<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 June 30, 1999

     [ ]    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 ____        No  X
                                            ---

     As of November 12, 1999, the Company had 45,600,678 shares of its $.0005
par value common stock issued and outstanding.
<PAGE>

                        PART 1 - FINANCIAL INFORMATION

<TABLE>
<CAPTION>
ITEM 1.  Financial Statements                                                                          PAGE
                                                                                                       ----
<S>                                                                                                    <C>
Condensed Consolidated Balance Sheets at June 30, 1999 (unaudited)
  and December 31, 1998..............................................................................      2
Unaudited Condensed Consolidated Statements of Operations for the three month and six month periods
  ended June 30, 1999 and 1998.......................................................................      3
Unaudited Condensed Consolidated Statements of Cash Flows for the six month periods
  ended June 30, 1999 and 1998.......................................................................      4
Notes to Condensed Consolidated Financial Statements.................................................      5
</TABLE>

                                      -1-
<PAGE>

                GLOBAL DIAMOND RESOURCES, INC. AND SUBSIDIARIES

                     Condensed Consolidated Balance Sheets

                      June 30, 1999 and December 31, 1998


<TABLE>
<CAPTION>
                            Assets                                        1999                      1998
                                                                     ---------------          ---------------
                                                                       (Unaudited)
<S>                                                                  <C>                      <C>
Current assets:
  Cash and cash equivalents                                          $     2,304,525                5,461,235
  Accounts receivable                                                         80,676                   50,478
  Inventory                                                                  175,635                   57,016
                                                                     ---------------          ---------------

                                                                           2,560,836                5,568,729

Fixed assets, net                                                          5,158,948                4,603,765
                                                                     ---------------          ---------------

                                                                     $     7,719,784               10,172,494
                                                                     ===============          ===============

                         Liabilities

Current liabilities:
  Accounts payable, accrued liabilities and current
  portion of long-term debt                                          $       213,225                  959,734
                                                                     ---------------          ---------------

Long-term debt, less current portion                                       3,000,000                3,000,000
                                                                     ---------------          ---------------


                     Stockholders' Equity

Stockholders' equity:
  Preferred stock, $0.001 par value, 10,000,000
    shares authorized, no shares issued                                           --                       --
  Common stock, $.0005 par value, 100,000,000
    shares authorized and 45,600,678 shares issued
    and outstanding                                                           22,800                   22,800
  Additional paid-in capital                                              13,457,899               13,457,899
  Accumulated deficit                                                     (7,938,952)              (6,432,958)
  Accumulated other comprehensive income
    Foreign currency translation adjustment                               (1,035,188)                (834,981)
                                                                     ---------------          ---------------

                                                                           4,506,559                6,212,760
                                                                     ---------------          ---------------

                                                                     $     7,719,784               10,172,494
                                                                     ===============          ===============
</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 and six-month periods ended June 30, 1999 and 1998
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                 Three month periods ended                 Six month periods ended
                                            ----------------------------------       ----------------------------------
                                               June 30,             June 30,            June 30,            June 30,
                                                 1999                 1998                1999                1998
                                            --------------      --------------       --------------      --------------
<S>                                         <C>                 <C>                  <C>                 <C>
Diamond Sales                               $           --                  --                   --                  --

Other Income:
  Interest Income                                   28,235              20,201               68,538              60,392

Production Expenses                                167,396                  --              293,788                  --

Exploration Expenses                                92,559                  --              185,395                  --

Expenses:
  Depreciation                                       3,092             (37,951)               6,305               5,097
  Interest                                         114,018             110,917              226,518             170,917
  Legal and accounting                              51,864              44,974              113,954             103,425
  Office and miscellaneous                          81,192              81,987              150,104             182,819
  Salaries and benefits                            213,384             169,743              449,759             300,885
  Travel                                            75,287              51,912              147,636             119,787
                                            --------------      --------------       --------------      --------------
                                                   538,837             421,582            1,094,276             882,930
                                            --------------      --------------       --------------      --------------

Operating Loss                                    (770,557)           (401,381)          (1,504,921)           (822,538)

Income Tax Expense                                     273                 115                1,073                 915
                                            --------------      --------------       --------------      --------------

  Loss before cumulative effect of
   accounting change                              (770,830)           (401,496)           1,505,994)           (823,453)

  Cumulative effect on prior years
   of change in accounting for
   exploration and related costs                        --            (729,658)                  --            (729,658)
                                            --------------      --------------       --------------      --------------

Net Loss                                          (770,830)         (1,131,154)          (1,505,994)         (1,553,111)

Other Comprehensive Income -
  Foreign currency translation
   adjustment                                       43,901            (842,023)            (200,207)           (935,348)
                                            --------------      --------------       --------------      --------------

Comprehensive Loss                                (726,929)         (1,973,177)          (1,706,201)         (2,488,459)
                                            ==============      ==============       ==============      ==============

Basic and diluted net
  loss per share before
    cumulative                                       (0.02)              (0.02)               (0.03)              (0.03)
  effect of accounting change
Accounting change                                       --               (0.03)                  --               (0.03)
                                            --------------      --------------       --------------      --------------
Basic and diluted loss per share            $        (0.02)              (0.05)               (0.03)              (0.06)
                                            ==============      ==============       ==============      ===============
Weighted average shares
  outstanding                                   45,600,678          24,075,890           45,600,678          24,004,104
                                            ==============      ==============       ==============       =============
</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 six-month periods ended June 30, 1999 and 1998
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                         1999                 1998
                                                                    --------------       --------------
<S>                                                                 <C>                  <C>
Cash flows from operating activities:
  Net loss                                                          $   (1,505,994)          (1,553,111)
  Adjustments to reconcile net loss to net
    cash used in operating activities:
    Depreciation                                                           189,882                5,097
    Increase (decrease) in accounts receivable                             (30,198)              12,302
    (Increase) in inventory                                               (118,619)                  --
    Increase (decrease) in accounts payable, accrued
      liabilities and current portion of long-term debt                   (746,509)              66,045
                                                                    --------------       --------------

      Net cash used in operating activities                             (2,211,438)          (1,469,667)
                                                                    --------------       --------------

Cash flows from investing activities:
  Additions to fixed assets                                               (751,651)          (1,943,455)
                                                                    --------------       --------------

Cash flows from financing activities:
  Proceeds from long-term debt                                                  --            1,400,000
  Repayment of long-term debt                                                   --              (91,666)
  Proceeds from exercise of common stock warrants                               --               45,895
                                                                    --------------       --------------

      Net cash provided by financing activities                                 --            1,354,229
                                                                    --------------       --------------

Effects of exchange rates on cash                                         (193,621)            (935,348)
                                                                    --------------       --------------

Net decrease in cash and cash equivalents                               (3,156,710)          (2,994,241)

Cash and cash equivalents, beginning of period                           5,461,235            4,096,141
                                                                    --------------       --------------

Cash and cash equivalents, end of period                            $    2,304,525            1,101,900
                                                                    ==============       ==============
</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 June 30, 1999 and December 31, 1998

(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>
<CAPTION>
                                                               June 30,          December 31,
                                                                 1999                1998
                                                            --------------      --------------
     <S>                                                    <C>                 <C>
     Mining property:
       Caerwinning deposit, at cost                         $      513,161             534,868
       Less accumulated amortization                               (39,273)            (13,392)
                                                            --------------      --------------

                                                                   437,888             521,476
                                                            --------------      --------------

     Mining properties under development:
       Grasdrif deposit                                          1,674,816           1,220,197
                                                            --------------      --------------

     Mining equipment, at cost:                                  3,435,144           3,123,268
       Less accumulated depreciation                              (447,866)           (290,883)
                                                            --------------      --------------

                                                                 2,987,278           2,832,385
                                                            --------------      --------------

     Office equipment, at cost:                                     62,018              57,880
       Less accumulated depreciation                               (39,052)            (28,173)
                                                            --------------      --------------

                                                                    22,966              29,707
                                                            --------------      --------------

                                                            $    5,158,948           4,603,765
                                                            ==============      ==============
</TABLE>

(3)  Authorized Share Capital

     On June 16, 1999 the Company increased its authorized common stock from
     50,000,000 shares of $.0005 par value common stock to 100,000,000 shares of
     $0.0005 par value common stock.

(4)  Production and Exploration Expenses

     Production expenses are net of diamonds recovered of $16,485 and $62,462
     for the three months ending June 30, 1999 and the six months ending June
     30, 1999, respectively. Exploration expenses are net of diamonds recovered
     of $33,425 and $44,031 for the three months ending June 30, 1999 and the
     six months ending June 30, 1999, respectively.

                                      -5-
<PAGE>

ITEM 2.    Management's Discussion and Analysis or Plan of Operations

Background
----------

     The Company is engaged in diamond exploration and mining.  The Company has
acquired two mining properties (the Grasdrif Deposit and the Caerwinning
Deposit) and owns an option to purchase a third mining property (the Montrose
Kimberlite Pipe), 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, exploratory work, site establishment
and purchase and operation of mining plant and equipment.  During the quarter
ended June 30, 1999, the Company purchased mining plant and equipment and
incurred site establishment costs for the development of the upper terrace at
the Grasdrif Deposit in the amount of $216,813. The equivalent figure for the
Caerwinning Deposit was  $139,822.

Results of Operations
---------------------

     The production expenses were incurred at the Caerwinning Deposit, which
commenced production in September 1998.  Due to higher than normal rainfall in
the area, run off from the irrigation lands, as well as a higher than normal
water table, wet ore from the T2 terrace had to be processed by the primary
recovery plant, which was designed as a dry primary recovery plant.  This caused
a drop in tonnes processed as well as in the recovery rate of diamonds,
resulting in the production loss for the three months ending June 30, 1999 of
$167,396, net of diamonds recovered of $16,485 and for the six months ending
June 30, 1999 of $293,788, net of diamonds recovered of $62,462.  The Company
erected a wet recovery plant at this mine, which commenced production during the
third quarter of 1999, resulting in a marked improvement.

     The exploration expenses, incurred at the Grasdrif Deposit, were $92,559,
net of diamonds recovered of $33,425 for the three months ended June 30, 1999
and $185,395, net of diamonds recovered of $44,031 for the six months ended June
30, 1999. Production will only commence if the exploration yields positive
results. The lower terrace at the Grasdrif Deposit contains 77 million tonnes of
gravel of which the Company has bulk sampled 115,800 tonnes through September
30, 1999, which represents about 0.15% of the deposit. Between August 1998 and
March 1999 the grade was disappointing. During the current quarter, however, the
grade has improved significantly. The entire run-of-mine production, consisting
of 57 diamonds with a total weight of 142.47 carats, was sold for $103,584
during July 1999. This equates to an average price of $727.06 per carat, 16%
over the budget of $625 per carat. A dense media separation plant was
commissioned on the upper terrace to conduct trial mining of this terrace during
the third quarter of 1999.

     The Company invested $707,761 in the first nine months of 1999 on the
purchase and erection of plant and equipment and mine development at the
Grasdrif Deposit to bring the upper terrace into production by the third quarter
of 1999. In addition the Company invested $1,469,715 in the first nine months of
1999 on the purchase and erection of a wet primary recovery plant at the
Caerwinning Deposit to increase tonnage processed and improve recovery. The wet
plant was placed into production during the third quarter of 1999.

     The increase in interest expense is due to an increase in the amount owed
on the 15%, $3,000,000 International PCM Holdings loan from $1,600,000 in 1998
to $3,000,000 in 1999. The increase in aggregate Company expenses is mainly due
to the additional overhead expenses incurred in supporting the production at the
Caerwinning Deposit, which commenced in September 1998, the bulk sample at the
Grasdrif deposit and the erection of plant and equipment at both deposits.

     The Company's mining properties, mining properties under development and
mining equipment are all situated in the Republic of South Africa, where the
currency is the Rand.  At December 31, 1998 the rate was Rand 5.865 to US$1 and
at June 30, 1999, the rate was Rand 6.13 to US$1. The revaluation of the
Company's property

                                      -6-
<PAGE>

and equipment caused most of the positive foreign currency translation
adjustment of $43,901 for the three months ended June 30, 1999. At November 12,
1999, the rate was Rand 6.2483 to US$1.

Liquidity and Capital Resources
-------------------------------

     The Company has financed its activities to date through the sale of its
equity and debt securities. A $6 million equity and debt financing agreement was
completed in December 1997 and a $6 million equity financing was completed in
December 1998. The Company's plan of operations for the next 12 months include
the completion of exploratory work at the Montrose Kimberlite Pipe properties,
the completion of exploratory work and commencement of mining operations at the
Grasdrif Deposit and continuation of mining operations at the Caerwinning
Deposit.

     Even though the Company has net current assets at June 30, 1999 amounting
to $2,347,611, the Company believes that it requires, at a minimum, additional
working capital of $3,000,000 to satisfy its working capital requirements for
the next 12 months, including the capital that will be required to conduct the
bulk sample at the Montrose Kimberlite Pipe. Should only one of the following
events occur, additional working capital would be needed in the next 12 months.

These events are:

          (a)  that the Caerwinning Deposit has negative cash flow from
               operations;
          (b)  the bulk sample at the Grasdrif Deposit does not identify a
               profitable area of diamondiferous grade of gravel to mine and
               profitable mining operations do not commence; or
          (c)  the mining on the Upper Terrace at Grasdrif results in an
               operating loss.

     The Company is in discussions with bankers to obtain financing secured by
new mining and earthmoving equipment, held free and clear, with a net book value
at June 30, 1999 of $2,987,278.  However, there is no assurance that the Company
will be able to raise the additional capital it requires through the equipment
refinancing or otherwise.  In the event that the Company is unable to raise the
working capital it needs, it will focus its efforts on the activities that its
resources can support at that time.

     The Company's beliefs concerning its working capital requirements are based
on certain assumptions concerning, among other things, the estimated grade of
the processed ore, average price per carat of diamond, commencement and scale of
mining operations, Rand - US$ exchange rate and cost of production. If any of
these assumptions prove to be incorrect, the Company may require additional
capital. Any such additional financing may require an additional pledge or
mortgage of the Company's properties and of any production therefrom. There is,
of course, no assurance that satisfactory financing, if necessary could be
obtained therefor. In addition to financing the individual development projects,
the Company may also borrow funds from time to time for working capital and
other general corporate purposes.

Year 2000
---------

     The Company recognizes the need to ensure that its operations will not be
adversely impacted by Year 2000 hardware and software failures. Failures due to
processing errors potentially arising from calculations using the Year 2000 date
are a known risk. The Company has addressed this risk as to the availability,
integrity and reliability of financial accounting and operational systems. The
Company has completed Year 2000 compliant testing on all hardware used for
financial accounting systems. Assurance has been received from the software
vendors of the accounting systems that all their software in use by the Company
is Year 2000 compliant. The Company considers its systems to be Year 2000
compliant and does not expect to incur any further material costs in connection
with Year 2000 issues. All expenses to date have been written off as incurred.
Since the Company's mining equipment is not date sensitive, the most likely
worse case scenario is the loss of supply of power and fuel to the mining
operations. The Company has been assured by the suppliers of power and fuel that
they are Year 2000 compliant.

                                      -7-
<PAGE>

     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 just commenced mining operations at any of its three
mines; 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.


PART II - OTHER INFORMATION


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

               Inapplicable.

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

               On June 16, 1999, the Company amended its Articles of
Incorporation to increase its authorized capital stock to 10,000,000 shares of
$.001 par value preferred stock and 100,000,000 shares of $.0005 par value
common stock.

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
                    --------

                    Financial Data Schedule.

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

                    Inapplicable.

                                      -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:  November 18, 1999               By: /s/ Johann De Villiers
                                           ----------------------------
                                           Johann de Villiers,
                                           Chief Executive Officer
                                            and Chief Financial Officer

                                      -9-