<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, 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 March 31, 1999 (unaudited)
  and December 31, 1998....................................................................     2
Unaudited Condensed Consolidated Statements of Operations for the three month periods
  ended March 31, 1999 and 1998............................................................     3
Unaudited Condensed Consolidated Statements of Cash Flows for the three month periods
  ended March 31, 1999 and 1998............................................................     4
Notes to Condensed Consolidated Financial Statements.......................................     5
</TABLE>

                                      -1-
<PAGE>

                GLOBAL DIAMOND RESOURCES, INC. AND SUBSIDIARIES

                     Condensed Consolidated Balance Sheets

                     March 31, 1999 and December 31, 1998


<TABLE>
<CAPTION>
                            Assets                                        1999                    1998
                                                                     ---------------         ---------------
                                                                       (Unaudited)
<S>                                                                  <C>                     <C>
Current assets:
  Cash and cash equivalents                                          $     2,773,982               5,461,235
  Accounts receivable                                                        116,729                  50,478
  Advance to related party                                                   963,165                      --
  Inventory                                                                  108,580                  57,016
                                                                     ---------------         ---------------

                                                                           3,962,456               5,568,729

Fixed assets, net                                                          4,791,859               4,603,765
                                                                     ---------------         ---------------

                                                                     $     8,754,315              10,172,494
                                                                     ===============         ===============

                       Liabilities

Current liabilities:
  Accounts payable, accrued liabilities and current
  portion of long-term debt                                          $      520,827                 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, 50,000,000
    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                                                     (7,168,122)             (6,432,958)
  Accumulated other comprehensive income
    Foreign currency translation adjustment                               (1,079,089)               (834,981)
                                                                     ---------------         ---------------

                                                                           5,233,488               6,212,760
                                                                     ---------------         ---------------

                                                                     $     8,754,315              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 ended March 31, 1999 and 1998
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                                           1999                   1998
                                                                      ---------------       ---------------
<S>                                                                   <C>                   <C>
Diamond Sales                                                         $            --                    --

Other Income:
  Interest Income                                                              40,303                40,191

Production Expenses                                                           126,392                    --

Exploration Expenses                                                           92,836                    --

Expenses:
  Depreciation                                                                  3,213                43,048
  Interest                                                                    112,500                60,000
  Legal and accounting                                                         62,090                58,451
  Office and miscellaneous                                                     68,912               100,832
  Salaries and benefits                                                       236,375               131,142
  Travel                                                                       72,349                67,875
                                                                      ---------------       ---------------

                                                                              555,439               461,348
                                                                      ---------------       ---------------

Operating Loss                                                               (734,364)             (421,157)

Income Tax Expense                                                                800                   800
                                                                      ---------------       ---------------

  Loss before cumulative effect of accounting change                         (735,164)             (421,957)

  Cumulative effect on prior years of change in
    accounting for exploration and related costs                                   --              (647,226)
                                                                      ---------------       ---------------

Net Loss                                                                     (735,164)           (1,069,183)

Other comprehensive income -
  Foreign currency translation adjustment                                    (244,108)              (93,325)
                                                                      ---------------       ---------------

Comprehensive loss                                                           (979,272)           (1,162,508)
                                                                      ===============       ===============

Basic and diluted net loss per share before cumulative
  effect of accounting change                                                   (0.02)                (0.02)
Accounting change                                                                  --                 (0.02)
                                                                      ---------------       ---------------
Basic and diluted loss per share                                      $         (0.02)                (0.04)
                                                                      ===============       ===============

Weighted average shares outstanding                                        45,600,678            23,932,318
                                                                      ===============       ===============
</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, 1999 and 1998
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                              1999                    1998
                                                                         ---------------        ---------------
<S>                                                                      <C>                    <C>
Cash flows from operating activities:
  Net loss                                                               $      (735,164)            (1,069,183)
  Adjustments to reconcile net loss to net
    cash used in operating activities:
    Depreciation                                                                  83,168                 43,048
    (Increase) in accounts receivable                                            (66,251)              (198,305)
    (Increase) in inventory                                                      (51,564)                    --
    Increase (decrease) in accounts payable,
      accrued liabilities and current portion of long-term debt                 (438,907)                99,377
                                                                         ---------------        ---------------

      Net cash used in operating activities                                   (1,208,718)            (1,125,063)
                                                                         ---------------        ---------------
Cash flows from investing activities:
  Additions to fixed assets                                                     (271,335)            (1,472,611)
                                                                         ---------------        ---------------

Cash flows from financing activities:
  Advance to related party                                                      (963,165)                    --
  Repayment of long-term debt                                                         --                (50,000)
  Proceeds from exercise of common stock warrants                                     --                 45,895
                                                                         ---------------        ---------------

      Net cash used by financing activities                                     (963,165)                (4,105)
                                                                         ---------------        ---------------

Effects of exchange rates on cash                                               (244,035)               (93,325)
                                                                         ---------------        ---------------

Net decrease in cash and cash equivalents                                     (2,687,253)            (2,695,104)

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

Cash and cash equivalents, end of period                                 $     2,773,982              1,401,037
                                                                         ===============        ===============
</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, 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)  Advance to Related Party

     The $963,165 was repaid during June 1999.

(3)  Fixed Assets

<TABLE>
<CAPTION>
                                                       March 31,             December 31,
                                                         1999                   1998
                                                    ---------------       ----------------
<S>                                                 <C>                   <C>
Mining property:
  Caerwinning deposit, at cost                      $       509,421                534,868
  Less accumulated amortization                             (28,492)               (13,392)
                                                    ---------------       ----------------

                                                            480,929                521,476
                                                    ---------------       ----------------

Mining properties under development:
  Grasdrif deposit                                        1,260,876              1,220,197
                                                    ---------------       ----------------

Mining equipment, at cost:                                3,381,608              3,123,268
  Less accumulated depreciation                            (355,756)              (290,883)
                                                    ---------------       ----------------

                                                          3,025,852              2,832,385
                                                    ---------------       ----------------

Office equipment, at cost:                                   59,080                 57,880
  Less accumulated depreciation                             (34,878)               (28,173)
                                                    ---------------       ----------------

                                                             24,202                 29,707
                                                    ---------------       ----------------

                                                    $     4,791,859              4,603,765
                                                    ===============       ================
</TABLE>

(4)  Production and exploration expenses are net of $45,977 and $10,606 of
     diamonds recovered, respectively, for the three months ending March 31,
     1999.

                                      -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 March 31, 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 $287,363.  The equivalent figure for the
Caerwinning Deposit was $177,297.

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 ended March 31, 1999 of
$126,392, net of diamonds recovered of $45,977. Losses of this magnitude
continued through the next quarter. 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 $92,836,
net of diamonds recovered of $10,606 for the three months ended March 31, 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 next 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.

                                      -6-
<PAGE>

     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 March 31, 1999, the rate was Rand 6.18 to US$1. The revaluation of the
Company's property and equipment caused most of the foreign currency translation
adjustment of $244,035 for the three months ended March 31, 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 March 31, 1999 amounting
to $3,441,629, 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.

The 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 March 31, 1999 of $ 3,025,852. 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 diamond carat, commencement and scale of
mining operations, Rand - US$ exchange rate and cost of production. If any of
these assumptions prove incorrect, the Company may require further 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 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

                                      -7-
<PAGE>

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.

     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.
         ---------------------

               Inapplicable.

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

               Inapplicable.

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

               Pursuant to a written consent of the shareholders of the Company
effective as of March 19, 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. The written consent was signed by the holders of 43,079,808
shares, representing 86% of the outstanding common shares of the Company.

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-