<PAGE>   1
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                                 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
                    For the period ended September 30, 1997
                                       or
            [ ] Transition Report Pursuant to Section 13 or 15(d) of
                      the Securities Exchange Act of 1934
               For the transition period from _____ to ______

                           ----------------------

                         Commission file number 0-14329

                          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 the number of shares outstanding of each of the issuers
          classes of common stock, as of the latest practicable date:
          41,082,074 shares of the Company's Common Stock were outstanding as
          of November 1, 1997.



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<PAGE>   2
                          PART I FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS

         The following 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. In the opinion
of the Company's management, the consolidated financial statements include all
adjustments, consisting only of adjustments of a normal, recurring nature,
necessary to present fairly the financial information set forth therein.

         These consolidated financial statements should be read in conjunction
with the financial statements and accompanying notes included in the Company's
Form 10-K for the year ended December 31, 1996.


<TABLE>
<S>                                                                                 <C>
 Consolidated Balance Sheets  . . . . . . . . . . . . . . . . . . . . . . . . . .   Page 3

 Consolidated Statements of Operations  . . . . . . . . . . . . . . . . . . . . .   Page 4

 Consolidated Statements of Cash Flows  . . . . . . . . . . . . . . . . . . . . .   Page 5-6

 Notes to Interim Consolidated Financial Statements . . . . . . . . . . . . . . .   Page 7-11


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS  . . . . . . . . . . . . . . . . . .   Page 12-16
</TABLE>





                                       2
<PAGE>   3
CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)

<TABLE>
<CAPTION>

                                                                 September 30,      December 31,
                                                                     1997              1996
                                                                 ------------      ------------
ASSETS

<S>                                                              <C>               <C>         
Cash and cash equivalents                                        $  2,530,100      $  4,181,100
Restricted cash                                                     4,461,600         2,557,500
Accounts receivable                                                   872,200           574,300
Inventories                                                         5,784,400         4,382,400
Prepaid and other assets                                            1,484,400           591,200
                                                                 ------------      ------------
     Total current assets                                          15,132,700        12,286,500
                                                                 ------------      ------------

Property and equipment, at cost
     Mining claims and leases                                      25,085,800        17,561,600
     Producing properties                                          59,164,100        53,875,000
     Other                                                            909,500           898,200
                                                                 ------------      ------------
                                                                   85,159,400        72,334,800
     Accumulated depreciation and depletion                        (5,966,300)       (1,995,200)
                                                                 ------------      ------------
       Net property and equipment                                  79,193,100        70,339,600
                                                                 ------------      ------------

Other assets                                                        1,615,900         1,758,200
                                                                 ------------      ------------

     Total Assets                                                $ 95,941,700      $ 84,384,300
                                                                 ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable                                                 $  2,935,400      $  1,616,400
Notes payable - current                                             3,572,900         2,071,800
Accrued taxes, other than payroll and income                          128,100           104,300
Accrued reclamation costs                                           1,085,500         1,421,000
Other accrued liabilities                                             535,000           612,400
                                                                 ------------      ------------
     Total current liabilities                                      8,256,900         5,825,900

Notes payable - long term                                          28,997,500        28,125,000
Accrued reclamation costs                                           1,011,500         1,584,000
Other noncurrent liabilities                                          474,100           408,800
                                                                 ------------      ------------
     Total Liabilities                                             38,740,000        35,943,700
                                                                 ------------      ------------

Commitments

Common stock ($.01 par value) 100,000,000 shares authorized;
  issued and outstanding: 41,082,100 at September 30, 1997, and
  37,503,600 at December 31, 1996                                     410,800           375,000
Capital in excess of par value                                     90,832,300        81,440,400
Deficit                                                           (34,041,400)      (33,374,800)
                                                                 ------------      ------------
     Total Stockholders' Equity                                    57,201,700        48,440,600
                                                                 ------------      ------------

     Total Liabilities and Stockholders' Equity                  $ 95,941,700      $ 84,384,300
                                                                 ============      ============
</TABLE>

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


                                      3
<PAGE>   4
<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED                  NINE MONTHS ENDED
                                                          SEPTEMBER 30,                       SEPTEMBER 30,
                                                     1997              1996              1997               1996 
                                                 ------------       ------------     -------------      ------------  
 <S>                                             <C>                <C>              <C>                <C>
 REVENUE
                                                                                                                    
 Sales                                           $ 8,337,300        $  1,535,100     $  21,445,700      $  3,982,300   
                                                 -----------        ------------     -------------      ------------  
 EXPENSES                                                                                                             
                                                                                                                      
 Cost of sales                                     6,621,600           1,488,700        15,017,200         3,634,900   
 Depreciation, depletion, and amortization         1,489,600              79,900         3,881,400           199,900   
 Selling, general and administrative                 712,900             838,300         2,383,500         2,577,300   
 Exploration costs                                    27,200              95,700           145,700           317,800   
 Abandoned mineral properties                        297,100              71,300           297,100            71,300   
                                                 -----------        ------------     -------------      ------------  
                                                                                                                      
                                                   9,148,400           2,573,900        21,724,900         6,801,200   
                                                 -----------        ------------     -------------      ------------  
 OTHER INCOME (EXPENSE)                                                                                               
                                                                                                                      
 Interest income                                     156,100             247,400           324,500           972,000   
 Interest expense                                   (400,200)            (40,500)         (940,200)         (842,800) 
 Gain (loss) on asset disposals                       89,100                   0           238,500            (4,000) 
 Other                                                 4,600              (6,100)          (10,200)           27,800   
                                                 -----------        ------------     -------------      ------------  
                                                                                                                      
                                                    (150,400)            200,800          (387,400)          153,000
                                                 -----------        ------------     -------------      ------------  
 Net loss                                        $  (961,500)       $   (838,000)   $     (666,600)     $ (2,665,900) 
                                                 ===========        ============     =============      ============  
                                                                                                                      
 Net loss per share                              $     (0.02)       $      (0.02)   $        (0.02)     $      (0.08)    
                                                 ===========        ============     =============      ============  
                                                                                                                      
 Weighted average shares outstanding              41,048,700          37,453,600        39,114,600        31,866,100   
                                                 ===========        ============     =============      ============  
</TABLE>

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





                                       4
<PAGE>   5
CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

<TABLE>
<CAPTION>
                                                                                  NINE MONTHS ENDED
                                                                                    SEPTEMBER 30,
                                                                              1997               1996 
                                                                          --------------    ----------------
 <S>                                                                      <C>               <C>
Cash flows from operating activities:
 Net loss                                                                 $     (666,600)   $     (2,665,900)
                                                                          --------------    ----------------
 Adjustments to reconcile net loss to net cash
 provided by (used in) operating activities:
  Depreciation and depletion                                                   3,881,400             199,900
  Amortization of financing costs                                                141,400             154,500
  Abandoned mineral properties                                                   297,100              71,300
  (Gain) loss on asset disposals                                                (238,500)              4,000
  Other                                                                            1,200                   -
 Changes in assets and liabilities,
  (Increase) in receivables                                                     (299,100)           (208,200)
  (Increase) in inventories                                                   (1,402,000)         (1,263,400)
  (Increase) in prepaid and other assets                                        (892,300)            (86,900)
  Increase in accounts payable and accrued liabilities                         2,443,400             923,200
  (Decrease) in other liabilities                                               (570,700)         (1,845,600)
  (Increase) in restricted cash                                               (1,575,100)                  - 
                                                                          --------------    ----------------
  Total adjustments                                                            1,786,800          (2,051,200)
                                                                          --------------    ----------------
  Net cash provided by (used in) operating activities                          1,120,200          (4,717,100)
                                                                          --------------    ----------------
                                                                                           
 Cash flows from investing activities:                                                                       
  Purchases of property and equipment                                        (17,543,200)        (28,632,600)
  Proceeds from asset sales                                                      239,600              45,300 
  Production proceeds during mine development and restricted cash              3,894,100                  -- 
  Other                                                                               --              20,000 
                                                                          --------------    ----------------
   Net cash used in investing activities                                     (13,409,500)        (28,567,300)
                                                                          --------------    ----------------
                                                                                          
 Cash flows from financing activities:                                                                       
  Issuance of stock, net                                                       9,308,100          14,530,600 
  Payments on debt                                                            (1,626,400)           (179,100)
  Payments on capital lease obligations                                         (110,300)            (37,900)
  Proceeds from loans and restricted cash, net                                 3,066,900          25,522,700 
  Payments to escrow account                                                          --             (83,100)
  Payments for debt issuance costs                                                    --            (159,700)
                                                                          --------------    ----------------

   Net cash provided by financing activities                                  10,638,300          39,593,500 
                                                                          --------------    ----------------
 Net increase (decrease) in cash and cash equivalents                         (1,651,000)          6,309,100 
 Cash and cash equivalents, beginning of year                                  4,181,100           1,893,800 
                                                                          --------------    ----------------
 Cash and cash equivalents, end of period                                 $    2,530,100    $      8,202,900 
                                                                          ==============    ================
                                         
</TABLE>

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





                                       5
<PAGE>   6

CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS, continued
(Unaudited)


Supplemental disclosures of cash flow information:

1.  The Company paid $1,167,700 of interest during the first nine months of
    1997, and $1,894,500 during the corresponding period of 1996. Of the total
    payments, capitalized interest during the first nine months of 1997 and
    1996 were $461,500 and $1,101,700, respectively.

2.  The Company paid no income taxes during the first nine months of 1997, and
    no income taxes during the corresponding period of 1996.

Supplemental schedule of noncash investing and financing activities:

1.  The Company acquired $85,200 in equipment through capital leases during the
    first nine months of 1997, and $356,400 in equipment through capital leases
    during the corresponding period of 1996.

2.  The Company issued 50,000 shares of common stock which was valued at
    $106,200 in connection with the termination of a previous agreement to
    acquire an exploration property during the first nine months of 1997.

3.  The Company issued 150,000 shares of common stock which was valued at
    $403,100 in exchange for a royalty interest during the first nine months of
    1996.

4.  Debentures in the principal amount of $1,812,500 were converted into
    552,200 shares of common stock and debentures in the principal amount of
    $19,363,000 were redeemed by the Company into 5,849,800 shares of common
    stock during the first nine months of 1996.



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





                                       6
<PAGE>   7
                          CANYON RESOURCES CORPORATION
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

1.       BASIS OF PRESENTATION:

         During interim periods, Canyon Resources follows the accounting
         policies set forth in its Annual Report to Stockholders and its Report
         on Form 10-K 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 and to the
         following additional information.

         The Company uses derivative commodity instruments (gold loans, gold
         forward contracts, and put options) to manage market risks associated
         with fluctuating gold prices. Gold loans are monetized at the original
         proceeds amount and are recognized into revenue at the time of
         physical delivery of the metal. Costs or premiums, if any, and gains
         or losses related to changes in values of other derivative commodity
         instruments are included in revenues when the underlying production is
         delivered to meet the commitment, or at the originally designated
         maturity dates in the event of early settlement of such instruments.
         Cash flow resulting from hedge contracts is included in net cash
         provided by operating activities on the statements of cash flows.

         In February, 1997, the Financial Accounting Standards Board issued
         Statement of Financial Accounting Standards No. 128, (SFAS128),
         Earnings per Share. SFAS128's objective is to simplify the computation
         of earnings per share (EPS) and to make the U.S. standard more
         compatible with that of other countries and the International
         Accounting Standards Committee. SFAS128 superceds APB Opinion 15,
         replacing the presentation of "primary" and "fully diluted" EPS with
         "basic" and "diluted" EPS. SFAS128 will become effective for the
         Company's year ended December 31, 1997, and all prior period EPS
         calculations will be restated to conform with the new standard.  Upon
         adoption, the Company does not anticipate a material impact on its
         EPS.

         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 and its consolidated subsidiaries for interim periods.
         Certain amounts in the prior period financial statements have been
         reclassified to conform to the current period presentation.

2.       INTERIM RESULTS:

         The foregoing interim results are not necessarily indicative of the
         results of operations for the full year ending December 31, 1997, as
         the Briggs Mine attained commercial production levels during March,
         1997.





                                       7
<PAGE>   8
CANYON RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(Unaudited)





3.       USE OF ESTIMATES:

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and disclosure of contingent assets and liabilities at the
         date of the financial statements and the reported amounts of revenues
         and expenses during the reporting period. Actual results could differ
         from those estimates.

4.       RESTRICTED CASH:

         Restricted cash consisted of the following:

<TABLE>
<CAPTION>
                 -------------------------------------------------------------------------------------------
                                                                            SEPTEMBER 30,     DECEMBER 31,
                                                                                1997             1996
                 -------------------------------------------------------------------------------------------
                 <S>                                                        <C>           <C>           
                 Collateral for Letter of Credit (a)                        $  1,953,000  $  1,953,000
                 Unexpended proceeds from loan drawing (b)                       933,200           100
                 Unexpended proceeds from gold sales (c)                       1,575,200       604,200
                 Contingency account (d)                                             200           200
                                                                            ------------  ------------
                                                                            $  4,461,600  $  2,557,500
                 Current portion                                               4,461,600     2,557,500
                                                                            ------------  ------------
                 Noncurrent portion                                         $         -   $         - 
                                                                            ============  ============
                 -------------------------------------------------------------------------------------------
</TABLE>


         (a)     In connection with the issuance of certain bonds for the
                 performance of reclamation obligations at the Kendall and
                 Briggs Mines, a bank Letter of Credit has been 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, 1997. At the
                 bank's option, the Letter of Credit may be renewed for
                 successive one-year periods.

         (b)     Loan proceeds are restricted solely for the development of the
                 Briggs Mine.

         (c)     The Briggs Mine loan facility requires all proceeds from gold
                 sales to be held in trust and disbursed from the collected
                 credit balance in certain orders of priority.

         (d)     As a condition precedent to securing the Briggs loan facility,
                 the Company transferred $2.0 million to an escrow account to
                 be held in reserve against construction cost overruns at the
                 Briggs Mine. These funds were utilized in 1996 due to higher
                 than anticipated construction costs and working capital needs.





                                      8
<PAGE>   9
CANYON RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(Unaudited)




5.       INVENTORIES:

         Inventories consisted of the following at:

<TABLE>
<CAPTION>
                   ------------------------------------------------------------------------
                                                           SEPTEMBER 30,      DECEMBER 31,
                                                               1997               1996
                   ------------------------------------------------------------------------
                   <S>                                    <C>              <C>
                   Gold-in-process (a)                     $ 4,256,300       $ 3,451,400
                   Industrial minerals - in process (a)        385,700           394,900
                   Materials and supplies                    1,142,400           536,100
                                                           -----------       -----------
                                                           $ 5,784,400       $ 4,382,400
                                                           ===========       ===========
                   ------------------------------------------------------------------------
</TABLE>

         (a)     Includes all direct and indirect costs of mining, crushing,
                 processing, and site overhead expenses.

6.       NOTES PAYABLE:

         Notes payable consisted of the following at:


<TABLE>
<CAPTION>
                   -------------------------------------------------------------------
                                                           SEPTEMBER 30,   DECEMBER 31,
                                                               1997           1996
                   -------------------------------------------------------------------
                   <S>                                    <C>           <C>
                   Briggs Loan (a)                         $ 32,550,000  $ 30,000,000
                   Caterpillar Finance Note (b)                  20,400       196,800
                                                           ------------  ------------
                                                           $ 32,570,400  $ 30,196,800
                   Current portion                            3,572,900     2,071,800
                                                           ------------  ------------
                   Notes Payable - Long Term               $ 28,997,500  $ 28,125,000
                                                           ============  ============
                   -------------------------------------------------------------------
</TABLE>


         (a)     On December 6, 1995, the Company's wholly owned subsidiary, CR
                 Briggs Corporation, secured a $34.0 million loan facility to
                 finance the capital requirements of mine construction and
                 working capital for its Briggs Mine in California. Drawings on
                 the facility include $25.0 million principal in the form of a
                 gold loan and $9.0 million principal as dollar loans. The gold
                 loan portion was monetized at $388.05 per ounce, or 64,425
                 ounces. Weighted average interest rates on the drawings during
                 the three months ended September 30, 1997 were (i) 3.5% on the
                 $25.0 million gold loan and (ii) 10.3% on the $9.0 million
                 cash loans. For the comparable period in 1996, weighted
                 average interest rates on the gold loan and dollar loans were
                 3.5% and 9.9%, respectively. For the nine months ended
                 September 30, 1997, weighted average interest rates on the
                 gold loan and dollar loans were (i) 3.4% and 10.1%,
                 respectively. For the comparable period in 1996, weighted
                 average interest rates were 4.2% and 9.7%, respectively.
                 Interest payments of $348,700 and $347,400 were made during
                 the three months ended September 30, 1997 and 1996,
                 respectively. For the nine month period interest payments of
                 $1,116,000 and $1,086,000 were made during 1997 and 1996,
                 respectively. The Company repaid $725,000 principal during the
                 third quarter of 1997, and $1,450,000 principal for the nine
                 months ended September 30, 1997, as per the facility's
                 amortization schedule.





                                       9
<PAGE>   10
CANYON RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(Unaudited)


6.       NOTES PAYABLE, CONTINUED:

                 The Briggs Mine is required to meet certain production and
                 economic parameters over a 120 day testing period (completion
                 testing) as measured against the project's original
                 feasibility study. Formal completion testing was initiated
                 February 1, 1997 and concluded June 1, 1997. Many items have
                 been satisfied, however, certain items, principally relating
                 to the crushing plant, were not. The lenders have granted an
                 extension to June 1, 1998 to satisfy the completion test
                 requirements and the Company anticipates it will achieve
                 project completion by that date.

         (b)     In August 1994, the Company exercised purchase options on its
                 leased mining equipment at the Kendall Mine for $899,900.
                 Caterpillar Financial Services Corporation subsequently agreed
                 to finance the purchase price over a three-year period at a
                 fixed rate of 9.5%. During the three months ended September
                 30, 1997, the Company paid $1,400 of interest and reduced the
                 principal balance by $60,200.  For the comparable period of
                 1996, the Company paid $6,400 of interest and reduced the
                 principal balance by $55,100. For the nine month period ended
                 September 30, 1997, the Company paid $8,500 of interest and
                 reduced the principal balance by $176,400. For the comparable
                 period of 1996, the Company paid $26,400 of interest and
                 reduced the principal balance by $179,000.

7.       CONTINGENT SALES OF EXPLORATION PROPERTIES:

         The Company executed an agreement during the second quarter of 1997 to
         sell the Mountain View property in Nevada for $3.0 million, payable
         over a twenty-four month period and, until the purchase price is paid
         in full, an aggregate work commitment of $1,250,000. At any time, the
         buyer, upon proper notice, may terminate the agreement and its then
         remaining obligations, and relinquish its interest in the property.
         Due to the contingent nature of the transaction, gain will be
         recognized only upon receipt of cash over the twenty-four month
         period. Accordingly, the Company recorded a gain of $191,700 during
         the nine months ended September 30, 1997.

         The Company executed an agreement during the third quarter of 1997 to
         sell the Aeropuerto property in Chubut Province, Argentina for $2.0
         million, payable over a sixty month period. At any time, the buyer,
         upon proper notice, may terminate the agreement and its then remaining
         obligations, and relinquish its interest in the property. Due to the
         contingent nature of the transaction, gain will be recognized only
         upon receipt of cash over the sixty month period. Accordingly, the
         Company recorded a gain of $47,400 during the third quarter of 1997.





                                       10
<PAGE>   11
CANYON RESOURCES CORPORATION AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(Unaudited)

8.       CONTINGENT LIABILITY:

         On 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 (Venture) from CR Montana's partner in the Venture, Phelps
         Dodge Corporation (Phelps Dodge). The Company and its wholly owned
         subsidiary now own 100% of the Venture. The Venture includes the
         McDonald Gold Project near Lincoln, Montana, which is currently in the
         permitting stage.

         The Company made an initial payment of $5 million as part of a total
         purchase price which will be no less than $100 million and no more
         than $150 million, assuming all applicable permits for the McDonald
         Gold Project are obtained. The largest part of the purchase price, $20
         to $30 per mineable reserve ounce attributable to the Phelps Dodge
         ownership as determined by a final feasibility study, is to be paid
         after all permits for mine development are obtained. Due to the
         contingent nature of the transaction, the Company has recorded only
         the initial payment of $5 million as additions to mining claims and
         leases for the period ended September 30, 1997.


         The 8.2 million ounce McDonald gold deposit includes more than 7
         million ounces in mineable reserves. A Plan of Operations for
         development of the project was submitted to the regulatory agencies in
         November, 1994. A draft Environmental Impact Statement is expected to
         be published mid-year, 1998.


9.       INCOME TAXES:

         The Company has not recorded a tax benefit for the current periods as
         the benefit is not expected to be realized 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.





                                       11
<PAGE>   12
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.

RESULTS OF OPERATIONS

         The Company recorded a net loss of $961,500, or $0.02 per share, on
revenues of $8,337,300 during the third quarter of 1997 and a net loss of
$666,600, or $0.02 per share, on revenues of $21,445,700 for the first nine
months of 1997. These compare to a net loss of $838,000, or $0.02 per share, on
revenues of $1,535,100 during the third quarter of 1996, and a net loss of
$2,665,900, or $0.08 per share on revenues of $3,982,300 during the first nine
months of 1996.

         For the three months ended September 30, 1997, the Company sold 18,811
ounces of gold and 6,000 ounces of silver from its Briggs mine at an average
realized price of $382 per equivalent gold ounce. For the comparable period of
1996, the Company sold 1,200 ounces of gold and 900 ounces of silver from its
Kendall Mine, which was in its final months of productive life. For the first
nine months of 1997, 52,823 ounces of gold and 12,500 ounces of silver (all
from the Briggs Mine) were sold at an average realized price of $398 per
equivalent gold ounce. This total includes the sale of 8,150 ounces of gold
during the first two months of 1997 which were credited against capitalized
development costs at the Briggs Mine. For the comparable period in 1996, 3,269
ounces of gold and 2,308 ounces of silver (all from the Kendall Mine) were sold
at an average realized price of $392 per equivalent gold ounce. The New York
Commodity Exchange (COMEX) gold price averaged $323 and $340 per ounce,
respectively for the three and nine months ended September 30, 1997. For the
comparable periods of 1996, the COMEX gold price averaged $385 and $392 per
ounce. Revenue from the sales of industrial minerals products increased 8% and
38%, respectively, for the three and nine months ended September 30, 1997 as
compared to the prior year, reflecting continued growth in diatomite sales and
the effect of pumice/volcanic glass sales from a processing facility acquired
in mid-1996. Sales of industrial mineral products accounted for 14% and 17% of
the Company's revenues for the three and nine months ended September 30, 1997,
respectively.





                                       12
<PAGE>   13

       Total cash costs of gold production from the Briggs Mine (as computed
under The Gold Institute's Production Cost Standard) for the three and nine
months ended September 30, 1997, were $308 per ounce and $278 per ounce,
respectively. The cash costs of gold production were higher than budgeted, due
to inadequate performance of the tertiary-stage, vertical-shaft-impactor (VSI)
crushers. Two replacement cone crushers are being tested with resulting lower
costs. The Company plans to replace all three of the VSI crushers with three of
the best-performing cone crushers so that cash costs can be significantly
reduced going into 1998 and onward. The prior period unit costs are not
comparable due to the nominal sales from the Kendall Mine.

         Depreciation depletion and amortization increased in the current
periods due to the attainment of commercial production levels at the Briggs
Mine.

         An abandonment charge of $0.3 million was recorded during the current
period as a result of the Company terminating a previous agreement to acquire
the Cahuilla exploration property located in southeastern California. For the
prior period, the Company abandoned several foreign properties resulting in a
charge of $0.1 million.

         Interest income was lower in the current periods due to lower cash
balances. Interest expense was significantly higher for the three months ended
September 30, 1997 due to the Briggs loan. Interest expense was marginally
higher for the nine months ended September 30, 1997 as the prior period also
included interest associated with the Company's convertible debentures which
were redeemed in July, 1996.

         The Company executed an agreement during the second quarter of 1997 to
sell the Mountain View property in Nevada for $3.0 million, payable over a
twenty-four month period and, until the purchase price is paid in full, an
aggregate work commitment of $1,250,000. At any time, the buyer, upon proper
notice, may terminate the agreement and its then remaining obligations, and
relinquish its interest in the property. Due to the contingent nature of the
transaction, gain will be recognized only upon receipt of cash over the
twenty-four month period. Accordingly, the Company recorded a gain of $191,700
during the nine months ended September 30, 1997.

         The Company executed an agreement during the third quarter of 1997 to
sell the Aeropuerto property in Chubut Province, Argentina for $2.0 million,
payable over a sixty month period. At any time, the buyer, upon proper notice,
may terminate the agreement and its then remaining obligations, and relinquish
its interest in the property. Due to the contingent nature of the transaction,
gain will be recognized only upon receipt of cash over the sixty month period.
Accordingly, the Company recorded a gain of $47,400 during the third quarter of
1997.





                                       13

<PAGE>   14
LIQUIDITY & CAPITAL RESOURCES

         CASH FLOW

         Net cash provided by operating activities during the nine months ended
September 30, 1997, was $1,120,200 as compared to $4,717,100 used in operating
activities for the same period in 1996. The current year positive operating
cash flow was due to commercial production levels being attained at the Briggs
Mine and contributions from the industrial minerals operations. Cash and cash
equivalents at September 30, 1997, was $2,530,100.

         The Company spent $13,409,500, net, on capital programs for the nine
months ended September 30, 1997, principally relating to final working capital
requirements at the Briggs Mine, improvements to the industrial minerals
business, drilling within the Panamint Range near the Briggs Mine, funding the
Company's share of costs on the McDonald Gold Project, and an initial payment
of $5.0 million to acquire the remaining participating interest in the Seven-Up
Pete Venture which includes the McDonald Gold Project (see separate caption
"Purchase of McDonald Gold Project").

         The Company borrowed the final $4.0 million tranche under its Briggs
loan facility during March, 1997, to provide funding for a leach pad expansion
phase scheduled for completion early in the fourth quarter of 1997. Principal
payments of $1,425,000 were made during the nine months ended September 30,
1997 as per the facility's amortization schedule.

         In June, 1997, the Company completed an equity financing which raised
$9,987,500 ($9.1 million net of expenses), through the sale of 3.4 million
shares of common stock. The Company issued warrants to purchase 278,200 shares
of common stock at a price of $4.25 per share to the underwriter in connection
with the financing.

         PURCHASE OF MCDONALD GOLD PROJECT

         On 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
(Venture) from CR Montana's partner in the Venture, Phelps Dodge Corporation
(Phelps Dodge). The Company and its wholly owned subsidiary now own 100% of the
Venture. The Venture includes the McDonald Gold Project near Lincoln, Montana,
which is currently in the permitting stage.

         The Company made an initial payment of $5 million from its existing
cash balance as part of a total purchase price which will be no less than $100
million and no more than $150 million, assuming all applicable permits for the
McDonald Gold Project are obtained. At present, Canyon is pursuing various
options with respect to the remaining purchase price obligation which may
include, amongst others, sale of equity, mergers, or joint venture
participation. A discretionary payment of $20 million can be made toward the
total purchase price. Subject to Canyon making the discretionary payment within
one year of the closing, a further payment of at least $75 million but no more
than $125 million will be made once all permits for the McDonald Gold Project
have





                                       14
<PAGE>   15
been obtained or construction is underway, based on a price of $20 per mineable
reserve ounce attributable to the former Phelps Dodge ownership as determined
by a final feasibility study. Should the Company not make the discretionary
payment and permits are obtained or construction commences on or before the
second anniversary of the closing, a further payment of at least $95 million
plus the product of $1,666,666 and the number of months between the first
anniversary date of the closing and the month in which permits are obtained or
construction commences but no more than $145 million will instead be made,
based on a price of $20 per mineable reserve ounce attributable to the former
Phelps Dodge ownership plus the product of $0.833 times the number of months
between the first anniversary date of the closing and the earlier to occur of
a) the month when the discretionary or other payments reach $20 million, and b)
the month in which permits are obtained or construction commences. Should the
Company not make the discretionary payment and permits are obtained or
construction commences after the second anniversary of the closing, a further
payment of at least $115 million but no more than $145 million will instead be
made, based on a price of $30 per mineable reserve ounce attributable to the
former Phelps Dodge ownership. If the aggregate payments have then not totaled
$150 million, a varying production payment will be made each quarter based on
72.25% of the ounces produced on a sliding scale commensurate with the then
gold price as follows: 1) $0 per ounce if the gold price is less than $350.00
per ounce; 2) $3 per ounce if the gold price is greater than $350.00 but less
than or equal to $375.00 per ounce; 3) $5 per ounce if the gold price is
greater than $375.00 but less than or equal to $400.00 per ounce; 4) $7 per
ounce if the gold price is greater than $400.00 but less than or equal to
$425.00 per ounce; and 5) $10 per ounce if the gold price is greater than
$425.00 per ounce.  Production payments will cease when the aggregate of all
payments reach $150 million.

         The purchase payments are secured only by the 72.25% participating
interest and underlying assets in the Venture 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.

         The 8.2 million ounce McDonald gold deposit includes more than 7
million ounces in mineable reserves. A Plan of Operations for development of
the project was submitted to the regulatory agencies in November, 1994. A draft
Environmental Impact Statement is expected to be published mid-year, 1998.

         BRIGGS MINE LOAN FACILITY

         The Briggs Mine is required to meet certain production and economic
parameters over a 120 day testing period (completion testing) as measured
against the project's original feasibility study. Formal completion testing was
initiated February 1, 1997 and concluded June 1, 1997. Many items have been
satisfied, however, certain items, principally relating to the crushing plant,
were not. The lenders have granted an extension to June 1, 1998 to satisfy the
completion test requirements and the Company anticipates it will achieve
project completion by that date.





                                       15
<PAGE>   16
         BRIGGS MINE RESERVES

         Drilling conducted in the first half of 1997 to the north and south of
the initial orebody has increased mineable reserves since year end 1996 by
234,100 ounces. The Company will be required to obtain a new permit to enable
mining of the new reserves.




                                      
                                      16
<PAGE>   17

                           PART II OTHER INFORMATION


<TABLE>
<S>             <C>                                                                      <C>
ITEM 1.          LEGAL PROCEEDINGS: . . . . . . . . . . . . . . . . . . . . . . . . . .   None

ITEM 2.          CHANGES IN SECURITIES: . . . . . . . . . . . . . . . . . . . . . . . .   None

ITEM 3.          DEFAULTS UPON SENIOR SECURITIES: . . . . . . . . . . . . . . . . . . .   None

ITEM 4.          SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS: . . . . . . . . . .   None

ITEM 5.          OTHER INFORMATION: . . . . . . . . . . . . . . . . . . . . . . . . . .   None

ITEM 6(A)        EXHIBITS:

                 No. 11 - Calculation of primary and fully diluted income (loss) per share
                 No. 27 - Financial Data Schedule

ITEM 6(B)        REPORTS ON FORM 8-K:

                 A report on Form 8-K was filed on October 9, 1997, in connection with the Company and a wholly owned
                 subsidiary acquiring the remaining interest (72.25%) in the Seven-Up Pete Venture, which includes the
                 McDonald Gold Project.
</TABLE>





                                      17

<PAGE>   18
                                  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 CORPORATION
                                        
                                        
                                        
Date: November 12, 1997                 /s/ Richard T. Phillips
                                        ---------------------------------
                                        Richard T. Phillips
                                        Treasurer
                                        
                                        
                                        
Date: November 12, 1997                 /s/ Gary C. Huber
                                        ---------------------------------
                                        Gary C. Huber
                                        Chief Financial Officer





                                      18
<PAGE>   19
                                EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO.          EXHIBIT DESCRIPTION                             PAGE
-----------          ------------------                              ----
  <S>                <C>                                             <C>
  11                  Calculation of primary and fully
                      diluted income (loss) per share
                     
  27                  Financial Data Schedule
</TABLE>