<PAGE>   1
================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

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

              [X] Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                     For the period ended September 30, 1999
                                       or
            [ ] Transition Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934
            For the transition period from __________ to ___________

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

                         Commission file number 1-11887

                          CANYON RESOURCES CORPORATION

                            (a Delaware Corporation)


                I.R.S. Employer Identification Number 84-0800747


                      14142 Denver West Parkway, Suite 250
                                Golden, CO 80401
                                 (303) 278-8464



         Indicate by check mark whether the registrant (1) has filed all reports
         required to be filed by Section 13 or 15(d) of the Securities Exchange
         Act of 1934 during the preceding 12 months (or for such shorter period
         that the registrant was required to file such reports), and (2) has
         been subject to such filing requirements for the past 90 days.
         Yes [X] No [ ]

         Indicate the number of shares outstanding of each of the issuers
         classes of common stock, as of the latest practicable date: 46,497,470
         shares of the Company's Common Stock were outstanding as of November 1,
         1999.

================================================================================


<PAGE>   2


                          PART I FINANCIAL INFORMATION


ITEM 1.           FINANCIAL STATEMENTS

         The following consolidated financial statements have been prepared by
Canyon Resources Corporation ("the Company") pursuant to the rules and
regulations of the Securities and Exchange Commission ("SEC"). Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such SEC rules and regulations.

         These consolidated financial statements should be read in conjunction
with the financial statements and accompanying notes included in the Company's
Form 10-K for the year ended December 31, 1998.


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

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

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

      Notes to Interim Consolidated Financial Statements...............................Page 7-17


ITEM 2.          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS...................................Page 18-23

ITEM 3.          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                 MARKET RISK...........................................................Page 23-24
</TABLE>


                                       2
<PAGE>   3

CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                    (Unaudited)
                                                                    September 30,        December 31,
                                                                        1999                  1998
                                                                    ------------         ------------
<S>                                                                 <C>                  <C>
ASSETS

Cash and cash equivalents                                           $    674,300         $  1,985,700
Restricted cash                                                        2,148,000            4,887,200
Accounts receivable                                                       35,800              173,800
Inventories                                                            7,378,200            5,372,200
Prepaid and other assets                                                 984,900            1,165,000
                                                                    ------------         ------------
   Total current assets                                               11,221,200           13,583,900
                                                                    ------------         ------------

Property and equipment, at cost
   Mining claims and leases                                           21,477,200           24,508,100
   Producing properties                                               51,252,200           51,124,700
   Other                                                                 928,400              994,200
                                                                    ------------         ------------
                                                                      73,657,800           76,627,000
   Accumulated depreciation and depletion                            (16,726,000)         (11,639,500)
                                                                    ------------         ------------
     Net property and equipment                                       56,931,800           64,987,500
                                                                    ------------         ------------

Other assets                                                           4,862,800            3,300,300
                                                                    ------------         ------------

     Total Assets                                                   $ 73,015,800         $ 81,871,700
                                                                    ============         ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable                                                    $  2,428,000         $  3,134,300
Notes payable - current                                                   27,600           18,708,400
Accrued taxes, other than payroll and income                              34,700               60,800
Accrued reclamation costs                                                964,000              964,000
Deferred income                                                        8,358,900            4,090,700
Other current liabilities                                                845,300              961,700
                                                                    ------------         ------------
   Total current liabilities                                          12,658,500           27,919,900

Notes payable - long term                                              5,209,800                   --
Accrued reclamation costs                                              2,409,400            2,704,900
Deferred income                                                        4,805,000            4,489,500
Other noncurrent liabilities                                           1,254,000            1,458,500
                                                                    ------------         ------------
     Total Liabilities                                                26,336,700           36,572,800
                                                                    ------------         ------------

Commitments and contingencies (Notes 9 and 10)

Common stock ($.01 par value) 100,000,000 shares authorized;
   issued and outstanding: 46,497,500 at September 30, 1999, and
   46,137,100 at December 31, 1998                                       465,000              461,400
Capital in excess of par value                                        95,422,100           95,293,500
Deficit                                                              (49,208,000)         (50,456,000)
                                                                    ------------         ------------
     Total Stockholders' Equity                                       46,679,100           45,298,900
                                                                    ------------         ------------

     Total Liabilities and Stockholders' Equity                     $ 73,015,800         $ 81,871,700
                                                                    ============         ============
</TABLE>


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


                                       3
<PAGE>   4

CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED               NINE MONTHS ENDED
                                                                            SEPTEMBER 30,                   SEPTEMBER 30,

                                                                       1999             1998            1999            1998
                                                                    ------------    ------------    ------------    ------------
<S>                                                                 <C>             <C>             <C>             <C>
   REVENUE
Sales                                                               $  8,168,200    $  7,525,800    $ 22,866,600    $ 25,064,000
                                                                    ------------    ------------    ------------    ------------

   EXPENSES
Cost of sales                                                          6,106,000       5,879,000      18,160,100      18,675,500
Depreciation, depletion, and amortization                              1,793,400       1,417,700       5,094,400       4,717,400
Selling, general and administrative                                      208,300         781,100         875,000       2,466,300
Exploration costs                                                         92,000         146,300         164,300         452,500
                                                                    ------------    ------------    ------------    ------------

                                                                       8,199,700       8,224,100      24,293,800      26,311,700
                                                                    ------------    ------------    ------------    ------------

   OTHER INCOME (EXPENSE)
Interest income                                                           29,000          51,800         106,600         164,300
Interest expense                                                        (162,600)       (263,500)       (513,600)     (1,200,100)
Gain on partial prepayment of gold loan                                       --         919,700       3,108,200         919,700
Gain (loss) on asset disposals                                            20,400          22,200         (19,000)         39,900
Other                                                                         --          13,800          (7,000)         (8,300)
                                                                    ------------    ------------    ------------    ------------

                                                                        (113,200)        744,000       2,675,200         (84,500)
                                                                    ------------    ------------    ------------    ------------

Income (loss) before extraordinary item and
   cumulative effect of changes in accounting
   principles                                                       $   (144,700)   $     45,700    $  1,248,000    $ (1,332,200)
Extraordinary loss on debt prepayments                                        --              --              --        (281,500)
Cumulative effect of changes in accounting
   principles                                                                 --              --              --      (8,928,100)
                                                                    ------------    ------------    ------------    ------------

Net income (loss)                                                   $   (144,700)   $     45,700    $  1,248,000    $(10,541,800)
                                                                    ============    ============    ============    ============

Basic and diluted income (loss) per share:
   Income (loss) before extraordinary item and
      cumulative effect of changes in accounting
      principles                                                              --              --    $       0.03    $     (0.03)
   Extraordinary loss on debt prepayments                                     --              --              --    $     (0.01)
   Cumulative effect of changes in accounting
      principles                                                              --              --              --    $     (0.19)
                                                                    ------------    ------------    ------------    ------------

   Net income (loss)                                                          --              --    $       0.03    $     (0.23)
                                                                    ============    ============    ============    ===========

Weighted average shares outstanding - basis eps                       46,497,500      46,107,100      46,298,000      46,107,100

Weighted average shares outstanding - diluted eps                     46,497,500      46,107,100      46,303,100      46,107,100
</TABLE>


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


                                       4
<PAGE>   5

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

<TABLE>
<CAPTION>
                                                                                        Nine months ended September 30,
                                                                                            1999               1998
                                                                                       ------------         ------------
<S>                                                                                    <C>                  <C>
Cash flows from operating activities:
  Net income (loss)                                                                    $  1,248,000         $(10,541,800)
                                                                                       ------------         ------------
  Adjustments to reconcile net income (loss) to net cash provided by
   operating activities:
    Extraordinary loss on debt prepayments                                                       --              281,500
    Cumulative effect of changes in accounting principles                                        --            8,928,100
    Depreciation, depletion, and amortization                                             5,094,400            4,717,400
    Amortization of financing costs                                                         116,400              165,400
    (Gain) loss on asset disposals                                                           19,000              (39,800)
    Other                                                                                        --               34,800
    Changes in assets and liabilities;
      (Increase) decrease in receivables                                                    138,000             (303,100)
      Increase in inventories                                                            (2,006,000)             (68,600)
      (Increase) decrease in prepaid and other assets                                     1,399,200             (862,100)
      Decrease in accounts payable and accrued liabilities                                 (558,800)            (738,100)
      Increase in deferred income                                                         2,055,700            9,818,200
      (Decrease) increase in other liabilities                                             (279,900)             465,800
      (Increase) decrease in restricted cash                                                339,200             (233,000)
                                                                                       ------------         ------------

    Total adjustments                                                                     6,317,200           22,166,500
                                                                                       ------------         ------------

    Net cash provided by operating activities                                             7,565,200           11,624,700
                                                                                       ------------         ------------

Cash flows from investing activities:
  Purchases of property and equipment                                                      (184,300)          (3,580,600)
  Proceeds on asset dispositions                                                             64,800              143,500
                                                                                       ------------         ------------

    Net cash used in investing activities                                                  (119,500)          (3,437,100)
                                                                                       ------------         ------------

Cash flows from financing activities:
  Issuance of stock, net                                                                     56,200            2,192,500
  Proceeds from loans                                                                            --            1,004,000
  Receipts from escrow account                                                                   --                  200
  Restricted cash utilized for debt payments                                              2,400,000                   --
  Payments on debt                                                                      (11,002,200)         (13,866,700)
  Payment to collateralize letter of credit                                                      --             (165,000)
  Payments on capital lease obligations                                                    (211,100)            (139,000)
                                                                                       ------------         ------------

    Net cash used in financing activities                                                (8,757,100)         (10,974,000)
                                                                                       ------------         ------------

Net decrease in cash and cash equivalents                                                (1,311,400)          (2,786,400)
Cash and cash equivalents, beginning of year                                              1,985,700            3,111,000
                                                                                       ------------         ------------

Cash and cash equivalents, end of period                                               $    674,300         $    324,600
                                                                                       ============         ============
</TABLE>


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


                                       5
<PAGE>   6

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



Supplemental disclosures of cash flow information:

1.   The Company paid $398,600 of interest during the first nine months of 1999,
     and $1,119,200 during the corresponding period of 1998. There was no
     capitalized interest for either period.

2.   The Company paid no income taxes during the first nine months of 1999 nor
     during the corresponding period of 1998.

3.   On September 29, 1999, the Company received $3.0 million in connection with
     a third party funding commitment. As the proceeds are designated for
     restricted use in the maintenance and development of certain noncurrent
     assets, the $3.0 million is included in other assets on the Company's
     Balance Sheet at September 30, 1999, with a corresponding reduction in the
     carrying value of mining claims and leases.

Supplemental schedule of noncash investing and financing activities:

1.   The Company converted a commodity based loan to a cash loan during the
     first nine months of 1999. The carrying amount was reduced by $2,528,000 at
     the time of conversion to adjust the monetized amount of the loan to fair
     market value.

2.   The Company financed an equipment lease buy-out in the amount of $59,200
     during the first nine months of 1999.

3.   The Company acquired equipment with a fair market value of $53,000 by
     exchange of certain assets during the first nine months of 1999.

4.   The Company issued 345,400 shares of common stock with a fair market value
     of $76,000 to certain creditors as payment for accounts payable during the
     first nine months of 1999.

5.   The Company acquired $12,300 in equipment through capital leases during the
     first nine months of 1999 and $1,258,900 in equipment through capital
     leases during the corresponding period of 1998.


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


                                       6
<PAGE>   7

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

1.       BASIS OF PRESENTATION:

         During interim periods, Canyon Resources (the Company) follows the
         accounting policies set forth in its Annual Report to Stockholders and
         its Report on Form 10-K filed with the Securities and Exchange
         Commission. Users of financial information produced for interim periods
         are encouraged to refer to the footnotes contained in the Annual Report
         to Stockholders when reviewing interim financial results.

         The Company's financial statements have been prepared on a going
         concern basis, which contemplates the realization of assets and
         settlement of liabilities and commitments in the ordinary course of
         business. The Company's liquidity, however, has been adversely impacted
         by a sustained period of low gold prices and high debt service
         requirements. Although the Company has significantly improved its
         working capital position since year-end by restructuring the Briggs
         Mine loan facility (See Note 7), substantially all of the Company's
         then forward sales contracts at prices that approximated $311 per ounce
         were liquidated and used to pay-down debt in connection with the
         restructuring. New forward contracts have been put in place for
         approximately six months of production at the Briggs Mine, however, the
         average price per ounce is approximately $29 lower than the liquidated
         contracts. The ability to generate cash flow on a going-forward basis
         will be dependent on the Briggs Mine producing gold at cash costs below
         its hedged price or the prevailing market price. In this regard, the
         Company has reduced staff levels at the Briggs Mine approximately 11%
         and implemented an alternative mine plan with the objective of
         producing gold at cash costs below $250 per ounce. In March 1999, the
         Company received a demand notice for an increase in collateral of
         approximately $1.2 million from the Sureties who issued certain bonds
         for reclamation obligations at the Briggs Mine, Kendall Mine and
         McDonald Gold Project. In September 1999, the Company reached an
         agreement in principle with the Sureties to satisfy the demand by
         granting a security interest in certain real property mineral rights
         and agreeing to make certain future cash deposits. However, until a
         final agreement is executed, there can be no assurances that the
         Sureties will not exercise any remedies available to them during the
         intervening period. The Company has curtailed all discretionary
         expenditures, is attempting to sell its African properties and
         continues to evaluate potential merger or other alliance opportunities.
         There can be no assurances, however, that the Company will be
         successful in this regard.

         In June 1998, the Financial Accounting Standards Board issued Statement
         of Financial Accounting Standards No. 133 Accounting for Derivative
         Instruments and Hedging Activities (SFAS 133). SFAS 133 requires that
         all derivatives be recognized as assets or liabilities and be measured
         at fair value. Gains or losses resulting from changes in the values of
         those derivatives would be accounted for depending on the use of the
         derivatives and whether they qualify for hedge accounting as either a
         fair value hedge or a cash flow hedge. The key criterion for hedge
         accounting is that the hedging relationship must be


                                       7
<PAGE>   8


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


1.       BASIS OF PRESENTATION: (CONTINUED)

         highly effective in achieving offsetting changes in fair value or cash
         flows of the hedging instruments and the hedged items. SFAS 133 is
         effective for the Company beginning on January 1, 2001 but earlier
         adoption is permitted. There are many complexities to this new standard
         and the Company is currently evaluating the impact that SFAS 133 will
         have on its reported operating results and financial position and has
         not yet determined whether it will adopt SFAS 133 earlier than January
         1, 2001.

         In the opinion of management, the accompanying interim financial
         statements contain all material adjustments, consisting only of normal
         recurring adjustments necessary to present fairly the financial
         position, the results of operations, and the cash flows of Canyon
         Resources and its consolidated subsidiaries for interim periods.

         Certain prior period items have been reclassified to conform with the
         current period presentation.

2.       PRIOR YEAR CHANGES IN ACCOUNTING PRINCIPLES:

         In the second quarter of 1998, the Company changed its method of
         accounting for exploration costs on unproven properties from
         capitalizing all expenditures to expensing all costs, other than
         acquisition costs, prior to the establishment of proven and probable
         reserves. This brought the Company's accounting method in accordance
         with the predominant practice in the US mining industry and better
         reflects operating income and cash flow. The $5,625,400 cumulative
         effect of the change on prior years is included in the loss for the
         nine months ended September 30, 1998.

         In the fourth quarter of 1998, the Company elected early adoption of
         Statement of Position No. 98-5, Reporting on the Costs of Start-Up
         Activities (SOP 98-5). SOP 98-5 was otherwise effective for financial
         statements for fiscal years beginning after December 15, 1998 and
         requires costs of start-up activities and organization costs to be
         expensed as incurred. The $3,302,700 cumulative effect of the change on
         prior years is included in the loss for the nine months ended September
         30, 1998. The effect of the change on the third quarter of 1998 was to
         decrease the loss before extraordinary item and cumulative effect of
         changes in accounting principles by $152,500, which had no effect on
         per share amounts. The effect of the change on the nine months ended
         September 30, 1998 was to decrease the loss before extraordinary item
         and cumulative effect of changes in accounting principles by $513,000,
         or $0.01 per share.


                                       8
<PAGE>   9

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


2.       PRIOR YEAR CHANGES IN ACCOUNTING PRINCIPLES: (CONTINUED)

         The following table summarizes the effect of the accounting changes on
         previously reported results for the three and nine months ended
         September 30, 1998:

<TABLE>
<CAPTION>
                                                       Three Months Ended                 Nine Months Ended
                                                       September 30, 1998                 September 30, 1998
                                                   ---------------------------      -------------------------------
                                                   $ Amounts         Per Share       $ Amounts           Per Share
                                                   ----------        ---------      --------------     ------------
<S>                                                <C>               <C>            <C>                <C>
Loss before extraordinary item and
   cumulative effect of changes in accounting
   principles as originally reported               $ (106,800)       $      --      $   (1,845,200)    $      (0.04)

Effect of start-up costs accounting change            152,500               --             513,000             0.01
                                                   ----------        ---------      --------------     ------------

Income (loss) before extraordinary item and
   cumulative effect of changes in accounting
   principles as restated                              45,700        $      --          (1,332,200)    $      (0.03)

Extraordinary loss on debt prepayments                     --        $      --            (281,500)    $      (0.01)

Cumulative effect on prior years                           --               --          (8,928,100)    $      (0.19)
                                                   ----------        ---------      --------------     ------------

Net income (loss) as restated                      $   45,700        $      --      $  (10,541,800)    $      (0.23)
                                                   ==========        =========      ==============     ============
</TABLE>


3.       INTERIM RESULTS:

         The foregoing interim results are not necessarily indicative of the
         results of operations for the full year ending December 31, 1999.

4.       USE OF ESTIMATES:

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


                                       9
<PAGE>   10

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


5.       RESTRICTED CASH:

         Restricted cash consisted of the following:

<TABLE>
<CAPTION>
                                                   SEPTEMBER 30,      DECEMBER 31,
                                                       1999              1998
                                                   ------------       -----------
<S>                                                <C>               <C>
Collateral for Letter of Credit (a)                 $  249,000        $2,118,000
Collateral for reclamation bond (a)                  1,869,000                --
Seven-Up Pete Venture funding commitment (b)         3,000,000                --
Proceeds from asset sales reserved for debt
   payments (c)                                             --         2,400,000
Unexpended proceeds from gold sales (d)                 30,000           369,200
                                                    ----------        ----------
                                                    $5,148,000        $4,887,200
Current portion                                      2,118,000         4,887,200
                                                    ----------        ----------
Noncurrent portion*                                 $3,000,000                --
                                                    ==========        ==========
</TABLE>

   *Included in other assets

         (a)      In connection with the issuance of certain bonds for the
                  performance of reclamation obligations at the Kendall Mine,
                  Briggs Mine, and McDonald Gold Project, a bank Letter of
                  Credit was provided in favor of the Sureties as partial
                  collateral for such bond obligations. The Letter of Credit is
                  fully collateralized with cash. In September 1999, $1,869,000
                  was transferred directly to the Sureties as continuing
                  collateral for the Kendall Mine reclamation bond and the bank
                  Letter of Credit was correspondingly reduced to $249,000. The
                  Letter of Credit will expire no earlier than December 31,
                  1999, and, at the bank's option, may be renewed for successive
                  one-year periods.

         (b)      In September 1999, the Seven-Up Pete Venture received $3.0
                  million solely for the purposes of maintaining its property
                  rights in the McDonald and Seven-Up Pete gold deposits and to
                  undertake a takings lawsuit against the State of Montana for
                  the lost value of the property rights incurred as a result of
                  the passage of the anti- cyanide initiative, I-137. (See Note
                  12).

         (c)      In connection with the sale of the Company's industrial
                  minerals assets on December 31, 1998, certain proceeds were
                  required to be utilized for debt reduction on the Briggs Mine
                  loan facility. (See Note 7).

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


                                       10
<PAGE>   11

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


6.       INVENTORIES:

         Inventories consisted of the following at:

<TABLE>
<CAPTION>
                                     SEPTEMBER 30,          DECEMBER 31,
                                         1999                   1998
                                     ------------           -----------
<S>                                  <C>                    <C>
Gold-in-process (a)                   $6,891,300            $4,962,200
Materials and supplies                   486,900               410,000
                                      ----------            ----------
                                      $7,378,200            $5,372,200
                                      ==========            ==========
</TABLE>

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

7.       NOTES PAYABLE:

         Notes payable consisted of the following at:

<TABLE>
<CAPTION>
                                      SEPTEMBER 30,         DECEMBER 31,
                                         1999                  1998
                                      ------------          -----------
<S>                                   <C>                   <C>
Briggs Facility (a)                   $        --           $18,058,400
   o  Gold Loan                         5,199,200                    --
   o  Cash Loan                                --               650,000
   o  Credit Line                          38,200                    --
                                      -----------           -----------
Caterpillar Finance (b)               $ 5,237,400           $18,708,400
Current portion (1)                        27,600            18,708,400
                                      -----------           -----------
Notes Payable - Noncurrent            $ 5,209,800           $        --
                                      ===========           ===========
</TABLE>


         (1)      At December 31, 1998, the Company was not in compliance with
                  certain covenants of the Briggs loan facility. The covenant
                  violations constituted events of default and the lenders
                  could, by notice to the Company, terminate the commitment and
                  declare all amounts immediately due and payable. Accordingly,
                  the Company classified all of the debt as current on its
                  Balance Sheet at December 31, 1998. In June 1999, the Company
                  reached an agreement with the lenders to restructure the
                  facility, the terms of which included (i) waivers for all
                  outstanding covenant violations, (ii) the liquidation of
                  125,000 ounces of forward gold contracts which netted $5.5
                  million, (iii) utilizing the forward liquidation proceeds to
                  reduce the


                                       11
<PAGE>   12


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


7.       NOTES PAYABLE: (CONTINUED)

                  gold loan debt by 20,506 ounces, (iv) rescheduling remaining
                  principal payments to 2001 and 2002 on a quarterly basis, and
                  (v) allowing the Company access to the first $1.6 million of
                  net cash flow from the Briggs Mine (as defined) and 50%
                  thereafter (the remaining 50% to be applied to the loan
                  balance) during the remainder of 1999 and 2000.

         (a)      On December 6, 1995, the Company's wholly owned subsidiary, CR
                  Briggs Corporation, obtained a $34.0 million loan facility to
                  finance the capital requirements of mine construction and
                  working capital for its Briggs Mine in California. Drawings on
                  the facility included $25.0 million principal in the form of a
                  gold loan and $9.0 million principal as dollar loans. The gold
                  loan portion was monetized at $388.05 per ounce, or 64,425
                  ounces. The dollar loans were paid off during the second
                  quarter of 1998. In connection with an August 1998
                  restructuring of the loan facility, the Company, during the
                  first quarter of 1999, utilized $1,650,000 of proceeds from
                  the December 1998 sale of its industrial minerals assets to
                  (i) pay off a credit line amount of $650,000, and (ii) reduce
                  the gold loan principal by 3,451 ounces. During the second
                  quarter of 1999, the Company utilized $750,000 of proceeds
                  from the 1998 sale of its industrial minerals assets to
                  further reduce the gold loan principal by 2,666 ounces. As a
                  result of these transactions, the Company recognized gains of
                  $339,300 and $284,600 during the first and second quarters of
                  1999, respectively. Additionally, in connection with the June
                  1999 restructuring of the loan facility as previously
                  described, the Company recognized a gain of $2,484,300 through
                  the application of 20,506 ounces of gold to the loan
                  principal. The gains associated with the partial prepayments
                  are shown as an other income item on the Statement of
                  Operations for the nine months ended September 30, 1999. On
                  June 30, 1999, the Company converted its then remaining gold
                  loan debt of 19,913 ounces to a dollar loan. As a result of
                  the conversion, the Company reduced its carrying value of the
                  debt from the monetized price of $388.05 per ounce to fair
                  market value of $261.10 per ounce. The gain of $2,528,000
                  [19,913 ounces x ($388.05 - $261.10)] associated with the
                  conversion will be deferred and recognized in operations over
                  the loan repayment schedule. The weighted average interest
                  rate on the dollar loan during the three months ended
                  September 30, 1999 was 7.6%. For the comparable period in
                  1998, weighted average interest rates on the gold loan and
                  dollar loans were 3.0% and 8.1%, respectively. For the nine
                  months ended September 30, 1999, weighted average interest
                  rates on the gold and dollar loans were 2.5% and 7.8%,
                  respectively. For the comparable period of 1998, weighted
                  average interest rates were 3.3% and 10.5%, respectively.
                  Interest payments of $101,500 and $154,700


                                       12
<PAGE>   13

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


7.       NOTES PAYABLE: (CONTINUED)

                  were made during the three months ended September 30, 1999 and
                  1998, respectively. For the nine month period, interest
                  payments of $298,400 and $966,200 were made during 1999 and
                  1998, respectively.

         (b)      In March 1999, the Company arranged to finance an equipment
                  lease buy-out with Caterpillar Finance in the amount of
                  $59,200. Terms of the financing require equal monthly payments
                  over two years at an interest rate of 8.5%. For the three
                  months ended September 30, 1999, principal and interest
                  payments of $9,500 and $1,300, respectively, were made. For
                  the nine months ended September 30, 1999, principal and
                  interest payments of $21,000 and $3,200, respectively, were
                  made.

8.       SITE RESTORATION COSTS:

         Reclamation spending at the Kendall Mine for the three months ended
         September 30, 1999 was $209,900. For the comparable period of 1998,
         spending totaled $235,700. For the nine months ended September 30,
         1999, spending totaled $666,200 as compared to $764,900 for the prior
         period.

9.       CONTINGENT LIABILITY:

         On September 25, 1997, the Company, together with its wholly owned
         subsidiary, CR Montana Corporation (CR Montana), purchased a 72.25%
         participating interest and underlying assets in the Seven-Up Pete
         Venture (Venture) from CR Montana's partner in the Venture, Phelps
         Dodge Corporation (Phelps Dodge). The Company and its wholly owned
         subsidiary now own 100% of the Venture. The Venture includes the
         McDonald Gold Project near Lincoln, Montana.

         The Company made an initial payment of $5 million as part of a total
         purchase price which was to be no less than $100 million and no more
         than $150 million, assuming all applicable permits for the McDonald
         Gold Project are obtained. The largest part of the purchase price, $30
         per mineable reserve ounce attributable to the Phelps Dodge ownership
         was to be paid after all permits for mine development were obtained. In
         September 1999, the Company and Phelps Dodge restructured the agreement
         to provide for a payment of $10.0 million upon issuance of all permits
         required for construction of the McDonald Gold Project, or
         alternatively, one-third of any proceeds received from a takings
         lawsuit. Due to the contingent nature of the transaction, the Company
         recorded only the initial payment of $5 million as additions to mining
         claims and leases.


                                       13
<PAGE>   14


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


10.      OTHER CONTINGENT MATTERS:

         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. This was
         provoked by Canyon's inability to continue permitting at McDonald due
         to the anti-cyanide initiative, I-137, and would require the Company,
         after a period of approximately seventeen months, to commence paying a
         delay rental of $150,000 per month in order to maintain the leases. The
         Company has challenged the DNRC's action in Montana District Court and
         believes it will prevail in this matter.

         In September 1998, the Montana Department of Environmental Quality
         (DEQ) filed a complaint in District Court alleging violations of the
         Montana Water Quality Act for unpermitted discharges at the Kendall
         Mine. The DEQ initially proposed a civil penalty in the amount of
         $330,000, which was subsequently modified to $302,000, in connection
         with the complaint. The Company has prepared a response to the
         complaint and believes the penalty as currently assessed is without
         substantial merit.

         In November 1998, the Montana electorate passed an anti-cyanide mining
         initiative (I-137) by a vote of 52% to 48%. I-137 bans development of
         new gold and silver mines which use open-pit mining and cyanide in the
         treatment and recovery process. For most of the campaign period, mining
         companies and their employees were prevented from campaigning due to a
         previously passed initiative (I-125) which prohibited campaign
         expenditures by "for-profit" entities. Ten days prior to the election,
         a federal judge declared the prohibition "unconstitutional". The mining
         community has an appeal pending regarding I-137 in the U.S. Ninth
         Circuit Court of Appeals. The basis of the appeal is that the election
         should be overturned based on having been denied the opportunity to
         campaign due to the effectiveness of I-125 until the last few days
         prior to the election. In addition, the Seven-Up Pete Venture intends
         to file a lawsuit against the State of Montana based on enactment of
         I-137. The lawsuit will, amongst other matters, challenge the
         constitutionality of I-137 based on due process considerations and
         contend that I-137 results in a taking of property. The Company's legal
         counsel believes that it is likely that I-137 will be declared
         unconstitutional, or at a minimum, be overturned.

         In March 1999, the Company received a demand notice for an increase in
         collateral of approximately $1.2 million from the Sureties who issued
         certain bonds for reclamation obligations at the Briggs Mine, Kendall
         Mine and McDonald Gold Project. In September 1999, the Company reached
         an agreement in principle with the Sureties to satisfy the demand by
         granting a security interest in certain real property mineral rights
         and agreeing to make certain future cash deposits. However, until a
         final agreement is executed, there


                                       14
<PAGE>   15


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


10.      OTHER CONTINGENT MATTERS: (CONTINUED)

         can be no assurances that the Sureties will not exercise any remedies
         available to them during the intervening period.

         In October 1999, the Company received a determination notice from the
         DEQ for an increase in the Kendall Mine reclamation bond amount from
         approximately $1.9 million to approximately $8.1 million. Although the
         Company believes the increased bond amount greatly exceeds the cost of
         remaining work to be accomplished, it is unsure what remedies, if any,
         the DEQ may seek if the parties cannot agree on the appropriate bond
         amount.

11.      CONTINGENT SALE OF EXPLORATION PROPERTY:

         The Company executed an agreement during the third quarter of 1997 to
         sell the Aeropuerto property in Chubut Province, Argentina for $2.0
         million, payable over a sixty month period. At any time, the buyer,
         upon proper notice, may terminate the agreement and its then remaining
         obligations, and relinquish its interest in the property. Due to the
         contingent nature of the transaction, gain will be recognized only upon
         receipt of cash in excess of basis over the sixty month period.
         Accordingly, the Company recorded a gain of $62,800 during the first
         nine months of 1999 and $70,100 during the comparable period in 1998.

12.      SEVEN-UP PETE VENTURE FUNDING COMMITMENT

         In September 1999, the Company entered into a contract with
         Franco-Nevada Mining Corporation, Inc. (Franco-Nevada) to provide $3.5
         million of funding ($3.0 million cash and a commitment to maintain an
         existing $0.5 million reclamation bond) for the Seven-Up Pete Venture
         (Venture). The funding is provided to allow the Venture to maintain its
         property rights in the McDonald and Seven-Up Pete gold deposits and to
         undertake a takings lawsuit against the State of Montana for the lost
         value of the property rights incurred as a result of implementation of
         the anti-cyanide initiative, I-137. As consideration for the financing,
         Franco-Nevada will receive a four percent net smelter returns royalty
         from any mineral production from the properties of the Venture or,
         alternatively, one-third of any proceeds received by the Venture
         resulting from a successful takings lawsuit. The $3.0 million is
         included in other assets on the Company's Balance Sheet at September
         30, 1999, with a corresponding reduction in the carrying value of the
         Venture's properties.


                                       15
<PAGE>   16

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


13.      DEFERRED INCOME:

         In May 1998, the Company liquidated a gold hedge position consisting of
         forward contracts on 105,900 ounces which resulted in proceeds of $11.1
         million. The gain on the liquidation was initially deferred and is
         being recognized in operations based on the original settlement dates
         of the forward contracts. For the three months ended September 30,
         1999, $1.0 million of the gain was recognized in operations. For the
         nine months ended September 30, 1999, $3.1 million of the gain was
         recognized in operations. For the three and nine months ended September
         30, 1998, $1.3 million of the gain was recognized in operations.

         In June 1999, the Company liquidated a gold hedge position consisting
         of forward contracts on 125,000 ounces which resulted in proceeds of
         $5.5 million. The gain on the liquidation was deferred and will be
         recognized in operations based on the original expected settlement
         dates of the forward contracts. For the three and nine months ended
         September 30, 1999, $0.3 million of the gain was recognized in
         operations.

         On June 30, 1999, the Company converted its Briggs Mine gold loan to a
         cash loan. In connection with the conversion, the Company reduced the
         monetized amount of the debt to fair value, resulting in a gain of
         $2,528,000. The gain will be deferred and recognized in operations over
         the scheduled repayment dates in 2001 and 2002.

         The Company's deferred gains will be recognized in operations as
follows:

<TABLE>
<CAPTION>
                                                             $MM
                                                             ----
                                    <S>                      <C>
                                    Balance of 1999           2.0
                                    2000                      8.4
                                    2001                      1.5
                                    2002                      1.3
                                                             ----
                                        TOTAL                13.2
                                                             ====
</TABLE>


14.      INCOME TAXES:

         No current provision for income taxes was recorded as the Company does
         not expect taxable income for the year. No deferred tax benefit was
         recorded as the Company applies a full valuation allowance to its gross
         deferred tax assets, except to the extent of offsetting reversals of
         expected deferred tax liabilities.


                                       16
<PAGE>   17


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


15.      EARNINGS PER SHARE (EPS):

         The Company computes EPS by applying the provisions of Financial
         Accounting Standards No. 128, Earnings per Share. The following table
         provides a reconciliation of the amounts used in the calculation of the
         Company's basic and diluted EPS before extraordinary item and
         cumulative effect of changes in accounting principles.

<TABLE>
<CAPTION>
                                                  THREE MONTHS ENDED          NINE MONTHS ENDED
                                                     SEPTEMBER 30,              SEPTEMBER 30,
                                                  1999         1998          1999           1998
                                              ------------  -----------   -----------    -----------
<S>                                           <C>           <C>           <C>            <C>
BASIC EPS
  Income (loss) before extraordinary
     item and accounting changes              $   (144,700) $    45,700   $ 1,248,000    $(1,332,200)
  Weighted average shares
       outstanding                              46,497,500   46,107,100    46,298,000     46,107,100
                                              ============  ===========   ===========    ===========

  Per share amount                            $       --    $      --     $      0.03    $     (0.03)
                                              ============  ===========   ===========    ===========

DILUTED EPS
  Income (loss) before extraordinary
     item and accounting changes              $   (144,700) $    45,700   $ 1,248,000    $(1,332,200)
  Weighted average shares
      outstanding                               46,497,500   46,107,100    46,298,300     46,107,100
  Add: effect of dilutive options                       (A)          (B)        5,100             (A)
                                              ------------  -----------   -----------    -----------
  Weighted average shares
      outstanding, as adjusted                  46,497,500   46,107,100    46,303,100     46,107,100
                                              ============  ===========   ===========    ===========

  Per share amount                            $       --    $      --     $      0.03    $     (0.03)
                                              ============  ===========   ===========    ===========
</TABLE>



(A)      Effect would be antidilutive due to a loss before extraordinary item
         and accounting changes.
(B)      The exercise price of all options and warrants outstanding during the
         period was greater than the average market price of the Company's
         common shares.

         At September 30, 1999, options and warrants to purchase 2,045,700
         shares of common stock were outstanding that were not included in the
         calculations of EPS for the nine months ended September 30, 1999,
         because their exercise price was greater than the average market price
         of the Company's common shares. Options and warrants to purchase
         4,694,500 shares of common stock were outstanding at September 30, 1998
         that were not included in the prior period calculations of diluted EPS
         as the effect would be antidilutive.



                                           17
<PAGE>   18



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995.

         The matters discussed in this report on Form 10-Q, when not historical
matters, are forward-looking statements that involve a number of risks and
uncertainties that could cause actual results to differ materially from
projected results. Such factors include, among others, the speculative nature of
mineral exploration, commodity prices, production and reserve estimates,
environmental and government regulations, availability of financing, force
majeure events, and other risk factors as described from time to time in the
Company's filings with the Securities and Exchange Commission. Many of these
factors are beyond the Company's ability to control or predict. The Company
disclaims any intent or obligation to update its forward-looking statements,
whether as a result of receiving new information, the occurrence of future
events, or otherwise.

RESULTS OF OPERATIONS

         The Company recorded a net loss of $144,700, or $0.00 per share on
revenues of $8,168,200 for the third quarter of 1999. For the nine months ended
September 30, 1999, the Company recorded net income of $1,248,000, or $0.03 per
share on revenues of $22,866,600. This compares to net income of $45,700, or
$0.00 per share on revenues of $7,525,800 for the third quarter of 1998 and a
loss before extraordinary item and cumulative effect of changes in accounting
principles of $1,332,200 or $0.03 per share and a net loss of $10,541,800, or
$0.23 per share on revenues of $25,064,000 during the first nine months of 1998.

         During the three months ended September 30, 1999, the Company sold
22,253 ounces of gold at an average price of $367 per ounce. For the comparable
period of 1998, the Company sold 16,097 ounces of gold and 3,500 ounces of
silver at an average realized price of $383 per equivalent gold ounce. For the
nine months ended September 30, 1999, 63,017 ounces of gold and 3,900 ounces of
silver were sold at an average realized price of $363 per equivalent gold ounce.
For the comparable period in 1998, 54,155 ounces of gold and 13,500 ounces of
silver were sold at an average realized price of $384 per equivalent gold ounce.
The New York Commodity Exchange (COMEX) gold price averaged $260 and $273 per
ounce, respectively, for the three and nine months ended September 30, 1999. For
the comparable periods of 1998, the COMEX gold price averaged $289 per ounce.

         Cost of sales was $6.1 million for the three months ended September 30,
1999, as compared to $5.9 million in the prior period. For the nine months ended
September 30, 1999, cost of sales was $18.2 million as compared to $18.7 million
in the prior period. For the three and nine months ended September 30, 1998,
cost of sales included $0.8 million and $2.6 million, respectively, related to
the Company's industrial minerals program. The assets of this business were sold
on December 31, 1998. Cost of sales for the Briggs Mine was higher in the
current period due to a greater number of gold ounces sold.



                                       18
<PAGE>   19




         Per ounce cost of gold sold at the Briggs Mine, as computed under the
Gold Institute's Production Cost Standard, was as follows:

                                 CR BRIGGS MINE
                           COST PER OUNCE OF GOLD SOLD

<TABLE>
<CAPTION>
                                               Three months ended                      Nine months ended
                                                  September 30,                          September 30,
                                           1999                 1998                1999               1998
                                           ----                 ----                ----               ----
<S>                                       <C>                  <C>                 <C>                <C>
Cash operating (1)                         $263                 $306                $277               $286
Total cash costs (2)                       $269                 $311                $282               $292
Total production costs (3)                 $354                 $397                $368               $378
</TABLE>


          (1)  All direct and indirect costs of the operation, excluding
               royalties and accruals for site restoration. Includes inventory
               changes and adjustments for deferred stripping.
          (2)  Cash operating costs plus royalties
          (3)  Total cash costs plus depreciation, depletion, amortization and
               accruals for site restoration.

         Unit costs were lower in the current periods due to higher production
levels.

         Depreciation, depletion and amortization was higher in the current
periods due to a greater number of gold ounces sold.

         Interest expense was significantly lower in the current periods due to
lower debt balances. Interest income was lower in the current periods due to
lower cash balances.

         In connection with an August 1998 restructuring of the Briggs Mine loan
facility, the Company, during the first quarter of 1999, utilized $1,000,000 of
proceeds from the 1998 sale of its industrial minerals assets to reduce the
Briggs Mine gold loan principal by 3,451 ounces. During the second quarter of
1999, the Company utilized $750,000 of proceeds from the sale to further reduce
the gold loan principal by 2,666 ounces. In June 1999, the Company restructured
the loan facility again, the terms of which included, amongst others, the
liquidation of 125,000 ounces of forward contracts which netted $5.5 million.
The proceeds were used to further reduce the gold loan principal by 20,506
ounces. As a result of these transactions, the Company recognized gains of
$339,300 and $2,768,900 during the first and second quarters of 1999,
respectively.

         During the third quarter of 1998, the Company recognized a gain of
$919,700 in connection with a restructuring of the Briggs Mine loan facility by
utilizing proceeds of approximately $2.5 million from a hedge liquidation to
reduce the gold loan principal by 8,869 ounces.

         In May 1998, the Company prepaid in full the cash loans outstanding of
$8.6 million on the Briggs Mine loan facility. As a result of the prepayment,
unamortized deferred financing costs of $285,100 allocated to the cash loans
were expensed and recorded as an extraordinary loss.




                                       19
<PAGE>   20



LIQUIDITY & CAPITAL RESOURCES

         The Company's financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and settlement of
liabilities and commitments in the ordinary course of business. The Company's
liquidity, however, has been adversely impacted by a sustained period of low
gold prices and high debt service requirements. Although the Company has
significantly improved its working capital position since year-end by
restructuring the Briggs Mine loan facility (see discussion below),
substantially all of the Company's then forward sales contracts at prices that
approximated $311 per ounce were liquidated and used to pay-down debt in
connection with the restructuring. New forward contracts have been put in place
for approximately six months of production at the Briggs Mine, however, the
average price per ounce is approximately $29 lower than the liquidated
contracts. The ability to generate cash flow on a going-forward basis will be
dependent on the Briggs Mine producing gold at cash costs below its hedged price
or the prevailing market price. In this regard, the Company has reduced staff
levels at the Briggs Mine approximately 11% and implemented an alternative mine
plan with the objective of producing gold at cash costs below $250 per ounce. In
March 1999, the Company received a demand notice for an increase in collateral
of approximately $1.2 million from the Sureties who issued certain bonds for
reclamation obligations at the Briggs Mine, Kendall Mine and McDonald Gold
Project. In September 1999, the Company reached an agreement in principle with
the Sureties to satisfy the demand by granting a security interest in certain
real property mineral rights and agreeing to make certain future cash deposits.
However, until a final agreement is executed, there can be no assurances that
the Sureties will not exercise any remedies available to them during the
intervening period. The Company has curtailed all discretionary expenditures, is
attempting to sell its African properties and continues to evaluate potential
merger or other alliance opportunities. There can be no assurances, however,
that the Company will be successful in this regard.

         Net cash provided by operating activities during the nine months ended
September 30, 1999 was $7.6 million and was principally due to the liquidation
of a hedge position. The Company spent a nominal $0.2 million on capital
programs for the period.

         During the first quarter of 1999, the Company utilized $1,650,000 of
proceeds from the December 1998 sale of its industrial minerals assets to (i)
pay off a credit line amount of $650,000, and (ii) purchase 3,451 ounces of gold
at a market price of $289.75 per ounce which was applied to the gold loan.
During the second quarter of 1999, the Company utilized $750,000 of proceeds
from the 1998 sales of its industrial minerals assets to purchase 2,666 ounces
of gold at a market price of $281.30 which was applied to the gold loan.

         In June 1999, the Company restructured the Briggs Mine loan facility,
the terms of which included (i) waivers for all covenant violations existing
since December 31, 1998, (ii) the liquidation of 125,000 ounces of forward gold
contracts which netted $5.5 million, (iii) utilizing the forward liquidation
proceeds to reduce the gold loan debt by 20,506 ounces, (iv) rescheduling
remaining principal payments to 2001 and 2002 on a quarterly basis, and (v)
allowing the Company access to the first $1.6 million of net cash flow from the
Briggs Mine (as defined) and 50% thereafter (the remaining 50% to be applied to
the loan balance) during the remainder of 1999 and 2000.


                                       20
<PAGE>   21




         On June 30, 1999, the Company converted its then remaining gold loan
debt of 19,913 ounces to a cash loan. As a result of the conversion, the Company
reduced its carrying value of the debt from the monetized price of $388.05 per
ounce to fair market value of $261.10 per ounce, or $5,199,200.

         In September 1999, the Company entered into a contract with
Franco-Nevada Mining Corporation, Inc. (Franco-Nevada) to provide $3.5 million
of funding ($3.0 million cash and a commitment to maintain an existing $0.5
million reclamation bond) for the Seven-Up Pete Venture (Venture). The funding
is provided to allow the Venture to maintain its property rights in the McDonald
and Seven-Up Pete gold deposits and to undertake a takings lawsuit against the
State of Montana for the lost value of the property rights incurred as a result
of implementation of the anti-cyanide initiative, I-137. (See discussion below).
As consideration for the financing, Franco-Nevada will receive a four percent
net smelter returns royalty from any mineral production from the properties of
the Venture or, alternatively, one-third of any proceeds received by the Venture
resulting from a successful takings lawsuit. The $3.0 million is included in
other assets on the Company's Balance Sheet at September 30, 1999, with a
corresponding reduction in the carrying value of the Venture's properties.

OTHER MATTERS

McDonald Gold Project

         Anti-Cyanide Mining Initiative

         In November 1998, the Montana electorate passed an anti-cyanide mining
initiative (I-137) by a vote of 52% to 48%. I-137 bans development of new gold
and silver mines which use open-pit mining and cyanide in the treatment and
recovery process. For most of the campaign period, mining companies and their
employees were prevented from campaigning due to a previously passed initiative
(I-125) which prohibited campaign expenditures by "for-profit" entities. Ten
days prior to the election, a federal judge declared the prohibition
"unconstitutional". The mining community has an appeal pending regarding I-137
in the U.S. Ninth Circuit Court of Appeals. The basis of the appeal is that the
election should be overturned based on having been denied the opportunity to
campaign due to the effectiveness of I-125 until the last few days prior to the
election. In addition, the Seven-Up Pete Venture, intends to file a lawsuit
against the State of Montana based on enactment of I-137. The lawsuit will,
amongst other matters, challenge the constitutionality of I-137 based on due
process considerations and contend that I-137 results in a taking of property.
The Company's legal counsel believes that it is likely that I-137 will be
declared unconstitutional, or at a minimum, be overturned.

         State Mineral 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. This was provoked by Canyon's
inability to continue permitting at McDonald due to the anti-cyanide


                                       21
<PAGE>   22



initiative, I-137, and would require the Company, after a period of
approximately seventeen months, to commence paying a delay rental of $150,000
per month in order to maintain the leases. The Company has challenged the DNRC's
action in Montana District Court and believes it will prevail in this matter.

Environmental Regulation

         In September 1998, the Montana Department of Environmental Quality
(DEQ) filed a complaint in District Court alleging violations of the Montana
Water Quality Act for unpermitted discharges at the Kendall Mine. The DEQ
initially proposed a civil penalty in the amount of $330,000, which was
subsequently modified to $302,000, in connection with the complaint. The Company
has prepared a response to the complaint and believes the penalty as currently
assessed is without substantial merit.

         In October 1999, the Company received a determination notice from the
DEQ for an increase in the Kendall Mine reclamation bond amount from
approximately $1.9 million to approximately $8.1 million. Although the Company
believes the increased bond amount greatly exceeds the cost of remaining work to
be accomplished, it is unsure what remedies, if any, the DEQ may seek if the
parties cannot agree on the appropriate bond amount.

Year 2000 Issue

         Many computer programs utilize a two digit format to identify the
applicable year. Without modification, any date sensitive software may recognize
a date using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing, among other things, disruptions
to operations and inability to process financial transactions.

         The Company has completed its inventory of systems which utilize
information technology. Noncompliant software at the Briggs Mine has been
upgraded or replaced. Certain financial reporting software and voice
communications systems at the Company's corporate headquarters are not year 2000
compliant and are expected to be upgraded or replaced in the fourth quarter of
1999. The associated costs are not expected to be material. The Company has
completed a review of equipment used in its operations and believes it is not at
material risk for embedded chip failures.

         The Company relies on third parties to supply certain materials,
utilities, transportation, and other services necessary for its business
operations. During the first quarter of 1999, the Company initiated a process to
ascertain their stage of year 2000 readiness through questionnaires, interviews
and other means. The Company has completed its third party assessment and
believes it is not at material risk for such failures. As part of the Company's
contingency planning, alternate suppliers, have been identified to reduce the
risks of interruption if third party failures do occur.

         Although the Company believes it has adequate resources and personnel
to complete its remediation efforts prior to December 31, 1999, the Company
remains at risk with respect to its


                                       22
<PAGE>   23



ability to complete its own program and/or to a failure by one or more of its
third party suppliers to achieve year 2000 compliance within the required time
frame.

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, and producer hedging. During the last five years, the
average annual market price has fluctuated between $294 per ounce and $388 per
ounce. During 1999, gold prices declined to their lowest level in two decades.

         The Company currently utilizes short dated forward gold contracts to
protect the selling price of a portion of its anticipated production. At
November 1, 1999, contracts totaling 43,000 ounces were in place at an average
price of approximately $283 per ounce, or approximately $7 per ounce less than
the market price of gold. Based on the Company's current hedge position, a $10
change in the price of gold would have an impact on annual profitability and
cash flow of approximately $0.4 million.

         There are certain market risks associated with commodity instruments.
If the Company's counterparties fail to honor their contractual obligation to
purchase gold at agreed-upon prices, the Company may be exposed to market price
risk by having to sell gold in the open market at prevailing prices. Similarly,
if the Company fails to produce sufficient quantities of gold to meet its
forward commitments, the Company would have to purchase the shortfall in the
open market at prevailing prices. The Company may also be subject to margin
calls by its counterparties when the market price exceeds the price of its
forward gold contracts.

         In May 1998, the Company liquidated a forward position that was
originally established in December 1995, resulting in proceeds of $11.1 million.
As of December 31, 1998, $8.6 million of the gain had not been recognized in
operations. During the first nine months of 1999, $3.1 million of the gain was
recognized. During the fourth quarter of 1999, $1.0 million of the gain will be
recognized with the balance of $4.5 million recognized in 2000.

         In June 1999, the Company liquidated a forward position that was
initially established in 1998, resulting in proceeds of $5.5 million. During the
third quarter of 1999, $0.3 million of the gain was recognized. The remaining
gain will be recognized as follows: (i) $1.0 million during the fourth quarter
of 1999, (ii) $3.9 million in 2000, and (iii) $0.3 million in 2001.

         On June 30, 1999, the Company converted a commodity based loan to a
cash loan. In connection with the conversion, the monetized amount of the debt
was reduced to fair value, resulting in a gain of $2,528,000. The gain will be
recognized in operations over the scheduled repayments in 2001 and 2002.



                                       23
<PAGE>   24




         At November 1, 1999, the mark to market value of the Company's forward
contracts was approximately negative $0.3 million.

Interest Rates

         At September 30, 1999, the Company's debt primarily consisted of a cash
loan for the Briggs Mine bearing interest at approximately 7.8%. The Company is
required to have the rate periodically reset for periods that it may choose
which range in duration from one to six months. The Company is not exposed to
significant interest rate risk, as a change of 100 basis points in the rate
would have an impact on annual earnings and cash flow of approximately $0.052
million, based on the September 30, 1999 outstanding loan amount of $5.2
million.

Foreign Currency

         The price of gold is denominated in US 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.





                                       24
<PAGE>   25


                            PART II OTHER INFORMATION


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

ITEM 2.       CHANGES IN SECURITIES:
              In October 1999, the Company issued 38,217 shares of its $0.01 par
              value common stock to a creditor as consideration for
              extinguishment of certain payables in the amount of $9,300. The
              shares were issued pursuant to the exemption from registration
              provided by Section 4(2) of the Securities Act of 1933, as
              amended.

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

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

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

ITEM 6(a)     EXHIBITS:

              No. 27 - Financial Data Schedule

ITEM 6(b)     REPORTS ON FORM 8-K:...................................................................    None
</TABLE>


                                       25
<PAGE>   26




                                   SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                                 CANYON RESOURCES CORPORATION



Date:   November 12, 1999                        /s/ Gary C. Huber
                                                 -------------------------------
                                                 Gary C. Huber
                                                 Chief Financial Officer



Date:   November 12, 1999                        /s/ Richard T. Phillips
                                                 -------------------------------
                                                 Richard T. Phillips
                                                 Treasurer




<PAGE>   27


                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
     EXHIBIT
     NUMBER                             DESCRIPTION
     ------                             -----------
<S>                           <C>
       27                       Financial Data Schedule
</TABLE>