    
    
    
    
    
    
    
    
    
    
    
    150,000Comprehensive lossNet loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,747,500
    )
    
    
    (9,747,500
    )Other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,747,500
    )
    
    
    (9,747,500
    )Balances, September 30, 2004
    
    
    29,054,100
    
    
    $
    290,500
    
    
    $
    127,356,500
    
    
    ($
    52,500
    )
    
    ($
    104,157,400
    )
    
    $
    23,437,100
  (1)
    
    Compensation expense determined under variable plan accounting for
the Companys stock option plans. The accompanying notes are an integral part of these consolidated financial statements. 6




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CANYON RESOURCES CORPORATION NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 1. Basis of Presentation: During interim periods, Canyon Resources Corporation (the Company) follows
the accounting policies set forth in its Annual Report to Stockholders and its
Report on Form 10-K/A filed with the Securities and Exchange Commission. Users
of financial information produced for interim periods are encouraged to refer
to the footnotes contained in the Annual Report to Stockholders when reviewing
interim financial results. In the opinion of management, the accompanying interim financial
statements contain all material adjustments, consisting only of normal
recurring adjustments necessary to present fairly the financial position, the
results of operations, and the cash flows of Canyon Resources Corporation and
its consolidated subsidiaries for interim periods. These interim results are
not necessarily indicative of the results of operations or cash flows for the
full year ending December 31, 2004. The
Company has restated its 2003 financial statements including
footnotes as applicable. For additional
information, see Note 14. 2. Management Estimates and Assumptions: Certain amounts included in or affecting the Companys financial
statements and related disclosures must be estimated, requiring that certain
assumptions be made with respect to values or conditions which cannot be made
with certainty at the time the financial statements are prepared. Therefore,
the reported amounts of the Companys assets and liabilities, revenues and
expenses, and associated disclosures with respect to contingent assets and
obligations are necessarily affected by these estimates. The Company evaluates
these estimates on an ongoing basis, utilizing historical experience,
consultation with experts, and other methods considered reasonable in the
particular circumstances. Nevertheless, actual results may differ significantly
from the Companys estimates. 3. Earnings per Share (EPS): The Company computes EPS by applying the provisions of Statement of
Financial Accounting Standards (SFAS) No. 128, Earnings per Share. As the
Company reported net losses for the periods presented, inclusion of common
stock equivalents would have an antidilutive effect on per share amounts.
Accordingly, the Companys basic and diluted EPS computations are the same for
the periods presented. For the three months ended September 30, 2004 and 2003,
common stock equivalents that were not included in the computation of diluted
EPS were 5,824,200 and 4,337,700, respectively. Common stock equivalents for
the nine months ended September 30, 2004 and 2003 that were not included in the
computation of diluted EPS were 6,280,700 and 4,159,500, respectively. 4. Stock Based Compensation: In accordance with the provisions of SFAS No. 123, Accounting for
Stock-Based Compensation(SFAS No. 123), the Company measures compensation cost
using the intrinsic value method prescribed by Accounting Principles Board
(APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related
interpretations to account for its stock option plans. However, because the
Company had allowed option holders to exercise options by surrendering shares
underlying vested but unexercised options in payment of the exercise price of
the options, the Companys outstanding options are accounted for using variable
plan accounting. As a result, while no compensation cost has been recognized at
the grant date as the exercise price of all stock option grants was at least
equal to 100% of the market price of the Companys common stock as of the date
of grant, subsequent changes in the market price of the Companys stock to the
date of exercise or forfeiture result in a change in the measure of
compensation cost for the award being recognized. 7




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CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) 4. Stock Based Compensation, continued: Effective July 1, 2004, the Company changed the manner in which payment of
the exercise price of an option could be tendered, requiring payment in cash or
tendering of shares of the Company that had been held for at least six months.
As a result, the Company has applied fixed plan accounting for its stock option
plans on a prospective basis, commencing July 1, 2004. Because deferred
compensation in the amount of $112,300 had previously been recorded for
in-the-money, unvested options at the time the Company changed from variable
plan accounting to fixed plan accounting, this amount will be amortized to
expense as the options vest. For the three months ended September 30, 2004, the
amount amortized was $59,800. In December 2002, the Financial Accounting Standards Board issued SFAS No.
148, Accounting for Stock-Based Compensation  Transition and Disclosure(SFAS
No. 148). SFAS No. 148 amends SFAS No. 123 to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, SFAS No. 148 amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in
both annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The amendments to SFAS No. 123 are effective for financial statements
for fiscal years ending after December 15, 2002. Had compensation cost been
determined under the provisions of SFAS No. 123, the following pro forma net
loss and per share amounts would have been recorded for the three and nine
months ended September 30: THREE MONTHS ENDED
    
    NINE MONTHS ENDEDSEPTEMBER 30,
    
    SEPTEMBER 30,2004
    
    2003
    
    2004
    
    2003(Restated)
    
    
    
    (Restated)Net loss, as reported
    
    ($
    3,468,300
    )
    
    ($
    2,895,800
    )
    
    ($
    9,747,500
    )
    
    ($
    9,777,100
    )Add back: compensation expense
(credit) determined under variable plan accounting
    
    
    59,800
    
    
    
    277,100
    
    
    
    427,400
    
    
    
    419,600Deduct:
compensation expense determined under fair value
based method
    
    
    (62,000
    )
    
    
    (111,500
    )
    
    
    (92,700
    )
    
    
    (162,200
    )Pro forma net loss
    
    ($
    3,470,500
    )
    
    ($
    2,730,200
    )
    
    ($
    9,412,800
    )
    
    ($
    9,519,700
    )Basic and diluted loss per share As reported
    
    ($
    0.12
    )
    
    ($
    0.13
    )
    
    ($
    0.35
    )
    
    ($
    0.46
    ) Pro forma
    
    ($
    0.12
    )
    
    ($
    0.12
    )
    
    ($
    0.34
    )
    
    ($
    0.44
    )
 8




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CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  5.
    
    Restricted Cash:Restricted cash consisted of the following at: September 30,
    
    December 31,2004
    
    2003Collateral for Letter of Credit(a)
    
    $
    249,000
    
    
    $
    249,000Collateral for reclamation bonds and other
contingent events(b)
    
    
    151,900
    
    
    
    150,800Kendall Mine reclamation(c)
    
    
    1,933,200
    
    
    
    1,920,100McDonald Gold Project cash reclamation bond(d)
    
    
    500,000
    
    
    
    500,000Net proceeds from property sales(e)
    
    
    272,000
    
    
    
    272,100Escrow deposits(f)
    
    
    
    
    
    
    35,0003,106,100
    
    
    
    3,127,000Current portion
    
    
    272,000
    
    
    
    307,100Noncurrent portion
    
    $
    2,834,100
    
    
    $
    2,819,900
  a)
    
    In connection with the issuance of certain bonds for the
performance of reclamation obligations and other contingent events at
the Briggs Mine, a bank Letter of Credit was provided in favor of the
Surety as partial collateral for such bond obligations. The Letter of
Credit is fully collateralized with cash and will expire no earlier
than December 31, 2004, and at the banks option, may be renewed for
successive one-year periods.(b)
    
    Held directly by the Surety as partial collateral for
reclamation and other contingent events at the Briggs Mine.(c)
    
    Held directly by the Montana Department of Environmental
Quality in an interest bearing account for use in continuing
reclamation at the Kendall minesite. (See Note 11(a))(d)
    
    Held directly by the Montana Department of Environmental
Quality for reclamation at the McDonald Gold Property.(e)
    
    In connection with the auction of certain properties,
cash has been sequestered by court order. (See Note 11(f)).(f)
    
    Earnest money received in connection with contracted
property sales in 2002 which had not closed and were held by
the Companys escrow agent. The Company rescinded the sales
contracts in 2004 because of uncertainty of the Montana
Department of Environmental Quality decision on the
Environmental Impact Statement. The money was refunded in June
2004.  6.
    
    Inventories:Metal inventories consisted of the following at: September 30, 2004
    
    December 31, 2003Broken ore under leach
    
    $
    2,820,100
    
    
    $
    4,191,300Doré
    
    
    225,800
    
    
    
    46,900$
    3,045,900
    
    
    $
    4,238,200
 9




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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) 6. Inventories, continued: The Company wrote down its metal inventory at the Briggs Mine to net
realizable value by $92,400 and $903,800 (restated) during the third quarters
of 2004 and 2003, respectively, and $1,056,500 and $1,636,300 (restated) for
the first
nine months of 2004 and 2003, respectively, due to a combination of
higher operating costs and lower production.  7.
    
    Undeveloped Mineral Claims and Leases: The carrying value of the Companys undeveloped mineral claims and leases
consists of the following components at: SEPTEMBER 30, 2004
    
    DECEMBER 31, 2003Gross
    
    
    
    
    
    
    
    
    
    GrossCarrying
    
    Accumulated
    
    Net Book
    
    Carrying
    
    Accumulated
    
    Net BookValue
    
    Amortization
    
    Value
    
    Value
    
    Amortization
    
    ValueProperty:McDonald
    
    $
    16,200,200
    
    
    ($
    5,568,700
    )
    
    $
    10,631,500
    
    
    $
    16,200,200
    
    
    ($
    4,050,000
    )
    
    $
    12,150,200Seven-Up Pete
    
    
    5,175,000
    
    
    
    (1,779,000
    )
    
    
    3,396,000
    
    
    
    5,175,000
    
    
    
    (1,293,800
    )
    
    
    3,881,200$
    21,375,200
    
    
    ($
    7,347,700
    )
    
    $
    14,027,500
    
    
    $
    21,375,200
    
    
    ($
    5,343,800
    )
    
    $
    16,031,400
 Amortization of these properties commenced in 2002 at the rate of
$2,671,900 per year. The properties are being amortized over eight years with
no residual value. Future amortization of $2,671,900 per year will be
recognized until the properties are fully amortized or events or circumstances
change. See Note 11(e) for a discussion of the legal status of the properties
and Note 15 for a discussion of recently issued accounting pronouncements.  8.
    
    Impairment of Long-lived Assets The Company tests for impairment of its long-lived assets when changes in
events or circumstances occur. In accordance with SFAS No. 144 the Company uses
estimates of future cash flows to test the recoverability of the Briggs Mines
long-lived assets which includes mine development expenditures and plant and
equipment. The estimated future cash flows include the projected revenues from
in-ground estimated reserves based on the Companys estimate of future gold
prices and all future expenditures necessary to produce those in-ground
reserves. As mining progressed in the second quarter of 2003, the Briggs Mine
encountered projected ore which contained lower gold grade and higher sulfide
contents (with lower gold recovery) than expected. The Company determined that
these gold ounces were no longer economic and, as such, decreased its reserves
at the Briggs Mine. The Company recorded a write down of $3,382,000 on these
assets to their estimated fair value of $4,634,300 as a consequence.  9.
    
    Notes Payable: Notes payable consisted of the following at: September 30, 2004
    
    December 31, 2003Caterpillar Finance(a)
    
    $
    
    
    
    $
    1,037,400Debentures(b)
    
    
    2,524,000
    
    
    
    2,674,000- discount
    
    
    (27,900
    )
    
    
    (75,000
    )2,496,100
    
    
    
    3,636,400Current portion
    
    
    2,496,100
    
    
    
    1,037,400Notes
payable  Noncurrent
    
    $
    
    
    
    $
    2,599,000
  (a)
    
    In January 2003, the Company exercised a lease purchase option
to buy the mining fleet at the Briggs Mine for approximately $1.6
million and arranged to finance the purchase price for one year at an
interest rate of 6.75%. The outstanding balance was paid off during
the second quarter of 2004. 10




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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  9.
    
    Notes Payable, continued:  (b)
    
    In March 2003, the Company completed a private placement
financing of 6%, two year convertible debentures raising $3,299,000.
Approximately $1.2 million of the proceeds was used to pay off the
Briggs Mine debt with the balance retained for general corporate
purposes. The debentures require quarterly interest payments, and the
holders have the right to convert principal to common stock of the
Company, subject to certain adjustments, at any time at a conversion
rate of $1.38 per share of common stock. The principal amount, unless
otherwise converted, is due March 1, 2005. The Companys stock price
at the end of September 2004 was $3.80 per share.  10.
    
    Asset Retirement Obligations: The Companys estimated asset retirement obligations include site specific
costs for earthwork, revegetation, water treatment and dismantlement of
facilities for its current or recently producing mineral properties. The following provides a reconciliation of the Companys beginning and
ending carrying values for its asset retirement obligations in the current
year: Balance, December 31, 2003
    
    $
    4,303,700Settlement of liabilities
    
    
    (2,291,700
    )Change in estimate(1)
    
    
    935,200Accretion expense
    
    
    129,900Balance, September 30, 2004
    
    
    3,077,100Current portion
    
    
    2,153,300Non current portion
    
    $
    923,800
  (1)
    
    During the second quarter of 2004, the Company held
discussions with the Montana Department of Environmental Quality
(DEQ) concerning reclamation at the Kendall Mine site. After
these discussions, the Company modified its reclamation plan to
include items which had been developed by an engineering
contractor to the DEQ and subsequently, revised its estimate to
achieve closure of the Kendall Mine.  11.
    
    Commitments and Contingencies:  (a)
    
    Kendall Mine ReclamationThe Kendall Mine holds permits granted by the DEQ. In February 2002,
the DEQ issued a decision that a comprehensive Environmental Impact
Statement (EIS) is needed for completion of remaining reclamation at
Kendall. On June 30, 2004, the Company commenced significant earthwork
reclamation. Subsequently, in August 2004, the DEQ notified the Company
that it could not complete the final capping of the leach pads until
the EIS was completed. The Companys estimate to achieve mine closure
could be impacted by the outcome of the DEQs decision following an
EIS. The Company has $1,933,200 on deposit in an interest bearing
account with the DEQ for reclamation at the Kendall Mine.(b)
    
    Briggs Mine Surety BondsThe Briggs Mine operates under permits granted by various agencies
including the U.S. Bureau of Land Management (BLM), Inyo County, the
California Department of Conservation, and the Lahontan Regional Water
Quality Control Board (Lahontan). These agencies have jointly required
the Company to post a reclamation bond in the amount of $3,030,000 to
ensure appropriate reclamation. Additionally, the Company 11




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CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  11.
    
    Commitments and Contingencies, continued:  was required by Lahontan to post a $1,010,000 bond to ensure adequate
funds to mitigate any foreseeable release, as defined, of pollutants
to state waters. Both bonds are subject to annual review and
adjustment.In 2000, in response to a demand for an increase in collateral by the
Surety 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
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 not made
any deposits to date, and is in discussions with the Surety to
reschedule the deposit requirements. If an acceptable rescheduling of
the deposit requirements cannot be agreed to, the Surety could seek to
terminate the bonds which could result in the Company becoming liable
for the principal amounts under its collateral agreement with the
Surety. In April 2004, the Company ceased active mining at Briggs and
has commenced reclamation activities.(c)
    
    Contingent LiabilityOn September 25, 1997, the Company, together with its wholly-owned
subsidiary, CR Montana Corporation (CR Montana), purchased a 72.25%
participating interest and underlying assets in the Seven-Up Pete
Venture (SPV) from CR Montanas partner in the SPV, Phelps Dodge
Corporation (Phelps Dodge). The Company and its wholly-owned subsidiary
now own 100% of the SPV. The SPV includes the McDonald Gold Project
near Lincoln, Montana.The Company made an initial payment of $5 million and is required to
make a final payment of $10.0 million upon issuance of all permits
required for construction of the McDonald Gold Project, or
alternatively, one-third of any proceeds received from any potential
takings lawsuit. Due to the contingent nature of the transaction, the
Company recorded only the initial payment of $5 million as additions to
mining claims and leases. The purchase payments are collateralized only
by the 72.25% participating interest and underlying assets in the SPV
transferred from Phelps Dodge to the Company and CR Montana in this
transaction, and the 50% co-tenancy interest in certain real property
also transferred to the Company and CR Montana.(d)
    
    Anti-Mining Initiative (I-137)In November 1998, the Montana electorate passed an anti-mining
initiative (I-137) by a vote of 52% to 48%. I-137, as modified by the
State Legislature in April 1999, that bans development of new gold and
silver mines, which use open-pit mining methods and cyanide in the
treatment and recovery process. In April 2000, the SPV filed lawsuits
in Montana State District Court and in the United States District
Court, seeking to have I-137 declared unconstitutional, or,
alternatively, to obtain a takings or damage award for the lost value
of the McDonald, Seven-Up Pete and Keep Cool mineral properties. These
lawsuits are based on, amongst others, (i) the right not to be deprived
of property without due process of law; (ii) the right to equal
protection under the laws; and (iii) the right to be protected against
laws which impair the obligations of existing contracts. The United
States District Court issued a ruling August 30, 2001 in which the
Court dismissed the SPVs substantive due process claim but, as
requested by the SPV, ruled that the remainder of the SPVs claims
could be pursued at such time as the State lawsuit was concluded. The
Montana State District Court issued a ruling November 1, 2001 in
response to a Motion to Dismiss and a Motion For Summary Judgment by
the State of Montana. In this ruling, the Court dismissed four of the
SPVs fourteen counts, including its substantive due process and equal
protection challenges to I-137s validity. The decision maintained for
adjudication the contract impairment validity challenge, contract
damage claims, and all of the takings claims. Following the November
2001 ruling by the State District Court, the State filed a new Motion
for Summary Judgment as to all claims. In an Order dated December 9,
2002, the Court granted the State Summary Judgment on all of the 12




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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  11.
    
    Commitments and Contingencies, continued:  remaining legal claims of the Companys lawsuit. On January 14, 2003,
the Company filed an appeal with the Montana State Supreme Court. Oral
arguments were heard by the Montana Supreme Court on October 28, 2003.
The Company expects a ruling during 2004.On March 2, 2004, a local citizens group (Miners, Merchants and
Montanans for Jobs and Economic Opportunity, FOR I-147), filed the
language of a new initiative, I-147, to be placed before the voters of
Montana at the November 2, 2004 ballot which, if enacted, would allow
use of cyanide leaching in open-pit gold mines with specific, rigorous
engineering practices and environmental safeguards. On July 14, 2004,
the official certification for the ballot was announced by the
Secretary of State. On November 2, 2004, I-147, the ballot initiative
that would have allowed the use of cyanide in processing gold and
silver ores from new open-pit mines, was defeated by Montana voters by
a 58% to 42% vote. The defeat of I-147 does not result in an impairment
to be taken against the $14,027,500 undeveloped mineral claims and
leases as their carrying value is considered recoverable through
development of the property or settlement with the state. As a result of this vote, the Seven-Up Pete Venture plans
to re-investigate alternate technologies of gold mining and recovery of
its gold deposits near Lincoln, Montana. In addition, the Company will
continue to pursue its lawsuits against the State of Montana regarding
the enactment of I-137 in state court and, if necessary, the federal
court system. For the nine months ended September 30, 2004, the Company
contributed $2,380,700 to the I-147 campaign, which was charged to
selling, general and administrative expense.Should an alternate technology be available to treat any of the gold
deposits of the Seven-Up Pete Venture, significant capital will be
required to resume permitting and ultimately develop them. No
assurances can be made regarding the Companys ability to find an
economically viable alternative technology, and if found, to be able to
obtain additional financing through capital markets, joint ventures, or
other arrangements in the future and that the
state leases will be favorably resolved as discussed below.(e)
    
    McDonald Gold Project  State LeasesOn September 24, 1998, the Montana Department of Natural Resources
(DNRC), the entity that administers state mineral leases, unilaterally
decided to cancel the permitting extension of the 10-year lease term of
the state leases that pertain to the McDonald Gold Project which would
require the Company, after a period of approximately seventeen months,
to commence paying a delay rental of $150,000 per month in order to
maintain the leases. The carrying value of the McDonald Gold Project as
of September 30, 2004 was $14,027,500.In February 2000, pursuant to its September 1998 decision, the DNRC
determined that the primary terms of the mineral leases had expired.
The Company believes it held valid mineral leases and appealed the
action of the DNRC in an administrative hearing process. Although a
DNRC Hearing Examiner affirmed the DNRC action, it is the Companys
position that the permitting process has been interrupted by the threat
and passage of I-137 and, thus, the permit extension is continued until
the governmental impediment is resolved. As part of the I-137 lawsuit
filed in April 2000 against the State of Montana, the Company asked the
court to review and invalidate the DNRCs action. The court, however,
in its December 9, 2002 order as described in the preceding section,
denied the Companys petition for judicial review. On January 14, 2003,
the Company filed an appeal with the Montana State Supreme Court. Oral
arguments were heard by the Montana State Supreme Court on October 28,
2003. The Company expects a ruling during 2004.The Company believes the state leases are still in effect. The Company
has made this determination based on our Montana legal counsels
opinion, the clear statement by the State of Montana notifying the
Company that annual rental payments, which are still being made and
deposited by the State, would be refundable once the leases have been
found to be terminated, and finally, the absence of actions of the
State of Montana with respect 13




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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  11.
    
    Commitments and Contingencies, continued:  to reclamation on the land covered by the leases. However, the Company
does not have the legal right to use cyanide extraction technology for
an open pit mine.(f)
    
    Kendall Mine LawsuitsIn October 2001, a Plaintiff group filed suit in Montana District Court
against the Company and its wholly-owned subsidiary, CR Kendall
Corporation, alleging violation of water rights and other torts in
connection with the operation of the Kendall Mine. The Complaint seeks
unspecified damages and punitive damages. A court date of November 29,
2004 has been scheduled for trial of this case. The Company believes
the allegations are completely without merit and that the Company will
prevail in this matter.In August 2002, a Preliminary Injunction was issued in Montana District
Court on behalf of the Plaintiff group in connection with the Companys
auction of certain mineral rights and fee lands in western Montana. In
October 2002, the Court issued a Supplemental Order which will
sequester up to $528,000 of any proceeds realized from the auction
until such time as the lawsuit is concluded. As of September 30, 2004,
$267,800 had been remitted to the Court as required by the Order.
Including interest earned on the funds remitted, the Court held
$272,000 as of September 30, 2004.In May 2004, the Company became aware of a suit filed in March 2004 in
Montana District Court against the Company, CR Kendall Corporation, and
the Kendall Mine alleging violations of the Federal Pollution Control
Act. The Complaint was filed by the Montana Environmental Information
Center, Inc. and Earthworks/Mineral Policy Center, Inc. and seeks
declaratory judgment, injunctive relief, remediation and the imposition
of civil penalties. A court date of May 5, 2005 has been scheduled for
trial of this case. The Company believes these allegations are
completely without merit and that the Company will prevail in this
matter.(g)
    
    Other ItemsDuring 2003, the Company entered into an agreement with Gold Resource
Corporation, a private Colorado Corporation, which is an affiliate of,
and 36% owned by U. S. Gold Corporation, a public Colorado Corporation,
to finance the exploration and possible development of a gold/silver
project in the State of Oaxaca, Mexico.The Company, through September 30, 2004, had funded $500,000 of
exploration and metallurgical test work. In August 2004, the Company
elected not to proceed with the financing of a gold/silver project in
the State of Oaxaca, Mexico. As consideration for its prior funding of
$500,000 of exploration, engineering, and metallurgical test work on
the property, the Company received 600,000 shares of Gold Resources
Corporation, a private Colorado corporation. As of September 30, 2004,
the Company owns approximately 10% of the outstanding shares. If Gold
Resources wishes to issue additional shares, the Company shall have the
right of first refusal. 14




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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  12.
    
    Derivative Instruments and Price Protection Arrangements: Gains and (losses) on the Companys forward contracts resulting from
period to period changes in the mark-to-market calculations are as follows: THREE MONTHS ENDED
    
    NINE MONTHS ENDEDSEPTEMBER 30,
    
    SEPTEMBER 30,2004
    
    2003
    
    2004
    
    2003
    
    ($
    185,400
    )
    
    $
    147,200
    
    
    $
    433,700
 The Company does not have any price protection arrangements in place on
the remaining Briggs production.  13.
    
    Income Taxes: The Company has not recorded a tax benefit for the current period as the
realization is not expected to be likely during the year. The benefit is also
not expected to be realizable as a deferred tax asset at year end as the
Company anticipates recording a full valuation allowance for all deferred tax
assets, except to the extent of offsetting reversals of expected deferred tax
liabilities.  14.
    
    Restatement of the Three and Nine Months Ended September 30, 2003 Financial Statements
and Related Information: Briggs Asset Impairments As a result of corrections to the Companys impairment analyses, the
Company has determined that certain long-lived assets at the Briggs Mine
were impaired in earlier periods. The previous impairment analyses, in
addition to the projected revenues from the estimated gold contained in
the ore at the Briggs Mine, incorrectly included projected revenues from
the sale of metals inventory. The reduction in the projected revenues due
to the elimination of revenues from the sale of metals inventory resulted
in the impairment of the long-lived assets at the Briggs Mine in prior
periods. The impairment of the long-lived assets also reduced the
Companys annual depreciation, depletion and amortization (DD&A)
capitalized as part of metals inventory and the related inventory
valuation and cost of sales calculations. Changes in the asset impairments
also impact the amount of gain (loss) recognized on the subsequent sales
of mine assets. These adjustments decreased the Companys net loss by
$82,500 or $0.00 per share in the third quarter of 2003 and $1,798,900, or
$0.08 per share for the nine months ended September 30, 2003. Expense Funding of Exploration Activities During 2003, the Company entered into an agreement with Gold Resources
Corporation (GRC), which was in substance an agreement to fund GRCs
exploration efforts at a project in the State of Oaxaca, Mexico. (See Note
11(g)). Through December 31, 2003, the Company had provided GRC $400,000,
with an additional $100,000 of funding in 2004, which the Company
originally recorded as a note receivable. The Company has subsequently
determined that the advances related to funding exploration costs should
be expensed as incurred. This adjustment increased the Companys net loss
by $200,000 in the third quarter of 2003 and for the nine months then
ended, or $0.01 per share. Stock Compensation Adjustment Prior to 2004, the Company issued 235,200 shares of unregistered common
stock as partial compensation to an individual pursuant to an employment
agreement. The Company originally recorded compensation expense for these
unregistered shares using a share price which was approximately 15% lower
than the market price. The Company has subsequently determined that
compensation expense should be calculated using the market price of 15




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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  14.
    
    Restatement of the Three and Nine Months Ended September 30, 2003 Financial Statements
and Related Information, continued: unregistered shares in accordance with APB 25, Accounting for Stock-Based
Compensation. These adjustments increased the Companys net loss by $8,900
in the third quarter of 2003 and $32,300 during the nine months ended
September 30, 2003. The adjustments had no material effect on per share
amounts. Beneficial Conversion Feature for Convertible Debt In March 2003, the Company completed a private placement financing of its
6% two year convertible debentures which can be converted at any time into
common stock at $1.38 per share. For certain investors, the common stock
had a fair value at the commitment date in excess of the conversion price
resulting in a beneficial conversion feature. Emerging Issues Task Force
(EITF) No. 98-5, Accounting for Convertible Securities with Beneficial
Conversion Features or Contingently Adjustable Convertible Ratios,
requires that the intrinsic value of a beneficial conversion feature be
recorded to additional paid-in capital and a discount on the convertible
debt. The discount is then amortized to interest expense over the term of
the debt using the effective interest rate method. This adjustment
increased the Companys net loss by $42,200, (no material effect on per
share amounts), in the third quarter of 2003 and $65,800 (no material
effect on per share amounts) during the nine months ended September 30,
2003. Variable Plan Accounting on Stock Option Plans The Company has restated prior periods to account for the Companys stock
option plans using variable plan accounting, insofar as the Company had
permitted option holders to exercise options by surrendering shares
underlying unexercised options in payment of the exercise price of the
options. While the Company had accounted for options issued under the
plans as fixed awards, it has been determined that variable plan
accounting would be appropriate. The use of variable plan accounting
requires a charge to compensation expense, commencing at the grant date,
in an amount by which the market price of the Companys stock covered by
the grant exceeds the option price. This accounting continues and
subsequent changes in the market price of the Companys stock from the
date of grant to the date of exercise or forfeiture result in a change in
the measure of compensation cost for the award being recognized but not
resulting in an accumulated adjustment below zero. These adjustments
increased the Companys net loss by $277,100, or $0.01 per share in the
third quarter of 2003, and $419,600, or $0.02 per share for the nine
months ended September 30, 2003. The following sets forth the effects of the aforementioned restatements to
the Companys Consolidated Statements of Operations for the three and nine
months ended September 30, 2003, and its Consolidated Statements of Cash Flows
for the nine months ended September 30, 2003. 16




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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  14.
    
    Restatement of the Three and Nine Months Ended September 30, 2003 Financial Statements
and Related Information, continued: CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended September 30, 2003
    
    Nine Months Ended September 30, 2003As Previously
    
    
    
    
    
    As
    
    As Previously
    
    
    
    
    
    AsReported
    
    Adjustments
    
    Restated
    
    Reported
    
    Adjustments
    
    RestatedREVENUESales
    
    $
    3,208,700
    
    
    $
    
    
    
    $
    3,208,700
    
    
    $
    10,458,400
    
    
    $
    
    
    
    $
    10,458,400EXPENSESCost of sales
    
    
    3,449,400
    
    
    
    512,600
    (1)
    
    
    3,962,000
    
    
    
    11,251,100
    
    
    
    (329,300
    )(1)5,400
    (5)
    
    
    10,927,200Depreciation, depletion & amortization
    
    
    1,345,500
    
    
    
    (595,100
    )(1)
    
    
    750,400
    
    
    
    4,975,800
    
    
    
    (1,253,800
    )(1)
    
    
    3,722,000Selling, general and administrative
    
    
    334,100
    
    
    
    8,900
    (2)
    
    
    
    
    
    
    1,179,300
    
    
    
    32,300
    (2)264,300
    (5)
    
    
    607,300
    
    
    
    
    
    
    
    387,300
    (5)
    
    
    1,598,900Exploration costs
    
    
    252,500
    
    
    
    200,000
    (3)
    
    
    
    
    
    
    642,700
    
    
    
    200,000
    (3)12,800
    (5)
    
    
    465,300
    
    
    
    
    
    
    
    26,900
    (5)
    
    
    869,600Accretion expense
    
    
    46,500
    
    
    
    
    
    
    
    46,500
    
    
    
    139,600
    
    
    
    
    
    
    
    139,600Impairment of producing assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,382,000
    (1)
    
    
    3,382,000(Gain) loss on asset disposals
    
    
    (9,500
    )
    
    
    
    
    
    
    (9,500
    )
    
    
    (85,200
    )
    
    
    
    
    
    
    (85,200
    )5,418,500
    
    
    
    403,500
    
    
    
    5,822,000
    
    
    
    18,103,300
    
    
    
    2,450,800
    
    
    
    20,554,100OTHER INCOME (EXPENSE)Interest income
    
    
    11,600
    
    
    
    
    
    
    
    11,600
    
    
    
    27,300
    
    
    
    
    
    
    
    27,300Interest expense
    
    
    (66,500
    )
    
    
    (42,200
    )(4)
    
    
    (108,700
    )
    
    
    (214,900
    )
    
    
    (65,800
    )(4)
    
    
    (280,700
    )Gain on derivative instruments
    
    
    (185,400
    )
    
    
    
    
    
    
    (185,400
    )
    
    
    433,700
    
    
    
    
    
    
    
    433,700Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,000
    
    
    
    
    
    
    
    150,000(240,300
    )
    
    
    (42,200
    )
    
    
    (282,500
    )
    
    
    396,100
    
    
    
    (65,800
    )
    
    
    330,300Loss before cumulative effect of
change in accounting principle
    
    
    (2,450,100
    )
    
    
    (445,700
    )
    
    
    (2,895,800
    )
    
    
    (7,248,800
    )
    
    
    (2,516,600
    )
    
    
    (9,765,400
    )Cumulative effect of change in
accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,700
    )
    
    
    
    
    
    
    (11,700
    )Net loss
    
    ($
    2,450,100
    )
    
    ($
    445,700
    )
    
    ($
    2,895,800
    )
    
    ($
    7,260,500
    )
    
    ($
    2,516,600
    )
    
    ($
    9,777,100
    )Basic and diluted net loss per share
    
    ($
    0.11
    )
    
    ($
    0.02
    )
    
    ($
    0.13
    )
    
    ($
    0.34
    )
    
    ($
    0.12
    )
    
    ($
    0.46
    )Weighted average shares outstanding
    
    
    23,107,200
    
    
    
    23,107,200
    
    
    
    23,107,200
    
    
    
    21,480,400
    
    
    
    21,480,400
    
    
    
    21,480,400
  (1)
    
    Change in Briggs Mine impairment model(2)
    
    Change in FMV determination of stock issued for services(3)
    
    Expense funding of exploration activities(4)
    
    Beneficial conversion feature on debentures(5)
    
    Variable plan accounting on stock option plans 17




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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  14.
    
    Restatement of the Three and Nine Months Ended September 30, 2003 Financial Statements
and Related Information, continued: CONSOLIDATED STATEMENT OF CASH FLOWS Nine months ended September 30, 2003As Previously
    
    
    
    
    
    AsReported
    
    Adjustments
    
    RestatedCash flows from operating activities:Net loss
    
    ($
    7,260,500
    )
    
    ($
    2,516,600
    )
    
    ($
    9,777,100
    )Adjustments to reconcile net loss to net cash
used in operating activities
    
    
    6,583,200
    
    
    
    419,600
    (1)1,798,900
    (2)32,300
    (3)65,800
    (4)200,000
    (5)Total adjustments
    
    
    6,583,200
    
    
    
    2,516,600
    
    
    
    9,099,800Net cash used in operating activities
    
    
    (677,300
    )
    
    
    
    
    
    
    (677,300
    )Net cash used in investing activities
    
    
    (1,425,100
    )
    
    
    
    
    
    
    (1,425,100
    )Net cash provided by financing activities
    
    
    7,492,900
    
    
    
    
    
    
    
    7,492,900Net increase in cash and cash equivalents
    
    
    5,390,500
    
    
    
    
    
    
    
    5,390,500Cash and cash equivalents, beginning of year
    
    
    430,800
    
    
    
    
    
    
    
    430,800Cash and cash equivalents, end of period
    
    $
    5,821,300
    
    
    $
    
    
    
    $
    5,821,300
  (1)
    
    Variable plan accounting on stock option plans(2)
    
    Briggs Mine asset impairment(3)
    
    Stock compensation adjustment(4)
    
    Beneficial conversion feature for convertible debt(5)
    
    Expense funding of exploration activities 18




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##### Table of Contents



15. Recently Issued Financial Accounting Standards: In January 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 46, Consolidation of Variable Interest Entities, (FIN No.
46) which provides guidance on the identification and reporting for entities
over which control is achieved through means other than voting rights. FIN No.
46 defines such entities as variable interest entities (VIEs). A FASB Staff
Position (FSP) issued in October 2003 deferred the effective date of FIN No. 46
to the first interim or annual period ending after December 15, 2003 for
entities created before February 1, 2003 if certain criteria are met.
Subsequently, during December 2003, the FASB issued a revision to FIN No. 46
(FIN No. 46R) which replaces the original interpretation. Application of this
revised interpretation is required in financial statements for companies that
have interests in VIEs or potential VIEs commonly referred to as
special-purpose entities created after December 15, 2003. Application for
entities created before January 1, 2004 is required in financial statements for
periods ending after March 15, 2004. The Company believes it has no such
variable interest entities and as a result FIN No. 46 did not have an impact on
the Companys financial position, results of operations, or cash flows. The EITF formed a committee (Committee) to evaluate certain mining
industry accounting issues, including issues arising from the application of
SFAS No. 141, Business Combinations(SFAS No. 141) and SFAS No. 142, Goodwill
and Other Tangible Assets(SFAS No. 142) to business combinations within the
mining industry, accounting for goodwill and other intangibles and the
capitalization of costs after the commencement of production, including
deferred stripping. The issues discussed also included whether mineral rights
conveyed by leases represent tangible or intangible assets and the amortization
of such assets. In March 2004, the EITF reached a consensus, subject to
ratification by the FASB, that mineral rights conveyed by leases should be
considered tangible assets. Mineral rights are defined by the EITF as the legal
right to explore, extract, and retain at least a portion of the benefits from
mineral deposits. The EITF also reached a consensus, subject to ratification by
the FASB, on other mining related issues involving impairment and business
combinations. On March 31, 2004, the FASB ratified the consensus of the EITF on other
mining related issues involving impairment and business combinations. This did
not have an impact to the Companys financial statements since it did not
change the Companys accounting. The FASB also ratified the consensus of the
EITF that mineral rights conveyed by leases should be considered tangible
assets subject to the finalization of a FSP in this regard. On April 30, 2004, the FASB issued a FSP amending SFAS No. 141 and SFAS
No. 142 to provide that certain mineral use rights are considered tangible
assets and should be accounted for based on their substance. If
recharacterization of an asset results, prior period amounts in the statement
of financial position are to be reclassified with any effects on amortization
or depreciation prospectively applied. The FSP was effective for the first
reporting period beginning after April 29, 2004, with early adoption permitted.
As the Company does not presently have the legal right to extract minerals from
the McDonald and Seven-Up Pete properties due to the I-137 constraint, the
Company has not reclassified prior period amounts and will continue to amortize
the carrying value of the properties until the legal impediment is resolved. The Committee is continuing its evaluation of other mining industry
accounting issues, which may have an impact on the Companys accounting in the
future. 19




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations Cautionary Statement for Purposes of the Safe Harbor Provisions of the
Private Securities Litigation Reform Act of 1995. The matters discussed in this report on Form 10-Q, when not historical
matters, are forward-looking statements that involve a number of risks and
uncertainties that could cause actual results to differ materially from
projected results. Such factors include, among others, the speculative nature
of mineral exploration, commodity prices, production and reserve estimates,
environmental and government regulations, availability of financing, force
majeure events, and other risk factors as described from time to time in the
Companys filings with the Securities and Exchange Commission. Many of these
factors are beyond the Companys ability to control or predict. The Company
disclaims any intent or obligation to update its forward-looking statements,
whether as a result of receiving new information, the occurrence of future
events, or otherwise. Restatement of Prior Financial Statements The Company has restated its
financial statements for the three and nine months ended September 30, 2003 for
the financial impact resulting from i) accounting for the Companys stock
option plans using variable plan accounting, insofar as the Company had
permitted option holders to exercise options by surrendering shares underlying
unexercised options in payment of the exercise price of the options; ii)
corrections to the Companys impairment analyses model used for impairment
testing of the Briggs Mine assets and the associated impact on the impairment
of long-lived assets, depreciation, depletion and amortization capitalized as
part of metal inventories and related inventory valuation and cost of sales
calculations; iii) expensing certain exploration costs that had been previously
recorded as a note receivable; iv) correcting the compensation expense to
reflect the fair market value of stock issued to an employee as compensation
for services; and v) recognizing and amortizing a beneficial conversion feature
associated with the Companys 6% convertible debentures that were issued in
March 2003. These adjustments increased the Companys previously reported net
loss for the three and nine months ended September 30, 2003 by $0.4 million, or
$0.02 per share and $2.5 million, or $0.12 per share, respectively. The ensuing
discussion gives effect to the aforementioned adjustments. Overview The Companys financial condition and liquidity improved from December 31,
2003 to September 30, 2004, primarily due to an equity financing which resulted
in proceeds of $7.1 million, the exercise of certain warrants, which resulted
in proceeds of $2.4 million, and the exercise of certain stock options, which
resulted in proceeds of $0.2 million. These inflows allowed the Company to
absorb negative operating cash flow of $4.7 million, and pay off the Briggs
equipment financing of $1.0 million. The Company ended the quarter with $8.1
million of cash and cash equivalents. Revenues for the third quarter decreased 29% from the prior year three
month period, due to declining production levels as a result of no new ore
added to the leach pads. Improving spot gold prices resulted in price
realizations of $398 per ounce during the third quarter and $394 per ounce year
to date for 2004, respectively, as compared to $369 per ounce in the third
quarter and $338 per ounce year to date for 2003, respectively. Overall, the
Companys results of operations reflect a higher net loss during the third
quarter of 2004 due to lower revenues. Results for the nine months ended
September 30, 2004 reflect a lower net loss as the prior period included an
impairment charge of $3.4 million, which was partially offset in the current
period by higher depreciation, depletion and amortization, higher selling,
general and administration costs (principally due to stock compensation
expense) and costs of $2.4 million associated with contributing to the funding
of the I-147 campaign in Montana which is described in the following paragraph. 20




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##### Table of Contents



On March 2, 2004, a local citizens group (Miners, Merchants and Montanans
for Jobs and Economic Opportunity, FOR I-147), filed the language of a new
initiative, I-147, to be placed before the voters of Montana at the November 2,
2004 ballot which, if enacted, would allow use of cyanide leaching in open-pit
gold mines with specific, rigorous engineering practices and environmental
safeguards. On July 14, 2004, the official certification for the ballot was
announced by the Secretary of State. On November 2, 2004, I-147, the ballot
initiative that would have allowed the use of cyanide in processing gold and
silver ores from new open-pit mines, was defeated by Montana voters. As a
result of this vote, the Seven-Up Pete Venture plans to re-investigate
alternate technologies of gold mining and recovery of its gold deposits near
Lincoln, Montana. In addition, the Company will continue to pursue its lawsuits
against the State of Montana regarding the enactment of I-137 in state court
and, if necessary, the federal court system. (See Other Matters  McDonald
Gold Project  Anti-Mining Initiative) Critical Accounting Policies and Estimates The ensuing discussion and analysis of financial condition and results of
operations are based on the Companys consolidated financial statements,
prepared in accordance with accounting principles generally accepted in the
United States of America. Certain amounts included in or affecting the
Companys financial statements and related disclosures must be estimated,
requiring that certain assumptions be made with respect to values or conditions
which cannot be made with certainty at the time the financial statements are
prepared. Therefore, the reported amounts of the Companys assets and
liabilities, revenues and expenses, and associated disclosures with respect to
contingent assets and obligations are necessarily affected by these estimates.
The more significant areas requiring the use of management estimates and
assumptions relate to mineral reserves that are the basis for future cash flow
estimates and units-of-production amortization determination; recoverability
and timing of gold production from the heap leaching process; environmental,
reclamation and closure obligations; asset impairments (including estimates of
future cash flows); useful lives and residual values of intangible assets; fair
value of financial instruments; valuation allowances for deferred tax assets;
and contingencies and litigation. The Company bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances. Actual results may differ from these estimates under
different assumptions or conditions. Users of financial information produced
for interim periods are encouraged to refer to the Companys accounting
policies, footnotes to the financial statements, and detailed discussion of
critical accounting policies and estimates set forth in its Annual Report on
Form 10-K/A. Results of Operations The Company recorded a net loss of $3.5 million, or $0.12 per share, on
revenues of $2.3 million for the third quarter of 2004. For the nine months
ended September 30, 2004, the Company recorded a net loss of $9.7 million, or
$0.35 per share, on revenues of $9.8 million. This compares to a net loss of
$2.9 million, or $0.13 per share, on revenues of $3.2 million for the third
quarter of 2003 and a net loss of $9.8 million, or $0.46 per share, on revenues
of $10.5 million during the first nine months of 2003. For the three months ended September 30, 2004, the Company sold 5,670
ounces of gold and 3,500 ounces of silver at an average price of $402 per
equivalent gold ounce. For the comparable period of 2003, the Company sold
8,705 ounces of gold and 1,500 ounces of silver at an average realized price of
$369 per equivalent gold ounce. The New York Commodity Exchange (COMEX) gold
price averaged $402 and $364 per ounce for the three months ended September 30,
2004 and 2003, respectively. The following table summarizes the Companys gold deliveries and revenues
for the three months ended September 30, 2004 and the comparable period for
2003: 21




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##### Table of Contents



THREE MONTHS ENDED
    
    THREE MONTHS ENDEDSEPTEMBER 30, 2004
    
    SEPTEMBER 30, 2003Gold
    
    AveragePrice Per
    
    Revenue
    
    Gold
    
    AveragePrice Per
    
    RevenueOunces
    
    Oz.
    
    $000s
    
    Ounces
    
    Oz.
    
    $000sDeliveriesForwards
    
    
    
    
    
    
    
    
    
    $
    
    
    
    
    6,045
    
    
    $
    366
    
    
    $
    2,210Spot Sales
    
    
    5,670
    
    
    $
    398
    
    
    
    2,258
    
    
    
    2,660
    
    
    $
    373
    
    
    
    9925,670
    
    
    $
    398
    
    
    
    2,258
    
    
    
    8,705
    
    
    $
    368
    
    
    
    3,202Other transactionsSilver proceeds
    
    
    
    
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    
    
    
    
    75,670
    
    
    $
    402
    
    
    $
    2,280
    
    
    
    8,705
    
    
    $
    369
    
    
    $
    3,209
 For the nine months ended September 30, 2004, the Company sold 25,015
ounces of gold and 5,700 ounces of silver at an average realized price of $394
per equivalent gold ounce. For the comparable period of 2003, the Company sold
30,936 ounces of gold and 9,843 ounces of silver at an average realized price
of $338 per equivalent gold ounce. The New York Commodity Exchange (COMEX) gold
price averaged $401 and $354 per ounce for the nine months ended September 30,
2004 and 2003, respectively. The following table summarizes the Companys gold deliveries and revenues
for the nine months ended September 30, 2004 and the comparable period for
2003: NINE MONTHS ENDED
    
    NINE MONTHS ENDEDSEPTEMBER 30, 2004
    
    SEPTEMBER 30, 2003Gold
    
    AveragePrice Per
    
    Revenue
    
    Gold
    
    AveragePrice Per
    
    RevenueOunces
    
    Oz.
    
    $000s
    
    Ounces
    
    Oz.
    
    $000sDeliveriesForwards
    
    
    3,820
    
    
    $
    378
    
    
    $
    1,442
    
    
    
    12,995
    
    
    $
    334
    
    
    $
    4,344Spot Sales
    
    
    21,195
    
    
    $
    395
    
    
    
    8,366
    
    
    
    17,941
    
    
    $
    348
    
    
    
    6,242Cash settlement of forwards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (173
    )25,015
    
    
    $
    392
    
    
    
    9,808
    
    
    
    30,936
    
    
    $
    337
    
    
    
    10,413Other transactionsSilver proceeds
    
    
    
    
    
    
    
    
    
    
    35
    
    
    
    
    
    
    
    
    
    
    
    4625,015
    
    
    $
    394
    
    
    $
    9,843
    
    
    
    30,936
    
    
    $
    338
    
    
    $
    10,459
 Cost of sales was $2.3 million for the three months ended September 30,
2004, as compared to $3.9 million for the three months ended September 30,
2003. For the nine months ended September 30, 2004, cost of sales was $8.7
million as compared to $10.9 million in the prior period. For the three and
nine months ended September 30, 2004, cost of sales includes write downs of
inventory to net realizable value of $0.1 million and $1.1 million,
respectively. For the three and nine months ended September 30, 2003, cost of
sales includes write downs of inventory to net realizable value of $0.9 million
(restated) due to a combination of higher operating costs and lower production
and $1.6 million (restated), respectively due to a combination of higher operating costs
and lower production. At September 30,
2004, the Company has estimated approximately 11,700 ounces of gold will be recovered from the leach pad. Depreciation, depletion and amortization was higher in the current periods
due to a greater number of recoverable ounces mined as the Company finished
mining of the high grade North Briggs layback. 22




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##### Table of Contents



Selling, general and administrative expense was approximately $1.7 million
higher for the three months ended September 30, 2004, as compared to the same
period ended September 30, 2003, due to a bonus and salary increase for certain
employees and the Companys participation in the funding of the I-147 campaign
in Montana. For the nine months ended September 30, 2004, selling, general and
administrative expense was approximately $3.2 million higher than the nine
months ended September 20, 2003, due principally to costs
associated with participation in the funding of the I-147 campaign in
Montana, corporate governance and compliance matters, and bonus and salary
increases for certain employees. Exploration expense was approximately $0.4 million lower for the three
months ended September 30, 2004, as compared to the same period ended September
30, 2003, due to spending of $0.2 million for Oaxaca and an additional $0.2
million spent for McDonald in 2003. During the second quarter of 2004, the Company held discussions with the
Montana Department of Environmental Quality (DEQ) concerning reclamation at the
Kendall Mine site. After these discussions, the Company modified its
reclamation plan to include items which had been developed by an engineering
contractor to the DEQ and subsequently, revised its estimate to achieve closure
of the Kendall Mine, which resulted in a charge of $0.9 million. Subsequently,
in August 2004, the DEQ notified the Company that it could not complete the
final capping of the leach pads until an Environmental Impact Study (EIS) was
completed. The Companys estimate to achieve mine closure could be further
impacted by the outcome of the DEQs decision following an EIS. During the second quarter of 2003, the Company determined that certain
gold ounces contained in sulfide ores were no longer economic and recorded a
write down of $3.4 million on the Briggs Mine long-lived assets as a
consequence. During the second quarter of 2004, the Company decided not to proceed with
certain contemplated property sales. As a result, the Company wrote off certain
expenses related to these property sales of $0.2 million of other expense. During the nine months ended September 30, 2004, the Company recorded
gains on forward gold contracts of approximately $0.1 million. During the three
and nine months ended September 30, 2003, loss/gains were recorded on forward
gold contracts of approximately ($0.2) million and $0.4 million, respectively.
The Company does not have any price protection arrangements on the remaining
Briggs production will be entered into. Effective July 1, 2004, the Company changed the manner in which payment of
the exercise price of an option could be tendered, requiring payment in cash or
tendering of shares of the Company that had been held for at least six months.
As a result, the Company has applied fixed plan accounting for its stock option
plans on a prospective basis, commencing July 1, 2004. Because deferred
compensation in the amount of $0.1 million had previously been recorded for
in-the-money, unvested options at the time the Company changed from variable
plan accounting to fixed plan accounting, this amount will be amortized to
expense as the options vest. For the three months ended September 30, 2004, the
amount amortized was $0.1 million. On January 1, 2003, the Company became subject to the accounting and
reporting requirements of Statement of Financial Accounting Standards No. 143,
Accounting for Asset Retirement Obligations(SFAS No. 143). SFAS No. 143
establishes accounting and reporting standards for obligations associated with
the retirement of tangible long-lived assets and the associated asset
retirement costs. SFAS No. 143 requires that the fair value of a liability for
an asset retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. Fair value is
determined by estimating the retirement obligations in the period an asset is
first placed in service and then adjusting the amount for estimated inflation
and market risk contingencies to the projected settlement date of the
liability. The result is then discounted to a present value from the projected
settlement date to the date the asset was first placed in service. The present
value of the asset retirement obligation is recorded as an additional property
cost and as an asset retirement liability. The amortization of the additional
property cost (using the units of production method) is included in
depreciation, depletion and amortization expense and the accretion of the
discounted liability is recorded as a separate operating expense in the
Companys Statement of Operations. Prior to adoption of SFAS No. 143, an
accrual for the Companys estimated asset retirement obligations (site specific
reclamation costs for earthwork, revegetation, 23




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##### Table of Contents



water treatment and dismantlement of facilities) was made using the units of
production method over the life of the property and was included in cost of
sales. Upon adoption of SFAS No. 143, the Company recorded a charge of $11,700
as the cumulative effect of a change in accounting principle. Liquidity & Capital Resources For the nine months ended September 30, 2004, operating activities used
$4.7 million of cash and financing activities provided $8.7 million of cash,
resulting in a net increase in cash of $4.0 million. Cash and cash equivalents
at September 30, 2004 was $8.1 million. During the first nine months of 2004, the Companys financing activities
included: (i) $7.1 million received through the sale of 1,631,000 shares of
common stock at a price of $4.37 per share, (ii) $2.4 million received in
connection with the exercise of certain warrants, (iii) $0.2 million received
in connection with the exercise of stock options, and (iv) $1.0 million used to
pay off the Briggs equipment financing. Outlook Summary The Company believes that its cash requirements over the next 12 months
can be funded through a combination of existing cash and cash flow from
operations, including the potential payment of $2,524,000 in debentures if not
converted by March 1, 2005, even though there has been negative cash flow from
operations for the nine months ended September 30, 2004. The Companys
long-term liquidity will be impacted by the scheduled wind down of operations
at the Briggs Mine during 2004-2005, which is currently the only internal
source of cash flow. The Company is continually evaluating business
opportunities such as joint ventures and mergers and acquisitions with the
objective of creating additional cash flow to sustain the corporation, provide
a future source of funds for growth, as well as to continue its litigation
efforts with respect to the McDonald Gold Project. Moreover, should an
alternate technology be developed to treat the McDonald or Seven-Up Pete
deposits, significant capital would be necessary to resume permitting and
ultimately develop the McDonald Gold Project. While the Company believes it
will be able to finance its continuing activities, there are no assurances of
success in this regard or in the Companys ability to obtain additional
financing through capital markets, joint ventures, or other arrangements in the
future. If managements plans are not successful, operations and liquidity may
be adversely impacted. Operations Active mining at the Briggs Mine was concluded in April 2004. Ore on the
heap leach pad will be actively leached throughout 2004. Reclamation of the
waste dumps commenced in the second quarter of 2004 and will continue through
the year. The Company expects to spend approximately $1.4 million on
reclamation over the next twelve months. The Briggs Mine is expected to
produce approximately 4,000 ounces of gold during the fourth quarter resulting
in approximately 30,000 ounces for 2004. Approximately 8,000 ounces will be
produced during 2005. The Company expects to spend up to $0.8 million on the Kendall Mine
reclamation over the next twelve months. Expenditures at the McDonald Gold Project for legal and land holding costs
are expected to be approximately $0.5 million in 2004. In addition, the Company
participated financially in the new initiative, I-147, contributing $2.4
million as of September 30, 2004, which was defeated by citizen vote in
November 2004. 24




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##### Table of Contents



Financing At September 30, 2004, the Company had outstanding warrants issued in
connection with previous transactions as follows: warrants to purchase
2,251,800 shares of common stock at a price of $1.98 per share through December
1, 2004, or at a price of $2.16 per share through December 1, 2005. Aggregate
proceeds of between $4.5 million and $4.9 million would be realized on exercise
of these warrants, depending on the terms in effect at the time of exercise. The Companys 6% convertible debentures ($2.5 million of principal at
September 30, 2004), are convertible by the holders to common stock of the
Company at any time at a conversion rate of $1.38 per share of common stock.
The principal amount, if not otherwise converted, is due March 1, 2005. The
Companys stock price at the end of September 2004 was $3.80 per share. Contractual Obligations The Companys contractual obligations are as follows: PAYMENTS DUE BY PERIODLess thanTotal
    
    1 year
    
    1-3 years
    
    3-5 years
    
    More than5 yearsLong-term debt obligations
(1)
    
    $
    2,524,000
    
    
    $
    2,524,000
    
    
    $
    
    
    
    $
    
    
    
    $
    Interest on debentures
    
    
    63,100
    
    
    
    63,100
    
    
    
    
    
    
    
    
    
    
    
    Capital lease obligations
    
    
    38,300
    
    
    
    14,100
    
    
    
    24,200
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    141,800
    
    
    
    48,900
    
    
    
    92,900
    
    
    
    
    
    
    
    Asset retirement obligations
    
    
    3,077,100
    
    
    
    2,153,300
    
    
    
    923,800
    
    
    
    
    
    
    
    Total
    
    $
    5,844,300
    
    
    $
    4,803,400
    
    
    $
    1,040,900
    
    
    $
    
    
    
    $
    
   (1)
    
    Convertible debentures due March 1, 2005, which can be
converted by the holder at any time to common stock of the Company at
a conversion rate of $1.38 per share of common stock. The Companys
stock price at the end of September 2004 was $3.80 per share. Other Matters McDonald Gold Project  Anti-Mining Initiative In November 1998, the Montana electorate passed an anti-mining initiative
(I-137) by a vote of 52% to 48%. I-137, as modified by the State Legislature in
April 1999, that bans development of new gold and silver mines, which use
open-pit mining methods and cyanide in the treatment and recovery process. In
April 2000, the SPV filed lawsuits in Montana State District Court and in the
United States District Court, seeking to have I-137 declared unconstitutional,
or, alternatively, to obtain a takings or damage award for the lost value of
the McDonald, Seven-Up Pete and Keep Cool mineral properties. These lawsuits
are based on, amongst others, (i) the right not to be deprived of property
without due process of law; (ii) the right to equal protection under the laws;
and (iii) the right to be protected against laws which impair the obligations
of existing contracts. The United States District Court issued a ruling August
30, 2001 in which the Court dismissed the SPVs substantive due process claim
but, as requested by the SPV, ruled that the remainder of the SPVs claims
could be pursued at such time as the State lawsuit was concluded. The Montana
State District Court issued a ruling November 1, 2001 in response to a Motion
to Dismiss and a Motion For Summary Judgment by the State of Montana. In this
ruling, the Court dismissed four of the SPVs fourteen counts, including its
substantive due process and equal protection challenges to I-137s validity.
The decision maintained for adjudication the contract impairment validity
challenge, contract damage claims, and all of the takings claims. Following the
November 2001 ruling by the State District Court, the State filed a new Motion
for Summary Judgment as to all claims. In an Order dated December 9, 2002, the
Court granted the State Summary Judgment on all of the remaining legal claims
of the Companys lawsuit. 25




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##### Table of Contents



On January 14, 2003, the Company filed an appeal with the Montana State Supreme
Court of the State District Court Order. Oral arguments were heard by the
Montana Supreme Court on October 28, 2003. The Company expects a ruling during
2004. On March 2, 2004, a local citizens group (Miners, Merchants and Montanans for
Jobs and Economic Opportunity, FOR I-147), filed the language of a new
initiative, I-147, to be placed before the voters of Montana at the November 2,
2004 ballot which, if enacted, would allow use of cyanide leaching in open-pit
gold mines with specific, rigorous engineering practices and environmental
safeguards. On July 14, 2004, the official certification for the ballot was
announced by the Secretary of State. On November 2, 2004, I-147, the ballot
initiative that would have allowed the use of cyanide in processing gold and
silver ores from new open-pit mines, was defeated by Montana voters by a 58% to
42% vote. The defeat of I-147 does not result in an impairment to be taken
against the $14.0 million undeveloped mineral claims and leases assets as their
carrying value is considered recoverable through development of the
property or settlement with the state. As a result of this vote,
the Seven-Up Pete Venture plans to re-investigate alternate technologies of
gold mining and recovery of its gold deposits near Lincoln, Montana. In
addition, the Company will continue to pursue its lawsuits against the State of
Montana regarding the enactment of I-137 in state court and, if necessary, the
federal court system. Should an alternate technology be available to treat any of the gold deposits
of the Seven-Up Pete Venture, significant capital will be required to resume
permitting and ultimately develop those deposits. No assurances can be made
regarding the Companys ability to finding an economically viable alternative
technology, and if found, to be able to obtain additional financing through
capital markets, joint ventures or other arrangements in the future. McDonald Gold Project  State Leases On September 24, 1998, the Montana Department of Natural Resources (DNRC),
the entity that administers state mineral leases, unilaterally decided to
cancel the permitting extension of the 10-year lease term of the state leases
that pertain to the McDonald Gold Project which would require the Company,
after a period of approximately seventeen months, to commence paying a delay
rental of $150,000 per month in order to maintain the leases. In February
2000, pursuant to its September 1998 decision, the DNRC determined that the
primary terms of the mineral leases had expired. The Company appealed the
action of the DNRC in an administrative hearing process and the DNRC Hearing
Examiner affirmed the DNRC action. It is the Companys position that the
permitting process has been interrupted by the threat and passage of I-137 and,
thus, the permit extension is continued until the governmental impediment is
resolved. As part of the I-137 lawsuit filed in April 2000 against the State of
Montana, the Company asked the court to review and invalidate the DNRCs
action, however, the court, in its December 9, 2002 order as described in the
preceding section, denied the Companys petition for judicial review. On
January 14, 2003, the Company filed an appeal with the Montana State Supreme
Court. Oral arguments were heard by the Montana State Supreme Court on October
28, 2003. The Company expects a ruling during 2004. The Company believes the state leases are still in effect. The Company has
made this determination based on our Montana legal counsels opinion, the clear
statement by the State of Montana notifying the Company that annual rental
payments, which are still being made and deposited by the State, would be
refundable once the leases have been found to be terminated, and finally, the
absence of actions of the State of Montana with respect to reclamation on the
land covered by the leases. Briggs Mine  Surety Matters The Briggs Mine operates under permits granted by various agencies
including the U.S. Bureau of Land Management (BLM), Inyo County, the California
Department of Conservation, and the Lahontan Regional Water Quality Control
Board (Lahontan). These agencies have jointly required the Company to post a
reclamation bond in the amount of $3,030,000 to ensure appropriate reclamation.
Additionally, the Company was required by Lahontan to post a $1,010,000 bond to
ensure adequate funds to mitigate any foreseeable release, as defined, of
pollutants to state waters. Both bonds are subject to annual review and
adjustment. 26




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##### Table of Contents



In 2000, in response to a demand for an increase in collateral by the
Surety 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 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 not made any deposits to date, and is in discussions with
the Surety to reschedule the deposit requirements. If an acceptable
rescheduling of the deposit requirements cannot be agreed to, the Surety could
seek to terminate the bonds which could result in the Company becoming liable
for the principal amounts under its collateral agreement with the Surety. In
April 2004, the Company ceased active mining at Briggs and has commenced
reclamation activities. Kendall Mine  Environmental Regulation The Kendall Mine holds permits granted by the Montana Department of
Environmental Quality (DEQ). In February 2002, the DEQ issued a decision that a
comprehensive Environmental Impact Statement (EIS) is needed for completion of
remaining reclamation at Kendall. The Company feels that it is crucial that
reclamation proceed at Kendall without further delay and, therefore, the
company commenced significant earthwork reclamation in June 2004. The primary
contractor for this $1.5 million phase of the project is MK Weeden
Construction, a local Lewistown firm. The Companys modification of its
reclamation plan to include items developed by a DEQ engineering contractor has
resulted in an increase in asset retirement obligations of $0.9 million. The
Companys estimate to achieve mine closure could be impacted by the outcome of
a DEQ decision following an EIS. The Company has $1,933,200 on deposit in an
interest bearing account with the DEQ for reclamation at the Kendall Mine. Kendall Mine  Legal Matters In October 2001, a Plaintiff group filed suit in Montana District Court
against the Company and its wholly-owned subsidiary, CR Kendall Corporation,
alleging violation of water rights and other torts in connection with the
operation of the Kendall Mine. The Complaint seeks unspecified damages and
punitive damages. A court date of November 29, 2004, has been scheduled for
trial of this case. The Company believes the allegations are completely without
merit and that the Company will prevail in this matter. In August 2002, a Preliminary Injunction was issued in Montana District
Court on behalf of the Plaintiff group in connection with the Companys auction
of certain mineral rights and fee lands in western Montana. In October 2002,
the Court issued a Supplemental Order which will sequester up to $528,000 of
any proceeds realized from the auction until such time as the lawsuit is
concluded. As of September 30, 2004, $272,000 had been remitted to the Court as
required by the Order. In May 2004, the Company became aware of a suit filed in March 2004 in
Montana District Court against the Company, CR Kendall Corporation, and the
Kendall Mine alleging violations of the Federal Pollution Control Act. The
Complaint was filed by the Montana Environmental Information Center, Inc. and
Earthworks/Mineral Policy Center, Inc. and seeks declaratory judgment,
injunctive relief, remediation and the imposition of civil penalties. A court
date of May 2, 2005 has been scheduled for trial of this case. The Company
believes these allegations are completely without merit and that the Company
will prevail in this matter. Recently Issued Financial Accounting Standards In January 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 46, Consolidation of Variable Interest Entities, (FIN No.
46) which provides guidance on the identification and reporting for entities
over which control is achieved through means other than voting rights. FIN No.
46 defines such entities as variable interest entities (VIEs). A FASB Staff
Position issued in October 2003 deferred the effective date of FIN No. 46 to
the first interim or annual period ending after December 15, 2003 for entities
created before February 1, 2003 if certain criteria are met. Subsequently,
during December 2003, the FASB issued a revision to FIN No. 46 (FIN No. 46R)
which replaces the original interpretation. Application of this revised
interpretation is required in financial statements for companies that have
interests in VIEs or potential VIEs commonly referred to as special-purpose
entities created after December 15, 2003. Application for entities created
before January 1, 2004 is required in financial statements for 27




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##### Table of Contents



periods ending after March 15, 2004. The Company believes it has no such
variable interest entities and as a result FIN No. 46 did not have an impact on
the Companys financial position, results of operations, or cash flows. The Emerging Issues Task Force (EITF) formed a committee (Committee) to
evaluate certain mining industry accounting issues, including issues arising
from the application of SFAS No. 141, Business Combinations(SFAS No. 141) and
SFAS No. 142, Goodwill and Other Tangible Assets(SFAS No. 142) to business
combinations within the mining industry, accounting for goodwill and other
intangibles and the capitalization of costs after the commencement of
production, including deferred stripping. The issues discussed also included
whether mineral rights conveyed by leases represent tangible or intangible
assets and the amortization of such assets. In March 2004, the EITF reached a
consensus, subject to ratification by the FASB, that mineral rights conveyed by
leases should be considered tangible assets. Mineral rights are defined by the
EITF as the legal right to explore, extract, and retain at least a portion of
the benefits from mineral deposits. The EITF also reached a consensus, subject
to ratification by the FASB, on other mining related issues involving
impairment and business combinations. On March 31, 2004, the FASB ratified the consensus of the EITF on other
mining related issues involving impairment and business combinations. This did
not have an impact to the Companys financial statements since it did not
change the Companys accounting. The FASB also ratified the consensus of the
EITF that mineral rights conveyed by leases should be considered tangible
assets subject to the finalization of a FASB Staff Position (FSP) in this
regard. On April 30, 2004, the FASB issued a FSP amending SFAS No. 141 and SFAS
No. 142 to provide that certain mineral use rights are considered tangible
assets and that mineral use rights should be accounted for based on their
substance. If recharacterization of an asset results, prior period amounts in
the statement of financial position are to be reclassified with any effects on
amortization or depreciation prospectively applied. The FSP is effective for
the first reporting period beginning after April 29, 2004, with early adoption
permitted. As the Company does not presently have the legal right to extract
minerals from the McDonald and Seven-Up Pete properties due to the I-137
constraint, the Company has not reclassified prior period amounts and will
continue to amortize the carrying value of the properties until the legal
impediment is resolved. The Committee is continuing its evaluation of mining industry accounting
issues, which may have an impact on the Companys accounting in the future. 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk Commodity Prices The Companys earnings and cash flow are significantly impacted by changes
in the market price of gold. Gold prices can fluctuate widely and are affected
by numerous factors, such as demand, production levels, economic policies of
central banks, producer hedging, and the strength of the U.S. dollar relative
to other currencies. During the last five years, the average annual market
price has fluctuated between $271 per ounce and $364 per ounce. Interest Rates At September 30, 2004, the Companys debt was approximately $2.5 million
which relates to its 6% convertible debentures. Thus, the Company is not
presently subject to interest rate risk. Foreign Currency The price of gold is denominated in U.S. dollars, and the Companys gold
production operations are in the United States. The Company conducts only a
minor amount of exploration activity in foreign countries and has minimal
foreign currency exposure. 28




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##### Table of Contents



Item 4. Controls and Procedures The Companys disclosure controls and procedures are designed to provide
reasonable assurance that the information required to be disclosed in our
Exchange Act reports are recorded, processed, summarized and reported as
specified in the SECs rules. Disclosure controls and procedures are designed
with the objective that information is accumulated and communicated to the
Companys management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow for timely decisions regarding required
disclosures. However, any system of controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance that the objective
of the system are met and management necessarily is required to apply its
judgment in evaluating the cost benefit relationship of possible controls and
procedures. During the review of the financial statements for the first quarter ending
March 31, 2004 PricewaterhouseCoopers LLP, our independent registered public
accountants, identified and communicated to the Company and its Audit Committee
a material weakness which is also a reportable condition (as defined under
standards established by the American Institute of Certified Public Accountants
(AICPA) relating to the Companys internal controls and procedures over its
financial reporting for stock option plans. In response thereto, the Company
performed a review of all stock option plans and the method of all related
stock option exercises by employees since the plans inception in 1982. This
review identified that a minority (approximately 25%) of the employee stock
options were exercised using the share withholding method for payment of the
exercise price. Based on this review, the Company determined that the stock
option plans would have to be recorded in the financial statements under
variable plan accounting, which resulted in the restatement filed as Amendment
No. 1 to Form 10-K/A. During the review of the financial statements for the second quarter
ending June 30, 2004, PricewaterhouseCoopers LLP communicated to the Company
and its Audit Committee that the method used for testing possible impairment of
the Briggs Mine may be inappropriate. After an evaluation of the method, the
Company determined that it inappropriately included ounces recovered from the
leach pad inventory in its impairment analysis. The Company changed its model using only projected ounces
from in-ground reserves which resulted in earlier and more frequent impairments
than had previously been recorded. The Company also determined that the
following items should have been reported differently: 1) a loan made to a
private exploration company, the proceeds of which were used for exploration,
should have been accounted for as an exploration expense; 2) the cost of
restricted shares issued under a contract for services should have been
recorded at fair market value at the time the contract was executed and or
amended; 3) a beneficial conversion feature and related amortization expense
should have been recognized with regards to a private placement of convertible debentures for certain subscribers that executed the subscription
agreement on a date when the conversion price was lower than the market price
of the Companys common stock. The items discussed in the preceding paragraphs constitute material
weaknesses in internal controls as defined by the standards established by the
AICPA. A material weakness is a reportable condition in which the design or
operation of one or more internal control components does not reduce to a
relatively low level the risk that errors or fraud in amounts that would be
material in relation to the financial statements being audited may occur and
not be detected within a timely period by employees in the normal course of
performing their assigned functions. The Company believes that the material
weaknesses resulted from:  1.
    
    insufficient review of the method used for testing the impairment of
the Briggs Mine;2.
    
    insufficient analysis, documentation and review of the
selection and application of generally accepted accounting principles
related to complex transactions. Our
Audit Committee held a meeting with management and
PricewaterhouseCoopers LLP and determined that the Companys financial
statements for 2003 and prior periods and quarterly period ended March 31,
2004, should be restated. Accordingly, the Company filed Amendment No. 2 to
Form 10-K/A filed on October 25, 2004 and Amendment No. 1 to 29




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##### Table of Contents



Form 10-Q/A
filed on October 25, 2004. The restatement of the Companys prior period financial statements
contained in this Form 10-Q are described in Part I, Item 2, Managements
Discussion and Analysis of Financial Condition and Results of Operations under
Restatement of Financial Information, and in Note 14 of the Notes to the
Interim Consolidated Financial Statements included in Part I, Item 1. We have undertaken the following initiatives with respect to our internal
controls and procedures in order to address the material weaknesses.  1.
    
    adding additional staff at the corporate controller level,2.
    
    scheduled training for accounting staff to heighten awareness
of generally accepted accounting principles,3.
    
    hired outside consultants to document our accounting processes
and identify areas that require control or process improvements, and4.
    
    implementation of initial recommendations by the outside consultants. Other than retention of outside consultants to identify areas of
improvement, there have been no changes in the Companys internal controls over
financial reporting that have materially affected or are reasonably likely to
materially affect internal controls over financial reporting for this period.
Subsequent to September 30, 2004, we began implementation of the initiatives
discussed above, which are reasonably likely to improve the Companys internal
controls over financial reporting. In connection with the identified internal control weaknesses, we have
performed substantial additional procedures to confirm that the financial
information fairly presents our operating results and financial condition for
the periods presented, therefore our principal executive and financial officers
have concluded that our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934) as of
the end of the period covered by this third quarter report on Form 10-Q for
September 30, 2004, are effective. 30




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##### Table of Contents



PART II OTHER INFORMATION 
 Item 1. Legal Proceedings
    
    None
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds  During the third quarter of 2004, the Company issued 29,000
unregistered shares of its $0.01 par value common stock as compensation
for services to a single sophisticated employee, John C. Doody. The shares were issued pursuant to the exemption provided by Section 4(2)
of the Securities and Exchange Act of 1933, as amended. 
 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  Exhibits as required by Item 601 of Regulation S-K, are listed on pages
32 and 33. The exhibit numbers correspond to the numbers assigned in
Item 601 of Regulation S-K. 31




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##### Table of Contents



NUMBER
    
    DESCRIPTION3.1
    
    Articles of Incorporation of the Company, as amended (1)3.1.1
    
    Executed Certificate of Designations, dated December 26, 1990, as filed
with the Delaware Secretary of State on December 26, 1990 (2)3.2
    
    Bylaws of the Company, as amended (3)4.1
    
    Specimen Common Stock Certificate (4)4.2
    
    Specimen Warrant Certificate (5)4.4
    
    Rights Agreement dated March 20, 1997, between Canyon Resources Corporation
and American Securities Transfer & Trust, Inc. (6)4.5
    
    Specimen Debenture (7)10.1
    
    Change of Control Agreements, dated December 6, 1991, between the Company
and Richard H. De Voto and Gary C. Huber (8)10.2
    
    Loan Agreement dated December 6, 1995, among CR Briggs Corporation as
Borrower and Banque Paribas as Agent (9)10.2.1
    
    Amendment No. 1 to Loan and Guarantee Agreements dated April 8, 1998,
among CR Briggs Corporation, Canyon Resources Corporation, and Banque
Paribas as Agent (10)10.2.2
    
    Amendment No. 2 to Loan and Guarantee Agreements dated August 19, 1998,
among CR Briggs Corporation, Canyon Resources Corporation, and Banque
Paribas as Agent (10)10.2.3
    
    Amendment No. 3 to Loan Agreement and Waiver dated July 8, 1999, among CR
Briggs Corporation and Banque Paribas as Agent (11)10.2.4
    
    Amendment No. 4 to Loan Agreement and Waiver dated March 26, 2001, among
CR Briggs Corporation and BNP Paribas, as successor-in-interest to Banque
Paribas as Agent (12)10.2.5
    
    Amendment No. 5 to Loan Agreement and Waiver dated March 25, 2002, among
CR Briggs Corporation, Canyon Resources Corporation, and Banque Paribas, as
Agent (13)10.2.6
    
    Amendment No. 6 to Loan Agreement and Waiver dated June 14, 2002, among
CR Briggs Corporation and BNP Paribas, as successor-in-interest to Banque
Paribas as Agent (14)10.3
    
    Master Tax Lease dated December 27, 1995, between CR Briggs Corporation and
Caterpillar Financial Services Corporation (9)10.4
    
    Purchase Agreement dated September 25, 1997, between Phelps Dodge
Corporation, acting through its division, Phelps Dodge Mining Company, and
CR Montana Corporation and Canyon Resources Corporation (15)10.4.1
    
    Second Amendment and Supplement to Purchase Agreement dated September 17,
1999, between Phelps Dodge Corporation, acting through its division, Phelps
Dodge Mining Company, CR Montana Corporation and Canyon Resources
Corporation, and Seven-Up Pete Joint Venture (11)10.5
    
    Assignment of Royalty Proceeds, effective as of April 1, 2001, between
Canyon Resources Corporation and Franco-Nevada Mining Corporation, Inc. (16)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
   *
    
    Filed herewith 32




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##### Table of Contents



(1)
    
    Exhibit 3.1 is incorporated by reference from Exhibit 3.1(a) to the
Companys Amended Annual Report on Form 10-K/A for the fiscal year ended
December 31, 2000.(2)
    
    Exhibit 3.1.1 is incorporated by reference from Exhibit 4 of the
Companys Report on Form 8-K filed with the Securities and Exchange
Commission on December 26, 1990.(3)
    
    Exhibit 3.2 is incorporated by reference from Exhibit 3.2 of the
Companys Annual Report on Form 10-K for the fiscal year ended December
31, 1997.(4)
    
    Exhibit 4.1 is incorporated by reference from the Companys
Registration Statement on Form 8-A as declared effective by the
Securities and Exchange Commission on March 18, 1986.(5)
    
    Exhibit 4.2 is incorporated by reference from Exhibit 4.2 of the
Companys Quarterly Report on Form 10-Q for the three months ended March
31, 2002.(6)
    
    Exhibit 4.4 is incorporated by reference from Exhibit 4 of the
Companys Report on Form 8-K filed with the Securities and Exchange
Commission on March 27, 1997.(7)
    
    Exhibit 4.5 is incorporated by reference from Exhibit 4.5 of the
Companys Annual Report on Form 10-K for the fiscal year ended December
31, 2002.(8)
    
    Exhibit 10.1 is incorporated by reference from Exhibit 10.20 of the
Companys Annual Report on Form 10-K for the fiscal year ended December
31, 1992.(9)
    
    Exhibits 10.2 and 10.3 are incorporated by reference from Exhibits
4.9, 4.10, 10.22 and 10.23 of the Companys Annual Report on Form 10-K
for the fiscal year ended December 31, 1995.(10)
    
    Exhibits 10.2.1 and 10.2.2 are incorporated by reference from
Exhibits 10.2.1 and 10.2.2 of the Companys Annual Report on Form 10-K
for the fiscal year ended December 31, 1998.(11)
    
    Exhibits 10.2.3 and 10.4.1 are incorporated by reference from
Exhibits 10.2.3 and 10.4.1 of the Companys Annual Report on Form 10-K
for the fiscal year ended December 31, 1999.(12)
    
    Exhibit 10.2.4 is incorporated by reference from Exhibit 10.2.4 of
the Companys Annual Report on Form 10-K for the fiscal year ended
December 31, 2000.(13)
    
    Exhibit 10.2.5 is incorporated by reference from Exhibit 10.2.5 of
the Companys Annual Report on Form 10-K for the fiscal year ended
December 31, 2001.(14)
    
    Exhibit 10.2.6 is incorporated by reference from Exhibit 10.2.6 of
the Companys Quarterly Report on Form 10-Q for the period ended June
30, 2002.(15)
    
    Exhibit 10.4 is incorporated by reference from Exhibit 2 of the
Companys Report on Form 8-K filed with the Securities and Exchange
Commission on October 9, 1997.(16)
    
    Exhibit 10.5 is incorporated by reference from Exhibit 1.1 of the
Companys Report on Form 8-K filed with the Securities and Exchange
Commission on October 9, 2001. 33




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##### Table of Contents



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. CANYON RESOURCES CORPORATIONDate: November 15, 2004
    /s/ Richard H. De VotoRichard H. De VotoChief Executive Officer Date: November 15, 2004
    /s/ Gary C. HuberGary C. HuberChief Financial Officer 34




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##### Table of Contents



Index to Exhibits NUMBER
    
    DESCRIPTION3.1
    
    Articles of Incorporation of the Company, as amended (1)3.1.1
    
    Executed Certificate of Designations, dated December 26, 1990, as filed
with the Delaware Secretary of State on December 26, 1990 (2)3.2
    
    Bylaws of the Company, as amended (3)4.1
    
    Specimen Common Stock Certificate (4)4.2
    
    Specimen Warrant Certificate (5)4.4
    
    Rights Agreement dated March 20, 1997, between Canyon Resources Corporation
and American Securities Transfer & Trust, Inc. (6)4.5
    
    Specimen Debenture (7)10.1
    
    Change of Control Agreements, dated December 6, 1991, between the Company
and Richard H. De Voto and Gary C. Huber (8)10.2
    
    Loan Agreement dated December 6, 1995, among CR Briggs Corporation as
Borrower and Banque Paribas as Agent (9)10.2.1
    
    Amendment No. 1 to Loan and Guarantee Agreements dated April 8, 1998,
among CR Briggs Corporation, Canyon Resources Corporation, and Banque
Paribas as Agent (10)10.2.2
    
    Amendment No. 2 to Loan and Guarantee Agreements dated August 19, 1998,
among CR Briggs Corporation, Canyon Resources Corporation, and Banque
Paribas as Agent (10)10.2.3
    
    Amendment No. 3 to Loan Agreement and Waiver dated July 8, 1999, among CR
Briggs Corporation and Banque Paribas as Agent (11)10.2.4
    
    Amendment No. 4 to Loan Agreement and Waiver dated March 26, 2001, among
CR Briggs Corporation and BNP Paribas, as successor-in-interest to Banque
Paribas as Agent (12)10.2.5
    
    Amendment No. 5 to Loan Agreement and Waiver dated March 25, 2002, among
CR Briggs Corporation, Canyon Resources Corporation, and Banque Paribas, as
Agent (13)10.2.6
    
    Amendment No. 6 to Loan Agreement and Waiver dated June 14, 2002, among
CR Briggs Corporation and BNP Paribas, as successor-in-interest to Banque
Paribas as Agent (14)10.3
    
    Master Tax Lease dated December 27, 1995, between CR Briggs Corporation and
Caterpillar Financial Services Corporation (9)10.4
    
    Purchase Agreement dated September 25, 1997, between Phelps Dodge
Corporation, acting through its division, Phelps Dodge Mining Company, and
CR Montana Corporation and Canyon Resources Corporation (15)10.4.1
    
    Second Amendment and Supplement to Purchase Agreement dated September 17,
1999, between Phelps Dodge Corporation, acting through its division, Phelps
Dodge Mining Company, CR Montana Corporation and Canyon Resources
Corporation, and Seven-Up Pete Joint Venture (11)10.5
    
    Assignment of Royalty Proceeds, effective as of April 1, 2001, between
Canyon Resources Corporation and Franco-Nevada Mining Corporation, Inc. (16)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
   *
    
    Filed herewith




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##### Table of Contents



(1)
    
    Exhibit 3.1 is incorporated by reference from Exhibit 3.1(a) to the
Companys Amended Annual Report on Form 10-K/A for the fiscal year ended
December 31, 2000.(2)
    
    Exhibit 3.1.1 is incorporated by reference from Exhibit 4 of the
Companys Report on Form 8-K filed with the Securities and Exchange
Commission on December 26, 1990.(3)
    
    Exhibit 3.2 is incorporated by reference from Exhibit 3.2 of the
Companys Annual Report on Form 10-K for the fiscal year ended December
31, 1997.(4)
    
    Exhibit 4.1 is incorporated by reference from the Companys
Registration Statement on Form 8-A as declared effective by the
Securities and Exchange Commission on March 18, 1986.(5)
    
    Exhibit 4.2 is incorporated by reference from Exhibit 4.2 of the
Companys Quarterly Report on Form 10-Q for the three months ended March
31, 2002.(6)
    
    Exhibit 4.4 is incorporated by reference from Exhibit 4 of the
Companys Report on Form 8-K filed with the Securities and Exchange
Commission on March 27, 1997.(7)
    
    Exhibit 4.5 is incorporated by reference from Exhibit 4.5 of the
Companys Annual Report on Form 10-K for the fiscal year ended December
31, 2002.(8)
    
    Exhibit 10.1 is incorporated by reference from Exhibit 10.20 of the
Companys Annual Report on Form 10-K for the fiscal year ended December
31, 1992.(9)
    
    Exhibits 10.2 and 10.3 are incorporated by reference from Exhibits
4.9, 4.10, 10.22 and 10.23 of the Companys Annual Report on Form 10-K
for the fiscal year ended December 31, 1995.(10)
    
    Exhibits 10.2.1 and 10.2.2 are incorporated by reference from
Exhibits 10.2.1 and 10.2.2 of the Companys Annual Report on Form 10-K
for the fiscal year ended December 31, 1998.(11)
    
    Exhibits 10.2.3 and 10.4.1 are incorporated by reference from
Exhibits 10.2.3 and 10.4.1 of the Companys Annual Report on Form 10-K
for the fiscal year ended December 31, 1999.(12)
    
    Exhibit 10.2.4 is incorporated by reference from Exhibit 10.2.4 of
the Companys Annual Report on Form 10-K for the fiscal year ended
December 31, 2000.(13)
    
    Exhibit 10.2.5 is incorporated by reference from Exhibit 10.2.5 of
the Companys Annual Report on Form 10-K for the fiscal year ended
December 31, 2001.(14)
    
    Exhibit 10.2.6 is incorporated by reference from Exhibit 10.2.6 of
the Companys Quarterly Report on Form 10-Q for the period ended June
30, 2002.(15)
    
    Exhibit 10.4 is incorporated by reference from Exhibit 2 of the
Companys Report on Form 8-K filed with the Securities and Exchange
Commission on October 9, 1997.(16)
    
    Exhibit 10.5 is incorporated by reference from Exhibit 1.1 of the
Companys Report on Form 8-K filed with the Securities and Exchange
Commission on October 9, 2001.