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 June 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     (I.R.S. Employer Identification No.)
incorporation or organization)

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 August 5, 1997,  the  number  of  Class  A  common  stock outstanding was
29,745,058,  the number of Series 1 Class B Common Stock outstanding  was  638,
and the number of Series A cumulative preferred stock outstanding was 261.

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                                                   5

ITEM  2. Changes in Securities                                               5

ITEM  3. Defaults Upon Senior Securities                                     6

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

ITEM  5. Other Information                                                   6

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



SIGNATURES                                                                   6



FINANCIAL STATEMENTS                                                         7


<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 are 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, mining operations at the mine 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  fund  continuing
operations.   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.

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

<PAGE>3

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  currently  being  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 June 30, 1997.

Since the cessation of mining operations at  the  San  Juan  Mine, the price of
gold  has declined to the $320 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.  Mr.  Callaway  will continue to act as President and Chief  Executive
Officer  on a month to month  basis.  To  provide  an  opportunity  for  future
exploration and development opportunities, the Company has agreed to contribute
its mining  equipment,  plant  and  supplies   in  exchange  for  a ten percent
interest in Cherokee Development Corporation ("Cherokee") together with a right
to receive twenty percent of the net profits derived from the Columbo  Mine. Mr
Callaway  currently owns one hundred percent of Cherokee. Cherokee has a  lease
on the Columbo  Mine  and  intends  to  conduct  active mineral exploration and
development activities.  Based on current estimates of the plant and equipment,
a write down of $3,174,396 was taken against the carrying  value  of  plant and
equipment.   After  the  reduction,  the  carrying value of plant and equipment
amounted to $1,337,000 at June 30, 1997. It  is  reasonably  possible  that the
exchange  could  result  in  a further loss on transfer to Cherokee Development
Corporation in accordance with generally accepted accounting principles.

In July, 1997, the exploration  agreement  with Boulder Creek Exploration which
was entered into in May 1997 was terminated.  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 selling timber at the Gray Eagle and
Iron Creek properties, 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.

The  debt  secured  by  the  San  Juan  and  Big Horn properties  amounting  to
$8,710,920 at June 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".

(b) FINANCIAL CONDITION AND RESULTS OF OPERATIONS

YEAR TO DATE COMPARISON

Siskon had cash on hand of  $181,333  and  $937,006  at  June 30, 1997 and 1996
respectively.

Cash  used by operating activities for the first six months  of  1997  totalled
$1,052,002 versus $798,981 for the first six months of 1996.

Cash provided  by  investing  activities  during  the  first six months of 1997
totalled $275,399 versus $2,674,309 used during the first  six  months of 1996.
During 1997, $308,000 was received from the sale of equipment, $17,500 from the
sale of oil and gas royalty interests in Montana and note collections of $1,231
as compared to $2,120 from the sale of equipment, $1,250 from the  sale  of the
Croman  property and note collections of $1,565 during the first six months  of
1996. Cash  used  in  investing  activities during the first six months of 1997
totalled $51,692 as compared to $2,675,782  in  1996.  During 1997, $30,806 was
expended on equipment at the San Juan Mine and $20,886 on  permitting  costs at

<PAGE>4

the  Big  Horn  Mine  as  compared  with $472,970 for equipment, $1,941,320 for
development  and $160,772 for bonds at  the  San  Juan  Mine  during  1996  and
$100,720 for permitting  at  the  Big  Horn  Mine during 1996. In mid-May 1996,
construction  of  the  San  Juan  Mine  was  completed.   The  note  receivable
collateralized by the Comstock property amounting to $275,326  is  currently in
default and the Company is initiating foreclosure proceedings.

Cash  provided  by  financing  activities  during the first six months of  1997
totalled $450,000 versus $500,000 during the  first  six  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  six  months of 1997, $1,886,751 of convertible debt
was converted into 13,017,029 shares  of Class A common stock and 512 shares of
Series A convertible preferred stock and 211 shares of the preferred stock thus
issued were converted into 1,884,549 shares of Class A common stock.

Cash used in financing activities during  the first six months of 1997 totalled
$220,859 as compared to $340,736 during the  first  six  months of 1996. During
1997,   $193,331  was  paid  on  equipment  and  land  notes  and  $27,528  for
registration and issuance costs. During 1996 $48,964 was paid on capital  lease
obligations,  $244,655  on equipment and land notes and $47,117 on registration
and issuance costs.

Siskon incurred a net loss  of  $8,024,781  for the first six months of 1997 as
compared to a net loss of $954,944 for the first  six  months  of 1996.  During
the first six 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  $1,474,421, $689,083 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 six months  of 1996 revenues  of
$609,343  resulted  from  the  sale  of 1,583 ounces of fine gold at an average
price of $385 per ounce. Production costs,  non-cash  costs and royalty expense
totalled $639,070, $211,792 and $12,152, 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.

Royalties were $34,418 in the  first  six  months of 1997 versus $37,787 in the
first six months of 1996. During  the second  quarter of 1997 Cominco cancelled
its lease of the Iron Creek property.

General and administrative expenses were $505,976  in  the  first six months of
1997  as  compared  with  $671,330  during  the first six months of  1996.  The
reduction resulted primarily from reductions in overhead and printing costs. At
June 30, 1997 accrued compensation and interest owed to Mr. Callaway, President
and Chairman of the Board, amounted to $93,891 which was paid in August 1997.

Exploration and project costs were $83,084 in  the  first  six  months  of 1997
versus  $12,152 in the first six 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 mineral rights was $17,500 during the first six  months
of  1997  from the sale of the oil and gas royalty interests in Montana  versus
$1,250 from  the  sale  of  the  Croman property during the first six months of
1996. During the first six months  of  1997  equipment  was  sold for a loss of
$139,789 primarily from the write off of unrecoverable underground equipment at
the San Juan Mine versus a gain of $2,120 during the first six months of 1996.

Interest  expense  during  the  first six months of 1997 amounted  to  $827,513
including amortization of the discount  of  the  price  of the stock underlying
convertible  debt  of $287,923. During the first six months  of  1996  interest
expense was $101,279  after  capitalization  of  interest  costs of $562,757 to
property, plant and equipment.  Interest and miscellaneous income  was  $36,534
in  the first six months of 1997 as compared with $71,092 in  the first quarter
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 six months of 1997 and 1996.


<PAGE>5

QUARTER TO QUARTER COMPARISON

Siskon  incurred  a  net  loss  of $6,459,260 for the second  quarter  of  1997
compared to a net loss of $703,838  for  the second quarter of 1996. During the
second quarter of 1997 revenues of $348,738  resulted  from  the  sale of 1,024
ounces  of  fine gold at an average price of $341 per ounce. Production  costs,
non-cash costs  and  royalty  expense  totalled $404,543,  $225,711 and $7,184,
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  since  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  second  quarter  of 1996 revenues of
$609,343  resulted  from the sale of 1,583 ounces of fine gold  at  an  average
price of $385 per ounce.  Production  costs, non-cash costs and royalty expense
totalled  $639,070,  $211,792  and $12,152,  respectively.  During  the  second
quarter of 1996 while the Company's  operations  were  in the development stage
gold revenues received from 1,233 ounces of gold amounting  to  $482,836  at an
average price of $392 were credited against capitalized costs.

Royalties  were  $16,348  in  the  second quarter of 1997 versus $14,881 in the
second quarter of 1996. During  the  second  quarter  of 1997 Cominco cancelled
its lease of the Iron Creek property.

General and administrative expenses were $215,600 in the second quarter of 1997
as  compared  with $358,390 during the second quarter of  1996.  The  reduction
resulted primarily from reductions in overhead and printing costs.

Exploration and project costs were $53,492 in the second quarter of 1997 versus
$12,152 in the  second  quarter  of  1996. The increase resulted primarily from
costs of the Gray Eagle Mine litigation  and exploration in Northern California
and Latin America.

During the second quarter of 1997 the loss  on  sale  of  equipment amounted to
$91,442  resulting  primarily  from the write off of unrecoverable  underground
equipment at the San Juan Mine. There was no sales in the same period  of 1996.
During the second quarter of 1996  a  gain  on  the  sale  of mineral rights of
$1,250 resulted from the sale of the Croman property. There  were  no  sales in
the same period of 1997.

Interest  expense  during  the  second  quarter  of  1997  amounted to $269,084
including  amortization  of  the discount of the price of the stock  underlying
convertible debt of $46,666. During the second quarter of 1996 interest expense
was $101,279 after capitalization of $339,710 to property, plant and equipment.
Interest and miscellaneous income  was $17,900 in the second quarter of 1997 as
compared with $25,756 in the second  quarter  of  1996  reflecting  higher cash
balances during 1996.


                                    PART II

ITEM 1.  LEGAL PROCEEDINGS

On  May 2, 1997, a former employee filed an application, James Tharp v.  Siskon
Gold  Corporation,  et  al., with the State Worker's Compensation Appeals Board
(the "Appeals Board"), Case  No.  96SJ0186690,  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
Appeals Board should sustain the plaintiff's application, any  payments made in
connection with the allegations would not be covered by insurance.  The Company
disputes  the  claim  of the plaintiff and intends to vigorously defend  itself
from the allegations contained in the application.

ITEM 2.  CHANGES IN SECURITIES

Not applicable.


<PAGE>6

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

Not applicable.

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

Not applicable.

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

Not applicable.

                                  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 August 19, 1997                           TIMOTHY A. CALLAWAY
                                                Timothy A. Callaway, President,
                                                CEO and Chairman of the Board



Dated August 19, 1997                           MICHAEL K. EPSTEIN
                                                Michael K. Epstein,
                                                Vice-President Finance and 
                                                Chief Financial Officer



<PAGE>7




                             FINANCIAL STATEMENTS




<PAGE>8

                              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 -
      June 30, 1997 (Unaudited) and December 31, 1996                        9

Consolidated Statements of Operations - (Unaudited)
      Six Months Ended June 30, 1997 and 1996                               10

Consolidated Statements of Cash Flows - (Unaudited)
      Six Months Ended June 30, 1997 and 1996                               11

Notes to Consolidated Financial Statements                                  12


<PAGE>9

SISKON GOLD CORPORATION AND SUBSIDIARY

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


                                              1997               1996
ASSETS

CURRENT ASSETS
Cash and cash equivalents                     $181,333           $812,606
Accounts receivable                              4,861              6,080
Inventories                                     91,630            230,875
Prepaid expenses and other                     134,079            400,792
                                            __________         __________

   Total Current Assets                        411,903          1,450,353

NOTES RECEIVABLE                               291,494            292,812

PROPERTY, PLANT AND EQUIPMENT, net           7,005,241         16,653,046

OTHER ASSETS                                   325,866            428,569
                                            __________        ___________

TOTAL ASSETS                                $8,034,504        $18,824,780
                                            ==========        ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable and accrued liabilities      $355,616           $773,306
Current portion of long-term debt              205,056            292,248
                                            __________        ___________   
 
   Total Current Liabilities                   560,672          1,065,554

LONG TERM DEBT ($8,772,642 in 1997 and
 $9,772,640 in 1996 to related parties)      9,104,530         10,692,224

OTHER LIABILITIES                              201,190             60,551
                                            __________        ___________

  Total Liabilities                          9,866,392         11,818,329
                                            __________        ___________

COMMITMENTS AND CONTINGENCIES (Note 7)

SHAREHOLDERS' EQUITY
Capital Stock
   Preferred stock, $.001 par value;
     Convertible Series A: 301 in 1997; 
     0 in 1996                                       1                  -
   Common stock, $.001 par value; issued 
     and outstanding: Class A: 26,893,895 
     in 1997; 11,989,662 in 1996                26,893              11,989
     Convertible Class B Series 1: 638 
     in 1996 and 1995                                1                   1
Additional paid-in capital                  56,094,557          53,730,633
Stock subscription receivable                 (344,803)           (326,812)
Accumulated deficit                        (57,608,537)        (46,409,360)
                                           ___________         ___________

   Total Shareholders' Equity               (1,831,888)          7,006,451
                                           ___________         ___________

TOTAL LIABILITIES AND SHAREHOLDERS' 
  EQUITY                                   $ 8,034,504         $18,824,780
                                           ===========         ===========

See notes to consolidated financial statements.


<PAGE>10

SISKON GOLD CORPORATION AND SUBSIDIARY

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

<TABLE>
<CAPTION>
                                 Three months ended June         Six months ended June 30
<S>                              <C>             <C>             <C>              <C>
                                 1997            1996            1997             1996
REVENUES
Gold sales                       $    348,738    $  609,343      $1,206,096       $609,343
Royalties and leases                   16,348        14,881          34,418         37,787
                                 ____________    __________      __________       ________

   Total Revenues                     365,086       624,224       1,240,514        647,130
                                 ____________    __________      __________       ________

OPERATING EXPENSES
Production                            404,543       639,070       1,474,421        639,070
Depreciation, depletion and           225,711       211,792         689,083        211,792
Property, plant and equipment
   impairment loss                  8,749,586             -       8,749,586              -
General and administrative            215,600       358,390         505,976        671,330
Royalties                               7,184        32,385          24,273         40,913
Exploration and project costs          53,492        12,152          83,084         12,152
                                  ___________    __________      __________      _________

   Total Operating Expenses         9,656,116     1,253,789      11,526,423      1,575,257

OPERATING LOSS                     (9,291,030)     (629,565)    (10,285,909)      (928,127)
                                  ___________    __________      __________      _________

OTHER (EXPENSE) INCOME
Gain on sale of property                    -         1,250          17,500          1,250
(Loss) gain on sale of equipment      (91,442)            -        (139,789)         2,120
Interest expense                     (269,084)     (101,279)       (827,513)      (101,279)
Interest and other income              17,900        25,756          36,534         71,092
                                   __________    __________       _________      _________

    Total Other (Expense) Income     (342,626)      (74,273)       (913,268)       (26,817)
                                   __________    __________       _________      _________

NET LOSS                         $ (9,633,656)   $ (703,838)  $ (11,199,177)     $(954,944)
                                 ============    ==========   =============      =========

NET LOSS PER SHARE               $      (0.44)       $(0.07)  $       (0.64)     $   (0.09)
                                 ============    ==========   =============      =========

WEIGHTED AVERAGE
    NUMBER OF SHARES               22,021,340    10,642,101      17,672,316     10,602,323
                                 ============    ==========    ============     ========== 
</TABLE>



See notes to consolidated financial statements.


<PAGE>11

SISKON GOLD CORPORATION AND SUBSIDIARY

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

<TABLE>
<CAPTION>
                                                                  1997              1996
<S>                                                               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                          $ (11,199,177)    $(442,522)
Adjustments to reconcile net loss to net cash used in
   operating activities
Issuance of common stock for services                                         -        50,000
Issuance of common stock for interest                                    73,973       101,279
Discount on price of stock underlying convertible debt                  287,923             -
Depreciation, depletion and amortization                                689,083       211,792
Property, plant and equipment impairment loss                         8,749,586             -
Gain on sale of property                                                (17,500)       (1,250)
Loss (gain) on sale of equipment                                        139,789        (2,120)
Accrued interest on convertible debt                                    372,558             -
Amortization of deferred financing costs                                 74,757             -
Accrued interest receivable                                             (17,991)       (8,971)
Decrease (increase) in accounts receivable                                1,306          (366)
Decrease (increase) in inventories                                      139,245       (73,645)
Decrease (increase) in prepaid expenses                                  72,136        (3,523)
(Decrease) Increase in accounts payable and accrued liabilities        (417,690)     (117,233)
                                                                     __________    __________

Net cash used in operating activities                                (1,052,002)     (798,981)
                                                                     __________    __________

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property                                           17,500         1,250
Proceeds from sale of equipment                                         308,000         2,120
Collections on notes receivable                                           1,231         1,565
Purchase of equipment                                                   (30,806)     (472,970)
Deferred development costs                                              (20,886)   (2,042,040)
Increase in reclamation bonds                                                 -      (160,772)
                                                                     __________    __________

Net cash provided by (used in) investing activities                     275,399    (2,674,309)
                                                                     __________    __________
  

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                                             (193,331)     (244,655)
Registration and issuance costs                                         (27,528)      (47,117)
                                                                     __________    __________

Net cash provided by (used in) financing activities                     145,330       159,264
                                                                     __________    __________

DECREASE IN CASH                                                       (631,273)   (3,314,026)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                        812,606     4,251,032
                                                                     __________    __________

CASH AND CASH EQUIVALENTS AT END OF PERIOD                           $  181,333    $  937,006
                                                                     ==========    ========== 
</TABLE>



See notes to consolidated financial statements.

<PAGE>12

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  dore',  the  Company's principle
      product,  is produced and sold in the United States. At  June  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 June
      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  $320  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. To provide an  opportunity
      for future exploration  and  development  opportunities,  the Company has
      agreed  to  contribute  its  mining  equipment,  plant  and supplies   in
      exchange  for a ten percent interest in Cherokee Development  Corporation
      ("Cherokee") together with the right to receive twenty percent of the net
      profits derived  from  the  Columbo  Mine.  Mr  Callaway  and  his family
      currently  own  one hundred percent of Cherokee. Cherokee owns or  leases
      several mineral exploration  properties  and  intends  to  conduct active
      mineral   exploration  and  development  activities.   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  $1,337,000  at  June  30, 1997. It is reasonable  possible  that  the
      exchange could result in a  further  loss  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 June 30, 1997 and December 31, 1996
      and the results of its operations and  cash flows for the interim periods
      ending  June  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>13

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 June 30 1997, and December 31, 1996 were as follows:

                                  1997                     1996

      Gold dore' inventory        $   19,180               $   81,380
      Materials and supplies          72,450                  149,495
                                  __________               __________

                                  $   91,630               $  230,875
                                  ==========               ==========

4.    PROPERTY, PLANT AND EQUIPMENT

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

<TABLE>
      <S>                                                         <C>               <C>    
                                                                  1997              1996

      Property acquisition and development costs
        San Juan                                                  $20,747,399       $ 20,747,399
        Big Horn                                                    1,200,254          1,179,728
        Gold Point                                                     95,000             95,000
      Mining equipment                                              4,976,340          5,442,216
      Plant                                                         1,312,165          1,326,380
      Office equipment, furniture and vehicles                        109,528            145,699
                                                                  ___________       ____________
 
                                                                   28,440,686         28,936,422
      Less: accumulated depreciation, depletion and
             amortization                                           2,390,342          1,987,859
            property, plant and equipment impairment loss          19,045,103         10,295,517
                                                                  ___________       ____________
                                                 
                                                                   $7,005,241        $16,653,046
                                                                  ===========       ============
</TABLE> 


<PAGE>14

5.    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 six months of 1997,  $1,886,751  of convertible debt was
      converted into 13,017,029  shares of Class A common  stock and 512 shares
      of Series A convertible preferred stock and 211 shares  of  the preferred
      stock thus issued were converted into 1,884,549 shares of Class  A common
      stock. From July 1, 1997 to August 5, 1997, an additional $46,571 of debt
      and 42 shares of preferred stock has been converted into 2,852,102 shares
      of  Class A common stock.  As of August 5, 1997, $15,624 of debt and  261
      shares of Series A convertible preferred stock were unconverted.

6.    CAPITAL STOCK, STOCK OPTIONS AND WARRANTS

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

<TABLE>
<CAPTION>
                                Number of          Exercise               Exercisable
                                CLASS A 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                     (69,500)          0.78 -  3.05           (47,000)
    Vested                              -           1.87 -  3.05            70,000
                                _________                                _________

  June 30, 1997                   657,000          $0.78 - $4.94           527,000
                                =========                                =========
Warrants outstanding at
  December 31, 1996             2,819,083          $2.82 - $7.50         2,819,083
    Cancelled                     (75,000)          7.50                   (75,000)
                                _________                                _________

  June 30, 1997                 2,744,083          $2.82 - $6.00         2,744,083
                                =========                                =========

</TABLE>

7.    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. As of  August 5, 1997 no further
      correspondence had been received from the respective  parties in relation
      to  this  matter.  In  the  event that the test results lead  to  further
      testing and analysis which ultimately results in a clean-up and abatement
      order issued by a state or federal environmental agency, then the Company
      intends to seek indemnification  from the prior operators of the property
      who may have been primarily responsible  for  the  condition  of the mine
      tailings located on the mill site.


<PAGE>15

      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.
      The  suit  seeks  to  require  the Company to obtain a discharge  permit,
      payment towards an environmental  remediation  fund,  civil  penalties of
      $25,000  per  day  and  attorneys  fees.  The  Company believes it has  a
      meritorious defense in that; the water treatment  plant  owned by a prior
      mine  operator  is  on  U.S. Forest Service ("USFS") land, the  plant  is
      operating  under  the proper  authorizations  and  satisfactorily  treats
      discharges into Indian  Creek;  the  Croman  Mill Site is more than three
      miles from the Gray Eagle Mine, the tailings came  from prior mine owners
      and  a prior lumber company's actions, the Company's  activities  on  the
      site during  the time of its ownership did not include any related mining
      activities and that the prior owners who created the mill site are liable
      for any remediation.  However,  there  are no assurances that the Company
      will prevail or that the ultimate judgement  or costs of defending itself
      will not have a material impact on the Company's financial position.

      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.