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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 1934For the period ended September 30, 2003

or

o Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934For the transition period from  to

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 o

Indicate by check mark whether registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act.) Yes o No x

Indicate the number of shares outstanding of each of the issuers
classes of common stock, as of the latest practicable date:
25,413,489 shares of the Companys Common Stock were outstanding as
of November 1, 2003.



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TABLE OF CONTENTS



|                                           |                                                                                               |  |  |  |  |  |  | 
|------------------------------------------ | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION              
|                                           | Item 1. Financial Statements                                                                 
|                                           | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                           | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                                           | Item 4. Controls and Procedures                                                              
|PART II OTHER INFORMATION                 
|                                           | Item 1. Legal Proceedings                                                                    
|                                           | Item 2. Changes in Securities                                                                
|                                           | Item 3. Defaults Upon Senior Securities                                                      
|                                           | Item 4. Submission of Matters to Vote of Security Holders                                    
|                                           | Item 5. Other Information                                                                    
|                                           | Item 6(a) Exhibits                                                                           
|                                           | Item 6(b) Reports on Form 8-K                                                                
|SIGNATURES                                
|INDEX TO EXHIBITS                         
|EX-31.1 Certification of CEO - Section 302
|EX-31.2 Certification of CFO - Section 302
|Ex-32.1 Certification of CEO - Section 906
|EX-32.2 Certification of CFO - Section 906



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CANYON RESOURCES CORPORATION
FORM 10-Q
For the Quarter ended September 30, 2003

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 18Item 3.      Quantitative and Qualitative Disclosures About Market Risk
    
    Page 23Item 4.      Controls and Procedures
    
    Page 24PART II OTHER INFORMATIONItem 1.      Legal Proceedings
    
    Page 25Item 2.      Changes in Securities
    
    Page 25Item 3.      Defaults Upon Senior Securities
    
    Page 25Item 4.      Submission of Matters to a Vote of Security Holders
    
    Page 25Item 5.      Other Information
    
    Page 25Item 6.      Exhibits and Reports on Form 8-K
    
    Page 25






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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 Form
10-K for the year ended December 31, 2002.

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 7-17Item 2.      Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    Page 18Item 3.      Quantitative and Qualitative Disclosures About Market Risk
    
    Page 23Item 4.      Controls and Procedures
    
    Page 24


1



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CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)

September 30,
    
    December 31,2003
    
    2002ASSETSCash and cash equivalents
    
    $
    5,821,300
    
    
    $
    430,800Restricted cash
    
    
    302,800
    
    
    
    375,100Accounts receivable
    
    
    34,100
    
    
    
    6,800Metal inventories
    
    
    6,407,600
    
    
    
    8,787,700Materials and supplies
    
    
    135,000
    
    
    
    187,900Prepaid and other assets
    
    
    572,900
    
    
    
    802,400Total current assets
    
    
    13,273,700
    
    
    
    10,590,700Property and equipment, at costProducing properties
    
    
    48,576,400
    
    
    
    43,347,000Other
    
    
    932,300
    
    
    
    916,30049,508,700
    
    
    
    44,263,300Accumulated depreciation and depletion
    
    
    (43,398,600
    )
    
    
    (38,905,400
    )Net property and equipment
    
    
    6,110,100
    
    
    
    5,357,900Undeveloped mineral claims and leases, net
    
    
    16,699,400
    
    
    
    18,703,300Restricted cash
    
    
    2,812,800
    
    
    
    2,294,700Other assets
    
    
    257,100
    
    
    
    79,300Total Assets
    
    $
    39,153,100
    
    
    $
    37,025,900LIABILITIES AND STOCKHOLDERS EQUITYAccounts payable
    
    $
    2,592,100
    
    
    $
    3,908,700Notes payable  current
    
    
    891,700
    
    
    
    1,355,600Capital leases  current
    
    
    15,900
    
    
    
    167,400Stock issuance obligation
    
    
    245,000
    
    
    
    Unrealized loss on derivative instruments
    
    
    53,900
    
    
    
    487,600Other current liabilities
    
    
    500,900
    
    
    
    688,600Total current liabilities
    
    
    4,299,500
    
    
    
    6,607,900Notes payable  long term
    
    
    2,699,000
    
    
    
    Capital leases  long term
    
    
    18,800
    
    
    
    28,400Asset retirement obligations
    
    
    4,113,700
    
    
    
    3,894,200Total Liabilities
    
    
    11,131,000
    
    
    
    10,530,500Commitments and contingencies (Note 10)Common stock ($.01 par value) 50,000,000 shares
authorized; issued and outstanding: 25,277,400 at
September 30, 2003,
and 18,853,400 at December 31, 2002
    
    
    252,800
    
    
    
    188,500Capital in excess of par value
    
    
    111,680,400
    
    
    
    102,957,500Deficit
    
    
    (83,911,100
    )
    
    
    (76,650,600
    )Total Stockholders Equity
    
    
    28,022,100
    
    
    
    26,495,400Total Liabilities and Stockholders Equity
    
    $
    39,153,100
    
    
    $
    37,025,900


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
(Unaudited)

Three months ended September 30,
    
    Nine months ended September 30,2003
    
    2002
    
    2003
    
    2002REVENUE
    
    
    
    
    
    (Restated)
    
    
    
    
    
    (Restated)Sales
    
    $
    3,208,700
    
    
    $
    4,903,600
    
    
    $
    10,458,400
    
    
    $
    11,783,900EXPENSESCost of sales
    
    
    3,449,400
    
    
    
    4,459,100
    
    
    
    11,251,100
    
    
    
    11,651,700Depreciation, depletion, & amortization
    
    
    1,345,500
    
    
    
    1,860,800
    
    
    
    4,975,800
    
    
    
    4,850,500Selling, general & administrative
    
    
    334,100
    
    
    
    277,100
    
    
    
    1,179,300
    
    
    
    1,017,100Exploration and development costs
    
    
    252,500
    
    
    
    188,600
    
    
    
    642,700
    
    
    
    480,300Accretion expense
    
    
    46,500
    
    
    
    
    
    
    
    139,600
    
    
    
    (Gain) loss on asset disposals
    
    
    (9,500
    )
    
    
    (1,328,300
    )
    
    
    (85,200
    )
    
    
    (2,729,800
    )5,418,500
    
    
    
    5,457,300
    
    
    
    18,103,300
    
    
    
    15,269,800OTHER INCOME (EXPENSE)Interest income
    
    
    11,600
    
    
    
    11,300
    
    
    
    27,300
    
    
    
    41,100Interest expense
    
    
    (66,500
    )
    
    
    (52,900
    )
    
    
    (214,900
    )
    
    
    (231,300
    )Unrealized gain (loss) on derivative instruments
    
    
    (185,400
    )
    
    
    452,500
    
    
    
    433,700
    
    
    
    (599,700
    )Other
    
    
    
    
    
    
    500
    
    
    
    150,000
    
    
    
    19,600(240,300
    )
    
    
    411,400
    
    
    
    396,100
    
    
    
    (770,300
    )Loss before cumulative effect of change in
accounting principle
    
    
    (2,450,100
    )
    
    
    (142,300
    )
    
    
    (7,248,800
    )
    
    
    (4,256,200
    )Cumulative effect of change in
accounting principle
    
    
    
    
    
    
    
    
    
    
    (11,700
    )
    
    
    Net loss
    
    
    ($2,450,100
    )
    
    
    ($142,300
    )
    
    
    ($7,260,500
    )
    
    
    ($4,256,200
    )Basic and diluted loss per share:Loss before cumulative effect of change in
accounting principle
    
    
    ($0.11
    )
    
    
    ($0.01
    )
    
    
    ($0.34
    )
    
    
    ($0.23
    )Cumulative effect of change in
accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Basic and diluted net loss per share
    
    
    ($0.11
    )
    
    
    ($0.01
    )
    
    
    ($0.34
    )
    
    
    ($0.23
    )Weighted average shares outstanding
    
    
    23,107,200
    
    
    
    19,766,100
    
    
    
    21,480,400
    
    
    
    18,420,200


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

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

Nine months ended September 30,2003
    
    2002(Restated)Cash flows from operating activities:Net loss
    
    
    ($7,260,500
    )
    
    
    ($4,256,200
    )Adjustments to reconcile net loss to net cash used in
operating activities:Depreciation, depletion and amortization
    
    
    4,975,800
    
    
    
    4,850,500Amortization of financing costs
    
    
    12,200
    
    
    
    44,200Cumulative effect of change in accounting principle
    
    
    11,700
    
    
    
    Gain on asset dispositions
    
    
    (85,200
    )
    
    
    (2,729,800
    )Unrealized (gain) loss on derivative instruments
    
    
    (433,700
    )
    
    
    599,700Reclassification adjustment of other comprehensive income
    
    
    
    
    
    
    (963,800
    )Other
    
    
    77,900
    
    
    
    66,200Changes in operating assets and liabilities:Increase in accounts receivable
    
    
    (27,300
    )
    
    
    (1,300
    )(Increase) decrease in inventories
    
    
    2,179,300
    
    
    
    (557,100
    )Increase in prepaid and other assets
    
    
    (104,600
    )
    
    
    (365,900
    )Increase in accounts payable and accrued liabilities
    
    
    475,900
    
    
    
    95,100Increase (decrease) in other liabilities
    
    
    (112,600
    )
    
    
    8,400(Increase) decrease in restricted cash
    
    
    (386,200
    )
    
    
    98,100Total adjustments
    
    
    6,583,200
    
    
    
    1,144,300Net cash used in operating activities
    
    
    (677,300
    )
    
    
    (3,111,900
    )Cash flows from investing activities:Purchases and development of property and equipment
    
    
    (1,567,200
    )
    
    
    (1,032,000
    )Proceeds from asset sales
    
    
    229,300
    
    
    
    4,261,900Earnest money applied
    
    
    (27,600
    )
    
    
    Increase in restricted cash
    
    
    (59,600
    )
    
    
    (31,800
    )Net cash provided by (used in) investing activities
    
    
    (1,425,100
    )
    
    
    3,198,100Cash flows from financing activities:Issuance of stock
    
    
    6,156,700
    
    
    
    2,171,500Proceeds from stock to be issued
    
    
    245,000
    
    
    
    Proceeds from sale of debentures
    
    
    3,299,000
    
    
    
    Payments on debt
    
    
    (2,046,700
    )
    
    
    (2,061,700
    )Payments on capital lease obligations
    
    
    (161,100
    )
    
    
    (819,600
    )Net cash provided by (used in) financing activities
    
    
    7,492,900
    
    
    
    (709,800
    )Net increase (decrease) in cash and cash equivalents
    
    
    5,390,500
    
    
    
    (623,600
    )Cash and cash equivalents, beginning of year
    
    
    430,800
    
    
    
    1,618,100Cash and cash equivalents, end of period
    
    $
    5,821,300
    
    
    $
    994,500


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

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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 $202,700 of interest during the first nine months of
2003, and $154,100 during the corresponding period of 2002.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------



|2. |  | The Company paid no income taxes during the first nine months of 2003 nor
the corresponding period of 2002.
|-- |  | -----------------------------------------------------------------------------------------------------------



|3. |  | In connection with proceeds of $245,000 received
from a September 2003 private placement, the Company, subsequent to
September 30, 2003, issued 136,100 shares of common stock.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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. During the first nine months of 2002, the Company
issued 1,881,000 shares of common stock with a fair market value of
$2,679,200 to certain creditors as payment for goods and services.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. |  | The Company issued 83,700 shares of common stock with a fair market value
of $77,900 to an employee as compensation for services during the first
nine months of 2003. During the first nine months of 2002, the Company
issued 66,600 shares of common stock with a fair market value of $61,200
to an employee as compensation for services.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. |  | The Company issued 434,800 shares of common stock in connection with the
conversion of $600,000 debenture principal during the first nine months of
2003.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



|5. |  | The Company issued 2,500 shares of common stock with a fair market value
of $5,000 as consideration for a mining lease during the first nine months
of 2002.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
(Unaudited)

Common Stock
    
    
    
    Capital in
    
    
    
    
    
    CommonNumber of
    
    At Par
    
    Excess of Par
    
    Retained
    

Shareholders'Shares
    
    Value
    
    Value
    
    Deficit
    
    EquityBalances, December 31, 2002
    
    
    18,853,400
    
    
    $
    188,500
    
    
    $
    102,957,500
    
    
    
    ($76,650,600
    )
    
    $
    26,495,400Stock issued for cash
    
    
    2,171,300
    
    
    
    21,700
    
    
    
    3,886,600
    
    
    
    
    
    
    
    3,908,300Stock issued in payment of
goods and services
    
    
    2,099,600
    
    
    
    21,000
    
    
    
    1,931,600
    
    
    
    
    
    
    
    1,952,600Other stock issued
    
    
    83,700
    
    
    
    900
    
    
    
    77,000
    
    
    
    
    
    
    
    77,900Exercise of stock options
    
    
    31,800
    
    
    
    300
    
    
    
    25,700
    
    
    
    
    
    
    
    26,000Exercise of warrants
    
    
    1,602,800
    
    
    
    16,000
    
    
    
    2,206,400
    
    
    
    
    
    
    
    2,222,400Conversion of debentures
    
    
    434,800
    
    
    
    4,400
    
    
    
    595,600
    
    
    
    
    
    
    
    600,000Comprehensive lossNet loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,260,500
    )
    
    
    (7,260,500
    )Other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,260,500
    )
    
    
    (7,260,500
    )Balances, September 30, 2003
    
    
    25,277,400
    
    
    $
    252,800
    
    
    $
    111,680,400
    
    
    
    ($83,911,100
    )
    
    $
    28,022,100


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

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CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Restatement of Prior Financial Information:

As further discussed in Note 15, the Company has restated its financial
statements for the three and nine months ended September 30, 2002. Overall, the
adjustments decreased the Companys net income in the third quarter of 2002 by
$358,500, or $0.02 per share. For the nine months ended September 30, 2002, the
adjustments increased the Companys net loss by $1,395,700, or $0.07 per share.
The adjustments were i) to expense previously capitalized costs for the
McDonald Gold Project; ii) to commence amortizing the carrying values of the
McDonald and Seven-Up Pete mineral property interests upon adoption on January
1, 2002 of Statement of Financial Accounting Standards No. 142, Goodwill and
Other Intangible Assets; and iii) to include depreciation, depletion and
amortization as a cost in inventories at the Companys Briggs Mine. See also
Note 19 to the Companys Consolidated Financial Statements included in its 2002
Form 10-K filing for further discussion of the restatements.

2. Basis of Presentation:

During interim periods, Canyon Resources (the Company) 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.

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. These interim results are not
necessarily indicative of the results of operations or cash flows for the full
year ending December 31, 2003.

See
Note 13 for pro forma disclosures in accordance with the
provisions of SFAS No. 123, Accounting for Stock Based
Compensation.

3. 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.

4. Adoption of New Accounting Standard:

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

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CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

4. Adoption of New Accounting Standard, continued:

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, 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, the Company recorded a loss of $11,700 as the
cumulative effect of a change in accounting principle.

The pro forma effects on net income and per share amounts before
cumulative effect of a change in accounting principle for the three and nine
months ended September 30, 2002 as if the Company had adopted SFAS No. 143 on
January 1, 2002 are presented below.

Three Months
    
    Nine MonthsEnded
    
    EndedSeptember 30, 2002
    
    September 30, 2002Loss before cumulative effect of change in accounting principle as reported
    
    (
    $142,300
    )
    
    (
    $4,256,200
    )Accretion expense
    
    
    (45,800
    )
    
    
    (137,400
    )Additional depreciation expense
    
    
    (56,200
    )
    
    
    (131,100
    )Reduction for reclamation accrual in cost of sales
    
    
    61,800
    
    
    
    144,100Pro forma loss before cumulative effect of change in accounting principle
    
    (
    $182,500
    )
    
    (
    $4,380,600
    )Basic and diluted loss per share before cumulative effect of change in
accounting principle:As reported
    
    
    ($0.01
    )
    
    
    ($0.23
    )Pro forma
    
    
    ($0.01
    )
    
    
    ($0.24
    )


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, 2002
    
    $
    4,122,200Impact of adopting SFAS No. 143
    
    
    332,000Settlement of liabilities
    
    
    (252,100
    )Accretion expense
    
    
    139,600Balance, September 30, 2003
    
    
    4,341,700Current portion*
    
    
    228,000Non current portion
    
    $
    4,113,700*Included in other current liabilities


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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 31,2003
    
    2002Collateral for Letter of Credit (a)
    
    $
    250,000
    
    
    $
    249,000Collateral for reclamation bonds and other contingent events (b)
    
    
    150,600
    
    
    
    149,400Kendall Mine reclamation (c)
    
    
    1,912,200
    
    
    
    1,896,300McDonald Gold Project cash reclamation bond (d)
    
    
    500,000
    
    
    
    Unexpended proceeds from gold sales (e)
    
    
    
    
    
    
    131,900Net proceeds from property sales (f)
    
    
    267,800
    
    
    
    182,000Escrow deposits (g)
    
    
    35,000
    
    
    
    61,2003,115,600
    
    
    
    2,669,800Current portion
    
    
    302,800
    
    
    
    375,100Noncurrent portion
    
    $
    2,812,800
    
    
    $
    2,294,700




| | (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, 2003, 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.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) |  | Held directly by the Montana Department of Environmental
Quality for reclamation at the McDonald Gold Property.
| | --- |  | ---------------------------------------------------------------------------------------------------------------



| | (e) |  | The Briggs Mine loan facility required all proceeds from
gold sales to be held in trust and disbursed from the collected
credit balance in certain orders of priority. The outstanding
balance on the loan facility was paid off on February 28, 2003.
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) |  | In connection with the auction of certain properties,
cash has been sequestered by court order. (See Note 10(e)).
| | --- |  | -----------------------------------------------------------------------------------------------------------------



| | (g) |  | Earnest money received in connection with contracted
property sales in 2002 which have not yet closed are being held
by the Companys escrow agent.
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------

9



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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

6. Inventories:

Metal inventories consisted of the following at:

September 30, 2003
    
    December 31, 2002Broken ore under leach
    
    $
    6,104,600
    
    
    $
    8,428,200Doré
    
    
    303,000
    
    
    
    359,500$
    6,407,600
    
    
    $
    8,787,700


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, 2003
    
    December 31, 2002Gross
    
    Accumulated
    
    
    
    
    
    Gross
    
    AccumulatedCarrying Value
    
    Amortization
    
    Net Book Value
    
    Carrying Value
    
    Amortization
    
    Net Book ValueProperty:McDonald
    
    $
    16,200,200
    
    
    
    ($3,543,700
    )
    
    $
    12,656,500
    
    
    $
    16,200,200
    
    
    
    ($2,025,000
    )
    
    $
    14,175,200Seven-Up Pete
    
    
    5,175,000
    
    
    
    (1,132,100
    )
    
    
    4,042,900
    
    
    
    5,175,000
    
    
    
    (646,900
    )
    
    
    4,528,100$
    21,375,200
    
    
    
    ($4,675,800
    )
    
    $
    16,699,400
    
    
    $
    21,375,200
    
    
    
    ($2,671,900
    )
    
    $
    18,703,300


These properties are being amortized over eight years with no residual
value. See Note 10(d) for a discussion of the legal status of the properties.

8. Notes Payable:

Notes payable consisted of the following at:

September 30, 2003
    
    December 31, 2002Briggs Facility (a)
    
    $
    
    
    
    $
    1,355,600Caterpillar Finance (b)
    
    
    891,700
    
    
    
    Debentures (c)
    
    
    2,699,000
    
    
    
    3,590,700
    
    
    
    1,355,600Current portion
    
    
    891,700
    
    
    
    1,355,600Notes payable  Noncurrent
    
    $
    2,699,000
    
    
    $
    




| | (a) |  | The outstanding balance on this facility was paid off on
February 28, 2003. The weighted average interest rate during the
first two months of 2003 was 4.9%.
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) |  | 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 has arranged to finance the purchase price for one year
at an interest rate of 6.75%.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10



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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

8. Notes Payable, continued:



| | (c) |  | In March 2003, the Company completed a private placement
financing of 6%, two year convertible debentures raising $3,299,000.
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. In August 2003, $600,000 was
converted to 434,800 shares of common stock.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9. Stock Issuance Obligation:

In
connection with proceeds of $245,000 received from a September 2003 private
placement, the Company, subsequent to September 30, 2003, issued 136,100
shares of common stock.

10. Commitments and Contingencies:



| | (a) |  | Kendall Mine Reclamation
| | --- |  | ------------------------



| |  |  | The Kendall Mine operates under 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, disagrees with the agency
decision, and is presently evaluating its course of action with regard
to the DEQs decision. The Companys estimate to achieve mine closure
could be impacted by the outcome of an agency decision following an
EIS. The Company has $1,912,200 on deposit in an interest bearing
account with the DEQ for reclamation at the Kendall Mine.
| |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) |  | Briggs Mine Surety Bonds
| | --- |  | ------------------------



| |  |  | 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.
| |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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.
| |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11



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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

10. Commitments and Contingencies, continued:



| | (c) |  | 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 (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 a 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, 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. 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 the first half of 2004.
| |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12



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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

10. Commitments and Contingencies, continued:



| | (e) |  | Kendall Mine Lawsuit
| | --- |  | --------------------



| |  |  | 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. 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, 2003,
$267,800 had been remitted to the Court as required by the Order. The
Company has filed an appeal to this Order with the Montana State
Supreme Court.
| |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) |  | Threatened Litigation
| | --- |  | ---------------------



| |  |  | In September 2003, the Company received a Sixty Day Notice of Intent to
Sue pursuant to the Federal Clean Water Act from two environmental
groups. In addition to naming the Company, the notice also named the
State of Montana Department of Environmental Quality and the U. S.
Environmental Protection Agency. The notice claims there have been
unaddressed violations under the Clean Water Act at the Kendall Mine
site. The Company believes these contentions to be without merit.
| |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11. Derivative Instruments and Price Protection Arrangements:

At September 30, 2003, the Company had 6,205 ounces outstanding on a gold
forward sales contract at a price of approximately $377 per
ounce. The fair market value of the contract at September 30, 2003, was $53,900 less than the contractual amount. Unrealized 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 Monhts Ended
    
    Nine Months EndedSeptember 30,
    
    September 302003
    
    2002
    
    2003
    
    2002Unrealized gain (loss)
    
    
    ($185,400
    )
    
    $
    452,500
    
    
    $
    433,700
    
    
    
    ($599,700
    )


These unrealized gains and losses are shown as a separate line item in the
other income (expense) section in the Statement of Operations.

On June 30, 1999, the Company converted its Briggs Mine gold loan to a
cash loan. In connection with the conversion, the Company reduced the
monetized amount of the debt to fair value, resulting in a gain of $2,528,000,
which was deferred and reported as a liability in the consolidated balance
sheet. On January 1, 2001, the Company adopted SFAS No. 133 and reclassified
this amount as a cumulative effect adjustment in other comprehensive income.
For the nine months ended September 30, 2002, $0.3 million of the gain was
recognized and is included in revenues in the Statement of Operations. There
was no comparable activity in the current year.

13



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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

12. Earnings per Share (EPS):

The Company computes EPS by applying the provisions of Financial
Accounting Standards 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.
Common stock equivalents for the three and nine months ended September 30, 2003
that were not included in the computation of diluted EPS because the effect
would be antidilutive were 4,337,700 and 4,159,500, respectively. For the three
and nine months ended September 30, 2002, common stock equivalents that were
not included in the computation of diluted EPS were 2,371,600 and 1,816,200,
respectively.

13. 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 based 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. As a result, no
compensation cost has been recognized in the accompanying financial statements
as the exercise price of all stock option grants is at least equal to 100% of
the market price of the Companys common stock at the date of grant. Had
compensation cost been recorded under the fair value provisions of SFAS No.
123, the following pro forma net loss and per share amounts would have been
recorded for the following periods:

Three Months Ended
    
    Nine Months EndedSeptember 30
    
    September 302003
    
    2002
    
    2003
    
    2002Net loss, as reported
    
    
    ($2,450,100
    )
    
    
    ($142,300
    )
    
    
    ($7,260,500
    )
    
    
    ($4,256,200
    )Add: compensation expense determined
under fair value based method
    
    
    (38,000
    )
    
    
    (39,200
    )
    
    
    (88,700
    )
    
    
    (144,700
    )Pro forma net loss
    
    
    ($2,488,100
    )
    
    
    ($181,500
    )
    
    
    ($7,349,200
    )
    
    
    ($4,400,900
    )Basic and diluted loss per shareo As reported
    
    ($0.11
    )
    
    
    ($0.01
    )
    
    
    ($0.34
    )
    
    
    ($0.23
    )o Pro Forma
    
    
    ($0.11
    )
    
    
    ($0.01
    )
    
    
    ($0.34
    )
    
    
    ($0.24
    )


14. Income Taxes:

The Company has not recorded a tax benefit for the current period 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.

14



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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

15. Restatement of Prior Financial Information:

The Company has determined that certain previously capitalized costs for
the McDonald Gold Project should be expensed. In November 1998, the Montana
electorate passed an anti-mining initiative, I-137, which prohibits
development of new gold and silver mines which use open-pit mining methods and
cyanide in the treatment and recovery process. As a result of the legal
impediment, the Company cannot presently proceed with the development of the
McDonald Gold Project. Accordingly, the Company has restated its prior
financial information to remove all costs capitalized since I-137 took effect.
This adjustment decreased the Companys net income by $129,800, or $0.01 per
share for the three months ended September 30, 2002. For the nine months ended
September 30, 2003, the adjustment increased the Companys net loss by
$415,900 or $0.02 per share.

On January 1, 2002, the Company became subject to the accounting and
reporting requirements of Statement of Financial Accounting Standards No. 142,
Goodwill and Other Intangible Assets(SFAS No. 142). As the Companys mineral
interests in the McDonald and Seven-Up Pete properties represent intangible
assets as defined in this new standard, the Company has commenced amortizing
the carrying values of these properties taking into account residual values
over their useful lives. This adjustment decreased the Companys net income by
$668,000, or $0.03 per share for the three months ended September 30, 2002. For
the nine months ended September 30, 2002, the adjustment increased the
Companys net loss by $2,004,000, or $0.11 per share.

The Company has restated its prior financial information to include
depreciation, depletion and amortization (DD&A) as a cost in inventories at the
Briggs Mine. Previously, the Company recorded DD&A as a period expense. In
addition, the Company changed from recognizing units-of-production (UOP) DD&A
based on the volume of gold sold to recognizing UOP DD&A based on estimated
recoverable ounces mined or produced from proven and provable reserves to
accommodate the capitalization of DD&A in inventory. This adjustment increased
the Companys net income by $439,300, or $0.02 per share, for the three months
ended September 30, 2002. For the nine months ended September 30, 2002, the
adjustment decreased the Companys net loss by $1,024,200, or $0.06 per share.

The following sets forth the effects of the aforementioned adjustments to
the Companys Consolidated Statements of Operations for the three and nine
months ended September 30, 2002, and Consolidated Statement of Cash Flows for
the nine months ended September 30, 2002.

15



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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

15. Restatement of Prior Financial Information, continued:

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended September 30, 2002As Previously
    
    McDonald
    
    Briggs
    
    AsReported
    
    Property
    
    Inventory
    
    RestatedREVENUESales
    
    $
    4,903,600
    
    
    $
    
    
    
    $
    
    
    
    $
    4,903,600EXPENSESCost of sales
    
    
    4,579,900
    
    
    
    
    
    
    
    (120,800
    )
    
    
    4,459,100Depreciation, depletion and amortization
    
    
    1,503,700
    
    
    
    675,600
    
    
    
    (318,500
    )
    
    
    1,860,800Selling, general and administrative
    
    
    277,100
    
    
    
    
    
    
    
    
    
    
    
    277,100Exploration and development costs
    
    
    66,400
    
    
    
    122,200
    
    
    
    
    
    
    
    188,600Gain on asset disposals
    
    
    (1,328,300
    )
    
    
    
    
    
    
    
    
    
    
    (1,328,300
    )5,098,800
    
    
    
    797,800
    
    
    
    (439,300
    )
    
    
    5,457,300OTHER INCOME (EXPENSE)
    
    
    411,400
    
    
    
    
    
    
    
    
    
    
    
    411,400Net income (loss)
    
    $
    216,200
    
    
    
    ($797,800
    )
    
    $
    439,300
    
    
    
    ($142,300
    )Basic and diluted net income (loss) per share
    
    $
    0.01
    
    
    
    ($0.04
    )
    
    $
    0.02
    
    
    
    ($0.01
    )Weighted average shares outstanding
    
    
    19,766,100
    
    
    
    19,766,100
    
    
    
    19,766,100
    
    
    
    19,766,100


Nine Months Ended September 30, 2002As Previously
    
    McDonald
    
    Briggs
    
    AsReported
    
    Property
    
    Inventory
    
    RestatedREVENUESales
    
    $
    11,783,900
    
    
    $
    
    
    
    $
    
    
    
    $
    11,783,900EXPENSESCost of sales
    
    
    11,933,200
    
    
    
    
    
    
    
    (281,500
    )
    
    
    11,651,700Depreciation, depletion and amortization
    
    
    3,566,400
    
    
    
    2,026,800
    
    
    
    (742,700
    )
    
    
    4,850,500Selling, general and administrative
    
    
    1,017,100
    
    
    
    
    
    
    
    
    
    
    
    1,017,100Exploration and development costs
    
    
    87,200
    
    
    
    393,100
    
    
    
    
    
    
    
    480,300Gain on asset disposals
    
    
    (2,729,800
    )
    
    
    
    
    
    
    
    
    
    
    (2,729,800
    )13,874,100
    
    
    
    2,419,900
    
    
    
    (1,024,200
    )
    
    
    15,269,800OTHER INCOME (EXPENSE)
    
    
    (770,300
    )
    
    
    
    
    
    
    
    
    
    
    (770,300
    )Net income (loss)
    
    
    ($2,860,500
    )
    
    
    ($2,419,900
    )
    
    $
    1,024,200
    
    
    
    ($4,256,200
    )Basic and diluted net income (loss) per share
    
    
    ($0.16
    )
    
    
    ($0.13
    )
    
    $
    0.06
    
    
    
    ($0.23
    )Weighted average shares outstanding
    
    
    18,420,200
    
    
    
    18,420,200
    
    
    
    18,420,200
    
    
    
    18,420,200


16



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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

15. Restatement of Prior Financial Information, continued:

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

Nine Months Ended September 30, 2002As Previously
    
    McDonald
    
    Briggs
    
    AsReported
    
    Property
    
    Inventory
    
    RestatedCash flows from operating activities:Net income (loss)
    
    
    ($2,860,500
    )
    
    
    ($2,419,900
    )
    
    $
    1,024,200
    
    
    
    ($4,256,200
    )Adjustments to reconcile net income (loss)
to net cash used in operating activities
    
    
    141,700
    
    
    
    2,026,800
    
    
    
    (1,024,200
    )
    
    
    1,144,300Net cash used in operating activities
    
    
    (2,718,800
    )
    
    
    (393,100
    )
    
    
    
    
    
    
    (3,111,900
    )Cash flows from investing activities:Net cash provided by investing activities
    
    
    2,805,000
    
    
    
    393,100
    
    
    
    
    
    
    
    3,198,100Cash flows from financing activities:Net cash used in financing activities
    
    
    (709,800
    )
    
    
    
    
    
    
    
    
    
    
    (709,800
    )Net decrease in cash and cash equivalents
    
    
    (623,600
    )
    
    
    
    
    
    
    
    
    
    
    (623,600
    )Cash and cash equivalents, beginning of year
    
    
    1,618,100
    
    
    
    
    
    
    
    
    
    
    
    1,618,100Cash and cash equivalents, end of period
    
    $
    994,500
    
    
    
    
    
    
    
    
    
    
    $
    994,500


16. Recently Issued Financial Accounting Standards:

Effective January 1, 2003, the Company adopted Interpretation No. 45,
Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others(FIN No. 45). FIN No. 45 broadens
the disclosures to be made by the guarantor about its obligations under certain
guarantees. FIN No. 45 also requires a guarantor to recognize a liability for
the fair value of the obligation undertaken in issuing the guarantee at the
inception of a guarantee. Adoption of FIN No. 45 did not have an impact on the
Companys results of operations or financial position at September 30, 2003.

In January 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 46, Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51 (FIN No. 46), which requires the consolidation of
certain variable interest entities, as defined. FIN No. 46 is effective
immediately for variable interest entities created after January 31, 2003, and
as a result of a FASB position issued in October 2003, the effective date of
FIN No. 46 for entities created before February 1, 2003 has been deferred if
certain criteria are met. While this deferral is in place disclosures are
required currently if a company expects to consolidate any variable interest
entities. The Company believes it has no such variable interest entities and as
a result FIN No. 46 will have no impact on its results of operations, financial
position or cash flows.

In April 2003, the FASB issued Statement of Financial Accounting Standards
No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities(SFAS No. 149). SFAS No. 149 amends and clarifies the accounting for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. SFAS No. 149 is generally
effective for contracts entered into or modified after June 30, 2003, and for
hedging relationships designated after June 30, 2003. The adoption of this
statement did not have an impact on the Companys results of operations or
financial position at September 30, 2003.

In May 2003, the FASB issued Statement of Financial Accounting Standards
No. 150, Accounting for Certain Financial Instruments with Characteristics of
both Liabilities and Equity(SFAS No. 150). SFAS No. 150 establishes standards
for how an issuer classifies and measures certain financial instruments with
characteristics of both liabilities and equity. It requires that an issuer
classify a financial instrument that is within its scope as a liability (or an
asset in some

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16. Recently Issued Financial Accounting Standards, continued:

circumstances). Many of those instruments were previously classified as equity.
The statement is effective for financial instruments entered into or modified
after May 31, 2003. A FASB position issued in October 2003 deferred the
provision of paragraph 9 and 10 of SFAS No. 150 as they apply to certain
mandatory redeemable financial instruments for an indefinite period. The
adoption of this statements operational components did not have an impact on
the Companys results of operations or financial position at September 30,
2003.







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 Financial Statements

As further discussed in Note 15 to the Consolidated Financial Statements,
the Company has restated its financial statements for the three and nine months
ended September 30, 2002. Overall, the adjustments decreased the Companys net
income in the third quarter of 2002 by $358,500, or $0.02 per share. For the
nine months ended September 30, 2002, the adjustments increased the Companys
net loss by $1,395,700, or $0.07 per share. The adjustments were i) to expense
previously capitalized costs for the McDonald Gold Project; ii) to commence
amortizing the carrying values of the McDonald and Seven-Up Pete mineral
property interests upon adoption on January 1, 2002 of Statement of Financial
Accounting Standards No. 142, Goodwill and Other Intangible Assets; and iii) to
include depreciation, depletion and amortization as a cost in inventories at
the Companys Briggs Mine. Prior period amounts in the ensuing discussion have
been adjusted for these restatements where applicable. See also Note 19 to the
Companys Consolidated Financial Statements included in its 2002 Form 10-K
filing for further discussion of the restatements.

Results of Operations

The Company recorded a net loss of $2.5 million, or $0.11 per share, on
revenues of $3.2 million for the third quarter of 2003. For the nine months
ended September 30, 2003, the Company recorded a net loss of $7.3 million, or
$0.34 per share, on revenues of $10.5 million. This compares to a net loss of
$0.1 million, or $0.01 per share, on revenues of $4.9 million for the third
quarter of 2002 and a net loss of $4.3 million, or $0.23 per share, on revenues
of $11.8 million during the first nine months of 2002.

For the three months ended September 30, 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. For the comparable period of 2002, the Company sold
16,700 ounces of gold and 2,500 ounces of silver at an average realized price
of $294 per equivalent gold ounce. The New York Commodity Exchange (COMEX)
gold price averaged $363 and $314 per ounce for the three months ended
September 30, 2003 and 2002, respectively.

The following table summarizes the Companys gold deliveries and revenues
for the three months ended September 30, 2003 and the comparable period for
2002:

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Three Months Ended
    
    Three Months EndedSeptember 30, 2003
    
    September 30, 2002Average
    
    
    
    
    
    
    
    
    
    AverageGold
    
    Price Per
    
    Revenue
    
    Gold
    
    Price Per
    
    RevenueOunces
    
    Oz.
    
    $000s
    
    Ounces
    
    Oz.
    
    $000sDeliveriesForwards
    
    
    6,045
    
    
    $
    366
    
    
    $
    2,210
    
    
    
    9,900
    
    
    $
    269
    
    
    $
    2,661Spot Sales
    
    
    2,660
    
    
    $
    373
    
    
    
    992
    
    
    
    6,800
    
    
    $
    315
    
    
    
    2,140Cash settlement
of forwards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (224
    )Deferred income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3168,705
    
    
    $
    368
    
    
    
    3,202
    
    
    
    16,700
    
    
    $
    293
    
    
    
    4,893Other transactionsSilver proceeds
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    118,705
    
    
    $
    369
    
    
    $
    3,209
    
    
    
    16,700
    
    
    $
    294
    
    
    $
    4,904


For the nine months ended September 30, 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. For the comparable period of 2002, the Company sold
38,938 ounces of gold and 11,554 ounces of silver at an average realized price
of $303 per equivalent gold ounce. The New York Commodity Exchange (COMEX)
gold price averaged $354 and $306 per ounce for the nine months ended September
30, 2003 and 2002, respectively.

The following table summarizes the Companys gold deliveries and revenues
for the nine months ended September 30, 2003 and the comparable period for
2002:

Nine Months Ended
    
    Nine Months EndedSeptember 30, 2003
    
    September 30, 2002Average
    
    
    
    
    
    
    
    
    
    AverageGold
    
    Price Per
    
    Revenue
    
    Gold
    
    Price Per
    
    RevenueOunces
    
    Oz.
    
    $000s
    
    Ounces
    
    Oz.
    
    $000sDeliveriesForwards
    
    
    12,995
    
    
    $
    334
    
    
    $
    4,344
    
    
    
    19,800
    
    
    $
    269
    
    
    $
    5,316Spot Sales
    
    
    17,941
    
    
    $
    342
    
    
    
    6,242
    
    
    
    19,138
    
    
    $
    306
    
    
    
    5,848Cash settlement
of forwards
    
    
    
    
    
    
    
    
    
    
    (173
    )
    
    
    
    
    
    
    
    
    
    
    (381
    )Deferred income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    94830,936
    
    
    $
    337
    
    
    
    10,413
    
    
    
    38,938
    
    
    $
    301
    
    
    
    11,731Other transactionsSilver proceeds
    
    
    
    
    
    
    
    
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    5330,936
    
    
    $
    338
    
    
    $
    10,459
    
    
    
    38,938
    
    
    $
    303
    
    
    $
    11,784


Cost of sales was $3.4 million for the three months ended September 30,
2003, as compared to $4.5 million in the prior period. For the nine months
ended September 30, 2003, cost of sales was $11.3 million as compared to $11.7
million in the prior period. For the three and nine months ended September 30,
2003, cost of sales includes write downs of inventory to net realizable value
of $0.4 million and $2.2 million, respectively.

Depreciation, depletion and amortization was lower in the current period
due to a lower number of recoverable ounces mined and was not materially
different for the nine months ended September 30, 2003.

Selling, general and administrative expense was not materially different
for the third quarter and was approximately $0.2 million higher in the current
year to date period due to higher legal and other professional services.

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Exploration and development costs were not materially different for the
third quarter and were approximately $0.2 million higher in the current year to
date period due to higher costs at the Companys McDonald Gold Project.

Interest income and expense were not materially different for the periods
presented.

The following table summarizes certain gains on asset dispositions the
Company recognized for the three and nine months ended September 30, 2003 and
the comparable periods for 2002.

$000s
    
    $000sThree months ended September 30,
    
    Nine months ended September 30,2003
    
    2002
    
    2003
    
    2002Sale of foreign exploration property
    
    
    
    
    
    $
    1,328
    
    
    
    
    
    
    $
    1,557Sale of Briggs crusher
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,173Sale of mineral property interests
    
    $
    10
    
    
    
    
    
    
    $
    85
    
    
    
    $
    10
    
    
    $
    1,328
    
    
    $
    85
    
    
    $
    2,730


The Company recorded an unrealized loss on its forward gold contracts of
approximately $0.2 million for the three months ended September 30, 2003. For
the comparable period in 2002, the Company recorded an unrealized gain of
approximately $0.5 million. For the nine months ended September 30, 2003, the
Company recorded an unrealized gain of approximately $0.4 million. For the
comparable period in 2002, the Company recorded an unrealized loss of
approximately $0.6 million. These amounts are shown as a separate line item in
the other income (expense) section on the Statement of Operations.

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, 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 loss of $11,700 as the cumulative effect
of a change in accounting principle. See Note 4 to the Consolidated Financial
Statements for further disclosures regarding the Companys adoption of SFAS No.
143.

Liquidity & Capital Resources

For the nine months ended September 30, 2003, operating activities used
$0.7 million of cash, investing activities used $1.4 million of cash and
financing activities provided $7.5 million of cash resulting in a net increase
in cash of $5.4 million. Cash and cash equivalents at September 30, 2003 was
$5.8 million.

During the first nine months of 2003, the Company spent approximately $1.6
million on mine development and realized proceeds of approximately $0.2 million
in connection with the sale of certain property interests.

During
the first nine months of 2003, the Company raised approximately $3.3
million through a private placement of 6% convertible debentures,
received approximately $1.9 million in connection with an offer to
exchange certain

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outstanding warrants for cash and issuance of new warrants, received
approximately $0.3 million in connection with the exercise of warrants not
tendered in the aforementioned tender offer, and raised approximately $4.2
million in connection with a private placement transaction. In addition, the
Company paid down debt by approximately $2.0 million, (which included the final
payoff of the Briggs Mine loan facility) and made capital lease payments of
approximately $0.2 million.

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. The Companys long-term liquidity may 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. While the
Company believes it will be able to finance its continuing activities,
including the McDonald litigation, there are no assurances of success in this
regard or in the Companys ability to secure additional financing through
capital markets, joint ventures, or other arrangements in the future.

Other Matters

McDonald Gold Project  Anti-Cyanide 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, 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. 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 the first half of 2004.

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 paragraph, denied the

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Companys petition
for judicial review. On January 14, 2003, the Company filed an appeal with the
Montana Supreme Court. Oral arguments were heard by the Montana Supreme Court
on October 28, 2003. The Company expects a ruling during the first half of
2004.

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.

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.

Kendall Mine  Environmental Regulation

The Kendall Mine operates under 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, disagrees with the agency decision, and is presently evaluating its
course of action with regard to the DEQs decision. The Companys estimate to
achieve mine closure could be impacted by the outcome of an agency decision
following an EIS. The Company has $1,912,200 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. 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, 2003, $267,800 had been remitted to the Court as
required by the Order. The Company has filed an appeal to this Order with the
Montana State Supreme Court.

Kendall Mine  Threatened Litigation

In September 2003, the Company received a Sixty Day Notice of Intent to
Sue pursuant to the Federal Clean Water Act from two environmental groups. In
addition to naming the Company, the notice also named the State of Montana
Department of Environmental Quality and the U. S. Environmental Protection
Agency. The notice claims there have been
unaddressed violations under the Clean Water Act at the Kendall Mine site. The
Company believes these contentions to be without merit.

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Recently Issued Financial Accounting Standards

Effective January 1, 2003, the Company adopted Interpretation No. 45,
Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others(FIN No. 45). FIN No. 45 broadens
the disclosures to be made by the guarantor about its obligations under certain
guarantees. FIN No. 45 also requires a guarantor to recognize a liability for
the fair value of the obligation undertaken in issuing the guarantee at the
inception of a guarantee. Adoption of FIN No. 45 did not have an impact on the
Companys results of operations or financial position at September 30, 2003.

In January 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 46, Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51 (FIN No. 46), which requires the consolidation of
certain variable interest entities, as defined. FIN No. 46 is effective
immediately for variable interest entities created after January 31, 2003, and
as a result of a FASB position issued in October 2003, the effective date of
FIN No. 46 for entities created before February 1, 2003 has been deferred if
certain criteria are met. While this deferral is in place disclosures are
required currently if a company expects to consolidate any variable interest
entities. The Company believes it has no such variable interest entities and as
a result FIN No. 46 will have no impact on its results of operations, financial
position or cash flows.

In April 2003, the FASB issued Statement of Financial Accounting Standards
No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities(SFAS No. 149). SFAS No. 149 amends and clarifies the accounting for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. SFAS No. 149 is generally
effective for contracts entered into or modified after June 30, 2003, and for
hedging relationships designated after June 30, 2003. The adoption of this
statement did not have an impact on the Companys results of operations or
financial position at September 30, 2003.

In May 2003, the FASB issued Statement of Financial Accounting Standards
No. 150, Accounting for Certain Financial Instruments with Characteristics of
both Liabilities and Equity(SFAS No. 150). SFAS No. 150 establishes standards
for how an issuer classifies and measures certain financial instruments with
characteristics of both liabilities and equity. It requires that an issuer
classify a financial instrument that is within its scope as a liability (or an
asset in some circumstances). Many of those instruments were previously
classified as equity. The statement is effective for financial instruments
entered into or modified after May 31, 2003. A FASB position issued in October
2003 deferred the provision of paragraph 9 and 10 of SFAS No. 150 as they apply
to certain mandatory redeemable financial instruments for an indefinite period.
The adoption of this statements operational components did not have an impact
on the Companys results of operations or financial position at September 30,
2003.







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 $331 per ounce.

At September 30, 2003, the Company had an outstanding forward contract on
6,205 ounces of gold at an average price of approximately $377 per ounce,
approximately 16% of anticipated production over the next twelve months. At
current production levels, a $10 per ounce change in the price of gold will
impact the Companys annual profitability and cash flow by
approximately $0.3 million.

There are certain market risks associated with the forward contracts
utilized by the Company. If the Companys counterparties fail to honor their
contractual obligation to purchase gold at agreed-upon prices, the Company may
be exposed to market price risk by having to sell gold in the open market at
prevailing prices. Similarly, if the Company fails

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to produce sufficient
quantities of gold to meet its forward commitments, the Company would have to
purchase the shortfall in the open market at prevailing prices. In addition,
the Company could be subject to cash margin calls by counterparties if the
market price of gold significantly exceeds the forward contract price which
would create additional financial obligations.

At September 30, 2003, the fair value of the Companys forward gold
contract was approximately $0.06 million lower than the contractual amount.

Interest Rates

At September 30, 2003, the Companys debt was approximately $3.6 million
of which $2.7 million relates to its 6% convertible debentures and $0.9 million
relates to a fixed rate (6.75%) financing of a lease buy-out of the mining
fleet at the Briggs Mine. 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.







Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains a system of disclosure controls and procedures. The
term disclosure controls and procedures, as defined by regulations of the
Securities and Exchange Commission (SEC), means controls and other procedures
that are designed to ensure that information required to be disclosed in the
reports that the Company files or submits to the SEC under the Securities
Exchange Act of 1934, as amended (the Act), is recorded, processed,
summarized and reported, within the time periods specified in the SECs rules
and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits to the SEC
under the Act is accumulated and communicated to the Companys management,
including its principal executive officer and its principal financial officer,
as appropriate to allow timely decisions to be made regarding required
disclosure. The Companys Chief Executive Officer and Chief Financial Officer
have evaluated the Companys disclosure controls and procedures as of the end
of the period covering by this Quarterly Report on Form 10-Q and have concluded
that the Companys disclosure controls and procedures are effective as of the
date of such evaluation.

Changes in Internal Controls

The Company also maintains a system of internal controls. The term
internal controls, as defined by the American Institute of Certified Public
Accountants Codification of Statement on Auditing Standards, AU Section 319,
means controls and other procedures designed to provide reasonable assurance
regarding the achievement of objectives in the reliability of the Companys
financial reporting, the effectiveness and efficiency of the Companys
operations and the Companys compliance with applicable laws and regulations.
There have been no significant changes in the Companys internal controls or in
other factors that could significantly affect such controls subsequent to the
date the Company carried out its evaluation.

24



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##### Table of Contents









PART II OTHER INFORMATION







Item 1. Legal Proceedings

In September 2003, the Company received a Sixty Day Notice of Intent to
Sue pursuant to the Federal Clean Water Act from two environmental
groups. In addition to naming the Company, the notice also named the
State of Montana Department of Environmental Quality and the U. S.
Environmental Protection Agency. The notice claims there have been
unaddressed violations under the Clean Water Act at the Kendall Mine
site. The Company believes these contentions to be without merit.







Item 2. Changes in Securities

During the three months ended September 30, 2003, the Company issued
27,900 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.

During the period September  October 2003, the Company issued
2,307,392 unregistered shares of its $0.01 par value common stock and
warrants to purchase 2,307,392 shares of common stock in connection
with a private placement. The private placement consisted of the sale
of 2,307,392 units, at $1.80 per unit, with each unit comprised of one
share of common stock plus a warrant to purchase an additional share of
common stock. The warrants have an expiration date of December 1, 2005,
and may be exercised 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. The
shares and warrants were issued to 31 accredited investors 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(a) Exhibits

Exhibits, as required by Item 601 of Regulation S-K, are listed on
pages 26  27. The exhibit numbers correspond to the numbers assigned
in Item 601 of Regulation S-K.







Item 6(b) Reports on Form 8-K

The following reports on Form 8-K were filed by the Company: i) under
date of August 14, 2003, the Companys press release concerning
financial results for three and six months ended June 30, 2003, and ii)
under date of October 7, 2003, the Companys press release announcing
the completion of a Pre-Feasibility Study and redesign of the McDonald
Gold Project.

25



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##### Table of Contents



EXHIBITNUMBER
    
    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

26



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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.                  

27



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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 14, 2003
    
    /s/ Richard H. De VotoRichard H. De Voto
Chief Executive OfficerDate: November 14, 2003
    
    /s/ Gary C. HuberGary C. Huber
Chief Financial Officer


28



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##### Table of Contents









INDEX TO EXHIBITS

EXHIBITNUMBER
    
    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.