SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

                 |X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended April 30, 2003

                                       OR

                 |_| TRANSITION REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
            For the transition period from ___________ to ___________

                         Commission File Number: 0-13078

                            CAPITAL GOLD CORPORATION
        (Exact name of small business issuer as specified in its charter)

               NEVADA                                       13-3180530
   (State or other jurisdiction of                      (I.R.S. Employer
    incorporation or organization)                     Identification No.)

                76 Beaver Street, 26TH floor, New York, NY 10005
                    (Address of principal executive offices)

                    Issuer's telephone number: (212) 344-2785

--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

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 |X| No |_|

Indicate the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date.

                Class                               Outstanding at June 19, 2003
           ---------------                          ----------------------------

Common Stock, par value $.001 per share                      44,044,800

Transitional Small Business Format (check one); Yes |_| No |X|

<PAGE>

                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

      The accompanying financial statements are unaudited for the interim
periods, but include all adjustments (consisting only of normal recurring
accruals), which we consider necessary for the fair presentation of results for
the three and nine months ended April 30, 2003.

      Moreover, these financial statements do not purport to contain complete
disclosure in conformity with generally accepted accounting principles and
should be read in conjunction with our audited financial statements at, and for
the fiscal year ended July 31, 2002.

      The results reflected for the three and nine months ended April 30, 2003
are not necessarily indicative of the results for the entire fiscal year.


                                      -2-
<PAGE>

                            CAPITAL GOLD CORPORATION
                    F/K/A LEADVILLE MINING AND MILLING CORP.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 APRIL 30, 2003
                                   (Unaudited)

                                     ASSETS

   Current Assets:
     Cash and Cash Equivalents                                     $    259,290
     Loans Receivable - Others                                           56,465
     Marketable Securities                                              140,000
     Option Payment                                                      50,000
     Other Current Assets                                                61,362
                                                                   ------------
        Total Current Assets                                            567,117
                                                                   ------------

   Mining, Milling and Other Property and Equipment
     (Net of Accumulated Depreciation of $358,230)                      343,575
                                                                   ------------

   Other Assets:
     Other Investments                                                   12,882
     Mining Reclamation Bonds                                            42,150
     Security Deposits                                                    8,435
                                                                   ------------
        Total Other Assets                                               63,467
                                                                   ------------

   Total Assets                                                    $    974,159
                                                                   ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

   Current Liabilities:
     Accounts Payable                                              $    180,233
     Accrued Expenses                                                   166,968
                                                                   ------------
        Total Current Liabilities                                       347,201
                                                                   ------------

   Minority Interest                                                    (56,357)
                                                                   ------------

   Commitments and Contingencies

   Stockholders' Equity:
     Common Stock, Par Value $.001 Per Share;
       Authorized 150,000,000 Shares; Issued and
       Outstanding 41,860,607 Shares                                     41,861
     Additional Paid-In Capital                                      21,673,051
     Deficit Accumulated in the Development Stage                   (21,141,272)
     Accumulated Other Comprehensive Income                             109,675
                                                                   ------------
        Total Stockholders' Equity                                      683,315
                                                                   ------------

   Total Liabilities and Stockholders' Equity                      $    974,159
                                                                   ============

The accompanying notes are an integral part of the financial statements.


                                      -3-
<PAGE>

                            CAPITAL GOLD CORPORATION
                    F/K/A LEADVILLE MINING AND MILLING CORP.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                               For The Period
                                                     Three Months Ended               Nine Months Ended       September 17,1982
                                                          April 30,                        April 30,             (Inception)
                                                 ----------------------------    ----------------------------         To
                                                     2003            2002            2003            2002       April 30, 2003
                                                 ------------    ------------    ------------    ------------   --------------
<S>                                              <C>             <C>             <C>             <C>             <C>
Revenues:
  Interest Income                                $      1,325    $      4,452    $     28,319    $      5,485    $    745,896
  Miscellaneous                                            --             115           7,701             115          33,977
                                                 ------------    ------------    ------------    ------------    ------------
       Total Revenues                                   1,325           4,567          36,020           5,600         779,873
                                                 ------------    ------------    ------------    ------------    ------------

Costs and Expenses:
  Mine Expenses                                       379,172         243,315         828,152         518,045       5,938,737
  Write-Down of Mining, Milling and Other
    Property and Equipment                                 --              --              --              --         999,445
  Selling, General and Administrative Expenses        195,561         175,468         499,772         437,606       7,899,350
  Stock Based Compensation                            132,201         388,027         207,554         388,027       8,761,901
  Depreciation                                             --             582              --           1,745         367,726
                                                 ------------    ------------    ------------    ------------    ------------
        Total Costs and Expenses                      706,934         807,392       1,535,478       1,345,423      23,967,159
                                                 ------------    ------------    ------------    ------------    ------------

(Loss) Before Other Income (Expense)                 (705,609)       (802,825)     (1,499,458)     (1,339,823)    (23,187,286)
                                                 ------------    ------------    ------------    ------------    ------------

Other Income (Expense):
  Gain on Sale of Property and Equipment                   --          83,638              --          83,638          46,116
  Gain on Sale of Subsidiary                               --       1,947,215              --       1,947,215       1,907,903
  Option Payment                                           --              --              --              --          70,688
  Loss on Write-Off of Investment                          --              --              --              --         (10,000)
  Loss on Joint Venture                                    --              --              --              --        (101,700)
                                                 ------------    ------------    ------------    ------------    ------------
           Total Other Income (Expense)                    --       2,030,853              --       2,030,853       1,913,007
                                                 ------------    ------------    ------------    ------------    ------------

Income (Loss) Before Minority Interest               (705,609)      1,228,028      (1,499,458)        691,030     (21,274,279)
Minority Interest in Net Loss of Subsidiary            20,119              --          78,464              --         133,007
                                                 ------------    ------------    ------------    ------------    ------------

Net Income (Loss)                                $   (685,490)   $  1,228,028    $ (1,420,994)   $    691,030    $(21,141,272)
                                                 ============    ============    ============    ============    ============

Net Income (Loss) Per Common Share -
  Basic and Diluted                              $       (.02)   $       0.03    $       (.03)   $       0.02
                                                 ============    ============    ============    ============

Weighted Average Common Shares Outstanding         40,837,405      38,818,308      41,311,671      36,562,422
                                                 ============    ============    ============    ============
</TABLE>

The accompanying notes are an integral part of the financial statements.


                                      -4-
<PAGE>

                            CAPITAL GOLD CORPORATION
                    F/K/A LEADVILLE MINING AND MILLING CORP.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                         For The Nine                 For The Period
                                                                         Months Ended               September 17, 1982
                                                                           April 30,                    (Inception)
                                                                -------------------------------              To
                                                                    2003                2002           April 30, 2003
                                                                -----------         -----------        --------------
<S>                                                             <C>                 <C>                 <C>
Cash Flow From Operating Activities:
  Net Income (Loss)                                             $(1,420,994)        $   691,030         $(21,141,272)
  Adjustments to Reconcile Net Income (Loss)
    to Net Cash Provided (Used) By Operating Activities:
      Depreciation                                                       --               1,745              367,726
      Gain on Sale of Subsidiary                                         --                  --           (1,907,903)
      Minority Interest in Net Loss of Subsidiary                   (78,464)                 --             (133,007)
      Write-Down of Impaired Mining, Milling and Other
       Property and Equipment                                            --                  --              999,445
       Gain on Sale of Property and Equipment                            --                  --              (46,116)
       Loss on Write-Off of Investment                                   --                  --               10,000
       Loss From Joint Venture                                           --                  --              101,700
      Value of Common Stock Issued for Services                          --                  --            2,755,602
      Stock Based Compensation                                      207,554             388,027            8,761,901
      Changes in Operating Assets and Liabilities:
        (Increase) in Other Current Assets                          (58,038)             (7,447)             (61,362)
        (Increase) in Security Deposits                                  --              (9,598)              (8,435)
        Increase (Decrease) in Accounts Payable                      (2,799)                 --              172,426
        Increase (Decrease) in Accrued Expenses                     (18,095)            342,415               44,414
        Other                                                            --                (308)                  --
                                                                -----------         -----------         ------------

Net Cash Provided (Used) By Operating Activities                 (1,370,836)          1,405,864          (10,084,881)
                                                                -----------         -----------         ------------

Cash Flow From Investing Activities:
  Purchase of Mining, Milling and Other Property and
    Equipment                                                            --                  --           (1,705,650)
  Proceeds on Sale of Mining, Milling and Other Property
    and Equipment                                                        --                  --               83,638
  Option Payment                                                    (50,000)                 --              (50,000)
  Proceeds From Sale of Subsidiary                                1,492,131                  --            2,131,616
  Expenses of Sale of Subsidiary                                         --                  --             (101,159)
  Advance Payments - Joint Venture                                       --                  --               98,922
  Investment in Joint Venture                                            --                  --             (101,700)
  Investment in Privately Held Company                                   --                  --              (10,000)
  Net Assets of Business Acquired (Net of Cash)                          --                  --              (42,130)
  Purchase of Marketable Securities                                 (50,000)                 --              (50,000)
  Purchase of Other Investments                                     (12,882)                 --              (12,882)
  Payment of Option Payment Payable                                      --             (50,000)                  --
  Due from Sale of Subsidiary                                            --          (1,492,131)                  --
                                                                -----------         -----------         ------------

Net Cash Provided (Used) By Investing Activities                  1,379,249          (1,542,131)             240,655
                                                                -----------         -----------         ------------
</TABLE>

The accompanying notes are an integral part of the financial statements.


                                      -5-
<PAGE>

                            CAPITAL GOLD CORPORATION
                    F/K/A/ LEADVILLE MINING AND MILLING CORP.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)
                                   (Continued)

<TABLE>
<CAPTION>
                                                                 For the Nine               For The Period
                                                                 Months Ended              September 17, 1982
                                                                   April 30,                  (Inception)
                                                          ---------------------------              To
                                                             2003              2002          April 30, 2003
                                                          ---------         ---------        --------------
<S>                                                       <C>               <C>               <C>
Cash Flow From Financing Activities:
  (Increase) Decrease in Loans Receivable -
    Related Party                                         $      --         $  (1,260)        $         --
  (Increase) Decrease in Loans Receivable - Others          (41,465)            9,689              (56,465)
  Increase in Loans Payable - Officers                           --                --               18,673
  Repayment of Loans Payable - Officers                          --                --              (18,673)
  Increase in Note Payable                                       --                --               11,218
  Payments of Note Payable                                       --            (3,144)             (11,218)
  Proceeds From Issuance of Common Stock                     30,800           567,524           10,432,571
  Commissions on Sale of Common Stock                            --                --               (5,250)
  Expenses of Initial Public Offering                            --                --             (408,763)
  Capital Contributions - Joint Venture Subsidiary           80,340                --              154,532
  Purchase of Certificate of Deposit - Restricted                --                --               (5,000)
  Purchase of Mining Reclamation Bond                            --                --              (37,150)
                                                          ---------         ---------         ------------

Net Cash Provided By Financing Activities                    69,675           572,809           10,074,475
                                                          ---------         ---------         ------------

Effect of Exchange Rate Changes                              31,769                --               29,041
                                                          ---------         ---------         ------------

Increase (Decrease) In Cash and Cash Equivalents            109,857           436,542              259,290

Cash and Cash Equivalents - Beginning                       149,433            63,920                   --
                                                          ---------         ---------         ------------

Cash and Cash Equivalents - Ending                        $ 259,290         $ 500,462         $    259,290
                                                          =========         =========         ============

Supplemental Cash Flow Information:
  Cash Paid For Interest                                  $      --         $      --                   --
                                                          =========         =========         ============

  Cash Paid For Income Taxes                              $      --         $   1,440         $     28,060
                                                          =========         =========         ============

Non-Cash Financing Activities:
  Issuances of Common Stock as Commissions
    on Sales of Common Stock                              $      --         $   8,000         $    440,495
                                                          =========         =========         ============

  Issuance of Common Stock as Payment for Mining,
    Milling and Other Property and Equipment              $      --         $      --         $      4,500
                                                          =========         =========         ============

  Transfer of Joint Venture Advance Payments into
    Joint Venture Capital                                 $  98,922         $      --         $     98,922
                                                          =========         =========         ============
</TABLE>

The accompanying notes are an integral part of the financial statements.


                                      -6-
<PAGE>

                            CAPITAL GOLD CORPORATION
                    F/K/A LEADVILLE MINING AND MILLING CORP.
                        (A DEVELOPMENT STAGE ENTERPRISE)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2003
                                   (Unaudited)

NOTE 1 - Basis of Presentation

            The consolidated financial statements include the accounts of
Capital Gold Corporation and its subsidiaries, which are wholly and majority
owned. All significant inter-company accounts and transactions have been
eliminated in consolidation.

            In the opinion of the Company's management, the accompanying
consolidated financial statements reflect all adjustments (which include only
normal recurring adjustments) necessary to present fairly the consolidated
financial position and results of operations and cash flows for the periods
presented. These financial statements are unaudited and have not been reported
on by independent public accountants.

            Results of operations for interim periods are not necessarily
indicative of the results of operations for a full year.

            The consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. The Company is a development stage
enterprise and has recurring losses from operations and operating cash
constraints that raise substantial doubt about the Company's ability to continue
as a going concern.

NOTE 2 - Marketable Securities

            The Company accounts for its investments in marketable securities in
accordance with Statement of Financial Accounting Standards No. 115, "Accounting
for Certain Investments in Debt and Equity Securities."

            Management determines the appropriate classification of all
securities at the time of purchase and re-evaluates such designation as of each
balance sheet date. The Company has classified its marketable equity securities
as available for sale securities and has recorded such securities at fair value.
The Company uses the specific identification method to determine realized gains
and losses. Unrealized holding gains and losses are excluded from earnings and,
until realized, are reported in a separate component of stockholders' equity.

            Marketable securities are classified as current assets and are
summarized as follows:

                  Marketable equity securities, at cost              $ 50,000
                                                                     ========

                  Marketable equity securities, at fair value        $140,000
                                                                     ========

NOTE 3 - Other Investments

            Other investments are carried at cost and consist of tax liens
purchased on properties located in Lake County, Colorado.


                                      -7-
<PAGE>

                            CAPITAL GOLD CORPORATION
                    F/K/A LEADVILLE MINING AND MILLING CORP.
                        (A DEVELOPMENT STAGE ENTERPRISE)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2003
                                   (Unaudited)

NOTE 4 - Other Comprehensive Income (Loss) - Supplemental Non-Cash Investing
         Activities

            Other comprehensive income (loss) consists of accumulated foreign
translation gains and losses and net unrealized gain on available-for-sale
securities and is summarized as follows:

            Balance - July 31, 2002                       $  (7,246)
              Equity Adjustments from Foreign
                Currency Translation                         26,921
              Unrealized Gain on Available-for-
                Sale Securities                              90,000
                                                          ---------

            Balance - April 30, 2003                      $ 109,675
                                                          =========

NOTE 5 - Stockholders' Equity

            In January 2003 the Company granted to two individuals an aggregate
of 350,000 options to purchase common stock. The stock options have an exercise
price of $.05 per share and expire in two years. In connection with the grant,
the Company recognized stock based compensation of $75,353.

            In January 2003 the Company terminated an aggregate of 5,010,454
options to purchase common stock and re-granted the same amount of stock options
to the same individuals under revised terms including an exercise price of $.05
per share and an expiration date of January 2005. The Company recognized no
stock based compensation as a result of this transaction.

            During the nine months ended April 30, 2003 the Company granted an
aggregate of 1,600,000 stock options at exercise prices ranging from $.05 to
$.25 per share. In connection with these grants, the Company recognized stock
based compensation of $ 207,554.

            During March 2003 the Company's stockholders approved an amendment
to the Articles of Incorporation to change its name from Leadville Mining and
Milling Corp. to Capital Gold Corporation.

NOTE 6 - Option Payments

            In March 2003 the Company obtained exclusive non-refundable options
to purchase an ore crusher and related assets for a total cost of $700,000. The
Company paid $25,000 for these options, which expire on April 30, 2003, unless
extended to June 30, 2003 upon payment of an additional $25,000. The Company has
paid the additional payment to extend the option.


                                      -8-
<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations.

Cautionary Statement on Forward-Looking Statements

Some information contained in or incorporated by reference into this report on
Form 10-QSB may contain "forward-looking statements," as defined in Section 21E
of the Securities and Exchange Act of 1934. These statements include comments
regarding exploration and mine development and construction plans, costs, grade,
production and recovery rates, permitting, financing needs, the availability of
financing on acceptable terms or other sources of funding, and the timing of
additional tests, feasibility studies and environmental permitting. The use of
any of the words "anticipate," "continue," "estimate," "expect," "may," "will,"
"project," "should," "believe" and similar expressions are intended to identify
uncertainties. We believe the expectations reflected in those forward-looking
statements are reasonable. However, we cannot assure you that these expectations
will prove to be correct. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of the risk factors
set forth below and other factors set forth in, or incorporated by reference
into, this report:

      o     worldwide economic and political events affecting the supply and
            demand for gold;

      o     volatility in market prices for gold and other metals;

      o     financial market conditions, and the availability of debt or equity
            financing on terms acceptable to our company;

      o     uncertainties as to whether additional drilling, testing and
            feasibility studies will establish reserves at any of our
            properties;

      o     uncertainties associated with developing a new mine, including
            potential cost overruns and the unreliability of estimates in early
            states of mine development;

      o     uncertainties as to title to our properties and the availability of
            sufficient properties to allow for planned activities at El Chanate
            in Mexico and at Leadville in Colorado.

      o     variations in ore grade and other characteristics affecting mining,
            crushing, milling and smelting operations and mineral recoveries;

      o     geological, metallurgical, technical, permitting, mining and
            processing problems;

      o     the availability and timing of acceptable arrangements for power,
            transportation, mine construction, contract mining, water and
            smelting; the availability, terms conditions and timing of required
            government approvals;

      o     uncertainties regarding future changes in tax and foreign-investment
            legislation or implementation of existing tax and foreign-investment
            legislation;

      o     the availability of experienced employees; and

      o     political instability, violence and other risks associated with
            operating in a country like Mexico with a developing economy.


                                      -9-
<PAGE>

Many of those factors are beyond our ability to control or predict. You should
not unduly rely on these forward-looking statements. These statements speak only
as of the date of this report on Form 10-QSB. Except as required by law, we are
not obligated to publicly release any revisions to these forward-looking
statements to reflect future events or developments. All subsequent written and
oral forward-looking statements attributable to our Company and persons acting
on our behalf are qualified in their entirety by the cautionary statements
contained in this section and elsewhere in this report on Form 10-QSB and other
periodic reports filed by us with the Securities and Exchange Commission.

                              Results of Operation

General

Sonora, Mexico

During the quarter ended April 30, 2003, we continued to analyze the El Chanate
concessions in Mexico. As of April 30, 2003, we had reduced our property
holdings to a coherent package of 12 contiguous, high priority concessions
totaling approximately 3,506 hectares (8,663 acres or 13.5 square miles).
Further exploration and development of the El Chanate project, assuming it is
economically feasible, will mostly occur on these concessions owned by us. We
also own outright 466 hectares (1,151 acres or 1.8 square miles) of surface
rights at El Chanate. No third party ownership or leases exist on this fee land
or the El Chanate concessions, except through a lease with our joint venture
partner Grupo Minera FG S.A. de C.V.

Metallurgical tests to determine the most optimal and economically feasible
crushing and or grinding sizes for processing the El Chanate deposit has been
completed. Management believes these studies indicate that El Chanate deposits
are generally suited for treatment using dilute cyanide solutions, and ore grade
samples from El Chanate have shown approximately 70% recoveries over a projected
500 day period from rock tested after crushing to 100% minus 3/8 inch size. The
result of the crushing and grinding studies show that the gold recovery
increases significantly as the rock is reduced to finer particle sizes. Test
work was conducted at Resources Development Inc. in Wheat Ridge, Colorado and in
Mexico at the La Colorada mine laboratory, which is owned by FG, our joint
venture partner. In November 2002, the Company employed Metcon Inc. of Tucson,
Arizona to conduct further metallurgical testing on Chanate ores.

In August 2002, we retained SRK Consulting to conduct a Scoping Study of the
proposed project at El Chanate. The Scoping Study was completed in October 2002
and we have received the definitive report. Based on our review of the Scoping
Study, we believe that the prospects for a surface/heap leach mining operation
at El Chanate remain positive. The Study indicated that additional metallurgical
testing would be necessary to allow for preparation of a feasibility study. This
testing has been completed.

In addition to the metallurgical tests, SRK, as previously reported, indicated
that it did not have sufficient historical information to determine the adequacy
of the equipment fleet, or the availability of a sufficient water supply.

The equipment fleet that FG is obligated to contribute to the El Chanate project
under the joint venture agreement (subject to certain conditions, as described
below, including completion of the feasibility study and obtaining financing for
Phase four of planned operations under the joint venture agreement) has been
evaluated by qualified personnel and certain recommendations have been made for
reconditioning the


                                      -10-
<PAGE>

equipment fleet. We estimate that reconditioning the equipment fleet will cost
approximately $400,000 and take approximately one to two months. The joint
venture agreement with FG provides that FG will contribute the equipment in
optimal state of maintenance and working condition. Accordingly, the expense is
the responsibility of FG. We believe that once funding is available and before
the start of commercial production, the required work on the equipment will be
completed.

Government permits for drilling our first water test well were recently received
and, assuming adequate funding, we anticipate drilling will begin in the near
future. We anticipate that this will cost about $50,000 and take about one month
to complete.

The SRK Study also recommended additional drilling to further define the
deposit. This drilling is complete and the results were generally positive. We
believe that no additional drilling is required at this time.

In February 2003, we retained M3 Engineering of Tucson, Arizona to begin working
on a feasibility study. Assuming no unexpected issues arise, we anticipate that
this study will be completed by July 2003. The results to date based upon
current gold prices remain positive and we believe that a commercial, open pit
heap leach mine can be established, assuming that adequate financing on
acceptable terms becomes available.

Leadville, Colorado

During the quarter ended April 30, 2003, as during the prior quarter and the
fiscal year ended July 31, 2002, activity at our Leadville, Colorado properties
consisted principally of mine maintenance. Primarily as a result of our focus on
El Chanate, we temporarily reduced to a minimum activity in Leadville, Colorado.

On November 1, 2002, we conditionally acquired 56 properties in Leadville,
Colorado having a gross acreage of approximately 594 acres. Some of the
properties are classified as residential and others are classified as mining.
All were purchased at the Lake County, Colorado, tax sale for the back taxes due
on the properties. We paid an aggregate of approximately $13,000 for the
properties.

If a property owner does not pay his property taxes the county treasurer has the
right to put the property up for auction at an advertised county tax sale.
Sometimes, the property owner will ask the treasurer to postpone the auction of
the property for a year with the promise to pay soon. If taxes are still not
paid, the auction bidder will be required to pay two years of taxes. If we pay
the 'back taxes' and then 'current year' taxes for four consecutive years our
ownership of a given property purchased at tax sale is final, and the deed is
transferred to us. If the property owner can pay the back taxes, he is required
to pay us the back taxes plus interest. The current back tax interest rate is
12% in Lake County.

We acquired these properties, especially the residential properties, as an
investment. We are not required to commit to any work or maintenance on any of
the properties at this time. Management believes that these are good
investments. The mining properties are located in the general area of our other
mining properties. There is a possibility that at some future date the zoning
for the mining claims will be changed to allow residential development.
Management believes that, at such time, these properties will most likely become
more valuable due to their scenic location. In the time prior to any zoning
change, these properties may have mineral value; however, we have no current
plans to explore these mining properties.


                                      -11-
<PAGE>

Revenues

We generated no revenues from mining operations during the three months ended
April 30, 2003 and 2002. There were de minimis non-operating revenues during the
three months ended April 30, 2003 and 2002 of $1,300 and $4,600, respectively.
These non-operating revenues primarily represent interest income.

Costs and Expenses

Over all, costs and expenses during the three months ended April 30, 2003
($706,900) decreased by $100,500 (approximately12%) from the three months ended
April 30, 2002 ($807,400). Costs and expenses during the nine months ended April
30, 2003 ($1,535,500) increased by $190,000 (approximately 14%) from the nine
months ended April 30, 2002 ($1,345,400).

Mine expenses during the three months ended April 30, 2003 ($379,200) increased
by $135,900 (approximately 56%) from the three months ended April 30, 2002
($243,300). We believe that the increase in mine expenses resulted primarily
from work at our Mexican properties. Mine expenses during the nine months ended
April 30, 2003 ($828,200) increased by $310,200 (approximately 60%) from the
nine months ended April 30, 2002 ($518,000). We believe that the increase in
mine expenses resulted primarily from work at our Mexican properties.

Selling, general and administrative expenses during the three months ended April
30, 2003 ($195,600) increased by $20,100 (approximately 11%) from the three
months ended April 30, 2002 ($175,500). We believe that the increase was due to
increased levels of activity at our El Chanate concessions in Mexico. Our
ability to increase activity was due to our receipt of funds from the sale of
our Subsidiary, Minera Chanate, S.A. de C.V. ("Minera Chanate"). Selling,
general and administrative expenses during the nine months ended April 30, 2003
($499,800) increased by $62,200 (approximately 14%) from the nine months ended
April 30, 2002 ($437,600). We believe that the increase was due to increased
levels of activity at our El Chanate concessions in Mexico. Our ability to
increase activity was due to our receipt of funds from the sale of Minera
Chanate.

Stock based compensation during the three months ended April 30, 2003 was
$132,200 compared to $388,000 for the three months ended April 30, 2002. Stock
based compensation during the nine months ended April 30, 2003 was $207,600
compared to 388,000 for the nine months ended April 30, 2002.

Net Income

As a result, our net loss for the three months ended April 30, 2003 was $685,500
and our net income for the three months ended April 30, 2002 was approximately
$1,228,000. Our net loss for the nine months ended April 30, 2003 was $1,421,000
and our net income for the nine months ended April 30, 2002 was 691,000. Income
for the 9 month period ended April 30, 2002 included $1,947,000 from the sale of
our subsidiary, Minera Chanate, and $84,000 from the sale of property and
equipment.

Gains from Changes in Foreign Exchange Rates

During the nine months ended April 30, 2003, we recorded equity adjustments from
foreign currency translations of approximately $26,900. These translation
adjustments are related to changes in the rates of exchange between the Mexican
Peso and the US dollar.


                                      -12-
<PAGE>

Liquidity and Capital Resources; Plan of Operations

As of April 30, 2003, we had working capital of $219,900. Our plans over the
next 12 months include the costs of administration, and exploration related
activities in Mexico and administration and holding costs in Colorado.

In this regard, as noted in prior reports, in February 2002, we entered into a
joint venture agreement with FG in Hermosillo to explore, evaluate and develop
certain of our Mexican properties in five phases. We completed the first phase
in November 2002. We estimate that the balance of our portion of the costs for
the second phase (anticipated to be completed by September 1, 2003) will be
approximately $236,000. As of April 30, 2003, we have spent approximately
$270,500 on Phases one and two.

Phase three will consist of FG's contribution of mining equipment to the joint
venture which will be used at the El Chanate project. The equipment to be
contributed by FG consists primarily of rolling stock, and does not constitute
all of the equipment that will need to be acquired to develop and mine the El
Chanate project. Therefore, on March 13, 2003, we obtained exclusive options to
purchase an ore crusher and related assets (spare parts for the crusher and
certain transportable building structures) for a total cost (exclusive of the
option cost) of $700,000. FG, our joint venture partner, has agreed orally that
this purchase will be pursuant to the joint venture and that FG will be
responsible for 50% of the cost. We have decided to purchase this equipment
because the crusher to be provided by FG in Phase three is smaller and more
limited in capacity than the crusher available under the option. See Part II,
Item 5 for additional information about the equipment options. We are also
engaged in ongoing discussions with a third party regarding the purchase of a
carbon plant for gold recovery for use at the project.

Phase three will occur only after completion of the feasibility study and if the
parties to the joint venture agreement determine to continue and they are able
to obtain outside funding to cover the costs for Phase four. Pursuant to the
joint venture agreement, if funding for Phase four is not obtained by September
1, 2003, additional capital contributions will be required or the joint venture
will dissolve.

Phase four would involve the building of an access road, the acquisition of
water extraction rights and the drilling and equipping of water wells. At this
time we estimate that Phase four will cost approximately $1,300,000.

At present we are in preliminary discussions with banks concerning the required
funding for the balance of the project, including Phase four; however, we must
finalize the feasibility study and deliver it to the prospective lenders for
their review before any bank financing would be available.

The feasibility study is nearing completion and we anticipate that it will be
completed by July 2003. While we expect the study to be generally supportive of
advancing the project for fund raising purposes, there are questions with regard
to certain criteria used in the study. These questions concern such items as how
capital costs are computed, clarifying certain aspects of Mexican accounting and
tax/benefit treatment and how certain royalty payments are accounted for.

In addition to the feasibility study, any bank financing will most likely
require us to raise a portion of the funds required to move forward with the
project from equity funding. We also need to come to agreement with FG on a
budget going forward and obtaining FG's commitment in terms of their level of
participation. Moreover, the equipment options referred to above


                                      -13-
<PAGE>

require us to commit to the purchase of and make partial payment for the
equipment not later than June 30, 2003. See Part II, Item 5 for additional
information about the equipment options.

We cannot assure that, following delivery of the completed feasibility study to
prospective lenders, we will be able to secure the requisite bank financing for
Phase four or the remainder of the project, or obtain financing from equity
funding that may be required to complete bank financing or, in the event that
bank financing is not sufficient for our needs, to supplement bank financing. In
addition, we cannot assure that we will have the funds available to exercise the
options to purchase the equipment described above by June 30, 2003. Finally, we
cannot assure that we will successfully complete our ongoing negotiations to
acquire a carbon plant, the acquisition of which is integral to the development
of the El Chanate project.

Our primary source of funds used during the quarter ended April 30, 2003 was
from the proceeds from the sale of our subsidiary, Minera Chanate in 2002. After
commissions of approximately $81,000 our gross proceeds from the sale of Minera
Chanate were approximately $1,990,000.

We plan to pay for the balance of our anticipated expenses related to phase two
of the joint venture, any funding needed to obtain or supplement bank financing
and our portion of the acquisition of the ore crusher and related assets with
the proceeds from the sale of our subsidiary, Minera Chanate, and the private
placement of our common stock. As explained in our annual report on form 10-KSB,
historically, we have not generated any material revenues from operations and
have been in a precarious financial condition. No assurance whatsoever can be
given that we will be able to obtain any significant funds in the near future
or, after we have depleted the proceeds from the sale of our subsidiary (as of
April 30, 2003, we had approximately $259,300 in cash remaining), that we will
be able to continue as a going concern or that any of our plans with respect to
our gold properties will, to a material degree, come to fruition. In order to
continue our program when we have depleted the proceeds from the sale of our
subsidiary, we will need to obtain substantial financing. There is no assurance
that we will be successful.

In addition, during the three months ended April 30, 2003, we raised $3,500
through the sale and issuance of common stock.

The consolidated financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. The Company is a development stage
enterprise and has recurring losses from operations and operating cash
constraints that raise substantial doubt about the Company's ability to continue
as a going concern.

Environmental Issues

Management does not expect that environmental issues will have an adverse
material effect on our liquidity or earnings. Before any additional exploration
or any development or mining or construction of milling facilities could begin
at our Leadville properties, it would be necessary to meet all environmental
requirements and to satisfy the regulatory agencies in Colorado that our
proposed procedures fell within the boundaries of sound environmental practice.
We currently are bonded to insure reclamation of any areas disturbed by our past
activities. The current amount of this bond is $42,150. In Mexico, we are not
aware of any significant environmental concerns or existing reclamation
requirements at the El Chanate properties. However, we will be required to
obtain various environmental and related permits in order to engage in our
planned activities at El Chanate. This process has begun. The costs and any
delays associated with obtaining these required permits could have an impact on
our ability to timely


                                      -14-
<PAGE>

complete our planned activities at El Chanate and ultimately on the feasibility
of opening a mine.

Part of the Leadville Mining District has been declared a federal Superfund site
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, and the Superfund Amendments and Reauthorization Act of 1986. Several
mining companies and one individual were declared defendants in a possible
lawsuit. We were not named a defendant or Possible Responsible Party. We did
respond in full detail to a lengthy questionnaire prepared by the Environmental
Protection Agency ("EPA") regarding our proposed procedures and past activities
in November 1990. To our knowledge, the EPA has initiated no further comments or
questions.

We do include in all our internal revenue and cost projections a certain amount
for environmental and reclamation costs on an ongoing basis. This amount is
determined at a fixed amount of $1.50 per ton of material to be milled on a
continual, ongoing basis to provide for further tailing disposal sites and to
reclaim the tailings disposal sites in use. At this time, there do not appear to
be any environmental costs to be incurred by us beyond those already addressed
above. No assurance can be given that environmental regulations will not be
changed in a manner that would adversely affect our planned operations.

Off-Balance Sheet Transactions

We do not have any transactions, agreements or other contractual arrangements
that constitute off-balance sheet arrangements.

                   Application Of Critical Accounting Policies

Our financial statements and accompanying notes are prepared in accordance with
accounting principles generally accepted in the United States of America.
Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue,
and expenses. These estimates and assumptions are affected by management's
application of accounting policies. Critical accounting policies for us include
impairment of long-lived assets, accounting for stock-based compensation and
environmental remediation costs.

In accordance with SFAS 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of," we review our long-lived assets
for impairments. Impairment losses on long-lived assets are recognized when
events or changes in circumstances indicate that the undiscounted cash flows
estimated to be generated by such assets are less than their carrying value and,
accordingly, all or a portion of such carrying value may not be recoverable.
Impairment losses then are measured by comparing the fair value of assets to
their carrying amounts. During the year ended July 31, 2002, we performed a
review of our Colorado mine and mill improvements and determined that an
impairment loss should be recognized. Accordingly, at July 31, 2002, we reduced
by $999,445 the net carrying value of certain assets relating to our Leadville,
Colorado facility to $300,000, which approximates management's estimate of fair
value.


                                      -15-
<PAGE>

Environmental remediation costs are accrued based on estimates of known
environmental remediation exposure. Such accruals are recorded even if
significant uncertainties exist over the ultimate cost of the remediation. It is
reasonably possible that our estimates of reclamation liabilities, if any, could
change as a result of changes in regulations, extent of environmental
remediation required, means of reclamation or cost estimates. Ongoing
environmental compliance costs, including maintenance and monitoring costs, are
expensed as incurred. There were no environmental remediation costs accrued at
April 30, 2003.

                            Issues And Uncertainties

The following issues and uncertainties, among others, should be considered in
evaluating our financial outlook.

      We have not generated any operating revenues. If we are unable to
      commercially develop our mineral properties, we will not be able to
      generate profits and our business may fail.

We are an exploration company engaged in the acquisition and exploration of
mineral exploration properties. To date, we have no producing properties. As a
result, we have no current source of operating revenue and we have historically
operated and continue to operate at a loss. Our ultimate success will depend on
our ability to generate profits from our properties. Our viability is largely
dependent on the successful commercial development of a mine at least one of our
properties.

      We lack operating cash flow and rely on external funding sources. If we
      are unable to continue to obtain needed capital from outside sources, our
      joint venture with FG could be dissolved and/or we will be forced to
      reduce or curtail our operations.

We do not generate any positive cash flow from operations and we do not
anticipate that any positive cash flow will be generated for some time. Aside
from the proceeds from the sale of Minera Chanate we have limited financial
resources. Leases and licenses which we hold as well as our joint venture
agreement with FG, impose financial obligations on us. In this regard, we are
required to obtain funding for Phase four of the joint venture with FG by
September 1, 2003 or either additional capital contributions will be required or
the joint venture will dissolve. We cannot assure that additional funding will
be available to allow us to fulfill such obligations.

Further exploration and development of the mineral properties in which we hold
interests depends upon our ability to obtain financing through

      o     bank or other debt financing,

      o     equity financing, or

      o     other means.

Failure to obtain additional financing on a timely basis could cause us to
forfeit all or parts of our interests in some or all of (i) the El Chanate
concessions, (ii) the joint venture with FG and (iii) our Leadville properties,
and reduce or terminate our operations.


                                      -16-
<PAGE>

      As a mineral exploration company, our ability to commence production and
      generate profits is dependent on our ability to discover viable and
      economic mineral reserves. Our ability to discover such reserves is
      subject to numerous factors, most of which are beyond our control and are
      not predictable.

Exploration for gold is speculative in nature, involves many risks and is
frequently unsuccessful. Any gold exploration program entails risks relating to

      o     the location of economic bodies of minerals,

      o     development of appropriate metallurgical processes,

      o     receipt of necessary governmental approvals and

      o     construction of mining and processing facilities at any site chosen
            for mining.

The commercial viability of a mineral deposit is dependent on a number of
factors including:

      o     the price of gold,

      o     exchange rates,

      o     the particular attributes of the deposit, such as its

                  o     size,

                  o     grade and concentrate ability

                  o     stripping ratio

      o     financing costs,

      o     taxation,

      o     royalties,

      o     land tenure,

      o     land use,

      o     water use,

      o     power use,

      o     importing and exporting gold and

      o     environmental protection.

The effect of these factors cannot be accurately predicted.

All of the mineral properties in which we have an interest or right are in the
exploration stages only and are without reserves of gold or other minerals. We
cannot assure that current or proposed exploration or development programs on
properties in which we have an interest will result in the discovery of gold
mineralization reserves or will result in a profitable commercial mining
operation.

      We have a limited number of prospects. As a result, our chances of
      commencing viable mining operations are dependent upon the success of one
      project.

Our only current properties are the El Chanate concessions and our Leadville
properties. At present, we are not doing any substantive work at our Leadville
properties. While the El Chanate concessions are owned by one of our
subsidiaries, FG, our joint venture partner, has a 31% interest with a right to
increase its interest to 45%. We currently do not have operations on either of
our properties, and we must commence such operations to receive revenues.
Accordingly, we are dependent upon the success of the El Chanate concessions.


                                      -17-
<PAGE>

      Gold prices can fluctuate on a material and frequent basis due to numerous
      factors beyond our control. If and when we commence production, our
      ability to generate profits from operations could be materially and
      adversely affected by such fluctuating prices.

The profitability of any gold mining operations in which we have an interest
will be significantly affected by changes in the market price of gold. Gold
prices fluctuate on a daily basis and are affected by numerous factors beyond
our control, including:

      o     the level of interest rates,

      o     the rate of inflation,

      o     central bank sales,

      o     world supply of gold and

      o     stability of exchange rates.

Each of these factors can cause significant fluctuations in gold prices. Such
external factors are in turn influenced by changes in international investment
patterns and monetary systems and political developments. The price of gold has
historically fluctuated widely and, depending on the price of gold, revenues
from mining operations may not be sufficient to offset the costs of such
operations.

      Changes in regulatory or political policy could adversely affect our
      exploration and future production activities.

Any changes in government policy may result in changes to laws affecting:

      o     ownership of assets,

      o     land tenure,

      o     mining policies,

      o     monetary policies,

      o     taxation,

      o     rates of exchange,

      o     environmental regulations,

      o     labor relations,

      o     repatriation of income and

      o     return of capital.

Any such changes may affect our ability to undertake exploration and development
activities in respect of present and future properties in the manner currently
contemplated, as well as our ability to continue to explore, develop and operate
those properties in which we have an interest or in respect of which we have
obtained exploration and development rights to date. The possibility,
particularly in Mexico, that future governments may adopt substantially
different policies, which might extend to expropriation of assets, cannot be
ruled out.

      Compliance with environmental regulations could adversely affect our
      exploration and future production activities.

With respect to environmental regulation, environmental legislation in the
United States and Mexico generally is evolving in a manner which will require:

      o     stricter standards and enforcement,

      o     increased fines and penalties for non-compliance,


                                      -18-
<PAGE>

      o     more stringent environmental assessments of proposed projects and

      o     a heightened degree of responsibility for companies and their
            officers, directors and employees.

There can be no assurance that future changes to environmental legislation and
related regulations, if any, will not adversely affect our operations. We could
be held liable for environmental hazards that exist on the properties in which
we hold interests, whether caused by previous or existing owners or operators of
the properties. Any such liability could adversely affect our business and
financial condition. In addition, compliance with more stringent laws and
regulations, as well as potentially more vigorous enforcement policies by
regulatory agencies or stricter interpretation of existing laws may (1)
necessitate significant capital outlays, (2) cause us to delay, terminate or
otherwise change our intended activities and/or (3) materially adversely affect
our future operations.

In Mexico, the environmental permitting and authorization processes may be less
established and less predictable then they are in the United States. There can
be no assurance that we will be able to acquire the necessary permits or
authorizations on a timely basis, if at all.

      Mining risks and potential inadequacy of insurance coverage could
      adversely affect us.

If and when we commence mining operations at any of our properties, such
operations will involve a number of risks and hazards, including:

      o     environmental hazards,

      o     industrial accidents,

      o     labor disputes,

      o     metallurgical and other processing,

      o     unusual and unexpected rock formations,

      o     ground or slope failures,

      o     cave-ins,

      o     acts of God,

      o     mechanical equipment and facility performance problems and

      o     the availability of materials and equipment.

Such risks could result in:

      o     damage to, or destruction of, mineral properties or production
            facilities,

      o     personal injury or death,

      o     environmental damage,

      o     delays in mining,

      o     monetary losses and

      o     possible legal liability.

Industrial accidents could have a material adverse effect on our future business
and operations. Although as we move forward in the development of any of our
properties we plan to maintain insurance within ranges of coverage consistent
with industry practice, we cannot be certain that this insurance will cover the
risks associated with mining or that we will be able to maintain insurance to
cover these risks at economically feasible premiums. We also might become
subject to liability for pollution or other hazards which we cannot insure
against or which we may elect not to insure against because of premium costs or
other reasons. Losses from such events could have a material adverse effect on
us.


                                      -19-
<PAGE>

      Calculation of reserves and metal recovery dedicated to future production
      is not exact, might not be accurate and might not accurately reflect the
      economic viability of our properties.

All of the mineral properties in which we have an interest or right are in the
exploration stages only and are without reserves of gold or other minerals. If
and when we can prove such reserves, reserve estimates may not be accurate.
There is a degree of uncertainty attributable to the calculation of reserves,
resources and corresponding grades being dedicated to future production. Until
reserves or resources are actually mined and processed, the quantity of reserves
or resources and grades must be considered as estimates only. In addition, the
quantity of reserves or resources may vary depending on metal prices. Any
material change in the quantity of reserves, resource grade or stripping ratio
may affect the economic viability of our properties. In addition, there can be
no assurance that mineral recoveries in small scale laboratory tests will be
duplicated in large tests under on-site conditions or during production.

      There are uncertainties as to title matters in the mining industry. We
      believe that we have good title to our properties; however, defects in
      such title could have a material adverse effect on us.

We have investigated our rights to explore, exploit and develop our various
properties in manners consistent with industry practice and, to the best of our
knowledge, those rights are in good standing. However, we cannot assure that the
title to or our rights of ownership of either the El Chanate concessions or our
Leadville properties will not be challenged or impugned by third parties or
governmental agencies. In addition, there can be no assurance that the
properties in which we have an interest are not subject to prior unregistered
agreements, transfers or claims and title may be affected by undetected defects.
Any such defects could have a material adverse effect on us.

      Should we successfully commence mining operations in the future, our
      ability to remain profitable, should we become profitable, will be
      dependent on our ability to find, explore and develop additional
      properties. Our ability to obtain such additional properties will be
      hindered by competition.

The acquisition of gold properties and their exploration and development are
subject to intense competition. Companies with greater financial resources,
larger staffs, more experience and more equipment for exploration and
development may be in a better position than us to compete for such mineral
properties. As a result of such competition, we may not be able to obtain such
additional properties. Assuming that we commence profitable operations from our
current properties, our inability to obtain and exploit new properties in the
future would, eventually, adversely affect our ability to maintain profitable
operations.

      We are dependent on the efforts of certain key personnel and contractors,
      the loss of whose services could have a materially adverse effect on our
      operations.

We are dependent on a relatively small number of key personnel, the loss of any
one of whom could have an adverse effect on us. In addition, while certain of
our officers and directors have experience in the exploration and operation of
gold producing properties, we will remain highly dependent upon contractors and
third parties in the performance of our exploration and development activities.
As such there can be no guarantee that such contractors and third parties will
be available to carry out such activities on our behalf or be available upon
commercially acceptable terms.


                                      -20-
<PAGE>

      Our property interests in Mexico are subject to the risks of doing
      business in a foreign country.

We face risks normally associated with any conduct of business in foreign
countries with respect to our El Chanate project in Sonora, Mexico, including
various levels of political and economic risk. The occurrence of one or more of
these events could have a material adverse impact on our efforts or future
operations which, in turn, could have a material adverse impact on our future
cash flows, earnings, results of operations and financial condition. These risks
include the following:

      o     labor disputes,

      o     invalidity of governmental orders,

      o     uncertain or unpredictable political, legal and economic
            environments,

      o     war and civil disturbances,

      o     changes in laws or policies,

      o     taxation,

      o     delays in obtaining or the inability to obtain necessary
            governmental permits,

      o     governmental seizure of land or mining claims,

      o     limitations on ownership,

      o     limitations on the repatriation of earnings,

      o     increased financial costs,

      o     import and export regulations, including restrictions on the export
            of gold, and

      o     foreign exchange controls.

These risks may limit or disrupt the project, restrict the movement of funds or
impair contract rights or result in the taking of property by nationalization or
expropriation without fair compensation.

      Gold is sold in the world market in U.S. dollars; however, we may incur a
      significant amount of our expenses in Mexican pesos. If and when we sell
      gold, if applicable currency exchange rates fluctuate, our revenues and
      results of operations may be materially and adversely affected.

If and when we commence sales of gold, such sales will be made in the world
market in U.S. dollars. We may incur a significant amount of our expenses in
Mexican pesos. As a result, our financial performance would be affected by
fluctuations in the value of the Mexican peso to the U.S. dollar. At the present
time, we have no plan or policy to utilize forward contracts or currency options
to minimize this exposure, and even if these measures are implemented there can
be no assurance that such arrangements will be available, be cost effective or
be able to fully offset such future currency risks.

Item 3. Controls and Procedures.

Gifford A Dieterle, our Chief Executive Officer and our Chief Financial Officer,
has conducted an evaluation of the effectiveness of disclosure controls and
procedures pursuant to Exchange Act Rule 13a-14. Based on that evaluation,
taking into account our limited resources and current business operations, he
concluded that the disclosure controls and procedures are effective in ensuring
that all material information required to be filed in this quarterly report has
been made known to him in a timely fashion. There have been no significant
changes in internal controls, or in other factors that could significantly
affect internal controls, subsequent to the date he completed his evaluation.


                                      -21-
<PAGE>

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings

            None.

Item 2. Changes in Securities THIS IS BARRY

During the quarter ended April 30, 2003, we issued the following shares of our
Common Stock pursuant to the exemption from registration provided by Section
4(2) of the Securities Act of 1933: We sold 35,000 shares for $3,500 to one
person.

Item 3. Defaults Upon Senior Securities

            None.

Item 4 Submission of Matters to a Vote of Security Holders

            None.

Item 5. Other Information

On March 13, 2003, we obtained exclusive options to purchase an ore crusher and
related assets (spare parts for the crusher and certain transportable building
structures). The total cost for these assets (exclusive of the option cost) will
be $700,000. FG, our joint venture partner, has agreed orally that this purchase
will be pursuant to the joint venture and that FG will be responsible for 50% of
the cost. On March 13, 2003, we paid $25,000 for these options. As originally
agreed, on April 30,2003 we elected to extend the options to June 30, 2003 by
paying an additional $25,000. Pursuant to the options, we are required to enter
definitive purchase agreements for these assets on or before June 30, 2003 and,
upon execution of these agreements, we are obligated to pay an aggregate of
$400,000 towards the purchase price. The owner of these assets is attempting to
obtain rights of clear passage from nearby property owners, who have filed suit
for back payments and are seeking to attach the assets. We are negotiating with
the owner to extend the June 30, 2003 deadline due to the current legal issues,
which call into question the owner's ability to deliver the equipment to us if
we exercise the options. These assets currently are located in Sonora, Mexico,
approximately 70 miles from the El Chanate Concessions. Assuming we can obtain
the requisite financing to acquire these assets, and rights of clear passage, we
plan to move them to our concessions after purchase.


                                      -22-
<PAGE>

Item 6. Exhibits and Reports on Form 8-K

Exhibits:

99.1        Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
            Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Reports on Form 8-K:

            None.


                                      -23-
<PAGE>

                                   SIGNATURES

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

                                   CAPITAL GOLD CORPORATION
                                          Registrant


                                  By: /s/ Gifford A. Dieterle
                                      --------------------------------
                                      Gifford A Dieterle
                                      President/Treasurer

Date: June 23, 2003


                                      -24-
<PAGE>

                                  CERTIFICATION

I, Gifford A. Dieterle, Chief Executive Officer and Chief Financial Officer of
Capital Gold Corporation (the "Registrant"), certify that:

1. I have reviewed this quarterly report on Form 10-QSB of the Registrant;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this quarterly report;

4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
Registrant and I have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the Registrant, including its consolidated subsidiaries,
is made known to me by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the Registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report my conclusions about the effectiveness of
the disclosure controls and procedures based on my evaluation as of the
Evaluation Date;

5. I have disclosed, based on my most recent evaluation, to the Registrant's
auditors and the audit committee of Registrant's board of directors (or persons
performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the Registrant's ability to record, process,
summarize and report financial data and have identified for the Registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal controls; and

6. I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

Date: June 23, 2003


/s/ Gifford A. Dieterle
-----------------------

Gifford A. Dieterle
Chief Executive Officer and
Chief Financial Officer


                                      -1-