##### 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 period ended June 30, 2005
  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
 þ o




---



CANYON RESOURCES CORPORATION
 FORM 10-Q
 For the Three and Six Months ended June 30, 2005
 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 23Item 4.
    
    Controls and Procedures
    
    Page 24PART II OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    Page 26Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    Page 26Item 3.
    
    Defaults Upon Senior Securities
    
    Page 26Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    Page 26Item 5.
    
    Other Information
    
    Page 27Item 6.
    
    Exhibits
    
    Page 27SIGNATURES
    
    Page 27Certification of Chief Executive Officer Pursuant to Section 302Certification of Chief Accounting Officer Pursuant to Section 302Certification of Chief Executive Officer Pursuant to Section 906Certification of Chief Accounting Officer Pursuant to Section 906




---



##### Table of Contents



PART I FINANCIAL INFORMATION
 
 Item 1.
    
    
    
    Financial Statements
   Consolidated Balance Sheets
    
    Page 2Consolidated Statements of Operations
    
    Page 3Consolidated Statements of Cash Flows
    
    Pages 4-5Consolidated Statement of Changes in Stockholders Equity
    
    Page 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 23Item 4.
    
    
    
    Controls and Procedures
    
    Page 24
 1




---



##### Table of Contents



CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2005
    
    
    2004ASSETSCash and cash equivalents
    
    $
    5,086,000
    
    
    $
    4,638,300Restricted cash
    
    
    274,800
    
    
    
    274,800Accounts receivable
    
    
    420,600
    
    
    
    769,000Metal inventories
    
    
    674,600
    
    
    
    1,906,400Prepaid and other assets
    
    
    69,100
    
    
    
    153,400Total current assets
    
    
    6,525,100
    
    
    
    7,741,900Property and equipment, at costMineral claims and leases
    
    
    5,175,000
    
    
    
    Producing properties
    
    
    6,443,500
    
    
    
    6,443,500Other
    
    
    639,000
    
    
    
    643,10012,257,500
    
    
    
    7,086,600Accumulated depreciation, depletion, and amortization
    
    
    (7,886,800
    )
    
    
    (5,667,700
    )Net property and equipment
    
    
    4,370,700
    
    
    
    1,418,900Undeveloped mineral claims and leases, net
    
    
    
    
    
    
    13,359,500Restricted cash
    
    
    2,870,100
    
    
    
    2,847,300Other assets
    
    
    246,300
    
    
    
    247,400Total Assets
    
    $
    14,012,200
    
    
    $
    25,615,000LIABILITIES AND STOCKHOLDERS EQUITYAccounts payable
    
    $
    568,400
    
    
    $
    446,300Notes payable  current
    
    
    
    
    
    
    2,412,700Capital leases  current
    
    
    24,900
    
    
    
    32,900Asset retirement obligations
    
    
    2,209,100
    
    
    
    2,007,700Payroll liabilities
    
    
    227,200
    
    
    
    273,800Other current liabilities
    
    
    57,200
    
    
    
    106,400Total current liabilities
    
    
    3,086,800
    
    
    
    5,279,800Notes payable  long term
    
    
    825,000
    
    
    
    Asset retirement obligations
    
    
    3,057,300
    
    
    
    4,231,200Total liabilities
    
    
    6,969,100
    
    
    
    9,511,000Commitments and contingencies (Note 12)Common stock ($.01 par value) 100,000,000 shares authorized;
issued and outstanding: 34,510,500 at June 30, 2005, and
29,207,600 at December 31, 2004
    
    
    345,100
    
    
    
    292,100Capital in excess of par value
    
    
    131,779,300
    
    
    
    127,608,200Retained deficit
    
    
    (125,081,300
    )
    
    
    (111,796,300
    )Total Stockholders Equity
    
    
    7,043,100
    
    
    
    16,104,000Total Liabilities and Stockholders Equity
    
    $
    14,012,200
    
    
    $
    25,615,000
  2




---



##### Table of Contents



CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 Three months ended June 30,
    
    
    Six months ended June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004REVENUESales
    
    $
    1,137,200
    
    
    $
    5,826,400
    
    
    $
    2,139,400
    
    
    $
    7,563,900EXPENSESCost of sales (exclusive of depreciation,
depletion and amortization)
    
    
    837,800
    
    
    
    4,087,800
    
    
    
    1,968,000
    
    
    
    6,442,900Depreciation, depletion and amortization
    
    
    704,700
    
    
    
    2,425,700
    
    
    
    1,614,600
    
    
    
    3,528,300Selling, general and administrative
    
    
    625,000
    
    
    
    468,100
    
    
    
    1,233,500
    
    
    
    2,466,400Exploration and development costs
    
    
    718,600
    
    
    
    80,100
    
    
    
    889,900
    
    
    
    294,500Impairment of mineral claims and leases
    
    
    9,242,100
    
    
    
    
    
    
    
    9,242,100
    
    
    
    Accretion expense
    
    
    33,500
    
    
    
    43,300
    
    
    
    67,000
    
    
    
    86,600Asset retirement obligation
    
    
    
    
    
    
    935,200
    
    
    
    
    
    
    
    935,200Debenture conversion expense
    
    
    
    
    
    
    
    
    
    
    448,200
    
    
    
    Loss on asset disposals
    
    
    2,700
    
    
    
    800
    
    
    
    2,700
    
    
    
    80012,164,400
    
    
    
    8,041,000
    
    
    
    15,466,000
    
    
    
    13,754,700OTHER INCOME (EXPENSE)Interest income
    
    
    41,900
    
    
    
    25,300
    
    
    
    74,600
    
    
    
    40,800Interest expense
    
    
    (12,900
    )
    
    
    (62,400
    )
    
    
    (54,100
    )
    
    
    (136,400
    )Gain on derivative instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    147,200Other
    
    
    21,100
    
    
    
    (151,000
    )
    
    
    21,100
    
    
    
    (140,000
    )50,100
    
    
    
    (188,100
    )
    
    
    41,600
    
    
    
    (88,400
    )Net loss
    
    $
    (10,977,100
    )
    
    $
    (2,402,700
    )
    
    $
    (13,285,000
    )
    
    $
    (6,279,200
    )Basic and diluted net loss per share
    
    $
    (0.32
    )
    
    $
    (0.09
    )
    
    $
    (0.41
    )
    
    $
    (0.23
    )Basic and diluted weighted average
shares outstanding
    
    
    34,510,500
    
    
    
    27,985,900
    
    
    
    32,401,100
    
    
    
    27,181,900
  3




---



##### Table of Contents



CANYON RESOURCES CORPORATION AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six months ended June 30,2005
    
    
    2004Cash flows from operating activities:Net loss
    
    $
    (13,285,000
    )
    
    $
    (6,279,200
    )Adjustments to reconcile net loss to net cash used in
operating activities:Depreciation, depletion and amortization
    
    
    1,614,600
    
    
    
    3,528,300Amortization of beneficial conversion feature
    
    
    11,300
    
    
    
    31,000Debenture conversion expense
    
    
    448,200
    
    
    
    Inventory impairment
    
    
    143,100
    
    
    
    964,100Impairment of mineral claims and leases
    
    
    9,242,100
    
    
    
    Loss on asset dispositions
    
    
    2,700
    
    
    
    800Gain on derivative instruments
    
    
    
    
    
    
    (147,200
    )Non-cash compensation expense
    
    
    
    
    
    
    497,200Provision for asset retirement obligations
    
    
    
    
    
    
    935,200Interest accretion
    
    
    67,000
    
    
    
    86,600Write off prepaid auction expenses
    
    
    
    
    
    
    151,000Changes in operating assets and liabilities:Decrease in accounts receivable
    
    
    348,400
    
    
    
    95,100Decrease in inventories
    
    
    673,300
    
    
    
    323,000Decrease in prepaid and other assets
    
    
    85,400
    
    
    
    90,200Increase (decrease) in accounts payable and
other current liabilities
    
    
    26,300
    
    
    
    (1,345,500
    )Decrease in asset retirement obligations
    
    
    (1,039,500
    )
    
    
    (910,100
    )(Increase) decrease in restricted cash
    
    
    (22,800
    )
    
    
    25,600Total adjustments
    
    
    11,600,100
    
    
    
    4,325,300Net cash used in operating activities
    
    
    (1,684,900
    )
    
    
    (1,953,900
    )Cash flows from investing activities:Purchases and development of property and equipment
    
    
    (36,300
    )
    
    
    (381,200
    )Proceeds from asset sales
    
    
    
    
    
    
    (800
    )Net cash used in investing activities
    
    
    (36,300
    )
    
    
    (382,000
    )Cash flows from financing activities:Issuance of common stock and warrants
    
    
    3,100,900
    
    
    
    8,341,000Payments on debt
    
    
    (924,000
    )
    
    
    (1,037,400
    )Payments on capital lease obligations
    
    
    (8,000
    )
    
    
    (8,900
    )Net cash provided by financing activities
    
    
    2,168,900
    
    
    
    7,294,700Net increase in cash and cash equivalents
    
    
    447,700
    
    
    
    4,958,800Cash and cash equivalents, beginning of year
    
    
    4,638,300
    
    
    
    4,139,800Cash and cash equivalents, end of period
    
    $
    5,086,000
    
    
    $
    9,098,600
  4




---



##### Table of Contents



CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS, continued
  1.
    
    The Company paid $142,800 of interest during the first six months of 2005, and $105,400
during the corresponding period of 2004.
 2.
    
    The Company paid no income taxes during the first six months of 2005 nor the corresponding
period of 2004.
  1.
    
    During the first six months of 2005, debenture holders representing $675,000 of principal
converted to common shares and warrants at a lower price than the original conversion price,
resulting in a conversion expense of $448,200.
 2.
    
    The Company issued 81,800 shares of common stock with a fair market value of $129,600 to an
employee as compensation for services during the first six months of 2004.
 3.
    
    Non-cash stock compensation for the Companys stock option plans under variable plan
accounting was $367,600 during the first six months of 2004.
  5




---



##### Table of Contents



CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
 Common Stock
    
    
    Capital in
    
    
    
    
    
    
    TotalNumber of
    
    
    At Par
    
    
    Excess of Par
    
    
    Retained
    
    
    StockholdersShares
    
    
    Value
    
    
    Value
    
    
    Deficit
    
    
    EquityBalances, January 1, 2005
    
    
    29,207,600
    
    
    $
    292,100
    
    
    $
    127,608,200
    
    
    $
    (111,796,300
    )
    
    $
    16,104,000Stock issued for cash, net of
issuance costs of $47,500
    
    
    4,366,700
    
    
    
    43,700
    
    
    
    3,057,200
    
    
    
    
    
    
    
    3,100,900Debentures converted into stock
    
    
    936,200
    
    
    
    9,300
    
    
    
    665,700
    
    
    
    
    
    
    
    675,000Debenture conversion expense
    
    
    
    
    
    
    
    
    
    
    448,200
    
    
    
    
    
    
    
    448,200Comprehensive lossNet loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,285,000
    )
    
    
    (13,285,000
    )Other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,285,000
    )
    
    
    (13,285,000
    )Balances, June 30, 2005
    
    
    34,510,500
    
    
    $
    345,100
    
    
    $
    131,779,300
    
    
    $
    (125,081,300
    )
    
    $
    7,043,100
  6




---



##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 1. Basis of Presentation :
   2. Management Estimates and Assumptions :
  3. Stock Based Compensation :
 Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees
 Accounting for Stock-Based Compensation  Transition and Disclosure
  7




---



##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 3. Stock Based Compensation , continued:
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net loss, as reported
    
    $
    (10,977,100
    )
    
    $
    (2,402,700
    )
    
    $
    (13,285,000
    )
    
    $
    (6,279,200
    )Add: compensation expense
(credit) determined under
variable plan accounting
    
    
    
    
    
    
    (892,100
    )
    
    
    
    
    
    
    367,600Deduct: compensation expense
determined under fair value
based method
    
    
    (70,000
    )
    
    
    (14,500
    )
    
    
    (158,500
    )
    
    
    (30,700
    )Pro forma net loss
    
    $
    (11,047,100
    )
    
    $
    (3,309,300
    )
    
    $
    (13,443,500
    )
    
    $
    (5,942,300
    )Basic and diluted loss per share As reported
    
    $
    (0.32
    )
    
    $
    (0.09
    )
    
    $
    (0.41
    )
    
    $
    (0.23
    ) Pro forma
    
    $
    (0.32
    )
    
    $
    (0.12
    )
    
    $
    (0.42
    )
    
    $
    (0.22
    )
 4. Earnings per Share (EPS)
 Earnings per Share
 5. Equity
  8




---



##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 6. Restricted Cash :
  June 30,
    
    
    December 31,2005
    
    
    2004Collateral for Letter of Credit (a)
    
    $
    249,000
    
    
    $
    249,000Collateral for reclamation bonds and other contingent events (b)
    
    
    154,000
    
    
    
    152,400Kendall Mine reclamation (c)
    
    
    1,967,100
    
    
    
    1,945,900McDonald Gold Project cash reclamation bond (d)
    
    
    500,000
    
    
    
    500,000Net proceeds from property sales (e)
    
    
    274,800
    
    
    
    274,8003,144,900
    
    
    
    3,122,100Current portion
    
    
    274,800
    
    
    
    274,800Noncurrent portion
    
    $
    2,870,100
    
    
    $
    2,847,300
 (a)
    
    In connection with the issuance of certain bonds for the
performance of reclamation obligations and other contingent events at the Briggs
Mine, a bank Letter of Credit was provided in favor of the Surety as partial
collateral for such bond obligations. The Letter of Credit is fully
collateralized with cash and will expire no earlier than December 31, 2005, and
at the banks option, may be renewed for successive one-year periods.
 (b)
    
    Held directly by the Surety as partial collateral for reclamation and
other contingent events at the Briggs Mine.
 (c)
    
    Held directly by the Montana Department of Environmental
Quality in an interest bearing account for use in continuing reclamation at the
Kendall minesite. (See Note 12(a))
 (d)
    
    Held directly by the Montana Department of Environmental Quality for
reclamation at the McDonald Gold Property.
 (e)
    
    In connection with the auction of certain properties, cash has been
sequestered by court order. (See Note 12(e)).
 7. Inventories :
  June 30, 2005
    
    
    December 31, 2004Broken ore under leach
    
    $
    589,500
    
    
    $
    1,805,700Doré
    
    
    85,100
    
    
    
    100,700$
    674,600
    
    
    $
    1,906,400
  9




---



##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 8. Undeveloped Mineral Claims and Leases :
  June 30, 2005
    
    
    December 31, 2004McDonald
    
    
    Seven-Up
    
    
    Total
    
    
    McDonald
    
    
    Seven-Up
    
    
    TotalPete
    
    
    
    
    
    
    
    
    PeteGross carrying value
    
    $
    16,200,200
    
    
    $
    5,175,000
    
    
    $
    21,375,200
    
    
    $
    16,200,200
    
    
    $
    5,175,000
    
    
    $
    21,375,200Accumulated amortization (1)
    
    
    (6,958,100
    )
    
    
    (2,210,200
    )
    
    
    (9,168,300
    )
    
    
    (6,075,000
    )
    
    
    (1,940,700
    )
    
    
    (8,015,700
    )Impairment (2)
    
    
    (9,242,100
    )
    
    
    
    
    
    
    (9,242,100
    )
    
    
    
    
    
    
    
    
    
    
    Reclassification (3)
    
    
    
    
    
    
    (2,964,800
    )
    
    
    (2,964,800
    )
    
    
    
    
    
    
    
    
    
    
    Net book value
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    10,125,200
    
    
    $
    3,234,300
    
    
    $
    13,359,500
 (1)
    
    Amortization of these properties commenced in 2002 at the rate of
$2,671,900 per year. The properties were being amortized over eight years with no
residual value. (See the following footnotes).
 (2)
    
    On June 8, 2005, the Montana Supreme Court i) upheld the anti-cyanide
initiative, I-137, ii) affirmed the conclusion of the Montana Department of Natural
Resources and Conservation hearing examiner with respect to termination of the
Companys mineral leases with the State of Montana, and iii) denied the Companys
takings compensation claim. Accordingly, the Company wrote off its carrying value for
the McDonald mineral leases during the second quarter of 2005. (See Note 9).
 (3)
    
    During the second quarter of 2005, the Company determined that the Seven-Up
Pete property may have the potential to be economically developed using non-cyanide
technologies. Consistent with the provisions of EITF 04-02, the Company has i)
re-characterized the underlying mineral leases as tangible from intangible; ii)
re-classified their carrying value to a separate component of property and equipment on
the Companys consolidated balance sheet; and iii) ceased amortizing their carrying
value with effect as of June 1, 2005. Prior period carrying values have not been
re-classified on the Companys consolidated balance sheet because development of the
property using cyanide technology was uncertain at the time of adoption of EITF 04-02
due to the pending litigation of matters relating to the anti-cyanide initiative,
I-137.
 9. Impairment of Undeveloped Mineral Claims and Leases
 Accounting for the Impairment and Disposal of Long-Lived Assets
 10




---



##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 10. Notes Payable :
  June 30, 2005
    
    
    December 31, 2004Debentures (a)
    
    $
    825,000
    
    
    $
    2,424,000- discount
    
    
    
    
    
    
    (11,300
    )825,000
    
    
    
    2,412,700Current portion
    
    
    
    
    
    
    2,412,700Notes payable  Noncurrent
    
    $
    825,000
    
    
    $
    
 (a)
    
    In March 2003, the Company completed a private placement financing of
6%, two year convertible debentures, raising $3,299,000. The debentures require
quarterly interest payments, and the holders have the right to convert
principal to common stock of the Company, subject to certain adjustments, at
any time, at a conversion rate of $1.38 per share of common stock. For certain
investors, the common stock had a fair value at the commitment date in excess
of the conversion price resulting in a beneficial conversion feature. The
intrinsic value of the beneficial conversion was recorded as an addition to
paid in capital and a discount on the debt with the discount then amortized to
interest expense over the term of the debt using the effective interest method.
The discount was fully accreted as of February 28, 2005. The Companys stock
price at the end of June 2005 was $0.69.
 In March 2005, $924,000 of principal was repaid, $675,000 was
converted into units consisting of common stock and warrants and $825,000 of
the remaining debentures were extended to March 2011. The debenture holders
that converted were given terms of $0.721 per unit consisting of one share of
common stock and 0.5 warrant. The total number of shares issued for conversion
to common stock was 936,200. The number of shares issued was determined by
dividing $675,000 by $0.721 per unit.
 Interest expense for the debentures was approximately $12,300 and $55,700 for
second quarters of 2005 and 2004, and $41,600 and $111,000 for the first six
months of 2005 and 2004, respectively.
The Company had no accretion of debt discount for the second quarter of 2005.
Accretion of the debt discount included in interest expense was $15,300 for the
second quarter of 2004, and $11,300 and $31,000 for the first six months of 2005
and 2004, respectively.
 11. Asset Retirement Obligations :
   11




---



##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 11. Asset Retirement Obligations , continued:
 Balance, December 31, 2004
    
    $
    6,238,900Settlement of liabilities
    
    
    (1,039,500
    )Accretion expense
    
    
    67,000Balance, June 30, 2005
    
    
    5,266,400Current portion
    
    
    2,209,100Non current portion
    
    $
    3,057,300
 12. Commitments and Contingencies :
 (a)
    
    Kendall Mine Reclamation
  (b)
    
    Briggs Mine Surety Bonds
   (c)
    
    Contingent Liability
  12




---



##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 12. Commitments and Contingencies , continued:
  (d)
    
    Anti-Cyanide Initiative (I-137)
  (e)
    
    Kendall Mine Lawsuits
  
  13




---



##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 13. Derivative Instruments and Price Protection Arrangements :
  14. Income Taxes :
  15. Recently Issued Financial Accounting Standards :
 Accounting
Changes and Error Corrections Accounting Changes Reporting Accounting Changes in Interim Financial
Statements
 Accounting for Conditional Asset
Retirement Obligations  an interpretation of FASB Statement No. 143 Accounting for Asset
Retirement Obligations,
 Accounting for Stripping Costs Incurred during Production in the Mining Industry,
 14




---



##### Table of Contents



CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 15. Recently Issued Financial Accounting Standards , continued:
 Share-Based Payment Accounting for Stock-Based Compensation
 16. Subsequent Event :
  15




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Cautionary Statement for Purposes of the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995.
  Overview
     Critical Accounting Policies and Estimates
  16




---



##### Table of Contents







Results of Operations








Three Months Ended
    
    
    Three Months EndedJune 30, 2005
    
    
    June 30, 2004Average
    
    
    
    
    
    
    
    
    
    
    AverageGold
    
    
    Price Per
    
    
    Revenue
    
    
    Gold
    
    
    Price Per
    
    
    RevenueOunces
    
    
    Oz.
    
    
    $000s
    
    
    Ounces
    
    
    Oz.
    
    
    $000sDeliveries
Spot Sales
    
    
    2,607
    
    
    $
    432
    
    
    $
    1,126
    
    
    
    14,805
    
    
    $
    394
    
    
    $
    5,8262,607
    
    
    $
    432
    
    
    
    1,126
    
    
    
    14,805
    
    
    $
    394
    
    
    
    5,826Other transactions
Silver proceeds
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    2,607
    
    
    $
    436
    
    
    $
    1,137
    
    
    
    14,805
    
    
    $
    394
    
    
    $
    5,826




17



---



##### Table of Contents



Six Months Ended
    
    
    Six Months EndedJune 30, 2005
    
    
    June 30, 2004Average
    
    
    
    
    
    
    
    
    
    
    AverageGold
    
    
    Price Per
    
    
    Revenue
    
    
    Gold
    
    
    Price Per
    
    
    RevenueOunces
    
    
    Oz.
    
    
    $000s
    
    
    Ounces
    
    
    Oz.
    
    
    $000sDeliveries
Forwards
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    
    3,820
    
    
    $
    377
    
    
    $
    1,442Spot Sales
    
    
    4,972
    
    
    $
    428
    
    
    
    2,128
    
    
    
    15,525
    
    
    $
    393
    
    
    
    6,1084,972
    
    
    $
    428
    
    
    
    2,128
    
    
    
    19,345
    
    
    $
    390
    
    
    
    7,550Other transactions
Silver proceeds
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    144,972
    
    
    $
    430
    
    
    $
    2,139
    
    
    
    19,345
    
    
    $
    391
    
    
    $
    7,564
        18




---



##### Table of Contents



Liquidity & Capital Resources
    Outlook
 Summary
   Operations
     19




---



##### Table of Contents



Financing
    Contractual Obligations
  Payments due by PeriodLess than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 year
    
    
    1  3 years
    
    
    3  5 years
    
    
    5 yearsLong-term debt obligations
    
    $
    825,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    825,000Capital lease obligations
    
    
    24,900
    
    
    
    24,900
    
    
    
    
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    170,300
    
    
    
    80,600
    
    
    
    89,700
    
    
    
    
    
    
    
    Asset retirement obligations
    
    
    5,266,400
    
    
    
    2,209,100
    
    
    
    3,057,300
    
    
    
    
    
    
    
    Total
    
    $
    6,286,600
    
    
    $
    2,314,600
    
    
    $
    3,147,000
    
    
    $
    
    
    
    $
    825,000
 Other Matters
 McDonald Gold Project Anti-Cyanide Initiative
  20




---



##### Table of Contents



Kendall Mine
 Lawsuit and Preliminary Injunction
   Lawsuit Alleging Violations of the Federal Pollution Control Act
  Environmental Regulation
    21




---



##### Table of Contents



Federal Legislation
  Gold Prices, Price Protection Arrangements, and Associated Risks
  Recently Issued Accounting Standards
 Accounting
Changes and Error Corrections Accounting Changes Reporting Accounting Changes in Interim Financial
Statements
 22




---



##### Table of Contents



Accounting for Conditional Asset
Retirement Obligations  an interpretation of FASB Statement No. 143 Accounting for Asset
Retirement Obligations,
 Accounting for Stripping Costs Incurred during Production in the Mining Industry,
 Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Commodity Prices
  Interest Rates
  Foreign Currency
  23




---



##### Table of Contents



Item 4. Controls and Procedures
 Disclosure Controls and Procedures
   Changes in Internal Control Over Financial Reporting
  Incorrect application of generally accepted accounting principles regarding equity
compensation plans
 
    
    During the first quarter of 2004, the Company determined that its stock option
plans should have been recorded under variable plan accounting, as the plans allowed an
option holder to pay for the exercise price using the share withholding method. This
caused the Company to restate the consolidated financial statements included in its
2003 Form 10-K. Although the Company subsequently amended its stock option plans and
modified existing option agreements to no longer allow the share withholding method of
payment, no transactions occurred since that time to allow testing of the Companys
remediation efforts relating to this control deficiency as of June 30, 2005.
 Lack of adequate policies and procedures regarding the review and approval process of
complex calculations or unusual transactions
 
    
    During the second quarter of 2004, the Company determined that its
model used for impairment testing of the Briggs Mine was incorrect,
insofar as the revenue stream included ounces recovered from the leach
pad. The Company changed its model using only projected revenues from
in-ground reserves which resulted in earlier and more frequent
impairments than had previously been recorded. This caused the Company
to restate the consolidated financial statements included in its 2003
Form 10-K and for the first quarter ended March 31, 2004 included in
its Form 10-Q. As the Briggs Mine is the Companys only producing
asset, and no in-ground reserves existed at June 30, 2005, the Company
has been unable to test its remediation efforts relating to this
control deficiency as of June 30, 2005.
    
    Also during the second quarter of 2004, the Company determined that
its accounting for a 2003 private placement of convertible debentures
was incorrect.Specifically, a beneficial conversion feature and
related amortization expense should have been recognized for certain
subscribers that executed the subscription agreement on a date when
the conversion price was lower than the market price of the Companys
common stock. This caused the Company to restate the consolidated
financial statements included in its 2003 Form 10-K and for the first
quarter ended March 31, 2004 included in its Form 10-Q. As no
transactions of a similar complexity occurred subsequent to this
private placement, the Company has been unable to test its remediation
efforts relating to this control deficiency as of June 30, 2005.
 24




---



##### Table of Contents






    
    Increased involvement in the review and analysis by senior management of the
Companys financial statements.



    
    Added more rigorous policies and procedures regarding the review and approval
process for complex calculations and transactions.



    
    Engaged outside consultants with accounting expertise regarding unusual and
complex transactions.


25



---



##### Table of Contents






PART II OTHER INFORMATION





Item 1.
    
    Legal Proceedings









Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    None





Item 3.
    
    Defaults Upon Senior Securities
    
    None





Item 4.
    
    Submission of Matters to Vote of Security Holders














26



---



##### Table of Contents



Item 5.
    
    Other Information
    
    None
 
 Item 6.
    
    Exhibits
  27




---



##### Table of Contents



Exhibit List
 NUMBER
    
    DESCRIPTION3.1
    
    Articles of Incorporation of the Company, as amended (1)3.1.1
    
    Executed Certificate of Designations, dated December 26, 1990, as filed with the
Delaware Secretary of State on December 26, 1990 (2)3.2
    
    Bylaws of the Company, as amended (3)4.1
    
    Specimen Common Stock Certificate (4)4.2
    
    Specimen Warrant Certificate (5)4.4
    
    Rights Agreement dated March 20, 1997, between Canyon Resources Corporation and
American Securities Transfer & Trust, Inc. (6)4.5
    
    Specimen Debenture (7)10.1
    
    Change of Control Agreements, dated December 6, 1991, between the Company and Richard H.
De Voto and Gary C. Huber (8)10.1.2
    
    Change of Control Agreement executed May 3, 2005, between the Company and James K. B.
Hesketh (9)10.2
    
    Loan Agreement dated December 6, 1995, among CR Briggs Corporation as Borrower and Banque
Paribas as Agent (10)10.2.1
    
    Amendment No. 1 to Loan and Guarantee Agreements dated April 8, 1998, among CR Briggs
Corporation, Canyon Resources Corporation, and Banque Paribas as Agent (11)10.2.2
    
    Amendment No. 2 to Loan and Guarantee Agreements dated August 19, 1998, among CR Briggs
Corporation, Canyon Resources Corporation, and Banque Paribas as Agent (11)10.2.3
    
    Amendment No. 3 to Loan Agreement and Waiver dated July 8, 1999, among CR Briggs
Corporation and Banque Paribas as Agent (12)10.2.4
    
    Amendment No. 4 to Loan Agreement and Waiver dated March 26, 2001, among CR Briggs
Corporation and BNP Paribas, as successor-in-interest to Banque Paribas as Agent (13)10.2.5
    
    Amendment No. 5 to Loan Agreement and Waiver dated March 25, 2002, among CR Briggs
Corporation, Canyon Resources Corporation, and Banque Paribas, as Agent (14)10.2.6
    
    Amendment No. 6 to Loan Agreement and Waiver dated June 14, 2002, among CR Briggs
Corporation and BNP Paribas, as successor-in-interest to Banque Paribas as Agent (15)10.3
    
    Master Tax Lease dated December 27, 1995, between CR Briggs Corporation and Caterpillar
Financial Services Corporation (10)10.4
    
    Purchase Agreement dated September 25, 1997, between Phelps Dodge Corporation, acting
through its division, Phelps Dodge Mining Company, and CR Montana Corporation and Canyon
Resources Corporation (16)10.4.1
    
    Second Amendment and Supplement to Purchase Agreement dated September 17, 1999, between
Phelps Dodge Corporation, acting through its division, Phelps Dodge Mining Company, CR
Montana Corporation and Canyon Resources Corporation, and Seven-Up Pete Joint Venture (12)10.5
    
    Assignment of Royalty Proceeds, effective as of April 1, 2001, between Canyon Resources
Corporation and Franco-Nevada Mining Corporation, Inc. (17)14.1
    
    Code of Business Conduct and Ethics (18)16.1
    
    Letter regarding Changes in Registrants Certifying Accountants (19)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 Accounting 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 Accounting Officer pursuant to U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 28




---



##### Table of Contents



(1)
    
    Exhibit 3.1 is incorporated by reference from Exhibit 3.1(a) to the Companys Amended
Annual Report on Form 10-K/A for the fiscal year ended December 31, 2000.(2)
    
    Exhibit 3.1.1 is incorporated by reference from Exhibit 4 of the Companys Report on
Form 8-K filed with the Securities and Exchange Commission on December 26, 1990.(3)
    
    Exhibit 3.2 is incorporated by reference from Exhibit 3.2 of the Companys Annual
Report on Form 10-K for the fiscal year ended December 31, 1997.(4)
    
    Exhibit 4.1 is incorporated by reference from the Companys Registration Statement on
Form 8-A as declared effective by the Securities and Exchange Commission on March 18, 1986.(5)
    
    Exhibit 4.2 is incorporated by reference from Exhibit 4.2 of the Companys Quarterly
Report on Form 10-Q for the three months ended March 31, 2002.(6)
    
    Exhibit 4.4 is incorporated by reference from Exhibit 4 of the Companys Report on Form
8-K filed with the Securities and Exchange Commission on March 27, 1997.(7)
    
    Exhibit 4.5 is incorporated by reference from Exhibit 4.5 of the Companys Annual
Report on Form 10-K for the fiscal year ended December 31, 2002.(8)
    
    Exhibit 10.1 is incorporated by reference from Exhibit 10.20 of the Companys Annual
Report on Form 10-K for the fiscal year ended December 31, 1992.(9)
    
    Exhibit 10.1.2 is incorporated by reference from Exhibit 10.1.2 of the Companys Report
on Form 8-K filed with the Securities and Exchange Commission on May 4, 2005.(10)
    
    Exhibits 10.2 and 10.3 are incorporated by reference from Exhibits 4.9, 4.10, 10.22 and
10.23 of the Companys Annual Report on Form 10-K for the fiscal year ended December 31,
1995.(11)
    
    Exhibits 10.2.1 and 10.2.2 are incorporated by reference from Exhibits 10.2.1 and 10.2.2
of the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 1998.(12)
    
    Exhibits 10.2.3 and 10.4.1 are incorporated by reference from Exhibits 10.2.3 and 10.4.1
of the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 1999.(13)
    
    Exhibit 10.2.4 is incorporated by reference from Exhibit 10.2.4 of the Companys Annual
Report on Form 10-K for the fiscal year ended December 31, 2000.(14)
    
    Exhibit 10.2.5 is incorporated by reference from Exhibit 10.2.5 of the Companys Annual
Report on Form 10-K for the fiscal year ended December 31, 2001.(15)
    
    Exhibit 10.2.6 is incorporated by reference from Exhibit 10.2.6 of the Companys
Quarterly Report on Form 10-Q for the period ended June 30, 2002.(16)
    
    Exhibit 10.4 is incorporated by reference from Exhibit 2 of the Companys Report on Form
8-K filed with the Securities and Exchange Commission on October 9, 1997.(17)
    
    Exhibit 10.5 is incorporated by reference from Exhibit 1.1 of the Companys Report on
Form 8-K filed with the Securities and Exchange Commission on October 9, 2001.(18)
    
    Exhibit 14.1 is incorporated by reference from Appendix B of the Companys Definitive
Proxy Statement filed with the Securities and Exchange Commission on April 29, 2004.(19)
    
    Exhibit 16.1 is incorporated by reference from Exhibit 16.1 of the Companys Report on
Form 8-K filed with the Securities and Exchange Commission on November 15, 2004.
 29




---



##### Table of Contents



SIGNATURES
  CANYON RESOURCES CORPORATIONDate:    August 5, 2005
    /s/ James K. B. HeskethJames K. B. HeskethChief Executive OfficerDate:   August 5, 2005
    /s/ Richard T. PhillipsRichard T. PhillipsChief Accounting Officer 30




---



##### Table of Contents



Exhibit Index
 NUMBER
    
    DESCRIPTION3.1
    
    Articles of Incorporation of the Company, as amended (1)3.1.1
    
    Executed Certificate of Designations, dated December 26, 1990, as filed with the
Delaware Secretary of State on December 26, 1990 (2)3.2
    
    Bylaws of the Company, as amended (3)4.1
    
    Specimen Common Stock Certificate (4)4.2
    
    Specimen Warrant Certificate (5)4.4
    
    Rights Agreement dated March 20, 1997, between Canyon Resources Corporation and
American Securities Transfer & Trust, Inc. (6)4.5
    
    Specimen Debenture (7)10.1
    
    Change of Control Agreements, dated December 6, 1991, between the Company and Richard H.
De Voto and Gary C. Huber (8)10.1.2
    
    Change of Control Agreement executed May 3, 2005, between the Company and James K. B.
Hesketh (9)10.2
    
    Loan Agreement dated December 6, 1995, among CR Briggs Corporation as Borrower and Banque
Paribas as Agent (10)10.2.1
    
    Amendment No. 1 to Loan and Guarantee Agreements dated April 8, 1998, among CR Briggs
Corporation, Canyon Resources Corporation, and Banque Paribas as Agent (11)10.2.2
    
    Amendment No. 2 to Loan and Guarantee Agreements dated August 19, 1998, among CR Briggs
Corporation, Canyon Resources Corporation, and Banque Paribas as Agent (11)10.2.3
    
    Amendment No. 3 to Loan Agreement and Waiver dated July 8, 1999, among CR Briggs
Corporation and Banque Paribas as Agent (12)10.2.4
    
    Amendment No. 4 to Loan Agreement and Waiver dated March 26, 2001, among CR Briggs
Corporation and BNP Paribas, as successor-in-interest to Banque Paribas as Agent (13)10.2.5
    
    Amendment No. 5 to Loan Agreement and Waiver dated March 25, 2002, among CR Briggs
Corporation, Canyon Resources Corporation, and Banque Paribas, as Agent (14)10.2.6
    
    Amendment No. 6 to Loan Agreement and Waiver dated June 14, 2002, among CR Briggs
Corporation and BNP Paribas, as successor-in-interest to Banque Paribas as Agent (15)10.3
    
    Master Tax Lease dated December 27, 1995, between CR Briggs Corporation and Caterpillar
Financial Services Corporation (10)10.4
    
    Purchase Agreement dated September 25, 1997, between Phelps Dodge Corporation, acting
through its division, Phelps Dodge Mining Company, and CR Montana Corporation and Canyon
Resources Corporation (16)10.4.1
    
    Second Amendment and Supplement to Purchase Agreement dated September 17, 1999, between
Phelps Dodge Corporation, acting through its division, Phelps Dodge Mining Company, CR
Montana Corporation and Canyon Resources Corporation, and Seven-Up Pete Joint Venture (12)10.5
    
    Assignment of Royalty Proceeds, effective as of April 1, 2001, between Canyon Resources
Corporation and Franco-Nevada Mining Corporation, Inc. (17)14.1
    
    Code of Business Conduct and Ethics (18)16.1
    
    Letter regarding Changes in Registrants Certifying Accountants (19)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 Accounting 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 Accounting Officer pursuant to U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 * Filed herewith




---



##### Table of Contents



(1)
    
    Exhibit 3.1 is incorporated by reference from Exhibit 3.1(a) to the Companys Amended
Annual Report on Form 10-K/A for the fiscal year ended December 31, 2000.(2)
    
    Exhibit 3.1.1 is incorporated by reference from Exhibit 4 of the Companys Report on
Form 8-K filed with the Securities and Exchange Commission on December 26, 1990.(3)
    
    Exhibit 3.2 is incorporated by reference from Exhibit 3.2 of the Companys Annual
Report on Form 10-K for the fiscal year ended December 31, 1997.(4)
    
    Exhibit 4.1 is incorporated by reference from the Companys Registration Statement on
Form 8-A as declared effective by the Securities and Exchange Commission on March 18, 1986.(5)
    
    Exhibit 4.2 is incorporated by reference from Exhibit 4.2 of the Companys Quarterly
Report on Form 10-Q for the three months ended March 31, 2002.(6)
    
    Exhibit 4.4 is incorporated by reference from Exhibit 4 of the Companys Report on Form
8-K filed with the Securities and Exchange Commission on March 27, 1997.(7)
    
    Exhibit 4.5 is incorporated by reference from Exhibit 4.5 of the Companys Annual
Report on Form 10-K for the fiscal year ended December 31, 2002.(8)
    
    Exhibit 10.1 is incorporated by reference from Exhibit 10.20 of the Companys Annual
Report on Form 10-K for the fiscal year ended December 31, 1992.(9)
    
    Exhibit 10.1.2 is incorporated by reference from Exhibit 10.1.2 of the Companys Report
on Form 8-K filed with the Securities and Exchange Commission on May 4, 2005.(10)
    
    Exhibits 10.2 and 10.3 are incorporated by reference from Exhibits 4.9, 4.10, 10.22 and
10.23 of the Companys Annual Report on Form 10-K for the fiscal year ended December 31,
1995.(11)
    
    Exhibits 10.2.1 and 10.2.2 are incorporated by reference from Exhibits 10.2.1 and 10.2.2
of the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 1998.(12)
    
    Exhibits 10.2.3 and 10.4.1 are incorporated by reference from Exhibits 10.2.3 and 10.4.1
of the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 1999.(13)
    
    Exhibit 10.2.4 is incorporated by reference from Exhibit 10.2.4 of the Companys Annual
Report on Form 10-K for the fiscal year ended December 31, 2000.(14)
    
    Exhibit 10.2.5 is incorporated by reference from Exhibit 10.2.5 of the Companys Annual
Report on Form 10-K for the fiscal year ended December 31, 2001.(15)
    
    Exhibit 10.2.6 is incorporated by reference from Exhibit 10.2.6 of the Companys
Quarterly Report on Form 10-Q for the period ended June 30, 2002.(16)
    
    Exhibit 10.4 is incorporated by reference from Exhibit 2 of the Companys Report on Form
8-K filed with the Securities and Exchange Commission on October 9, 1997.(17)
    
    Exhibit 10.5 is incorporated by reference from Exhibit 1.1 of the Companys Report on
Form 8-K filed with the Securities and Exchange Commission on October 9, 2001.(18)
    
    Exhibit 14.1 is incorporated by reference from Appendix B of the Companys Definitive
Proxy Statement filed with the Securities and Exchange Commission on April 29, 2004.(19)
    
    Exhibit 16.1 is incorporated by reference from Exhibit 16.1 of the Companys Report on
Form 8-K filed with the Securities and Exchange Commission on November 15, 2004.