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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)    o
   Commission file number 1-11887 CANYON RESOURCES CORPORATION (a Delaware Corporation)        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 oIndicate by check mark whether registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act.) Yes o No xIndicate the number of shares outstanding of each of the issuers
classes of common stock, as of the latest practicable date:
29,053,803 shares of the Companys Common Stock were outstanding as
of September 30, 2004.




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CANYON RESOURCES CORPORATION
 FORM 10-Q
 For the Three and Six Months ended June 30, 2004
  
 TABLE OF CONTENTS PART I FINANCIAL INFORMATIONItem 1. Financial Statements
    
    Page 1Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    Page 20Item 3. Quantitative and Qualitative Disclosures About
Market Risk
    
    Page 28Item 4. Controls and Procedures
    
    Page 29PART II OTHER INFORMATIONItem 1. Legal Proceedings
    
    Page 31Item 2. Changes in Securities, Use of Proceeds and
Issuer Purchases of Equity Securities
    
    Page 31Item 3. Defaults Upon Senior Securities
    
    Page 31Item 4. Submission of Matters to a Vote of Security Holders
    
    Page 31Item 5. Other Information
    
    Page 31Item 6. Exhibits and Reports on Form 8-K
    
    Page 32SIGNATURES
    
    Page 35




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PART I FINANCIAL INFORMATION 
 Item 1. Financial Statements The following unaudited consolidated financial statements have been
prepared by Canyon Resources Corporation (the Company) pursuant to the rules
and regulations of the Securities and Exchange Commission (SEC). Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such SEC rules and regulations. These consolidated financial statements should be read in conjunction with
the financial statements and accompanying notes included in the Companys
Amendment No. 2 to Form 10-K/A for the year ended December 31, 2003. Consolidated Balance Sheets
    
    Page 2Consolidated Statements of Operations
    
    Page 3Consolidated Statements of Cash Flows
    
    Page 4-5Consolidated Statement of Changes in Stockholders Equity
    
    Page 6Notes to Interim Consolidated Financial Statements
    
    Page 7-19Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    Page 20Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    Page 28Item 4. Controls and Procedures
    
    Page 29Certification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
  1




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES 
 CONSOLIDATED BALANCE
SHEETS  (Unaudited)
 June 30,
    
    December 31,2004
    
    2003ASSETSCash and cash equivalents
    
    $
    9,098,600
    
    
    $
    4,139,800Restricted cash
    
    
    272,100
    
    
    
    307,100Accounts receivable
    
    
    33,100
    
    
    
    128,200Metal inventories
    
    
    4,470,600
    
    
    
    4,238,200Materials and supplies
    
    
    62,200
    
    
    
    128,900Prepaid and other assets
    
    
    129,900
    
    
    
    561,100Total current assets
    
    
    14,066,500
    
    
    
    9,503,300Property and equipment, at costProducing properties
    
    
    6,603,700
    
    
    
    6,237,000Other
    
    
    915,200
    
    
    
    940,0007,518,900
    
    
    
    7,177,000Accumulated depreciation and depletion
    
    
    (5,889,100
    )
    
    
    (2,275,500
    )Net property and equipment
    
    
    1,629,800
    
    
    
    4,901,500Undeveloped mineral claims and leases, net
    
    
    14,695,500
    
    
    
    16,031,400Restricted cash
    
    
    2,829,300
    
    
    
    2,819,900Other assets
    
    
    247,100
    
    
    
    57,100Total Assets
    
    $
    33,468,200
    
    
    $
    33,313,200LIABILITIES AND STOCKHOLDERS EQUITYAccounts payable
    
    $
    616,500
    
    
    $
    2,138,200Notes
payable  current
    
    
    2,630,000
    
    
    
    1,037,400Capital
leases  current
    
    
    15,400
    
    
    
    20,400Asset retirement obligations
    
    
    2,814,300
    
    
    
    932,500Unrealized loss on derivative instruments
    
    
    
    
    
    
    147,200Other current liabilities
    
    
    508,700
    
    
    
    340,200Total current liabilities
    
    
    6,584,900
    
    
    
    4,615,900Notes
payable  long term
    
    
    
    
    
    
    2,599,000Capital
leases  long term
    
    
    29,700
    
    
    
    33,600Asset retirement obligations
    
    
    1,601,100
    
    
    
    3,371,200Total liabilities
    
    
    8,215,700
    
    
    
    10,619,700Commitments
and contingencies (Note 11)Common stock
($.01 par value) 50,000,000 shares authorized; issued and outstanding: 28,082,300 at June 30, 2004, and
25,593,800 at December 31, 2003
    
    
    280,800
    
    
    
    255,900Capital in excess of par value
    
    
    125,773,100
    
    
    
    117,111,700Deferred compensation
    
    
    (112,300
    )
    
    
    (264,200
    )Retained deficit
    
    
    (100,689,100
    )
    
    
    (94,409,900
    )Total Stockholders Equity
    
    
    25,252,500
    
    
    
    22,693,500Total Liabilities and Stockholders Equity
    
    $
    33,468,200
    
    
    $
    33,313,200
 The accompanying notes are an integral part of these consolidated financial statements. 2




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Three months ended June 30,
    
    Six months ended June 30,2004
    
    2003
    
    2004
    
    2003(Restated)
    
    
    
    
    
    (Restated)REVENUESales
    
    $
    5,826,400
    
    
    $
    3,387,100
    
    
    $
    7,563,900
    
    
    $
    7,249,700EXPENSESCost of sales
    
    
    4,087,800
    
    
    
    3,852,100
    
    
    
    6,442,900
    
    
    
    6,965,200Depreciation, depletion, & amortization
    
    
    2,425,700
    
    
    
    1,281,800
    
    
    
    3,528,300
    
    
    
    2,971,600Selling, general & administrative
    
    
    468,100
    
    
    
    538,000
    
    
    
    2,466,400
    
    
    
    991,600Exploration and development costs
    
    
    80,100
    
    
    
    179,300
    
    
    
    294,500
    
    
    
    404,300Accretion expense
    
    
    43,300
    
    
    
    46,600
    
    
    
    86,600
    
    
    
    93,100Asset retirement obligation
    
    
    935,200
    
    
    
    
    
    
    
    935,200
    
    
    
    Impairment of long-lived assets
    
    
    
    
    
    
    3,382,000
    
    
    
    
    
    
    
    3,382,000(Gain) loss on asset disposals
    
    
    800
    
    
    
    600
    
    
    
    800
    
    
    
    (75,700
    )8,041,000
    
    
    
    9,280,400
    
    
    
    13,754,700
    
    
    
    14,732,100OTHER INCOME (EXPENSE)Interest income
    
    
    25,300
    
    
    
    6,100
    
    
    
    40,800
    
    
    
    15,700Interest expense
    
    
    (62,400
    )
    
    
    (92,000
    )
    
    
    (136,400
    )
    
    
    (172,000
    )Gain on derivative instruments
    
    
    
    
    
    
    131,500
    
    
    
    147,200
    
    
    
    619,100Other
    
    
    (151,000
    )
    
    
    
    
    
    
    (140,000
    )
    
    
    150,000(188,100
    )
    
    
    45,600
    
    
    
    (88,400
    )
    
    
    612,800Loss before cumulative effect of change in
accounting principle
    
    
    (2,402,700
    )
    
    
    (5,847,700
    )
    
    
    (6,279,200
    )
    
    
    (6,869,600
    )Cumulative effect of change in
accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,700
    )Net loss
    
    ($
    2,402,700
    )
    
    ($
    5,847,700
    )
    
    ($
    6,279,200
    )
    
    ($
    6,881,300
    )Basic and diluted net loss per share
    
    ($
    0.09
    )
    
    ($
    0.28
    )
    
    ($
    0.23
    )
    
    ($
    0.33
    )Weighted average shares outstanding
    
    
    27,985,900
    
    
    
    21,021,100
    
    
    
    27,181,900
    
    
    
    20,660,800
 The accompanying notes are an integral part of these consolidated financial statements. 3




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six months ended June 30,(Unaudited)
    
    2004
    
    2003(Restated)Cash flows from operating activities:Net loss
    
    ($
    6,279,200
    )
    
    ($
    6,881,300
    )Adjustments
to reconcile net loss to net cash used in operating activities:Depreciation, depletion and amortization
    
    
    3,528,300
    
    
    
    2,971,600Amortization of financing costs
    
    
    
    
    
    
    12,200Amortization of beneficial conversion feature
    
    
    31,000
    
    
    
    23,600Cumulative effect of change in accounting principle
    
    
    
    
    
    
    11,700Impairment of inventory
    
    
    964,100
    
    
    
    732,500Impairment of long-lived assets
    
    
    
    
    
    
    3,382,000Loss (gain) on asset dispositions
    
    
    800
    
    
    
    (75,700
    )Gain on derivative instruments
    
    
    (147,200
    )
    
    
    (619,100
    )Non-cash compensation expense
    
    
    497,200
    
    
    
    217,900Provision for asset retirement obligations
    
    
    935,200
    
    
    
    Interest accretion
    
    
    86,600
    
    
    
    93,100Write off of prepaid expenses
    
    
    151,000
    
    
    
    Changes in operating assets and liabilities:Decrease (increase) in accounts receivable
    
    
    95,100
    
    
    
    (800
    )Decrease (increase) in inventories
    
    
    323,000
    
    
    
    (475,300
    )Decrease in prepaid and other assets
    
    
    90,200
    
    
    
    98,700Increase (decrease) in accounts payable and accrued liabilities
    
    
    449,700
    
    
    
    (72,100
    )Decrease in other liabilities
    
    
    (2,705,300
    )
    
    
    (68,500
    )Decrease (increase) in restricted cash
    
    
    25,600
    
    
    
    (378,600
    )Total adjustments
    
    
    4,325,300
    
    
    
    5,853,200Net cash used in operating activities
    
    
    (1,953,900
    )
    
    
    (1,028,100
    )Cash flows from investing activities:Purchases and development of property and equipment
    
    
    (381,200
    )
    
    
    (371,200
    )Proceeds from asset sales
    
    
    (800
    )
    
    
    186,000Increase in restricted cash
    
    
    
    
    
    
    (43,800
    )Net cash used in investing activities
    
    
    (382,000
    )
    
    
    (229,000
    )Cash flows from financing activities:Issuance of stock
    
    
    8,341,000
    
    
    
    26,000Proceeds from exercise of warrants
    
    
    
    
    
    
    835,800Proceeds from sale of debentures
    
    
    
    
    
    
    3,299,000Payments on debt
    
    
    (1,037,400
    )
    
    
    (1,612,100
    )Payments on capital lease obligations
    
    
    (8,900
    )
    
    
    (128,500
    )Net cash provided by financing activities
    
    
    7,294,700
    
    
    
    2,420,200Net increase in cash and cash equivalents
    
    
    4,958,800
    
    
    
    1,163,100Cash and cash equivalents, beginning of year
    
    
    4,139,800
    
    
    
    430,800Cash and cash equivalents, end of period
    
    $
    9,098,600
    
    
    $
    1,593,900
 The accompanying notes are an integral part of these consolidated financial statements. 4




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CANYON RESOURCES CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS, continued
(Unaudited) Supplemental disclosures of cash flow information:  1.
    
    The Company paid $105,400 of interest during the first six months of
2004, and $136,000 during the corresponding period of 2003.2.
    
    The Company paid no income taxes during the first six months of 2004 nor
the corresponding period of 2003. Supplemental schedule of noncash investing and financing activities:  1.
    
    The Company financed an equipment lease buy-out in the amount of
$1,582,800 during the first six 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
six months of 2003.3.
    
    The Company issued 81,800 shares of common stock with a fair market value
of $129,600 to an employee as compensation for services during the first
six months of 2004. During the first six months of 2003, the Company
issued 55,800 shares of common stock with a fair market value of $75,400
(restated) to an employee as compensation for services.4.
    
    Non-cash stock compensation for the Companys stock option plans under
variable plan accounting was $367,600 and $142,500 during the first six
months of 2004 and 2003, respectively. The accompanying notes are an integral part of these consolidated financial statements. 5




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES 
 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
 Common Stock
    
    Capital in
    
    
    
    
    
    
    
    
    
    CommonNumber of
    
    At Par
    
    Excess of Par
    
    Deferred
    
    Retained
    
    Shareholders,Shares
    
    Value
    
    Value
    
    Compensation
    
    Deficit
    
    EquityBalances, January 1, 2004,
    
    
    25,593,800
    
    
    $
    255,900
    
    
    $
    117,111,700
    
    
    ($
    264,200
    )
    
    ($
    94,409,900
    )
    
    $
    22,693,500Stock issued for cash
    
    
    1,631,000
    
    
    
    16,300
    
    
    
    7,111,000
    
    
    
    
    
    
    
    
    
    
    
    7,127,300Exercise of warrants
    
    
    613,700
    
    
    
    6,200
    
    
    
    1,027,300
    
    
    
    
    
    
    
    
    
    
    
    1,033,500Exercise of stock options
    
    
    162,400
    
    
    
    1,600
    
    
    
    178,600
    
    
    
    
    
    
    
    
    
    
    
    180,200Other stock issued
    
    
    81,400
    
    
    
    800
    
    
    
    128,800
    
    
    
    
    
    
    
    
    
    
    
    129,600Other equity
changes (1)
    
    
    
    
    
    
    
    
    
    
    215,700
    
    
    
    151,900
    
    
    
    
    
    
    
    367,600Comprehensive lossNet loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,279,200
    )
    
    
    (6,279,200
    )Other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,279,200
    )
    
    
    (6,279,200
    )Balances, June 30, 2004
    
    
    28,082,300
    
    
    $
    280,800
    
    
    $
    125,773,100
    
    
    ($
    112,300
    )
    
    ($
    100,689,100
    )
    
    $
    25,252,500
  (1)
    
    Compensation expense determined under variable plan accounting for
the Companys stock option plan. The accompanying notes are an integral part of these consolidated financial statements. 6




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CANYON RESOURCES CORPORATION 
 NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
  1.
    
    Basis of Presentation: During interim periods, Canyon Resources Corporation (the Company) follows
the accounting policies set forth in its Annual Report to Stockholders and its
Report on Form 10-K/A filed with the Securities and Exchange Commission. Users
of financial information produced for interim periods are encouraged to refer
to the footnotes contained in the Annual Report to Stockholders when reviewing
interim financial results. In the opinion of management, the accompanying interim financial
statements contain all material adjustments, consisting only of normal
recurring adjustments necessary to present fairly the financial position, the
results of operations, and the cash flows of Canyon Resources Corporation and
its consolidated subsidiaries for interim periods. These interim results are
not necessarily indicative of the results of operations or cash flows for the
full year ending December 31, 2004. The Company has restated its 2003 financial statements. For additional
information, see Note 14.  2.
    
    Management Estimates and Assumptions: Certain amounts included in or affecting the Companys financial
statements and related disclosures must be estimated, requiring that certain
assumptions be made with respect to values or conditions which cannot be made
with certainty at the time the financial statements are prepared. Therefore,
the reported amounts of the Companys assets and liabilities, revenues and
expenses, and associated disclosures with respect to contingent assets and
obligations are necessarily affected by these estimates. The Company evaluates
these estimates on an ongoing basis, utilizing historical experience,
consultation with experts, and other methods considered reasonable in the
particular circumstances. Nevertheless, actual results may differ significantly
from the Companys estimates.  3.
    
    Earnings per Share (EPS): The Company computes EPS by applying the provisions of Statement of
Financial Accounting Standards (SFAS) No. 128, Earnings per Share. As the
Company reported net losses for the periods presented, inclusion of common
stock equivalents would have an antidilutive effect on per share amounts.
Accordingly, the Companys basic and diluted EPS computations are the same for
the periods presented. For the three months ended June 30, 2004 and 2003,
common stock equivalents that were not included in the computation of diluted
EPS were 6,326,800 and 4,869,400, respectively. Common stock equivalents for
the six months ended June 30, 2004 and 2003 that were not included in the
computation of diluted EPS were 6,535,600 and 4,070,300, respectively.  4.
    
    Stock Based Compensation: In accordance with the provisions of SFAS No. 123, Accounting for
Stock-Based Compensation(SFAS No. 123), the Company measures compensation cost
using the intrinsic value method prescribed by Accounting Principles Board
(APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related
interpretations to account for its stock option plans. However, because the
Company had allowed option holders to exercise options by surrendering shares
underlying vested but unexercised options in payment of the exercise price of
the options, the Companys outstanding options are accounted for using variable
plan accounting. As a result, while no compensation cost has been recognized at
the grant date as the exercise price of all stock option grants was at least
equal to 100% of the market price of the Companys common stock as of the date
of grant, subsequent changes in the market price of the Companys stock to the
date of exercise or forfeiture result in a change in the measure of
compensation cost for the award being recognized. 7




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CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  4.
    
    Stock Based Compensation, continued: In December 2002, the Financial Accounting Standards Board issued SFAS No.
148, Accounting for Stock-Based Compensation  Transition and Disclosure(SFAS
No. 148). SFAS No. 148 amends SFAS No. 123 to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, SFAS No. 148 amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in
both annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The amendments to SFAS No. 123 are effective for financial statements
for fiscal years ending after December 15, 2002. Had compensation cost been
determined under the provisions of SFAS No. 123, the following pro forma net
loss and per share amounts would have been recorded for the three and six
months ended June 30: THREE MONTHS ENDED JUNE
    
    SIX MONTHS ENDED JUNE30,
    
    30,2004
    
    2003
    
    2004
    
    2003(Restated)
    
    
    
    
    
    (Restated)Net loss, as reported
    
    ($
    2,402,700
    )
    
    ($
    5,847,700
    )
    
    ($
    6,279,200
    )
    
    ($
    6,881,300
    )Add: compensation expense
(credit) determined
under variable
plan accounting
    
    
    (892,100
    )
    
    
    97,900
    
    
    
    367,600
    
    
    
    142,500Deduct: compensation
expense determined under fair
value
based method
    
    
    (14,500
    )
    
    
    (21,700
    )
    
    
    (30,700
    )
    
    
    (50,700
    )Pro forma net loss
    
    ($
    3,309,300
    )
    
    ($
    5,771,500
    )
    
    ($
    5,942,300
    )
    
    ($
    6,789,500
    )Basic and diluted loss per share  As reported
    
    ($
    0.09
    )
    
    ($
    0.28
    )
    
    ($
    0.23
    )
    
    ($
    0.33
    )  Pro forma
    
    ($
    0.12
    )
    
    ($
    0.27
    )
    
    ($
    0.22
    )
    
    ($
    0.33
    )
  5.
    
    Restricted Cash: Restricted cash consisted of the following at: June 30,
    

    December 31,2004
    
    2003Collateral for Letter of Credit(a)

    $
    249,000
    
    
    $
    249,000Collateral for reclamation bonds and other
contingent events(b)

    
    151,500
    
    
    
    150,800Kendall Mine reclamation(c)
    
    1,928,800
    
    
    
    1,920,100McDonald Gold Project cash reclamation
bond(d)

    
    500,000
    
    
    
    500,000Net proceeds from property sales(e)
    
    272,100
    
    
    
    272,100Escrow deposits(f)

    
    
    
    
    
    35,0003,101,400
    
    
    
    3,127,000Current portion

    
    272,100
    
    
    
    307,100Noncurrent portion

    $
    2,829,300
    
    
    $
    2,819,900
 8




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CANYON RESOURCES CORPORATIONNOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)  5.
    
    Restricted Cash, continued:  (a)
    
    In connection with the issuance of certain bonds for the
performance of reclamation obligations and other contingent
events at the Briggs Mine, a bank Letter of Credit was provided
in favor of the Surety as partial collateral for such bond
obligations. The Letter of Credit is fully collateralized with
cash and will expire no earlier than December 31, 2004, and at
the banks option, may be renewed for successive one-year
periods.(b)
    
    Held directly by the Surety as partial collateral for
reclamation and other contingent events at the Briggs Mine.(c)
    
    Held directly by the Montana Department of Environmental
Quality in an interest bearing account for use in continuing
reclamation at the Kendall minesite. (See Note 11(a))(d)
    
    Held directly by the Montana Department of Environmental
Quality for reclamation at the McDonald Gold Property.(e)
    
    In connection with the auction of certain properties,
cash has been sequestered by court order. (See Note 11(e)).(f)
    
    Earnest money received in connection with contracted
property sales in 2002 which have not closed and held by the
Companys escrow agent. The Company rescinded the sales
contracts because of uncertainty of the Montana Department of
Environmental Quality decision on the Environmental Impact
Statement. The money was refunded in June 2004.  6.
    
    Inventories: Metal inventories consisted of the following at: June 30, 2004
    
    December 31, 2003Broken ore under leach
    $
    4,085,800
    
    
    $
    4,191,300Doré
    
    384,800
    
    
    
    46,900$
    4,470,600
    
    
    $
    4,238,200
 The Company wrote down its metal inventory at the Briggs Mine to net
realizable value by $411,800 and $732,500 (restated) during the second quarters
of 2004 and 2003, and $964,100 and $732,500 (restated) for the first six months
of 2004 and 2003, respectively. 9




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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) 7. Undeveloped Mineral Claims and Leases: The carrying value of the Companys undeveloped mineral claims and leases
consists of the following components at: JUNE 30, 2004
    
    DECEMBER 31, 2003Gross
    
    
    
    
    
    
    
    
    
    GrossCarrying
    
    Accumulated
    
    Net Book
    
    Carrying
    
    Accumulated
    
    Net BookValue
    
    Amortization
    
    Value
    
    Value
    
    Amortization
    
    ValueProperty:McDonald
    
    $
    16,200,200
    
    
    ($
    5,062,500
    )
    
    $
    11,137,700
    
    
    $
    16,200,200
    
    
    ($
    4,050,000
    )
    
    $
    12,150,200Seven-Up Pete
    
    
    5,175,000
    
    
    
    (1,617,200
    )
    
    
    3,557,800
    
    
    
    5,175,000
    
    
    
    (1,293,800
    )
    
    
    3,881,200$
    21,375,200
    
    
    ($
    6,679,700
    )
    
    $
    14,695,500
    
    
    $
    21,375,200
    
    
    ($
    5,343,800
    )
    
    $
    16,031,400
 Amortization of these properties commenced in 2002 at the rate of
$2,671,900 per year. The properties are being amortized over eight years with
no residual value. Future amortization of $2,671,900 per year will be
recognized until the properties are fully amortized or events or circumstances
change. See Note 11(e) for a discussion of the legal status of the properties
and Note 15 for a discussion of recently issued accounting pronouncements. 8. Impairment of Long-lived Assets The Company
tests for impairment of its long-lived assets when changes in events or
circumstances occur. In accordance with SFAS No. 144 the Company uses estimates
of future cash flows to test the recoverability of the Briggs Mines long-lived
assets which includes mine development expenditures and plant and equipment.
The estimated future cash flows include the projected revenues from in-ground
estimated reserves based on the Companys estimate of future gold prices and
all future expenditures necessary to produce those in-ground
reserves. As mining progressed in the second quarter of 2003, the Briggs Mine
encountered projected ore which contained lower gold grade and higher
sulfide contents (with low gold recovery) than expected. The Company
determined that these gold ounces were no longer economic and, as
such, decreased its reserves at the Briggs Mine. The Company recorded
a write down of $3,382,000 of these assets to their estimated fair
value of $4,634,300 as a consequence. 9. Notes Payable: Notes payable consisted of the following at: June 30, 2004
    
    December 31, 2003Caterpillar Finance (a)
    
    $
    
    
    
    $
    1,037,400Debentures (b)
    
    
    2,674,000
    
    
    
    2,674,000- discount
    
    
    (44,000
    )
    
    
    (75,000
    )2,630,000
    
    
    
    3,636,400Current portion
    
    
    2,630,000
    
    
    
    1,037,400Notes payable  Noncurrent
    
    $
    
    
    
    $
    2,599,000
  (a)
    
    In January 2003, the Company exercised a lease purchase option
to buy the mining fleet at the Briggs Mine for approximately $1.6
million and arranged to finance the purchase price for one year at an
interest rate of 6.75%. The outstanding balance was paid off during
the second quarter of 2004.(b)
    
    In March 2003, the Company completed a private placement
financing of 6%, two year convertible debentures. Approximately $1.2
million of the proceeds was used to pay off the Briggs Mine debt with
the balance retained for general corporate purposes. The debentures
require quarterly interest payments, and the holders have the right
to convert principal to common stock of the Company, subject to
certain adjustments, at any time at a conversion rate of $1.38 per
share of common stock. The principal amount, unless otherwise converted, is due
March 1, 2005. The Companys stock price at the end of June 2004, was $3.89 per share. 10




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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) 10. Asset Retirement Obligations: The Companys estimated asset retirement obligations include site specific
costs for earthwork, revegetation, water treatment and dismantlement of
facilities for its current or recently producing mineral properties. The following provides a reconciliation of the Companys beginning and
ending carrying values for its asset retirement obligations in the current
year: Balance, December 31, 2003
    
    $
    4,303,700Settlement of liabilities
    
    
    (910,100
    )Change in estimate (1)
    
    
    935,200Accretion expense
    
    
    86,600Balance, June 30, 2004
    
    
    4,415,400Current portion
    
    
    2,814,300Non current portion
    
    $
    1,601,100
  (1)
    
    During the second quarter, the Company held discussions with
the Montana Department of Environmental Quality (DEQ) concerning
reclamation at the Kendall Mine site. After these discussions, the
Company modified its reclamation plan to include items which had been
developed by an engineering contractor to the DEQ and subsequently,
revised its estimate to achieve closure of the Kendall Mine. 11. Commitments and Contingencies:  (a)
    
    Kendall Mine ReclamationThe Kendall Mine holds permits granted by the DEQ. In February 2002, the DEQ issued a
decision that a comprehensive Environmental Impact Statement (EIS) is
needed for completion of remaining reclamation at Kendall. On June 30,
2004, the Company commenced significant earthwork reclamation.
Subsequently, in August 2004, the DEQ notified the Company that it
could not complete the final capping of the leach pads until the EIS
was completed. The Companys estimate to achieve mine closure could be
impacted by the outcome of the DEQs decision following an EIS. The
Company has $1,928,800 on deposit in an interest bearing account with
the DEQ for reclamation at the Kendall Mine.(b)
    
    Briggs Mine Surety BondsThe Briggs Mine operates under permits granted by various agencies
including the U.S. Bureau of Land Management (BLM), Inyo County, the
California Department of Conservation, and the Lahontan Regional Water
Quality Control Board (Lahontan). These agencies have jointly required
the Company to post a reclamation bond in the amount of $3,030,000 to
ensure appropriate reclamation. Additionally, the Company 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 11




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CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) 11. Commitments and Contingencies, continued:  Company becoming liable for the principal amounts under its collateral
agreement with the Surety. In April 2004, the Company ceased active
mining at Briggs and has commenced reclamation activities.(c)
    
    Contingent LiabilityOn September 25, 1997, the Company, together with its wholly-owned
subsidiary, CR Montana Corporation (CR Montana), purchased a 72.25%
participating interest and underlying assets in the Seven-Up Pete
Venture (SPV) from CR Montanas partner in the SPV, Phelps Dodge
Corporation (Phelps Dodge). The Company and its wholly-owned subsidiary
now own 100% of the SPV. The SPV includes the McDonald Gold Project
near Lincoln, Montana.The Company made an initial payment of $5 million and is required to
make a final payment of $10.0 million upon issuance of all permits
required for construction of the McDonald Gold Project, or
alternatively, one-third of any proceeds received from any potential
takings lawsuit. Due to the contingent nature of the transaction, the
Company recorded only the initial payment of $5 million as additions to
mining claims and leases. The purchase payments are collateralized only
by the 72.25% participating interest and underlying assets in the SPV
transferred from Phelps Dodge to the Company and CR Montana in this
transaction, and the 50% co-tenancy interest in certain real property
also transferred to the Company and CR Montana.(d)
    
    Anti-Mining Initiative (I-137)In November 1998, the Montana electorate passed an anti-mining
initiative (I-137) by a vote of 52% to 48%. I-137, as modified by the
State Legislature in April 1999, that bans development of new gold and
silver mines, which use open-pit mining methods and cyanide in the
treatment and recovery process. In April 2000, the SPV filed lawsuits
in Montana State District Court and in the United States District
Court, seeking to have I-137 declared unconstitutional, or,
alternatively, to obtain a takings or damage award for the lost value
of the McDonald, Seven-Up Pete and Keep Cool mineral properties. These
lawsuits are based on, amongst others, (i) the right not to be deprived
of property without due process of law; (ii) the right to equal
protection under the laws; and (iii) the right to be protected against
laws which impair the obligations of existing contracts. The United
States District Court issued a ruling August 30, 2001 in which the
Court dismissed the SPVs substantive due process claim but, as
requested by the SPV, ruled that the remainder of the SPVs claims
could be pursued at such time as the State lawsuit was concluded. The
Montana State District Court issued a ruling November 1, 2001 in
response to a Motion to Dismiss and a Motion For Summary Judgment by
the State of Montana. In this ruling, the Court dismissed four of the
SPVs fourteen counts, including its substantive due process and equal
protection challenges to I-137s validity. The decision maintained for
adjudication the contract impairment validity challenge, contract
damage claims, and all of the takings claims. Following the November
2001 ruling by the State District Court, the State filed a new Motion
for Summary Judgment as to all claims. In an Order dated December 9,
2002, the Court granted the State Summary Judgment on all of the
remaining legal claims of the Companys lawsuit. On January 14, 2003,
the Company filed an appeal with the Montana State Supreme Court. Oral
arguments were heard by the Montana Supreme Court on October 28, 2003.
The Company expects a ruling during 2004.On March 2, 2004, a local citizens group (Miners, Merchants and
Montanans for Jobs and Economic Opportunity, FOR I-147), filed the
language of a new initiative, I-147, to be placed before the voters of
Montana at the November 2, 2004 ballot which, if enacted, would allow
use of cyanide leaching in open-pit gold mines with specific, rigorous
engineering practices and environmental safeguards. On July 14, 2004,
the official certification for the ballot was announced by the Secretary of
State. On July 23, 2004, the Montana 12




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CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) 11. Commitments and Contingencies, continued:  Environmental Information Center and a Montana rancher filed suit in
the Supreme Court of the State of Montana and in Montana State District
Court seeking to have I-147 declared legally insufficient and defective
in substance and to enjoin the Secretary of State and Attorney General
of Montana from placing I-147 on the ballot at the November 2, 2004 general election. The Montana Supreme
Court subsequently refused to hear the suit and the Company believes
that the initiative will remain on the ballot. If enacted by citizen
vote, I-147 would make unnecessary any favorable court action on behalf
of the Companys legal actions described in the preceding paragraph and
would allow the Company to resume permitting of the McDonald Gold
Project. In any case, the Company will continue its legal efforts until
the I-137 impediment is removed or otherwise resolved.Should I-137 be overturned through the legal process or by voter
initiative, significant capital will be required to resume permitting
and ultimately develop the McDonald Gold Project. No assurances can be
made regarding the Companys ability to obtain additional financing
through capital markets, joint ventures, or other arrangements in the
future.(e)
    
    McDonald Gold Project - State LeasesOn September 24, 1998, the Montana Department of Natural Resources
(DNRC), the entity that administers state mineral leases, unilaterally
decided to cancel the permitting extension of the 10-year lease term of
the state leases that pertain to the McDonald Gold Project which would
require the Company, after a period of approximately seventeen months,
to commence paying a delay rental of $150,000 per month in order
to maintain the leases.In February 2000, pursuant to its September 1998 decision, the DNRC
determined that the primary terms of the mineral leases had expired.
The Company believes it held valid mineral leases and appealed the
action of the DNRC in an administrative hearing process. Although a
DNRC Hearing Examiner affirmed the DNRC action, it is the Companys
position that the permitting process has been interrupted by the threat
and passage of I-137 and, thus, the permit extension is continued until
the governmental impediment is resolved. As part of the I-137 lawsuit
filed in April 2000 against the State of Montana, the Company asked the
court to review and invalidate the DNRCs action. The court, however,
in its December 9, 2002 order as described in the preceding paragraph,
denied the Companys petition for judicial review. On January 14, 2003,
the Company filed an appeal with the Montana State Supreme Court. Oral
arguments were heard by the Montana State Supreme Court on October 28,
2003. The Company expects a ruling during 2004.The new initiative, I-147, described in Note 11(d), contains a
provision which, if enacted, would restore all contractual interest or
right in a mineral estate which was diminished or lost as a consequence
of the enactment of I-137 to the same rights at the date of the
enactment of I-137 (November 3, 1998). Since the state mineral leases
were in full force and effect on November 3, 1998, the new initiative,
if enacted by citizen vote in November 2004, would restore the state
mineral leases to full validity.The Company believes the state leases are still in effect. The Company
has made this determination based on our Montana legal counsels
opinion, the clear statement by the State of Montana notifying the
Company that annual rental payments, which are still being made and
deposited by the State, would be refundable once the leases have been
found to be terminated, and finally, the absence of actions of the
State of Montana with respect to reclamation on the land covered by the
leases. 13




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CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) 11. Commitments and Contingencies, continued:  (f)
    
    Kendall Mine LawsuitsIn October 2001, a Plaintiff group filed suit in Montana District Court
against the Company and its wholly-owned subsidiary, CR Kendall
Corporation, alleging violation of water rights and other torts in
connection with the operation of the Kendall Mine. The Complaint seeks
unspecified damages and punitive damages. 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 June 30, 2004,
$267,800 had been remitted to the Court as required by the Order.
Including interest earned on the funds remitted, the Court held
$272,100 as of June 30, 2004.In May 2004, the Company became aware of a suit filed in March 2004 in
Montana District Court against the Company, CR Kendall Corporation, and
the Kendall Mine alleging violations of the Federal Pollution Control
Act. The Complaint was filed by the Montana Environmental Information
Center, Inc. and Earthworks/Mineral Policy Center, Inc. and seeks
declaratory judgment, injunctive relief, remediation and the imposition
of civil penalties. The Company believes these allegations are
completely without merit and that the Company will prevail in this
matter.(g)
    
    Other ItemsDuring 2003, the Company entered into an agreement with Gold Resource
Corporation, a private Colorado Corporation, which is an affiliate of,
and 36% owned by U. S. Gold Corporation, a public Colorado Corporation,
to finance the exploration and possible development of a
gold/silver project in the State of Oaxaca, Mexico.The Company, through June 30, 2004, had funded $500,000 of exploration
and metallurgical test work. The Company is presently evaluating those
results and will make a determination in the third quarter of 2004
whether to proceed to the next phase, which would require a $3.0
million commitment and allow the Company to earn a 50% interest in the
project. Should the Company elect to not proceed with this phase, it
will receive 600,000 shares of Gold Resource Corporation as
consideration for its funding of $500,000 of exploration, engineering
and metallurgical test work. See Note 16, Subsequent Events. 12. Derivative Instruments and Price Protection Arrangements: Gains on the Companys forward contracts resulting from period to period
changes in the mark-to-market calculations are as follows: THREE MONTHS ENDED JUNE 30,
    
    SIX MONTHS ENDED JUNE 30,2004
    
    2003
    
    2004
    
    2003
    
    $131,500
    
    $147,200
    
    $619,100
 The Company currently is unhedged and does not anticipate that any further
price protection arrangements on the remaining Briggs production will be
entered into. 14




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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) 13. Income Taxes: The Company has not recorded a tax benefit for the current period as the
realization is not expected to be likely during the year. The benefit is also
not expected to be realizable as a deferred tax asset at year end as the
Company anticipates recording a full valuation allowance for all deferred tax
assets, except to the extent of offsetting reversals of expected deferred tax
liabilities. 14. Restatement of Prior Financial Information: Briggs Asset Impairments As a result of corrections to the Companys impairment analyses, the
Company has determined that certain long-lived assets at the Briggs Mine
were impaired in earlier periods. The previous impairment analyses, in
addition to
the projected revenues from the estimated gold contained in the ore at the
Briggs Mine, incorrectly included projected revenues from the sale of
metals inventory. The reduction in the projected revenues due to the
elimination of revenues from the sale of metals inventory resulted in the
impairment of the long-lived assets at the Briggs Mine in prior periods.
The impairment of the long-lived assets also reduced the Companys annual
depreciation, depletion and amortization (DD&A) capitalized as part of
metals inventory and the related inventory valuation and cost of sales
calculations. Changes in the asset impairments also impact the amount of
gain (loss) recognized on the subsequent sales of mine assets. These
adjustments increased the Companys net loss by $2,796,700 or $0.13 per
share in the second quarter of 2003 and $1,881,400, or $0.09 per share for
the six months ended June 30, 2003. Expense Funding of Exploration Activities During 2003, the Company entered into an agreement with Gold Resources
Corporation (GRC), which was in substance an agreement to fund GRCs
exploration efforts at a project in the State of Oaxaca, Mexico. (See Note
11(g)). Through December 31, 2003, the Company had provided GRC $400,000,
with an additional $100,000 of funding in 2004, which the Company
originally recorded as a note receivable. The Company has subsequently
determined that the advances related to funding exploration costs should
be expensed as incurred. This adjustment increased the Companys net loss
by $100,000 in the first quarter of 2004 and $400,000 for the year ended
December 31, 2003. Stock Compensation Adjustment Prior to
2004, the Company issued 235,200 shares of unregistered common
stock as partial compensation to an individual pursuant to an employment
agreement. The Company originally recorded compensation expense for these
unregistered shares using a share price which was approximately 15% lower
than the market price. The Company has subsequently determined that
compensation expense should be calculated using the market price of
unregistered shares in accordance with APB 25, Accounting for Stock-Based
Compensation. These adjustments increased the Companys net loss by $8,900
in the second quarter of 2003 and $23,400 during the six months ended June
30, 2003. The adjustments had no material effect on per share amounts. Beneficial Conversion Feature for Convertible Debt In March 2003, the Company completed a private placement financing of its
6% two year convertible debentures which can be converted at any time into
common stock at $1.38 per share. For certain investors, the common stock
had a fair value at the commitment date in excess of the conversion price
resulting in a beneficial conversion feature. Emerging Issues Task Force
(EITF) No. 98-5, Accounting for Convertible Securities with Beneficial
Conversion Features or Contingently Adjustable Convertible Ratios,
requires that the intrinsic value of a beneficial 15




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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  14.
    
    Restatement of Prior Financial Information, continued:conversion feature be recorded to additional paid-in capital and a
discount on the convertible debt. The discount is then amortized to
interest expense over the term of the debt using the effective interest
rate method. This adjustment increased the Companys net loss by $17,800, or $0.01 per share, in the
second quarter of 2003 and $23,600 (no material effect on per share
amounts) during the six months ended June 30, 2003.Variable Plan Accounting on Stock Option PlansThe Company has restated prior periods to account for the Companys stock
option plans using variable plan accounting, insofar as the Company had
permitted option holders to exercise options by surrendering shares
underlying unexercised options in payment of the exercise price of the
options. While the Company had accounted for options issued under the
plans as fixed awards, it has been determined that variable plan
accounting would be appropriate. The use of variable plan accounting
requires a charge to compensation expense, commencing at the grant date,
in an amount by which the market price of the Companys stock covered by
the grant exceeds the option price. This accounting continues and
subsequent changes in the market price of the Companys stock from the
date of grant to the date of exercise or forfeiture result in a change in
the measure of compensation cost for the award being recognized but not
resulting in an accumulated adjustment below zero. These adjustments
increased the Companys net loss by $97,900 (no material effect on per
share amounts) in the second quarter of 2003 and $142,500, or $0.01 per
share for the six months ended June 30, 2003. The following sets forth the effects of the aforementioned restatements to
the Companys Consolidated Statements of Operations for the three and six
months ended June 30, 2003, and its Consolidated Statements of Cash Flows for
the six months ended June 30, 2003. 16




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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) 14. Restatement of Prior Financial Information, continued: CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended June 30, 2003
    
    Six Months Ended June 30, 2003As Previously
    
    
    
    
    
    As
    
    As Previously
    
    
    
    
    
    AsReported
    
    Adjustments
    
    Restated
    
    Reported
    
    Adjustments
    
    RestatedREVENUESales
    
    $
    3,387,100
    
    
    $
    
    
    
    $
    3,387,100
    
    
    $
    7,249,700
    
    
    $
    
    
    
    $
    7,249,700EXPENSESCost of sales
    
    
    4,173,500
    
    
    
    (321,400
    )  (1)
    
    
    
    
    
    
    7,801,700
    
    
    
    (841,900
    )  (1)
    
    
    
    3,852,100
    
    
    
    
    
    
    
    5,400
    (3)
    
    
    6,965,200Depreciation, depletion & amortization
    
    
    1,545,700
    
    
    
    (263,900
    )  (1)
    
    
    1,281,800
    
    
    
    3,630,300
    
    
    
    (658,700
    )  (1)
    
    
    2,971,600Selling, general and administrative
    
    
    435,400
    
    
    
    8,900
    (2)
    
    
    
    
    
    
    845,200
    
    
    
    23,400
    (2)93,700
    (3)
    
    
    538,000
    
    
    
    
    
    
    
    123,000
    (3)
    
    
    991,600Exploration costs
    
    
    175,100
    
    
    
    4,200
    (3)
    
    
    179,300
    
    
    
    390,200
    
    
    
    14,100
    (3)
    
    
    404,300Accretion expense
    
    
    46,600
    
    
    
    
    
    
    
    46,600
    
    
    
    93,100
    
    
    
    
    
    
    
    93,100Impairment of producing assets
    
    
    
    
    
    
    3,382,000
    (1)
    
    
    3,382,000
    
    
    
    
    
    
    
    3,382,000
    (1)
    
    
    3,382,000(Gain) loss on asset disposals
    
    
    600
    
    
    
    
    
    
    
    600
    
    
    
    (75,700
    )
    
    
    
    
    
    
    (75,700
    )6,376,900
    
    
    
    2,903,500
    
    
    
    9,280,400
    
    
    
    12,684,800
    
    
    
    2,047,300
    
    
    
    14,732,100OTHER INCOME (EXPENSE)Interest income
    
    
    6,100
    
    
    
    
    
    
    
    6,100
    
    
    
    15,700
    
    
    
    
    
    
    
    15,700Interest expense
    
    
    (74,200
    )
    
    
    (17,800
    )  (4)
    
    
    (92,000
    )
    
    
    (148,400
    )
    
    
    (23,600
    )  (4)
    
    
    (172,000
    )Gain on derivative instruments
    
    
    131,500
    
    
    
    
    
    
    
    131,500
    
    
    
    619,100
    
    
    
    
    
    
    
    619,100Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,000
    
    
    
    
    
    
    
    150,00063,400
    
    
    
    (17,800
    )
    
    
    45,600
    
    
    
    636,400
    
    
    
    (23,600
    )
    
    
    612,800Loss before cumulative effect of
change in accounting principle
    
    
    (2,926,400
    )
    
    
    (2,921,300
    )
    
    
    (5,847,700
    )
    
    
    (4,798,700
    )
    
    
    (2,070,900
    )
    
    
    (6,869,600
    )Cumulative effect of change in
accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,700
    )
    
    
    
    
    
    
    (11,700
    )Net loss
    
    ($
    2,926,400
    )
    
    ($
    2,921,300
    )
    
    ($
    5,847,700
    )
    
    ($
    4,810,400
    )
    
    ($
    2,070,900
    )
    
    ($
    6,881,300
    )Basic and diluted net loss per share
    
    ($
    0.14
    )
    
    ($
    0.14
    )
    
    ($
    0.28
    )
    
    ($
    0.23
    )
    
    ($
    0.10
    )
    
    ($
    0.33
    )Weighted average shares outstanding
    
    
    21,021,100
    
    
    
    21,021,100
    
    
    
    21,021,100
    
    
    
    20,660,800
    
    
    
    20,660,800
    
    
    
    20,660,800
  (1)
    
    Briggs Mine asset impairment(2)
    
    Stock compensation adjustment(3)
    
    Variable plan accounting on stock option plans(4)
    
    Beneficial conversion feature for convertible debt 17




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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  14.
    
    Restatement of Prior Financial Information, continued: CONSOLIDATED STATEMENT OF CASH FLOWS Six months ended June 30, 2003As Previously
    
    
    
    
    
    AsReported
    
    Adjustments
    
    RestatedCash flows from operating activities:Net loss
    
    ($
    4,810,400
    )
    
    ($
    2,070,900
    )
    
    ($
    6,881,300
    )Adjustments to reconcile net loss to net cash
used in operating activities
    
    
    3,782,300
    
    
    
    142,500
    (1)1,881,400
    (2)
    
    
    
    23,400
    (3)
    
    
    
    23,600
    (4)Total adjustments
    
    
    3,782,300
    
    
    
    2,070,900
    
    
    
    5,853,200Net cash used in operating activities
    
    
    (1,028,100
    )
    
    
    
    
    
    
    (1,028,100
    )Net cash used in investing activities
    
    
    (229,000
    )
    
    
    
    
    
    
    (229,000
    )Net cash provided by financing activities
    
    
    2,420,200
    
    
    
    
    
    
    
    2,420,200Net increase in cash and cash equivalents
    
    
    1,163,100
    
    
    
    
    
    
    
    1,163,100Cash and cash equivalents, beginning of year
    
    
    430,800
    
    
    
    
    
    
    
    430,800Cash and cash equivalents, end of period
    
    $
    1,593,900
    
    
    $
    
    
    
    $
    1,593,900
 (1) Variable plan accounting on stock option plans(2) Briggs Mine asset impairment(3) Stock compensation adjustment(4) Beneficial conversion feature for convertible debt 18




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##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  15.
    
    Recently Issued Financial Accounting Standards: In January 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 46, Consolidation of Variable Interest Entities, (FIN No.
46) which provides guidance on the identification and reporting for entities
over which control is achieved through means other than voting rights. FIN No.
46 defines such entities as variable interest entities (VIEs). A FASB Staff
Position (FSP) issued in October 2003 deferred the effective date of FIN No. 46
to the first interim or annual period ending after December 15, 2003 for
entities created before February 1, 2003 if certain criteria are met.
Subsequently, during December 2003, the FASB issued a revision to FIN No. 46
(FIN No. 46R) which replaces the original interpretation. Application of this
revised interpretation is required in financial statements for companies that
have interests in VIEs or potential VIEs commonly referred to as
special-purpose entities created after December 15, 2003. Application for
entities created before January 1, 2004 is required in financial statements for
periods ending after March 15, 2004. The Company believes it has no such
variable interest entities and as a result FIN No. 46 did not have an impact on
the Companys financial position, results of operations, or cash flows. The EITF formed a committee (Committee) to evaluate certain mining
industry accounting issues, including issues arising from the application of
SFAS No. 141, Business Combinations(SFAS No. 141) and SFAS No. 142, Goodwill
and Other Tangible Assets(SFAS No. 142) to business combinations within the
mining industry, accounting for goodwill and other intangibles and the
capitalization of costs after the commencement of production, including
deferred stripping. The issues discussed also included whether mineral rights
conveyed by leases represent tangible or intangible assets and the amortization
of such assets. In March 2004, the EITF reached a consensus, subject to
ratification by the FASB, that mineral rights conveyed by leases should be
considered tangible assets. Mineral rights are defined by the EITF as the legal
right to explore, extract, and retain at least a portion of the benefits from
mineral deposits. The EITF also reached a consensus, subject to ratification by
the FASB, on other mining related issues involving impairment and business
combinations. On March 31, 2004, the FASB ratified the consensus of the EITF on other
mining related issues involving impairment and business combinations. This did
not have an impact to the Companys financial statements since it did not
change the Companys accounting. The FASB also ratified the consensus of the
EITF that mineral rights conveyed by leases should be considered tangible
assets subject to the finalization of a FSP in this regard. On April 30, 2004, the FASB issued a FSP amending SFAS No. 141 and SFAS
No. 142 to provide that certain mineral use rights are considered tangible
assets and that mineral use rights should be accounted for based on their
substance. If recharacterization of an asset results, prior period amounts in
the statement of financial position are to be reclassified with any effects on
amortization or depreciation prospectively applied. The FSP is effective for
the first reporting period beginning after April 29, 2004, with early adoption
permitted. As the Company does not presently have the legal right to extract
minerals from the McDonald and Seven-Up Pete properties due to the I-137
constraint, the Company has not reclassified prior period amounts and will
continue to amortize the carrying value of the properties until the legal
impediment is resolved. The Committee is continuing its evaluation of mining industry accounting
issues, which may have an impact on the Companys accounting in the future.  16.
    
    Subsequent Events: During the third quarter of 2004, the Company received proceeds of
approximately $1.4 million in connection with the exercise of 834,000 warrants
at $1.67 per share. In August 2004, the Company elected not to proceed with the financing of a
gold/silver project in the State of Oaxaca, Mexico. As consideration for its
prior funding of $0.5 million of exploration, engineering, and metallurgical
test work on the property, the Company received 600,000 shares of Gold
Resources Corporation, a private Colorado corporation. 19




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations Cautionary Statement for Purposes of the Safe Harbor Provisions of the
Private Securities Litigation Reform Act of 1995. The matters discussed in this report on Form 10-Q, when not historical
matters, are forward-looking statements that involve a number of risks and
uncertainties that could cause actual results to differ materially from
projected results. Such factors include, among others, the speculative nature
of mineral exploration, commodity prices, production and reserve estimates,
environmental and government regulations, availability of financing, force
majeure events, and other risk factors as described from time to time in the
Companys filings with the Securities and Exchange Commission. Many of these
factors are beyond the Companys ability to control or predict. The Company
disclaims any intent or obligation to update its forward-looking statements,
whether as a result of receiving new information, the occurrence of future
events, or otherwise. Restatement of Prior Financial Statements The Company has restated its financial statements for prior periods for
the financial impact resulting from i) accounting for the Companys stock
option plans variable plan accounting, insofar as the Company had permitted
option holders to exercise options by surrendering shares underlying
unexercised options in payment of the exercise price of the options; ii)
corrections to the Companys impairment analyses model used for impairment
testing of the Briggs Mine assets and the associated impact on the impairment
of long-lived assets, depreciation, depletion and amortization capitalized as
part of metal inventories and related inventory valuation and cost of sales
calculations; iii) expensing certain exploration costs that had been previously
recorded as a note receivable; iv) correcting the fair market value of stock
issued to an employee as compensation for services; and v) recognizing and
amortizing a beneficial conversion feature associated with the Companys 6%
convertible debentures that were issued in March 2003. These adjustments
increased the Companys previously reported net loss for the three and six
months ended June 30, 2003 by $2.9 million, or $0.14 per share and $2.1
million, or $0.10 per share, respectively. The ensuing discussion gives effect
to the aforementioned adjustments. Overview The Companys financial condition and liquidity improved from December 31,
2003 to June 30, 2004, primarily due to an equity financing which resulted in
proceeds of $7.1 million, the exercise of certain warrants, which resulted in
proceeds of $1.0 million, and the exercise of certain stock options, which
resulted in proceeds of $0.3 million. These inflows allowed the Company to
absorb negative operating cash flow of $2.0 million, spend $0.4 million on
development of the last area of known reserves at the Briggs Mine, and pay off
the Briggs equipment financing of $1.0 million. The Company ended the quarter
with $9.1 million of cash and cash equivalents. Revenues for the second quarter increased 72% from the prior year three
month period, due to higher production levels associated with recoveries of the
high grade North Briggs Layback ore placed on pad during the first quarter of
2004. Improving spot gold prices resulted in price realizations of $394 per
ounce during the second quarter and $391 per ounce year to date for 2004,
respectively, as compared to $350 per ounce in the second quarter and $326 per
ounce year to date for 2003, respectively. Overall, the Companys results of
operations reflect a lower net loss during the second quarter of 2004 due to
higher revenues and a favorable adjustment to stock compensation expense.
Results for the six months ended June 30, 2004 reflect a lower net loss as the
prior period included an impairment charge of $3.4 million, which was partially
offset in the current period by higher depreciation, depletion and
amortization, higher selling, general and administration costs (principally due
to stock compensation expense) and costs associated with funding the I-147
campaign in Montana which is described in the following paragraph. On March 2, 2004, a local citizens group (Miners, Merchants and Montanans
for Jobs and Economic Opportunity, FOR I-147), filed the language of a new
initiative, I-147, to be placed before the voters of Montana at
the November 2, 2004 ballot which, if enacted, would allow use of cyanide
leaching in open-pit gold mines with specific, 20




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##### Table of Contents



rigorous engineering practices
and environmental safeguards. On July 14, 2004, the official certification for
the ballot was announced by the Secretary of State. On July 23, 2004, the
Montana Environmental Information Center and a Montana rancher filed suit in
the Supreme Court of the State of Montana and Montana State District Court
seeking to have I-147 declared legally insufficient and defective in substance
and to enjoin the Secretary of State and Attorney General of Montana from
placing I-147 on the ballot at the November 2, 2004 general election. The
Montana Supreme Court subsequently refused to hear the suit and the Company
believes that the initiative will remain on the ballot. If enacted by citizen
vote, I-147 would make unnecessary any favorable court action on behalf of the
Companys legal actions and would allow the Company to resume permitting of the
McDonald Gold Project. In any case, the Company will continue its legal efforts
until the I-137 impediment is removed or otherwise resolved. (See Other
Matters  McDonald Gold Project  Anti-Mining Initiative) Critical Accounting Policies and Estimates The ensuing discussion and analysis of financial condition and results of
operations are based on the Companys consolidated financial statements,
prepared in accordance with accounting principles generally accepted in the
United States of America. Certain amounts included in or affecting the
Companys financial statements and related disclosures must be estimated,
requiring that certain assumptions be made with respect to values or conditions
which cannot be made with certainty at the time the financial statements are
prepared. Therefore, the reported amounts of the Companys assets and
liabilities, revenues and expenses, and associated disclosures with respect to
contingent assets and obligations are necessarily affected by these estimates.
The more significant areas requiring the use of management estimates and
assumptions relate to mineral reserves that are the basis for future cash flow
estimates and units-of-production amortization determination; recoverability
and timing of gold production from the heap leaching process; environmental,
reclamation and closure obligations; asset impairments (including estimates of
future cash flows); useful lives and residual values of intangible assets; fair
value of financial instruments; valuation allowances for deferred tax assets;
and contingencies and litigation. The Company bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances. Actual results may differ from these estimates under
different assumptions or conditions. Users of financial information produced
for interim periods are encouraged to refer to the Companys accounting
policies, footnotes to the financial statements, and detailed discussion of
critical accounting policies and estimates set forth in its Annual Report on
Form 10-K/A. Results of Operations The Company recorded a net loss of $2.4 million, or $0.09 per share, on
revenues of $5.8 million for the second quarter of 2004. For the six months
ended June 30, 2004, the Company recorded a net loss of $6.3 million, or $0.23
per share, on revenues of $7.6 million. This compares to a net loss of $5.8
million, or $0.28 per share, on revenues of $3.4 million for the second quarter
of 2003 and a net loss of $6.9 million, or $0.33 per share, on revenues of $7.3
million during the first six months of 2003. For the three months ended June 30, 2004, the Company sold 14,805 ounces
of gold at an average price of $394 per equivalent gold ounce. For the
comparable period of 2003, the Company sold 9,681 ounces of gold and 4,043
ounces of silver at an average realized price of $350 per equivalent gold
ounce. The New York Commodity Exchange (COMEX) gold price averaged $393 and
$347 per ounce for the three months ended June 30, 2004 and 2003, respectively. The following table summarizes the Companys gold deliveries and revenues
for the three months ended June 30, 2004 and the comparable period for 2003: 21




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##### Table of Contents



THREE MONTHS ENDED
    
    THREE MONTHS ENDEDJUNE 30, 2004
    
    JUNE 30, 2003Average
    
    
    
    
    
    
    
    
    
    AverageGold
    
    Price Per
    
    Revenue
    
    Gold
    
    Price Per
    
    RevenueOunces
    
    Oz.
    
    $000s
    
    Ounces
    
    Oz.
    
    $000sDeliveriesForwards
    
    
    
    
    
    
    
    
    
    $
    
    
    
    
    2,750
    
    
    $
    364
    
    
    $
    1,001Spot Sales
    
    
    14,805
    
    
    $
    394
    
    
    
    5,826
    
    
    
    6,931
    
    
    $
    342
    
    
    
    2,36714,805
    
    
    $
    394
    
    
    
    5,826
    
    
    
    9,681
    
    
    $
    348
    
    
    
    3,368Other transactionsSilver proceeds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1914,805
    
    
    $
    394
    
    
    $
    5,826
    
    
    
    9,681
    
    
    $
    350
    
    
    $
    3,387
 For the six months ended June 30, 2004, the Company sold 19,345 ounces of
gold and 2,200 ounces of silver at an average realized price of $391 per
equivalent gold ounce. For the comparable period of 2003, the Company sold
22,231 ounces of gold and 8,343 ounces of silver at an average realized price
of $326 per equivalent gold ounce. The New York Commodity Exchange (COMEX) gold
price averaged $401 and $350 per ounce for the six months ended June 20, 2004
and 2003, respectively. The following table summarizes the Companys gold deliveries and revenues
for the six months ended June 30, 2004 and the comparable period for 2003: SIX MONTHS ENDED
    
    SIX MONTHS ENDEDJUNE 30, 2004
    
    JUNE 30, 2003Average
    
    
    
    
    
    
    
    
    
    AverageGold
    
    Price Per
    
    Revenue
    
    Gold
    
    Price Per
    
    RevenueOunces
    
    Oz.
    
    $000s
    
    Ounces
    
    Oz.
    
    $000sDeliveriesForwards
    
    
    3,820
    
    
    $
    377
    
    
    $
    1,442
    
    
    
    6,950
    
    
    $
    307
    
    
    $
    2,134Spot Sales
    
    
    15,525
    
    
    $
    393
    
    
    
    6,108
    
    
    
    15,281
    
    
    $
    344
    
    
    
    5,250Cash settlement
of forwards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (173
    )19,345
    
    
    $
    390
    
    
    
    7,550
    
    
    
    22,231
    
    
    $
    325
    
    
    
    7,211Other transactionsSilver proceeds
    
    
    
    
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    3919,345
    
    
    $
    391
    
    
    $
    7,564
    
    
    
    22,231
    
    
    $
    326
    
    
    $
    7,250
 Cost of sales was $4.1 million for the three months ended June 30, 2004,
as compared to $3.9 million for the three months ended June 30, 2003. For the
six months ended June 30, 2004, cost of sales was $6.4 million as compared to
$7.0 million in the prior period. For the three and six months ended June 30,
2004, cost of sales includes write downs of inventory to net realizable value
of $0.4 million and $1.0 million, respectively. For the three and six months
ended June 30, 2003, cost of sales includes write downs of inventory to net
realizable value of $0.7 million (restated) and $0.7 million (restated),
respectively. Depreciation, depletion and amortization was higher in the current periods
due to a greater number of recoverable ounces mined as the Company finished
mining of the high grade North Briggs layback. 22




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##### Table of Contents



Selling, general and administrative expense was approximately $0.07
million lower for the three months ended June 30, 2004, as compared to the same
period ended June 30, 2003, due to a mark-to-market adjustment recorded in
connection with the Companys stock option plans partially offset by the
Companys funding of the I-147 campaign in Montana. For the six months ended
June 30, 2004, selling, general and administrative expense was approximately
$1.5 million higher than the six months ended June 20, 2003, due principally to
compensation recorded with the Companys stock option plans and costs
associated with funding the I-147 campaign in Montana. During
the second quarter of 2004, the Company held discussions with the Montana
Department of Environmental Quality (DEQ) concerning reclamation at
the Kendall Mine site. After these discussions, the Company modified
its reclamation plan to include items which had been developed by an
engineering contractor to the DEQ and subsequently, revised its
estimate to achieve closure of the Kendall Mine. Which resulted in a charge of $0.9 million. Subsequently, in
August 2004, the DEQ notified the Company that it could not complete the final
capping of the leach pads until an Environmental Impact Study (EIS) was
completed. The Companys estimate to achieve mine closure could be further
impacted by the outcome of the DEQs decision following an EIS. During the second quarter of 2003, the Company determined that certain
gold ounces contained in sulfide ores were no longer economic and recorded a write
down of $3.4 million on the Briggs Mine long-lived assets as a consequence. During the second quarter of 2004, the Company decided not to proceed with
certain contemplated property sales. As a result, the Company wrote off certain
expenses related to these property sales of $0.151 million of other expense. During the six months ended June 30, 2004, the Company recorded gains on
forward gold contracts of approximately $0.1 million. During the three and six
months ended June 30, 2003, gains were recorded on forward gold contracts of
approximately $0.1 million and $0.6 million, respectively. The Company is
currently unhedged and does not anticipate that any further price protection
arrangements on the remaining Briggs production will be entered into. 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. Liquidity & Capital Resources For the six months ended June 30, 2004, operating activities used $2.0
million of cash, investing activities used $0.4 million of cash and financing
activities provided $7.3 million, resulting in a net increase in cash of $4.9
million. Cash and cash equivalents at June 30, 2004 was $9.1 million. 23




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##### Table of Contents



During the first six months of 2004, the Companys financing activities
included: (i) $7.1 million received through the sale of 1,631,000 shares of
common stock at a price of $4.37 per share, (ii) $1.0 million received in
connection with the exercise of certain warrants, (iii) $0.2 million received
in connection with the exercise of stock options, and (iv) $1.0 million used to
pay off the Briggs equipment financing. Outlook Summary The Company believes that its cash requirements over the next 12 months
can be funded through a combination of existing cash and cash flow from
operations, even though there has been negative cash flow from operations for
the six months ended June 30, 2004. 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. Moreover, should the I-137 legal impediment be removed through
litigation or voter initiative (See Other Matters  McDonald Gold Project -
Anti-Mining Initiative), significant capital will be necessary to resume
permitting and ultimately develop the McDonald Gold Project. While the Company
believes it will be able to finance its continuing activities, there are no
assurances of success in this regard or in the Companys ability to obtain
additional financing through capital markets, joint ventures, or other
arrangements in the future. If managements plans are not successful,
operations and liquidity may be adversely impacted. Operations Active mining at the Briggs Mine was concluded in April 2004. Ore on the
heap leach pad will be actively leached throughout 2004. Reclamation of the
waste dumps commenced in the second quarter of 2004 and will continue through
the year. The Company expects to spend approximately $1.1 million on
reclamation over the next twelve months. The Briggs Mine is expected to
produce approximately 31,000 ounces of gold in 2004 at cash operating costs of
approximately $200  $220 per ounce. The Company expects to spend up to $1.7 million on closure activities at
the Kendall Mine during 2004 relating to pad capping, recontouring, and water
management efforts. Expenditures at the McDonald Gold Project for legal and land holding costs
are expected to be approximately $0.5 million in 2004. In addition, the Company
is participating financially in the new initiative, I-147, for the November
2004 ballot which, if enacted, would allow use of cyanide leaching in open-pit
mines with specific, rigorous engineering practices and environmental
safeguards. Financing At June 30, 2004, the Company had outstanding warrants issued in
connection with previous transactions as follows: i) warrants to purchase
834,000 shares of common stock at an exercise price of $1.67 per share, which
expire on September 30, 2004 (all warrants subsequently exercised prior to
September 30, 2004) and ii) warrants to purchase 2,251,800 shares of common
stock at a price of $1.98 per share through December 1, 2004, or at a price of
$2.16 per share through December 1, 2005. Aggregate proceeds of between $5.9
million and $6.3 million would be realized on exercise of these warrants,
depending on the terms in effect at the time of exercise. The Companys 6% convertible debentures ($2.7 million of principal at June
30, 2004), are convertible by the holders to common stock of the Company at any
time at a conversion rate of $1.38 per share of common stock. The principal
amount, if not otherwise converted, is due March 1, 2005. The Companys stock
price at the end of June 2004 was $3.89 per share. 24




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##### Table of Contents



Contractual Obligations The Companys contractual obligations are as follows: PAYMENTS DUE BY PERIODLess than
    
    
    
    
    
    
    
    
    
    More than 5Total
    
    1 year
    
    1-3 years
    
    3-5 years
    
    yearsLong-term
debt obligations (1)
    
    $
    2,674,000
    
    
    $
    2,674,000
    
    
    $
    
    
    
    $
    
    
    
    $
    Capital lease obligations
    
    
    45,100
    
    
    
    15,400
    
    
    
    29,700
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    154,200
    
    
    
    48,900
    
    
    
    101,000
    
    
    
    4,300
    
    
    
    Purchase
obligations (2)
    
    
    1,185,600
    
    
    
    1,185,600
    
    
    
    
    
    
    
    
    
    
    
    Asset retirement obligations
    
    
    4,415,400
    
    
    
    2,814,300
    
    
    
    1,601,100
    
    
    
    
    
    
    
    Total
    
    $
    8,474,300
    
    
    $
    6,738,200
    
    
    $
    1,731,800
    
    
    $
    4,300
    
    
    $
    
  (1)
    
    Convertible debentures due March 1, 2005, which can be converted by
the holder at any time to common stock of the Company at a conversion
rate of $1.38 per share of common stock. The Companys stock price at
the end of June 2004 was $3.89 per share.(2)
    
    One year purchase contract for cyanide consumption at the Briggs
Mine. Other Matters McDonald Gold Project  Anti-Mining Initiative In November 1998, the Montana electorate passed an anti-mining initiative
(I-137) by a vote of 52% to 48%. I-137, as modified by the State Legislature in
April 1999, that bans development of new gold and silver mines, which use
open-pit mining methods and cyanide in the treatment and recovery process. In
April 2000, the SPV filed lawsuits in Montana State District Court and in the
United States District Court, seeking to have I-137 declared unconstitutional,
or, alternatively, to obtain a takings or damage award for the lost value of
the McDonald, Seven-Up Pete and Keep Cool mineral properties. These lawsuits
are based on, amongst others, (i) the right not to be deprived of property
without due process of law; (ii) the right to equal protection under the laws;
and (iii) the right to be protected against laws which impair the obligations
of existing contracts. The United States District Court issued a ruling August
30, 2001 in which the Court dismissed the SPVs substantive due process claim
but, as requested by the SPV, ruled that the remainder of the SPVs claims
could be pursued at such time as the State lawsuit was concluded. The Montana
State District Court issued a ruling November 1, 2001 in response to a Motion
to Dismiss and a Motion For Summary Judgment by the State of Montana. In this
ruling, the Court dismissed four of the SPVs fourteen counts, including its
substantive due process and equal protection challenges to I-137s validity.
The decision maintained for adjudication the contract impairment validity
challenge, contract damage claims, and all of the takings claims. Following the
November 2001 ruling by the State District Court, the State filed a new Motion
for Summary Judgment as to all claims. In an Order dated December 9, 2002, the
Court granted the State Summary Judgment on all of the remaining legal claims
of the Companys lawsuit. On January 14, 2003, the Company filed an appeal with
the Montana State Supreme Court of the State District Court Order. Oral
arguments were heard by the Montana Supreme Court on October 28, 2003. The
Company expects a ruling during 2004. On March 2, 2004, a local citizens group (Miners, Merchants and Montanans
for Jobs and Economic Opportunity, FOR I-147), filed the language of a new
initiative, I-147, to be placed before the voters of Montana at the November 2,
2004 ballot which, if enacted, would allow use of cyanide leaching in open-pit
gold mines with specific, rigorous engineering practices and environmental
safeguards. On July 14, 2004, the official certification for the ballot was
announced by the Secretary of State. On July 23, 2004, the Montana
Environmental Information Center and a Montana rancher filed suit in the
Supreme Court of the State of Montana and Montana State District Court seeking
to have I-147 declared legally insufficient and defective in substance and to
enjoin the Secretary of State and Attorney General of Montana from placing
I-147 on the ballot at the November 2, 2004 general election. The Montana Supreme 25




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Court subsequently refused to hear the suit and the Company believes that
the initiative will remain on the ballot. If enacted by citizen vote, I-147
would make unnecessary any favorable court action on behalf of the Companys
legal actions described in the preceding paragraph and would allow the Company
to resume permitting of the McDonald Gold Project. In any case, the Company
will continue its legal efforts until the I-137 impediment is removed or
otherwise resolved. 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 Companys petition for judicial review. On
January 14, 2003, the Company filed an appeal with the Montana State Supreme
Court. Oral arguments were heard by the Montana State Supreme Court on October
28, 2003. The Company expects a ruling during 2004. The new initiative, I-147, described above contains a provision which, if
enacted, would restore all contractual interest or right in a mineral estate
which was diminished or lost as a consequence of the enactment of I-137 to the
same rights at the date of the enactment of I-137 (November 3, 1998). Since the
state mineral leases were in full force and effect on November 3, 1998, the new
initiative, if enacted by citizen vote in November 2004, would restore the
state mineral leases to full validity. The Company believes the state leases are still in effect. The Company has
made this determination based on our Montana legal counsels opinion, the clear
statement by the State of Montana notifying the Company that annual rental
payments, which are still being made and deposited by the State, would be
refundable once the leases have been found to be terminated, and finally, the
absence of actions of the State of Montana with respect to reclamation on the
land covered by the leases. Briggs Mine  Surety Matters The Briggs Mine operates under permits granted by various agencies
including the U.S. Bureau of Land Management (BLM), Inyo County, the California
Department of Conservation, and the Lahontan Regional Water Quality Control
Board (Lahontan). These agencies have jointly required the Company to post a
reclamation bond in the amount of $3,030,000 to ensure appropriate reclamation.
Additionally, the Company was required by Lahontan to post a $1,010,000 bond to
ensure adequate funds to mitigate any foreseeable release, as defined, of
pollutants to state waters. Both bonds are subject to annual review and
adjustment. In 2000, in response to a demand for an increase in collateral by the
Surety who issued the above described bonds, the Company granted a security
interest in 28,000 acres of mineral interests in Montana. In addition, the
Company agreed to make cash deposits with the Surety totaling $1.5 million over
a three year period at the rate of $0.5 million per year, commencing June 30,
2001. The Company has not made any deposits to date, and is in discussions with
the Surety to reschedule the deposit requirements. If an acceptable
rescheduling of the deposit requirements cannot be agreed to, the Surety could
seek to terminate the bonds which could result in the Company becoming liable
for the principal amounts under its collateral agreement with the Surety. In
April 2004, the Company ceased active mining at Briggs and has commenced
reclamation activities. 26




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Kendall Mine  Environmental Regulation The Kendall Mine holds permits granted by the Montana Department of
Environmental Quality (DEQ). In February 2002, the DEQ issued a decision that a
comprehensive Environmental Impact Statement (EIS) is needed for completion of
remaining reclamation at Kendall. The Company feels that it is crucial that
reclamation proceed at Kendall without further delay and, therefore, the
company commenced significant earthwork reclamation in June 2004. The primary
contractor for this $1.5 million phase of the project is MK Weeden
Construction, a local Lewistown firm. The Companys decision to change the
method of funding this $1.5 million phase now has resulted in an increase in
asset retirement obligations of $0.9 million. The Company had previously
contemplated an exchange of land with this contractor for earthwork
reclamation. During the second quarter of 2004, the Company decided to proceed
with the reclamation work directly and defer the sale to a future date. The
Companys estimate to achieve mine closure could be impacted by the outcome of
a DEQ decision following an EIS. The Company has $1,928,800 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 June 30, 2004, $272,100 had been remitted to the Court as
required by the Order. In May 2004, the Company became aware of a suit filed in March 2004 in
Montana District Court against the Company, CR Kendall Corporation, and the
Kendall Mine alleging violations of the Federal Pollution Control Act. The
Complaint was filed by the Montana Environmental Information Center, Inc. and
Earthworks/Mineral Policy Center, Inc. and seeks declaratory judgment,
injunctive relief, remediation and the imposition of civil penalties. The
Company believes these allegations are completely without merit and that the
Company will prevail in this matter. Recently Issued Financial Accounting Standards In January 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 46, Consolidation of Variable Interest Entities, (FIN No.
46) which provides guidance on the identification and reporting for entities
over which control is achieved through means other than voting rights. FIN No.
46 defines such entities as variable interest entities (VIEs). A FASB Staff
Position issued in October 2003 deferred the effective date of FIN No. 46 to
the first interim or annual period ending after December 15, 2003 for entities
created before February 1, 2003 if certain criteria are met. Subsequently,
during December 2003, the FASB issued a revision to FIN No. 46 (FIN No. 46R)
which replaces the original interpretation. Application of this revised
interpretation is required in financial statements for companies that have
interests in VIEs or potential VIEs commonly referred to as special-purpose
entities created after December 15, 2003. Application for entities created
before January 1, 2004 is required in financial statements for periods ending
after March 15, 2004. The Company believes it has no such variable interest
entities and as a result FIN No. 46 did not have an impact on the Companys
financial position, results of operations, or cash flows. The Emerging Issues Task Force (EITF) formed a committee (Committee) to
evaluate certain mining industry accounting issues, including issues arising
from the application of SFAS No. 141, Business Combinations(SFAS No. 141) and
SFAS No. 142, Goodwill and Other Tangible Assets(SFAS No. 142) to business
combinations within the mining industry, accounting for goodwill and other
intangibles and the capitalization of costs after the commencement of
production, including deferred stripping. The issues discussed also included
whether mineral rights conveyed by 27




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##### Table of Contents



leases represent tangible or intangible assets and the amortization of such
assets. In March 2004, the EITF reached a consensus, subject to ratification by
the FASB, that mineral rights conveyed by leases should be considered tangible
assets. Mineral rights are defined by the EITF as the legal right to explore,
extract, and retain at least a portion of the benefits from mineral deposits.
The EITF also reached a consensus, subject to ratification by the FASB, on
other mining related issues involving impairment and business combinations. On March 31, 2004, the FASB ratified the consensus of the EITF on other
mining related issues involving impairment and business combinations. This did
not have an impact to the Companys financial statements since it did not
change the Companys accounting. The FASB also ratified the consensus of the
EITF that mineral rights conveyed by leases should be considered tangible
assets subject to the finalization of a FASB Staff Position (FSP) in this
regard. On April 30, 2004, the FASB issued a FSP amending SFAS No. 141 and SFAS
No. 142 to provide that certain mineral use rights are considered tangible
assets and that mineral use rights should be accounted for based on their
substance. If recharacterization of an asset results, prior period amounts in
the statement of financial position are to be reclassified with any effects on
amortization or depreciation prospectively applied. The FSP is effective for
the first reporting period beginning after April 29, 2004, with early adoption
permitted. As the Company does not presently have the legal right to extract
minerals from the McDonald and Seven-Up Pete properties due to the I-137
constraint, the Company has not reclassified prior period amounts and will
continue to amortize the carrying value of the properties until the legal
impediment is resolved. The Committee is continuing its evaluation of mining industry accounting
issues, which may have an impact on the Companys accounting in the future. 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk Commodity Prices The Companys earnings and cash flow are significantly impacted by changes
in the market price of gold. Gold prices can fluctuate widely and are affected
by numerous factors, such as demand, production levels, economic policies of
central banks, producer hedging, and the strength of the U.S. dollar relative
to other currencies. During the last five years, the average annual market
price has fluctuated between $271 per ounce and $364 per ounce. Interest Rates At June 30, 2004, the Companys debt was approximately $2.7 million which
relates to its 6% convertible debentures. Thus, the Company is not presently
subject to interest rate risk. Foreign Currency The price of gold is denominated in U.S. dollars, and the Companys gold
production operations are in the United States. The Company conducts only a
minor amount of exploration activity in foreign countries and has minimal
foreign currency exposure. 28




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Item 4. Controls and Procedures The Companys disclosure controls and procedures are designed to provide
reasonable assurance that the information required to be disclosed in our
Exchange Act reports are recorded, processed, summarized and reported as
specified in the SECs rules. Disclosure controls and procedures are designed
with the objective that information is accumulated and communicated to the
Companys management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow for timely decisions regarding required
disclosures. However, any system of controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance that the objective
of the system are met and management necessarily is required to apply its
judgment in evaluating the cost benefit relationship of possible controls and
procedures. The Companys management, including our principal executive and financial
officers have evaluated the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities and Exchange Act of 1934) as of the end of the period
covered by this second quarter report on Form 10-Q for June 30, 2004. At the
time of this evaluation, we were aware of the following weaknesses related to
our internal control over financial reporting and as a result have concluded
that the Companys disclosure controls and procedures were not effective as of
June 30, 2004. During the review of the financial statements for the first quarter ending
March 31, 2004 PricewaterhouseCoopers, our independent registered public
accountants, identified and communicated to the Company and its Audit Committee
a material weakness which is also a reportable condition (as defined under
standards established by the American Institute of Certified Public Accountants
(AICPA) relating to the Companys internal controls and procedures over its
financial reporting for stock option plans. In response thereto, the Company
performed a review of all stock option plans and the method of all related
stock option exercises by employees since the plans inception in 1982. This
review identified that a minority (approximately 25%) of the employee stock
options were exercised using the share withholding method for payment of the
exercise price. Based on this review, the Company determined that the stock
option plans would have to be recorded in the financial statements under
variable plan accounting, which resulted in the restatement filed as Amendment
No. 1 to Form 10-K/A. During the review of the financial statements for the second quarter
ending June 30, 2004, PricewaterhouseCoopers communicated with both the Company
and its Audit Committee that the method used for testing possible impairment of
the Briggs Mine may be inappropriate. After an evaluation of the method, the
Company determined that it inappropriately included ounces recovered from the
leach pad inventory. The Company changed its model using only projected ounces
from in-ground reserves which resulted in earlier and more frequent impairments
than had previously been recorded. The Company also determined that the
following items should have been reported differently: 1) a loan made to a
private exploration company, the proceeds of which were used for exploration,
should have been accounted for as an exploration expense; 2) the cost of
restricted shares issued under a contract for services should have been
recorded at fair market value at the time the contract was executed and or
amended; 3) a beneficial conversion feature and related amortization expense
should have been recognized with regards to a private placement of a
convertible debenture for certain subscribers that executed the subscription
agreement on a date when the conversion price was lower than the market price
of the Companys common stock. The items discussed in the preceding paragraphs constitute material
weaknesses in internal controls as defined by the standards established by the
AICPA. A material weakness is a reportable condition in which the design or
operation of one or more internal control components does not reduce to a
relatively low level the risk that errors or fraud in amounts that would be
material in relation to the financial statements being audited may occur and
not be detected within a timely period by employees in the normal course of
performing their assigned functions. The Company believes that the material
weaknesses resulted from: 29




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##### Table of Contents



1.
    
    insufficient review of the method used for testing the impairment of
the Briggs Mine;2.
    
    insufficient analysis, documentation and review of the
selection and application of generally accepted accounting principles
related to complex transactions. Our Audit Committee held a meeting with management and the independent
registered public accountants and determined that the Companys financial
statements for 2003 and prior periods and quarterly period ended March 31,
2004, should be restated. Accordingly, the Company filed Amendment No. 2 to
Form 10-K/A and Amendment No. 1 to Form 10-Q/A. The restatement of the
Companys prior period financial statements contained in this Form 10-Q are
described in Part I, Item 2, Managements Discussion and Analysis of Financial
Condition and Results of Operations under Restatement of Financial
Information, and in Note 14 of the Notes to the Interim Consolidated Financial
Statements included in Part I, Item 1. We have undertaken the following initiatives with respect to our internal
controls and procedures in order to address the material weaknesses.  1.
    
    adding additional staff at the corporate controller level,2.
    
    scheduled training for accounting staff to heighten awareness
of generally accepted accounting principles,3.
    
    hired outside consultants to document our accounting processes
and identify areas that require control or process improvements, and4.
    
    implementation of initial recommendations by the outside consultants. Other than retention of outside consultants to identify areas of
improvement, for the period ending June 30, 2004, there have been no changes in
the Companys internal controls over financial reporting that have materially
affected or are reasonably likely to materially affect internal controls over
financial reporting for this period. Subsequent to June 30, 2004, we began
implementation of the initiatives discussed above, which are reasonably likely
to improve the Companys internal controls over financial reporting. In connection with the identified internal control weaknesses, we have
performed substantial additional procedures to confirm that the financial
information fairly presents our operating results and financial condition for
the periods presented, therefore our principal executive and financial officers
have concluded that our disclosure controls and procedures were effective as of
October 25, 2004. 30




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PART II OTHER INFORMATION Item 1.
    
    Legal ProceedingsIn May 2004, the Company became aware of a suit filed on March 26, 2004
in Montana District Court against the Company, CR Kendall Corporation,
and the Kendall Mine alleging violations of the Federal Pollution
Control Act relating to discharge of pollutants into the waters of the
United States. The Complaint was filed by the Montana Environmental
Information Center, Inc. and Earthworks/Mineral Policy Center, Inc. and
seeks declaratory judgment, injunctive relief, remediation and the
imposition of civil penalties. The Company believes these allegations
are completely without merit and that the Company will prevail in this
matter.
 Item 2.
    
    Changes in Securities, Use of Proceeds and Issuer Purchases of Equity
SecuritiesDuring the second quarter of 2004, the Company issued 29,500
unregistered shares of its $0.01 par value common stock as compensation
for services to a single sophisticated employee, John C. Doody. The
shares were issued pursuant to the exemption provided by Section 4(2)
of the Securities and Exchange Act of 1933, as amended.
 Item 3.
    
    Defaults Upon Senior Securities None
 Item 4.
    
    Submission of Matters to Vote of Security HoldersOn July 14, 2004, the Company held its Annual Meeting of Shareholders.
The following items of business were voted upon by shareholders at the
meeting.Proposal I was the election of two Directors of the Company, Richard H.
De Voto and Ronald D. Parker. The proposal electing Dr. De Voto passed
with votes of 22,690,705 shares For and 1,152,381 Withheld. The
proposal electing Mr. Parker passed with votes of 22,689,684 For and
1,153,402 Withheld.The following individuals continued in their capacity as Directors of
the Company subsequent to the Annual Meeting of Shareholders: Gary C.
Huber, Leland O. Erdahl, David K. Fagin, and Richard F. Mauro.Proposal II was the approval of the Amended and Restated Incentive
Stock Option Plan. The proposal approving the Amended and Restated
Incentive Stock Option Plan passed with votes of 6,066,438 shares
For, 1,275,097 shares Against, 245,984 shares Abstained and
16,255,567 shares Not Voted.Proposal III was the approval of the Amended and Restated Non-Qualified
Stock Option Plan. The proposal approving the Amended and Restated
Non-Qualified Stock Option Plan passed with votes of 5,763,845 shares
For, 1,566,529 shares Against, 257,145 shares Abstained and
16,255,567 shares Not Voted.Proposal IV was to ratify the appointment of PricewaterhouseCoopers LLP
as the Companys Independent Auditor for 2004. The proposal passed with
votes of 23,408,963 shares For, 318,894 shares Against and
115,229 shares Abstained.
 Item 5.
    
    Other Information None
 31




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Item 6(a)
    
    ExhibitsExhibits as required by Item 601 of Regulation S-K, are listed on pages
33 and 34. The exhibit numbers correspond to the numbers assigned in
Item 601 of Regulation S-K.Item 6(b)
    
    Reports on Form 8-KReports on Form 8-K were filed under dates of May 25, 2004, concerning
the Companys financial results for the three months ended March 31,
2004; June 1, 2004, concerning the rescheduling of its Annual Meeting
and the filing of an Amended Form 10-K for the fiscal year ended
December 31, 2003; August 23, 2004, concerning the Companys notice of
non-timely filing of its second quarter report on Form 10-Q; August 24,
2004, concerning the status of its second quarter report on Form 10-Q
and announcing preliminary results for the quarter; September 1, 2004,
concerning notification from the Companys independent accountants who
advised that disclosures should be made or actions taken to prevent
future reliance on their 2003 audit report and the Companys
determination that its financial statements for 2003 and prior periods
as well as its quarterly report for the three months ended March 31,
2004 should be restated; September 15, 2004, concerning notice of
delisting proceedings by the Exchange if the Company is not in
compliance with the continued listing standards by October 25, 2004, or
does not make progress consistent with its plan; September 30, 2004,
concerning acceptance by the American Stock Exchange (Exchange) of the
Companys plan to regain compliance with the continued listing
standards of the Exchange; and October 15, 2004, concerning the
Companys change in certifying accountant.
 32




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NUMBER
    
    DESCRIPTION3.1
    
    Articles of Incorporation of the Company, as amended (1)3.1.1
    
    Executed Certificate of Designations, dated December 26, 1990, as filed with the Delaware Secretary of
State on December 26, 1990 (2)3.2
    
    Bylaws of the Company, as amended (3)4.1
    
    Specimen Common Stock Certificate (4)4.2
    
    Specimen Warrant Certificate (5)4.4
    
    Rights Agreement dated March 20, 1997, between Canyon Resources Corporation and American Securities
Transfer & Trust, Inc. (6)4.5
    
    Specimen Debenture (7)10.1
    
    Change of Control Agreements, dated December 6, 1991, between the Company and Richard H. De Voto and Gary
C. Huber (8)10.2
    
    Loan Agreement dated December 6, 1995, among CR Briggs Corporation as Borrower and Banque Paribas as Agent
(9)10.2.1
    
    Amendment No. 1 to Loan and Guarantee Agreements dated April 8, 1998, among CR Briggs Corporation, Canyon
Resources Corporation, and Banque Paribas as Agent (10)10.2.2
    
    Amendment No. 2 to Loan and Guarantee Agreements dated August 19, 1998, among CR Briggs Corporation,
Canyon Resources Corporation, and Banque Paribas as Agent (10)10.2.3
    
    Amendment No. 3 to Loan Agreement and Waiver dated July 8, 1999, among CR Briggs Corporation and Banque
Paribas as Agent (11)10.2.4
    
    Amendment No. 4 to Loan Agreement and Waiver dated March 26, 2001, among CR Briggs Corporation and BNP Paribas, as successor-in-interest
to Banque Paribas as Agent (12)10.2.5
    
    Amendment No. 5 to Loan Agreement and Waiver dated March 25, 2002, among CR Briggs Corporation, Canyon Resources Corporation, and
Banque Paribas, as Agent (13)10.2.6
    
    Amendment No. 6 to Loan Agreement and Waiver dated June 14, 2002, among CR Briggs Corporation and BNP
Paribas, as successor-in-interest to Banque Paribas as Agent (14)10.3
    
    Master Tax Lease dated December 27, 1995, between CR Briggs Corporation and Caterpillar Financial Services
Corporation (9)10.4
    
    Purchase Agreement dated September 25, 1997, between Phelps Dodge Corporation, acting through its
division, Phelps Dodge Mining Company, and CR Montana Corporation and Canyon Resources Corporation (15)10.4.1
    
    Second Amendment and Supplement to Purchase Agreement dated September 17, 1999, between Phelps Dodge
Corporation, acting through its division, Phelps Dodge Mining Company, CR Montana Corporation and Canyon
Resources Corporation, and Seven-Up Pete Joint Venture (11)10.5
    
    Assignment of Royalty Proceeds, effective as of April 1, 2001, between Canyon Resources Corporation and
Franco-Nevada Mining Corporation, Inc. (16)31.1*
    
    Certification of Chief Executive Officer pursuant to Rule 13(a)-14(a)/15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 200231.2*
    
    Certification of Chief Financial Officer pursuant to Rule 13(a)-14(a)/15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 200232.1*
    
    Certification of Chief Executive Officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 200232.2*
    
    Certification of Chief Financial Officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002* Filed herewith
 33




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(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.
   34




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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: October 25, 2004
    /s/ Richard H. De VotoRichard H. De VotoChief Executive Officer Date: October 25, 2004
    /s/ Gary C. HuberGary C. HuberChief Financial Officer 35




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Index to Exhibits NUMBER
    
    DESCRIPTION3.1
    
    Articles of Incorporation of the Company, as amended (1)3.1.1
    
    Executed Certificate of Designations, dated December 26, 1990, as filed with the Delaware Secretary of
State on December 26, 1990 (2)3.2
    
    Bylaws of the Company, as amended (3)4.1
    
    Specimen Common Stock Certificate (4)4.2
    
    Specimen Warrant Certificate (5)4.4
    
    Rights Agreement dated March 20, 1997, between Canyon Resources Corporation and American Securities
Transfer & Trust, Inc. (6)4.5
    
    Specimen Debenture (7)10.1
    
    Change of Control Agreements, dated December 6, 1991, between the Company and Richard H. De Voto and Gary
C. Huber (8)10.2
    
    Loan Agreement dated December 6, 1995, among CR Briggs Corporation as Borrower and Banque Paribas as Agent
(9)10.2.1
    
    Amendment No. 1 to Loan and Guarantee Agreements dated April 8, 1998, among CR Briggs Corporation, Canyon
Resources Corporation, and Banque Paribas as Agent (10)10.2.2
    
    Amendment No. 2 to Loan and Guarantee Agreements dated August 19, 1998, among CR Briggs Corporation,
Canyon Resources Corporation, and Banque Paribas as Agent (10)10.2.3
    
    Amendment No. 3 to Loan Agreement and Waiver dated July 8, 1999, among CR Briggs Corporation and Banque
Paribas as Agent (11)10.2.4
    
    Amendment No. 4 to Loan Agreement and Waiver dated March 26, 2001, among CR Briggs Corporation and BNP Paribas, as successor-in-interest
to Banque Paribas as Agent (12)10.2.5
    
    Amendment No. 5 to Loan Agreement and Waiver dated March 25, 2002, among CR Briggs Corporation, Canyon Resources Corporation, and
Banque Paribas, as Agent (13)10.2.6
    
    Amendment No. 6 to Loan Agreement and Waiver dated June 14, 2002, among CR Briggs Corporation and BNP
Paribas, as successor-in-interest to Banque Paribas as Agent (14)10.3
    
    Master Tax Lease dated December 27, 1995, between CR Briggs Corporation and Caterpillar Financial Services
Corporation (9)10.4
    
    Purchase Agreement dated September 25, 1997, between Phelps Dodge Corporation, acting through its
division, Phelps Dodge Mining Company, and CR Montana Corporation and Canyon Resources Corporation (15)10.4.1
    
    Second Amendment and Supplement to Purchase Agreement dated September 17, 1999, between Phelps Dodge
Corporation, acting through its division, Phelps Dodge Mining Company, CR Montana Corporation and Canyon
Resources Corporation, and Seven-Up Pete Joint Venture (11)10.5
    
    Assignment of Royalty Proceeds, effective as of April 1, 2001, between Canyon Resources Corporation and
Franco-Nevada Mining Corporation, Inc. (16)31.1*
    
    Certification of Chief Executive Officer pursuant to Rule 13(a)-14(a)/15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 200231.2*
    
    Certification of Chief Financial Officer pursuant to Rule 13(a)-14(a)/15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 200232.1*
    
    Certification of Chief Executive Officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 200232.2*
    
    Certification of Chief Financial Officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002* Filed herewith




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##### Table of Contents



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