THIS PAPER DOCUMENT IS BEING SUBMITTED
                    PURSUANT TO RULE 101(d) OF REGULATION S-T

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                         ------------------------------

                                   FORM 10-KSB

(Mark One)
[ X ]              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended January 31, 1998

                                       OR

[   ]             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                         Commission File Number 0-18616

                         ------------------------------

                             ST. GEORGE METALS, INC.
             (Exact name of registrant as specified in its charter)

           Nevada                                               88-0227915
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                           Identification Number)

                              125 NationsBank Plaza
                            Richmond, Virginia 23219
                    (Address of principal executive offices)

           Securities registered pursuant to Section 12(g) of the Act:
              St. George Metals, Inc. Common Stock, $.01 par value

       Registrant's telephone number, including area code: (804) 644-3434

                         ------------------------------

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.  Yes X   No
                                              ---    ---

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [ X ]

         The  registrant had revenues in its most recent fiscal year of $30,000.
As a development stage company, all revenues were netted against mining costs.

         As of March 31,  1998,  14,487,159  shares of the  registrant's  Common
Stock were  outstanding.  The aggregate market value of the registrant's  Common
Stock held by  non-affiliates  was less than $10,000  based on the closing sales
price ($0.001 per share) in March, 1998, the last reported trade date.


<PAGE>




                                     PART I
Item 1.   Business

Significant Developments During Year Ended January 31, 1998

         During the year ended  January  31,  1998,  the  Company  engaged in no
significant  business  activities  other  than  environmental  remediation  work
undertaken  with  the  supervision  of  the  Nevada  Division  of  Environmental
Protection (NDEP) at its former Dean Mine property. As previously reported,  the
Company  posted  a  $220,000  cash  bond  with  NDEP in  fiscal  1996  to  cover
reclamation costs associated with the Dean Mine. Following  discussions with and
review  of plans by NDEP,  the  Company  commissioned  reclamation  work  during
calendar year 1997.  Principal items included closure and sealing of adits (mine
openings), road regrading, waste dump reclamation,  heap leach pad regrading and
related matters. As work was certified by NDEP during the year ended January 31,
1998,  NDEP  authorized  partial  releases  from the  cash  bond to pay for work
performed. At January 31, 1998, $120,000 remained available under the cash bond.
The  Company  believes  its  reclamation  obligations  have  been  substantially
fulfilled but weather  conditions in January and February 1998  prevented  final
inspections by NDEP. As a result  further  releases from the cash bond have been
delayed until final NDEP  inspections  can be performed.  In order to permit the
Company to pay its independent contractor for reclamation work completed but not
yet funded  under its cash bond,  one  shareholder  of the Company has  advanced
funds to the  contractor.  These  advances  have been  recorded on the Company's
books as shareholder advances, which will be repaid as further releases from the
cash bond are  authorized.  At January 31, 1998,  shareholder  advances  totaled
$320,000,  as increase of $189,000 from the $131,000  outstanding at January 31,
1997.

         At the  present  time,  the  Company's  financial  resources  have been
substantially exhausted and management does not know of any additional financing
available  to the  Company.  The Company  has no  continuing  on-going  business
activities at this time other than holding certain of its properties  subject to
options to purchase by unrelated  third  parties.  Although the Company is still
interested in the possibility of participating in other mining projects,  it has
no  meaningful  available  financial  resources,   and  only  minimal  personnel
resources.  The Company has liquidated substantially all its assets and paid off
its trade creditors to the extent possible in a continuing effort to wind up its
business  other than  through a court  supervised  process,  which would  entail
significant administrative expenses. The Company has paid most of its trade debt
(other than to related  parties) and it is unlikely any payments will be made on
its other indebtedness, which has been voluntarily subordinated to the Company's
trade creditors.

         Because  of  the  Company's  financial  condition  and  its  consequent
difficulty  paying the attendant legal and accounting  expenses,  its ability to
continue to meet its reporting  obligations under the Securities Exchange Act of
1934 has been and remains doubtful.  Accordingly, the Company may not be able to
continue filing periodic reports with the Securities and Exchange Commission. As
was the case in 1997,  the financial  statements  included with this Form 10-KSB
are not  audited  because  the  Company  was not able to incur the expense of an
audit.

         Management  does not presently  anticipate  that any of its outstanding
obligations  under its  Operations  Advances,  Gold Delivery  Contracts and term
debt, a substantial portion of which outstanding obligations are held by members
of  the  Company's  board  of  directors,  can  be  satisfied.  Correspondingly,
management does not believe,  as a practical matter, that there is any remaining
value to be  ascribed to the  Company's  outstanding  preferred  stock or common
stock.


Other Matters

         Until  1995,   the  Company  had  been  engaged  in  the   acquisition,
exploration and, if warranted,  development of natural resource  properties.  At
the present time,  the Company has ceased all active  operations,  and is in the
process  of winding up its  business.  The  Company  had or has an  interest  in
various  properties located primarily in the Battle Mountain and Carlin areas of
central Nevada,  which  properties  were acquired in the expectation  they could


                                     - 2 -
<PAGE>

have economic potential for gold and silver mineralization (ore deposits). There
can be no assurance any of its remaining properties have a commercially mineable
ore body  unless and until  further  exploration  and  feasibility  studies  are
concluded.  For a number of years,  the only active  operations were those being
undertaken  at  the  Company's  Dean  Mine  site.  These  activities  and  other
information  concerning  properties  still held by the Company are  described in
"Item 2 - Properties" below.

         Employees;  Offices.  While it was  engaged in active  exploration  and
development  operations,  the Company relied almost exclusively upon independent
contractors  and  consultants to provide  equipment,  geological,  technical and
professional  and other  administrative  services.  With the cessation of active
business  operations  the Company has  terminated  all employees and most of its
consultant  relationships.  During the fiscal  years ended  January 31, 1997 and
1998,  the Company had no employees.  The Company  previously  owned a house and
small office building,  both in Battle Mountain,  Nevada, which functioned as an
office and as employee  housing.  These properties were sold in December,  1994,
and June, 1995, respectively. At the present time the Company's executive office
in Richmond,  Virginia, is maintained in the office of its Board Chairman, C. B.
Robertson,  III. The Company does not reimburse Mr. Robertson any portion of his
lease expense but has reimbursed him from time to time for certain telephone and
other operating expenses incurred in connection with the Company's business. See
"Item 12 - Certain Relationships and Related Transactions" below.


Item 2.   Properties

         Mining  Properties.  The Company's former and remaining  properties are
located in the Battle Mountain area of north central Nevada. The Battle Mountain
area comprises the central  portion of the Battle  Mountain-Eureka  Gold Belt, a
chain of over 14 known metal deposits which stretch approximately 100 miles from
the Marigold  deposit in the  northwest,  to the Windfall Mine in the southeast.
Four of the 14 known deposits are located in the Battle  Mountain area, the most
significant of which is the Fortitude Mine of Battle Mountain Gold Company.

         Title  Matters.  Over the years,  the Company  acquired  ownership  and
leasehold  interests in a number of patented  (titled or deeded) and  unpatented
(not  titled or deeded,  but where the holder  has  mineral  rights to the land,
providing  assessment work is done annually)  mining claims.  In most cases, the
Company's purchase price or lease obligations, as the case may be, extend over a
period of time not yet  completed  and are not paid in full.  Also,  each of the
purchase or lease  agreements  has obligated the Company to pay royalties to the
sellers  or  lessors  if  production  commences.  Failure  to comply  with these
agreements,  or with the law and  regulations  which govern the  maintenance  of
unpatented mining claims,  could cause a loss of the Company's interest in these
properties.

         Under federal law,  unpatented mining claims grant the holder equitable
title to the claim,  with fee title remaining with the United States  Government
as the owner of public lands.  An unpatented  mining claim permits the holder to
exclusive  use of all  minerals  and to  the  non-exclusive  use of the  surface
subject to the right of the United States  Government and other  non-mining uses
of the land. Unpatented claims are acquired by staking, posting, and recording a
claim,  and are  maintained by performing  annual work and recording  affidavits
with the U.S. Bureau of Land Management.  Patented claims are acquired by filing
applications  with the United  States  Government.  A patented  claim grants the
holder exclusive fee title to the surface and minerals. In light of the time and
expense required to secure a patented claim, and the policy of the United States
Government to retain title to public lands, patent applications  customarily are
not filed.  Unpatented claims are, therefore,  widely held and recognized in the
mining industry.

         The Company obtained various title opinions with respect to each of its
properties which has been the subject of significant  exploration activity.  The
opinions obtained to date typically suggested that the Company undertake various
curative  actions which,  if not taken,  could  materially  impair the Company's
property interests.
The Company has endeavored to cure any deficiencies of which it is aware.

         The  Company  has  no  patents,  trademarks,  licenses,  franchises  or
concessions material to its operations.

Dean Mine Property

         The Company's  principal  property used in it business  during the past
five years was its Dean Mine  leasehold  and a 560-acre  mill site owned in fee.
The Company's Form 10-K for the year ended January 31, 1995, contains a detailed


                                     - 3 -
<PAGE>

description of  exploratory  mining  activities  conducted at the Company's Dean
Mine leasehold  site,  which  activities  were  concluded  during the year ended
January 31, 1995.  No further  mining  efforts  were  conducted at the Dean Mine
property during the fiscal years ended January 31, 1996, 1997 and 1998.

         In March,  1996, the Company  received written notice of termination of
its lease on the Dean Mine property from Cascade  Resources  Joint Venture,  the
lessor,  for non-payment of rent,  aggregating  $38,400,  since June,  1995. The
Company  accepted the notice of  termination,  which became  effective March 11,
1996,  but  denied  the  lessor's  contention  that the  Company  owed a $75,000
production fee under the lease agreement. This matter was resolved by payment of
all back rent claimed by the lessor in  settlement of all claims under the lease
agreement.  By its terms, the Company's ten-year lease on the Dean Mine property
would have expired in October,  1996, had it not been  terminated  earlier.  The
Company  retained  its fee  ownership  in the Dean Mine  mill  site and  related
equipment. See Item 1 above.

         On November 5, 1996, the NDEP issued a Finding of Alleged Violation and
Order,  requiring  compliance  with the terms and conditions of the Order by the
dates  specified in the Order, a copy of which is filed as Exhibit 10.37.  These
terms and conditions related generally to mine closure requirements.  Subsequent
to issuance of the Order,  the Company  responded to NDEP in writing  concerning
its plan to meet each of the points raised in NDEP's Order. At the present time,
the Company  believes that it has satisfied the requirements of the Order in all
material respects.

         As previously  reported,  during the year ended  January 31, 1996,  the
Company  completed  posting a cash bond in the amount of $220,000 as required by
the Nevada Division of Environmental  Protection,  to cover reclamation costs on
the Dean Mine  property.  As a result of reclamation  efforts  undertaken by the
Company during fiscal 1998, the balance  remaining under the foregoing cash bond
at January 31, 1998 was $120,000.

         Information   concerning  the  Company's  remediation  and  reclamation
activities  during  fiscal 1998 at the Dean Mine property is contained in Item 1
above under "Significant Developments During Year Ended January 31, 1998."

AMAX/Draco and Hancock Canyon Properties

         The Company's principal remaining  properties,  known as AMAX/Draco and
Hancock Canyon,  are described below. The Company carries these interests on its
books at a nominal $1.00 value.

         As described in the  Company's  Form 10-KSB for the year ended  January
31,  1996,  the  Company  acquired  a group of  claims  known as the  AMAX/Draco
property from Luning Gold, Inc. pursuant to a purchase agreement dated August 8,
1990.  These claims are in the Lewis Mining  District,  Lander  County,  Nevada,
approximately 15 miles southeast of Battle Mountain. The claim block consists of
three  separate  blocks  containing  a total of 107 claim  blocks.  A production
payment  ($300,000 due from the lesser of 25% of  production or $25,000  payable
quarterly  after the  start of  production)  is still  due,  but only  after the
project goes into production. As previously reported, the Company has granted an
option on a portion of this  property (44 claim blocks) to Cameco (U.S.) Inc., a
U.S. subsidiary of Cameco  Corporation,  a Canadian  corporation.  The Agreement
provides for an option expiring October 9, 1999,  pursuant to which the optionee
may purchase the subject  property  (described  as the "BXA" group of unpatented
lode claims in Lander County,  Nevada) for a purchase price of $75,000,  subject
to a reserved 1% net smelter royalty to the Company. The option price payable to
the Company  aggregates  $70,000,  paid  $10,000  upon  satisfaction  of certain
conditions,  with the  balance  paid  $10,000  on the first  anniversary  of the
effective  date,  $20,000 on the second  anniversary,  and  $30,000 on the third
anniversary. The optionee retains the right to terminate the option at any time.
The optionee made its second anniversary payment in the fall of 1997.

         The Company is currently in discussions  with a third party regarding a
lease of 62 of the remaining 63 blocks in the Draco/AMAX  property.  There is no
assurance the parties will be able to reach any agreement regarding the terms of
such a transaction.

         The Company  acquired  various  properties  from Auritech in 1987.  The
mining lease encompassed five properties,  Indian Grouse, Horse Canyon,  Hancock
Canyon, Mill Creek and Trenton Canyon. The lease obligated the Company initially
to issue to  Auritech  250,000  shares  of  Common  Stock.  Further,  the  lease
contemplated  the issuance of 150,000  shares of Common Stock for each  property


                                     - 4 -
<PAGE>

brought to  production.  A net smelter  royalty of 0.5% would also be due in the
event of production on the  properties.  Annual lease payments are paid to Santa
Fe Minerals  pursuant to an underlying  lease.  These properties were subject to
various  joint  venture   agreements,   all  of  which  were  later  terminated.
Additionally, the Company has terminated the leases for the Horse Canyon, Indian
Grouse, Mill Creek and Trenton Canyon properties.

         The Company has retained the Hancock  Canyon  property.  This property,
consisting of 58 claims,  is located on the western side of the Shoshone  Range,
approximately  2 miles north of Mill Creek and  approximately  25 miles south of
Battle Mountain.  In 1994, the Company undertook additional steps to clear title
to the Hancock Canyon  property in anticipation of a possible joint venture with
another  mining  company,  but no such joint  venture was ever agreed upon.  The
Company has  obtained  title to Hancock  Canyon,  but it still is  obligated  to
Barringer  Technologies,  Inc.,  the  successor to the prior owner,  for the net
smelter  royalty and,  after the Company has spent $80,000 on drilling into that
property, a payment in the form of 150,000 shares of Company Common Stock.

         As  previously  reported,  in November,  1996,  the Company  granted an
option on the  Company's  Hancock  Canyon  property to Cameo  (U.S.) Inc.  for a
purchase  price  of  $65,000,  which  was paid  $10,000  upon  execution  of the
definitive  agreement with the balance payable $10,000 on the first  anniversary
of the execution date (paid October,  1997),  $15,000 on the second  anniversary
and  $30,000 on the third  anniversary,  subject to a reserved  2.5% net smelter
royalty. The Company will receive minimum annual royalties of $40,000 commencing
on the fourth  anniversary  of the  agreement  which will be offset  against any
future net smelter  royalties.  The optionee  retains the right to terminate the
option at any time.

         Also,  although the Company terminated the lease for Trenton Canyon, it
has staked over that property.  Lode claims, Mill 1 through 31, have been staked
in the Battle  Mountain area on the west side of Antler Peak which adjoins Santa
Fe's North Peak  project to the west.  If the Company  should ever  develop that
property,  it may be obligated to pay the prior owner the net smelter royalty of
0.5%.  The  Company is  discussing  with a third party a lease of the 31 Trenton
Canyon claims.

         As previously reported,  the Trenton and Hancock Canyon properties were
written down,  together with certain other properties,  to a nominal $1.00 value
at year-end January 31, 1995.

         The Company also holds under lease a group of claims on  properties  in
the Battle  Mountain  area known as Whiskey  Canyon,  Red Cap and North Cap. The
Company is presently in  discussions  with a  third-party  (the same party it is
having  discussions  with  concerning  the  Hancock  Canyon  properties  and the
remaining Draco/AMAX  properties)  regarding a possible lease transaction.  This
would require the consent of the Company's lessor. The Company is discussing the
terms of this transaction  with its lessor.  there is no assurance any agreement
can be reached among the parties.

         Dean Mine Mill Site.  The Company owns in fee a 560 acre tract known as
the Dean Mine Mill Site, used in connection with its previous exploratory mining
efforts at the Dean Mine. As previously reported, in October,  1996, the Company
entered into an agreement  with Idaho  Consolidated  Mining  Corporation  (ICMC)
which,  among other  things,  contemplated  a sale to ICMC of the Dean Mine Mill
Site together with certain  ancillary  claims,  in exchange for 75,000 shares of
common stock of ICMC.  Subsequently,  however,  ICMC advised the Company that it
had no further interest in the Dean Mine Mill Site. No shares of ICMC stock have
ever been  delivered  to the Company and the Company has treated that portion of
the 1996 agreement as having been rescinded.  The Company has recently  received
correspondence  from ICMC  indicating  it is of a  contrary  view as to at least
certain unpatented claims.

Item 3.   Legal Proceedings

         None.

Item 4.   Submission of Matters to Vote of Security Holders

         None.


                                     - 5 -
<PAGE>

                                     PART II

Item 5.   Market for Registrant's Common Equity and Related Stockholder Matters

         The reported high and low bid prices for the Company's  common stock on
the bulletin board over-the-counter trading system operated by the NASD (Symbol:
SGGM) for the periods shown were as follows:*

                                     Fiscal Year ended January 31,
                                   1997                        1998
                           ----------------------      ---------------------
                           High Bid       Low Bid      High Bid      Low Bid
                           --------       -------      --------      -------

     First Quarter       $    0.10         0.0001        0.001        0.0001
     Second Quarter         0.0001         0.0001        0.001        0.0001
     Third Quarter          0.0001         0.0001        0.001        0.0001
     Fourth Quarter          0.001         0.0001        0.001        0.0001

      First Quarter fiscal 1998 (through March 31, 1997):  Two trades  reported.
High/low prices unchanged from Fourth Quarter.

---------------
*        The trading  information listed in this table may not be representative
         because  the  trading of Company  Common  Stock  reflected  by the NASD
         bulletin board is sporadic and no trades were reported  during a number
         of months. Approximately 20 trades were reported during fiscal 1998. No
         trades were reported in the Second Quarter of fiscal 1998.

         The  over-the-counter  market quotations  reflect  interdealer  prices,
without retail mark-up,  mark-down or commission,  and may not represent  actual
transactions.

         As of March 31, 1998,  there were  approximately  720  shareholders  of
record, holding an aggregate of 14,487,159 shares of Common Stock outstanding.

         The  Company  paid no cash  dividends  in either of the two most recent
fiscal years.


                                     - 6 -
<PAGE>

Item 6.   Management's Discussion and Analysis of Financial Condition and 
          Results of Operations

(a)      Results of Operations for the Year Ended January 31, 1998

         During the year ended  January  31,  1998,  the  Company  engaged in no
         material  business  activities  other  than  (i) to  undertake  certain
         environmental  remediation  work at its  former  Dean  Mine site in the
         Battle Mountain,  Nevada area; and (ii) to continue to explore possible
         arrangements  for  the  lease  or  sale  of  certain  of its  remaining
         properties.

         During the year the Company had cash  receipts of $30,000 under its two
         existing option agreements with Cameco (U.S.), Inc. for the purchase of
         certain   Company   properties.   The  Company   incurred   substantial
         remediation  expenses in order to comply with certain  requirements  of
         the Nevada Division of Environmental  Protection (NDEP) with respect to
         the Company's former Dean Mine leasehold. As a result, accounts payable
         at January 31, 1998,  increased to $199,000 from $44,000 the prior year
         and shareholder advances,  which were made to permit the Company to pay
         for certain of this work,  increased from $131,000 in the prior year to
         $320,000 at January 31, 1998.

         The Company had a net loss of $893,000 ($.06 per share) compared to net
         recovery of $65,000  ($.00 per share) for the  previous  year.  Accrued
         interest   was  $554,000   compared  to  $425,000  the  prior   period;
         reclamation  expenses  were  $333,000  compared  to zero for the  prior
         period.  Professional  fees were  $13,000  compared  to $12,000 for the
         prior  year;  and  general  and  administrative  expenses  were  $5,000
         compared to $1,000 the prior year.

         Total assets at year end were  $124,000,  with $4,000 cash and $120,000
         in other  assets  (balance of  reclamation  bond posted with NDEP).  At
         year-end the Company had current liabilities of $3,219,000, an increase
         of  $874,000   over  prior  year  (of  this   increase,   $650,000  was
         attributable  to  accrued  interest  expenses),  and long  term debt of
         $6,999,000. Shareholder equity was negative ($10,094,000),  compared to
         ($9,201,000) at January 31, 1997.



                                     - 7 -
<PAGE>

(b)      Results of Operations for the Year Ended January 31, 1997

         During the year ended  January  31,  1997,  the  Company  continued  to
         attempt to  resolve  its  outstanding  trade  debt,  to which all other
         Company debt has been  subordinated,  through a liquidation  of certain
         assets.

         During the fiscal  year ended  January 31,  1997,  the Company had cash
         receipts of $426,000, all of which resulted from the sale of or options
         to purchase various Company properties.  Proceeds of these transactions
         were applied to various trade debt and the  settlement  during the year
         for  approximately  $38,000  of a claim for back rent on the  Company's
         Dean Mine leasehold interest prior to its termination. Accounts payable
         were  reduced from  January 31, 1996 by  $347,000,  and  advances  from
         shareholder were reduced by $145,000.

         The Company  experienced  a net  recovery of $65,000  ($.00 per share),
         compared to a net loss of $661,000  ($.05 per share) in the prior year.
         The difference between fiscal 1997 and 1996 was largely attributable to
         a recovery of mineral interests previously written off of $492,000,  as
         a  result  of  the  sales  transactions   described  in  the  preceding
         paragraph,  and an  adjustment  of  $157,000  through  negotiations  of
         accounts payable.  Additionally,  general and administrative costs were
         $1,000 for fiscal 1997, down from $15,000 the preceding year;  interest
         cost  was  $425,000  compared  to  $614,000  the  preceding  year;  and
         professional  fees were $12,000 for fiscal 1997 compared to $32,000 the
         preceding  year,  reflecting  a continued  reduction  in the  Company's
         activities requiring legal and accounting services.

         Total  assets at  year-end  were  $240,000,  with  $20,000  in cash and
         $220,000  in other  assets  (reclamation  bond  posted  with the Nevada
         Department of Environmental  Protection).  At year-end, the Company had
         current  liabilities of  $2,345,000,  an increase of $76,000 over prior
         year, and long-term debt of $7,096,000. Shareholder equity was negative
         ($9,201,000),   including  a  cumulative   deficit  from  inception  of
         ($20,435,000).

 (c)     Liquidity and Capital Resources at Year End January 31, 1998

         The Company had no material liquidity or capital resources at year end,
         January 31,  1998.  At that date,  the  Company  had current  assets of
         $124,000 and current  liabilities of $3.2 million.  Current liabilities
         include $2.6 million of accrued interest payable which is in arrears. A
         substantial  portion of the  Company's  current  liabilities  and other
         indebtedness is owed to related  parties.  The Company  obtained no new
         financing (other than through payments under option  agreements for the
         sale of  certain  capital  assets  and in the form of  advances  from a
         principal shareholder) during the twelve-month period ended January 31,
         1998. The Company  continues to seek to satisfy its trade creditors and
         other  operational  expenses  other  than  through  a court  supervised
         process.  The Company does not presently  expect to be in a position to
         make any payments on its Operations  Advances (which are payable solely
         from Dean Mine Net Cash  Flow) or on its Gold  Delivery  Contracts  and
         $4.3 million  principal  amount of term debt, both of which  categories
         have been voluntarily subordinated by the holders to the payment of the
         Operations Advances.

(d)      Accounting Changes

         In February,  1993,  the Financial  Accounting  Standards  Board issues
         Statement No. 109,  "Accounting  for Income  Taxes".  Statement No. 109
         requires a change from the  deferred  method of  accounting  for income
         taxes to the asset and liability method of accounting for income taxes.
         Under  the  asset  and  liability  method,   deferred  tax  assets  and
         liabilities  are recognized for the estimated  future tax  consequences
         attributable to differences  between the financial  statement  carrying
         amounts of existing  assets and  liabilities  and their  respective tax
         basis. Effective February,  1994, the Corporation adopted Statement No.
         109 on a  prospective  basis.  There is no effect on the  Corporation's
         statement of operations for the year ended January 31, 1995 as a result
         of the  adoption of  Statement  No.  109.  The  effective  tax rate and
         components  of income tax  expense at January  31,  1995 did not change
         significantly from that at January 31, 1994.


Item 7.  Financial Statements and Supplementary Data

         The Financial  Statements  (unaudited) and related  schedules and notes
are set forth beginning at Page F-1 of the report.


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

         None.  Because of the Company's  financial position it has not retained
any certified public accountants to audit its financial  statements for the year
ended January 31, 1998.


                                     - 8 -
<PAGE>

                                    PART III

Item 9.  Directors and Executive Officers of the Registrant; Compliance with 
         Section 16(a)

         Each of the  members  of the  Board of  Directors  of the  Company  was
elected by the  shareholders  on August 12,  1993.  The  Company  has not had an
annual  meeting of  shareholders  since  that time due to a variety of  factors,
including extreme financial difficulties and management turnover.

                                    Directors

           Name            Age              Positions Held                Since
           ----            ---              --------------                -----

Harrison Nesbit II         70       Director                               1989

Fred G. Pollard            79       Director                               1993

C. B. Robertson III        62       Director; Chairman of the Board        1993
                                    effective September 1, 1993

Ralph D. Rooney            72       Director                               1984

---------------

         Harrison  Nesbit,  II has  served  since  1961 as  Chairman  of Godine,
Nesbit,  McCabe,  an insurance firm located in  Charlottesville,  Virginia.  Mr.
Nesbit also serves as a director of Figgie  International,  Inc.,  an  operating
company servicing consumer, technical, industrial and service markets worldwide.

         Fred G.  Pollard has been an attorney  since 1942.  He is  presently Of
Counsel to the law firm of  Williams,  Mullen,  Christian & Dobbins in Richmond,
Virginia.

         C. B. Robertson,  III has been engaged for more than five years in real
estate development through CBR Associates, Inc. in Richmond, Virginia.

         Ralph D. Rooney was elected Senior  Chairman and member of the Board of
Directors  of the  Company  in  1984.  Mr.  Rooney  has,  for many  years,  been
self-employed as a prospector.


                               Executive Officers

           Name                      Positions Held             Since
           ----                      --------------             -----

C. B. Robertson III          Chairman of the Board              1993
                             effective September 1, 1993

Harrison Nesbit, II          Treasurer                          1995

---------------

         There are no other  individuals who are considered by the Company to be
"significant  employees." There are no family  relationships among the directors
and executive officers.

Section 16(a) Beneficial Ownership Reporting Compliance

         The  Company is  registered  pursuant  to Section 12 of the  Securities
Exchange Act of 1934.  As a result,  Section  16(a) of the Exchange Act requires
directors and executive  officers,  and any persons holding more than 10% of the
Company's  Common  Stock,  to report their  initial  ownership of the  Company's


                                     - 9 -
<PAGE>

equity securities and any subsequent changes in that ownership to the Securities
and  Exchange  Commission  ("SEC").  The  Company is required to disclose in the
Annual Report on Form 10-KSB or in the proxy  statement  for the annual  meeting
any  failure to file a required  report by its due date  during the fiscal  year
ended  January  31,  1998.  The  Company  is not  aware of any  transactions  in
securities of the Company requiring the filing of any required report during the
year ended January 31, 1998.


Item 10.  Executive Compensation

         Summary  Compensation  Table.  The  following  table  provides  certain
summary  information  concerning  compensation paid or accrued during the fiscal
years ended  January 31, 1998,  1997 and 1996 to the Company's  Chief  Executive
Officer. There were no other executive officers of the Company, determined as of
the end of the last fiscal year, whose annual compensation exceeded $100,000.
<TABLE>
<CAPTION>
                                                                                            Long term compensation
                                                         Annual compensation                          Awards
                                               -----------------------------------------    --------------------------
                                     Year                                       Other        Restricted
                                    Ended                                      Annual        Stock
                                    Jan. 31    Salary         Bonus         Compensation     Awards         Options(1)
                                    -------    ------         -----         ------------     ------         ----------
<S> <C>
     Name and principal position
     ---------------------------
     C.B. Robertson(2)              1997       $      0          --         --                 --
       Chairman of the Board        1996       $      0          --         --                 --
       and acting CEO               1995       $      0          --         --                 --
</TABLE>

(1)      No stock  options were  granted in the fiscal years ending  January 31,
         1996, 1997 or 1998.
(2)      Mr.  Robertson was appointed  CEO and Chairman  effective  September 1,
         1993. He has accepted no compensation  for this position.  See Item 12,
         Certain Relationships and Related Transactions.

         Option Grants in Last Fiscal Year. No stock options were granted to the
Chief  Executive  Officers (or any other  officer)  during the fiscal year ended
January 31, 1998 under the 1989 Stock Plan (the "Plan").

         Aggregated  Option  Exercises in Last Fiscal Year and  Year-End  Option
Values.  No stock options were exercised by the Chief  Executive  Officer during
the fiscal year ended January 31, 1998 under the Plan.

         Compensation  Plans.  In 1989,  the Board of  Directors  of the Company
approved a non-qualified stock option plan ("Plan") which provided for the grant
to officers,  employees,  consultants and independent contractors of the Company
of options to purchase shares of Common Stock.

         The Plan authorized the issuance of options covering 1,630,332,  shares
of Common  Stock.  As of July 31, 1994,  options  covering  1,435,401  shares of
Common Stock were  outstanding,  of which options  covering  1,240,470 shares of
Common Stock were held by officers and directors of the Company. All outstanding
options expired by their terms unexercised as of July 31, 1994.


Item 11.  Security Ownership of Certain Beneficial Owners and Management

         The following table sets forth certain information regarding beneficial
ownership of the Company's  Common  Stock,  including the effect of its Series A
and Series B Preferred Stock, at January 31, 1998 by (i) each person known to be
the beneficial owner of, directly or indirectly,  or to control or direct, as of
January 31,  1998,  more than five percent of the  outstanding  shares of Common
Stock,  (ii) each director and officer named in the Summary  Compensation  Table
(See "Executive Compensation") and (iii) all officers and directors as a group.




                                     - 10 -
<PAGE>
<TABLE>
<CAPTION>
                                                                 Amount and Nature
                                                                  of  Beneficial
                                                                     Ownership
                                                                     of Common                Percentage of
         Name and Address             Title of Class                 Stock* **                Class Owned*
         ----------------             --------------                 ---------                ------------
<S> <C>
Harris Capital Mngmt. Ltd.              Common Stock                     887,250  (1)              6.04%
545 Ventura Crescent
North Vancouver
British Columbia, Canada  V7N 3G8

Richard O. Hunton                       Common Stock                   1,177,210  (2)              7.60%
10555 Westpark Drive
Houston, Texas  77042

Harrison Nesbit, II                     Common Stock                   1,094,899  (3)              7.53%
P. O. Drawer 5287
Charlottesville, Virginia  22905

Fred G. Pollard                         Common Stock                   1,100,000  (4)              7.10%
1021 Cary Street
Richmond, Virginia  23219

C. B. Robertson, III                    Common Stock                   1,128,605  (5)              7.10%
125 NationsBank Center
Richmond, Virginia  23277

Ralph D. Rooney                         Common Stock                     484,134                   3.36%
St. George Metals, Inc.
P. O. Box 548
Battle Mountain, Nevada

Neal O. Wade, Jr.                       Common Stock                   1,158,536  (6)              7.48%
750 Bering Drive
Suite 606
Houston, Texas  77057

All directors and executive officers    Common Stock                   3,807,638                   23.0%
            as a group (4 in group)
</TABLE>

* The beneficial  ownership table reflects Company Common Stock holdings,  which
  figures  include  holdings of Preferred Stock adjusted to reflect each series'
  respective  initial  conversion ratio into Company Common Stock. In accordance
  with rules and  regulations of the SEC,  beneficial  ownership and percentages
  assume,  for each individual  shown, the conversion of all Preferred Stock and
  exercise  of  all  warrants  held  by  such   individual  but  not  any  other
  shareholder,  thus potentially  overstating such person's beneficial ownership
  in the Company.  Beneficial ownership for all directors and executive officers
  as a group assumes the  conversion of all Preferred  Stock and the exercise of
  all warrants  held by all such  individuals  in the group but not by any other
  shareholder,  thus  potentially  overstating the beneficial  ownership of such
  group. (All Series B Warrants held by Harris Capital and Mr. Nesbit referenced
  below in Notes (1) and (5),  will  expire by their  terms,  unless  previously
  exercised, on or before December 31, 1998).

**These  calculations  do not include  shares  convertible  into Company  Common
  Stock by persons holding  Operations  Advances.  Pursuant to those  Operations
  Advances,  holders may convert each $1.00 in  Operations  Advances  into seven
  shares of  Company  Common  Stock.  However,  such  conversion  rights are not
  practically  effective  pursuant  to the  terms of those  Operations  Advances
  unless  and until the  Company's  articles  of  incorporation  are  amended to
  increase the number of authorized  shares of Company  Common Stock to a number
  sufficient  to  permit  conversion  of  those  Operations  Advances.  No  such


                                     - 11 -
<PAGE>

  shareholder  approval  had  been  sought  or  obtained  as of the date of this
  report.  Holders of more than five percent of the Company's outstanding Common
  Stock,  and directors and officers named in the Executive  Compensation  Table
  above hold Operations Advances as follows: Mr. Hunton:  $100,000;  Mr. Nesbit:
  $42,000; Mr. Pollard: $625,000; and Mr. Robertson: $575,000.

(1) Shares held for the beneficial  owners,  members of Venture North Investment
    Club.  Includes 204,750 shares which the company may acquire under presently
    exercisable Series B warrants.

(2) Includes  1,000,000  shares which Mr. Hunton may acquire upon  conversion of
    250 shares of Series A Preferred Stock.

(3) Includes 2,500 shares held by an IRA controlled by Mr. Nesbit,  3,000 shares
    held by a company of which Mr. Nesbit is an officer and shareholder,  60,000
    shares which Mr.  Nesbit may acquire upon  conversion  of Series B Warrants,
    and  60,000  shares  owned by Mr.  Nesbit's  spouse as to which  Mr.  Nesbit
    disclaims beneficial ownership.

(4) Includes  1,000,000  shares which Mr. Pollard may acquire upon conversion of
    250 shares of Series A Preferred Stock.

(5) Includes 88,605 shares held by a controlled partnership,  15,000 shares held
    by Mr.  Robertson's  wife,  and  1,000,000  shares which Mr.  Robertson  may
    acquire upon conversion of 250 shares of Series A Preferred Stock.

(6) Includes  1,000,000 shares which Mr. Wade may acquire upon conversion of 250
    shares of Series A Preferred Stock.

Item 12. Certain Relationships and Related Transactions

         As noted above,  C. B.  Robertson,  III served as Chairman of the Board
and Chief Executive Officer without  compensation  during the year ended January
31, 1998. During the fiscal year ended January 31, 1998, Mr. Robertson  advanced
$188,910 to the Company for the payment of operating expenses.  During 1997, Mr.
Robertson  advanced  $12,000 to the Company for operating  purposes which amount
was repaid  without  interest  during the year.  Additionally,  during the years
ended January 31, 1995 and 1996, Mr. Robertson  personally advanced an aggregate
of  $257,237  and  $19,773,   respectively,   to  the  Company  and  to  various
third-parties, including in fiscal 1995 certain salary payments to the Company's
only salaried employee,  on behalf of the Company in order to permit the Company
to continue its operations at its Dean Mine  facility.  During 1997, the Company
repaid approximately $130,000 of these amounts without interest. The balance has
been  accrued  on the  Company's  books at January  31,  1998 as  advances  from
shareholder. See Note 6 of Notes to Financial Statements.


                                     - 12 -
<PAGE>
<TABLE>
Item 13.  Exhibits, Financial Statements and Reports on Form 8-K

(a)(1) Financial Statements (see Financial Statements at Page F1)

(a)(2) Financial Schedules

         No Financial Schedules are required.

(a)(3) Exhibits
<CAPTION>
             Exhibit No.                                      Exhibit
<S> <C>
               3.1(1)               Copy of Articles of Incorporation of Registrant.

               3.2(1)               Copy of Bylaws of Registrant.

               10.7(1)              Copy of Agreement  dated June 19, 1987,  between  Auritech Joint Venture and St.
                                    George Minerals Inc., as amended.

              10.19(1)              Copy of  Registration  Rights  Agreement,  dated  effective as of  July 1, 1990,
                                    among St. George Metals, Inc. and the participants in the Private Placement.

              10.20(1)              Copy of Purchase  Agreement dated March 21, 1990,  between Luning Gold, Inc. and
                                    St. George  Minerals  Inc.,  together with the First  Amendment  thereto,  dated
                                    June 14, 1990.

              10.21(1)              Copy of Promissory Note of St. George Metals, Inc. dated August 8, 1990,  in the
                                    original principal amount of $140,000 payable to Luning Gold, Inc.

              10.25(3)              Subscription Agreement for Private Placement of Series A Preferred Stock.

              10.26(4)              Certificate  of  Designation,  Preferences,  Rights and  Limitations of Series A
                                    Preferred Stock, $.01 par value, of St. George Metals, Inc.

              10.27(4)              Loan Agreement between St. George Metals, Inc. and borrowers (plus exhibits).

              10.30(6)              Certificate  of  Designation,  Preferences,  Rights and  Limitations of Series B
                                    Preferred Stock.

              10.31(6)              Subscription Agreement for Private Placement of Series B Preferred Stock.

              10.33(7)              Form of Operations Advance.

              10.34(7)              Form of Gold Delivery Contract.

              10.35(8)              Option  Agreement  dated as of February  21, 1996 between the Company and Cameco
                                    (U.S.) Inc.

              10.36(9)              Purchase Agreement with Idaho  Consolidated  Metals Corporation dated October 9,
                                    1996.

              10.37(10)             Finding of Alleged  Violation  and Order  dated  November  5, 1996 by the Nevada
                                    Division of Environmental Protection



                                     - 13 -
<PAGE>

              10.38(10)             Hancock Option  Agreement  dated as of November 21, 1996 between the Company and
                                    Cameco (U.S.) Inc.

                 24                 Powers of Attorney, filed herewith.

                 27                 Financial Data Schedule, filed herewith.s
</TABLE>
------------

(1)  Filed as an exhibit to the  Company's  Registration  Statement  on Form 10,
     dated May 25, 1990, as amended and incorporated herein by reference to such
     filing.
(2)  Filed as an exhibit to the  Company's  Annual  Report on Form  10-KSB,  for
     fiscal year ended January 31, 1992.
(3)  Filed as an exhibit to the Company's Quarterly Report on Form 10-Q, for the
     fiscal quarter ended October 31, 1992, as amended and  incorporated  herein
     by reference to such filing.
(4)  Filed as an exhibit to the Company's Quarterly Report on Form 10-Q, for the
     fiscal quarter ended July 31, 1992, as amended and  incorporated  herein by
     reference to such filing.
(5)  Filed as an exhibit to the Company's current report on Form 8-K, dated June
     15, 1992.
(6)  Filed as an exhibit to the Company's Quarterly Report on Form 10-Q, for the
     fiscal quarter ended July 31, 1994, as amended and  incorporated  herein by
     reference to such filing.
(7)  Filed as an exhibit to the Company's  Annual Report on Form 10-K for fiscal
     year  ended  January  31,  1995,  as  amended  and  incorporated  herein by
     reference to such filing.
(8)  Filed as an exhibit to the  Company's  Quarterly  Report on Form 10-QSB for
     the fiscal quarter ended April 30, 1996, as amended and incorporated herein
     by reference to such filing.
(9)  Filed as an  exhibit  to the  Company's  current  report  on Form 8-K dated
     October 2, 1996,  as amended and  incorporated  herein by reference to such
     filing.
(10) Filed as an exhibit to the  Company's  Annual  Report on Form  10-KSB,  for
     fiscal year ended January 31, 1997 and incorporated  herein by reference to
     such filing.

(b)      Reports on Form 8-K

         None


(c)      Exhibits

         (See Item (a)(3) above).


(d)      Additional Financial Statements

         (See Items (a)(1) and (a)(2) above).


                                     - 15 -
<PAGE>
                                   SIGNATURES

         In  accordance  with the  requirements  of  Section  13 or 15(d) of the
Securities  Exchange Act of 1934,  the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                          ST. GEORGE METALS, INC.


Dated:  April 21, 1997                    By:/s/ C. B. Robertson, III
                                             ------------------------
                                                   C. B. Robertson, III
                                                   Chairman of the Board


         In accordance with the  requirements of the Securities  Exchange Act of
1934,  this report has been signed below by the  following  persons on behalf of
the registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
              Signature                                         Capacity                                Date
              ---------                                         --------                                ----
<S> <C>
* /s/ C. B. Robertson, III                             Chairman of the Board                       April 21, 1998
------------------------------------                                                                             
C. B. Robertson, III                                   and Director (Principal
                                                       Executive Officer)

* /s/ Harrison Nesbit, II                              Treasurer (Principal                        April 21, 1998
------------------------------------                                                                             
Harrison Nesbit, II                                    Financial and
                                                       Accounting Officer)

* /s/ Harrison Nesbit II                               Director                                    April 21, 1998
------------------------------------                                                                             
Harrison Nesbit II

* /s/ Fred G. Pollard                                  Director                                    April 21, 1998
------------------------------------                                                                             
Fred G. Pollard

* /s/ Ralph D. Rooney                                  Director                                    April 21, 1998
------------------------------------                                                                             
Ralph D. Rooney


* By /s/ F. Claiborne Johnston, Jr.
-----------------------------------
F. Claiborne Johnston, Jr.
Attorney-in-Fact
</TABLE>



                                     - 16 -
<PAGE>
                             ST. GEORGE METALS, INC.

                             ST. GEORGE METALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                    UNAUDITED
                              FINANCIAL STATEMENTS

                            JANUARY 31, 1998 AND 1997

                      (EXPRESSED IN THOUSANDS U.S. DOLLARS)






    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

                                       F-1

<PAGE>
<TABLE>
                             ST. GEORGE METALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                    UNAUDITED
                                 BALANCE SHEETS
                            JANUARY 31, 1998 AND 1997

                    (EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
<CAPTION>

                                                                                  1998                  1997
                                                                                --------             ---------
<S> <C>
         ASSETS
CURRENT
     Cash                                                                       $      4             $      20

OTHER - Reclamation deposit                                                          120                   220
                                                                                --------             ---------

     TOTAL                                                                      $    124             $     240
                                                                                --------             ---------

         LIABILITIES
CURRENT
     Accounts payable                                                           $    199             $      44
     Advances from shareholder                                                       320                   131
     Accrued interest payable                                                      2,600                 1,950
     Accrued mineral interests reclamation costs                                     100                   220
                                                                                --------             ---------
                                                                                   3,219                 2,345

LONG TERM-DEBT
     Other                                                                         1,888                 1,888
     Related parties                                                               5,111                 5,208
                                                                                --------             ---------

     TOTAL LIABILITIES                                                            10,218                 9,441
                                                                                --------             ---------

         SHAREHOLDERS' DEFICIT
SHARE CAPITAL
     Authorized
         10,000,000 Preferred shares -
              Par value $.01 per share
         30,000,000 Common shares -
              Par value $.01 per share
     Issued and paid in capital
                 1,450   Series A Preferred shares                                 1,450                 1,450
               166,417   Series B Preferred shares                                   499                   499
            14,487,159   Common shares                                             9,285                 9,285
     Deficit accumulated during development stage                                (21,328)              (20,435)
                                                                                ---------              --------
                                                                                 (10,094)               (9,201)
                                                                                ---------            ----------
     TOTAL                                                                      $    124             $     240
                                                                                --------             ---------


                             PREPARED BY MANAGEMENT

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS


                                      F-2
<PAGE>
                             ST. GEORGE METALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)




                                    UNAUDITED
                          STATEMENT OF LOSS AND DEFICIT
                  FOR THE YEARS ENDED JANUARY 31, 1998 AND 1997

                    (EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
<CAPTION>

                                                        CUMULATIVE                       YEARS ENDED
                                                        JANUARY 31,                      JANUARY 31,
                                                           1998                  1998                     1997
                                                       -----------           -----------             --------------
WRITE DOWN AND (RECOVERY)
     OF MINERAL INTEREST                               $    14,594           $         -             $        (492)
                                                       -----------           -----------             --------------

ADMINISTRATIVE COSTS
     Related party administration charges              $       377           $                       $           -
     Related party fees                                        611                                               -
     General and administrative                                741                     5                         1
     Interest                                                3,042                   554                       425
     Reclamation and other costs                               333                   333                         -
     Professional fees                                       1,154                    13                        12
     Salaries and benefits                                     892                                               -
     Shareholder information                                   239                                               -
     Loss on disposal of agreement receivables                  22                                               -
     Fees and recoveries                               (       247)                    -                         -
                                                       ------------          -----------             -------------

     TOTAL ADMINISTRATIVE COSTS                              7,164                   905                       438
                                                       -----------           -----------             -------------

NET (LOSS) RECOVERY BEFORE
     INTEREST INCOME                                   (    21,758)          (       905)                       54

INTEREST INCOME                                                430                    12                        11
                                                       -----------           -----------             --------------

NET (LOSS) RECOVERY                                    (   21,328)           (      893)                        65
                                                       -----------

DEFICIT BEGINNING OF PERIOD                                                       20,435                    20,500
                                                                             -----------             -------------

DEFICIT END OF PERIOD                                                        $    21,328             $      20,435
                                                                             -----------             -------------

BASIC LOSS PER SHARE
     IN U.S. DOLLARS                                                         $       .06             $         .00

WEIGHTED AVERAGE NUMBER OF                                                    14,487,159                14,487,159
     COMMON SHARES OUTSTANDING


                             PREPARED BY MANAGEMENT

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

                                      F-3
<PAGE>

                             ST. GEORGE METALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                    UNAUDITED
                            STATEMENTS OF CASH FLOWS
                  FOR THE YEARS ENDED JANUARY 31, 1998 AND 1997

                    (EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
<CAPTION>

                                                         CUMULATIVE                       YEARS ENDED
                                                         JANUARY 31,                      JANUARY 31,
                                                            1998                  1998                  1997
                                                          --------              --------             ---------

FUNDS PROVIDED (USED) BY OPERATING
     ACTIVITIES
     Net recovery (loss) for the period                   $(21,328)             $   (893)            $      65

     WRITE DOWN OF MINERAL INTEREST                         15,086                                           -

     CHANGES IN OTHER NON-CASH
         WORKING CAPITAL ITEMS                               3,219                   874                    93
                                                          --------              --------             ---------
                                                            (3,023)                  (19)                  158
                                                          --------              --------             ---------

FINANCING ACTIVITIES
     ISSUED AND PAID IN CAPITAL
         Preferred shares                                    1,949                                           -
         Common shares                                       9,309                                           -
         Share issue costs                                (     24)                                          -

LONG-TERM DEBT                                               6,999                   (97)                 (176)
                                                          --------              --------             ---------
                                                            18,233                   (97)                 (176)
                                                          --------              --------             ---------

INVESTING ACTIVITIES
     Reclamation deposits                                 (    120)                  100                     -
     Mineral interest (recovery)                          ( 15,086)                    -                    34
                                                          ---------             --------             ---------
                                                          ( 15,206)                  100                    34
                                                          ---------             --------             ---------

INCREASE (DECREASE) IN CASH                                      4              (     16)                   16
CASH BALANCE BEGINNING OF PERIOD                                 -                    20                     4
                                                          --------              --------             ---------
CASH BALANCE END OF PERIOD                                $      4              $      4             $      20
                                                          --------              --------             ---------
</TABLE>

                             PREPARED BY MANAGEMENT

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS


                                      F-4
<PAGE>

                             ST. GEORGE METALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
                                    UNAUDITED

                            JANUARY 31, 1998 AND 1997

                           (EXPRESSED IN U.S. DOLLARS)



1.       GOING CONCERN CONSIDERATIONS

         The  Company  has been  unable  to  attain  profitable  operations  and
         generate  funds  therefrom  and/or raise equity capital to meet current
         and future obligations.

         At the  present  time,  the  Company's  financial  resources  have been
         substantially  exhausted and management does not know of any additional
         financing  available  to the  Company.  The Company  has no  continuing
         on-going   business   activities   at  this  time  other  than  certain
         remediation  efforts  at  its  former  Dean  Mine  leasehold,  and  its
         activities  holding  certain  of its  properties  subject to options to
         purchase by  unrelated  third  parties.  Although  the Company is still
         interested  in  the  possibility  of   participating  in  other  mining
         projects, it has no meaningful available financial resources,  and only
         minimal personnel resources.  The Company has liquidated  substantially
         all its assets and paid off its trade  creditors to the extent possible
         in a  continuing  effort to wind up its  business  other than through a
         court supervised process, which would entail significant administrative
         expenses.  The  Company  has paid most of its trade debt (other than to
         related  parties) and it is unlikely  any payments  will be made on its
         other  indebtedness,  which has been  voluntarily  subordinated  to the
         Company's trade creditors.

         At year-end January 31, 1995, management reviewed the Dean Mine project
         and  concluded  that it did not contain  sufficient  mineable ore to be
         economically viable. The Company has ceased exploration and has written
         down the carrying  values of mineral  interests to their  estimated net
         realizable   value,   as   determined   by   management  or  subsequent
         disposition.

         As at January 31, 1998 and 1997,  the  Company's  liabilities  exceeded
         total assets by $10,094,000  and $9,201,000  respectively.  The Company
         was  notified in 1994 by two holders of term notes that the Company was
         in default  under the terms of these  agreements,  although the Company
         does not  agree  with  this  contention.  See  Note 8 to the  financial
         statements.   During  the  year-ended  1997,  the  Company's  leasehold
         interest in the Dean Mine was terminated by the lessor.

         As noted, management has been in the process of disposing of assets and
         settling its trade liabilities as funds become  available.  The Company
         has not made any proposals to the holders of its  operations  advances,
         gold  delivery  contracts  and term notes for  settlement of amounts at


                                      F-5
<PAGE>

                             ST. GEORGE METALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
                                    UNAUDITED

                            JANUARY 31, 1998 AND 1997

                           (EXPRESSED IN U.S. DOLLARS)



         less than the face value of these debts.  The Company is also  required
         to complete  reclamation  on its Dean Mine project at an estimated cost
         of $220,000.  The estimate of reclamation costs has been accrued in the
         year end financial statements. See Note 4 to the financial statements.

2.       ACCOUNTING POLICIES

         (a)      Accounting Principles

                  These consolidated  financial statements have been prepared in
                  accordance with  accounting  principles and practices that are
                  generally accepted in the United States.

         (b)      Mineral Interests

                  Through the fiscal year ended  January 31,  1996,  the Company
                  engaged in the exploration and development of mineral resource
                  properties.  It recorded  mineral  interests  at cost or at an
                  ascribed amount if the  consideration  was common shares.  The
                  Company  included in costs the lease and option  payments  and
                  advanced  royalties on properties  held under lease and option
                  agreements.   The  Company  carried  its  investments  net  of
                  recoveries from former joint venture partners.

         (c)      Values of Mineral Interests

                  Historically,   the  amounts   shown  for  mineral   interests
                  represented  nominal costs of retained  properties and did not
                  necessarily   represent   present   or  future   values.   The
                  recoverability   of  these  amounts  was  dependent  upon  the
                  confirmation of economically recoverable reserves, the ability
                  of the Company to obtain necessary  financing to meet property
                  purchase,  lease, option and minimum  exploration  commitments
                  and  to  successfully  complete  their  development  and  upon
                  subsequent profitable production. The Company's investments in
                  resource  properties  have been subject to periodic review for
                  permanent impairment.  Generally,  the Company considered that
                  impairment of a mineral interest  occurred at the earlier of a
                  decision  by  management  to  abandon  the  claims or that the
                  carrying  value of an  investment  in a  mineral  interest  or


                                      F-6
<PAGE>

                             ST. GEORGE METALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
                                    UNAUDITED

                            JANUARY 31, 1998 AND 1997

                           (EXPRESSED IN U.S. DOLLARS)



                  project  will likely  exceed the future net cash flows.  As of
                  January 31, 1995,  the Company's  retained  mineral  interests
                  were written down to a nominal amount. As of January 31, 1997,
                  the Company's retained mineral interests were reduced to zero.

         (d)      Income Taxes

                  Effective  February l, 1994, the Company adopted the method of
                  accounting  for  income  taxes   prescribed  by  Statement  of
                  Financial  Accounting Standards No. 109 "Accounting for Income
                  Taxes".  Among other  requirements,  tax  benefits  related to
                  operating  losses  are to be  recognized  in the  accounts  if
                  management believes,  based on available evidence,  that it is
                  more  likely than not that they will be  realized.  Due to the
                  nature of the Company's  development  stage operations and the
                  unlikelihood  of  realization  within a  reasonable  time,  no
                  fixture tax benefit has been  recognized  in the  accounts for
                  the current or prior years.

         (e)      Loss Per Share

                  Basic loss per share is  calculated  on the  weighted  average
                  number of common shares  outstanding  during the year.  Common
                  stock equivalents, convertible debt and convertible shares and
                  other  adjustments in  determining  any diluted loss per share
                  are not included in the weighted  average if they would reduce
                  the Company's reported loss per share.

3.       MINERAL INTERESTS

         The Company holds its remaining mineral interests under various mineral
         agreements. The mineral interests are subject to royalties ranging from
         3 % to 6 % of net smelter  returns.  Certain  interests  are subject to
         production commencement payments and consumer price index adjustments.

         In the years  ended  January  31,  1998 and  1997,  the  Company  had a
         recovery on mineral interests of $-0- and $492,000, respectively.

4.       OTHER ASSETS
                                            1998                  1997
                                            ----                  ----

         Reclamation deposits             $120,000              $220,060
                                          ========              ========



                                      F-7
<PAGE>
                             ST. GEORGE METALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
                                    UNAUDITED

                            JANUARY 31, 1998 AND 1997

                           (EXPRESSED IN U.S. DOLLARS)




         Reclamation deposits are comprised of interest-bearing  certificates of
         deposit,  which have been pledged as security  with the State of Nevada
         for the performance of the Company's reclamation commitments. The funds
         will not be available for general working  capital  purposes until such
         time as the approved reclamation program has been completed. During the
         year ended January 31, 1998, the State of Nevada authorized the release
         of  $100,000  from the  reclamation  deposits as  reclamation  work was
         performed.

5.       FUNDS PROVIDED (USED BY) OTHER NON-CASH WORKING CAPITAL ITEMS
<TABLE>
<CAPTION>
                                                       Cumulative to                     Years Ended
                                                        January 31,                      January 31,
                                                           1998                    1998                 1997
                                                           ----                    ----                 ----
<S> <C>
         Accounts payable                            $     199,054              $  154,232        $   (346,736)
         Accrued interest payable
              - Term notes and advances                  2,600,414                 650,907             584,100
         Accrued mineral interests
              reclamation costs                            100,000                (120,000)                  -
         Advances from shareholder                         319,910                 188,910            (145,000)
                                                     -------------              ----------        ------------

                                                     $   3,219,378              $  874,049        $     92,364
</TABLE>

6.       ADVANCES FROM SHAREHOLDER

         Advances  from  shareholder  bear  interest  at quoted bank prime rates
         (year end rate - 8.5 %), are unsecured and  repayable  upon demand.  No
         interest was paid on the shareholder  advances during the year. For the
         year ended January 31, 1998,  accrued interest on shareholder  advances
         was $11,135.




                                      F-8
<PAGE>
                             ST. GEORGE METALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
                                    UNAUDITED

                            JANUARY 31, 1998 AND 1997

                           (EXPRESSED IN U.S. DOLLARS)


7.       LONG-TERM DEBT
<TABLE>
<CAPTION>
                                                                                 1998                    1997
                                                                                 ----                    ----
<S> <C>
         (a)    Operations advances, non-interest bearing
                Third parties                                              $     587,343           $     587,343
                Related parties                                                1,277,000               1,277,000

         (b)    Gold delivery contracts - related parties                        835,000                 932,000

         (c)    Term Notes payable, bearing interest at 
                quoted bank prime rate plus l%. (Effective 
                rate - 9.5%.)

                Third parties                                                  1,300,000               1,300,000
                Related parties                                                3,000,000               3,000,000
                                                                           -------------           -------------

                                                                           $   6,999,343           $   7,096,343
</TABLE>
         (d)    Operations Advances

                In 1994, the Company authorized up to $2,000,000 of non-interest
                bearing senior  convertible  promissory notes which,  subject to
                authorization  of additional  common shares,  are convertible at
                the option of the holder  into 7 common  shares for each  dollar
                advanced.  No such authorization of additional common shares has
                been sought or  obtained,  so the  conversion  privilege  is not
                effective.   The  notes   are  to  be   repaid  in   semi-annual
                installments  from future net cash flow from the Company's  Dean
                Mine as  calculated at January 31 or July 31 and payable April l
                and October 1  respectively.  No  payments  were made during the
                fiscal years ending January 31, 1998 and 1997.

         (e)    Gold Delivery Contracts - Related Parties

                The holders of the gold  delivery  contracts  have  subordinated
                their right to any repayment  until such time as the  operations
                advances   have  been  repaid  in  fill.   The   contracts   are
                non-interest  bearing  and are  repayable  by  delivery of 2,694
                ounces of gold. At January 31, 1998, the equivalent value of the
                gold obligation was $835,000, a reduction from the prior year of


                                      F-9
<PAGE>
                             ST. GEORGE METALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
                                    UNAUDITED

                            JANUARY 31, 1998 AND 1997

                           (EXPRESSED IN U.S. DOLLARS)




                $97,000 to reflect  changes in the price of gold.  Related party
                interest charges for the fiscal years ended January 31, 1998 and
                1997   include    provisions   of   $(97,000)   and   $(159,000)
                respectively,  for decrease in the value of the gold  obligation
                during the periods shown.

         (f)    Term Notes Payable and Related Interest

                The holders of the term notes  payable have  subordinated  their
                right to any repayment of principal or interest  until such time
                as the operations advances have been repaid in full.

                No  interest  was paid by the  Company  during the fiscal  years
                ending  January 3l,  1998 and 1997.  In 1993,  the Company  made
                interest  payments of $120,290.  Interest  payable as at January
                31, 1998 is summarized as follows:




                                      F-10
<PAGE>
                             ST. GEORGE METALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
                                    UNAUDITED

                            JANUARY 31, 1998 AND 1997

                           (EXPRESSED IN U.S. DOLLARS)



<TABLE>
<CAPTION>
                                                              Third                Related
Year Ended                                                   Parties               Parties                Total
----------                                                   -------               -------                -----
<S> <C>
January 31, 1998                                           $    222,833          $    416,939      $     639,772
January 31, 1997                                                197,682               369,718            567,400
January 31, 1996                                                182,181               340,727            522,908
January 31, 1995                                                142,950               267,357            410,307
January 31, 1994                                                110,473               206,613            317,086
January 31, 1993                                                 30,975                57,911             88,886
Total Accrued Interest
     on Term Notes                                         $    887,094          $  1,659,265      $   2,546,359
                                                           ------------          ------------      -------------

Accrued on Shareholder Advances                                                                           54,055
                                                                                                   -------------
                                                                                                   $   2,600,414
</TABLE>

                  The Company was  notified in 1994 by two holders of term notes
                  that the Company was in default  under the terms of such notes
                  and  the  lenders  demanded  repayment  of  notes  aggregating
                  $900,000.  Management  is of the opinion that the lenders have
                  subordinated their rights to repayment until the retirement of
                  the operations advances, and so advised the holders.

         (g)      Principal Payments

                  Due to the  uncertainty  of repayment of  operations  advances
                  from net cash flow, the conversion  rights to common shares of
                  the  operations   advances  and  the   subordination   to  the
                  operations  advances of the gold  delivery  contracts and term
                  notes  payable,  these  amounts  are  carried  as  non-current
                  liabilities.

                  Principal payments of unsubordinated other long-term debt over
                  the next five  years  are:  1998 - $Nil;  1999 - $Nil;  2000 -
                  $Nil; 2001- $Nil; 2002 - $Nil.

                  The  Company  has  agreed  not to incur,  create or assume any
                  funded debt  ranking  ahead of the term notes,  declare or pay
                  dividends  on  its  shares,  purchase  or  redeem  any  of its
                  outstanding  share  capital  or  distribute  any assets to its
                  shareholders without the prior written consent of the lenders.



                                      F-11
<PAGE>
                             ST. GEORGE METALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
                                    UNAUDITED

                            JANUARY 31, 1998 AND 1997

                           (EXPRESSED IN U.S. DOLLARS)






8.       INCOME TAXES

         The Company has incurred  resource-related  expenditures  and operating
         losses which are available to reduce future years taxable income. As at
         January  31,  1998,  tax  losses  of  approximately   $21,290,000  were
         available for  carry-forward.  The future  benefits in respect of these
         losses  have been  offset by a  valuation  allowance  arising  from the
         Company's assessment of likelihood of realization.  The availability of
         these losses expires as follows: 2000 - $3,000; 2002 - $378,000; 2003 -
         $1,449,000; 2004 - $2,944,000; 2005 - $537,000; 2006 - $2,227,000; 2007
         - $2,532,000;  2008 - $2,858,000; 2009 - $4,358,000; 2010 - $2,441,000;
         2011 - $661,000; and 2013 - $893,000.

         No income  taxes  were paid or payable  by the  Company  during the two
         fiscal years ending January 31, 1998.

9.       COMPARATIVE FIGURES

         The  comparative  figures have been restated where necessary to conform
         to the current year's financial statement presentation.

10.      SHARE CAPITAL

         (a)      Authorized Capital

                  30,000,000   common   shares  of  $.01  par  value  per  share
                  10,000,000 preferred shares of $.01 par value per share

                  The preferred  shares may be issued in one or more series with
                  the rights, privileges, restrictions and conditions determined
                  by the directors prior to each issue.

                  The directors have designated 1,750 preferred shares as Series
                  A,  participating,   voting,   convertible,   $.01  par  value
                  (liquidation value $1,000 each) and 1,500,000 preferred shares
                  as Series B participating, voting, convertible, $.01 par value
                  (liquidation  value $3 each). Each preferred share is entitled
                  to the number of votes and dividends  based on the  conversion
                  ratio, subject to shareholder  authorization of an increase in


                                      F-12
<PAGE>
                             ST. GEORGE METALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
                                    UNAUDITED

                            JANUARY 31, 1998 AND 1997

                           (EXPRESSED IN U.S. DOLLARS)





                  the  Company's   authorized  common  shares.  The  shares  are
                  currently  convertible  at the  option  of the  holder  in the
                  ratios of 4,000 common  shares for each Series A and 10 common
                  shares  for each  Series B  preferred  share.  The  conversion
                  ratios for Series A and B are  subject to  adjustments  in the
                  event of subsequent  issues of shares or convertible  debt for
                  consideration  less  than  $.25  and $.30  per  common  share,
                  respectively.

                  The Company has issued  operations  advances with  conditional
                  conversion  rights  which,  if  exercised,  will  require  the
                  Company  to issue  additional  common  shares in excess of the
                  Company's authorized common share capital. The Company has not
                  requested   shareholder  approval  for  any  increase  in  its
                  authorized  common  shares,  and  consequently  the conversion
                  privilege  is not  effective.  The  reported  ratios  for  all
                  convertible  debt have not been  adjusted so as to assume that
                  required approvals have been obtained.


                                      F-13
<PAGE>
                             ST. GEORGE METALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
                                    UNAUDITED

                            JANUARY 31, 1998 AND 1997

                           (EXPRESSED IN U.S. DOLLARS)



<TABLE>

         (b)      Issued Capital
<CAPTION>
                                                                   Price
                                                                 Per Share           Shares        Consideration
                                                                 ---------           ------        -------------
<S> <C>
                  Preferred Shares - Series A
                      1992-cash                               $     1,000               1,450         $1,450,000

                  Preferred Shares - Series B
                      1994-cash                                         3             228,917         $  686,751
                      1996 - conversion to common                                     (62,500)          (187,500)
                                                                                      166,417            499,251
                  Common Shares
                      1987-cash                               $         1                 500                500
                  1988 - cash contributed to
                      capital by parent                                                     -            564,397
                                                                                          500            564,897
                  1990 - cash contributed to capital
                       by parent                                                            -          3,067,711
                      - cash via convertible
                       promissory notes                            20,000                  98          1,960,000
                      - cash and subscriptions on
                       private placement                           20,000                 180          3,600,000
                  -   share issue costs
                      other                                       (78,071)
                      related parties                                                                    (24,242)


                                                                                          778              9,090
</TABLE>


                                      F-14
<PAGE>
                             ST. GEORGE METALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
                                    UNAUDITED

                            JANUARY 31, 1998 AND 1997

                           (EXPRESSED IN U.S. DOLLARS)



<TABLE>

         (b)      Issued Capital (continued)
<CAPTION>
                                                                       Price
                                                                     Per Share       Shares           Consideration
                                                                     ---------       ------           -------------
<S> <C>
                  1991     - cash on private placement               $ 20,000                 l              20,000
                           - share issue costs                                                              (13,295)
                                                                                     ----------
                                                                                            779         $ 9,097,000
                  1991     - Split on a 17,721 for 1 basis                           13,804,659         $ 9,097,000
                  1992     - 1995 - No common shares were issued                     13,804,659           9,097,000
                  1996     - Shares issued on conversion
                              of Series B Preferred                                     682,500           $ 187,500

                                                                                     14,487,159         $ 9,284,500
</TABLE>

         (c)      Stock Option and Share Purchase Warrants

                  Other Stock Option

                  As at January 31,  1996,  an option to acquire  50,000  common
                  shares at $.40 per share, exercisable to October 28, 1998, was
                  outstanding.


                  Common Share Purchase Warrants

                  The Company has issued share purchase  warrants  entitling the
                  holders to acquire  common  shares,  subject to  adjustment if
                  subsequent rights are issued at a lower price,  exercisable as
                  follows:
<TABLE>
<CAPTION>
                                                                          Exercise               Price Per Share
                                                                       Price at Issue            After Dilution
                                                                       --------------            --------------
<S> <C>
                  686,751 shares (expire June, 1998)                   $          .40            $        .32
</TABLE>

                  During the year ended  January 31,  1998,  warrants  entitling
                  holders to acquire  5,700,000  common shares  expired  without
                  exercise.



                                      F-15
<PAGE>
                             ST. GEORGE METALS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                        NOTES TO THE FINANCIAL STATEMENTS
                                    UNAUDITED

                            JANUARY 31, 1998 AND 1997

                           (EXPRESSED IN U.S. DOLLARS)





                  Dilution assumes  conversion  privilege for operating advances
                  which is conditional upon  shareholder  approval of additional
                  authorized   shares  of  common  stock.  No  such  shareholder
                  approval has yet been requested or obtained.


11.      SEGMENTED INFORMATION

         All of the Company's property interests are in the United States.