<PAGE>
 
                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                                  FORM 10-QSB

(Mark One)

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

For the quarterly period ended March 31, 1997

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

          For the transition period from _______________ to _______________


Commission File Number 0-21635

                         Global Diamond Resources, Inc.
--------------------------------------------------------------------------------
       (Exact name of small business issuer as specified in its charter)

             Nevada                                    33-0213535
---------------------------------                -------------------------------
(State or other jurisdiction                     (IRS Employer
of incorporation or organization)                Identification No.)


           836 Prospect Street, Suite 2B, La Jolla, California  92037
--------------------------------------------------------------------------------
                    (Address of principal executive offices)


                                 (619) 459-1928
                          ---------------------------
                          (Issuer's telephone number)


                                Not Applicable
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

                       Yes   X            No  
                           -----             -----        

     As of May 8, 1997, the Company had 5,500,054 shares of its $.001 par value
Company issued and outstanding.
<PAGE>
 
                         PART 1 - FINANCIAL INFORMATION
<TABLE> 
<CAPTION> 
                                                                                   PAGE
                                                                                   ----
<S>                                                                                <C>
ITEM 1.   Financial Statements


Condensed Consolidated Balance Sheets at March 31, 1997 and December 31, 1996...   2
Condensed Consolidated Statements of Operations for the three month periods
 ended March 31, 1997 and 1996..................................................   3
Condensed Consolidated Statements of Cash Flows for the three month periods
 ended March 31, 1997 and 1996..................................................   4
Notes to Condensed Consolidated Financial Statements............................   5
</TABLE>

                                      -1-
<PAGE>
 
                GLOBAL DIAMOND RESOURCES, INC. AND SUBSIDIARIES

                     Condensed Consolidated Balance Sheets

                      March 31, 1997 and December 31,1996
<TABLE>
<CAPTION>
 
                               Assets                                          1997           1996
                                                                           -----------   -----------
<S>                                                                        <C>           <C>
                                                                            (Unaudited)
Current assets:
  Cash and cash equivalents                                                $    89,011       334,387
  Accounts receivable                                                           33,668        31,538
  Inventory                                                                     64,208        64,208
  Marketable security available-for-sale                                       287,500            --
  Prepaid expenses                                                              52,620        24,115
                                                                           -----------   -----------
                                                                               527,007       454,248
 
Fixed assets, net                                                              370,911       271,739
                                                                           -----------   -----------
                                                                           $   897,918       725,987
                                                                           ===========   ===========
                            Liabilities
 
Current liabilities:
  Accounts payable and accrued liabilities                                 $   104,380        86,258
                                                                           -----------   -----------

                        Stockholders' Equity
 
Stockholders' equity:
  Preferred stock, $0.001 par value, 10,000,000 shares authorized,
    no shares issued                                                                --            --
  Common stock, $0.001 par value, 25,000,000 shares authorized,
    5,500,054 shares issued and outstanding, 802,931 subscribed
    and unissued                                                                 5,500         5,500
  Additional paid-in capital                                                 2,199,234     2,199,234
  Common stock subscription received                                           287,500            --
  Accumulated deficit                                                       (1,686,990)   (1,547,612)
  Cumulative translation adjustment                                            (11,706)      (17,393)
                                                                           -----------   -----------
                                                                               793,538       639,729
                                                                           -----------   -----------
                                                                           $   897,918       725,987
                                                                           ===========   =========== 
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                      -2-
<PAGE>
 
                GLOBAL DIAMOND RESOURCES, INC. AND SUBSIDIARIES

                Condensed Consolidated Statements of Operations

           For the three month periods ended March 31, 1997 and 1996
                                  (Unaudited)
<TABLE>
<CAPTION>
 
                                                   1997           1996
                                              -------------   -----------
<S>                                           <C>             <C>
Other Income:
  Interest income                             $       1,653         3,141
                                              -------------   -----------
Expenses:
 
  Site investigation, option costs and
    project costs written off                             -        50,585
  Depreciation                                        2,572           465
  Legal and accounting                               47,885         7,611
  Office and miscellaneous                           28,373        24,314
  Salaries and benefits                              50,715        19,807
  Travel                                             10,686        13,086
                                              -------------   -----------
                                                    140,231       115,868
 
Operating loss                                     (138,578)     (112,727)
Income taxes                                            800         1,600
                                              -------------   -----------
  Net loss                                    $    (139,378)     (114,327)
                                              =============   ===========
  Net loss per share                          $       (0.03)        (0.02)
                                              =============   ===========
  Weighted average shares outstanding             5,500,054     5,100,054
                                              =============   ===========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                      -3-
<PAGE>
 
                GLOBAL DIAMOND RESOURCES, INC. AND SUBSIDIARIES

                Condensed Consolidated Statements of Cash Flows

           For the three month periods ended March 31, 1997 and 1996
                                  (Unaudited)
<TABLE>
<CAPTION>
 
                                                          1997         1996
                                                     ------------    --------
<S>                                                  <C>             <C>
Cash flows from operating activities:
  Net loss                                           $   (139,378)   (114,327)
  Adjustments to reconcile net loss to net
    cash used in operating activities:
    Depreciation                                            2,572         465
    (Increase) decrease in accounts receivable             (2,130)        224
    (Increase) decrease in prepaid expenses               (28,505)        106
    Increase (decrease) in accounts payable and
      accrued liabilities                                  18,122      (1,425)
                                                     ------------    --------
      Net cash used in operating activities              (149,319)   (114,957)
                                                     ------------    --------
 
Cash flows from investing activities:
  Purchase of equipment, net                               (1,593)          -
  Development of mining properties                       (100,151)          -
                                                     ------------    --------
 
    Net cash used in investing activities                (101,744)          -
                                                     ------------    --------
 
Effects of exchange rates on cash                           5,687      (2,790)
                                                     ------------    --------
 
Net decrease in cash and cash equivalents                (245,376)   (117,747)
 
Cash and cash equivalents, beginning of period            334,387     390,439
                                                     ------------    --------
 
Cash and cash equivalents, end of period             $     89,011     272,692
                                                     ============    ========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                      -4-
<PAGE>
 
                GLOBAL DIAMOND RESOURCES, INC. AND SUBSIDIARIES

              Notes to Condensed Consolidated Financial Statements

        As of March 31, 1997 and December 31, 1996, and for each of the
          three month periods ended March 31, 1997 and March 31, 1996


     (1)  These condensed consolidated financial statements of Global Diamond
          Resources, Inc. (the "Company") do not include all of the information
          and footnotes required by generally accepted accounting principles for
          complete financial statements and should be read in conjunction with
          the financial statements and notes thereto included in the Company's
          Annual Report on Form 10-KSB.  In the opinion of management, the
          financial information set forth in the accompanying condensed
          consolidated financial statements reflect all adjustments necessary
          for a fair statement of the periods reported, and all such adjustments
          were of a normal and recurring nature.  Interim results are not
          necessarily indicative of results for a full year.

     (2)  Fixed Assets
<TABLE> 
                                                              March  31,    December 31,
                                                                 1997           1996
                                                              ----------    ------------
          <S>                                                 <C>           <C>
          Mining properties under development:
            Caerwinning deposit                               $  292,248         209,553
            Grasdrif deposit                                      55,860          38,404
                                                              ----------    ------------
                                                                 348,108         247,957
                                                              ----------    ------------
          Equipment, at cost                                      35,913          34,320
          Less accumulated depreciation                          (13,110)        (10,538)
                                                              ----------    ------------
                                                                  22,803          23,782
                                                              ----------    ------------
                                                              $  370,911         271,739
                                                              ==========    ============
</TABLE>
     (3)  During March 1997, the Company entered into agreements with three
          parties ("Agreements") whereby they would subscribe, at prices ranging
          from $1.60 to $2.20 per share, for 802,931 common shares of the
          Company for a total of $1,500,000.  The offering was conducted
          pursuant to Regulation S under the Securities Act of 1933.  Through
          March 31, 1997, subscriptions totalling $287,500 have been received by
          the Company in connection with these Agreements.  The consideration
          received consisted of 100,000 shares of a publicly traded company with
          a market value as of March 31, 1997 of $287,500.  These shares are to
          be sold and the net proceeds are to be used to purchase shares in the
          Company at $1.90 per share.  Through May 8, 1997, subscriptions
          totalling $985,520 have been received by the Company in connection
          with these Agreements.  The consideration received consists of
          $685,520 in cash and 200,000 shares of the publicly traded company
          with a market value as of May 8, 1997 of $300,000.

          The Company is accounting for these publicly-traded shares in
          accordance with SFAS No 115, Accounting for Certain Investments in
          Debt and Equity Securities, which requires that debt and marketable
          equity securities be classified into one of three categories: trading,
          available-for-sale, or held to maturity.  The Company's equity
          security qualifies under the provisions of SFAS No 115 as available-
          for-sale.

                                      -5-
<PAGE>
 
ITEM 2.   Management's Discussion and Analysis or Plan of Operation

     The Company is engaged in diamond exploration and mining.  The Company has
exercised an option to acquire one mining property (the Caerwinning Deposit),
acquired an option to purchase a second mining property (the Montrose Kimberlite
Pipe) and has acquired a 50% partnership interest in the third property (the
Grasdrif Deposit), all of which are located in the Republic of South Africa.
The Company intends to conduct exploration and acquisitions of additional
diamond pipes and alluvial deposits and is continuously evaluating potential
property acquisitions.

     To date, the Company's activities have included the investigation and
acquisition of mining property interests and limited exploratory and development
work.  The Company has financed its activities to date through the sale of
shares of its Common Stock.   As of the date of this report, the Company is
engaged in the pursuit of an additional $1.5 million of capital, the proceeds of
which will be used to complete exploration activities and commence production,
as described below.  In March 1997, the Company entered into agreements with
three parties ("Agreements") whereby they would subscribe, at prices ranging
from $1.60 to $2.20 per share, for 802,931 common shares of the Company for a
total of $1,500,000.  The offering is being conducted pursuant to Regulation S
under the Securities Act of 1933.  Through March 31, 1997, subscriptions
totalling $287,500 have been received by the Company in connection with these
Agreements.  The consideration received consisted of 100,000 shares of a
publicly traded company with a market value as of March 31, 1997 of $287,500.
These shares are to be sold and the net proceeds are to be used to purchase
shares in the Company at $1.90 per share.  Through May 8, 1997, subscriptions
totalling $985,520 have been received by the Company in connection with these
Agreements.  The consideration received consists of $685,520 in cash and 200,000
shares of the publicly traded company with a market value as of May 8, 1997 of
$300,000.

     As of the date of this report, the Company is seeking to acquire $5,000,000
of capital in addition to that sought to be obtained pursuant to the Agreements
through the nonpublic offering of shares of its Common Stock and convertible
debt.  However, there are no firm commitments or agreements on the part of any
party at this time to provide any additional capital to the Company and there
can be no assurance that the Company will be able to obtain sufficient
additional capital in order to attain a meaningful level of operations.  If the
Company is unable to raise additional capital, the Company may not be able to
commence revenue producing operations or finance the exercise of certain options
to acquire mining properties prior to their termination.

     The Company's plan of operations for the next 12 months include the
completion of exploratory work and the commencement of production at all three
of its present mining properties, subject to the receipt of additional
financing.  The Company intends to undertake the following activities at each of
its three properties, in the following order of priority.  The Company intends
to commence production at the Caerwinning Deposit, subject to its receipt of an
additional $1.8 million of capital to be applied towards this purpose.  The
Company intends to commence a bulk sampling program at the Montrose Pipe subject
to its receipt of an additional $400,000 in capital to be applied towards this
purpose.  If the results from the proposed bulk sampling program are successful,
the Company intends to conduct open pit mining to a depth of 30 meters which
would be followed by underground mining activity.  The Company estimates that it
will require $3 million in capital expenditures and 2 years of development in
order to commence underground mining operations at the Montrose Pipe.  Subject
to the Company's receipt of an additional $2.8 million in capital to be applied
towards such purpose, the Company intends to complete site establishment,
including the development of roads, power, housing and water, and commence
mining operations at the Grasdrif Deposit.  The Company believes that site
establishment will take approximately 3 months, after which the Company would
propose to commence production at the Grasdrif Deposit.

     In addition to the foregoing requirements, the Company will require
additional capital to finance the cost of development of its three mining
properties from banks and others or from the sale of equity securities.  Because
the likelihood of discovery of an economically recoverable deposit and the
amount of funds required to finance the development of any particular project
cannot be predicted, it is impracticable to estimate the Company's requirements
for additional financing for development purposes at this time.  Any such
additional

                                      -6-
<PAGE>
 
financing might involve a pledge or mortgage of the Company's properties and of
any production therefrom.  There is, of course, no assurance that satisfactory
financing could be obtained therefor.  In addition to borrowings to finance
individual development projects, the Company may also borrow funds from time to
time for working capital and other general corporate purposes.

     On March 3, 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share,"
replacing Accounting Principles Board ("APB") Opinion No. 15, "Earnings per
Share."  SFAS No. 128 replaces "primary" and "fully diluted" earnings per share
("EPS") under APB Opinion No. 15 with "basic" and "diluted" EPS.  Unlike primary
EPS, basic EPS excludes the dilutive effects of options, warrants and other
convertible securities.  Dilutive EPS reflects the potential dilution of
securities that could share in the earnings of an entity, similar to fully
diluted EPS.  However, under SFAS No. 128, the Company would use the average
market price for its stock during the reporting period to determine the cost of
options as opposed to the greater of the closing price at the end of the period
or the average market price during the period, as currently required by APB
Opinion No. 15.  SFAS No. 128 is effective for years ending after December 15,
1997.  The Company does not believe, based on current circumstances, the impact
of the implementation of SFAS No. 128 will be material.

     This report contains various forward-looking statements that are based on
the Company's beliefs as well as assumptions made by and information currently
available to the Company.  When used in this report, the words "believe,"
"expect," "anticipate," "estimate" and similar expressions are intended to
identify forward-looking statements.  Such statements are subject to certain
risks, uncertainties and assumptions, including, without limitation, that as of
this date the Company has not commenced mining operations at any of its three
mines; the Company requires an additional $5 million of capital to achieve a
meaningful level of revenue producing operations; the lack of proven reserves at
any of the Company's three mines; mining risks generally; political risks
associated with the Company's operations in the Republic of South Africa;
general economic conditions; currency fluctuations; and estimates of costs of
production.  Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated, or projected.  The Company
cautions potential investors not to place undue reliance on any such forward-
looking statements all of which speak only as of the date made.

                                      -7-
<PAGE>
 
PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.
         ----------------- 

            Inapplicable.

Item 2.  Changes in Securities.
         --------------------- 

            Inapplicable.

Item 3.  Defaults Upon Senior Securities.
         ------------------------------- 

            Inapplicable.

Item 4.  Submission of Matters to a Vote of Security Holders.
         --------------------------------------------------- 

            Inapplicable.

Item 5.  Other Information.
         ----------------- 

            Inapplicable.

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

            (a)  Exhibits
                 --------

                 1) EX-27 Financial Data Schedule.

            (b)  Reports on Form 8-K
                 -------------------

                 During the quarter ended March 31, 1997, the Company filed a
Current Report on Form 8-K dated April 7, 1997 for purposes of reporting the
sale of 802,931 shares of Common Stock pursuant to Regulation S under the
Securities Act of 1933.

                                      -8-
<PAGE>
 
                                   SIGNATURES


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

                                    Global Diamond Resources, Inc.
                                    (Registrant)


Dated:  May 8, 1997                 By:  /s/ MERVYN J. McCULLOCH
                                       -------------------------
                                       Mervyn J. McCulloch,
                                       Chief Financial Officer

                                      -9-