##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended June 30, 2007
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission file number 1-11887
 CANYON RESOURCES CORPORATION
   
 þ o
 o o  þ
 o þ




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##### 



CANYON RESOURCES CORPORATION
FORM 10-Q
For the Six Months ended June 30, 2007
 TABLE OF CONTENTS
 PART I FINANCIAL INFORMATIONItem 1.
    
    Financial Statements
    
    Page 1Item 2.
    
    Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    Page 16Item 3.
    
    Quantitative and Qualitative Disclosures About
Market Risk
    
    Page 27Item 4.
    
    Controls and Procedures
    
    Page 28PART II OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    Page 29Item 2.
    
    Unregistered Sales of Equity Securities and
Use of Proceeds
    
    Page 29Item 3.
    
    Defaults Upon Senior Securities
    
    Page 29Item 4.
    
    Submission of Matters to a Vote of
Security Holders
    
    Page 29Item 5.
    
    Other Information
    
    Page 30Item 6.
    
    Exhibits
    
    Page 30SIGNATURES
    
    Page 31Certification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
  i




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##### Table of Contents



PART I FINANCIAL INFORMATION
 
 Item 1. Financial Statements
   Consolidated Balance Sheets
    
    Page 2Consolidated Statements of Operations
    
    Page 3Consolidated Statement of Changes in Stockholders Equity
    
    Page 4Consolidated Statements of Cash Flows
    
    Pages 5-6Notes to Interim Consolidated Financial Statements
    
    Pages 7-15Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    Page 16Item 3. Quantitative and Qualitative Disclosures About
Market Risk
    
    Page 27Item 4. Controls and Procedures
    
    Page 28
 1




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES  CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2007
    
    
    2006ASSETSCash and cash equivalents
    
    $
    4,758,500
    
    
    $
    1,513,700Short term investments
    
    
    500,000
    
    
    
    2,500,000Accounts receivable
    
    
    4,700
    
    
    
    47,300Metal inventories
    
    
    163,100
    
    
    
    47,300Prepaid insurance
    
    
    162,200
    
    
    
    171,700Other current assets
    
    
    117,100
    
    
    
    146,800Total current assets
    
    
    5,705,600
    
    
    
    4,426,800Property, plant and mine development, net
    
    
    9,065,500
    
    
    
    8,719,800Restricted cash
    
    
    3,262,600
    
    
    
    3,431,300Other noncurrent assets
    
    
    246,200
    
    
    
    246,700Total assets
    
    $
    18,279,900
    
    
    $
    16,824,600LIABILITIES AND STOCKHOLDERS EQUITYAccounts payable
    
    $
    412,700
    
    
    $
    659,000Asset retirement obligations
    
    
    1,088,200
    
    
    
    1,180,100Payroll liabilities
    
    
    119,300
    
    
    
    171,700Legal settlement accrual
    
    
    206,200
    
    
    
    343,700Other current liabilities
    
    
    22,200
    
    
    
    37,800Total current liabilities
    
    
    1,848,600
    
    
    
    2,392,300Notes payable
    
    
    825,000
    
    
    
    825,000Capital leases
    
    
    55,600
    
    
    
    65,800Asset retirement obligations
    
    
    2,919,000
    
    
    
    3,021,400Total liabilities
    
    
    5,648,200
    
    
    
    6,304,500Commitments and contingencies (note 10)Common stock ($.01 par value) 150,000,000 shares authorized;
issued and outstanding: 53,037,800 at June 30, 2007,
and 44,161,800 at December 31, 2006
    
    
    530,400
    
    
    
    441,600Capital in excess of par value
    
    
    145,133,400
    
    
    
    140,266,900Retained deficit
    
    
    (133,032,100
    )
    
    
    (130,188,400
    )Total stockholders equity
    
    
    12,631,700
    
    
    
    10,520,100Total liabilities and stockholders equity
    
    $
    18,279,900
    
    
    $
    16,824,600
  2




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES  CONSOLIDATED STATEMENTS
OF OPERATIONS
 Three months ended June 30,
    
    
    Six months ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006REVENUESales
    
    $
    
    
    
    $
    413,100
    
    
    $
    67,200
    
    
    $
    1,006,400EXPENSESCost of sales
    
    
    
    
    
    
    413,000
    
    
    
    60,400
    
    
    
    866,600Depreciation, depletion and amortization
    
    
    10,600
    
    
    
    6,700
    
    
    
    21,700
    
    
    
    15,600Selling, general and administrative
    
    
    1,070,900
    
    
    
    770,900
    
    
    
    1,958,500
    
    
    
    1,638,700Exploration
    
    
    299,100
    
    
    
    424,100
    
    
    
    871,600
    
    
    
    733,200Accretion expense
    
    
    41,900
    
    
    
    50,800
    
    
    
    83,800
    
    
    
    101,600Loss on asset disposals
    
    
    
    
    
    
    
    
    
    
    35,100
    
    
    
    1,422,500
    
    
    
    1,665,500
    
    
    
    3,031,100
    
    
    
    3,355,700Operating loss
    
    
    (1,422,500
    )
    
    
    (1,252,400
    )
    
    
    (2,963,900
    )
    
    
    (2,349,300
    )OTHER INCOME (EXPENSE)Interest income
    
    
    76,600
    
    
    
    78,600
    
    
    
    150,400
    
    
    
    136,300Interest expense
    
    
    (15,200
    )
    
    
    (13,400
    )
    
    
    (30,400
    )
    
    
    (26,400
    )Gain on sale of securities
    
    
    
    
    
    
    66,200
    
    
    
    
    
    
    
    882,200Loss on derivative instruments
    
    
    
    
    
    
    (164,600
    )
    
    
    
    
    
    
    (310,500
    )Other
    
    
    
    
    
    
    (84,600
    )
    
    
    200
    
    
    
    (84,600
    )61,400
    
    
    
    (117,800
    )
    
    
    120,200
    
    
    
    597,000Net loss
    
    $
    (1,361,100
    )
    
    $
    (1,370,200
    )
    
    $
    (2,843,700
    )
    
    $
    (1,752,300
    )Basic and diluted net loss per share
    
    $
    (0.03
    )
    
    $
    (0.03
    )
    
    $
    (0.06
    )
    
    $
    (0.05
    )Basic and diluted weighted-average
shares outstanding
    
    
    47,176,800
    
    
    
    40,000,300
    
    
    
    45,677,700
    
    
    
    39,165,000
  3




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES  CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
 Common Stock
    
    
    Capital
    
    
    
    
    
    
    TotalNumber of
    
    
    At Par
    
    
    in Excess
    
    
    Retained
    
    
    StockholdersShares
    
    
    Value
    
    
    of Par Value
    
    
    Deficit
    
    
    EquityBalances, January 1, 2007
    
    
    44,161,800
    
    
    $
    441,600
    
    
    $
    140,266,900
    
    
    $
    (130,188,400
    )
    
    $
    10,520,100Share-based compensation amortized
    
    
    52,500
    
    
    
    500
    
    
    
    251,900
    
    
    
    
    
    
    
    252,400Stock and warrants issued for cash
net of issuance costs of $247,200
    
    
    8,823,500
    
    
    
    88,300
    
    
    
    4,614,600
    
    
    
    
    
    
    
    4,702,900Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,843,700
    )
    
    
    (2,843,700
    )Balances, June 30, 2007
    
    
    53,037,800
    
    
    $
    530,400
    
    
    $
    145,133,400
    
    
    $
    (133,032,100
    )
    
    $
    12,631,700
  4




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF
CASH FLOWS
 Six months ended June 30,2007
    
    
    2006Cash flows from operating activities:Net loss
    
    $
    (2,843,700
    )
    
    $
    (1,752,300
    )Adjustments to reconcile net loss to net cash used in
operating activities:Depreciation, depletion and amortization
    
    
    21,700
    
    
    
    15,600Receivable write-off
    
    
    
    
    
    
    13,800Impairment of inventory
    
    
    
    
    
    
    17,600Loss on asset dispositions
    
    
    35,100
    
    
    
    Gain on sale of securities
    
    
    
    
    
    
    (882,200
    )Share based compensation expense
    
    
    252,400
    
    
    
    279,600Purchase of short term investments
    
    
    
    
    
    
    (6,501,800
    )Warrant extension cost
    
    
    
    
    
    
    70,800Loss on derivative instruments
    
    
    
    
    
    
    310,500Accretion of asset retirement obligation
    
    
    83,800
    
    
    
    101,600Changes in operating assets and liabilities:Decrease (increase) in accounts receivable
    
    
    42,600
    
    
    
    (48,100
    )(Increase) decrease in inventories
    
    
    (115,800
    )
    
    
    19,400Decrease in prepaid and other assets
    
    
    39,700
    
    
    
    98,000Decrease in accounts payable and accrued liabilities
    
    
    (282,000
    )
    
    
    (288,800
    )Decrease in asset retirement obligations
    
    
    (278,100
    )
    
    
    (642,700
    )Decrease (increase) in restricted cash
    
    
    168,700
    
    
    
    (84,100
    )Total adjustments
    
    
    (31,900
    )
    
    
    (7,520,800
    )Net cash used in operating activities
    
    
    (2,875,600
    )
    
    
    (9,273,100
    )Cash flows from investing activities:Purchases and development of property and equipment
    
    
    (572,900
    )
    
    
    (875,000
    )Redemption of short term investments
    
    
    2,000,000
    
    
    
    Proceeds on asset disposition
    
    
    
    
    
    
    10,000Proceeds from sale of securities
    
    
    
    
    
    
    882,200Net cash provided by investing activities
    
    
    1,427,100
    
    
    
    17,200Cash flows from financing activities:Issuance of stock and warrants
    
    
    4,950,100
    
    
    
    5,457,200Issuance cost
    
    
    (247,200
    )
    
    
    (302,900
    )Payments on capital lease obligations
    
    
    (9,600
    )
    
    
    (3,900
    )Net cash provided by financing activities
    
    
    4,693,300
    
    
    
    5,150,400Net increase(decrease) in cash and cash equivalents
    
    
    3,244,800
    
    
    
    (4,105,500
    )Cash and cash equivalents, beginning of period
    
    
    1,513,700
    
    
    
    5,649,200Cash and cash equivalents, end of period
    
    $
    4,758,500
    
    
    $
    1,543,700
  5




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CANYON RESOURCES CORPORATION AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF
CASH FLOWS, continued
 Supplemental disclosures of cash flow information:
 Six Months Ended June 30,2007
    
    2006Interest paid
    
    $
    30,400
    
    
    $
    26,400Income taxes paid
    
    $
    
    
    
    $
    Supplemental disclosures of noncash investing and financing activities:Non-cash financing activities:Issued 30,000 shares for option on the Suitcase/Mineral Hill properties
    
    $
    
    
    
    $
    30,300Fair value of amended warrants
    
    $
    
    
    
    $
    271,700Issued 535,000 series A warrants related placement agent fee
    
    $
    
    
    
    $
    219,300Issued 330,900 series A warrants related placement agent fee
    
    $
    50,100
    
    
    $
    Issued 992,600 series B warrants related placement agent fee
    
    $
    266,500
    
    
    $
    
  6




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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 1. Nature of Operations and Liquidity:
         7




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2. Basis of Presentation:
 Management Estimates and Assumptions:
  Consolidation Principles:
 3. Restricted Cash:
  June 30,
    
    
    December 31,2007
    
    
    2006Kendall reclamation project
    
    $
    2,324,700
    
    
    $
    2,401,300Briggs Mine
    
    
    831,000
    
    
    
    442,900Seven-Up Pete Joint Venture
    
    
    52,500
    
    
    
    553,400Reward Project
    
    
    33,700
    
    
    
    33,700Other
    
    
    20,700
    
    
    
    3,262,600
    
    
    
    3,431,300Current portion
    
    
    
    
    
    
    Noncurrent portion
    
    $
    3,262,600
    
    
    $
    3,431,300
   8




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##### Table of Contents



4. Metal Inventories:
   5. Property, Plant and Mine Development:
  As of June 30, 2007Depreciation
    
    Asset Value
    
    
    Accumulated
    
    
    Net BookMethod
    
    at Cost
    
    
    Depreciation
    
    
    ValueBuildings and equipment
    
    1  5 Years SL
    
    $
    5,954,300
    
    
    $
    4,051,300
    
    
    $
    1,903,000Mine development
    
    UOP(a)
    
    
    2,033,700
    
    
    
    
    
    
    
    2,033,700Mineral interest
    
    UOP
    
    
    8,750,400
    
    
    
    3,820,900
    
    
    
    4,929,500Asset retirement cost
    
    UOP
    
    
    199,300
    
    
    
    
    
    
    
    199,300$
    16,937,700
    
    
    $
    7,872,200
    
    
    $
    9,065,500
 
 (a)
    
    Unit-of-Production, or UOP, is a depreciation method that calculates depreciation expense
over the estimated proven and probable reserves of the related property. As of December 31, 2006Depreciation
    
    Asset Value
    
    
    Accumulated
    
    
    Net BookMethod
    
    at Cost
    
    
    Depreciation
    
    
    ValueBuildings and equipment
    
    1  5 Years SL
    
    $
    6,004,800
    
    
    $
    4,047,200
    
    
    $
    1,957,600Mine development
    
    UOP(a)
    
    
    1,637,900
    
    
    
    
    
    
    
    1,637,900Mineral interest
    
    UOP
    
    
    8,745,900
    
    
    
    3,820,900
    
    
    
    4,925,000Asset retirement cost
    
    UOP
    
    
    199,300
    
    
    
    
    
    
    
    199,300$
    16,587,900
    
    
    $
    7,868,100
    
    
    $
    8,719,800
  9




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6. Asset Retirement Obligations:
  Balance, December 31, 2006
    
    $
    4,201,500Settlement of liabilities
    
    
    (278,100
    )Accretion expense
    
    
    83,800Balance, June 30, 2007
    
    
    4,007,200Current portion
    
    
    1,088,200Noncurrent portion
    
    $
    2,919,000
 7. Notes Payable:
  Balance, December 31, 2006
    
    $
    825,000Conversions / retirements
    
    
    Balance, June 30, 2007
    
    
    825,000Current portion
    
    
    Noncurrent portion
    
    $
    825,000
   8. Outstanding Warrants:
  Shares Underlying
    
    
    Weighted Average
    
    
    Weighted AverageRange of Exercise Prices
    
    Warrants Outstanding
    
    
    Remaining Contractual Life
    
    
    Exercise Price$0.50-$1.00
    
    
    10,428,061
    
    
    3.2 years
    
    $
    0.69$1.01-$1.50
    
    
    7,155,729
    
    
    1.4 years
    
    $
    1.30Total/average
    
    
    17,583,790
    
    
    2.4 years
    
    $
    0.94
   10




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9. Equity Transactions:
     10. Commitments and Contingencies :
 (a)
    
    Kendall Mine ReclamationThe Kendall Mine operates under permits granted by the Montana DEQ. In February 2002, the
DEQ issued a decision that a comprehensive Environmental Impact Statement (EIS) was needed
for completion of remaining reclamation at Kendall. The Montana DEQ has yet to complete its
work on this EIS. The Companys estimate to achieve mine closure could be impacted by the
outcome of an agency decision following an EIS. The Company has deposited $2.1 million in
an interest bearing account with the DEQ for reclamation at the Kendall Mine which is
currently ongoing.
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(b)
    
    Briggs Mine Surety BondsThe Briggs Mine operates under permits granted by various agencies including BLM, Inyo
County, California, the California Department of Conservation, and the Lahontan Regional
Water Quality Control Board (Lahontan). The Company has posted cash and reclamation bonds
with these agencies in the amount of $4.3 million of which $4.2 million are reclamation
bonds supported by a surety. All surety bonds are subject to annual review and adjustment
and in March 2007, the Company posted a $0.1 million cash reclamation bond with Inyo County
as an inflation adjustment.In 1999, in response to a demand for an increase in collateral by the surety company who
issued the above described bonds, the Company granted a security interest in 28,000 acres of
mineral interests in Montana. The Company further agreed to make cash deposits with the
surety company totaling $1.5 million over a three year period at the rate of $0.5 million
per year, commencing June 30, 2001. The Company made a $0.3 million deposit in March 2007,
after the Company received notice from the surety that Canyon was in default of its
obligations under the collateral agreement. In June 2007, the surety company filed a civil
action in the U.S. District Court for the District of Colorado against the Company for
monies due of $1.25 million and unspecified costs, damages and legal expenses. The Company
answered the complaint in July 2007 and expects that the complaint will be settled through
negotiations regarding the timing and the form of collateral or by the court. The suretys
request for monies as collateral represents a reimbursable deposit to the Company to support
required future reclamation of the Briggs Mine site and therefore no liability has been
accrued. If the Company was required to fund all of the monies requested in the civil
action, cash balances and the timing of mine development projects could be adversely
impacted.(c)
    
    McDonald Gold ProjectA lawsuit was filed against the State of Montana to recover value lost due to changes in the
Montana mining law and the cancellation of mineral leases related to the Companys
wholly-owned Seven-Up Pete Joint Ventures interest in the McDonald Gold Project. Phelps
Dodge, a wholly-owned subsidiary of Freeport-McMoRan Copper & Gold Inc., retains a one-third
interest in any proceeds which may be received from the currently active takings lawsuit.In April 2006, the Companys complaint under the takings lawsuit was dismissed in U.S.
District Court for the District of Montana and the Company filed a notice of appeal to the
U.S. Court of Appeals for the Ninth Circuit. Briefs have been submitted to the U.S. Court of
Appeals for the Ninth Circuit. In addition, the Company has filed a breach of contract
complaint against the State of Montana related to the termination of the McDonald Gold
Projects state mineral leases.(d)
    
    Kendall Mine LawsuitsIn October 2001, a plaintiff group including members of the Shammel, Ruckman and Harrell
families filed suit in the State of Montana District Court against the Company and its
wholly-owned subsidiary, CR Kendall Corporation. The complaint alleges violation of water
rights, property damage, trespass and negligence in connection with the operation of the
Kendall Mine and seeks unspecified damages and punitive damages.In August 2002, a Preliminary Injunction was issued in Montana District Court on behalf of
the Kendall Mine plaintiff group in connection with the Companys auction of certain mineral
rights and fee lands unrelated to the CR Kendall Corporation or its operation. In October
2002, the Court issued a Supplemental Order which sequesters any proceeds realized from the
auction until such time as the lawsuit is concluded. As of June 30, 2007, $0.2 million is
held by the Court as required by the Order. The Companys share of the above mentioned
settlement was paid out of the funds held by the Court.In February 2007, the Company entered into a settlement and release agreement with eight of
the twelve plaintiffs in this suit. Settlement negotiations continue with the remaining four
plaintiffs who have yet to
 12




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settle. The Companys share of the settlement was $0.1 million and maintains a balance of
$0.2 million recorded as a legal settlement accrual on the consolidated balance sheet as of
June 30, 2007.
 (e)
    
    Asset Exchange AgreementThe Adelaide and Tuscarora properties were optioned as part of the Asset Exchange Agreement
with Newmont. Under this agreement, we are required to spend a total of $3.0 million on both
projects over five years to earn our interest in the properties, including a $250,000 firm
commitment in 2007. The Company has the ability to sublease either property to third parties
to meet its obligations under the agreement.
 11. Fair Value of Financial Instruments:
  Cash and Cash Equivalents, Receivables, Short-term Investments and Restricted Cash:
 Long-term Debt:
 12. Income Taxes:
 Accounting for Uncertainty in Income Taxes
 13. Share-Based Compensation:
    13




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2007
    
    2006Expected volatility
    
    
    60
    %
    
    
    50
    %Expected option term
    
    2.5 years
    
    2.5-3.0 yearsWeighted-average risk-free interest rate
    
    
    4.8%-5.0
    %
    
    
    4.3%-5.0
    %
 Stock Options
  2007
    
    
    2006Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    ExerciseNumber
    
    
    Price
    
    
    Number
    
    
    PriceOutstanding  beginning of the year
    
    
    2,580,526
    
    
    $
    1.30
    
    
    
    1,757,526
    
    
    $
    1.77Grants
    
    
    350,000
    
    
    $
    0.64
    
    
    
    700,000
    
    
    $
    0.95Exercises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeitures
    
    
    (50,000
    )
    
    $
    0.75
    
    
    
    (480,000
    )
    
    $
    2.00Expirations
    
    
    (10,000
    )
    
    $
    2.30
    
    
    
    
    
    
    
    Outstanding  end of the period
    
    
    2,870,526
    
    
    $
    1.23
    
    
    
    1,977,526
    
    
    $
    1.42Exercisable  end of the period
    
    
    2,435,526
    
    
    $
    1.27
    
    
    
    1,877,526
    
    
    $
    1.45
  14




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Stock Grants
  Weighted-Average
    
    
    TotalAmount
    
    
    Price
    
    
    Fair ValueNonvested  beginning of the year
    
    
    202,500
    
    
    $
    0.93
    
    
    $
    188,950Grants
    
    
    117,970
    
    
    
    0.64
    
    
    
    75,001Vested
    
    
    (90,006
    )
    
    
    0.68
    
    
    
    (60,909
    )Forfeitures
    
    
    (65,464
    )
    
    
    0.90
    
    
    
    (58,842
    )Nonvested  end of period
    
    
    165,000
    
    
    $
    0.87
    
    
    $
    144,200
  14. Earnings per Share:
 Earnings per Share
 15. Recently Issued Financial Accounting Standards:
 The Fair Value Option for Financial Assets and
Financial Liabilities Fair Value Measurements.
 Fair Value Measurements
 15




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##### Table of Contents



ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Overview of the Second Quarter 2007 and Future Outlook
 What did we spend cash on during the quarter?
  
    
    Selling, general and administrative spending amounted to approximately $0.9 million.
 
    
    Includes holding costs at the Briggs Mine of $0.4 million.
 
    
    Exploration and development spending amounted to $0.4 million including amounts capitalized.
    
    Asset retirement obligation spending amounted to $0.1 million primarily for the Kendall
Mine operations and continued leach pad dewatering at the Briggs Mine.
 What are our results of operation?
  What have we done to increase shareholder value?
      16




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##### Table of Contents



How much property and mineralized material do we now control?
  Fee
    
    FeeProperty/Location
    
    Surface
    
    Mineral
    
    Patented (b)
    
    UnpatentedBriggs Mine  California
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    3,280Reward Project  Nevada
    
    
    
    
    
    
    
    
    
    
    220
    
    
    
    1,545Seven-Up Pete  Montana
    
    
    
    
    
    
    
    
    
    
    170
    
    
    
    1,390CR Nevada  Nevada
    
    
    560
    
    
    
    840
    
    
    
    
    
    
    
    6,960Industrial Minerals  Montana
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    210CR Montana  Montana
    
    
    
    
    
    
    901,167
    
    
    
    
    
    
    
    Sand Creek JV  Wyoming (a)
    
    
    8,560
    
    
    
    4,284
    
    
    
    
    
    
    
    3,396CR Kendall  Montana
    
    
    
    
    
    
    
    
    
    
    1,085
    
    
    
    Total acreage
    
    
    9,120
    
    
    
    906,291
    
    
    
    1,480
    
    
    
    16,781
 
 (a)
    
    Canyon currently controls 70% of the Sand Creek JV through the Converse JV.(b)
    
    Patented claims are owned fee simple which combine the surface and mineral estates.  MineralizedMaterial
    
    Average Gold
    
    Cut-off GoldProperty/Location
    
    (Million Tons)
    
    Grade (opt)
    
    Grade (opt)Briggs Mine  Inyo County, California
    
    
    26.99
    
    
    
    0.031
    
    
    
    0.10-0.01Cecil R  satellite deposit
    
    
    5.75
    
    
    
    0.024
    
    
    
    0.015Mineral Hill  satellite deposit
    
    
    2.31
    
    
    
    0.035
    
    
    
    0.015Suitcase  satellite deposit
    
    
    0.33
    
    
    
    0.052
    
    
    
    0.01535.38
    
    
    
    0.030Reward Project  Beatty, Nevada
    
    
    12.74
    
    
    
    0.025
    
    
    
    0.010Seven-Up Pete  Lincoln, Montana
    
    
    17.00
    
    
    
    0.035
    
    
    
    0.020Total mineralized material
    
    
    65.12
    
    
    
    0.031
  How is the Briggs re-start going?
   17




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##### Table of Contents



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




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##### Table of Contents



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




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##### Table of Contents



Liquidity & Capital Resources
     Financing Transactions
      20




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##### Table of Contents



Debt
  Capital Expenditures
  Outstanding Warrants
  UnderlyingExpiration Date
    
    Shares
    
    
    Exercise PriceAugust 31, 2007
    
    
    50,000
    
    
    $
    0.80March 14, 2008
    
    
    2,304,726
    
    
    $
    1.03Approximately September 1, 2008 (a)
    
    
    2,536,766
    
    
    $
    0.64December 1, 2008
    
    
    1,765,503
    
    
    $
    1.30December 1, 2008
    
    
    231,000
    
    
    $
    0.76June 1, 2009
    
    
    3,085,500
    
    
    $
    1.50May 25, 2011
    
    
    7,610,295
    
    
    $
    0.70Total/average
    
    
    17,583,790
    
    
    $
    0.94
 
 (a)
    
    These represent the Series A Warrants from the May 25, 2007 private placement financing that
have an exercise date of twelve months after the effectiveness of the registration statement. The
registration statement that was filed on June 29, 2007 has not yet been declared effective. Surety Bonds
  21




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##### Table of Contents



Results of Operations  Three Months Ended June 30, 2007 versus Three Months Ended June 30,
2006
  
    
    Negative variance of $0.4 million in revenue was offset by $0.4 million positive
variance in cost of sales.
    
    Negative variance of $0.3 million in selling, general and administrative costs due
primarily to the lack of gold production to allocate general and administrative costs.
    
    Positive variance of $0.1 million in exploration costs due to decreased drilling
activity at Briggs and Reward in the current quarter compared to last year.
    
    Positive variance of $0.2 million related to last years fair market adjustment to the
increase in warrant liabilities and warrant extension expense.
   Three Months Ended
    
    
    Three Months EndedJune 30, 2007
    
    
    June 30, 2006Average
    
    
    
    
    
    
    
    
    
    
    AverageGold
    
    
    Price Per
    
    
    Revenue
    
    
    Gold
    
    
    Price Per
    
    
    RevenueOunces
    
    
    Oz.
    
    
    $000s
    
    
    Ounces
    
    
    Oz.
    
    
    $000sGold sales
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    
    690
    
    
    $
    597
    
    
    $
    412Silver sales
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1$
    
    
    
    
    
    
    
    
    
    
    
    $
    413
   Results of Operations  Six Months Ended June 30, 2007 versus Six Months Ended June 30,
2006
  
    
    Negative variance of $0.1 million in gross margin from gold sales due to the reduction
in gold sales and production as a result of the depletion of gold ounces on the leach pad.
    
    Negative variance of $0.1 million in exploration costs.
    
    Negative variance of $0.3 million in selling, general and administrative costs due
primarily to the lack of gold production to allocate general and administrative costs.
 22




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##### Table of Contents




    
    Negative variance of $0.9 million related to last years gain on sales of securities.
    
    Positive variance of $0.4 million related to last years fair market adjustment due to
the increase in warrant liabilities and warrant extension expense.
   Six Months Ended
    
    
    Six Months EndedJune 30, 2007
    
    
    June 30, 2006Average
    
    
    
    
    
    
    
    
    
    
    AverageGold
    
    
    Price Per
    
    
    Revenue
    
    
    Gold
    
    
    Price Per
    
    
    RevenueOunces
    
    
    Oz.
    
    
    $000s
    
    
    Ounces
    
    
    Oz.
    
    
    $000sGold sales
    
    
    100
    
    
    $
    668
    
    
    $
    67
    
    
    
    1,735
    
    
    $
    579
    
    
    $
    1,005Silver sales
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1$
    67
    
    
    
    
    
    
    
    
    
    
    $
    1,006
 Contractual Obligations
  Payments due by PeriodLess than 1
    
    
    
    
    
    
    
    
    
    
    More than 5Total
    
    
    year
    
    
    1-3 years
    
    
    3-5 years
    
    
    yearsLong term debt obligations
    
    $
    825,000
    
    
    $
    
    
    
    $
    
    
    
    $
    825,000
    
    
    $
    Capital lease obligations
    
    
    75,600
    
    
    
    20,000
    
    
    
    55,600
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    385,500
    
    
    
    121,000
    
    
    
    264,500
    
    
    
    
    
    
    
    Purchase obligations
    
    
    151,700
    
    
    
    151,700
    
    
    
    
    
    
    
    
    
    
    
    Asset retirement obligations
    
    
    4,007,200
    
    
    
    1,088,200
    
    
    
    2,741,400
    
    
    
    106,700
    
    
    
    70,900Total
    
    $
    5,445,000
    
    
    $
    1,380,900
    
    
    $
    3,061,500
    
    
    $
    931,700
    
    
    $
    70,900
 Off-Balance Sheet Arrangements
  23




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##### Table of Contents



Critical Accounting Policies and Estimates
   Reserves and Mineralized Material:
   Impairments of Long-Lived Assets:
 Accounting for the Impairment or Disposal of
Long-Lived Assets
 24




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##### Table of Contents



Asset Retirement Obligations:
  Warrant Liability: Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Companys Own Stock Accounting for Registration
Payment Arrangements Accounting for Contingencies
 Stock-Based Compensation: Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees
  25




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##### Table of Contents



Income Taxes: Accounting for Uncertainty in Income Taxes
 Potential Litigation Liabilities:
 Other Matters
 Federal Legislation
  Dividends
  Recently Issued Accounting Standards
 The Fair Value Option for Financial Assets and
Financial Liabilities Fair Value Measurements.
 Fair Value Measurements
 26




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##### Table of Contents



ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Commodity Prices
    Interest Rates
  Foreign Currency
  27




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##### Table of Contents



ITEM 4 CONTROLS AND PROCEDURES
 DISCLOSURE CONTROLS AND PROCEDURES
   CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
   28




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##### Table of Contents



PART
II OTHER INFORMATION
 
 Item 1. Legal Proceedings
   Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to Vote of Security Holders
    29




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##### Table of Contents



Item 5. Other Information
  
 Item 6. Exhibits
 3.1
    
    Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1
to the Companys Current Report on Form 8-K (File No. 001-11887) on June 1, 2007,
and incorporated herein by reference)3.2
    
    Amended and Restated Bylaws (filed as Exhibit 3.2 to the Companys
Current Report on Form 8-K (File No. 001-11887) on June 1, 2007 and incorporated
herein by reference)10.1
    
    Form of Subscription Agreement and a Schedule of such Agreements (filed
as Exhibit 10.1 to the Companys Current Report on Form 8-K (File No. 001-11887) on
May 30, 2007, and incorporated by reference)10.2
    
    Form of Series A Warrant and Schedule of such Warrants (filed as Exhibit
10.2 to the Companys Current Report on Form 8-K (File No. 001-11887) on May 30,
2007, and incorporated by reference)10.3
    
    Form of Series B Warrant and Schedule of such Warrants (filed as Exhibit
10.3 to the Companys Current Report on Form 8-K (File No. 001-11887) on May 30,
2007, and incorporated by reference)31.1
    
    Certification of Chief Executive Officer pursuant to Rule
13(a)-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 200231.2
    
    Certification of Chief Financial Officer pursuant to Rule
13(a)-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 200232.1
    
    Certification of Chief Executive Officer pursuant to U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification of Chief Financial Officer pursuant to U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 30




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##### Table of Contents



SIGNATURES
  CANYON RESOURCES CORPORATIONDate:  August 13, 2007
    /s/ James K. B. HeskethJames K. B. HeskethPresident and Chief Executive
Officer
(Principal Executive Officer)Date:   August 13, 2007
    /s/ David P. SuleskiDavid P. SuleskiChief Financial Officer, Treasurer
and
Corporate Secretary
(Principal Financial and Accounting Officer) 31




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##### Table of Contents



EXHIBIT INDEX
 EXHIBITNUMBER
    
    DESCRIPTION
 3.1
    
    Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1 to the
Companys Current Report on Form 8-K (File No. 001-11887) on June 1, 2007, and incorporated
herein by reference)3.2
    
    Amended and Restated Bylaws (filed as Exhibit 3.2 to the Companys Current Report on
Form 8-K (File No. 001-11887) on June 1, 2007 and incorporated herein by reference)10.1
    
    Form of Subscription Agreement and a Schedule of such Agreements (filed as Exhibit 10.1
to the Companys Current Report on Form 8-K (File No. 001-11887) on May 30, 2007, and
incorporated by reference)10.2
    
    Form of Series A Warrant and Schedule of such Warrants (filed as Exhibit 10.2 to the
Companys Current Report on Form 8-K (File No. 001-11887) on May 30, 2007, and incorporated
by reference)10.3
    
    Form of Series B Warrant and Schedule of such Warrants (filed as Exhibit 10.3 to the
Companys Current Report on Form 8-K (File No. 001-11887) on May 30, 2007, and incorporated
by reference)31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13(a)-14(a)/15d-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Rule 13(a)-14(a)/15d-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of Chief Executive Officer pursuant to U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification of Chief Financial Officer pursuant to U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 32