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

                                   FORM 10-KSB

(Mark One)

[X]  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934

     For the fiscal year ended JUNE 30, 1999

[_]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

      Commission file number 0-12761

                           J.A.B. INTERNATIONAL, INC.
                  --------------------------------------------
                 (Name of Small Business Issuer in Its Charter)

             NEVADA                                            88-0180496
  ------------------------------                             ---------------
 (State or Other Jurisdiction of                            (I.R.S. Employer
   Incorporation or Organization)                         Identification Number)


                 1013 Fairway Drive, Winter Park, Florida 32792
                     --------------------------------------
                    (Address of principal executive offices)

                                 (407) 629-7373
                 ----------------------------------------------
                (Issuer's telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act: NONE

Securities registered under Section 12(g) of the Exchange Act: COMMON, PAR VALUE
$.0001

Check whether the Issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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     No  X
                                                             -----  -----

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  Registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.

State  Issuer's  revenues for its most recent  fiscal  year:  $35,000 from sales
(timber), roughly $6,000 from interest off bonds.

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State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was sold,  or the average bid and asked  price of such  common  equity,  as of a
specified  date within the past 60 days.  As of March 30,  2000,  the  aggregate
market  value  of  the  Common  Stock  held  by  non-affiliates  of  the  Issuer
(23,758,365  common  shares)  was  approximately   $950,335,   The  most  recent
transaction  prior to March 30, 2000, had a purchase price in the amount of $.04
per  share  which  is the  amount  the  Registrant  used  for  purposes  of this
disclosure.

The number of shares  outstanding  of the Common Stock ($.0001 par value) of the
Issuer as of the close of business on June 30, 2000 was 6,419,455

Documents Incorporated by Reference: None

Transitional Small Business Disclosure Format:       Yes       No  X
                                                         -----   -----

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                                     Part I

Item 1.   Description of Business.

Background
----------

          Brush Creek Mining and  Development  Co.,  Inc.  (the  "Company")  was
incorporated  in 1982 and is engaged in the  exploration and development of gold
and diamond  mining  properties.  From its  incorporation  until April 1989, the
Company operated as a mining and mineral  development  company at which time its
mining operations,  conducted through the Brush Creek Joint Venture of which the
Company owned 40%,  were  terminated.  Shortly  thereafter,  the Company  became
actively engaged in acquiring  additional mineral  properties,  raising capital,
and preparing  properties for resumed  production.  The Company did not have any
significant  operations  or  activities  from April 1989 through June 1989,  and
suspended  all  mining  operations  and  reduced  its  activities  to a care and
maintenance  level.  Accordingly,  the Company is deemed to have  reentered  the
development stage effective July 1, 1989.

          The Company currently owns or leases 10 former producing gold mines in
the most famous  high-grade  gold district in California.  The Company's land is
assessed at $18,000,000  with a $1,000,000  mill plant on site and a $46,000,000
tax loss  carry-forward.  The Company currently has over 5,316 acres of patented
and  un-patented  lode and placer  claims.  Additionally,  the Company  controls
49,000 feet along a major gold  bearing  structure.  The  Company  owns both the
Brush  Creek upper and lower  mines,  as well as the  Carson,  High  Commission,
Gardner's  Point and Pioneer  Mines.  . In fiscal  1997,  the  Company  acquired
options to purchase  the New  California  Placer Mine and  Wilbank's  Placer and
Loade  Mine.  All of these  mines,  except for the  Gardner's  Point and Pioneer
Mines, are located in the  Allegheny-Forest-Downieville  mining districts on the
western slope of the Sierra Nevada  mountain  range in northern  California  and
comprise  approximately  18,000 acres.  Because of the proximity of the mines to
each other,  at such time as gold prices and mining costs make it cost effective
to  mine,  the  Company  believes  it can  efficiently  mine and  operate  these
properties  since it will be able to take  advantage  of  economies  of scale by
sharing personnel, mill facilities and equipment.

          Based on  previous  studies  completed  in December  1990,  management
believed  that the  Company's  mines had  sufficient  mineralization  to warrant
feasibility studies and in January 1991 engaged Keewatin  Engineering to conduct
and document  those studies.  The Company  received Phase I and Phase II reports
dated October 1992 from Keewatin  Engineering.  The Phase I and Phase II reports
were  exploration  and development  reports of the  Allegheny-Forest-Downieville
mining district and mining properties of the Company, including an evaluation of
the  underground  hard-rock  system and  surface  geology  studies  to  identify
precious metal rock units, and additional  structural geology studies within the
district.  The Ruby Mine was the  Company's  original  focus because of its rich
production  history and because permits were in place for placer  production and
hard rock exploration.

          The Company  filed its plan of operation for the Ruby and Carson Mines
with the United  States  Forestry  Department,  and has obtained  all  necessary
permits for continued  production and milling at the Ruby Mine of up to 225 tons
of material per day. In order to continue  the  underground  development  of the
Carson vein system, a more extensive geologic  evaluation using diamond drilling
on surface and subsurface  should be completed.  As this was a capital intensive
expense,  the Company  decided to detain further  development of the Carson Mine
until the Company decides to integrate this program into its future  development
budget.

          From February  1992 when the Company  began limited  production at the
Ruby Mine to December 1992 when the Company  ceased  production due to inclement
weather,  the Company  milled  approximately  7,300 tons of  mineralized  placer
material  and  recovered  approximately  200 ounces of gold,  an amount  that is
inconsistent  with  historical  production at the Ruby Mine in the early 1940's.
However, the Company's management believes that these preliminary results are

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too small to be a reliable  representative sample of the expected placer grades.
See "Mining  Properties"  under  "Properties"  for a detailed  discussion of the
mining properties controlled by the Company.

Merger with J.A.B. International Trading Co.
--------------------------------------------

          Effective April 14, 1999, the Company merged with J.A.B. International
Trading Co., a Florida corporation ("JAB"),  with the Company as the corporation
surviving  the  merger.  As a result  of the  merger,  the  shareholders  of JAB
acquired a controlling interest in the Company. Jefferson A. Bootes, the current
President and Chairman of the Board of the Company and the former  President and
a  controlling  shareholder  of JAB,  was  appointed as President of the Company
March  1,1999.  As a result of the merger,  Mr.  Bootes  received  approximately
3,000,000  shares  of Common  Stock,  or  approximately  50% of the  issued  and
outstanding common stock in the Company.

          JAB was  organized  in 1992 to engage in the  business  of mining  and
exporting  diamonds and gold from the Central African  Republic ("CAR") for sale
in the United States and Europe.  JAB decided to engage in this business because
of a long history of  involvement in the CAR,  which  included  researching  the
country and assessing its suitability as a site for a mining operation.

          In  1994,  JAB  acquired  a  CAR-registered   company  VOCAR  S.A.R.L.
("VOCAR").  VOCAR  holds  the  permits  to a mining  concession  located  in the
Southeastern  section of the CAR. The mining area is approximately  3,500 square
kilometers  in size with one major  river and  hundreds of  tributaries  flowing
through it.

          In 1997, JAB acquired an 80% stake in the "Esperanza  Gold Project," a
49,000 acre placer gold mine located in Southeastern  Honduras.  Under the terms
of the agreement JAB gave Esperanza mining company 50,000 shares of common stock
and a 3% Net  smelter  Royalty  for 2 years  for 80% of the  claim.  Only  minor
exploration  has taken  place to date,  but a full  geological  and  engineering
report is expected to be completed by mid 2000.

          By operation of the merger,  the properties and interests owned by JAB
are now owned by the Company.

Diamond Exploration
-------------------

          With  respect  to  the  former  JAB   properties,   during  the  early
development of the VOCAR project,  JAB initiated an exploration  program digging
over 50 test pits and  recovering  high-grade  diamonds  and gold.  These  tests
indicated  a yield of 0.23  carats of  diamonds  and 0.2 grams of gold per cubic
meter of gravel.  JAB has estimated that the property has over 20,000,000  cubic
meters of diamond and gold-bearing gravel.

The Company's Current Strategy
------------------------------

          1.   Honduras,. The company expects to begin a engineering and
               environmental impact study by mid-April 2000 with the purpose of
               filing with the Honduran government for final approval to begin
               logging operations and initial geological studies by June 1, 2000
               and limited test mining by July 2000. The company has signed an
               agreement with Universal Resources Group International (URG) to
               do the timber harvest on its property in Honduras The company
               will mine the gold behind the harvest, reclaiming the land and
               re-foresting the property as it goes. The project is expected to
               take 10 years to complete.

          2.   C.A.R.,  The Company plans to do several  inspection trips in the
               spring of 2000 to  establish  the best  location of its base camp
               and plant  locations.  Once the  locations  are  established  and
               financing in place JAB will ship the need  equipment and supplies
               by ship to Douala, Cameroon and then on to CAR by truck.

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               JAB  expects  to have its  first  plant  and base camp on site by
               October 2000 with  productions  set to begin by December of 2000.
               The  company  will have  geological,  engineering  and  valuation
               reports  conducted  along  with an  airborne  magnetic  survey to
               locate the kimberlite source of the diamonds. It is the companies
               plan to use a small amount of profits from the operation to build
               schools  throughout  the  country as well as sponsor  Doctors and
               Nurses on trips to the CAR to improve the education and health of
               the people.


          3.   Brush Creek Properties- The company plans to follow a clean up
               and abatement order from the Dept. of Conservation and the US
               Forest service to bring the properties up to code by July 2000.


               During the summer of 2000 the company will have a geologist  from
               A.C.A.   Howe  on  site  taking  all  previous   geological   and
               engineering  reports  completed  to date to produce one  cohesive
               report.  Once the company has  thoroughly  gone  through the past
               reports  a  10  month  exploration  program  will  commence  with
               geological  studies  to  be  completed  by  A.C.A.  Howe  Inter.,
               engineering and feasibility studies by SNC-Lavalin and valuations
               to be assessed by and Big 7 accounting firm. This process will be
               carried out for all of the Companies properties.

               The company also plans to  negotiate  with the owners of the Ruby
               and  Kate  Hardy  mines  for  the  possible   purchase  of  those
               properties.

               The  company  will   negotiate   with  the  State  of  California
               concerning  the  Gardner's  Point  property.   The  site  has  an
               estimated 35 Million tons of silica sand. The company  researched
               the   feasibility  of  the  operation  and  determined  that  the
               railheads were to far from the project site to make the operation
               profitable.  The  company  would like to have a spur run from the
               railhead  to a  location  close  enough  to the  site to make the
               project  profitable.  In  consideration  of this the  Company  is
               willing to propose  that after the mining  operation is completed
               the hole left by the mining  would be turned into a man made lake
               and the  property  donated  to the  state  as a  Ranger  station,
               research park and scout camp.

General
-------

          The Company  plans to file all past 10-K's and 10-Q's with the SEC and
then file a 15c-211 for  re-listing  on the OTC  exchange.  Further plans are to
have the Company listed on the American Stock Exchange as soon as practicable.

Brush Creek Properties
----------------------

          During fiscal 1998, the Company pursued a joint venture partner, which
it began in fiscal 1997. In November 1997, the Company successfully  concluded a
mining  agreement with Sterling  Mining,  LLC that called for payments  totaling
$9,000,000.  Subsequently,  in February 1998, the lead  negotiators for Sterling
Mining agreed to  contribute  an additional  $6,000,000 to the Company under the
name of Volcanic  Resources,  LLC.  The monies  were to be paid in over  several
years.  The initial  venture  contributions  were primarily used for exploratory
mining,  which was conducted in the Lower Brush Creek Mine. Initially 9,000 tons
of  remnant  pillars  surrounding  the Golden  Gate Ore Shoot and  approximately
50,000  tons  of  material  also  situated  above  track  level  and  previously
identified as  prospective  were  targeted.  Pillar number one,  adjacent to the
dyke,  yielded  high-grade  specimen gold until Company miners  discovered that,
contrary to maps in the Company's possession, its top had been previously mined,
presumably  by a lessor.  Pillar number four also proved to have been mined more
extensively than expected. The remaining material in the pillar was below ore

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grade. At about the same time, Company mining engineers and geologists concluded
that  stopping  on the fifth and sixth  levels of the  Golden  Gate Shaft to the
south of the ore shoot and underhand  stopes on the Peavine level might indicate
the presence of an ore shoot.  Extensive  exploratory  mining  produced  several
rounds of encouraging high grade gold. Other rounds were barren, but many showed
visible gold. Overall, the effort was inconclusive.

          During 1998, the Company  planned for and began  construction of a new
tailings disposal pit on the Carson site. Finally,  the Company investigated the
potential for mining silica at two of its mine sites. Plans during 2000 were for
developing  operations  for  silica.  However,  after  several  months,  it  was
discovered that transporting the material from the site to the rail head was too
great for the project to be profitable at this time.

          The Company has two types of gold deposits,  placer  deposits and lode
deposits.  The area has been successfully  mined since the mid-1800's,  however;
even so,  experts  that have  tested the site have stated that only about 10% of
the gold in the ground has been extracted. The Company believes that some of the
properties can be brought on line immediately while also conducting an extensive
exploration program.

Exploration
-----------

          Starting in  mid-2000,  the Company  intends to enlist the services of
SNC-Lavalin  Engineering and A.C.A.  Howe  International to begin an underground
drilling program,  starting with the upper (now "Devine Intervention") and lower
Brush Creek  properties,  Gardner's Point and the Carson mine. The Company plans
to  conduct  preliminary  exploration  and  pre-engineering  studies.  This will
include a study of the previous records,  sampling of the ore deposits, and test
mining selected areas.

CAR Properties
--------------

          Diamonds are commercially mined all over the world, the method used to
extract the minerals and the  specialized  equipment  that is used vary based on
the type of deposit.  The following briefly describes the two different types of
deposits.

          Kimberlite:  These are the volcanic  columns that  originally  brought
diamonds to the surface over 20 million years ago. In the mining industry, these
are known as the  primary  source.  The largest of these has  measured  over 800
meters  across,  though the  average is  approximately  250 meters  with  depths
reaching over 500 meters.

          Alluvial:  Also  known as a placer  deposit,  alluvial  means that the
minerals  have been moved by water.  These  deposits  are found mainly under the
river basins,  and their presence is due to rain and erosion that has washed the
diamond bearing gravel into the valleys where they have been concentrated by the
rivers.

          The Company's  diamond project in the Central Africa Republic  ("CAR")
is an  alluvial  mining  operation  with  an  exploration  plan  to  locate  the
Kimberlite source. The following mining plan will outline the specialized nature
of this operation the equipment,  personnel,  logistical support, communications
and security needed to make this venture successful.  There has been no activity
on this project in fiscal 1999 or 2000. Representations made are forward looking
on planned development and production.

          Phase I. Strip mining  riverbanks by removing clay and some overburden
to reach and extract the diamond bearing gravel.

          Phase II. The mining equipment to be used for Phase II of this project
has been custom designed  specifically for this project by Aztec Development and
International  Resource  Development ("IRD"). The machinery that they will build
and install will be placed on steel barges built by Suggart Manufacturing.

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          o    Stage one is the "Underwater Dredging System" designed and built
               by Aztec Development. The system is actually a converted backhoe
               attached to a 10" dredge pump. An extended reach arm with a
               1-1/2yard bucket is used for the actual digging, a 10" hose is
               fitted to the back of the bucket that connects to the dredge pump
               on the barge. The bucket is used to scoop up the river gravel;
               the loose material is forced into the bucket and is then sucked
               through the hose to the recovery unit.

          o    Stage two is the recovery unit or wash plant. This unit will be
               manufactured by IRD. This equipment processes the recovered
               material. First, the material is washed under very high pressure
               to remove any clay or sand. Then, the gravel is put through a
               Trommel, a two-stage rotating cylinder, where the first stage
               scrubs and breaks up any cemented gravel and the second stage
               separates the material into different size classifications. The
               separated material is then fed into jig plants that reduce the
               material down to a concentrate for sorting.

          Some areas of the river have gravel depths greater than the dredge can
reach,  for those areas a clamshell  dredge  will be used.  For the  riverbanks,
bulldozers  will be used to strip the over burden,  and backhoes will be used to
extract the gravel.  In all, the Company will use five barges  dredging  plants,
two clamshell  dredges,  two  bulldozers,  four  backhoes,  and two 30-yard dump
trucks.  The  Company  will need to lease or purchase  four 4 x 4 vehicles,  two
boats and a C-130  cargo  plane  when it  reaches  full  production.  Project is
scheduled to start in October of 2000 after the rainy season ends in August.  It
will take approximately 60 days to begin production.

          Base Camp. The heart of the operation will be the base camp.  Over two
years of work has gone into its planning and design  alone.  The location of the
camp with respect to the over all mining  operation is very important.  The camp
location  that has been chosen has several  features  that make it ideal for the
Company's purposes:

          1.   The site is on the  banks of a key  tributary  1/2-mile  from the
               major river that flows. through the property;
          2. The site has  access to two of the main  roads in the area;  3. The
          site is on high ground and will not be affected  by  flooding;  4. The
          site is centrally  located  within the mining area;  and 5. The site's
          remoteness lends to the Company's security needs.

          The  camp  will be  divided  into  three  areas:  office,  living  and
maintenance.  The offices will be located in a 6,000 square foot  building  that
will also house the kitchen  and dining  area.  The living area will  consist of
three  buildings  with each  having  eight  apartments  and a common  area.  The
maintenance  area will be a 3,500 square foot metal building that will store all
the spare parts, tools, fuel tanks and equipment needed for the operation.

          JAB  has  worked  closely  with   Exploration   Products  of  Spokane,
Washington on the development of the base camp. This company  specializes in the
design,  installation  and  logistical  support of remote camps  throughout  the
world.  Exploration  Products  has  designed  the camp for our  project and will
handle the ordering, shipping and installation of the camp components in Africa.

          Logistics.

               1. Dredge Locations. Working with the Company's mining engineers
and geologists, the Company has established some of the locations that the
dredges will be placed as the starting points for the operation.

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               2. Sub-Camps.  There will be sub-camps  installed in remote areas
to support the dredging  operations  that are too far from the base camp.  These
camps will include living accommodations,  kitchen, communications, security and
basic maintenance needs.

               3.  Communications.  A digital  satellite  phone  system  will be
installed  for this  operation  with three  stations  located  at the  Company's
corporate headquarters in Orlando, Florida, VOCAR offices in Bangui, C.A.R., and
at the campsite. The system will allow the Company to send voice data and e-mail
on secure  lines of  communication  anywhere  in the world.  The system  will be
designed, installed and leased through Tele Data.

               4. Security.  The security needs for the operation are one of the
Company's  highest  priorities.  Due to the sensitive nature of this project and
given the general region of the world where the Company will be doing  business,
the Company has seen the need to consult experts in this field to devise a total
security  package.  The  security  needs have been  broken down into four areas;
however, for security reasons exact procedures, equipment and schedules will not
be outlined in this Memorandum.

                  a. Base  Camp.  The camp  security  will be insured on several
levels. The first is the remote location of the camp itself, where there will be
only one  access  road  into the camp  with a guard  gate at the  entrance.  The
Company will install  three rows of perimeter  fencing  topped with barbed wire,
high-powered  light towers and sophisticated  detection devices  surrounding the
camp.  There also will be an underground  vault  installed to store the diamonds
and gold.  Security guards with attack dogs will patrol the entire area 24 hours
a day.

                  b. Dredges. The recovery units will be equipped with security
measures so that no one person can have access to the recovered material. Three
times a day, a security detail with two supervisors will clean out the machines
and bring the concentrate back to the base camp.

                  c.  Transporting  the Diamonds to Bangui.  Twice a month,  the
diamonds and gold will be transported from mining area to Bangui to be evaluated
for export taxes.  For this purpose,  the Company will fly the material from its
private airstrip to the International  Airport in Bangui. The Company's security
personnel  and  government  troops  will move the parcel from the airport to the
Ministry of Mines.

                  d.  Transporting  the  Diamonds to the U.S. The parcel will be
taken to the  airport in the same  manner as it came.  The parcel will be loaded
onto the Company's private aircraft and transported directly to the U.S.

               5. Supplies.  Supplies will be brought in quarterly from the U.S.
and  France by  Commercial  Airlines,  and then  flown to the base camp by cargo
plane. Some food items such as vegetables and meat will be produced at the site.
The  Company  intends to maintain a  one-year's  supply of spare parts to ensure
that the operation  does not stop for any extended  period of time.  The Company
also has established the necessary contacts to replace parts or equipment within
seven days.

               6. Shipping.  The Company  intends to establish a staging area in
Houston, Texas to store containerized  equipment for further shipping to Doaula,
Cameroon.  This will include the base camp and the wash plants spare parts.  All
of the motorized  equipment such as flat bed truck,  backhoe,  clamshell dredges
and 4 x 4 vehicles will be shipped out of Jacksonville, Florida. From Doaula the
equipment will be taken to the mining area by truck or cargo plane.  We estimate
that it will take 60 days to ship the cargo from the U.S.  to the mining site in
the C.A.R.

          Personnel. The Company intends to employ a large number of people both
in the U.S. and in the CAR in order to support its CAR mining operation. With
offices in Orlando, Florida; Bangui; CAR; and at the mining site, the Company

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will require an array of skilled  people to make its operation  successful.  The
following is a breakdown of the personnel  requirements  for the CAR mining site
in the initial stages of the operation.

              1 - Project Supervisor           12 - Heavy Equipment Operators
              2 - Assistant Supervisors         4 - Wash Plant Operators
              1 - Mining Engineer              12 - Truck Drivers
              4- Geologists                    20 - Security Guards
              3 - Office Staff

          The Company  intends to enlist the services of Big 5  accounting  firm
Deloitte & Touche to prepare our 2000 audit and another auditing firm to prepare
a valuation of the mining project. The Company intends to enlist the services of
some of the  biggest  names in the  mining  industry  to supply  the  mining and
support  equipment needed for this project.  Some of these individuals will also
act as consultants for the on going operation,  they will include:  James Noble,
President of International  Resource  Development,  manufacturers of the mineral
recovery plants,  Troy Deal,  President of Aztec Development Inc.,  Inventor and
Manufacturer  of the under water dredging  system,  and Harold  McGuire,  Mining
Engineer and,  Designer and supplier of the base camp.  Also,  numerous  jewelry
manufacturers  and  diamond  wholesale  buyers in Europe and the U.S.  have been
contacted  and are willing to buy the entire  diamond  production as soon as the
operation begins.

          Geological and Feasibility  Studies.  In order to establish if an area
is suitable  for a mining  operation,  certain  studies  and  reports  have been
completed in order to confirm that the proposed  site has a  significant  enough
presence of minerals to substantiate the cost of extraction.

          The  former  JAB  spent  years  studying  the CAR  properties  and its
potential as a viable  mining  venture.  The data gathered so far has shown that
the VOCAR area will produce in excess of 0.23 carats of diamonds per cubic meter
and 0.2 grams of gold as well; however, no assurance thereof can be given.

          1. Explore two possible  sites at wash plant we will be evaluating two
sites  within the mining area for our base camp.  We plan to make two trips with
representatives  of A.C.A.  Howe  during  the spring of 2000  (before  the rainy
season of June - August) to determine  the most  suitable site base on access to
roads and waterways, closeness to site of initial mining area.

          2. Ship  equipment for start-up in October  2000.] It takes 30 days to
ship from the US to Douala, Cameroon,  another 30 days for trucking to site with
a stop in Bangui, CAR to register equipment and pay import fees.

          For this  venture,  the  Company  will be  retaining  the  services of
qualified available geologists and engineers to produce the necessary geological
and feasibility  studies to substantiate its claims.  A.C.A. Howe  International
has prepared the initial geological report for the CAR.

          The Company intends to retain the services of SNC-Lavalin Engineering,
Inc., an environmental  and mining  engineering firm out of Toronto,  Canada, to
complete the engineering and feasibility study for the projects.

          The Company  intends to retain the services of Fugro Airborne  Surveys
Corp. to complete a high-resolution  airborne magnetic and geophysical survey of
the CAR project area.  This study will show the exact location of the kimberlite
pipes in the area.

          Investment Risks. Mining for diamonds and gold in three different
parts of the world is a difficult and expensive task. In order to protect the
Company and its shareholders from potential loss, careful planning has gone into
the structuring of all phases of the VOCAR CAR project. Even with all the hard


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work and planning  that has gone into this  venture,  investors  should be aware
that this is a risky undertaking.  The following will outline the steps that the
Company has taken to remove as much of the risk as possible.

               1. Security.  The Company has consulted with security  experts to
assist in the  design  of all mine  sites  security  and  surveillance  systems.
Securing the safe transport of the diamonds to the U.S. is one critical concern,
with the help of the security  consultants;  the Company has  developed a secure
means of  transporting  the  diamonds  out of Africa.  The Company  also will be
retaining an outside  security company to handle the security of our gold mining
sites to prevent theft.

               2.  Personnel.  From the outset the people  associated  with this
project have been chosen for their experience and reputation in their respective
fields.  A great  amount of time has gone into  researching  this project and in
finding the experts and key personnel that will be working on this project.

               3. Insurance. The Company has registered with Overseas Private
Investment Corporation for political risk insurance. This U.S. government agency
insures American companies and their investors against political violence,
hostile takeovers and expropriation by the host government.

Competition
-----------

          The Company  operates in an industry that is  characterized by intense
competition  for  resources,  equipment  and  personnel.  Some of the  Company's
principal  competitors are  substantially  larger,  have  substantially  greater
resources,  and expend  considerably larger sums of capital than the Company for
exploration, rehabilitation and development.

Governmental Regulation
-----------------------

          The  Company's  mining   facilities  and  operations  are  subject  to
substantial  government  regulation,  including  federal,  state and local  laws
concerning mine safety, land use and environmental protection.  The Company must
comply  with  local,  state  and  federal  requirements   regarding  exploration
operations,  public safety,  employee health and safety, use of explosives,  air
quality,  water pollution,  noxious odor, noise and dust controls,  reclamation,
solid waste, hazardous waste and wildlife, as well as laws protecting the rights
of other property owners and the public.  Although the Company  believes that it
is in substantial  compliance with such regulations,  laws and requirements with
respect to the mines  currently  in  operation,  failure to comply  could have a
material adverse effect on the Company,  including substantial  penalties,  fees
and expenses,  significant delays in the Company's  operations and the potential
shutdown of the  Company's  operations.  The Company must also obtain and comply
with local, state and federal permits,  including waste discharge  requirements,
other  environmental   permits,  use  permits,  plans  of  operation  and  other
authorizations.  Obtaining these permits can be very costly and take significant
amounts of time.  Although the Company foresees no material  problems or delays,
no assurances can be given that the Company can obtain the necessary  permits or
commence mining operations,  or that, if permits are obtained,  there will be no
delay in the  Company's  operations  or that the Company can  maintain  economic
production in compliance with the necessary permits.

Employees
---------

          As of June 30,  2000,  the Company had one  full-time  employee.  When
operating  funds are obtained,  employees will be hired to operate the Company's
Central African Republic,  Northern  California and Honduras  properties and the
Company's corporate offices in the United States.

                                       10





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Major Customers
---------------

          The  Company is not  dependent  upon one or a few major  customers  or
suppliers.

Costs and Effects of Compliance with Environmental Laws
-------------------------------------------------------

          The Company  complies with all applicable  federal,  state,  and local
environmental  laws and  regulations,  none of which the Company believes have a
material   effect  on  its  operations  and  business.   JAB  is  currently  See
"Governmental Regulation."

Item 2.   Description of Property.

Office Space
------------

          The Company intends to lease approximately 5,800 square feet of office
space located in NYC, for a monthly rental of approximately $30,000. The Company
also will be  obligated  to pay its pro rata share of any  increase in operating
costs incurred by the landlord with respect to the leased premises. The proposed
lease is for a 2-year term. The Company  believes that these facilities will not
be  adequate  to  serve  the  Company's  needs  for the  next 2 years  and  that
approximately 35,000 feet of additional space will be required.

Mining Properties
-----------------

          The Company is currently in default on property taxes to Sierra County
in the sum of  $604,833.52.  The  properties at risk of a tax sale are the Upper
and Lower Brush Creek mines,  Gardner's  Point,  Carson and the High  Commission
mines.  The  company has made  arrangements  to pay the tax's  immediately  upon
completion of a debt funding that is due to fund my the end of March 2000.

          The following is a discussion of the mining  properties  controlled by
the Company.  The Company began geological and engineering studies on all of its
mining  properties in January 1991.  The Company  received  Phase I and Phase II
Reports,  the  most  recent  of which is dated  October  1992,  following  these
studies.  The Company has not completed  sufficient  geological  activities  and
drilling to  establish  proven or probable ore reserves for its mines other than
with  respect to  Gardner's  Point.  The  Company  has no present  intention  of
conducting  further  geological  exploration and drilling to search for economic
mineralized material for its mining properties.

          The Company commenced limited  production  operations at the Wolf vein
and Lawry area placer gravels at the Ruby Mine during the fiscal year ended June
30,  1996;  however,  limited  production  was  suspended in October 1996 as the
Company  focused its efforts on  rehabilitating  the lower Brush Creek mine.  In
early 1997,  the Company began  preparing the lower Brush Creek Mine for limited
production.  In June 1997, the Company  received interim approval from the U. S.
Forest Service to transport thirty tons of mineralized material per day from the
lower Brush  Creek Mine to the Ruby mill site.  The Company is in the process of
writing its plan for the operation of the Forest Service.  Since the Company has
not  commenced  economic  production,  it is  still  considered  to  be  in  the
development  stage.  Further  work at these  mines  is  subject  to the  Company
receiving additional financing.  There can be no assurance that the Company will
obtain any required  financing or any part thereof.  In the event the Company is
unable to raise the required financing, the Company will be forced to scale back
its operations.

Brush Creek Mine.
-----------------

          The Company owns the Brush Creek Mine,  which the Company  acquired in
1982.  The Brush Creek Mine is an  underground  lode gold mine located in Sierra
County,  California,  approximately eight miles west of the town of Downieville,
California. It consists of eight patented mining claims comprising approximately

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<PAGE>


245 acres and 45 un-patented  mining claims comprising  approximately 960 acres.
There are no proven or probable reserves at this time. The Company believes that
all regulatory requirements are up-to-date and approved.

          All of the un-patented  claims in the mineral  property package are in
good standing  tax's are due on these  properties as well with  assessment  work
documents  for 1997  filed  with  both the  Bureau of Land  Management  (BLM) in
Sacramento and Sierra County in  Downieville.  The patented  claims of the Brush
Creek Mine are not fully permitted for underground exploration,  development and
production. A waste discharge permit is required and a plan of operation must be
filed with the U.S.  Department of Forestry and Sierra County before  full-scale
mining may begin.  The Company intends to obtain such permit or file a plan when
feasible.

          The Brush Creek Mine was opened in 1868 when the old Brush Creek Shaft
was sunk to a depth of  approximately  600 feet.  Reports  indicate that between
1868 and 1870 it produced  approximately 19,632 ounces of gold. Between 1870 and
1944,  operations  at the Brush Creek Mine were limited.  In 1870,  the mine was
closed  due to  poor  ground  conditions,  flooding  of the  shaft  and a  fatal
accident.  In 1922, the Ante Up Mining Company drove a 2,200-foot  drift,  which
eventually  connected  with the old Brush  Creek  tunnel.  In 1927,  shafts were
driven into the Brush Creek Mine by the Kate Hardy Mining Company.  Between 1870
and 1994,  production  records are sparse.  Reports during this period  indicate
that 223 ounces of gold were  produced in April of 1929.  Between 1944 and 1950,
A.L. Merritt made additional  improvements to the Brush Creek Mine including the
sinking of the Golden Gate Shaft to a depth of  approximately  647 feet.  Mining
activity  occurred  between 1978 and 1979 when new equipment was installed and a
new level was started. This activity ended when the Brush Creek Mine was flooded
due to a power failure in 1979.

Gardner's Point and Pioneer Mines.
---------------------------------

          The Company owns the  Gardner's  Point and Pioneer  Mines,  which were
acquired  by the  Company in 1985.  The mine has been in a care and  maintenance
status since October  1988.  There are no permits in place at this time for this
mine other than annual storm water  permits.  The Company  intends to eventually
operate the mine.  The current cost of repair and  maintenance  to maintain this
mine idle is  approximately  $50,000  plus  $180,000 in  additional  reclamation
bonding.

          Based upon its  feasibility  studies,  the Company  believes  that the
Gardner's Point gold placer deposit contains a probable reserve of approximately
9,810,000  bank cubic yards  ("bcy") with an estimated  average  grade of 0.0221
ounce of gold per bcy  resulting in an estimated  total amount of  approximately
216,000 contained ounces of gold. The property contains an estimated  35,000,000
tons of  high-grade  silica sand as well.  No  assurance  can be given that such
results  will be  achieved  or that  any  gold  will be  successfully  mined  at
Gardner's Point.

          The Gardner's Point and Pioneer Mines include two placer mines located
on the same parcel of land comprising  approximately 700 acres.  These mines are
approximately  10 air miles northwest of Downieville and three air miles east of
La Porte in Sierra County,  California in the Port Wine Gold Mining Region.  The
Gardner's  Point and  Pioneer  Mines are  approximately  12.5 air miles from the
Company's  other  mines.  These  mines  consist of three  patented  claims,  the
Pioneer, the Comet, and the Challenge, and two un-patented claims.

          In 1985, the Brush Creek Joint Venture,  consisting of the Company and
two other  companies,  purchased  all  patented  and  un-patented  claims of the
Gardner's  Point and Pioneer Mines.  The venture  produced  approximately  2,800
ounces of gold from operations  before the partners decided in August of 1988 to
suspend  operations  at  the  Gardner's  Point  and  Pioneer  Mines  and  reduce
operations to a care and  maintenance  level.  The  Gardner's  Point and Pioneer
Mines were subsequently  purchased by the Company in connection with a change of
control of the Company in 1989.

                                       12





<PAGE>


<PAGE>


          The Gardner's  Point and Pioneer  Mines have a Yuba-Lowe  trommel that
contains new interior screens and a water hutch. Additionally,  the property has
a  two-story  gold  recovery  building  that  houses a large  Deister  table and
associated  equipment  for gold  recovery.  The Company has spent  approximately
$100,000 to upgrade and improve water quality measures on these mines.

Ruby Mine
---------

          Pursuant to a leasehold  interest acquired in 1989, the Company leased
the Ruby Mine with an option to  purchase  for  $4,000,000.  The Ruby Mine is an
underground  placer and lode mine located  between  Downieville and Forest City,
California in Sierra County.  The Company  defaulted on its lease payments.  The
landowner  obtained  a default  judgment  against  the  Company  for back  lease
payments and damages plus court costs..

          In December of 1989,  the Company  issued 100,000 shares of its Common
Stock that it used to  purchase an option to lease the Ruby Mine and to purchase
equipment  located on the site.  In March of 1990,  the Company  paid $50,000 to
extend the option period to April 30, 1990. In April of 1990, the Company issued
an additional  125,000  shares of its common stock in order to extend the option
period to June 30, 1990.  The Company  exercised  the option on June 30, 1990 by
paying the owner $150,000 cash, which represents lease  consideration of $50,000
and a $100,000  down payment on the purchase of the  equipment.  To complete the
equipment purchase,  the Company agreed to pay an additional $100,000 in cash in
three equal semi-annual installments, all of which have been paid.

          Pursuant to the terms of the lease,  which was most recently  modified
on March 27,  1997,  the Company  must pay a 7-1/2% net  smelter  royalty on all
minerals  produced from lode  deposits and 10% on minerals  produced from placer
deposits  with a minimum  lease  payment of $13,066 per month  through  June 30,
2000,  subject to an adjustment  based on the Consumer Price Index.  The mineral
property may be purchased  for  $4,000,000  subject to  adjustment  based on the
Consumer Price Index payable by June 30, 2000.  All payments made  subsequent to
July 1, 1995, to acquire the  lease/option and all payments made under the lease
subsequent to July 1, 1995, will be credited  against the option purchase price.
Performance  under the lease  purchase  agreement  was secured by the  Company's
equipment used in the mining operations on the leased premises.


          During 1997, the Company  negotiated  modification  agreements for the
Ruby Mine and the Rising Sun Mine (see below) to pay,  in cash,  one month lease
payment in arrears, increase the amount of equipment held as collateral pursuant
to the Ruby Mine and the  Rising  Sun Mine  lease  agreements  by  filing  UCC-1
financing  statements  listing the additional  equipment,  all right,  title and
interest of certain "ore  specimens" for which Ruby  Development  Co., Inc. will
credit  the value  against  past due  minimum  royalty  payments  and grant Ruby
Development Co., Inc. an option to purchase up to 50,000 shares of the Company's
common  stock at a price of $.25 per share  until July 1, 1999.  The Company has
not made any  payments  on this lease  since  June of 1998,  and the lease is no
longer in effect.  Ruby  Development  and Rising Sun (owned by the same  family)
filed  lawsuits  against  Brush Creek and were awarded  default  judgments.  The
company  maintains that it was never properly served on these suits and plans to
appeal.


Rising Sun Mine.
---------------

          The  Rising  Sun  Mine  is  an  underground  lode  gold  mine  located
approximately  three miles  southeast of Allegheny,  California.  Pursuant to an
interest acquired in 1989, the Company leases the Rising Sun Mine with an option
to purchase for $1,000,000.  The Company owes a minimum monthly lease payment of
$5,213, but is delinquent in payment].  There are no proven or probable reserves
in this mine at this time. The mine is currently idle.  Regulatory  requirements
before the mine is operational include: approved Use Permit from lead agency of


                                       13





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Sierra County; Plan of Operations from U. S. Forest Service; Waste Discharge
Permit from California Water Quality Control Board; approval from California
Fish and Game; and approval from Northern Sierra Air Quality Board.

          In December of 1989,  the Company  issued  10,000 shares of its common
stock for an option to lease the Rising Sun Mine. On June 30, 1990,  the Company
exercised  the option upon  payment of $20,000 cash and entered into a five-year
lease with an option to purchase.  Pursuant to the terms of the lease, which was
most recently  modified on November 11, 1994, the Company must pay a net smelter
royalty of 8% on all  minerals  produced,  with a minimum  royalty of $4,590 per
month  through June 30,  2000,  subject to an  adjustment  based on the Consumer
Price Index. The mineral property may be purchased for $1,000,000  payable on or
before June 30, 2000,  subject to adjustment  based on the Consumer Price Index.
All payments  made to acquire the  lease/option  and all payments made under the
lease will be credited against the option purchase price. (See the discussion of
the Ruby Mine above for information on the modification  agreement  entered into
in 1997.) The  Company  has not made any  payments  on this lease  since June of
1998. The lease was in default,  the Company was sued and a default judgment was
given.  The Company claims that it was never properly  served and is planning to
appeal.

          There are a generator,  compressor, rock drills, and a mucking machine
located on the mineral  property.  The overall  ground  condition of the mine is
good.  Since the early  1960's,  the Rising Sun Mine has  operated on a care and
maintenance  level only.  Currently,  however,  the Company is driving  around a
caved in area in an  attempt  to get to the face of the drift  where  high-grade
assays  have  been  reported.  The  Company  also  is  attempting  to  find  the
potentially high-grade intersection of the Belmont and Rising Sun veins.

          The Rising Sun Mine is  accessible  via Kanaka  Creek Road, a graveled
road. The mineral property will require on-site generators to supply power.

Carson Mine.
-----------

          The Carson Mine is located in Sierra County, California, on the
western slope of the Sierra Nevada Mountain Range. The Company owns the Carson
Mine that was acquired in July 1990. There are no proven or probable reserves at
this mine at this time. The mine is currently idle. The regulatory requirements
of this mine are under the same Plan of Operations as for the Ruby Mine: i.e.,
the Company is waiting for approval from the U. S. Forest Service Renewal
three-year Plan of Operations. There are no other regulatory permits to make the
mine fully operational.

          Access to the Carson Mine is by a two-mile dirt road that connects the
Henness  Pass Road,  an all weather  paved road.  The nearest  large  population
center is Grass Valley, about 40 miles south of the site. Downieville is located
two miles north of the Carson Mine. Allegheny,  California is approximately four
miles south of the Carson Mine.  The Carson Mine,  also known as the City of Six
Mine, is an underground  mine and consists of 21 un-patented lode claims and two
un-patented placer claims comprising approximately 550 acres.

          A 30-foot winze is operable in the same areas as the raise.  The winze
accesses the vein about 25 feet down dip from the upper level. The vein has been
drifted on for 60 feet to the south from the winze. A 14-foot cross cut connects
the main raise  with the winze sub  level.  The main rise is open from the winze
sub level  downward,  for about 350 feet on the vein. The bottom 125 feet of the
raise above the lower level is plugged with mineralized material and muck, as is
that above the upper level. The underground  portion of the mineral property has
20-pound mine rail in good condition.

          On July 31, 1990, the Company acquired the Carson Mine,  together with
the improvements,  inventory and equipment located on the mineral property, from
Golden Lion Mining for a total  consideration of approximately  $2,299,000.  The
consideration paid to Golden Lion Mining consisted of $50,000 cash, an $89,000

                                       14





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promissory  note due August 15, 1990,  502,070  shares of common  stock,  and an
agreement  to deliver 61.3 ounces of gold bullion by August 1, 1992 In addition,
Golden Lion Mining had forward sold 2,000 ounces of gold to four individuals. As
additional consideration,  the Company assumed Golden Lion Mining's forward sell
obligation by issuing a total of 781,072  shares of its common  stock.  Finally,
the Company issued 976,000 shares of common stock to Ireland Mining  Corporation
in consideration for Ireland Mining Corporation terminating its lease and option
to purchase the mineral property with Golden Lion Mining.

          On July 24, 1990,  the Company  obtained  from an  independent  mining
laboratory 64 channel samples of mineralized material from the Carson Mine. Each
sample  weighed  approximately  25 pounds and had an  average  width of over 4.6
feet.  Samples taken yielded an overall uncut weighted average of 5.45 ounces of
gold per ton. These substantial-grade mineralized material shoots were tested in
two levels with a distance of 400 feet  vertical  separation.  All of the assays
occurred  within a strike  length of 125 feet.  On August 29, 1990,  the Company
received  confirmation of these substantial  grades from a separate  independent
mining  laboratory.  The  confirmation  report  consisted of nine channel sample
checks  of  mineralized  material  taken  from  the  Carson  Mine.  Although  no
assurances can be given that these substantial  grades will continue through the
length of the entire vein, the strike length  potential of this vein is believed
to be 4,100 feet and is  thought  to extend  into  additional  ground  currently
controlled by the Company.  In order to determine the magnitude of its discovery
and to evaluate  its  findings  further the  Company has  completely  mapped and
sludge  drilled  the vein system in the  exposed  portions  of the Carson  vein.
Because the Company  decided to begin  production at the Ruby Mine,  the Company
postponed further development at the Carson Mine.

          The  Company  also has 16 lode  claims  named the BC  Claims  that are
located  on the  northern  border of the Carson  Mines.  The  Company  owns this
mineral property subject to the General Mining Law of 1872. The Company acquired
its interest in 1990.  There are no proven or probable  reserves at this mine at
this time. The mine is currently idle.

High Commission Mine.
--------------------

          The High Commission Mine is located in the
Allegheny-Forest-Downieville  mining  districts  in Sierra  County,  California,
approximately  one-half to two miles northeast of Downieville.  The Company owns
the  mineral  property  subject to the General  Mining Law of 1872.  The Company
acquired  its  interest  in  September  1990.  There are no  proven or  probable
reserves  at this mine at this  time.  The  Company's  original  cost was 50,000
shares of common stock and $30,000. The mine is currently idle.

          The High  Commission  Mine is an  underground  mine and consists of 22
un-patented lode claims comprising 440 acres and five un-patented  placer claims
comprising 500 acres. The un-patented claims in the mineral property package are
in good  standing  with  assessment  work  documents  filed with both the BLM in
Sacramento  and Sierra County in  Downieville.  Its current  configuration  is a
consolidation of four past producing gold mines.

          The  High   Commission  Mine  was  discovered  in  1888  and  produced
approximately  1,234 ounces of gold in a bunch of arsenopyrite  from the sinking
of an 18-foot shaft. In addition,  approximately  177 ounces were produced about
1914. Three veins were developed on the mineral  property,  the High Commission,
Big Ledge, and Mexican.  The High Commission has a 280-foot tunnel with a quartz
vein averaging 4.5 feet and carries free gold and  arsenopyrite.  The strike was
over three  miles on the  surface.  The Big Ledge vein is 11 feet wide,  carries
free  gold  and no  sulphide,  and  parallels  the  High  Commission  vein.  The
subsequently  developed  Mexican vein parallels and is 300 feet in length.  Both
tunnels  were in pay  shoots,  with open cuts  occurring  over 900 feet.  Quartz
fissure  veins occur along a slate  footwall and  porphyry  hanging wall contact
which carry free gold,  arsenopyrite and pyrite mineralized material.  The veins
vary  from two to  fifteen  feet in width  and the  parallel  vein 40 feet  west
averages four to five feet in width. The strike is north,  dips 70 to 80 degrees
east, and has a length on surface of 3,000 feet.

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The Poker Flat District (Diamond Potential).
-------------------------------------------

          The Company owns the mineral  property  subject to the General  Mining
Law of 1872.  The  Company  acquired  its  interest  in 1997 when it staked  its
un-patented lode mining claims.  There are no proven or probable reserves on the
mineral  property at this time.  While the mine is  currently  idle,  regulatory
requirements before mine may become operational are: approved Plan of Operations
from U.S. Forest Service;  Waste Discharge  Permit from California Water Quality
Control  Board;  approval from  California  Dept. of Fish and Game; and approval
from the Northern Sierra Air Quality Board.

Properties Acquired through Merger with JAB
-------------------------------------------

VOCAR
-----

          JAB owns VOCAR, a Central African Republic ("CAR") registered company.
VOCAR owns the permit to an African mining concession  located in the CAR, which
is a land-locked country located in the geographical center of Africa. C.A.R. is
bordered by the two Congo  nations to the South,  Cameroon to the West,  Chad to
the North and Sudan to the  Northeast.  The  country was a French  colony  until
gaining its independence  from France in 1963; it now maintains a democratically
elected government with a major economic and political reliance of France.

          The  project is located in the  southeastern  section of the  country,
just north of the border with the Congo (formerly Zaire).  The mining area is 35
kilometers  wide and 100 kilometers long (roughly 23 miles by 66 miles) in size.
The area was chosen for  exploration  after years of  research  in the CAR.  JAB
investigated  numerous  locations as possible  sites for a mining project before
acquiring the current permits.

          This  particular  site  was  by  far  the  best  suited  for a  mining
operation.  Initial  engineering and geological  research has indicated that the
area will  produce an average of 0.23 carats of  diamonds  and 0.2 grams of gold
per cubic  meter of gravel.  The area has over  250,000  linear  meters of river
basin of which JAB had tested 100,000 meters.

Estimated Value of CAR Mineral Rights
-------------------------------------

          In order to calculate the estimated value of the mineral rights in the
C.A.R.,  the Company has used the following  data  obtained  through the initial
examination of the site and current artisan production in the area.

          The  concession  area equals 3,500 square  kilometers - 35K x 100K (23
miles x 66 miles). For the purpose of this Memorandum,  the Company is reporting
only the known alluvial gravel deposits. There is an estimated 250,000 meters of
river basin inside the  Company's  permits,  of that the Company has estimated a
minimum of 100,000 meters to contain  diamond  bearing  gravel.  With an average
width of 200 meters, the estimated mining area will be 20,000,000 square meters.
The average  gravel  depth that has been found within the  Company's  permits is
1.89 meters, with 3 - 4 meters of overburden. Initial tests and existing artisan
mining  area in the area show an average of 0.23  carats of  diamonds  per cubic
meter of gravel.  Initial  tests  indicate  that a small  percentage  of gold is
present.  The Company has estimated  this to be 0.2 grams per cubic meter.  With
respect to diamond  reserves,  only 1/3 of the property has been tested to date.
Based upon the  information  available to date,  the Company has  estimated  its
diamond reserves at over 5,000,000  carats.  The estimated selling price for the
diamond  production will be $250.00 per carat. The gold will be refined and sold
at the discounted gold price listed on the day of sale.

                                       16





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Esperanza
---------

          The Esperanza  project is located in  Southeastern  Honduras about a 1
1/2-hour ride from the port city of Trujillo. The mine is a 49,000 acres parcel.
Initial  sampling  shows that this has the  potential to be a high-grade  placer
deposit with the possibility of gold veins and even load deposits underground.

          JAB acquired the property in 1997 from Esperanza mining company. Under
the terms of the  agreement  JAB gave the company  50,000 shares of common stock
and a 3% Net  Smelter  Royalty  (NSR)  on  production  for two  years  from  the
commencement of operations for an 80% stake in the Property.

          The mining laws of the country were changed in year 2000, JAB retained
the law firm of Bufete Danzilo & Associados, Ruben A. Rodezno, Esq. Tegucigalpa,
Honduras to up-date our mining permits in accordance with the new laws.

Un-patented Mineral Property Interests
--------------------------------------

          The Company  occasionally  acquired  rights to explore for and produce
minerals on  federally  owned lands and paid all  required  fees to maintain the
un-patented claims. The Company acquired these rights through the acquisition of
previously  located  mining  claims from the claimant or through the location of
un-patented  mining  claims  upon  un-appropriated   federal  land  pursuant  to
procedures  established  by the General  Mining Law of 1872,  the  Federal  Land
Policy and Management Act of 1976, and various state laws. These referenced laws
generally provide that a citizen of the United States,  including a corporation,
may  acquire a  possessory  right to  explore  for and to  develop  and  produce
valuable  mineral  deposits  discovered  upon  un-appropriated   federal  lands,
provided  that  such  lands  have  not been  withdrawn  from  mineral  location.
Withdrawn lands would include, for example, lands included in national parks and
military  reservations and lands  designated as part of the National  Wilderness
Preservation System.

          The  location of a valid mining  claim on federal  lands  requires the
discovery of a valuable mineral deposit, the erection of appropriate  monuments,
the posting of a location  notice at the point of discovery,  the marking of the
boundaries of the claim in accordance with federal law and the laws of the state
in which it is located,  and the filing of a notice or  certificate  of location
and a map with the BLM and the real property recording official of the county in
which the claim is located. Failure to follow the required procedures may render
the mining claim void.  If the statutes  and  regulations  for the location of a
mining claim are complied with, the locator obtains a valid  possessory right to
explore for, develop and produce minerals from the claim.  This mineral property
right can be freely  transferred and is protected  against  appropriation by the
government without just compensation. Also, the claim locator acquires the right
to obtain a patent (or deed)  conveying  fee title to his claim from the federal
government  upon  payment  of  fees  and  compliance  with  certain   additional
procedures.

          Un-patented    mining   claim   interests   possess   certain   unique
vulnerabilities  not  associated  with other  types of property  interests.  For
example,  in order to maintain each un-patented  mining claim, the claimant must
annually  perform not less than $100 worth of work or improvements on or for the
benefit  of the  claim  and must file with  state  and  federal  authorities  an
affidavit  attesting to the performance of such work.  Although  currently not a
requirement,  the  Company  feels it should  continue to file proofs of labor to
prevent  adverse  claimants  from  occupation  of the claim and to have a proper
chain of title should the Company decide to apply for patents. Additionally, the
Bureau of Land Management  currently assesses a $100 per claim rental fee which,
if  not  paid  annually  before  August  31st  of  each  year,  invalidates  the
un-patented  claims.  Failure to perform such work will render the claim subject
to  relocation  by third  parties  and  constitutes  abandonment  of the  claim.
Further,  because  mining claims are often located with less then  sophisticated
surveying techniques, great difficulty may arise in determining the validity and
ownership of specific mining claims.  Moreover, under applicable regulations and
court decisions, in

                                       17





<PAGE>


<PAGE>


order  for  un-patented  mining  claims  to  be  valid  against  a  governmental
challenge,  the claimant  must be able to prove that the mine on which the claim
is based can be mined at a profit. Thus, it is conceivable that, during times of
declining metal prices, claims that were valid when located could be invalidated
by the federal government.

Item 3.   Legal Proceedings.

The Royal Bank Action.
---------------------

          On December 13,  1995,  the Company  entered  into an  agreement  (the
"Royal  Bank  Agreement")  to settle an action  commenced  by the Royal  Bank of
Scotland,  et al. by delivering to the plaintiffs (the "Royal Bank  Plaintiffs")
216,667 shares of the Company's Common Stock and cash in the amount of $241,000.
The Company also assigned to the Royal Bank Plaintiffs a portion of its interest
in any total recovery from claims against the law firm formerly known as Bartel,
Eng, Miller & Torngren,  the Company's formal legal counsel ("Bartel,  Eng"). On
December  13, 1996,  the Company was further  required to deliver to each of the
Royal Bank Plaintiffs,  at his or her option, additional shares of the Company's
common  stock or  additional  cash.  The number of shares of Common Stock or the
amount of cash each Royal Bank  Plaintiff  was  entitled to receive was based on
the  amount  of his or her pro rata  interest  in  amounts  paid by the  Company
pursuant to the Royal Bank Agreement.  If all Royal Bank  Plaintiffs  elected to
receive  Common  Stock,  then the Company  would have been required to issue and
deliver a maximum  of  300,000  shares in the  aggregate  and if all Royal  Bank
Plaintiffs elected to receive cash, then the Company would have been required to
deliver cash in the maximum aggregate amount of $600,000.

          Prior to  December  13,  1996,  the Royal Bank  Plaintiffs  elected to
receive  $600,000  in cash  under the terms of the Royal Bank  Agreement.  On or
about  December  17,  1996,  the  Company  received  notice  from the Royal Bank
Plaintiffs  that  the  Company  was in  default  of its  obligation  to pay them
$600,000 on December  13,  1996.  Under the Royal Bank  Agreement,  such default
caused the Company to incur an  immediate  $3.25  million debt to the Royal Bank
Plaintiffs.

          Subsequently,  in January 1997, the Company entered into a Forbearance
Agreement (the  "Forbearance  Agreement")  with the Royal Bank Plaintiffs  which
provided  that  notwithstanding  the $3.25  million  obligation,  the Royal Bank
Plaintiffs  agreed to forbear from exercising  their rights and remedies against
the Company  provided  the Company made a payment of $629,100 on or before March
20, 1997 and a payment of  $175,000  on or before July 1, 1997.  The Company had
the option to postpone  the second  payment  ($175,000)  by  delivering  written
notice to the Royal Bank  Plaintiffs no later than June 25, 1997,  whereupon the
second  payment  was to have been paid no later than  December  15, 1997 and the
amount was to be increased to $250,000. The Company also agreed to reimburse the
Royal Bank Plaintiffs for their attorneys' fees and costs. Thereafter, the Royal
Bank Plaintiffs agreed to extend the time period for paying the $629,100 to them
until May 15, 1997.  In addition,  the second  payment was increased to $225,000
payable on July 1, 1997 subject to  postponement  until  December  15, 1997,  in
which event the amount was to be increased to  $300,000.  The amount,  which was
due May 15, 1997, was not paid by such date. However, effective on June 2, 1997,
the  Company  entered  into an  Amendment  No.  2 to the  Forbearance  Agreement
("Amendment  No. 2") which,  among other  things,  provided  that the Royal Bank
Plaintiffs  would continue to forbear from exercising  their rights and remedies
under the Royal Bank Agreement and related Forbearance  Agreement,  provided the
Company  performed the  following:  (a) paid $896,000 in eight  installments  of
$112,000 each on May 31, July 31, September 30 and November 30, 1997 and January
31,  March 31,  May 31 and July 31,  1998 (the  "Periodic  Payments"),  (b) paid
$250,000 on or before  September 30, 1998,  (c) made payments of $25,000  within
five  business days after any  closing(s)  since March 20, 1997 of any single or
series of  sale-leaseback  transaction(s)  in which the Company  received in the
aggregate of at least  $65,000 in proceeds,  and (d) made a final  payment on or
before  September 30, 1998 of the Judgment Amount (as defined in the Forbearance
Agreement) less the aggregate amount of the Periodic  Payments  previously paid;
provided,  however,  that if the Company timely performed its obligations  under
its settlement documents with the Plaintiffs and either (i) Plaintiffs received

                                       18





<PAGE>


<PAGE>


all of the Periodic  Payments,  or (ii) the Company made one final payment in an
amount set forth in Amendment  No. 2 which amount  ranged from  $950,000 if such
final  payment  was paid on or before  May 31,  1997 to  $350,000  if such final
payment was paid after May 31, 1998 and on or before July 31, 1998 (and assuming
all Periodic  Payments coming due prior to the final payment were made), in such
event the Plaintiffs  agreed to waive the  enforceability of the Judgment Amount
against the  Company  and the Company  would not be required to make any further
payments.

          The Company  also  agreed to issue  433,334  shares (the  "Forbearance
Agreement  Shares") of its Common Stock to the Royal Bank  Plaintiffs and agreed
to register such shares for resale  pursuant to a  Registration  Statement to be
filed with the Securities and Exchange  Commission.  Also, the Company agreed to
issue to the Plaintiffs,  from time to time until the payments referred to above
have been  completed,  .025 shares of its Common  Stock for each share issued in
excess of 24,000,000 of the Company's  outstanding shares.  Amendment No. 2 also
provided that the Company  reimburse  Plaintiffs for  attorneys'  fees and costs
incurred in connection with the preparation and negotiation of Amendment No. 2.

          In fiscal 1999, the Company again amended the Forbearance Agreement to
provide for payment to Royal bank of $200,000 and 75,000 shares of the Company's
Common Stock ("Amendment No. 3").

          Effective on March 17, 1999, the Company entered into an Amendment No.
4 to the Forbearance  Agreement  ("Amendment No. 4") which,  among other things,
provides  that  the  Royal  Bank  Plaintiffs  would  continue  to  forbear  from
exercising  their rights and remedies under the Royal Bank Agreement and related
Forbearance Agreement,  provided the Company performed the following:  (a) on or
before April 16, 1999 paid  $200,000 of the  Judgment  Amount (as defined in the
Forbearance  Agreement).  The Company also agreed to issue to the  plaintiffs an
aggregate  of  319,500  shares  of  the  Company's  common  stock   ("Additional
Forbearance  Shares") pursuant to an exemption from registration  under Rule 506
of  Regulation  D  promulgated  under  Section 4(2) of the  Securities  Act. The
Company  agreed to  register  these  shares  with the  Securities  and  Exchange
Commission on Form S-3 no later than December 31, 1999.  The  plaintiffs and the
Company executed mutual releases, with the release in favor of the Company to be
effective  upon  the  Company's  performance  of all of  its  obligations  under
Amendment No. 4 and the other settlement documents.

          The Company's  obligations  under the Royal Bank Agreement are secured
by (1) a deed of trust on all real property and patented and un-patented mineral
claims owned by the Company;  (2) a first priority  security  interest in all of
the Company's right,  title and interest in and to any and all goods,  products,
yield,  receivables,  inventory (including any gold from any mines), any and all
exploration and drilling  information,  data, maps, reports or surveys,  and any
and all income and proceeds  derived from the  Company's  mining  operations  on
property  which the Company  presently  or  subsequently  owns or leases;  (3) a
first-priority  security interest in the Company's right,  title and interest in
and to any total recovery by the Company on the claims against Bartel,  Eng; and
(4) a stipulated judgment in the amount of $3,250,000.

          In fiscal 1996, the Company  registered the 1,616,667 shares of Common
Stock to be issued and delivered  pursuant to the Zuri  Agreement the Royal Bank
Agreement,  which  included  the  300,000  additional  shares that may have been
issued pursuant to the Royal Bank Agreement as described above. This number does
not include  the  Forbearance  Agreement  Shares or the  Additional  Forbearance
Shares (as described above).

                                       19





<PAGE>


<PAGE>


The Anderson Matter.
-------------------

          The Company  was  plaintiff  in the matter of Brush  Creek  Mining and
Development  Co.,  Inc. v.  Anderson,  et al.,  United  States  District  Court,
Northern  District of California,  case no. C94-3487 CAL, filed on September 24,
1994.  The action was against  former  officers and directors of the Company and
others for violations of federal and state securities laws and common law torts.
On April 3, 1998, the Company's counsel,  the Hinton & Alfert firm,  withdrew as
counsel of record.  Upon the Company's failure to obtain new counsel as directed
by the Court, the action was dismissed with prejudice on May 15, 1998. Following
entry of  judgment  of  dismissal,  two of the  defendants  moved  as  purported
prevailing  parties  for an  award of  attorney's  fees and  costs  incurred  in
defending against the Company's claims. The defendants sought by their motion to
recover $63,782.14. On August 21, 1998, the Court denied the defendants' motion.
The Company is not actively pursuing this matter.

The Volcanic Matter.
-------------------

          On August 12, 1998, Volcanic Resources,  LLC filed a complaint against
the Company,  its past CEO and Chairman of the Board,  and two of its directors.
On September  16, 1998,  Plaintiff  filed its First Amended  Complaint  alleging
breach of contract and breach of express warranties against the Company only and
alleging fraud,  negligent  misrepresentation,  rescission,  constructive trust,
declaratory  relief and violation of Business and Professions Code section 17200
against  all  defendants.  The  underlying  contract  giving  rise to this  suit
involves a written Exploration, Development and Mine Operating Agreement entered
into November 20, 1997 between  Sterling Mining,  LLC and the Company.  Sterling
Mining,  LLC  assigned its rights under the  Exploration,  Development  and Mine
Operating  Agreement to  Plaintiff.  In  accordance  therewith,  the  individual
defendants filed three  preliminary  "motions":  (1) Motion to Change Venue; (2)
Demurrer; and (3) Petition to Compel Arbitration.

The Shareholder Suit.
---------------------

          In August 1999, Paul Body and other  shareholders of the Company filed
a complaint  against  the  Company,  its past CEO and  Chairman of the Board and
three  of its  directors,  alleging  fraudulent  misrepresentations,  breach  of
contract, breach of express and implied contractual obligations, defamation. The
plaintiffs  purchased  shares of common  stock in a private  offering and allege
that the  defendants  fraudulently  misrepresented  the financial  condition and
business  prospects of the Company.  The defendants also allege that the Company
did not  register  the  common  stock  purchased  as it agreed to as part of the
private placements.  Certain plaintiffs also allege that they were obstructed in
their efforts to sell certain of their shares of common  stock.  With respect to
the defamation  allegations,  the plaintiffs  allege that the former chairman of
the Company posted publicly on the Internet defamatory  statements regarding the
plaintiffs and that the Company has never withdrawn or recanted such statements.

Other Matters.
-------------

          In fiscal  1996 and 1997,  the  Company  was  requested  pursuant to a
non-public  informal  inquiry  by the  staff  of  the  Securities  and  Exchange
Commission  ("Commission"),  to provide information to the Commission  regarding
the  Company's  financing  activities  in reliance  upon  Regulation S under the
Securities  Act. The Commission  advised the Company that the inquiry should not
be construed as an indication by the Commission or its staff that any violations
of law have occurred,  nor should it be considered a reflection upon any person.
No charges were filed as a result of the inquiry.

          On February 8, 1996,  the Company  filed a complaint  against F. James
Anderson and Simone  Anderson in Superior Court of the State of  California,  in
and for the County of Sacramento, Case No. 96AS 00513 (the "Sacramento Action").
The complaint seeks (a) judicial determination and declarations that the Company
(1) has no further obligations to advance defense fees and costs incurred by the

                                       20





<PAGE>


<PAGE>


Andersons in connection  with other settled  litigation  involving  Zuri Invest,
including on the  Andersons'  appeal of that judgment  (which fees and costs the
Company agreed to pay pursuant to a settlement in a previously resolved matter);
(2) is entitled to recoup  defense fees and costs  allocable  to the  Andersons'
defense of claims in the Zuri  Invest  matter for which they were found  liable;
(3) is not required to indemnify the  Andersons for their  liability in the Zuri
Invest  litigation;  (4) has no duty or  obligation  to the Andersons to account
for, replenish, and/or return monies to or pay interest on the $200,000 provided
by the Andersons as partial  indemnification  to the Company in connection  with
the Royal Bank  litigation;  and (5) is entitled to have all amounts returned to
the Company from the $200,000  which were  disbursed for the purposes other than
to indemnify the Company such that the Company  receives the full net benefit of
the $200,000,  and (b) equitable  indemnification  to collect from the Andersons
their proportionate share of the judgment in the Zuri Invest litigation.

          On April 4, 1996, the Company was served with the Andersons' answer to
the  Sacramento  Action and they're  cross-complaint  against the  Company.  The
answer generally denied the allegations of the Company's  complaint and asserted
various affirmative defenses.  The cross-complaint seeks judicial  determination
and  declarations  that the Company (1) is obligated  to advance the  Andersons'
defense costs  (including  costs of appeal) in the Zuri  litigation  and defense
costs in the Federal  Action and (2) is  obligated  to  indemnify  them from the
judgment in the Zuri Invest  litigation  and any judgment that might be rendered
against them in the Federal Action.

          Also,  on April 4, 1996,  the  Company was served with a motion by the
Andersons for summary adjudication of two of their cross claims which would have
forced the Company to advance the Andersons' defense cost in the Zuri litigation
and the Federal Action.  On May 3, 1996, the Andersons'  motion was heard by the
superior court and denied.  The Company  answered the Andersons' cross complaint
on May 6, 1996 generally denying the allegations and asserting various defenses.
[Although the Company has not done so to date,  the Company may attempt to amend
its  original  complaint  to assert an  additional  claim to hold the  Andersons
liable for the entire amount of the Royal Bank of Scotland settlement.

          The  Company is a party to other  various  claims,  legal  actions and
complaints  arising  in the  ordinary  course of  business.  In the  opinion  of
management,  the ultimate  disposition of these matters will not have a material
adverse effect on the business or financial position of the Company.

1. Ruby  Development  - Judgment for  $1,250,000,  default for breech of contact
associated  with lease of the mine. The Company was not properly served and will
ask the court to set aside the judgment.

2. Kate Hardy / Omega - Judgment for $401,606.46

3. Rising Sun - Judgment for $250,000

4. Jean Gasperoni - Judgment for $105,000,  filed suit for commission on funding
that the  company  did not  receive.  The  company is  currently  appealing  the
judgment.

5.  ACP-Laurich  - Judgment  for $50,000,  Default  judgment for lease on office
space that the company  never  occupied.  The company is  currently  planning to
appeal.

6. Robert Half Inter. - Judgment for $21,481.79, dated 3/23/99, we have no idea
who they are.

7. Western Capital Group for $300,000, Financial Public Relations firm in
Aurora, Co. had a consulting agreement with Brush Creek from May 1, 1998 through
October 1, 1998. Award by Arbitrator on Dec. 30, 1998 of $209,211.00 Plus costs
of $2,323.50 and interest of 8% per month from Aug. 1, 1998.

                                       21





<PAGE>


<PAGE>

The company plans to appeal all above-mentioned  suits through the law office of
Pillsbury, Madison & Sutro, LLP.


Item 4.   Submission of Matters to a Vote of Security Holders.

          None.

                                     Part II

Item 5.   Market for Common Equity and Related Stockholder Matters.

          The Common Stock ("Common Stock") of the Company,  par value $.001 per
share, trades on the "pink sheets" under the symbol "JABI."

          The  following  table  sets forth the range of high and low bid prices
for the Common Stock as of the periods  indicated  as reported by NASDAQ.  These
over-the-counter  market quotations reflect inter-dealer prices,  without retail
mark-up,  markdown  or  commission,  and may not  necessarily  represent  actual
transactions.

          Common Stock                     High ($)             Low ($)
          ------------                     --------             -------

          3rd Quarter 1999                   1.62                 .53
          4th Quarter 1999                    .97                 .16
          1st Quarter 2000                    .38                 .26
          2nd Quarter 2000                    .13                 .03

          The Company has not paid any cash  dividends  since its  inception and
does not anticipate paying cash dividends in the foreseeable future.

Item 6.   Management's Discussion and Analysis or Plan of Operation.

          Liquidity and Capital Resources
          -------------------------------

          The mining industry is capital intensive. During the fiscal year ended
June 30, 2000,  the Company  raised  $152,449  from the sale of shares of common
stock.  Consistent with prior years,  the Company  derived no material  revenues
from  operations.  The  Company's  accumulated  deficit  at June  30,  2000  was
$(59,146,084), compared to accumulated deficit at June 30, 1999 of $(58,527,437)
and an accumulated  deficit of $(50,059,368) as of June 30, 1998. As of June 30,
2000, the Company had negative working capital of  $(7,192,164).  As of June 30,
1999, the Company had negative  working  capital of  $(7,831,967) as compared to
negative  working  capital of  $(1,387,633) as of June 30, 1998. The decrease in
working capital is largely  attributable  to an increase in current  liabilities
due to litigation.  Office furniture and equipment has decreased due to property
abandonment.  Mineral  properties and mining equipment,  net of depreciation was
$3,669,613  as of June 30, 2000 and  $3,669,613 as of June 30, 1999, as compared
to $4,657,240 as of June 30, 1998. The decrease in Mining  properties and mining
equipment is mainly attributable to defaults on leases and property abandonment.

          The  Company's  financial  resources are limited and to date have been
depleted through  development  costs and losses sustained by the Company through
its development stage. The Company has virtually no liquidity as a result of its
costs and  losses,  and the  Company  currently  is  experiencing  a severe cash
shortage. Additional financing continues to be required for the Company to cover
its mining and development costs and to commence  full-scale mining  operations.
At this time the Company has no definite plans regarding additional financing,

                                       22





<PAGE>


<PAGE>

but  continues  to  consider  equity  financings  via stock  offerings  or joint
ventures.  There  can be no  assurance  that the  Company  will be able to raise
sufficient capital to cover its costs and commence mining operations, or that it
ever will be able to achieve profitable operations.  If the Company is unable to
obtain sufficient funding from future financings, the Company may not be able to
achieve  its  business  objectives  and may have to scale  back its  development
plans.  Additionally,  the  Company may be forced to seek  protection  under the
bankruptcy laws.

          During the 2000 fiscal  year,  the Company  continued to be in default
with respect to certain mining  properties and certain county taxes. The lessors
have taken  action to foreclose on the leases.  Default  judgments  were entered
against the company by Rising Sun, Ruby  Development  and Kate Hardy Mines.  The
Company estimates mining development and operating costs will be approximately $
4 million  for the next  fiscal  year,  assuming  the  Company is able to obtain
adequate  financing on terms  acceptable  to the Company.  The majority of these
funds will be used to exploration  and development  operations.  There can be no
assurance  that ht Company will be able to obtain such  financing,  or that such
financing,  or that  the  terms  of such  financing  will be  acceptable  to the
Company.

          Results Of Operations

          The Company had total  revenues of $41,584 for the year ended June 30,
2000 as compared to total  revenues of $12,123 for the year ended June 30, 1999.
Revenues  were  primarily  derived from  logging  income of $32,500 and interest
income of $8,949  for the  fiscal  year  ended June 30,  2000,  as  compared  to
interest  income of $12,123 for the fiscal year ended June 30, 1998. The Company
had no material  revenues from mining  operations,  which is consistent with the
year ended June 30, 1999 and June 30, 1998.

          The  Company  had a net loss of  $(618,647)  for the fiscal year ended
June 30,  2000,  as compared to a net loss of  $(8,468,069)  for the fiscal year
ended June 30, 1999.  The decrease in the size of the net loss of  approximately
$7,849,422 is largely  attributable to a decrease in general and  administrative
expenses,   general  mining  and  exploration   expenses,   lease  and  property
abandonment  and loss due to  litigation.  General and  Administrative  expenses
decreased  from  $2,616,536  for the fiscal year ended June 30, 1999 to $660,231
for the fiscal year ended June 30, 2000. General mining and mineral  exploration
expenses  decreased  from  $81,621 for the fiscal year ended June 30, 1999 to $0
for the fiscal year ended June 30,  2000.  There were no losses due to lease and
property  abandonment  and also loss due to litigation.  The decrease in general
mining and  exploration  costs,  and the decrease in general and  administrative
expenses are primarily due to the cessation of the Company's operations.

                                       23





<PAGE>


<PAGE>


Item 7.  Financial Statements.




                          J. A. B. INTERNATIONAL, INC.
                          (a development stage company)

                              FINANCIAL STATEMENTS







                               AS OF JUNE 30, 1999








<PAGE>


                           J.A.B. INTERNATIONAL, INC.
                     Financial Statements Table of Contents




         FINANCIAL STATEMENTS                                             Page #


            Independent Auditors Report                                      F-1


                  Balance Sheet                                              F-2


                  Statements of Operations                                   F-3


            Statement of Stockholders' Equity                                F-4


                  Cash Flow Statements                                      F-11


                  Notes to the Financial Statements                         F-13


















<PAGE>









              INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS



To the Board of Directors and Stockholders
J.A.B. INTERNATIONAL, INC.
Orlando, Florida



We have audited the accompanying balance sheet of J.A.B. International,  Inc. (a
development  stage enterprise) as of June 30, 1999, and the related statement of
operations,  stockholders'  equity,  and cash  flows for the year ended June 30,
1999.  These  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

 In our opinion,  the financial  statements referred to above present fairly, in
all material respects, the financial position of J.A.B.  International,  Inc. (a
development  stage  enterprise),  as of June  30,  1999 and the  results  of its
operations  and its cash flows for each of the year in the period ended June 30,
1999, and the period from the date of resumption of development stage activities
July 1, 1989)  through  June 30,  1999 in  conformity  with  generally  accepted
accounting principles.


The  accompanying  financial  statements  have been  prepared  assuming that the
company  will  continue as a going  concern.  As  discussed  in the notes to the
financial statements, the Company has experienced a loss since the resumption of
development stage  activities.  The Company's  financial  position and operating
results  raise  substantial  doubt  about its  ability  to  continue  as a going
concern.  The  financial  statements do not include any  adjustments  that might
result from the outcome of this uncertainty.


                                                 /s/Gately & Associates, LLC
                                                 Gately & Associates, LLC
                                                 Certified Public Accountants
                                                 Orlando, Florida
                                                 August 31, 2000




<PAGE>



<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                         ( A Development Stage Company)

                                  BALANCE SHEET
                               As of June 30, 1999




                             ASSETS

       CURRENT ASSETS
<S>                                                                <C>                      <C>

                  Cash                                              $             -
                                                                   ----------------

                             Total Current Assets                                 -         $             -


                  Mineral Properties and reclamation deposits             3,845,722
                                                                   ----------------

                                                                          3,845,722               3,845,722


                             TOTAL ASSETS                                                   $     3,845,722
                                                                                           ================

       LIABILITIES AND STOREHOLDERS' EQUITY


       CURENT LIABILITIES

                  Accounts payable and accrued liabilities              $ 2,823,721
                  Demand notes payable                                       57,017
                  Liability due to litigation                             4,851,229
                                                                   ----------------

                             Total current liabilities                    7,731,967         $    7,731,967



       SHAREHOLDERS' EQUITY

       Common stock - $.001 par value; authorized 10,000,000
       shares;issued and outstanding,  4,449,455 shares                 54,541,192

       Accumulated Deficit                                              (11,260,214)
       Accumulated Deficit during the Development Stage                 (47,167,223)
                                                                   ----------------

                  Total shareholders' equity                             (3,886,245)             (3,886,245)
                                                                                           ----------------


       TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY                                           $     3,845,722
                                                                                           ================
</TABLE>


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

F-2

<PAGE>




<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                        ( A Development Stage Enterprise)

                            STATEMENTS OF OPERATIONS
                   For the Years Ended June 30, 1999 and 1998
                      and for the Period From July 1, 1989
        ( Date of Resumption of Development Stage Enterprise Activities)
                              Through June 30, 1999



                                                                                                  Period from
                                                                                                  July 1, 1989
                                                                                                    Through
                                                                         1999       1998         June 30, 1999
                                                             ---------------- ----------------  ----------------
<S>                                                          <C>              <C>               <C>
REVENUES

       Sale of Joint Venture                                  $             - $              -   $     4,232,000
       Other Income                                                         -            4,701           161,145
       Interest                                                        12,123           10,689           210,591
                                                             ---------------- ----------------  ----------------

       TOTAL REVENUES                                                  12,123           15,390         4,603,736
                                                             ---------------- ----------------  ----------------

 EXPENSES

       General and Administrative                                   2,616,536        2,652,211        20,327,668
       General Mining and Exploration                                  81,621        2,487,019        13,622,893
       Impairment of Development Costs                                      -                -         5,393,115
       Loss on Lease & Equipment Abandonments                       1,194,306                -         1,586,623
       Depreciation and Amortization                                        -          252,791         1,686,693
       (Gain) Loss on Sale of Mining Equipment                              -                -           171,174
       Interest Expense                                                     -            3,200           498,494
       Loss from Litigation & Settlement                            4,487,729            4,000         8,628,761
                                                             ---------------- ----------------  ----------------

       TOTAL EXPENSES                                               8,380,192        5,399,221        51,915,421
       --------------
                                                             ---------------- ----------------  ----------------


       Loss Before Extra-ordinary Item                             (8,368,069)      (5,383,831)      (47,311,685)
       Extra-ordinary Item, Net Gain from Debt
       Extinguishment, Net of Tax                                           -                -           144,462
                                                             ---------------- ----------------  ----------------


NET INCOME (LOSS)                                                  (8,368,069)      (5,383,831)      (47,167,223)
-----------------
                                                             ================ ================  ================

NET LOSS PER COMMON SHARE                                               (2.70)          (13.87)
-------------------------
                                                             ================ ================

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                          3,104,437          388,369
------------------------------------------
                                                             ================ ================
</TABLE>

(Note: weighted averages are adjusted for reverse stock split during 1999)


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

                                      F-3

<PAGE>



<TABLE>
<CAPTION>

                           J.A.B. INTERNATIONAL, INC.
                        ( A Development Stage Enterprise)


                       STATEMENTS OF SHAREHOLDER'S EQUITY
                   For the Years Ended June 30, 1999 and 1998
                      and for the Period From July 1, 1989
         (Date of Resumption of Development Stage Enterprise Activities)
                              Through June 30, 1999

                                                          COMMON STOCK
                                                 -------------------------------                    Accumulated
                                                                                                       Deficit
                                                     Number                                          During the
                                                       of                          Accumulated       Development
                                                     Shares          Amount          Deficit            Stage            Total
                                                 -------------- ---------------- ---------------- ----------------- --------------

<S>                                              <C>             <C>             <C>                <C>             <C>
Balance, June 30, 1989                                  123,304       12,318,877     (11,260,214)               -      1,058,663

Issuance of stock for options on mining
properties                                                1,567          117,500               -                 -       117,500
Sales of stock in private placement, net
of offering costs                                        15,000          434,000               -                 -       434,000
Issuance of stock for services                            2,350           72,500               -                 -        72,500
Sale of stock in private placement, net of
offering costs                                           13,173          828,110               -                 -       828,110
Issuance of units for debt to affiliates                  7,376          553,242               -                 -       553,242
Net Loss                                                      -                -               -          (768,436)     (768,436)
                                                 -------------- ---------------- ---------------- ----------------- --------------

Balance, June 30, 1990                                  162,770       14,324,229     (11,260,214)         (768,436)     2,295,579
</TABLE>





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

                                       F-4

<PAGE>




<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                        ( A Development Stage Enterprise)


                       STATEMENTS OF SHAREHOLDER'S EQUITY
                   For the Years Ended June 30, 1999 and 1998
                      and for the Period From July 1, 1989
         (Date of Resumption of Development Stage Enterprise Activities)
                              Through June 30, 1999

                                                                  COMMON STOCK
                                                            -----------------------                 Accumulated
                                                                                                      Deficit
                                                             Number                                  During the
                                                               of                    Accumulated    Development
                                                             Shares      Amount        Deficit         Stage          Total
                                                            ----------- -----------  -------------  --------------  -----------

<S>                                                         <C>          <C>         <C>              <C>            <C>
Balance, June 30, 1990                                          162,770  14,324,229  (11,260,214)       (768,436)     2,295,579


Issuance of stock for options on mining properties               15,474   2,283,020            -               -      2,283,020

Sales of stock in private placement, net of offering costs       14,161     910,840            -               -        910,840
Exercise of Warrants                                                333      35,000            -               -         35,000
Issuance of stock for debt                                        6,412   1,097,258            -               -      1,097,258
Issuance of stock for services                                      515     114,560                                     114,560
Cancellation of units from CSGM                                  (7,377)          -            -               -              -
Issuance of shares to CSGM                                       12,000           -            -               -              -
Issuance of stock for litigation settlement                       3,334     875,000            -               -        875,000

Net Loss                                                              -           -            -      (2,558,381)
                                                                                                                     (2,558,381)
                                                            ----------- -----------  -------------  --------------  -----------

Balance, June 30, 1991                                          207,622  19,639,907  (11,260,214)     (3,326,817)    5,052,876
</TABLE>




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


                                       F-5

<PAGE>






<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                        ( A Development Stage Enterprise)


                       STATEMENTS OF SHAREHOLDER'S EQUITY
                   For the Years Ended June 30, 1999 and 1998
                      and for the Period From July 1, 1989
         (Date of Resumption of Development Stage Enterprise Activities)
                              Through June 30, 1999

                                                          COMMON STOCK
                                                    ------------------------                      Accumulated
                                                                                                    Deficit
                                                     Number                                        During the
                                                       of                       Accumulated       Development
                                                     Shares       Amount          Deficit            Stage             Total
                                                    -----------  -----------   --------------  ----------------  ----------------
<S>                                                 <C>          <C>           <C>             <C>               <C>
                                                        207,622   19,639,907      (11,260,214)        (3,326,817)     5,052,876
Balance, June 30, 1991

Issuance of stock for options on mining properties       19,578      564,899                -                  -        564,899

Sales of stock in private placement,                     14,210    2,298,451                -                  -      2,298,451
   net of offering costs                                 12,483    1,250,750                -                  -      1,250,750
Exercise of warrants and options                         18,458    1,818,102                -                  -      1,818,102
Issuance of stock for services                            2,444      336,617                -                  -        336,617
Issuance of stock for debt                                8,800      748,750                -                  -        748,750
Issuance of shares to CSGM                                    -      312,805                -                  -        312,805
Capital contributions

Net Loss                                                      -            -                -         (3,178,878)    (3,178,878)
                                                    -----------  -----------   --------------  ----------------  ----------------

                                                        283,595   26,970,281      (11,260,214)        (6,505,695)     9,204,372
Balance, June 30, 1992
</TABLE>



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


                                       F-6

<PAGE>





<TABLE>
<CAPTION>

                           J.A.B. INTERNATIONAL, INC.
                        ( A Development Stage Enterprise)


                       STATEMENTS OF SHAREHOLDER'S EQUITY
                   For the Years Ended June 30, 1999 and 1998
                      and for the Period From July 1, 1989
         (Date of Resumption of Development Stage Enterprise Activities)
                              Through June 30, 1999

                                                          COMMON STOCK
                                                    ------------------------                      Accumulated
                                                                                                    Deficit
                                                     Number                                        During the
                                                       of                       Accumulated       Development
                                                     Shares       Amount          Deficit            Stage             Total
                                                    -----------  -----------   --------------  ----------------  ----------------
<S>                                                 <C>          <C>           <C>             <C>               <C>
                                                       283,595    26,970,281      (11,260,214)     (6,505,695)       9,204,372
Balance, June 30, 1992

Issuance of stock for options                            3,729       255,238                -               -          255,238
   on mining properties                                  1,066        80,000                -               -           80,000
Sale of stock in private placement,                      9,540       707,105                -               -          707,105
Exercise of warrants and options                         3,334       250,000                -               -          250,000
Exchange of options for debt, CSGM                      18,319     1,616,659                -               -        1,616,659
Issuance of stock for services                          10,514       713,494                -               -          713,494
Issuance of stock for debt                              10,026       500,285                -               -          500,285
Issuance of shares for CSGM                             53,940       (84,176)               -               -          (84,176)
Issuance of stock for acquisition of Trans-Russian           -             -                -      (3,420,220)
                                                                                                                    (3,420,220)
                                                    ----------  ------------   ---------------  --------------  --------------

Net Loss
                                                       394,063    31,008,886      (11,260,214)     (9,925,915)       9,822,757
Balance, June 30, 1993
</TABLE>




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


                                       F-7

<PAGE>



<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                        ( A Development Stage Enterprise)


                       STATEMENTS OF SHAREHOLDER'S EQUITY
                   For the Years Ended June 30, 1999 and 1998
                      and for the Period From July 1, 1989
         (Date of Resumption of Development Stage Enterprise Activities)
                              Through June 30, 1999

                                                          COMMON STOCK
                                                    ------------------------                      Accumulated
                                                                                                    Deficit
                                                     Number                                        During the
                                                       of                       Accumulated       Development
                                                     Shares       Amount          Deficit            Stage          Total
                                                    -----------  -----------   --------------  ---------------- ----------------
<S>                                                 <C>          <C>           <C>             <C>               <C>

Balance, June 30, 1993                                  394,063    31,008,886     (11,260,214)       (9,925,915)      9,822,757

Sale of stock                                             8,248       241,139               -                 -         241,139
Exercise of warrants and options                          5,832       608,925               -                 -         608,925
Issuance of stock for services                           21,510       938,159               -                 -         938,159

Net income                                                    -             -               -           136,625         136,625
                                                    -----------  ------------  --------------  ---------------- ----------------

Balance as of June 30, 1994                             429,653    32,797,109     (11,260,214)       (9,789,290)     11,747,605

Sale of stock                                           256,667     3,696,457               -                 -       3,696,457

Net Loss                                                      -             -               -        (4,671,396)     (4,671,396)
                                                    -----------  ------------  --------------  ---------------- ----------------

Balance as of June 30, 1995                             686,320    36,493,566     (11,260,214)      (14,460,686)     10,772,666

Sale of stock                                           678,350     6,875,416               -                 -       6,875,416

Issuance of stock for  partial settlement of Royal
Bank agreement                                           21,667       223,436               -                 -         223,436

Compensation recognized on stock options granted
                                                              -       160,021               -                 -         160,021

Issuance of stock, held in trust  for                         -             -               -                 -               -
   partial settlement of Zuri Invest                    110,000             -               -                 -               -
   litigation                                                 -             -               -        (9,270,102)     (9,270,102)
                                                    -----------  ------------  --------------  ---------------- ----------------
Net loss
                                                      1,496,337    43,752,439     (11,260,214)      (23,730,788)      8,761,437
Balance, June 30, 1996
</TABLE>



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

                                       F-8

<PAGE>




<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                        ( A Development Stage Enterprise)


                       STATEMENTS OF SHAREHOLDER'S EQUITY
                   For the Years Ended June 30, 1999 and 1998
                      and for the Period From July 1, 1989
         (Date of Resumption of Development Stage Enterprise Activities)
                              Through June 30, 1999

                                                          COMMON STOCK
                                                    ------------------------                      Accumulated
                                                                                                    Deficit
                                                     Number                                        During the
                                                       of                       Accumulated       Development
                                                     Shares       Amount          Deficit            Stage          Total
                                                    -----------  -----------   --------------  ----------------  ----------------
<S>                                                 <C>          <C>           <C>             <C>               <C>
Balance, June 30, 1996                                1,496,337   43,752,439      (11,260,214)      (23,730,788)      8,761,437

Sale of stock                                         1,638,711    2,111,101                -                 -       2,111,101
Issuance of stock for                                         -            -                -                 -
   new California Placer mine.                            2,000        5,200                -                 -           5,200
Zuri Invest litigation Settlement                             -    1,200,000                -                 -       1,200,000
Compensation recognized on
   stock options granted                                      -       24,000                -                 -          24,000

Net Loss                                                      -            -                -        (9,681,535)     (9,681,535)
                                                    -----------  -----------   --------------  ----------------  ----------------

Balance, June 30, 1997                                3,137,048   47,092,740      (11,260,214)      (33,412,323)      2,420,203

Sale of stock                                         2,367,131    3,697,585                -                 -       3,697,585
Issuance of common stock subscribed                           -    2,673,600                -                 -       2,673,600
Zuri Invest litigation Settlement                             -      179,400                -                 -         179,400

Net loss                                                      -            -                -        (5,386,831)     (5,386,831)
                                                    -----------  -----------   --------------  ----------------  ----------------

Balance, June 30, 1998                                5,504,179   53,643,325      (11,260,214)      (38,799,154)      3,583,957
</TABLE>



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


                                       F-9

<PAGE>




<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                        ( A Development Stage Enterprise)

                       STATEMENTS OF SHAREHOLDER'S EQUITY
                   For the Years Ended June 30, 1999 and 1998
                      and for the Period From July 1, 1989
         (Date of Resumption of Development Stage Enterprise Activities)
                              Through June 30, 1999

                                                          COMMON STOCK
                                                    ------------------------                      Accumulated
                                                                                                    Deficit
                                                     Number                                        During the
                                                       of                       Accumulated       Development
                                                     Shares       Amount          Deficit            Stage          Total
                                                    -----------  -----------   --------------  ----------------  ----------------
<S>                                                 <C>          <C>           <C>             <C>               <C>

Balance, June 30, 1998                                5,504,179     53,643,325   (11,260,214)      (38,799,154)        3,583,957

Issuance of stock to Company Director                 3,730,861        894,287             -                 -           894,287
Reverse stock split, 1-for-12                        (8,365,585)             -             -                 -                 -
Issuance of stock persuant to merger                  3,580,000          3,580             -                 -             3,580
Stock issued for cash                                                   57,017                                            57,017

Net Loss                                                      -              -             -        (8,468,069)       (8,468,069)
                                                    -----------  ------------- --------------  ----------------  ----------------

Balance, June 30, 1999                                4,449,455     54,598,209   (11,260,214)      (47,267,223)       (3,929,228)
                                                    ===========  ============= ==============  ================  ================
</TABLE>



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

                                      F-10







<PAGE>



<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.

                            STATEMENTS OF CASH FLOWS
                   For the Years Ended June 30, 1999 and 1998
                      and for the Period From July 1, 1989
        ( Date of Resumption of Development Stage Enterprise Activities)
                              Through June 30, 1999




                                                                                                Period From
                                                                                                July 1, 1989
                                                                                                  Through
                                                                                                    June
                                                                1999              1998            30,1999
                                                              ------------  ----------------  ----------------
<S>                                                           <C>           <C>               <C>
Net  (loss)                                                     (8,368,069)       (5,386,831)      (47,167,223)

Gain on debt restructuring                                                                            (144,462)
Impairment of development costs                                                                      5,393,115
Depreciation and amortization                                                        252,791         1,686,693
Loss on lease and asset abandonments                             1,194,306                           1,638,665
Loss on littigation                                              4,487,729             4,000         8,598,761
settlement
(Gain) loss on sale of mining equipment                                                                 49,164
Other                                                                                                   43,576
Shareholder payment of services                                                                        105,055
Stock and debt issued for services                               1,881,787           176,584         2,761,439
Change in note receivable                                                                               47,462
Change in inventory                                                 39,735           (36,985)            2,290
Change in prepaid expenses                                                                             501,736
Change in deposits, advaces and other current assets                   500              (500)         (115,961)
Change in deposits                                                                                      (3,200)
Change in accounts payable and accrued                             289,580          (291,431)        4,295,755
liabilities
                                                              ------------  ----------------  ----------------

           Total adjustments                                     7,893,637           104,459        24,860,088
                                                              ------------  ----------------  ----------------

Net cash usded in operating activities                            (474,432)       (5,282,372)      (22,307,135)




Acquisition of mineral properties, equipment and deferred                            (90,388)       (5,164,817)
developments
Acquisition of office equipment                                                      (18,886)         (278,987)
Proceeds from sale of equipment                                                                        384,356
Proceeds from the acquisition of Trans-Russian                                                          20,060
                                                              ------------  ----------------  ----------------

Net cash flows provided by (used in) investing activites                 -          (109,274)       (5,039,388)
                                                              ------------  ----------------  ----------------
</TABLE>

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

                                      F-11



<PAGE>


<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.

                            STATEMENTS OF CASH FLOWS
                   For the Years Ended June 30, 1999 and 1998
                      and for the Period From July 1, 1989
         ( Date of Resumption of Development Stage Enterprise Activites)
                              Through June 30, 1999


                                                                                                    Period From
                                                                                                   July 1, 1989
                                                                                                      Through
                                                                  1999             1998            June 30,1999
                                                              ------------- ------------------  -------------------
<S>                                                           <C>           <C>                 <C>
CASH FLOWS FROM FINANCING ACTIVITIES

           Advances from affiliates                                                                       2,009,127
           Payments made to affiliates                                                                     (343,798)
           Proceeds from issuance of stock                                           6,370,002           26,336,515
           Proceeds from warrant extensions                                                                 207,750
           Proceeds from issuance of notes payable                   57,017                                 927,060
           Payments of long-term debt                                                 (672,000)          (2,093,979)
           Proceeds from convertible debenture                                                              300,000
                                                              ------------- ------------------  -------------------

Net cash provided by (used in) financing activities                  57,017          5,698,002           27,342,675
                                                              ------------- ------------------  -------------------

CASH RECONCILIATION

           Net increase (decrease) in cash                         (417,415)           306,356               (3,848)
           Cash at beginning of period                              417,415            111,059                3,848
                                                              ------------- ------------------  -------------------

CASH AT END OF PERIOD                                                     -            417,415                    -
                                                              ============= ==================  ===================



SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid during the year for interest (net of amounts        $           - $                -
capitalized)
                                                              ============= ==================
</TABLE>

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

                                      F-12



<PAGE>

NOTE  1  -  OPERATIONS  AND  BASIS  OF  PRESENTATION
            ----------------------------------------

J.A.B.  International,  Inc. (the Company)  formerly known as Brush Creek Mining
and Development Company,  Inc. was incorporated in 1982 and operated as a mining
and mineral  development  company until April 17, 1989, at which time its mining
operations,  all of which  had been  conducted  through  the Brush  Creek  Joint
Venture  (BCJV) (40% owned) were  terminated.  Shortly  thereafter,  the Company
became actively  engaged in acquiring  additional  mineral  properties,  raising
capital,  and preparing  properties for resumed production.  The Company did not
have any  significant  operations or activities from April 17, 1989 through June
30, 1989 and suspended  all mining  operations  and reduced its  activities to a
care and maintenance level. Accordingly, the Company is deemed to have reentered
the development stage effective July 1, 1989.

In February 1992, the Company began limited  production at the Ruby Mine under a
permit that limited mill capacity to 225 tons per day. Production was terminated
due to adverse weather  conditions in December 1992. The Company resumed limited
production  at the Ruby Mine in July  1993 and  gradually  increased  production
until October 1996 when  production  was  suspended.  In early 1997, the Company
began preparing the lower Brush Creek Mine for limited production. In June 1997,
the Company  received  interim approval from the United States Forest Service to
transport thirty tons of ore per day from the lower Brush Creek Mine to the Ruby
mill  site.  Some of the  Company's  leases  have  been  defaulted  upon and are
therefore  at risk.  See  footnotes  5 and 11.  The  Company  has not  commenced
economic  production and is therefore still  considered to be in the development
stage.

The Company's financial statements have been presented on the basis that it is a
going concern,  which contemplates the realization of the mineral properties and
other  assets  and the  satisfaction  of  liabilities  in the  normal  course of
business.  The Company has incurred losses of $58,527,437 from inception to June
30, 1999.  The Company has not  realized  economic  production  from its mineral
properties as of June 30, 1999. These factors raise  substantial doubt about the
Company's  ability to  continue  as a going  concern.  Management  continues  to
actively  seek  additional  sources  of  capital  to  fund  current  and  future
operations.  There  is no  assurance  that the  Company  will be  successful  in
continuing  to raise  additional  capital,  establishing  probable or proven ore
reserves,  or determining if the mineral  properties can be mined  economically.
Additionally,  the  Company is in default on the leases of certain of its mining
properties.  The lessors  have taken  action to  foreclose on the leases and the
Company is making  every  effort to fulfill  the  agreements.  The loss of these
leases  would have a material  adverse  effect on the Company.  These  financial
statements do not include any adjustments  that might result from the outcome of
these uncertainties.


NOTE  2  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
            ----------------------------------------------

Use  of  Estimates
- ------------------

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

                                      F-13

<PAGE>



Mineral  Properties  and  Mining  Equipment
- -------------------------------------------

Mineral  properties  and  mining  equipment  include  land  (and in prior  years
development  costs)  and mining  equipment  carried  at cost.  Mining  equipment
including mill  facilities is depreciated  using the  straight-line  method over
estimated useful lives of 5 to 15 years, or the units-of-production method based
on  estimated  tons of ore  reserves if the  equipment is located at a producing
property with a shorter  economic life.  Mining  equipment not in service is not
depreciated.

In the past,  the Company  deferred  direct  costs  related to the  acquisition,
exploration and development of mineral properties pending determination of their
economic viability which normally entails performing an in-depth  geological and
geophysical study. If no minable ore body was discovered, previously capitalized
costs were  expensed  in the period the  property  was  abandoned.  Any  revenue
generated from pre-production activities was offset against the related deferred
development and  pre-production  costs. When a property was placed in commercial
production,  such  deferred  costs were depleted  using the  units-of-production
method.

During 1997,  the Securities and Exchange  Commission  (SEC) staff  reconsidered
existing accounting  practices for mineral  expenditures by United States junior
mining companies.  They now interpret  generally accepted  accounting policy for
junior mining companies to permit capitalization of acquisition, exploration and
development  costs only after  persuasive  engineering  evidence  is obtained to
support  recoverability  of these costs  (ideally upon  determination  of proven
and/or  probable  reserves  based upon dense  drilling  samples and  feasibility
studies  by  a  recognized  independent  engineer).  Although  the  Company  has
performed  drilling  samples,  and an  independent  engineer has deemed the gold
properties contain profitable reserves in excess of property and equipment costs
incurred,  management  has  chosen to  follow  the more  conservative  method of
accounting by expending the previously capitalized gold mineral costs, for which
there is no feasibility study.

Land  Options
- -------------

In prior years it was the Company's policy to record land options at cost during
the initial year of the lease on the mining  properties.  As noted above,  since
the  Company  interprets   generally  accepted  accounting  policies  to  permit
capitalization of acquisition costs including leases and land options only after
persuasive  engineering evidence has been obtained to support  recoverability of
these costs, these costs will now be expensed, effective July 1, 1996.

Asset  Impairment
- -----------------

In  accordance  with  Statement  of  Financial  Accounting  Standards  No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of," (SFAS 121),  management of the Company reviews the net carrying
value of the Northern  California mines and development  properties on a regular
quarterly  basis.  Estimated future net cash flows from each mine are calculated
using estimated future prices,  operating  capital,  and reclamation costs on an
undescended basis. Reductions in the carrying value of each mine are recorded to
the extent the net book value of the  investment  exceeds the estimate of future
discounted net cash flows.

                                      F-14

<PAGE>



The  recoverability  of the carrying value of development  projects is evaluated
based upon persuasive  engineering  evidence of estimated  future net cash flows
from each property,  determined as described above, using estimates of contained
mineralization expected to be classified as proven and/or probable reserves upon
completion of a  feasibility  study.  Reductions  in the carrying  value of each
property are recorded to the extent that the  Company's  carrying  value in each
property exceeds management's estimate of future discounted net cash flows. When
mining equipment is idle,  management decides if it will be used productively in
the  future.  For idle  equipment  that is unique to an  abandoned  or  impaired
property,  the Company  reduces its  carrying  value  following  the  impairment
accounting principle.

Management's estimates of gold prices, recoverable proven and probable reserves,
operating  capital,  and  reclamation  costs are  subject to  certain  risks and
uncertainties which may affect the recoverability of the Company's investment in
property,  plant, and equipment.  Although management has made its best estimate
of these factors  based on current  conditions,  it is reasonably  possible that
changes could occur in the near term which could adversely  affect  management's
estimate of the net cash flow expected to be generated from its operations.

Office  Furniture  and  Equipment
- ---------------------------------

Office furniture and equipment are recorded at cost. Depreciation is computed by
the straight-line method based upon the estimated useful lives of the respective
assets, generally three to five years.

Income  (Loss)  per  Common  Stock
- ----------------------------------

Income  (loss)  per  share of common  stock is  computed  based on the  weighted
average  number  of  shares  outstanding.   Warrants,  options  and  convertible
debentures  have not been included in the  calculation  as their effect would be
anti-dilutive.  All common shares included in the financial statements reflect a
reverse  stock  split of 1:12,  which the Board of  Directors  approved  and was
effective as of April 13, 1999.

                                      F-15

<PAGE>



Reclamation  and  Environmental  Costs
- --------------------------------------

Reclamation costs and related accruals are based on the Company's interpretation
of  environmental  and  regulatory  requirements.  Minimum  standards  for  mine
reclamation have been established by various governmental agencies. Reclamation,
site restoration, and closure costs for each producing mine are accrued over the
life of the mine  using  the  units-of-production  method.  Ongoing  reclamation
activities are expensed in the period incurred.

Income  Taxes
- -------------

The Company  accounts for income taxes using the liability method which requires
recognition of deferred tax  liabilities  and assets for the expected future tax
consequences  of events that have been included in the  financial  statements or
tax returns.  Deferred tax assets and  liabilities  are determined  based on the
difference  between  the  financial  statements  and tax  basis  of  assets  and
liabilities  using  enacted  tax  rates in  effect  for the  year in  which  the
differences are expected to reverse.

Inventory
- ---------

Gold inventory is stated at net realizable value.

Stock  Based  Compensation
- --------------------------

In October 1995, the Financial  Accounting  Standards Board issued  Statement of
Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation,"  (SFAS  123),  which is  effective  for periods  beginning  after
December  15,  1995.   SFAS  123  requires  that  companies   either   recognize
compensation  expense  for  grants of stock,  stock  options,  and other  equity
instruments based on fair value or provide proforma  disclosure of the effect on
net income and earnings per share in the Notes to the Financial Statements.  The
Company  intends to continue to account for its stock-based  compensation  under
Accounting  Principles  Board No. 25;  however,  the  Company  has  adopted  the
disclosure provisions of SFAS 123 for the fiscal year ended June 30, 1998.

Cash  and  Cash  Equivalents
- ----------------------------

For purposes of reporting cash flows,  cash and cash equivalents  include highly
liquid debt instruments purchased with a maturity of three months or less.

Earnings  Per  Share
- --------------------

In February  1997,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement of Financial  Accounting  Standards No. 128 (SFAS 128),  "Earnings Per
Share",  which was adopted by the Company for the year ended June 30, 1997. SFAS
128 replaces the  presentation of primary earnings per share with a presentation
of basic  earnings  per share based upon the weighted  average  number of common
shares for the period.

Leases
- ------

The Company leases office space and mining  properties  under operating  leases.
All of the Company's leased mining properties  contain certain  provisions which
provide the Company with the option to purchase the property at a  predetermined
price or to renew the lease at a predetermined price. The Company is required to
pay all taxes, insurance, and maintenance on leased mining properties.


                                      F-16


<PAGE>



New  Accounting  Pronouncements
- -------------------------------

In June 1997, the FASB issued  Statement of Financial  Accounting  Standards No.
130 (SFAS 130), Reporting Comprehensive Income. This statement requires that all
items  that  are  required  to  be  recognized  under  accounting  standards  as
components of comprehensive  income be reported in a financial statement that is
displayed with the same prominence as other financial statements.  SFAS 130 will
be adopted by the Company for the year ended  December  31,  1998.  Prior period
financial statements provided for comparative purposes will be reclassified,  as
required. Upon adoption, the Company does not expect SFAS 130 to have a material
effect upon the Company's financial condition or results of operations.

In June 1997, the FASB issued Statements of Financial  Accounting  Standards No.
131  (SFAS  131),  Disclosures  about  Segments  of an  Enterprise  and  Related
Information. The statement requires the Company to report income/loss,  revenue,
expense and assets by  business  segment  including  information  regarding  the
revenues derived from specific  products and services and about the countries in
which the Company is  operating.  The  Statement  also requires that the Company
report  descriptive  information  about  the way that  operating  segments  were
determined,  the  products  and  services  provided by the  operating  segments,
differences  between the measurements used in reporting segment  information and
those used in the Company's general-purpose financial statements, and changes in
the  measurement  of segment  amounts  from period to period.  SFAS 131 has been
adopted by the Company for the year ended December 31, 1998.  This statement has
no effect on financial  statements  traditionally  presented by the Company, but
increases required disclosures.


NOTE  3  -  AFFILIATES  AND  RELATED  PARTIES
            ---------------------------------

Significant relationships with (1) companies affiliated through common ownership
and/or management, and (2) other related parties are as follows:

The Company has Joint ownership in the "Esperanza Gold Project". See Footnote #5
for a description of this Project and the joint ownership.


NOTE  4  -  OFFICE  FURNITURE  AND  EQUIPMENT
            ---------------------------------

Office furniture and equipment have been written-off as a loss as the items were
reposessed,  bartered, claimed or abandoned during the year ended June 30, 1999.
The Company  shall  reinstate  any  property  that is  recovered  if the Company
satisfies  amounts  that it is in default.  See  footnotes  6,7 and 12 regarding
commitments and contingencies with regard to the Company's property.


                                      F-17

<PAGE>



NOTE  5  -  MINERAL  PROPERTIES  AND  MINING  EQUIPMENT
            -------------------------------------------

The Company's net investment in mineral  properties  and mining  equipment is as
follows:


<TABLE>
<CAPTION>
                                                                       Development            Mining
                                                         Land             Costs             Equipment           Total
                                                      -------------   ---------------    ----------------   ---------------
<S>                                                   <C>             <C>                <C>                 <C>
Carson Mine                                           $   2,199,858   $             -    $         42,835    $    2,242,693
Brush Creek Mine                                            408,496                 -             403,171           811,667
Gardners' Point and Pioneer Mines                           185,477           770,327             128,521         1,084,325
Ruby Mine                                                         -                 -           1,589,229     (*) 1,589,229
High Commission Mine                                        101,875                 -                   -           101,875
Esperanza gold project and Vocar S.A.R.L. Permits             3,580                 -                   -             3,580
                                                      -------------   ---------------    ----------------   ---------------
                                                          2,899,286           770,327           2,163,756         5,833,369
Accumulated depreciation                                          -                 -          (1,172,549)       (1,172,549)
                                                      -------------   ---------------    ----------------   ---------------
                                                      $   2,899,286   $       770,327    $       991,207    $    4,660,820
Less abandoned During 1999                                                                      (991,207)       (*)(991,207)
                                                      -------------   ---------------    ----------------   ---------------
                                                      $   2,899,286   $       770,327    $             -    $    3,669,613
                                                      =============   ===============    ================   ===============
</TABLE>

(*) Note that the Company no longer holds a lease on Ruby Mine. The equipment on
the property remains with the former lessor.  The Company hopes to renegotiate a
lease or  purchase  the  property  at  which  time  equipment  may or may not be
returned. Equipment on other properties is either no longer on the properties or
is obsolete.

The  Company  owns or holds  claims and rights to the above  properties  but has
property taxes,  maintenance fees and reclamation  bonds outstanding with regard
to its  California  properties.  Those  amounts  have been  included in accounts
payable.

All of the Company's mineral  properties in the U.S. contain mines which were in
production previously. All such mines, except for the Esperanza Gold Project and
Vocar S.A.R.L.  Permits,  Gardners's  Point and Pioneer Mines are located in the
Allegheny-Forest-Downieville mining districts on the western slope of the Sierra
Nevada mountain range in Northern  California and aggregate  approximately 6,300
acres.  Because of the close  proximity of the mines to each other,  the Company
plans to centralize  milling  operations.  The Gardner's Point and Pioneer Mines
are  located   outside  this  district  and  management   has  been   evaluating
alternatives to placing them into current production. The Esparanza Gold Project
is located in  Southeastern  Honduras.  The VOCAR  S.A.R.L.  mining  permits are
located in the Central African  Republic.  Current  developments and commitments
related to certain properties follow:

Reverse Merger between Brushcreek Mining & Development Company and J.A.B.

International, Inc.
- -------------------

On April 14,  1999 the  Company  completed  a merger  whereby  it  obtained  two
properties.  The company obtained a Central African Republic  registered company
named VOCAR S.A.R.L. which holds a the permits to a mining concession located in
the  Southeastern  section of the  country.  This  company was formed in 1987 by
Robert  Hendry,  Esq. And Harold McQuire in 1994 and purchased by the Company in
1994.  The permits for the mining  property were granted in November of 1995 and
are in VOCAR S.A.R.L.  and the Company's name. The permits require a maintenance
fee of  $5,000  every 5 years,  of which no fees are  outstanding.  The  permits
require  that the  Company  pay an import  tax on mining  equipment  of  various
amounts  and an export  tax on  minerals  at 8.25% of the  value in the  Central
African  Republic.  The mining area is 3,500 square  kilometers in size with one
major river with  tributaries.  The Company has initiated test pits to determine
the  recoverability  of diamonds and gold.  A full  geological  and  engineering
report is planned.

In addition to this property,  the Company acquired the "Esperanza Gold Project"
from the Esperanza  Mining Company in 1997. 80% of the Esperanza  Mining Company
was purchased with 50,000 common shares of the Company's  stock and an agreement
to pay a 3% net smelter royalty. Through additional agreements,  the Company has
issued an additional  100,000 common shares of the Company's  stock.  The mining
company was formed in the US by 3 Honduran  natives who owned the property.  The
property is roughly  49,000 acres located in the North Central part of Honduras.
Only  minor  exploration  has  taken  place  to  date.  A  full  geological  and
engineering  report is planed.  The Honduran  Government changed the mining laws
during the year 2000  whereby the Company had its law firm in  Tegucigalpa  file
papers with the bureau of mines to keep current.  The Company is responsible for
filing  a  Mining  Plan of  Operations  with the  Government  in  order  stay in
compliance with the new law.


                                      F-18

<PAGE>



NOTE  6  -  DEMAND NOTE PAYABLE  AND LINES OF CREDIT
            --------------------------------------------

The Company had a demand note  payable in the amount of $57,017 with no interest
that was converted to 174,209  common  shares of stock during  fiscal 2000.  The
amounts were loaned during fiscal year 1999.

No unused lines of credit exist.


NOTE  7  -  INCOME  TAXES
            -------------

At June 30, 1999, the Company had available net operating loss carryforwards for
financial  statement and federal income tax purposes.  These loss  carryforwards
expire between 2000 and 2019.

The Company has reported income tax losses of approximately $58,500,000 in prior
years.  In  general,  income tax losses are carried  forward to future  years to
reduce  future  income  taxes,  however,  the full amount of these losses is not
available or has been reduced.

The  Company's  management  has decided a valuation  allowance  is  necessary to
reduce any tax benefits because the available  benefits are more likely than not
to expire before they can be used.


NOTE  8  -  SHAREHOLDERS'  EQUITY
            ---------------------

During fiscal 2000  (subsequent  events after the year ended June 30, 1999), the
following major equity transaction occurred:

The Company  undertook an S-8  registration for the issuance of 1,330,000 common
shares with a value of $987,500 during the first quarter of the year. The shares
issued were used to reduce accrued  consulting  expenses  incurred during fiscal
year 1999.

The Company also issued 174,209 common shares with a value of $57,017 to convert
a demand note payable to common stock.

The Company sold 465,791  shares of common stock for $152,449 in cash during the
fiscal year 2000.

During fiscal 1999, the following major equity transactions occurred:

On March 1, 1999 the Company issued  3,730,861  common shares valued at $894,287
to Jefferson  Adams Bootes for services as a Director of the Company.  After the
issuance there were 9,235,040 shares issued and outstanding.

The Company  offered a 1 for 12 reverse  stock  split on April 13, 1999  leaving
869,455 common shares issued and outstanding..


                                      F-19

<PAGE>


In an exchange of 3,580,000  common shares of the  Company's  stock on April 14,
1999, the Company executed a tax free reverse merger with a Florida  corporation
by the name of J.A.B. International, Inc. The merger was accounted for under the
purchase method.  The transaction was valued at the Company's par value.  When a
proper reserve study is completed of the acquired  assets,  the transaction will
be  revalued in  accordance  with  industry  standards.  The assets  transferred
included VOCAR  S.A.R.L.,  a company which holds permits to a mining  concession
located in the  Southeastern  section of the Central African  Republic,  and the
Esperanza Gold Project, a 49,000 acre placer gold mine in Southeastern Honduras.
At the time of merger the Company  changed its name from Brush Creek  Mining and
Development Company, Inc. to J.A.B. International,  Inc. The Florida corporation
was then disolved leaving J.A.B. International,  Inc., a Nevada corporation, the
surviving  company.  After this merger,  the Company had 4,449,455 shares issued
and outstanding.

During fiscal 1998, the following major equity transactions occurred:

The Company  effected a 10 for 1 reverse stock split.  To effect the split,  the
Company's  authorized,  issued,  and  outstanding  no par stock was reduced from
53,705,482 to 5,504,179.

At year end, the Company  shareholders'  equity had  increased  2,673,600 and is
carried as subscribed common stock.

The Company sold 1,867,131  shares of Common Stock for $2,224,599.  These shares
were sold pursuant to Regulation S of the Securities Act of 1933.

The Company  issued  500,000  shares of Common Stock with a value of $3,250,001.
The shares were registered  with the Securities and Exchange  Commission on Form
S-8.

The  following  shares  were sold under  Regulation  D and  Section  4(2) of the
Securities  Act of 1933.  Investors who acquires such shares were required to be
accredited investors.  The Company has agreed to register the shares pursuant to
a  registration   statement  to  be  filed  with  the  Securities  and  Exchange
Commission.  The Company sold 600,000 restricted shares of Common Stock at $.125
per share  wherein  the Company  received  net  proceeds  of $75,000;  1,822,221
restricted shares of Common Stock at $.15 per share wherein the Company received
net proceeds of $290,000;  4,300,000  restricted  shares of Common Stock at $.07
per share  wherein the Company  received  net  proceeds of  $301,000;  6,600,000
restricted shares of Common Stock at $.10 per share wherein the Company received
net proceeds of $660,000;  670,000 restricted shares of Common Stock at $.50 per
share wherein the Company received net proceeds of $335,000; 1,750,00 restricted
shares of Common  Stock at $.184 per share  wherein  the  Company  received  net
proceeds of $322,000; 60,000 restricted shares of Common Stock at $.50 per share
wherein the Company  received  net  proceeds  of $30,000;  1,150,000  restricted
shares of Common  Stock at $.184 per share  wherein  the  Company  received  net
proceeds of $211,600.  The Company sold  5,000,001  shares of Common Stock under
Regulation  S at $.65 per share  wherein the Company  received  net  proceeds of
$3,250,000.

During fiscal 1997, the following major equity transactions occurred:

The Company sold 286,756  shares of Common  Stock for  $1,016,250.  These shares
were sold pursuant to Regulation S of the Securities Act of 1933.

The  Company  issued  2,000  shares  of Common  Stock  with a value of $5,200 in
connection with its acquisition of the New California Placer Mine.

The Company  issued 16,500  shares of Common Stock with a value of $41,250.  The
shares were registered with the Securities and Exchange Commission on Form S-8.

Shareholders'  equity increased by $1,200,000 as shares issued in the prior year
were used to settle the Zuri Invest litigation.  See 100,000 shares below issued
in 1996.

The Company sold 360,001  restricted  shares of Common Stock at $.0625 per share
wherein the Company received net proceeds of $225,000; 660,000 restricted shares
of Common Stock at $.07 per share  wherein the Company  received net proceeds of
$460,600;  175,455  restricted  shares of Common Stock at $.11 per share wherein
the Company  received  net proceeds of $193,000;  140,000  restricted  shares of
Common  Stock at $.125 per share  wherein the Company  received  net proceeds of
$175,000.  All  shares  were sold under  Regulation  D and  Section  4(2) of the
Securities  Act of 1933.  Investors who acquired such shares were required to be
accredited investors.  The Company has agreed to register the shares pursuant to
a  registration   statement  to  be  filed  with  the  Securities  and  Exchange
Commission.


                                      F-20

<PAGE>



During fiscal 1996, the following major equity transactions occurred:

The Company sold 678,350  shares of Common  Stock for  $6,875,416.  These shares
were sold pursuant to Regulation S of the Securities Act of 1933.

The  Company  issued  110,000  shares as partial  settlement  of the Zuri Invest
litigation.  These shares were held in trust by the adverse party. The stock was
forfeited  and was valued at fair market  value on the forfeit  date,  i.e.  the
trading price.

The Company  issued  21,667  shares as partial  settlement  of the Royal Bank of
Scotland litigation.

During fiscal 1995, the following major equity transactions occurred:

The Company sold 256,667  shares of Common  Stock for  $3,696,457.  These shares
were sold pursuant to Regulation S of the Securities Act of 1933.

During fiscal 1994, the following major equity transactions occurred:

The Company  issued 21,510 shares of Common Stock in exchange for certain legal,
engineering,  consulting,  and  employment  services  rendered  to  the  Company
totaling $938,159.(*)

The Company  issued shares of the Company's  Common Stock  pursuant to a service
agreement with James Anderson totaling $421,875.

The Board of Directors of the Company  approved a 15-for-1  reserve  stock split
effective November 29, 1993.

During fiscal 1993, the following major equity transactions occurred:

The  Company  issued  53,940  shares  of  Common  Stock in  connection  with its
acquisition  of  Trans-Russian.  Total  reduction  in equity in  relation to the
acquisition was $84,176.(*)

In connection  with its mining  properties,  the Company  issued 3,729 shares of
Common Stock for accrued lease payments of $107,710, prepayment of certain lease
expenses of $113,153, and acquisition of mining equipment of $34,375.(*)

The Company  issued  10,514  shares of Common  Stock with a value of $713,494 in
satisfaction of outstanding debt obligations amounting to $558,592.(*)

The Company  issued  10,026  shares of Common  Stock with a value of $500,285 in
satisfaction of the Company's obligation to CSGM of $574,750.(*)

The Company  issued 18,319 shares of Common Stock in exchange for certain legal,
engineering,  consulting,  and  employment  services  rendered  to  the  Company
totaling $1,616,659.(*)

The Company sold 1,066 shares of stock at $7.50 per share, totaling $80,000.

The Company  issued  3,334  shares of Common  Stock  pursuant to the exercise of
options in settlement of debt to CSGM of $250,000.(*)

During fiscal 1992, the following major equity transactions occurred:

The  Company  issued  15,534  shares  of  Common  Stock in  connection  with its
acquisition  of Sierra Gold and the related  options on mineral  properties  for
$74,807.(*)

The  Company  issued  1,031  shares  of  Common  Stock  in  connection  with its
acquisition of the  Kate-hardy  Mine for $88,667 and prepayment of certain lease
expenses of $66,000.(*)

In connection  with its lease on the Ruby Mine,  the Company issued 2,480 shares
of Common Stock for:  accrued  lease  payments of $72,502,  prepayment  of lease
obligation  of  $63,287,  and  modification  and  extension  to  lease  term  of
$154,836.(*)


                                      F-21

<PAGE>



In  connection  with its lease on the Rising Sun Mine,  the  Company  issued 533
shares of Common  Stock for accrued  lease  payments of $22,002,  prepayment  of
lease  obligation of $18,687,  and  modification  and extension to lease term of
$4,111.(*)

The Company issued 2,444 shares of Common Stock in  satisfaction  of outstanding
debt obligations amounting to $336,617.(*)

The Company issued 88000 shares of Common Stock with a value of $748,750 to CSGM
in satisfaction of the Company's obligation to CSGM of $900,000.(*)

The Company  issued 11,791 shares of Common Stock in exchange for certain legal,
engineering,   and  employment   services   rendered  to  the  Company  totaling
$1,286,852.(*)

In May 1992, the Company entered into a three-year  consulting contract with Mr.
Anderson in exchange  for issuing  6,667  shares of Common Stock with a value of
$531,250.(*)

Ms. Anderson paid expenses on behalf of the Company amounting to $105,055.  This
amount and the  proceeds  received  from the  extension  of warrants of $207,750
totaling $312,805 is accounted for as a contribution of capital.

The Company made several  private  placements of a total of 14,210 shares of its
Common Stock at prices ranging from $.90 to $1.50 per share totaling $2,298,451,
net of offering costs of $177,974.

During fiscal 1991, the following major equity transactions occurred:

On June 29,  1990,  the  Company  sold  13,173  units  for  $987,955.  Each unit
consisted  of one share of Common  Stock and a warrant to purchase  one share of
Common Stock. The Company's previous chairman,  Mr. Benarroch,  is the president
of the  underwriter,  Euro  Canadian,  in this  transaction,  which  received  a
commission of $98,796.  The underwriter also received warrants to purchase 3,334
shares of the  Company's  Common Stock at $.50 through July 1992.  In July 1990,
the Company sold an additional 14,161 units. The Company received $910,840 after
offering  expenses.  Warrants  covering  25,333 shares are  exercisable  at $.70
through June 1992, and warrants  covering  2,000 shares are  exercisable at $.90
through June 1992.

On June 26, 1990,  the  Company's  Board of  Directors  approved the issuance of
7,376 units to ISGM and CSGM in  satisfaction  of the Company's debt of $553,242
to these entities. Each unit consists of one share of the Company's Common Stock
and one  warrant to purchase  one share of stock at $.50 per share,  exercisable
through July 1992. As of December 31, 1990,  these units had not been  delivered
due to administrative delays. As an inducement to the approval of the consulting
agreement  described below, CSGM and ISGM agreed to cancel the units approved by
the Board of Directors on June 26, 1990.

On January 23, 1991,  the Company  entered into an agreement  with CSGM and ISGM
whereby CSGM and ISGM are obligated to render consulting services to the Company
to assist the Company in the acquisition of mining properties, identification of
and negotiation with the Company's creditors,  and other day-to-day business and
administrative tasks. In exchange for rendering consulting services, the Company
agreed to issue 12,000  shares of its Common Stock to CSGM.  As the market value
of the shares issued was approximately equal to that of the units canceled,  the
issuance  of the  shares  has been  treated  as a  replacement  of the units for
accounting purposes.(*)

In January 1991, an additional 4,927 shares of Common Stock were issued to third
parties. These shares, valued at fair market value of $630,568,  were issued for
legal and  consulting  services  rendered  and the  repayment  of a note payable
issued for services of $114,560.(*)

The Company  agreed to issue 2,000  shares of Common Stock valued at fair market
value of $581,250 to an engineering firm for past and future services.(*)

The Company  entered into a litigation  settlement with Mr.  Benarroch,  whereby
6,667 shares of the  Company's  outstanding  Common  Stock were  returned to the
Company and,  simultaneously,  the Company issued back to Mr.  Benarroch  10,000
shares,  valued at fair market value of $1.75 per share. The settlement resulted
in a net issuance of 3,333 shares of Common Stock valued at $875,000.(*)


                                      F-22

<PAGE>


During  fiscal  1990,  the Company  initiated a private  placement of its Common
Stock. In April 1990, the Company sold 15,000 shares for $450,000.

In March 1990,  Ms.  Anderson  sold 6,667  shares of her Common Stock to Sungold
Mining Corp.  (Sungold) for $10,000 as an inducement for an affiliate of Sungold
to lend the Company $140,000.(*)

In March and May 1990,  the  Company  issued  23,500  shares of Common  Stock in
exchange for legal services valued at $72,500.(*)

(*) For each issuance involving noncash consideration,  the Company recorded the
fair market value of the shares issued as the consideration received.



NOTE  9  -  STOCK  OPTIONS  AND  WARRANTS
             -----------------------------

Upon the merger that  occurred on April 14, 1999,  the Company  cancelled all of
its existing stock option agreements.


NOTE  10  -  COMMITMENTS  AND  CONTINGENCIES
             -------------------------------

Compensation Agreement:

During March of 1999, the Company entered into a 5 year  compensation  agreement
compensation agreement with Jefferson Adams Bootes, the President and CEO of the
Company,  whereby he is to  receive  compensation  of $25,000  per month for his
duties as President and CEO.

Changes in management:

Recent  changes  in  management,  as  noted  in  footnote  18,  have  led to the
contingency  that all  transaction and liabilities may not have been recorded in
the Company's  accounting  records during fiscal year 1999. With the uncertainty
of  the  Company's  cash  flows,  the  Company's  management  chose  to  satisfy
liabilities that may or may not have been recorded with the bartering of company
assets  such as  equipment.  In  addition,  assets such as  equipment  have been
claimed by lessors of property in which the Company is in default.

The Company's management has inspected the mining locations for property and has
written-off  as an  abandonment  loss any assets not  observed.  In addition the
Company's  management has decided to leave accounts  payable amount as being due
if satisfaction has not been recorded in the Company's  accounting  records.  At
such time that the Company has funds to  research  these  amounts as having been
satisfied and possibly  additional  amounts due, the Company will  determine the
materiality of these amounts in order to determine if a prior period  adjustment
should be recorded and revised statements issued.

Contingencies:

The Company is currently in default of its lease  payments on mining  properties
and the  property  taxes on these  leases.  The Company has also had  judgements
filed  against it which have been  accrued at  $4,951,229.  The Company may have
additional  suits  brought  against it in the future.  Currently  the Company is
negotiating  settlements,  however,  there is no  assurance  as to  whether  the
Company will be successful in these negotiations.

Judgements whereby a settlement  agreement has been agreed to have been recorded
at the minimum amount due. The additional  judgement  liability that the Company
would record if a settlement was not in place is $5,850,000.

The Company holds no leases for office space. The Company is currently  accruing
expense  reimbursements  for the Company president to retain all records for the
Company.


                                      F-23

<PAGE>



The Company's  mining and exploration  activities are subject to various federal
and state laws and  regulations  governing the  protection  of the  environment.
These laws and regulations are continually  changing and are generally  becoming
more  restrictive.  The Company  conducts  its  operations  so as to protect the
public health and  environment and believes its operations are not in compliance
with all applicable laws and  regulations.  The Company has made, and expects to
make in the future,  expenditures to comply with such laws and regulations.  The
Company cannot predict such future expenditures.

The Company contracted with an outside consultant to develop a cost estimate for
future  reclamation  costs  on the  Gardner's  Point  Mine.  This  estimate  was
developed  pursuant to SMARA  guidelines and required for submission to the lead
agency and the  Department of  Conservation  as the Company  develops a plan for
future  mining  at this  site.  Future  reclamation  costs are  estimated  to be
$380,000.  Additional  bonding for  reclamation  will be required  subsequent to
final  approval  estimated to be  completed  in May of 1998.  As of this balance
sheet date, a  contingent  liability  for the amount of the new  estimate  which
exceeds the  liability  accrued in prior years was not included in the Company's
financial statements. Consistent with the Company's policy, as discussed in Note
1,  reclamation  costs  are  accrued  over  the  life  of  the  mine  using  the
units-of-production  method.  Once the mine enters the production stage,  should
the end of the mine's  production  life become  imminent,  the entire  estimated
liability would be expensed.

On April 1, 1997,  the Company sold certain  pieces of equipment with a net book
value of  $73,191  for  $60,000  pursuant  to a  sale-leaseback  agreement.  The
agreement  required a single $90,000 payment on July 31, 1997 to reacquire title
to the equipment.  The Company did not make the $90,000 payment and defaulted on
the agreement.  Subsequent to the default, the Company made a $10,000 payment to
continue to use the equipment.  No additional agreements or modifications to the
original agreement have been made. Due to the Company's default,  the assets are
not included on the books of the Company.

NOTE  11  -  LEGAL  PROCEEDINGS
             ------------------

The Royal Bank Action.
---------------------

On December 13,  1995,  the Company  entered into an agreement  (the "Royal Bank
Agreement") to settle an action commenced by the Royal Bank of Scotland,  et al.
by delivering to the plaintiffs (the "Royal Bank Plaintiffs")  216,667 shares of
the Company's Common Stock and cash in the amount of $241,000.  The Company also
assigned  to the Royal Bank  Plaintiffs  a portion of its  interest in any total
recovery from claims against the law firm formerly known as Bartel,  Eng, Miller
& Torngren, the Company's formal legal counsel ("Bartel,  Eng"). On December 13,
1996,  the  Company  was  further  required to deliver to each of the Royal Bank
Plaintiffs,  at his or her option,  additional  shares of the  Company's  common
stock or additional  cash. The number of shares of Common Stock or the amount of
cash each Royal Bank  Plaintiff  was entitled to receive was based on the amount
of his or her pro rata  interest in amounts paid by the Company  pursuant to the
Royal Bank  Agreement.  If all Royal Bank  Plaintiffs  elected to receive Common
Stock,  then the Company would have been required to issue and deliver a maximum
of 300,000 shares in the aggregate and if all Royal Bank  Plaintiffs  elected to
receive  cash,  then the Company would have been required to deliver cash in the
maximum aggregate amount of $600,000.


                                      F-24

<PAGE>



Prior to  December  13,  1996,  the Royal  Bank  Plaintiffs  elected  to receive
$600,000  in cash  under  the  terms of the Royal  Bank  Agreement.  On or about
December 17, 1996, the Company  received  notice from the Royal Bank  Plaintiffs
that the  Company  was in  default of its  obligation  to pay them  $600,000  on
December  13, 1996.  Under the Royal Bank  Agreement,  such  default  caused the
Company to incur an immediate $3.25 million debt to the Royal Bank Plaintiffs.

Subsequently,  in January 1997, the Company entered into a Forbearance Agreement
(the "Forbearance Agreement") with the Royal Bank Plaintiffs which provided that
notwithstanding the $3.25 million  obligation,  the Royal Bank Plaintiffs agreed
to forbear  from  exercising  their  rights and  remedies  against  the  Company
provided  the Company made a payment of $629,100 on or before March 20, 1997 and
a payment of $175,000  on or before July 1, 1997.  The Company had the option to
postpone the second payment ($175,000) by delivering written notice to the Royal
Bank Plaintiffs no later than June 25, 1997, whereupon the second payment was to
have  been  paid no  later  than  December  15,  1997 and the  amount  was to be
increased  to  $250,000.  The Company  also agreed to  reimburse  the Royal Bank
Plaintiffs  for their  attorneys'  fees and  costs.  Thereafter,  the Royal Bank
Plaintiffs  agreed to extend the time  period for  paying the  $629,100  to them
until May 15, 1997.  In addition,  the second  payment was increased to $225,000
payable on July 1, 1997 subject to  postponement  until  December  15, 1997,  in
which event the amount was to be increased to  $300,000.  The amount,  which was
due May 15, 1997, was not paid by such date. However, effective on June 2, 1997,
the  Company  entered  into an  Amendment  No.  2 to the  Forbearance  Agreement
("Amendment  No. 2") which,  among other  things,  provided  that the Royal Bank
Plaintiffs  would continue to forbear from exercising  their rights and remedies
under the Royal Bank Agreement and related Forbearance  Agreement,  provided the
Company  performed the  following:  (a) paid $896,000 in eight  installments  of
$112,000 each on May 31, July 31, September 30 and November 30, 1997 and January
31,  March 31,  May 31 and July 31,  1998 (the  "Periodic  Payments"),  (b) paid
$250,000 on or before  September 30, 1998,  (c) made payments of $25,000  within
five  business days after any  closing(s)  since March 20, 1997 of any single or
series of  sale-leaseback  transaction(s)  in which the Company  received in the
aggregate of at least  $65,000 in proceeds,  and (d) made a final  payment on or
before  September 30, 1998 of the Judgment Amount (as defined in the Forbearance
Agreement) less the aggregate amount of the Periodic  Payments  previously paid;
provided,  however,  that if the Company timely performed its obligations  under
its settlement  documents with the Plaintiffs and either (i) Plaintiffs received
all of the Periodic  Payments,  or (ii) the Company made one final payment in an
amount set forth in Amendment  No. 2 which amount  ranged from  $950,000 if such
final  payment  was paid on or before  May 31,  1997 to  $350,000  if such final
payment was paid after May 31, 1998 and on or before July 31, 1998 (and assuming
all Periodic  Payments coming due prior to the final payment were made), in such
event the Plaintiffs  agreed to waive the  enforceability of the Judgment Amount
against the  Company  and the Company  would not be required to make any further
payments.

The Company  also agreed to issue  433,334  shares (the  "Forbearance  Agreement
Shares") of its Common Stock to the Royal Bank Plaintiffs and agreed to register
such shares for resale pursuant to a Registration Statement to be filed with the
Securities  and Exchange  Commission.  Also,  the Company agreed to issue to the
Plaintiffs,  from time to time until the  payments  referred  to above have been
completed,  .025 shares of its Common  Stock for each share  issued in excess of
24,000,000 of the Company's  outstanding  shares.  Amendment No. 2 also provided
that the Company reimburse  Plaintiffs for attorneys' fees and costs incurred in
connection with the preparation and negotiation of Amendment No. 2.

In fiscal 1999, the Company again amended the  Forbearance  Agreement to provide
for payment to Royal bank of $200,000 and 75,000 shares of the Company's  Common
Stock ("Amendment No. 3").


                                      F-25

<PAGE>



Effective on March 17, 1999, the Company  entered into an Amendment No. 4 to the
Forbearance  Agreement  ("Amendment No. 4") which, among other things,  provides
that the Royal Bank Plaintiffs  would continue to forbear from exercising  their
rights and  remedies  under the Royal Bank  Agreement  and  related  Forbearance
Agreement,  provided the Company performed the following: (a) on or before April
16, 1999 paid  $200,000 of the  Judgment  Amount (as defined in the  Forbearance
Agreement).  The Company also agreed to issue to the  plaintiffs an aggregate of
319,500 shares of the Company's common stock ("Additional  Forbearance  Shares")
pursuant  to an  exemption  from  registration  under Rule 506 of  Regulation  D
promulgated  under  Section 4(2) of the  Securities  Act. The Company  agreed to
register these shares with the Securities and Exchange Commission on Form S-3 no
later than December 31, 1999.  The plaintiffs  and the Company  executed  mutual
releases,  with the  release in favor of the  Company to be  effective  upon the
Company's  performance of all of its  obligations  under Amendment No. 4 and the
other settlement documents.

The Company's  obligations  under the Royal Bank  Agreement are secured by (1) a
deed of trust on all real property and patented and  un-patented  mineral claims
owned by the  Company;  (2) a first  priority  security  interest  in all of the
Company's  right,  title and  interest  in and to any and all  goods,  products,
yield,  receivables,  inventory (including any gold from any mines), any and all
exploration and drilling  information,  data, maps, reports or surveys,  and any
and all income and proceeds  derived from the  Company's  mining  operations  on
property  which the Company  presently  or  subsequently  owns or leases;  (3) a
first-priority  security interest in the Company's right,  title and interest in
and to any total recovery by the Company on the claims against Bartel,  Eng; and
(4) a stipulated judgment in the amount of $3,250,000.

In fiscal 1996, the Company  registered the 1,616,667  shares of Common Stock to
be issued and delivered pursuant to the Zuri Agreement the Royal Bank Agreement,
which included the 300,000  additional shares that may have been issued pursuant
to the Royal Bank Agreement as described above. This number does not include the
Forbearance Agreement Shares or the Additional  Forbearance Shares (as described
above).

The Anderson Matter.
-------------------

The Company was  plaintiff in the matter of Brush Creek  Mining and  Development
Co., Inc. v. Anderson,  et al., United States District Court,  Northern District
of  California,  case no.  C94-3487 CAL, filed on September 24, 1994. The action
was  against  former  officers  and  directors  of the  Company  and  others for
violations of federal and state  securities  laws and common law torts. On April
3, 1998, the Company's counsel, the Hinton & Alfert firm, withdrew as counsel of
record.  Upon the  Company's  failure to obtain new  counsel as  directed by the
Court, the action was dismissed with prejudice on May 15, 1998.  Following entry
of judgment of dismissal,  two of the defendants  moved as purported  prevailing
parties for an award of attorney's fees and costs incurred in defending  against
the  Company's  claims.  The  defendants  sought  by  their  motion  to  recover
$63,782.14.  On August 21, 1998, the Court denied the  defendants'  motion.  The
Company is not actively pursuing this matter.

The Volcanic Matter.
-------------------

On August 12,  1998,  Volcanic  Resources,  LLC filed a  complaint  against  the
Company,  its past CEO and Chairman of the Board,  and two of its directors.  On
September 16, 1998,  Plaintiff filed its First Amended Complaint alleging breach
of  contract  and breach of express  warranties  against  the  Company  only and
alleging fraud,  negligent  misrepresentation,  rescission,  constructive trust,
declaratory  relief and violation of Business and Professions Code section 17200
against  all  defendants.  The  underlying  contract  giving  rise to this  suit
involves a written Exploration, Development and Mine Operating Agreement entered
into November 20, 1997 between  Sterling Mining,  LLC and the Company.  Sterling
Mining,  LLC  assigned its rights under the  Exploration,  Development  and Mine
Operating  Agreement to  Plaintiff.  In  accordance  therewith,  the  individual
defendants filed three  preliminary  "motions":  (1) Motion to Change Venue; (2)
Demurrer; and (3) Petition to Compel Arbitration.


                                      F-26

<PAGE>



The Shareholder Suit.

In  August  1999,  Paul  Body and  other  shareholders  of the  Company  filed a
complaint against the Company,  its past CEO and Chairman of the Board and three
of its directors,  alleging fraudulent  misrepresentations,  breach of contract,
breach  of  express  and  implied  contractual  obligations,   defamation.   The
plaintiffs  purchased  shares of common  stock in a private  offering and allege
that the  defendants  fraudulently  misrepresented  the financial  condition and
business  prospects of the Company.  The defendants also allege that the Company
did not  register  the  common  stock  purchased  as it agreed to as part of the
private placements.  Certain plaintiffs also allege that they were obstructed in
their efforts to sell certain of their shares of common  stock.  With respect to
the defamation  allegations,  the plaintiffs  allege that the former chairman of
the Company posted publicly on the Internet defamatory  statements regarding the
plaintiffs and that the Company has never withdrawn or recanted such statements.

Other Matters.
-------------

In fiscal  1996 and 1997,  the Company was  requested  pursuant to a  non-public
informal  inquiry  by  the  staff  of the  Securities  and  Exchange  Commission
("Commission"), to provide information to the Commission regarding the Company's
financing activities in reliance upon Regulation S under the Securities Act. The
Commission  advised the Company  that the inquiry  should not be construed as an
indication  by the  Commission  or its  staff  that any  violations  of law have
occurred,  nor should it be considered a reflection upon any person.  No charges
were filed as a result of the inquiry.

On February 8, 1996, the Company filed a complaint against F. James Anderson and
Simone  Anderson in Superior  Court of the State of  California,  in and for the
County of  Sacramento,  Case No.  96AS  00513  (the  "Sacramento  Action").  The
complaint seeks (a) judicial determination and declarations that the Company (1)
has no further  obligations  to advance  defense fees and costs  incurred by the
Andersons in connection  with other settled  litigation  involving  Zuri Invest,
including on the  Andersons'  appeal of that judgment  (which fees and costs the
Company agreed to pay pursuant to a settlement in a previously resolved matter);
(2) is entitled to recoup  defense fees and costs  allocable  to the  Andersons'
defense of claims in the Zuri  Invest  matter for which they were found  liable;
(3) is not required to indemnify the  Andersons for their  liability in the Zuri
Invest  litigation;  (4) has no duty or  obligation  to the Andersons to account
for, replenish, and/or return monies to or pay interest on the $200,000 provided
by the Andersons as partial  indemnification  to the Company in connection  with
the Royal Bank  litigation;  and (5) is entitled to have all amounts returned to
the Company from the $200,000  which were  disbursed for the purposes other than
to indemnify the Company such that the Company  receives the full net benefit of
the $200,000,  and (b) equitable  indemnification  to collect from the Andersons
their proportionate share of the judgment in the Zuri Invest litigation.

On April 4, 1996,  the  Company  was served  with the  Andersons'  answer to the
Sacramento Action and they're  cross-complaint  against the Company.  The answer
generally denied the allegations of the Company's complaint and asserted various
affirmative  defenses.  The  cross-complaint  seeks judicial  determination  and
declarations that the Company (1) is obligated to advance the Andersons' defense
costs  (including  costs of appeal) in the Zuri  litigation and defense costs in
the Federal  Action and (2) is obligated to indemnify  them from the judgment in
the Zuri Invest  litigation and any judgment that might be rendered against them
in the Federal Action.

Also,  on April 4, 1996,  the Company was served with a motion by the  Andersons
for summary  adjudication  of two of their cross  claims which would have forced
the Company to advance the  Andersons'  defense cost in the Zuri  litigation and
the  Federal  Action.  On May 3, 1996,  the  Andersons'  motion was heard by the
superior court and denied.  The Company  answered the Andersons' cross complaint
on May 6, 1996 generally denying the allegations and asserting various defenses.
[Although the Company has not done so to date,  the Company may attempt to amend
its  original  complaint  to assert an  additional  claim to hold the  Andersons
liable for the entire amount of the Royal Bank of Scotland settlement.

The Company is a party to other various  claims,  legal  actions and  complaints
arising in the ordinary  course of business.  In the opinion of management,  the
ultimate disposition of these matters will not have a material adverse effect on
the business or financial position of the Company.

1. Ruby  Development  - Judgment for  $1,250,000,  default for breech of contact
associated  with lease of the mine. The Company was not properly served and will
ask the court to set aside the judgment.

2. Kate Hardy / Omega - Judgment for $401,606.46

3. Rising Sun - Judgment for $250,000

4. Jean Gasperoni - Judgment for $105,000,  filed suit for commission on funding
that the  company  did not  receive.  The  company is  currently  appealing  the
judgment.

5.  ACP-Laurich  - Judgment  for $50,000,  Default  judgment for lease on office
space that the company  never  occupied.  The company is  currently  planning to
appeal.

6. Robert Half Inter. - Judgment for $21,481.79,  dated 3/23/99, we have no idea
who they are.



                                      F-27

<PAGE>



7. Western  Capital  Group for  $300,000,  Financial  Public  Relations  firm in
Aurora, Co. had a consulting agreement with Brush Creek from May 1, 1998 through
October 1, 1998.  Award by Arbitrator on Dec. 30, 1998 of $209,211.00 Plus costs
of $2,323.50 and interest of 8% per month from Aug. 1, 1998.

The company plans to appeal all above-mentioned  suits through the law office of
Pillsbury, Madison & Sutro, LLP.

NOTE  12  -  SEGMENT  INFORMATION
             --------------------

The Company's activities have been devoted to the acquisition,  development, and
production of mineral properties.  Accordingly,  the Company is considered to be
in a single  line of  business.  To  date,  substantially  all of the  Company's
identifiable  assets  and  operating  expenditures  are  in the  United  States,
Southeastern Honduras and Africa.

NOTE  13  -  CHANGES IN MANAGEMENT
             ------------------

On April 14, 1999, in connection with the Company's merger, the Company accepted
as President and CEO Jefferson Adams Bootes, replacing Larry Stocket.

On November  16,  1998,  Brush Creek Mining and  Development  Inc.  received the
resignation of its chief executive officer (C.E.O.),  James Chapin.  Brush Creek
has  accepted the proposal  submitted by Mr. Larry  Stockett,  President of U.S.
Cement Company and the Board  appointed him as the new President and C.E.O.  Mr.
Stockett had accepted these  positions  without  compensation  until the company
reaches its first quarterly  after tax profit.  Upon resolution of Brush Creek's
current legal and financial  problems,  Mr.  Stockett had agreed to transfer his
51% ownership in U.S.  Cement Company to Brush Creek.  In return,  Mr.  Stockett
would  receive  restricted  shares of stock of Brush  Creek at a price of $5 per
share for the audited book value of U.S. Cement. In addition, Mr. Stockett would
receive one million shares of Brush Creek  restricted  stock if the BCMDE shares
achieve  a $5 per  share  closing  price  for 10  consecutive  days.  The  above
transfers of shares in either company did not take place.

The above changes in management and additional  changes in employees have led to
certain  complication  that were  created with the  transfers  of the  Company's
records.  There remains a contingency  that all transactions and liabilities may
have not been recorded.

                                      F-28









<PAGE>


Item 8.   Changes in and Disagreements with Accountants on Accounting and
          Financial Disclosure.

          None.

                                    Part III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act.

Executive Officers and Directors
--------------------------------

          The table  below sets forth the names of the  executive  officers  and
directors of the Company, and certain information concerning them:

          Name                    Age                 Position
          ----                    ---                 ---------

          Jefferson A. Bootes      42       Chairman, Chief Executive Officer

          Samuel P. Martin         53       Secretary and Director

          Stephen H. Durland       42       Chief Financial Officer and Director

          Peter Howe               66       Director


Officers and Employee Directors
-------------------------------

          Jefferson A. Bootes - Chairman, Chief Executive Officer, and a
Director. Mr. Bootes was appointed as President and Secretary of the Company
effective March 1, 1999. In 1992, Mr. Bootes founded J.A.B. International
Trading Co., the Florida Corporation that was merged into the Company in April
1999.

Non-Employee Directors
----------------------

          Stephen H. Durland - Chief Financial Officer and Director. Mr. Durland
is a certified public accountant.

          Samuel P. Martin - Secretary and Director. Dr. Martin has been a
Director of the Company since July 1999. Dr. Martin completed his undergraduate
work at Yale University and obtained his M.D. degree from Duke University,
College of Medicine in Durham, North Carolina, in 1972. Dr. Martin is a member
of the teaching staff at Orlando Regional Medical Center and has been practicing
medicine as a vascular and general surgeon in Orlando, Florida, since 1978. From
1973 to 1977 Dr. Martin completed his residency training at New York Hospital -
Cornell. From 1977 to 1978, he was a Peripheral Vascular Surgeon at the Alton
Ochsner Foundation. He is a member of the Orange County Medical Society,
Orlando, Florida, Florida Medical Associate, American Medical Associate, Florida
Society of General Surgery, The Southern Association of Vascular Surgery, and
the International Society of Cardiovascular Surgery.

          Peter Howe - Director. Mr. Howe has been a Director of the Company
since July 1999. Mr. Howe graduated from the Royal School of Mines in 1949 with
a B.S. in Mining Engineering from the University of London, England, and a
diploma from the Royal School of Mines. In 1957, he was registered as a
Professional Engineer in the Province of Ontario, Canada. Mr. Howe commenced a

                                       24




<PAGE>


<PAGE>
<TABLE>
<CAPTION>


consulting practice concentrating mainly on exploration for minerals. In 1965,
he founded the firm of A.C.A. Howe International, Ltd., which has gained an
international reputation having operated offices in Canada, United Kingdom,
South Africa, Australia, Indonesia, U.S.A., and Chile. Mr. Howe currently serves
as Chairman and director of Diadem Resources, Ltd., and President and Director
of Ateba Mines, Inc., with diamond exploration in Africa, NWT, Canada,
California, U.S.A., plus phosphate recovery in Florida, and President and
Director of Wascco Resources, Inc., with gold deposits in Indonesia.


Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------

          Section  16(a) of the  Securities  Exchange  Act of 1934  requires the
Company's executive officers,  directors, and affiliates to file initial reports
of ownership and reports of changes of ownership of the  Company's  Common Stock
with  the  Securities  and  Exchange   Commission.   These  executive  officers,
directors, and affiliates are required to furnish the Company with copies of all
Section  16(a) forms that they file.  Based  solely on the  Company's  review of
Securities  and Exchange  Commission  Forms 3, 4, and 5 submitted to the Company
and written representations from these officers,  directors, and affiliates that
no other reports were  required,  the Company  reports that the following  forms
were filed late or not at all for the 1999 fiscal year:


Item 10.  Executive Compensation.
---------------------------------

          The  following  summary  compensation  table  sets  forth  information
concerning the annual compensation for services in all capacities to the Company
for the fiscal years ended June 30, 2000, 1999, and 1998, of the person who was,
at June 30, 2000, the chief  executive  officer of the Company.  No other person
had an annual base salary and bonus compensation that was in excess of $100,000.

                                            Fiscal
         Name and Principal Position         Year        Salary         Bonus
         ---------------------------                     ------         -----
         Jefferson A. Bootes,                1999          -0-           -0-
         CEO and President                   and
                                             2000
         James  S.  Chapin,                  1998        $110,000     $50,000(2)
         Chief  Executive  Officer,
         Chief Financial Officer,
         Chairman of the Board and Director




          The following table sets forth a summary of the non-cash  compensation
awarded in the form of Common Stock or stock options granted to the Officers and
Directors of the Company for the fiscal year ended June 30, 2000:

          Name                        Number       % of Total
                                     of shares      Options
                                     of Common     Granted to
                                      Stock         Employees    Exercise Price per     Expiration
                                      -----         in Fiscal         Share                Date
                                                      year            -----                ----
                                                      ----
          <S>                          <C>             <C>             <C>                <C>
          Jefferson A. Bootes, CEO

                                       -0-             -0-


                                                25
</TABLE>




<PAGE>


<PAGE>


Stock Option Plans
------------------

          The  Company  has no stock  option  plans  and prior  plans  have been
cancelled  effective  April 14, 1999,  date of merger with J.A.B.  International
Trading Co.

Pension Plans
-------------

          The Company does not have any pension plan  available to its executive
officers.

Compensation of Directors
-------------------------

          The non-employee, independent Directors of the Company are entitled to
compensation at a rate of $1,500 per month for their services. During the fiscal
year ended  June 30,  2000,  however,  no fees were paid to  Directors.  Certain
expenses  incurred  in  connection  with  such  services,  including  travel  to
meetings,  also may be reimbursed.  In addition the Board has awarded options to
acquire  Common Stock of the Company to directors  in  recognition  of services.
Directors  are not paid  fees for their  services  but they are  reimbursed  for
expenses of attending board meetings.

Item 11.  Security Ownership of Certain Beneficial Owners and Management.

          The  following  table  sets  forth as of April 3, 2000 the  beneficial
ownership of the Company's Common Stock (i) by the only persons who are known by
the Company to own beneficially more than 5% of the Company's Common Stock; (ii)
by each  director of the Company;  and (iii) by all  directors and officers as a
group. Percentage ownership assumes all vested options are fully exercised.



 Name and Address of       Shares of Common
  Beneficial Owner            Stock Owned          Options     Percent Owned
  ----------------            -----------          -------     -------------


Jefferson A. Bootes            2,960,582              0            100%
1013 Fairway Drive
Winter Park, FL  32792

All Officer and Directors     12,100,000              0            100%
as a Group                    ==========              =            ====


(1) Includes share held by spouse.

Item 12.  Certain Relationships and Related Transactions.

Change in Management
--------------------

          On November 16, 1998, the Company received the resignation of its
chief executive officer (C.E.O.), James Chapin. The Company accepted a proposal
submitted by Mr. Larry Stockett, President of U.S. Cement Company and the Board
appointed him as the new President and C.E.O. Mr. Stockett agreed to accept
these positions without payment of compensation until the Company reaches its
first quarterly after tax profit. Upon affecting a resolution of the Company's
current legal and financial problems, Mr. Stockett agreed to transfer his 51%
ownership in U.S. Cement Company to the Company. In return, the Company agreed
to issue Mr. Stockett restricted share of stock of the Company at a price of $5
per share for the audited book value of U.S. Cement. In addition, the Company
agreed to issue to Mr. Stockett one million shares of the Company`s restricted
stock if the Common Stock achieve a $5 per share closing price for 10
consecutive days. Mr. Stockett resigned on March 1, 1999.

                                       26





<PAGE>


<PAGE>


Change in Control
-----------------

          On March 1, 1999, the Company issued to Jefferson A. Bootes a total of
3,730,861 shares of the Company's Common Stock. Mr. Bootes also was appointed
President and Secretary of the Company on that date.

Merger
------

          Effective  on April 14,  1999,  J.A.B.  International  Trading  Co., a
Florida corporation  ("JAB"),  merged with the Company (the "Merger"),  with the
Company as the  corporation  surviving  the Merger.  As part of the Merger,  the
Company's name was changed to J.A.B. International, Inc. Pursuant to the Merger,
each share of common stock of JAB  outstanding  immediately  prior to the Merger
was  converted  into the right to receive one (1) newly  issued  share of Common
Stock of the Company. Jefferson A. Bootes owned 2,739,750 shares of common stock
in JAB that were converted into 2,739,750  additional  shares of Common Stock in
the  Company  pursuant to the  Merger.  Mr.  Bootes now  directly  controls  the
Company.

          Except  as   described   above,   there  are   currently  no  proposed
transactions between the Company,  its officers,  directors,  shareholders,  and
affiliates. Conflicts of interest could arise in the negotiation of the terms of
any transaction between the Company and its shareholders,  officers,  directors,
or affiliates. The Company has no plans or arrangements, including the hiring of
an independent  third party,  for the resolution of disputes between the Company
and such  persons,  if they arise.  The Company  and its  shareholders  could be
adversely  affected should such individuals  choose to place their own interests
before  those of the  Company.  No  assurance  can be given  that  conflicts  of
interest will not cause the Company to lose potential opportunities, profits, or
management attention. The Board of Directors of the Company has adopted a policy
regarding  transactions  between  the  Company  and any  officer,  director,  or
affiliate, including loan transactions,  requiring that all such transactions be
approved by a majority of the independent and disinterested members of the Board
of Directors and that all such  transactions be for a bona fide business purpose
and be entered  into on terms at least as  favorable  to the Company as could be
obtained from unaffiliated independent third parties.

Item 13.  Exhibits and Reports on Form 8-K.

          (a)       Exhibits.

          (b)       Reports on Form 8-K. No reports on Form 8-K were filed by
                    the Company for the fiscal year ended June 30, 2000.


                                       27





<PAGE>


<PAGE>


                                   SIGNATURES


          Pursuant to the  requirements of Section 13 or 15(d) 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.

JAB INTERNATIONAL, INC.
(Registrant)


By:  /s/  Jefferson A. Bootes                              Date:  April 4, 2000
   --------------------------
          Jefferson A. Bootes, President

          Pursuant to the  requirements of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Signature and Title
-------------------

By:  /s/  Jefferson A. Bootes                              Date:  April 4, 2000
   --------------------------
          Jefferson A. Bootes
          President and Director/Chairman
          (Principal Executive Officer)


By:  /s/  Stephen H. Durland                               Date:  April 4, 2000
   --------------------------
          Stephen H. Durland, CPA
          Chief Financial Officer and Director
          (Principal Financial Officer)


By:  /s/  Peter Howe                                       Date:  April 4, 2000
   --------------------------
          Peter Howe
          Director


By:  /s/  Samual P. Martin                                 Date:  April 4, 2000
   --------------------------
          Samuel P. Martin
          Director


                                       28