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

                                  FORM 10-QSB


(Mark One)

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

               For the quarterly period ended September 30, 1997


                                      OR
[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the transition period from                  to                .


                          Commission file no. 0-19502



                              SISKON GOLD CORPORATION
            (Exact name of registrant as specified in its charter)

            CALIFORNIA                                      68-0254824
(State or other jurisdiction of incorporation 
       or organization)                                 (I.R.S. Employer
                                                       Identification No.)

   350 Crown Point Circle, Suite 100
        GRASS VALLEY, CA.                   95945        (916) 273-4311
(Address of principal executive offices)  (Zip Code)     (Registrant's 
                                                         telephone number)



      Securities registered pursuant to Section 12(b) of the Act:  None.



          Securities registered pursuant to Section 12(g) of the Act:

                             CLASS A COMMON STOCK
                               (Title of Class)




Check  whether  the  issuer  (1) has filed all reports required to be filed  by
Section 13 or 15(d) of the Securities  Exchange Act of 1934, 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    .

As of November 5,  1997,  the  number  of  Class A common stock outstanding was
32,261,289, the number of Series 1 Class B Common  Stock  outstanding  was 638,
and the number of Series A cumulative preferred stock outstanding was 241.

Transitional Small Business Disclosure Format (check one):  Yes   .   No   X .

<PAGE>1

                               TABLE OF CONTENTS



                        PART I - FINANCIAL INFORMATION


ITEM  1. Financial Statements                                                2

ITEM  2. Management's Discussion and Analysis                                2



                          PART II - OTHER INFORMATION


ITEM  1. Legal Proceedings                                                   6

ITEM  2. Changes in Securities                                               6

ITEM  3. Defaults Upon Senior Securities                                     6

ITEM  4. Submission of Matters to a Vote of Security Holders                 6

ITEM  5. Other Information                                                   7

ITEM  6. Exhibits and Reports on Form 8-K                                    7



SIGNATURES  .........                                                        8



FINANCIAL STATEMENTS                                                         9


<PAGE>2
                                    PART I


ITEM 1.  FINANCIAL STATEMENTS.

The  Consolidated Interim Financial Statements of Siskon Gold Corporation  (the
"Company")  are  attached at the end of this document and incorporated fully by
this reference.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

Safe Harbor Statement  Under  the  Private  Securities Litigation Reform Act of
1995

With the exception of historical facts stated  herein, the matters discussed in
this  report  are  "forward  looking"  statements  that   involve   risks   and
uncertainties  that  could  cause  actual  results  to  differ  materially from
projected  results.  Such  "forward  looking" statements include, but  are  not
necessarily  limited  to, statements regarding  anticipated  levels  of  future
production in tons of material  produced  as  well  as ounces of gold recovered
from  the mining operations of the Company, projected  costs  and  expenditures
relating to the Company's mining operations and exploration activities, and the
availability  of  future  debt  and  equity  capital on commercially reasonable
terms. Factors that could cause actual results to differ materially include, in
addition  to  the  other  factors  identified  in  this   report,   risks   and
uncertainties  relating  to  general  economic  and  political conditions, both
domestically  and internationally, the cyclical and volatile  prices  of  gold,
unanticipated ground  and  water conditions, unanticipated grade and geological
problems, including lower than  anticipated ore grades, metallurgical and other
processing problems, availability  of  seasoned personnel and equipment, delays
in the receipt of, or failure to receive  necessary governmental permits or the
renewals  thereof,  changes in the law and regulations  governing  gold  mining
specifically and environmental  matters generally, results of financing efforts
and market conditions, and other  risk  factors.   Readers  of  this report are
cautioned not to put undue reliance on "forward looking" statements  which are,
by  their  nature, uncertain as reliable indicators of future performance.  The
Company disclaims  any  intent  or obligation to publicly update these "forward
looking" statements, whether as a  result  of new information, future events or
otherwise.

(A) PLAN OF OPERATIONS

The Company's ability to continue regular corporate  activities and to continue
as a "going concern" over the foreseeable future is dependent  upon  generating
sufficient  working  capital  from  selling  the  Company's  assets and raising
additional  capital  through debt or equity offerings, or through  a  strategic
merger with a financial  partner.   Due  to extremely poor ground conditions at
the San Juan Mine and low gold prices, mining  operations  have  ceased and the
Company   is   currently   reclaiming  the  property  in  accordance  with  the
requirements of its operating  permits.  Due to recent declines in the price of
gold, it is unlikely that the Company  will be successful in raising additional
working  capital through debt or equity offerings.   The  Company  is  actively
engaged in  the search for a merger partner, or a joint venture partner for the
San Juan Mine  and/or  Big  Horn  Mine, but the Company's efforts have not been
well received, primarily due to the  decline  in  gold prices and the amount of
secured debt encumbering the Company's properties.   In  addition,  the Company
has  been  trying to sell pieces of its mining equipment in an effort to  raise
working capital.   However,  the  Company  has  not  been successful in selling
enough  mining  equipment  at  acceptable  prices to raise  sufficient  working
capital to continue operations for the long  term.   Consequently,  unless  the
Company  is  successful  in  attracting  a  merger  partner,  or  otherwise  is
successful  in  raising  additional  working  capital,  the Company will likely
continue to sell its assets to pay its liabilities.  While  the  Company has no
current  plans to file for protection under the United States Bankruptcy  laws,
it is conceivable  that  the Company may do so in the future.  However, because
the Company's San Juan Mine and Big Horn Mines are pledged as collateral to the
Company's secured creditors,  it  is  unlikely  that  a  bankruptcy filing will
succeed in preserving these assets because the value of the  San  Juan Mine and
Big  Horn  Mine  is  likely  to  be  less  than  the amount of the secured debt
encumbering the properties.  Siskon is required to pay certain costs, including
property  taxes,  associated  with  the  San Juan and Big  Horn  properties  in
compliance with the terms of the loans to  the  long term debt holders.  Siskon
is currently in arrears with respect to the property  taxes at the San Juan and
Big Horn mine but expects to pay the taxes due by the first  quarter  of  1998.
There  is  no  assurance Siskon can get current or stay current with respect to
the costs associated  with  the  loans  and therefore a default notice could be
filed by the debt holders.  There is no assurance Siskon could cure the default
and that could result ultimately in a notice of foreclosure.

<PAGE>3

The San Juan Mine produced 3,483 ounces of gold during the first five months of
1997. The average price for gold during this  period  of  1997  was $346 versus
$395  for  the  same  period  of  1996.  During  the first week in April,  1997
unforeseen ground failures occurred in the area where  mining  operations  were
advancing  in  the  eastern ore body which prevented any further progress from
existing haulage ways.  The  number  of  mining  crews were reduced and retreat
mining was conducted back to the area of the underground  plant.  In  early May
the Company suspended mining operations and reviewed the feasibility and  costs
associated  with   alternative  mining plans. The review indicated that 101,460
ounces of reserves are not economically  mineable  and that a new access tunnel
would  have to be made to develop and mine the west ore  blocks.  The  existing
tunnel to  the east ore body is closed. The reduction in reserves resulted in a
reduction in  the  carrying  value  of  development costs and mineral rights of
$5,575,190. After the reduction, the carrying  value  of  development costs and
mineral rights totalled $2,518,049 at September 30, 1997.

Since  the cessation of mining operations at the San Juan Mine,  the  price  of
gold has  declined  to  the $310 per ounce level and there is no assurance that
gold  prices will recover  to  economically  mineable  levels  or  not  decline
further.  The  ability  to  develop  and  implement any future mining plans, is
dependant upon the Company's ability to raise additional capital through equity
or  debt  offerings. The prospects of obtaining  additional  capital  or  joint
venture partners  in the near future is unlikely. Consequently, the Company has
decided to put its  existing  properties  into a care and maintenance basis and
has terminated the contractual agreements with  its  officers  effective August
15,1997.  Severance  costs  of $821,000 were incurred during the quarter  as  a
result  of  contract terminations.   Mr.  Callaway  will  continue  to  act  as
President and Chief Executive Officer on a month to month basis.

In August the  company  entered  into  an  agreement  with Cherokee Development
Corporation,  A Corporation owned by Tim Callaway, whereby  Siskon  would  have
contributed  mining  equipment  and  supplies  into Cherokee in exchange for an
equity and royalty interest in the Colombo Mine  Project.  In  August  1997 the
Company  sold  equipment  and  supplies  to  the  President  of the Company for
$385,300.   A  cash payment of $89,349 was received and $228,000  in  debt  was
assumed.  In addition,  the  balance  of  $67,951  is due in cash, December 15,
1997.

In November the Board reversed its actions relative  to  the  Cherokee deal and
entered  into  a  contract  with  an  equipment  liquidation  company who  have
guaranteed to sell the mobile mining equipment for $1,027,200 and  have  agreed
to loan the company $907,000 at 8.6% secured by the equipment and payable  from
the proceeds from the sale of the equipment.

Based  on  current  estimates  of  the  plant and equipment a write down of the
carrying value of plant and equipment to net realizable value of $3,174,396 was
made in the second quarter. After the reduction,  the  carrying  value of plant
and  equipment  amounted  to  $988,642  at September 30, 1997. It is reasonably
possible  that  further  losses could occur  on  transfer  in  accordance  with
generally accepted accounting principles.

The  Company's  ability to continue  corporate  activities  is  dependant  upon
generating sufficient working capital from selling timber at the Gray Eagle and
Iron Creek properties,  reducing  overhead  costs, Sales of equipment, sales of
property,  sales of royalty interests and raising  additional  capital  through
equity  or  debt  offerings.   No assurance can be given that these  activities
will generate sufficient working capital.

The  debt  secured  by  the San Juan  and  Big  Horn  properties  amounting  to
$8,922,169 at September 30, 1997, matures November 15, 1998. The ability of the
Company  to meet these debt  requirements  is  dependant  upon  the  successful
renegotiation  or  refinancing  of the debt. No assurance can be given that the
Company will successfully renegotiate or refinance the debt.

Due to the price decline of the Company's  Class  A  common  stock  the  NASDAQ
National  Market  System  removed  the  listing of the Company's Class A common
stock effective April 18, 1997. The Company's  Class  A  common  stock  is  now
quoted on the OTC Bulletin Board under the symbol "SISK".

<PAGE>4

(B) FINANCIAL CONDITION AND RESULTS OF OPERATIONS

YEAR TO DATE COMPARISON

Siskon had cash on hand of $104,516 and $421,469 at September 30, 1997 and 1996
respectively.

Cash  used  by  operating activities for the first nine months of 1997 totalled
$1,455,563 versus $1,289,520 for the first nine months of 1996.

Cash provided by  investing  activities  during  the  first nine months of 1997
totalled $1,039,326 versus $303,795 provided during the  first  nine  months of
1996.  During  1997, $57,500 was received from the sale of properties, $650,885
from the sale of  equipment,  note  collections  of  $227,761 and redemption of
bonds of $40,000 as compared to $303,370 from the sale  of  equipment  and note
collections of $425 during the first nine months of 1996. In September 1997 the
Company  sold  its interest in the Humbolt Starlight property for $40,000  cash
and its interest  in  the  Aurora  properties  for  $25,000  cash  and  a  note
receivable  of  $75,000  which  was  collected  in  October  1997. Cash used in
investing activities during the first nine months of 1997 totalled  $53,767  as
compared  to $2,804,800 in 1996. During 1997, $30,806 was expended on equipment
at the San  Juan  Mine  and $22,961 on permitting costs at the Big Horn Mine as
compared with $500,688 for  equipment,  $1,941,320 for development and $160,772
for bonds at the San Juan Mine during 1996  and  $202,020 for permitting at the
Big Horn Mine during 1996. In mid-May 1996, construction  of  the San Juan Mine
was completed.

Cash  provided  by  financing activities during the first nine months  of  1997
totalled $450,000 versus  $500,000  during  the  first nine months of 1996 both
from the issuance of convertible debt. On February  18, 1997 the Company issued
convertible debentures bearing interest at 8% and a maturity  date  of February
1, 1999.  During the first nine months of 1997, $1,949,020 of convertible  debt
was converted into 15,569,115 shares of Class A common stock and 512 shares  of
Series A convertible preferred stock and 241 shares of the preferred stock thus
issued were converted into 3,321,031 shares of Class A common stock.

Cash used in financing activities during the first nine months of 1997 totalled
$688,086  as  compared to $538,738 during the first nine months of 1996. During
1997,  $574,572  was  paid  on  equipment  and  land  notes  and  $113,514  for
registration  and issuance costs. During 1996 $48,964 was paid on capital lease
obligations, $442,657  on  equipment and land notes and $47,117 on registration
and issuance costs.

Siskon incurred a net loss of  $12,611,572 for the first nine months of 1997 as
compared to a net loss of $2,012,316 for the first nine months of 1996.  During
the first nine months  of 1997 revenues of $1,206,096 resulted from the sale of
3,483 ounces of fine gold at an  average  price  of  $346 per ounce. Production
costs,  non-cash  costs and royalty expense totalled $1,672,674,  $743,825  and
$24,273, respectively.  A   property,  plant  and  equipment impairment loss of
$8,749,586 resulted from the reduction in the reserves at the San Juan Mine and
a  reduction  of  mining  plant  and  equipment  to its net  realizable  value.
Subsequent to May 30, 1997, no revenues from gold sales were received as mining
operations  at  the  San  Juan  Mine had ceased. Commencing  in  Mid-May  1996,
revenues, production costs, non-cash  costs  and royalties at the San Juan Mine
were reflected in operations. During the first  nine months of 1996 revenues of
$1,344,833 resulted from the sale of 3,497 ounces  of  fine  gold at an average
price of $385 per ounce. Production costs, non-cash costs and  royalty  expense
totalled  $2,051,641, $532,607 and $26,785, respectively. During the first  six
months of 1996  while  the  Company's  operations were in the development stage
gold revenues received from 5,003 ounces  of gold amounting to $1,993,170 at an
average price of $398 were credited against capitalized costs.

Timber sales were $40,000 in the first nine  months  of  1997  from  Gray Eagle
versus $450,000 in the first nine months of 1996 from San Juan.

Royalties were $48,674 in the first nine months of 1997 versus $50,528  in  the
first nine months of 1996.  During  the  first  quarter  of  1997  the Company 
sold its Montana oil and gas properties, during the second quarter of  1997  
Cominco  cancelled its lease of the Iron Creek property and during the third 
quarter of 1997  the  Company sold its Humbolt Starlight and Aurora royalty 
interests which comprised the majority of  the  royalty  revenue.  Future 
royalties from the remaining properties  are negligible.

<PAGE>5

General and administrative expenses were $1,545,543 in the first nine months of
1997 as compared with $905,242  during  the first nine months of 1996. Expenses
for 1997 reflect the severance costs of the executive contract terminations.

Exploration and project costs were $105,484  in  the  first nine months of 1997
versus $26,785 in the first nine months of 1996. The increase related primarily
to  costs  of  the  Gray  Eagle  Mine  litigation and exploration  in  Northern
California and Latin America.

The gain on the sale of property was $157,500  during  the first nine months of
1997 from the sale of the Aurora property for $100,000,  the  Humbolt Starlight
property for $40,000 and the Montana oil and gas royalty interests  for  $17500
versus $1,250 from the sale of the Croman property during the first nine months
of 1996. During the first nine months of 1997 equipment was sold for a gain  of
$6,780  versus  a  loss  of  $32,333  during the first nine months of 1996.  In
August 1997 the Company sold equipment  and  supplies  to  the President of the
Company for $385,300.  A cash payment of $89,349 was received  and  $228,000 in
debt was assumed.  In addition, the balance of $67,951 is due in cash, December
15,  1997.  The  discount  on  note  receivable  in  1997 amounting to $181,547
resulted from the Company agreeing to accept $112,000 in cash as payoffs on the
notes.

Interest expense during the first nine months of 1997  amounted  to  $1,089,884
including  amortization  of  the  discount of the price of the stock underlying
convertible debt of $287,923. During  the  first  nine  months of 1996 interest
expense  was  $334,779 after capitalization of interest costs  of  $562,757  to
property, plant  and  equipment.  Interest and miscellaneous income was $42,284
in the first nine months  of  1997  as compared with $89,135 in  the first nine
months of 1996 reflecting higher cash balances during 1996.

The  Company believes that its business  and  operations  were  not  materially
affected by inflation during the first nine months of 1997 and 1996.

QUARTER TO QUARTER COMPARISON

Siskon incurred a net loss of $1,318,248 for the third quarter of 1997 compared
to a net  loss  of  $1,057,372  for the third quarter of 1996. During the third
quarter of 1997 there were no gold  revenues  as  the  mine had been closed and
costs of $198,343 for care and maintenance.  During the  third  quarter of 1996
revenues of $735,490 resulted from the sale of 1,914 ounces of fine  gold at an
average  price of $384 per ounce. Production costs, non-cash costs and  royalty
expense totalled $1,412,571, $320,815 and $14,633, respectively.

Timber sales  were  $40,000 in the third quarter of 1997 from Gray Eagle versus
$450,000 in the third quarter of 1996 from San Juan.

Royalties were $14,256  in  the  third  quarter  of  1997 versus $12,471 in the
second quarter of 1996.  During the third quarter of 1997  the Company sold its
Humbolt Starlight and Aurora royalty interests which comprised  the majority of
the  royalty  revenue.  Future  royalties  from  the  remaining properties  are
negligible.

General and administrative expenses were $1,039,567 in  the  third  quarter  of
1997  as  compared with $233,912 during the third quarter of 1996. Expenses for
1997 reflect the severance costs of the executive contract terminations.

Exploration  and project costs were $22,400 in the third quarter of 1997 versus
$14,633 in the  third  quarter  of  1996.  The increase resulted primarily from
costs of the Gray Eagle Mine litigation.

The gain on the sale of property was $140,000  during the third quarter of 1997
from the sale of the Aurora property for $100,000  and  the  Humbolt  Starlight
property for $40,000. There were no sales in the third quarter of 1996.  During
the  third  quarter  of 1997 the gain on sale of equipment amounted to $146,569
versus a loss of $34,453  for  the  third  quarter  of  1996. During the second
quarter of 1997 the Company wrote its equipment down to net realizable value.

Interest expense during the third quarter of 1997 amounted  to  $262,371 versus
$233,500  during  the  third  second  quarter  of  1996 reflecting higher  loan
balances during 1997. Interest and other income was $5,750 in the third quarter
of 1997 as compared with $18,043 in the third quarter of 1996 reflecting higher
cash balances during 1996.


<PAGE>6

                                    PART II

ITEM 1.  LEGAL PROCEEDINGS

As previously disclosed in the Company's 10-KSB for the year ended December 31,
1997.  In May 1991, the Company received a request from the California Regional
Water  Quality  Control  Board ("CALRWQCB") to prepare  an  environmental  site
assessment report on a site  known as the Croman Mill Site, located in Siskiyou
County, California. In April 1996,  state  and  federal environmental officials
and a representative of the Company conducted a site  visit.  Several  soil and
water  samples  were  taken by the officials as well as the Company. The Croman
Mill Site is a historical  mining  mill  site  which  contains  stockpiled mine
tailings  from  mining operations conducted by prior operators and  owners  and
represents a "pre-existing" condition in relation to the time the Company owned
the property.  The  Company  owned  the site from 1989 to June 1996 and did not
conduct  any  mining related activities  on  the  site  during  that  time.  On
September 23, 1997 the CAL RWQCB issued a tentative cleanup and abatement order
97-116 for the  Old  Grey  Eagle  tailings  disposal  site naming the companies
whoever operated the Grey Eagle Mine and disposed the mine tailings at the site
and mine subsequent owners of the property including the Company.  Comments are
due by October 15, 1997.  The Company intends to seek indemnification  for  the
prior owners and operators of the property.

On  March 11, 1997 an action in U.S. District Court for the Eastern District of
California,  case number CIVS 970357 WBSJFM, was brought against the Company by
the California  Sportfishing Protection Alliance ("CALSPA") alleging violations
of the Clean Water  Act at the Gray Eagle Mine and Croman Mill Site in Siskiyou
County, California. The  allegations include the failure to obtain a permit for
the wastewater treatment plant, discharges from the mine and failure to monitor
pollutants released into Indian  Creek.   In  April  1997  the Company notified
Noranda  Grey Eagle Mines, Inc. ("Noranda") of Norandas obligations  to  defend
Siskon pursuant  to the indemnity agreement between the parties.  On August 11,
1997 Noranda brought an action in US District court for the Eastern District of
California, case number CIV-S 97-1486 WBS 166H, seeking declaratory relief from
such indemnity and  granted  an extension until November 15, 1997 for Siskon to
file its response.  On October  22, 1997 CALSPA dismissed without prejudice its
action against the Company.

ITEM 2.  CHANGES IN SECURITIES

Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On August 7, 1997, the Company held its Annual Meeting of Shareholders to elect
four directors to approve an increase  in  the  number of shares to 300,000,000
shares. The shareholders approved proposals 1 and 2 and turned down proposals 3
and 4.

   PROPOSAL NO. 1 - ELECTION OF DIRECTORS

NOMINEE                 FOR           WITHHELD       ABSTAINED        TOTAL

Timothy A. Callaway     22,868,605    2,318,375      1,610,566      26,797,546
Michael K. Epstein      22,861,211    2,325,769      1,610,566      26,797,546
Scott E. Bartel         22,885,858    2,301,122      1,610,566      26,797,546
David A. Lawler         22,878,571    2,308,409      1,610,566      26,797,546

<PAGE>7

   PROPOSAL NO. 2 - INCREASE NUMBER OF SHARES TO 300,000,000 SHARES

                   FOR             WITHHELD       ABSTAINED      TOTAL

                   22,441,971      2,745,009      1,610,566      26,797,546

   PROPOSAL NO. 3- INCREASE STOCK OPTION PLAN BY 10,000,000 SHARES

                    FOR             WITHHELD      ABSTAINED       TOTAL

                    10,291,322      3,882,639     12,623,585      26,797,546

   PROPOSAL NO. 4 - REINCORPORATE IN THE STATE OF NEVADA

                     FOR             WITHHELD      ABSTAINED      TOTAL

                     11,976,678      2,197,283     12,623,585     26,797,546

Proposals  3 and 4 needed 13,398,773 votes to be approved  and  were  thus  not
approved


ITEM 5.  OTHER INFORMATION

Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(A)       EXHIBITS

Not applicable.

(B)       REPORTS ON FORM 8-K

On November  5, 1997 the Company's principal independent accountants, Coopers &
Lybrand L.L.P.  ("Coopers  &  Lybrand"),  resigned.   The  reports of Coopers &
Lybrand on the Company's financial statements for the years  ended December 31,
1995  an 1996 did not contain an adverse opinion or disclaimer  of  opinion  or
qualification  of  modifications  as  to uncertainty, audit scope or accounting
principles.  During the relationship between  the  Company an Coppers & Lybrand
there were no disagreements regarding any matters with  respect  to  accounting
practices,  financial statement disclosure, or audit scope or procedure,  which
disagreements,  if  not  resolved,  would have caused Coopers & Lybrand to make
reference to the subject matter of the  disagreement  in  connection  with  its
report.   The  change  in  accountant  was  not recommended nor approved by the
Company's Board of Directors or any committee of the Board of Directors.


<PAGE>8

                                  SIGNATURES

In  accordance with Section 13 or 15(d) of the  Exchange  Act,  the  Registrant
caused  this  report  to  be signed on its behalf by the undersigned, thereunto
duly authorized.


                                              SISKON GOLD CORPORATION



Dated  November 26, 1997                      TIMOTHY A. CALLAWAY
                                              Timothy A. Callaway, 
                                              President, CEO and 
                                              Chairman of the Board
<PAGE>9














                             FINANCIAL STATEMENTS





<PAGE>10

                              FORM 10-QSB - ITEM 1

                    SISKON GOLD CORPORATION AND SUBSIDIARY

                         LIST OF FINANCIAL STATEMENTS


The following consolidated  financial statements of the Company are included in
response to Item 1:




Consolidated Balance Sheets -
      September 30, 1997 (Unaudited) and December 31, 1996                  11

Consolidated Statements of Operations - (Unaudited)
      Nine Months Ended September 30, 1997 and 1996                         12

Consolidated Statements of Cash Flows - (Unaudited)
      Nine Months Ended September 30, 1997 and 1996                         13

Notes to Consolidated Financial Statements                                  14


<PAGE>11

SISKON GOLD CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 (UNAUDITED) AND DECEMBER 31, 1996

                                                 1997              1996
ASSETS

CURRENT ASSETS
Cash and cash equivalents                        $104,516          $812,606
Notes and Accounts receivable                     143,891             6,080
Inventories                                         1,000           230,875
Prepaid expenses and other                        138,086           400,792
                                               ----------       -----------
   Total Current Assets                           387,493         1,450,353

NOTES RECEIVABLE                                        -           292,812

PROPERTY, PLANT AND EQUIPMENT,  net             6,536,138        16,653,046

OTHER ASSETS                                      265,619           428,569
                                               ----------       -----------
TOTAL ASSETS                                   $7,189,250       $18,824,780

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable and accrued liabilities       $1,123,820          $773,306
Current portion of long-term debt                  22,282           292,248
                                               ----------        ----------
   Total Current Liabilities                    1,146,102         1,065,554

LONG TERM DEBT ($9,011,518 in 1997 and
   $9,772,640 in 1996 to related parties)       9,035,590        10,692,224

OTHER LIABILITIES                                 171,747            60,551
                                               ----------        ----------
  Total Liabilities                            10,463,040        11,818,329
                                               ----------        ----------
COMMITMENTS AND CONTINGENCIES (Note 9)

SHAREHOLDERS' EQUITY
Capital Stock
   Preferred stock, $.001 par value;
      Convertible Series A: 241 in 1997; 
      0 in 1996                                                          -
   Common stock, $.001 par value; issued 
      and outstanding:
      Class A: 30,791,524 in 1997; 11,989,662 
       in 1996                                     30,792           11,989
      Convertible Class B Series 1: 638 in 
       1996 and 1995                                    1                1
Additional paid-in capital                     56,170,752       53,730,633
Stock subscription receivable                    (344,803)        (326,812)
Accumulated deficit                           (59,020,932)     (46,409,360)
                                               ----------       ----------
   Total Shareholders' Equity                  (3,164,189)       7,006,451
                                               ----------       ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY     $7,189,250      $18,824,780
                                               ==========       ==========
See notes to consolidated financial statements.


<PAGE>12

SISKON GOLD CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

<TABLE>
<CAPTION>
                               Three months ended September 30        Nine months ended September 30

<S>                             <C>                 <C>               <C>                   <C>
                                1997                1996              1997                  1996
REVENUES
Gold sales                      $         -         $735,490          $1,206,096            $1,344,833
Timber Sales                         40,000          450,000              40,000               450,000
Royalties and leases                 14,256           12,471              48,674                50,528
                                -----------        ---------          ----------            ----------
   Total Revenues                    54,256        1,197,961           1,294,770             1,845,091
                                -----------        ---------          ----------            ----------
OPERATING EXPENSES
Production                          198,343        1,412,571           1,672,674             2,051,641
Depreciation, depletion and          54,742          320,815             743,825               532,607
   amortization
Property, plant and equipment             -                -           8,749,586
   impairment loss
General and administrative         1,039,567         233,912           1,545,543               905,242
Royalties                                  -          23,492              24,273                64,405
Exploration and project costs         22,400          14,633             105,484                26,785
                                ------------       ---------           ---------            ----------
   Total Operating Expenses        1,315,052       2,005,423          12,841,475             3,580,680
                                ------------       ---------          ----------            ----------
OPERATING LOSS                    (1,260,796)       (807,462)        (11,546,705)           (1,735,589)
                                ------------       ---------          ----------            ----------
OTHER (EXPENSE) INCOME
Gain on sale of property             140,000               -             157,500                 1,250
(Loss) gain on sale of               146,569         (34,453)              6,780               (32,333)
equipment
Discount on Note Receivable         (181,547)                           (181,547)
Interest expense                    (262,371)       (233,500)         (1,089,884)             (334,779)
Interest and other income              5,150          18,043              42,284                89,135
                                 -----------       ---------           ---------             ---------
    Total Other (Expense)           (151,599)       (249,910)          1,064,867              (276,727)
     Income
                                 -----------       ---------          ----------             ---------
NET LOSS                         $(1,412,395)    $(1,057,372)       $(12,611,572)          $(2,012,316)
                                 ===========     ===========        ============           =========== 
NET LOSS PER SHARE                    $(0.05)         $(0.10)             $(0.58)               $(0.19)
                                 ===========     ===========        ============           ===========
WEIGHTED AVERAGE
    NUMBER OF SHARES              29,327,207      11,056,207          21,599,971            10,754,721
                                  ==========     ===========        ============           ===========
</TABLE>




See notes to consolidated financial statements.

<PAGE>13

SISKON GOLD CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

                                             1997               1996

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                     $(12,611,572)      $(2,012,316)
Adjustments to reconcile net loss to 
   net cash used in operating activities
Issuance of common stock for services              73,973            50,000
Issuance of common stock for interest                   -           280,211
Discount on price of stock underlying 
   convertible debt                               287,923                 -
Depreciation, depletion and amortization          743,825           532,607
Property, plant and equipment impairment loss   8,749,586                 -
(Gain) on sale of property                       (157,500)                -
Loss (gain) on sale of equipment                   (6,780)           31,083
Discount on Note Receivables                      181,547                 -
Accrued interest on convertible debt              584,354                 -
Amortization of deferred financing costs           96,531                 -
Accrued interest receivable                       (17,991)          (13,506)
Decrease (increase) in accounts receivable          2,993            (1,520)
Decrease (increase) in inventories                229,875           (12,696)
Decrease in prepaid expenses                       66,602            11,731
(Increase) in accounts payable and accrued 
   liabilities                                    350,514          (155,114)
Reclamation Incurred                              (29,443)                -
                                                ---------          --------
Net cash used in operating activities          (1,455,563)       (1,289,520)
                                                ---------         ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property                     57,500                 -
Proceeds from sale of equipment                   650,885           303,370
Proceeds from sale of land                         63,180                 -
Collections on notes receivable                   227,761               425
Purchase of equipment                             (30,806)         (500,688)
Deferred development costs                        (22,961)       (2,143,340)
Decrease (Increase) in reclamation bonds           40,000          (160,772)
                                               ----------         ---------
Net cash provided by (used in) investing 
  activities                                      985,559        (2,501,005)
                                               ----------         ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible debt        450,000           500,000
Payments of obligations under capital leases            -           (48,964)
Payments of long term debt                       (574,572)         (442,657)
Registration and issuance costs                  (113,514)          (47,117)
                                               ----------         --------- 
Net cash provided by (used in) financing 
   activities                                    (238,086)          (38,738)
                                               ----------         ---------
DECREASE IN CASH                                 (708,090)       (3,829,263)

CASH AND CASH EQUIVALENTS AT BEGINNING OF
  PERIOD                                          812,606         4,251,032
                                               ----------         ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD       $104,516          $421,469
                                               ==========         =========


See notes to consolidated financial statements.


<PAGE>14

SISKON GOLD CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    NATURE OF OPERATIONS

      Siskon Gold Corporation  and  subsidiary  (the Company) is engaged in the
      business   of   exploring,   developing  and  mining   precious   mineral
      properties, principally  gold.  Gold  dor<e'>,  the  Company's  principle
      product,  is  produced and sold in the United States. At September  1997,
      the Company owned  interests in various mineral properties located in the
      Western United  States.  The  Company's  operations  are conducted in one
      business   segment:   mineral   resource  exploration,  development   and
      production.

       In early May the Company suspended  mining  operations  and reviewed the
      feasibility  and  costs  associated with  alternative mining  plans.  The
      review indicated that 101,460  ounces  of  reserves  are not economically
      mineable.  The  reduction  in  reserves  resulted in a reduction  in  the
      carrying  value of development costs and mineral  rights  of  $5,575,190.
      Should the  Company  be  unable to raise additional capital and remain in
      operation, it may be necessary  to  further write down the carrying value
      of  its  development costs and mineral  rights  totalling  $2,518,049  at
      September 30, 1997 resulting in additional losses to the Company.

      Since the  cessation of mining operations at the San Juan Mine, the price
      of gold has  declined  to  the  $310  per  ounce  level  and  there is no
      assurance  that gold prices will recover to economically mineable  levels
      or not decline  further.  The ability to develop and implement any future
      mining plans, is dependant upon the Company's ability to raise additional
      capital through equity or debt  offerings.  The  prospects  of  obtaining
      additional  capital  or  joint  venture  partners  in  the near future is
      unlikely.  Consequently,  the  Company  has  decided to put its  existing
      properties  into  a care and maintenance basis.  In  August  the  company
      entered  into an agreement  with  Cherokee  Development  Corporation,   A
      Corporation  owned by Tim Callaway, whereby Siskon would have contributed
      mining equipment and supplies into Cherokee in exchange for an equity and
      royalty interest  in  the  Colombo  Mine  Project.  In November the Board
      reversed  its actions relative to the Cherokee deal and  entered  into  a
      contract with  an  equipment  liquidation  company who have guaranteed to
      sell the mobile mining equipment for $1,027,200  and  have agreed to loan
      the  company $907,000 at 8.6% secured by the equipment and  payable  from
      the proceeds  from  the sale of the equipment. Based on current estimates
      of the plant and equipment  a  write  down of the carrying value of plant
      and equipment to net realizable value of  $3,174,396  was made. After the
      reduction, the carrying value of plant and equipment amounted to $988,642
      at  September  30,  1997.  It is reasonable possible that further  losses
      could occur on transfer in accordance  with generally accepted accounting
      principles.

      The Company's ability to continue corporate  activities  and  to fund the
      acquisition, exploration and development of these mineral properties over
      the  foreseeable  future is dependant upon generating sufficient  working
      capital from sales  of  timber, reducing overhead costs, sales of royalty
      interests  and  raising  additional   capital   through  equity  or  debt
      offerings.   No  assurance  can  be  given  that these   activities  will
      generate sufficient working capital, or that  the  Company will remain in
      operation for the next twelve months.

      The  accompanying  interim  consolidated financial statements  have  been
      prepared by the Company without  audit and contain all adjustments which,
      in  the  opinion  of management, are  necessary  to  present  fairly  the
      Company's financial  position  as  of September 30, 1997 and December 31,
      1996 and the results of its operations  and  cash  flows  for the interim
      periods ending September 30, 1997 and 1996. Such adjustments  consist  of
      normal, recurring adjustments.

      The accompanying interim consolidated financial statements do not contain
all disclosures required by generally accepted accounting principles for annual
financial  statements.  It is suggested that these financial statements be read
in  conjunction with the audited  consolidated  financial  statements  and  the
related  notes contained in the Company's Annual Report on Form 10-KSB, for the
year  ended December 31, 1996.

      Operating  results  for interim periods are not necessarily indicative of
      those expected for a full year.

<PAGE>15

2.    RECENT ACCOUNTING STANDARDS

      In June 1997, the Financial  Accounting  Standards  Board ("FASB") issued
      Statement  of  Financial   Accounting Standard ("SFAS")  130,  "Reporting
      Comprehensive Income." SFAS  130  establishes standards for the reporting
      and display of comprehensive income  and  its components in a full set of
      general purpose financial statements. Comprehensive  income is defined as
      the  change  in  equity  of  a business enterprise during a  period  from
      transactions and other events  and  circumstances from non-owner sources.
      SFAS 130 is effective for fiscal years beginning after December 15, 1997.
      The Company does not believe that SFAS 130 will have a material impact on
      its financial statements.

      In July 1997, the FASB issued SFAS 131, "Disclosures about Segments of an
      Enterprise  and Related Information."  SFAS  131  requires  publicly-held
      companies to  report  financial  and  other information about key revenue
      producing segments of the entity for which  such information is available
      and  is  utilized  by  the  chief  operating  decision   maker.  Specific
      information  to  be reported for individual segments includes  profit  or
      loss,  certain  revenue   and   expense   items   and   total  assets.  A
      reconciliation  of segment financial information to amounts  reported  in
      the financial statements  would  be  provided.  SFAS 131 is effective for
      fiscal  years  beginning after December 15, 1997. The  Company  does  not
      believe that SFAS  131  will  have  a  material  impact  on its financial
      statements.

3.    INVENTORIES

      Inventories at September 30 1997, and December 31, 1996 were as follows:

                                         1997               1996

         Gold dore' inventory            $       -          $   81,380
         Materials and supplies              1,000             149,495
                                
                                         $   1,000          $  230,875
                                         =========          ==========
4.    NOTES RECEIVABLE

      In September 1997 the Company agreed to discount two notes receivable for
      cash  of  $112,000.  The  Company recognized a loss of $181, 547  on  the
      transaction.

5.    PROPERTY, PLANT AND EQUIPMENT

      Property, plant and equipment at September 30 1997, and December 31, 1996
      were as follows:

                                                  1997           1996

      Property acquisition and development costs
        San Juan                                  $20,747,398    $ 20,747,399
        Big Horn                                    1,139,509       1,179,728
        Gold Point                                     95,000          95,000
      Mining equipment                              3,852,458       5,442,216
      Plant                                         1,312,166       1,326,380
      Office equipment, furniture and vehicles         64,262         145,699
                                                  -----------     -----------
                                                   27,210,793      28,936,422

      Less: accumulated depreciation, depletion 
       and amortization                             2,304,722       1,987,859
       property, plant and equipment impairment    18,369,933      10,295,517
       loss                                       -----------     -----------
                                                   $6,536,138     $16,653,046
                                                  ===========     ===========

<PAGE>16

      In February 1997 the Company  sold  its  interest  in  its  oil  and  gas
      properties  for  $17,500  cash  and  recognized  a  gain  of  $17,500. In
      September  1997  the  Company  sold its interest in the Humbolt Starlight
      property for $40,000 cash and its  interest  in the Aurora properties for
      $25,000  cash and a note receivable of $75,000  which  was  collected  in
      October 1997.  The  Company  recognized  a  gain  of  $140,000  on  these
      transactions.  In August 1997 the Company sold equipment and supplies  to
      the President of the Company for $385,300.  A cash payment of $89,349 was
      received  and  $228,000 in debt was assumed.  In addition, the balance of
      $67,951 is due in cash, December 15, 1997.

6.    ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

      In August 1997 the Company terminated the employment of its two officers.
      The Company recognized  severance  costs  of  $821,000  pursuant to their
      employment  agreements. At September 30, 1997 $791,000 was  owed  to  Mr.
      Callaway.

7.    CONVERTIBLE DEBT

      On February 18,  1997  the  Company issued convertible notes for $450,000
      with  interest at 8%, due February  1,  1999.   The  Company  issued  the
      convertible   debentures   in   reliance   upon  an  exemption  from  the
      registration  provisions  of  the Securities Act  of  1933,  as  amended,
      provided for in Regulation S promulgated  thereunder. The debentures were
      offered and sold in an "offshore" transaction  to  qualified  persons who
      were not "U.S. Persons," as defined in Regulation S. At the option of the
      holder, the principle and accrued interest may  be converted into  shares
      of the Company's Class A common stock after forty five days from the date
      of  issuance  at  a conversion price equal to the lesser of  seventy five
      percent of the market   price of the common stock on February 18, 1997 or
      on the date of conversion.  The  market  price for the applicable date is
      defined as the average closing bid price of  the  common  stock  for five
      days preceding that date.

      During the first nine months of 1997, $1,949,020 of convertible debt  was
      converted  into  15,569,115 shares of Class A common stock and 512 shares
      of Series A convertible  preferred  stock and 253 shares of the preferred
      stock thus issued were converted into  3,231,031 shares of Class A common
      stock. From October 1, 1997 to November  5, 1997, an additional 21 shares
      of preferred stock has been converted into  1,469,765  shares  of Class A
      common stock.  As of November 5, 1997, $15,624 of debt and 241 shares  of
      Series A convertible preferred stock were unconverted.

8.    CAPITAL STOCK, STOCK OPTIONS AND WARRANTS

      Stock  option and warrant transactions for the six months ended September
      30, 1997 were as follows:

<TABLE>
<CAPTION>
                            Number of CLASS A         Exercise            Exercisable
                            SHARES                    PRICE PER SHARE     OPTIONS
<S>                         <C>                       <C>                  <C>
Options outstanding at:
  December 31, 1996          723,500                  $2.00  -   $4.94       501,000
    Granted                    3,000                   0.78                    3,000
    Cancelled               (207,000)                  0.78  -    4.94       (62,000)
    Vested                         -                   2.06  -    3.05        55,000
                             -------                                        --------
  September 30, 1997         519,500                  $0.78  -   $4.94       497,000
                             =======                                       =========

  Warrants outstanding at
    December 31, 1996      2,819,083                  $2.82  -   $7.50     2,819,083
      Cancelled              (75,000)                  7.50                  (75,000)
                           ---------                                       ---------
    September 30, 1997     2,744,083                  $2.82  -   $6.00     2,744,083
                           =========                                       =========
</TABLE>


<PAGE>17

9.    COMMITMENTS AND CONTINGENCIES

      ENVIRONMENTAL

      In May 1991,  the Company received a request from the California Regional
      Water Quality Control  Board  to prepare an environmental site assessment
      report  on a site known as the Croman  Mill  Site,  located  in  Siskiyou
      County, California.  In  April  1996,  state  and  federal  environmental
      officials  and  a  representative of the Company conducted a site  visit.
      Several soil and water samples were taken by the officials as well as the
      Company. The Croman  Mill  Site  is  a  historical mining mill site which
      contains  stockpiled mine tailings from mining  operations  conducted  by
      prior operators  and  owners and represents a "pre-existing" condition in
      relation to the time the  Company  owned the property.  The Company owned
      the site from 1989 to June 1996 and  did  not  conduct any mining related
      activities on the site during that time.  On September  23,  1997 the CAL
      RWQCB issued a tentative cleanup and abatement order 97-116 for  the  Old
      Grey  Eagle  tailings disposal site naming the companies whoever operated
      the Grey Eagle  Mine  and disposed the mine tailings at the site and mine
      subsequent owners of the  property  including  the Company.  Comments are
      due  by  October 15, 1997.  The Company intends to  seek  indemnification
      from the prior owners and operators of the property.

      In March 1997  an  action  in U.S. District Court was brought against the
      Company  by  the  California Sportfishing  Protection  Alliance  alleging
      violations of the Clean  Water Act at the Gray Eagle Mine and Croman Mill
      Site in Siskiyou County, California.  The allegations include the failure
      to obtain a permit for the wastewater treatment  plant,  discharges  from
      the  mine  and  failure to monitor pollutants released into Indian Creek.
      In  April 1997 the  Company  notified  Noranda  Grey  Eagle  Mines,  Inc.
      ("Noranda")  of  Noranda's  obligations  to defend Siskon pursuant to the
      indemnity agreement between the parties.   On  August  11,  1997  Noranda
      brought  an  action  in  US  District  court  for the Eastern District of
      California,  Case  number  CIV-S  97-1486 WBS 166H,  Seeking  declaratory
      relief from such indemnity and granted  an  extension  until November 15,
      1997  for  Siskon  to  file  its  response.   On October 22, 1997  CALSPA
      dismissed without prejudice its action against the Company.

      In  March 1994, the Company received preliminary  notice  from  the  USFS
      naming  the  Company  and  six  other  parties as potentially responsible
      parties to a hazardous waste site in Siskiyou  County,  California.   The
      hazardous  waste  site  is  believed  to be related to old mill tailings,
      storage containers and a mine tunnel.  One of the sites may have been the
      Siskon Mine which was previously  owned  by the Company and may have been
      operated  by  a predecessor of the Company among  others.   In  September
      1995, the Company  received  a  letter  from  the USFS requesting a field
      visit to the Siskon Mine, however the field visit  was  postponed  due to
      the  occurrence  of   forest fires in the area.  On October 31, 1996, the
      Company received a notice  from  the  USFS that a field visit to the site
      was  scheduled for  November 4, 1996. The  USFS  has  contracted  with  a
      private contractor to prepare an environmental evaluation to determine if
      the site  poses  any  significant  environmental  risk  and,  if  so, the
      establishment   of   clean-up   goals.   If   necessary,  an  Engineering
      Evaluation/Cost  Assessment may be conducted by  the  USFS  to  determine
      appropriate alternatives,  if  any,  for  removal of any hazardous wastes
      located on the site. Due to flooding in the  area, the USFS has agreed to
      an additional visit to the site with Company representatives  at  a later
      date.  Until  more  information is developed, the Company is not able  to
      determine if it will  be liable for environmental remediation or estimate
      the amount of liability, if any. In the event that the Company incurs any
      liability  associated  with   the  site,  the  Company  intends  to  seek
      indemnification from other potentially  responsible  parties who may have
      been responsible for creating the hazardous waste found on the property.

      In May 1997, a former employee filed an application with  the  California
      State Worker's Compensation Appeals Board alleging that the employer  was
      engaged   in   "serious   or  willful  misconduct"  contributing  to  the
      plaintiff's injury.  Plaintiff  was  injured  in a mining accident on the
      premises of the Company and has been receiving  treatment  in  accordance
      with  California  Worker's Compensation laws. The amount of the claim  is
      estimated to be $150,000.   If the California State Worker's Compensation
      Appeals Board should sustain  the  plaintiff's  application, any payments
      made  in  connection with the allegations would not  be  covered  by  any
      available insurance.  The Company disputes the claim of the plaintiff and
      intends to vigorously defend itself from the allegations contained in the
      application.

<PAGE>18

10.   SUBSEQUENT EVENTS

      The Company entered into a contract with an equipment liquidation company
      who  have  guaranteed  to  sell  the  mobile  mining  equipment  with  an
      approximate book value of $988,642 for $1,027,200 and have agreed to loan
      the company  $907,000  at  8.6% secured by the equipment and payable from
      the proceeds from the sale of the equipment.