FORM 10-QSB
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

         Quarterly Report pursuant to Section 13 or 15(d) of the Securities
  X      Exchange Act of 1934
------   For the fiscal quarter ended June 30, 2001

         Transition Report under Section 13 or 15(d) of the Securities
         Exchange Act of 1934.
-------  For the transition period from _____ to _____.

         Commission File No. 0-26669

                             Can-Cal Resources, Ltd.
--------------------------------------------------------------------------------
                 (Name of Small Business Issuer in its charter)

             Nevada                                      88-0336988
-----------------------------------         ------------------------------------
 (State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)

                   8221 Cretan Blue Lane, Las Vegas, NV 89128
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (702) 243-1849
--------------------------------------------------------------------------------
                           (Issuer's telephone number)

                                      N/A
--------------------------------------------------------------------------------
              (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
                                                            -------      -------

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the  distribution of
securities under a plan by a court.
                                                       Yes           No
                                                            -------      -------
                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

               Class                            Outstanding on June 30, 2001
-----------------------------------         ------------------------------------
  Common Stock, Par Value $.001.                          9,372,791

Transitional Small Business Disclosure Format (Check one): Yes       No    X
                                                              ------    -------


                                        1

<PAGE>









                           FORWARD LOOKING STATEMENTS


         Section  27A of the  Securities  Act of  1933  and  Section  21E of the
Securities  Exchange  Act of 1934  provide a "safe  harbor" for forward  looking
statements that are based on current  expectations,  estimates and  projections,
and management's beliefs and assumptions.  Words such as "believes,"  "expects,"
"intends," "plans,"  "estimates," "may," "attempt," "will," "goal," "promising,"
or  variations  of such words and similar  expressions  are intended to identify
such forward-looking  statements.  These statements are not guarantees of future
performance and involve certain risks and  uncertainties  which are difficult or
impossible  to  predict.  Therefore,  actual  outcomes  and  results  may differ
materially  from  what is  expressed  or  forecasted  in such  forward-  looking
statements.  The  Company  undertakes  no  obligation  to  update  publicly  any
forward-looking statement whether as a result of new information,  future events
or otherwise.

         Such  risks and  uncertainties  include,  but are not  limited  to, the
availability of ore, negative test results,  the existence of precious metals in
the ore available to the Company in an amount which permits their  production on
an economic  basis;  the Company's  ability to drill holes and properly test and
assay samples,  and its ability to locate and acquire mineral  properties  which
contain  sufficient  grades of precious  metals and/or  minerals;  the Company's
ability  to sell a portion  or all of any of its  properties  to  larger  mining
companies,  to enter into agreements with larger mining companies to explore and
possibly  develop its  properties,  to produce  precious  metals on a commercial
basis,  the prices of precious  metals,  obtaining a mill or refinery to extract
precious  metals on an economic  basis,  the  Company's  ability to maintain the
facilities it currently utilizes;  obtain permitting requirements for any mining
and milling operations and pay the costs thereof;  have good title to claims and
equipment,  and the Company's ability to obtain financing  necessary to maintain
its operations.




                                        2

<PAGE>



                                    CONTENTS



                                                                        PAGE NO.

PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

          Independent accountants' report                                     4

          Interim balance sheets                                              5

          Interim statements of operations                                    6

          Interim statements of changes in stockholders' deficit              7

          Interim statements of cash flows                                    8

          Notes to interim financial statements                            9-13

          Supplementary schedule:
            Supplemental schedule I--
            Operating, general and administrative expenses                   14

ITEM 2.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations                      15


PART II.  OTHER INFORMATION

ITEM 3.   Defaults Upon Senior Securities                                    16

ITEM 6.   Exhibits and Reports on Form 8-K                                   17

          Signatures                                                         18


                                        3

<PAGE>






                         INDEPENDENT ACCOUNTANTS' REPORT


To the Board of Directors and Stockholders
Can-Cal Resources, Ltd.
Las Vegas, Nevada

We have reviewed the accompanying  condensed balance sheet of Can-Cal Resources,
Ltd., as of June 30, 2001,  and the condensed  statements of operations  for the
three and six months ended June 30, 2001 and 2000,  the condensed  statements of
cash flows for the six months  ended June 30, 2001 and 2000,  and the  condensed
statement of changes in  stockholders'  equity for the six months ended June 30,
2001.  These  financial  statements  are  the  responsibility  of the  company's
management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and making  inquiries of persons  responsible  for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression of an opinion  regarding the financial  statements  taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the  accompanying  financial  statements for them to be in conformity
with generally accepted accounting principles.

We previously audited, in accordance with generally accepted auditing standards,
the  balance  sheet  as of  December  31,  2000,  and  the  related  changes  in
stockholders' equity (deficit), and cash flows and statements of operations (not
presented herein); for the year then ended; and in our report dated February 18,
2001, we expressed an unqualified opinion on these financial statements.  In our
opinion,  the information set forth in the accompanying  condensed balance sheet
as of December 31, 2000 and the condensed  statement of changes in stockholders'
equity for the year then ended,  is fairly  stated in all  material  respects in
relation to the balance sheet and statement of changes in  stockholders'  equity
from which they have been derived.


MURPHY, BENNINGTON & CO.

/s/ Murphy, Bennington & Co.


Las Vegas, NV
July 31, 2001


                                        4

<PAGE>



CAN-CAL RESOURCES, LTD.

BALANCE SHEETS

JUNE 30, 2001
(ROUNDED TO THE NEAREST HUNDRED, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>

                                                                    JUNE 30,     DECEMBER 31,
                                                                      2001           2000
                                                                  ------------   ------------
                                                                   (UNAUDITED)      (NOTE)
ASSETS

CURRENT ASSETS:
<S>                                                              <C>             <C>
     Cash                                                        $   133,700     $   510,800
     Notes receivable, related parties (note 2)                       54,900          48,100
     Note receivable                                                  53,000          53,000
                                                                 -----------     -----------
         Total current assets                                        241,600         611,900

PROPERTY AND EQUIPMENT, NET (NOTE 3)                                  61,900          72,400

OTHER ASSETS (NOTE 4)                                                 57,400          53,700

LONG-TERM INVESTMENTS (NOTE 5)                                       586,100         586,100
                                                                 -----------     -----------
                                                                 $   947,000     $ 1,324,100
                                                                 ===========     ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
     Accounts payable                                            $    17,100     $    51,300
     Accrued expenses                                                 59,900          26,300
     Checks written against future deposits                             --            14,200
     Note payable, current portion (note 6)                           10,000          32,500
                                                                 -----------     -----------
         Total current liabilities                                    87,000         124,300

NOTE PAYABLE, NET OF CURRENT PORTION (NOTE 6)                        300,000         300,000

NOTE PAYABLE - RELATED PARTIES (NOTE 7)                              110,500         119,200
                                                                 -----------     -----------
                                                                     497,500         543,500
                                                                 -----------     -----------
STOCKHOLDERS' DEFICIT:
     Common stock, $.001 par value; authorized, 15,000,000
         shares;  issued and outstanding, 9,372,791 shares             9,400           9,400
     Preferred stock, $.001 par value; authorized, 10,000,000
         shares;  none issued or outstanding                            --              --
     Additional paid-in-capital                                    3,408,600       3,408,600
     Accumulated deficit                                          (2,968,500)     (2,637,400)
                                                                 -----------     -----------
                                                                     449,500         780,600
                                                                 -----------     -----------
                                                                 $   947,000     $ 1,324,100
                                                                 ===========     ===========
</TABLE>

Note: The balance sheet of December 31, 2000 has been derived from the audited
      financial statements at that date.


                 See accompanying notes and accountant's report.

                                        5

<PAGE>



CAN-CAL RESOURCES, LTD.

STATEMENTS OF OPERATIONS

THREE AND SIX  MONTHS  ENDED  JUNE 30,  2001 AND 2000  (ROUNDED  TO THE  NEAREST
HUNDRED, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>

                                         THREE MONTHS ENDED               SIX MONTHS ENDED
                                    ---------------------------     ---------------------------
                                      JUNE 30,         JUNE 30,      JUNE 30,         JUNE 30,
                                        2001             2000          2001             2000
                                    ------------    -----------     -----------     -----------
                                    (UNAUDITED)     (UNAUDITED)     (UNAUDITED)     (UNAUDITED)
SALES

<S>                                 <C>             <C>             <C>             <C>
Mining revenue                      $       100     $      --       $       100     $      --
Royalty revenue                          22,500          22,500            --
                                    -----------     -----------     -----------     -----------
                                         22,600            --            22,600            --

COST OF GOODS SOLD                         --              --              --              --
                                    -----------     -----------     -----------     -----------
GROSS PROFIT                             22,600            --            22,600            --
OPERATING EXPENSES,
GENERAL AND ADMINISTRATIVE              156,700         148,100         328,400         253,500
                                    -----------     -----------     -----------     -----------
LOSS FROM OPERATIONS                   (134,100)       (148,100)       (305,800)       (253,500)
OTHER INCOME (EXPENSES):
     Other income                           800          15,100             800          25,500
     Interest income                      5,200           3,800           8,000           4,800
     Interest expense                   (19,200)         (2,700)        (34,100)         (4,400)
                                    -----------     -----------     -----------     -----------
INCOME (LOSS) FROM CONTINUING
OPERATIONS                             (147,300)       (131,900)       (331,100)       (227,600)
                                    -----------     -----------     -----------     -----------

PROVISION FOR INCOME TAXES                 --              --              --              --
                                    -----------     -----------     -----------     -----------
NET INCOME (LOSS)                   $  (147,300)    $  (131,900)    $  (331,100)    $  (227,600)
                                    ===========     ===========     ===========     ===========
NET INCOME (LOSS) PER SHARE OF
COMMON STOCK AND COMMON STOCK
EQUIVALENTS:

BASIC EPS
     Net income (loss)              $     (0.02)    $     (0.02)    $     (0.04)    $     (0.03)
                                    ===========     ===========     ===========     ===========
     Weighted average shares
     outstanding                      9,372,791       8,758,782       9,372,791       8,587,115
                                    ===========     ===========     ===========     ===========
DILUTED EPS
     Net income (loss)              $     (0.02)    $     (0.02)    $     (0.04)    $     (0.03)
                                    ===========     ===========     ===========     ===========
     Weighted average shares
     outstanding                      9,372,791       8,758,782       9,372,791       8,587,115
                                    ===========     ===========     ===========     ===========
</TABLE>



                 See accompanying notes and accountant's report.

                                        6

<PAGE>



CAN-CAL RESOURCES, LTD.

STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

SIX MONTHS ENDED JUNE 30, 2001

(UNAUDITED)
(ROUNDED TO THE NEAREST HUNDRED, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>

                                                                        ADDITIONAL                     CUMULATIVE         TOTAL
                                                                         PAID-IN       ACCUMULATED     TRANSLATION      STOCKHOLDER
                                               COMMON STOCK               CAPITAL         DEFICIT      ADJUSTMENT         EQUITY
                                         --------------------------    -----------    ------------    ------------    --------------
                                          SHARES          AMOUNT
                                         -----------  -------------

<S>                                        <C>          <C>            <C>            <C>             <C>             <C>
BALANCE, DECEMBER 31, 1998                 7,005,161    $     7,000    $ 1,887,600    $(1,397,800)    $     8,500     $   505,300
     Issuance of common stock              1,248,621          1,200        572,600           --              --           573,800
     Foreign currency translation               --             --             --             --           (11,800)        (11,800)
     Realized foreign currency                  --             --             --             --             3,300           3,300
         translation loss
     Net income (loss) for the year             --             --             --         (322,100)           --          (322,100)
                                         -----------    -----------    -----------    -----------     -----------     -----------
BALANCE, DECEMBER 31, 1999                 8,253,782          8,200      2,460,200     (1,719,900)           --           748,500
     Issuance of common stock              1,119,009          1,200        948,400           --              --           949,600
     Net income (loss) for the year             --             --             --         (917,500)           --          (917,500)
                                         -----------    -----------    -----------    -----------     -----------     -----------
BALANCE, DECEMBER 31, 2000                 9,372,791          9,400      3,408,600     (2,637,400)           --           780,600
     Net income (loss) for the period           --             --             --         (331,100)           --          (331,100)
                                         -----------    -----------    -----------    -----------     -----------     -----------
BALANCE, JUNE 30, 2001                     9,372,791    $     9,400    $ 3,408,600    $(2,968,500)    $      --       $   449,500
                                         ===========    ===========    ===========    ===========     ===========     ===========
</TABLE>




                 See accompanying notes and accountant's report.

                                        7

<PAGE>



CAN-CAL RESOURCES, LTD.

STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2001 AND 2000
(ROUNDED TO THE NEAREST HUNDRED)
<TABLE>
<CAPTION>

                                                                 SIX MONTHS ENDED
                                                             ------------------------
                                                              JUNE 30,       JUNE 30,
                                                                2001          2000
                                                             -----------   ----------
                                                             (UNAUDITED)   (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                          <C>           <C>
NET LOSS                                                     $(331,100)    $(227,600)
     Adjustments to reconcile net income to net cash
         provided by operating activities:
           Depreciation                                         13,000        13,200
           Changes in operating assets and liabilities:
              (Increase) decrease in accounts receivable        (1,800)         --
              (Increase) decrease in prepaid expenses           (2,000)
              (Increase) decrease in other assets               (3,700)      (12,200)
              Increase (decrease) in accounts payable and
                other current liabilities                      (14,800)       23,600
                                                             ---------     ---------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES              (338,400)     (205,000)
                                                             ---------     ---------
CASH FLOW FROM INVESTING ACTIVITIES:
     Other investing activities                                   --          (5,000)
     Purchase of property and equipment                         (2,500)      (26,900)
                                                             ---------     ---------
NET CASH PROVIDED BY INVESTING ACTIVITIES                       (2,500)      (31,900)
CASH FLOW FROM FINANCING ACTIVITIES:
     Increase in related party debt                             (8,600)      107,700
     Principal payments on note payable                        (22,600)      (22,600)
     Proceeds from issuance of common stock                       --         375,000
     Proceeds from debt issuance                                (5,000)         --
                                                             ---------     ---------
NET CASH USED BY FINANCING ACTIVITIES                          (36,200)      460,100

NET INCREASE (DECREASE) IN CASH                               (377,100)      223,200
CASH AT BEGINNING OF PERIOD                                    510,800        51,800
                                                             ---------     ---------
CASH AT END OF PERIOD                                        $ 133,700     $ 275,000
                                                             =========     =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
CASH PAID DURING THE YEAR FOR:
     Interest                                                $    --       $    --
                                                             =========     =========
     Income taxes                                            $    --       $    --
                                                             =========     =========

</TABLE>


                 See accompanying notes and accountant's report.

                                        8

<PAGE>



CAN-CAL RESOURCES, LTD.

NOTES TO FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2001 AND 2000


1.   BASIS OF PRESENTATION OF FINANCIAL STATEMENTS:

     These unaudited interim  financial  statements of Can-Cal  Resources,  Ltd.
     have been  prepared in  accordance  with the rules and  regulations  of the
     Securities and Exchange  Commission.  Such rules and regulations  allow the
     omission of certain information and footnote  disclosures normally included
     in financial  statements  prepared in accordance  with  generally  accepted
     accounting principles as long as the statements are not misleading.

     In  the  opinion  of  management,  all  adjustments  necessary  for a  fair
     presentation  of these interim  statements  have been included and are of a
     normal recurring nature.  These interim financial statements should be read
     in conjunction with the financial statements of the Company included in its
     2000 Annual  Report on Form  10-KSB.  Interim  results are not  necessarily
     indicative of results for a full year.

     In the course of its  activities,  the  Company  has  sustained  continuing
     operating  losses and expects such losses to continue  for the  foreseeable
     future.  The Company plans to continue to finance its operations with stock
     sales and, in the longer term,  revenues from sales. The Company's  ability
     to continue as a going concern is dependent upon future obtaining financing
     and ultimately upon achieving profitable operations.

2.   NOTES RECEIVABLE (RELATED PARTIES):

     Notes  receivable,  related  parties,  at June 30,  2001  consisted  of the
     following:

<TABLE>
     <S>                                                                             <C>
     Note receivable from S&S Mining, Inc., a joint venture partner, unsecured,
       interest imputed at 8%, due on demand                                         $  27,800
     Note receivable from an individual, unsecured, interest imputed
       at 8%, due on demand                                                             12,000
     Note receivable from an individual, unsecured, interest imputed
       at 6%, due on demand                                                              5,000
     Accrued interest receivable                                                        15,700
                                                                                     ---------
                                                                                        60,500
     Allowance for uncollectible accounts                                               (5,600)
                                                                                     ---------
                                                                                     $  54,900
                                                                                     =========
</TABLE>



                                        9

<PAGE>



CAN-CAL RESOURCES, LTD.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

SIX MONTHS ENDED JUNE 30, 2001 AND 2000

3.   PROPERTY AND EQUIPMENT:

     Property and equipment at June 30, 2001 consisted of the following:

<TABLE>

<S>                                                                                 <C>
     Machinery and equipment                                                        $    97,600
     Transportation equipment                                                            18,400
     Office equipment and furniture                                                      14,200
                                                                                    -----------
                                                                                        130,200
     Less accumulated depreciation                                                      (68,300)
                                                                                    -----------
                                                                                    $   61,900
                                                                                    ===========
</TABLE>

     Depreciation  expense  for the six  months  ended June 30,  2001  totaled
     $13,000.

4.   OTHER ASSETS:

     Other assets at June 30, 2001 consisted of the following:

<TABLE>
<S>                                                                                 <C>
     Note receivable from Tyro, Inc., and principals, a corporation, secured by
          equipment,  interest accrued at 6% per annum, due on demand               $    53,300
     Deposits                                                                             6,800
     Non destructive testing materials                                                   14,200
     Mining claims                                                                       36,400
                                                                                    -----------
                                                                                       110,700
     Allowance for uncollectible notes                                                 (53,300)
                                                                                    -----------
                                                                                    $   57,400
                                                                                    ===========
</TABLE>

5.   LONG-TERM INVESTMENTS:

     Long-term investments at June 30, 2001 consisted of the following:

<TABLE>

<S>                                                                                 <C>
     Pisgah property                                                                $  567,100
     Investment in S&S Mining joint venture                                             19,000
                                                                                    ----------
                                                                                    $  586,100
                                                                                    ==========
</TABLE>



                                       10

<PAGE>



CAN-CAL RESOURCES, LTD.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

SIX MONTHS ENDED JUNE 30, 2001 AND 2000

6.   NOTES PAYABLE:

     Note payable at June 30, 2001 consisted of the following:

<TABLE>

<S>                                                                                 <C>
     Note payable to lender; secured by 1st deed of trust; interest at              $   10,000
        8.00% per annum, matures July 31, 2001

     Note payable to lender; secured by 2nd deed of trust; interest at
        16.00% per annum; matures November 24, 2005                                     300,000
                                                                                    -----------
                                                                                        310,000
     Less current portion                                                              (10,000)
                                                                                    -----------
                                                                                    $  300,000
                                                                                    ===========
</TABLE>

     The  Company  did not make the  interest  payment of $24,000 due on May 24,
     2001 to the  lender  which  holds the  second  deed of trust on the  Pisgah
     property.  The  Company  also did not make the final  principal  payment of
     $10,000 due on July 31, 2001 to the lender which holds the first trust deed
     on the Pisgah Property. See Note 8 for further details.

7.   NOTE PAYABLE, RELATED PARTIES:

     Notes  payable,  related  parties,  at  June  30,  2001  consisted  of  the
     following:

<TABLE>

<S>                                                                                 <C>
     Note payable to shareholder; unsecured; interest at prime plus
        1.00% per annum; due on demand                                              $ 110,500
                                                                                    =========
</TABLE>

8.   RELATED PARTY TRANSACTIONS:

     The Board of Directors approved a resolution to pay an officer compensation
     of  $5,000  per  month.  At June 30,  2001  $15,000  had been  paid to this
     individual.

9.   SUBSEQUENT EVENTS:

     On August 7, 2001 the Company entered into a Forbearance agreement with the
     lender that holds the 2nd deed of trust. The Forbearance Agreement provides
     that the  $24,000  interest  payment due May 24, 2001 shall be added to the
     principal of the loan and paid on or before November 24, 2001. Further, the
     lender has the option of purchasing restricted common shares of the company
     in lieu of the $24,000.  The lender must  exercise this option on or before
     November 20, 2001.

     On August 10, 2001 the Company  entered into a Forbearance  Agreement  with
     the lender that holds the 1st deed of trust.  The  agreement  provides that
     interest  due on the  $10,000  principal  balance  shall  be  added  to the
     principal and shall be paid on or before June 1, 2002. An interest  payment
     is due on December 1, 2001.


                                       11

<PAGE>



CAN-CAL RESOURCES, LTD.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

SIX MONTHS ENDED JUNE 30, 2001 AND 2000


10.  FAIR VALUE OF FINANCIAL INSTRUMENTS:

     The following table presents the carrying  amounts and estimated fair value
     of the Company's financial instruments at June 30, 2001:

<TABLE>
<CAPTION>
                                                        CARRYING            FAIR
                                                         AMOUNT            VALUE
                                                      -----------       ------------
     Financial assets:
<S>                                                   <C>               <C>
          Notes receivable-related party              $    54,900       $    54,900
          Note receivable                                  53,000            53,000
          Property and equipment                           61,900            61,900
          Other assets                                     57,400            57,400
          Long-term investments                           586,100           586,100
     Financial liabilities:
          Notes payable, related parties                  110,500           110,500
          Note payable                                    310,000           310,000

</TABLE>

     The  carrying  amounts of cash,  prepaid  expenses,  accounts  payable  and
     accrued  expenses  approximate  fair value because of the short maturity of
     those instruments.

     The fair value of note payable is based upon the borrowing  rates currently
     available  to the  Company  for bank loans with  similar  terms and average
     maturities.





                                       12

<PAGE>



CAN-CAL RESOURCES, LTD.

SUPPLEMENTAL SCHEDULE I -
OPERATING, GENERAL AND ADMINISTRATIVE EXPENSES

THREE AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000
(UNAUDITED)
(ROUNDED TO THE NEAREST HUNDRED)


<TABLE>
<CAPTION>

                                                      THREE MONTHS   THREE MONTHS    SIX MONTHS   SIX MONTHS
                                                       ENDED JUNE     ENDED JUNE     ENDED JUNE   ENDED JUNE
                                                        30, 2001       30, 2000       30, 2001     30, 2000
                                                     ------------   ------------   ------------  ------------
OPERATING, GENERAL AND ADMINISTRATIVE
EXPENSES:
<S>                                                  <C>            <C>            <C>           <C>
     Mine exploration                                $     21,100   $     50,900   $    80,400   $    82,900
     Consulting                                            57,100          9,300        90,500        14,800
     Travel and entertainment                              18,100         18,800        41,700        27,000
     Accounting and legal                                   5,000          6,100         8,000        23,300
     Insurance                                             12,500         14,500        20,600        30,200
     Office expense                                        12,400         10,500        30,800        14,000
     Office rent                                            8,000          9,500        15,900        18,800
     Depreciation and amortization                          6,600          7,300        13,000        13,200
     Advertising and promotion                              2,100          6,200         3,300         7,000
     Lease expense                                          2,800          6,700         4,400         9,300
     Miscellaneous                                          3,400          2,000         5,100         4,400
     Telephone                                              3,400          4,000         6,100         5,800
     Utilities                                              2,800            900         4,300         1,200
     Repairs and maintenance                                1,300          1,300         4,200         1,300
     Bank charges                                             100            100           100           300
                                                     ------------  -------------  ------------  ------------
                                                     $   156,700   $    148,100   $   328,400   $   253,500
                                                     ============  =============  ============  ============
</TABLE>




                            See accountants' report.

                                       13

<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR
         PLAN OF OPERATION

(A)      PLAN OF OPERATION.

         During the quarter ended June 30, 2001 and continuing  thereafter,  the
Company  continued  utilizing  various  precious  metal  extractive  techniques,
procedures and  methodologies in its program of testing volcanic cinder material
from its  patented  mineral  claims  at  Pisgah,  California.  It has  dedicated
virtually all its efforts to this testing during the second quarter. It conducts
its  operations  at the  facility in Nye County,  Nevada,  which it leases.  The
purpose of the extractive  metallurgical  program is to determine the nature and
extent of precious  metals  contained  in the  volcanic  cinder  material and to
determine and verify the  feasibility and the possible  commercial  viability of
the various  extractive  technologies  which it has  developed  and continues to
develop.  The testing is conducted primarily through consultants and independent
contractors who are experienced in testing procedures.

         The  Company  intends to  continue  and  possibly  expand  further  its
extractive  testing of volcanic cinders from its property at Pisgah,  California
depending  on  results  of  its  testing  and  the  availability  of  financing.
Analytical data confirms that precious metals exist in the volcanic  cinders and
the Company is presently  conducting a commercial  viability extraction program.
Can-Cal will hold all of the Company's  other  properties in abeyance  until the
Pisgah program is completed.

         It is not  anticipated  that the Company  will  purchase  (or sell) any
significant  amount of equipment or other assets,  or experience any significant
change in the number of personnel who perform  services for the Company,  during
the 12 months ending June 2002. However,  this depends on results of its ongoing
testing programs and financing available to it.

(B)      LIQUIDITY AND CAPITAL RESOURCES AND RESULTS OF OPERATIONS

         As of June 30,  2001,  the  Company's  working  capital  was  $154,600.
Working  capital as of March 31, 2001,  was  $308,900.  During the quarter ended
June 30,  2001,  the Company did not make an interest  payment of $24,000 to the
lender which loaned the Company  $300,000 in November,  2000,  and which holds a
second deed of trust on its Pisgah  Property.  The Company also did not make the
final  principal  payment of $10,000 due on July 31, 2001 to a different  lender
which holds the first deed of trust on the Pisgah property. See Item 3, Defaults
Upon Senior Securities.

         The  Company  had no  operating  income or cash  flow from its  mineral
operations  for the three  months  ended June 30,  2001 other than the sale of a
small amount of gold it produced for $137 and royalty  revenue of $22,500  which
was  pledged,  and was paid  directly,  to the lender  holding the first deed of
trust.  The Company had no revenue  during the three months ended June 30, 2000.
The Company  sustained a loss from  operations  of $134,100  for the three month
period ended March 31, 2001, compared to a loss of $148,100 for the three period
ended March 31, 2000.  The decreased  loss reflect an increase of  approximately
$8,000 in operating  expenses as a result of the expanded  testing  program,  as
well as  royalty  revenue  of  $22,500,  which was paid  directly  to the lender
holding the first deed of trust.

         During the three month  period ended June 30,  2001,  mine  exploration
costs  decreased  to $21,100  from $50,900 for the three month period ended June
30, 2000 and consulting costs

                                       14

<PAGE>



increased  from  $14,800 to $57,100.  The decrease in mine  exploration  and the
increase in  consulting  costs is accounted  for by the  Company's  focus on its
accelerated testing program on the volcanic cinders, compensation paid to Ronald
D. Sloan,  consulting fees paid to Bruce Ballantyne and other  consultants,  and
assay expenses  associated with the testing  program.  Travel and  entertainment
costs decreased to $18,100 from $18,800.  Office expense  increased from $10,500
to $12,400 as a result of increased  activity.  Insurance  costs  decreased from
$14,500 to  $12,400.  Accounting  and legal  expenses  decreased  to $5,000 from
$6,100.  Advertising  and  promotion  decreased  from $6,200 to $2,100 and lease
expense (equipment rental) decreased from $6,700 to $2,800.

         The Company has no material  commitments for capital expenditures other
than expenditures it chooses to make with respect to testing and/or  exploration
of its mineral properties.

         As a result of the  Company's  expanded  and  accelerated  program  for
testing its volcanic  cinders  material  during the quarter ended June 30, 2001,
and continuing thereafter, the Company has expended its funds faster than it had
anticipated.  The Company anticipates that, as long as results appear to warrant
it, it will  continue  its high level of testing  and  assaying  and, if results
warrant it, seek to obtain suitable facilities and equipment to produce precious
metals from its  volcanic  cinders  material.  Therefore,  the Company  requires
additional  funds to continue  conducting  those  operations  at their level and
possibly expand those operations. In August, 2001 the Company sold 30,000 shares
of its common  stock  (restricted  under Rule 144) to a citizen and  resident of
Canada for $.75 per share for proceeds of $22,500.  The Company  estimates  that
its cash will last until about October, 2001. The Company is currently exploring
other financing mechanisms and alternatives although it has not reached any firm
agreement for financing at this time.  The Company does not  anticipate  that it
will attempt to sell any interest in its volcanic cinders material.


                           PART II - OTHER INFORMATION

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         During the  quarter  ended June 30,  2001,  the Company did not make an
interest  payment of $24,000 to the lender which loaned the Company $300,000 and
holds a second deed of trust on the Pisgah  Property.  The Company  also did not
make the final principal  payment of $10,000 due on July 31, 2001 to a different
lender which holds the first deed of trust on its Pisgah property.

         On August 7, 2001 the Company entered into a Forbearance Agreement with
the lender that  loaned the Company  $300,000  in  November,  2000  secured by a
second deed of trust on the Pisgah property.  The Forbearance Agreement provides
that the $24,000  interest  payment due May 24, 2001 but not paid shall be added
to the  principal of the loan and shall be paid on or before  November 24, 2001.
Interest  accrues on the  principal  amount at 16% per year.  The lender has the
option of  purchasing  the number of  restricted  common  shares of the  Company
determined  by using a  purchase  price  per  share  equal to 50% of the  lowest
trading  price  published by Yahoo!  Finance  historical  Price Quote during the
period of the Loan Agreement  from November 23, 2000 through  November 19, 2001,
and  dividing the price per share so  determined  into the total of $24,000 plus
interest  through the date of exercise.  The lender must exercise this option in
whole by giving written  notice to the borrower on or before  November 20, 2001.
If the lender  exercises  this option the principal of the note shall be reduced
by $24,000 and no interest shall be due on the $24,000.


                                       15

<PAGE>



         The Company has signed a separate  Forbearance  Agreement  dated August
10, 2001 with the lender  holding the first deed of trust  which  provides  that
interest due on the $10,000  principal  balance  shall be added to the principal
and the  entire  amount  shall be paid on or before  June 1, 2002.  An  interest
payment at the rate of 8% per annum is due on December 1, 2001.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)     Exhibits.

                 No.          Description                              Page No.
                 ---          -----------                              --------

                 10.19        Forbearance Agreement                       18

                 10.20        Forbearance Agreement                       21

                 23.0         Consent of Independent Accountants          24

         (b)     Reports on Form 8-K. There were no reports filed by the Company
                 on Form 8-K during the quarter ended June 30, 2001.


                                       16

<PAGE>


                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                                 CAN-CAL RESOURCES LTD.
                                                 (REGISTRANT)


         Date:  August 10, 2001           By:      / s /   Ronald D. Sloan
                                                 -------------------------------
                                                 RONALD D. SLOAN, President


                                       17

<PAGE>