<PAGE>

                          SECURITIES AND EXCHANGE COMMISSION
                                 Washington, DC 20549

                                      FORM 10-Q

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

                         For the quarter ended MARCH 31, 1997

                                          OR

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

                    For the transition period from _____ to _____

                            Commission File Number 0-9897

                                 SOLV-EX CORPORATION
                (Exact name of Registrant as specified in its charter)

         NEW MEXICO                                  85-0283729          
(State or other jurisdiction of            (IRS employer identification) 
 incorporation or organization)

                 500 MARQUETTE, NW, SUITE 300, ALBUQUERQUE, NM 87102
                       (Address of principal executive offices)

                                    (505)-243-7701
                 (Registrant's telephone number, including area code)

Former name, former address and former fiscal year, if changed since last 
report:  None

Securities registered pursuant to Section 12(b) of the Act:  None

    Securities registered pursuant to Section 12(g) of the Act:
                        COMMON, CAPITAL STOCK, $.01 PAR VALUE

Indicate by check mark whether the Registrant (1) has filed all reports 
required to be filed by Section 12, 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  XX          NO    
                                   ----            ----

Indicate the number of shares outstanding of each of the Registrant's classes 
of Common Stock, as of the latest practicable date:  Common Stock, $.01 par 
value, 24,339,180 shares outstanding as of May 1, 1997.

<PAGE>
                                 SOLV-EX CORPORATION
                           (DEVELOPMENT STAGE ENTERPRISES)

                                        INDEX

PART I.  FINANCIAL INFORMATION

    Item 1.   Financial Statements:

         Consolidated Balance Sheets,
         March 31, 1997 and June 30, 1996 (Unaudited)                         1

         Consolidated Statements of Operations,
         three months ended March 31, 1997 and 1996,
         nine months ended March 31, 1997 and 1996,
         and Cumulative from Inception (Unaudited)                            2

         Consolidated Statements of Stockholders' Equity,
         nine months ended March 31, 1997 and 
         Cumulative from Inception (Unaudited)                                3

         Consolidated Statements of Cash Flows,                                
         nine months ended March 31, 1997 and 1996,
         and Cumulative from Inception (Unaudited)                          4-5

         Notes to Consolidated Financial Statements
         (Unaudited)                                                        6-9

    Item 2.   Management's Discussion and Analysis of
              Financial Condition and Results of
              Operations.                                                 10-14

PART II. OTHER INFORMATION

         Item 1.   Legal Proceedings                                      15-16

         Item 6.   There were no reports filed on Form 8-K during the quarter
                   ended March 31, 1997.  An 8-K, dated April 2, 1997, was
                   filed on April 18, 1997, reporting under Item 9 sales of
                   equity securities pursuant to regulation D and S.  

Each other item of information required under Part II is inapplicable for the
quarter ended March 31, 1997.

                                       (i)

<PAGE>
                         SOLV-EX CORPORATION AND SUBSIDIARIES
                           (DEVELOPMENT STAGE ENTERPRISES)
                             CONSOLIDATED BALANCE SHEETS

                          MARCH  31, 1997 AND JUNE 30, 1996
                                     (UNAUDITED)
                                                        MARCH 31,     JUNE 30,
                                                         1997          1996   
                                                     ------------   ----------
ASSETS                                               
Current assets:                                      
   Cash and cash equivalents                         $  1,561,199   43,902,567
   Accounts Receivable                                  2,723,513    2,154,135
   Financing Receivable                                 9,459,974          -  
   Deferred financing costs                             1,348,190    1,067,285
   Notes Receivable - stockholder                               -    1,534,950
   Prepaid Expenses                                       531,535    3,390,920
   Other                                                   21,895       44,358
                                                     ------------   ----------
         Total current assets                          15,646,306   52,094,215
                                                     ------------   ----------
Property, plant and equipment at cost:
   Mineral lease                                        1,976,432    1,976,432
   Pilot plant land                                       167,768      167,768
   Buildings                                            8,087,229    2,774,171
   Heavy Equipment                                     10,180,367    5,001,753
   Field and laboratory equipment                       3,657,937    2,124,058
   Furniture, fixtures and leasehold
      improvements                                      1,019,760      398,143
   Construction in process                             64,201,465   14,362,025
                                                     ------------   ----------
                                                       89,290,958   26,804,350
   Less accumulated depreciation                                      
      and amortization                                  2,273,041    1,078,871
                                                     ------------   ----------
      Net property, plant and equipment                87,017,917   25,725,479
                                                     ------------   ----------
Patents, at cost, net of accumulated
   amortization of $68,300  at  
   March 31, 1997, and $47,109 at
   June 30, 1996                                          387,185      364,081
Deferred financing costs                                1,223,633    1,613,353
Other assets, at cost                                   1,176,093      369,710
                                                     ------------   ----------
                                                     $105,451,134   80,166,838
                                                     ------------   ----------
                                                     ------------   ----------
                                                        MARCH 31,     JUNE 30,
                                                         1997          1996   
                                                     ------------   ----------
LIABILITIES AND STOCKHOLDERS' EQUITY                         
Current liabilities:
      Accounts payable and accrued expenses          $ 10,533,563    4,468,605
      Deferred compensation                                99,000       99,000
      Current installments of long-term debt              480,706       25,367
                                                     ------------   ----------
         Total current liabilities                     11,113,269    4,592,972
                                                     ------------   ----------
Long-term debt, excluding current
      installments and including $2 million
      from related party                               47,265,512   33,057,000
                                                     ------------   ----------
         Total liabilities                             58,378,781   37,649,972
                                                     ------------   ----------
Stockholders' equity:
   Common stock, $.01 par value
      Authorized 30,000,000 shares;
      issued and outstanding 24,335,680
      shares at March 31, 1997, and 
      22,846,649 at June 30, 1996                         243,357      228,466
   Additional paid-in capital                          80,509,847   67,556,328
   Unearned compensation                                 (206,250)         -  
   Deficit accumulated during development
      stage                                           (33,474,601) (25,267,928)
                                                     ------------   ----------
         Total stockholders' equity                    47,072,353   42,516,866

   Commitments and contingencies
                                                     ------------   ----------
                                                     $105,451,134   80,166,838
                                                     ------------   ----------
                                                     ------------   ----------

          See accompanying notes to consolidated financial statements.

                                       -1-

<PAGE>

                       SOLV-EX CORPORATION AND SUBSIDIARIES
                         (DEVELOPMENT STAGE ENTERPRISES)
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                    THREE MONTHS ENDED MARCH 31, 1997 AND 1996
                    NINE MONTHS ENDED MARCH 31, 1997 AND 1996
                   AND CUMULATIVE FROM JULY 2, 1980 (INCEPTION)
                                   (UNAUDITED)

<TABLE>
                                              THREE MONTHS ENDED          NINE MONTHS ENDED
                                                    MARCH 31,                  MARCH 31,              CUMULATIVE
                                           -------------------------   -------------------------   FROM JULY 2, 1980
                                               1997          1996          1997          1996         (INCEPTION)
                                           -----------    ----------   -----------    ----------      ------------
<S>                                             <C>          <C>            <C>           <C>              <C>
Revenues:
   Contract fees                           $        -             -    $        -              -      $  5,278,637
   Interest                                     97,140        83,221       796,229       126,117         3,139,096
   Gain on sale of equipment                         -             -             -             -            15,078
   State grant                                       -             -             -             -           407,760
                                           -----------    ----------   -----------    ----------      ------------
                                                97,140        83,221       796,229       126,117         8,840,571
                                           -----------    ----------   -----------    ----------      ------------
Expenses:
   Research and development                  1,092,374       811,954     3,792,315     2,123,512        23,179,885
   Research and development
      funded by others                               -             -             -             -        (2,032,956)
   General and administrative                1,100,631       495,814     3,438,761     1,220,678        17,578,944
   Interest expense, net of $1,501,230         
      capitalized during the period
      ended 1997, and $1,452,541
      during the period ended 1996             779,400             -     1,771,826             -         2,255,766
   Write-off of mineral lease                        -             -             -             -         1,447,453
                                           -----------    ----------   -----------    ----------      ------------
                                             2,972,405     1,307,768     9,002,902     3,344,190        42,429,092
                                           -----------    ----------   -----------    ----------      ------------
Minority interest in loss
   of subsidiary                                     -             -             -             -           113,920
                                           -----------    ----------   -----------    ----------      ------------
   Net (loss)                              $(2,875,265)   (1,224,547)  $(8,206,673)   (3,218,073)     $(33,474,601)
                                           -----------    ----------   -----------    ----------      ------------
                                           -----------    ----------   -----------    ----------      ------------
Weighted average number of
   common shares outstanding                23,274,269    21,213,722    20,543,624    21,213,722        14,697,777
                                           -----------    ----------   -----------    ----------      ------------
                                           -----------    ----------   -----------    ----------      ------------
(Loss) per common share                    $     (0.12)        (0.06)  $     (0.40)        (0.15)     $      (2.28)
                                           -----------    ----------   -----------    ----------      ------------
                                           -----------    ----------   -----------    ----------      ------------
</TABLE>


See accompanying notes to consolidated financial statements.


                                                     -2-

<PAGE>

                         SOLV-EX CORPORATION AND SUBSIDIARIES
                           (DEVELOPMENT STAGE ENTERPRISES)
                   CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                     FOR THE PERIOD FROM JULY 2, 1980 (INCEPTION)
                                THROUGH MARCH 31, 1997
                                     (UNAUDITED)
<TABLE>
                                                                                                         DEFICIT
                                                                                                       ACCUMULATED
                                          PRICE          COMMON STOCK        ADDITIONAL     UNEARNED      DURING
                                           PER       ---------------------    PAID-IN       COMPEN-    DEVELOPMENT
                                          SHARE        SHARES      AMOUNT     CAPITAL        SATION       STAGE           TOTAL
                                          -----      ----------   --------   ----------     --------   -----------        -----
<S>                                       <C>        <C>          <C>        <C>           <C>         <C>             <C>
Balance at June 30, 1996                             22,846,649   $228,466   $67,556,328   $       -   $(25,267,928)   $42,516,866

Issued to employees as compensation                           -          -       288,750    (206,250)             -         82,500
                                                                              
Issued to individual as compensation                                          
  July 1, 1996 through September 30, 
   1996                                  4.92-8.00       25,653        257       179,868           -              -        180,124
  October 1, 1996 through December 31, 
   1996                                  6.94-7.66        4,900         49        35,845           -              -         35,894
  January 1, 1997 through March 31, 
   1997                                 10.625-17.50      7,166         72       112,532           -              -        112,603
                                                                                                 
Due to GFL Advantage per private 
 placement agreement                            -             -          -      (847,462)          -              -       (847,462)
                                                                                                 
Converted Debentures                                                                             
  January 31, 1997                                      283,402      2,834     3,330,166           -              -      3,333,000
  February 25, 1997                                     139,761      1,398     1,761,935           -              -      1,763,333
  March 31, 1997                                        887,264      8,874     7,894,794           -              -      7,903,668
                                                                                                 
Stock options exercised:                                                                         
  August 12, 1996                        1.500           15,600        156        23,244           -              -         23,400
  September 3, 1996                      2.560              500          5         1,275           -              -          1,280
  September 20, 1996                     2.56-8.53       12,500        125        91,575           -              -         91,700
  September 24, 1996                     2.560           12,500        125        31,875           -              -         32,000
  October 7, 1996                        2.560            5,000         50        12,750           -              -         12,800
  October 16, 1996                       2.560            5,000         50        12,750           -              -         12,800
  December 18, 1996                      2.560            1,000         10         2,550           -              -          2,560
  January 30, 1997                       2.560            1,000         10         2,550           -              -          2,560
  January 30, 1997                       9.060            2,000         20        18,100           -              -         18,120
  March 31, 1997                         2.560              500          5         1,275                                     1,280
                                                                                                 
                                                                                                 
                                                                                                 
Stock options exercised with stock:                                                              
  October 17, 1996                       1.500           85,285        853          (853)          -              -              -


Net (loss)                                                    -          -             -           -     (8,206,673)    (8,206,673)
                                                     ----------   --------   -----------   ---------   ------------    -----------
Balance at March 31, 1997                            24,335,680   $243,357   $80,509,847   $(206,250)  $(33,474,601)   $47,072,353
                                                     ----------   --------   -----------   ---------   ------------    -----------
                                                     ----------   --------   -----------   ---------   ------------    -----------
</TABLE>

See accompanying notes to consolidated financial statements.


                                       -3-

<PAGE>
                         SOLV-EX CORPORATION AND SUBSIDIARIES
                           (DEVELOPMENT STAGE ENTERPRISES)
                  CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                      NINE MONTHS ENDED MARCH 31, 1997 AND 1996
                     AND CUMULATIVE FROM JULY 2, 1980 (INCEPTION)
<TABLE>
                                                                           NINE MONTHS ENDED
                                                                                MARCH 31                   CUMULATIVE
                                                                   --------------------------------     FROM JULY 2, 1980
                                                                       1997                 1996            (INCEPTION) 
                                                                   ------------         -----------       --------------
<S>                                                                <C>                  <C>               <C>
Cash flows from operating activities:                                 
 Net loss                                                          $ (8,206,673)        $(3,218,073)       $(25,267,928)
 Adjustments to reconcile net loss to net cash used                                                                     
   by operating activities:                                                                                            
     Depreciation and amortization                                    1,215,361             145,928           1,369,577
     Amortization of Financing Costs                                    659,997                  -                     
     Write-off of mineral leases and other                                    -                  -            1,505,541
     Gain on sale of equipment                                                -                  -              (15,078)
     Issuance of stock, warrants, and options for                             - 
        services performed                                              411,121             127,959           2,416,417 
     Minority interest in loss of subsidiary                                  -                   -            (113,920)
     Changes in certain assets and liabilities:                                                                         
          Receivables and other assets                               (6,272,552)           (401,172)         (7,122,971)
          Accounts payable and accrued expenses                       5,217,496             790,293           4,459,385
          Accrued deferred interest                                           -                   -             167,260
          Deferred compensation                                               -                   -             370,250
                                                                   ------------         -----------       -------------
             Net cash provided by (used for) operating activities    (6,975,250)         (2,555,065)        (22,231,467)
                                                                   ------------         -----------       -------------
Cash flows from investing activities:                                                                                   
 Proceeds from short-term investments                                         -                   -           2,296,745
 Additions to property, plant and equipment                         (62,486,608)         (5,455,839)        (27,119,747)
 Proceeds from sale of equipment                                              -                   -              15,078
 Expenditures for short-term investments                                      -                   -          (2,100,000)
 Cash acquired in excess of payment for the purchase                                                 
   of a majority interest in Can-Amera Oil Sands, Inc.                        -                   -              97,976
 Expenditures for Patents                                               (44,295)            (41,149)           (405,886)
 Expenditures for other                                                (697,568)                  -            (256,569)
                                                                   ------------         -----------       -------------
             Net cash (used for) investing                                                                              
               activities                                           (63,228,471)         (5,496,988)        (27,472,403)
                                                                   ------------         -----------       -------------
Cash flows from financing activities:                                                                                   
 Proceeds from issuance of short and long-term debt                  26,540,886             165,938          34,515,282
 Proceeds from loan from stockholder                                  2,000,000           1,000,000                   -
 Proceeds from issuance of common stock                              13,198,502          43,710,541          63,227,522
 Principal payments on short and long-term debt                     (13,877,035)           (511,823)         (1,416,016)
 Payment of costs associated with proposed financing                          -            (120,249)         (2,738,726)
 Other                                                                        -                   -              18,375
                                                                   ------------         -----------       -------------
          Net cash provided by financing activities                  27,862,353          44,244,407          93,606,437
                                                                   ------------         -----------       -------------
Change in cash and cash equivalents                              $  (42,341,368)        $36,192,354       $  43,902,567
                                                                   ------------         -----------       -------------
                                                                   ------------         -----------       -------------
</TABLE>
                                                                     (continued)

                                     -4-

<PAGE>
                         SOLV-EX CORPORATION AND SUBSIDIARIES
                           (DEVELOPMENT STAGE ENTERPRISES)
                  CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                      NINE MONTHS ENDED MARCH 31, 1997 AND 1996
                     AND CUMULATIVE FROM JULY 2, 1980 (INCEPTION)
<TABLE>
                                                                           NINE MONTHS ENDED                   
                                                                                MARCH 31                   CUMULATIVE
                                                                   --------------------------------     FROM JULY 2, 1980
                                                                       1997                 1996            (INCEPTION) 
                                                                   ------------         -----------       --------------
<S>                                                                <C>                  <C>               <C>
Change in cash and cash equivalents                               $ (42,341,368)        $36,192,354       $  43,902,567

Cash and cash equivalents at beginning of period                     43,902,567             854,719                   -
                                                                   ------------         -----------       -------------

Cash and cash equivalents at end of period                        $   1,561,199         $37,047,073       $  43,902,567
                                                                   ------------         -----------       -------------
                                                                   ------------         -----------       -------------
Supplemental disclosure of cash flow information:                     
   Interest paid                                                  $      18,438         $    34,270       $     217,937
                                                                   ------------         -----------       -------------
                                                                   ------------         -----------       -------------
 Noncash investing and financing activities:                          
 Issuance of stock for minerals lease                             $           -         $         -       $     281,000
                                                                   ------------         -----------       -------------
                                                                   ------------         -----------       -------------
 Acquisition of controlling interest in                               
   Can-Amera Oil Sands, Inc. for cash of $150,000 and 75,000
   shares of common stock valued at $122,250.  In conjunction
   with the acquisition, liabilities were assumed as follows:
     Fair value of assets acquired                                $           -         $         -       $  1,659,211
     Cash and stock paid for capital stock                                    -                   -           (272,250)
     Minority interest                                                        -                   -           (113,920)
                                                                   ------------         -----------       -------------
     Liabilities assumed                                          $           -         $         -       $  1,273,041
                                                                   ------------         -----------       -------------
                                                                   ------------         -----------       -------------

 Issuance of stock for deferred compensation                      $           -         $         -       $    271,250
                                                                   ------------         -----------       -------------
                                                                   ------------         -----------       -------------
 Issuance of subsidiary stock for redemption
   of Can-Amera notes                                             $           -         $         -       $  1,447,980
                                                                   ------------         -----------       -------------
                                                                   ------------         -----------       -------------
</TABLE>


        See accopmpanying notes to consolidated financial statements.


                                     -5-

<PAGE>

                         SOLV-EX CORPORATION AND SUBSIDIARIES
                           (DEVELOPMENT STAGE ENTERPRISES)

                      Notes to Consolidated Financial Statements
                                     (Unaudited)


(1)  BASIS OF NOTE PRESENTATION

The notes to the consolidated financial statements do not present all
disclosures required under generally accepted accounting principles but instead,
as permitted by Securities and Exchange Commission regulations, presume that
users of the interim financial statements have read or have access to the June
30, 1995, audited consolidated financial statements and that the adequacy of
additional disclosure needed for a fair presentation may be determined in that
context.

The accompanying consolidated interim financial statements include all
adjustments which are, in the opinion of management, necessary to fair
presentation of the consolidated results of operations for the periods
presented.  All such adjustments are of a normal recurring nature.


(2)  LEASE COMMITMENTS

The Company has leased certain facilities and heavy equipment under agreements
which are classified as either operating or capital leases. 

At March 31, 1997, future minimum annual rental commitments under lease
obligations are as follows:

                               Capital                        Operating
                               Lease                            Lease
-----------------------------------------------------------------------
June 30, 1997                $207,335                          $713,846
June 30, 1998                 207,335                           492,350
June 30, 1999                 207,335                           405,049
June 30, 2000                 207,335                           245,360

(3)  DEBT

The Company has entered into certain debt financing, consisting of a capital
lease, referred to in footnote 2 above, and certain short term insurance premium
financing with a balance of $81,485 as of March 31, 1997.  The insurance
financing carries a Canadian annual rate of interest of 5.33 percent, and
terminates in June, 1997.  During March, 1997, the Company entered into
additional short term insurance premium financing with a balance of $118,066 as
of March 31, 1997, and carries a Canadian annual rate of interest of 4.50
percent, and terminates in February, 1998.       


                                    -6-

<PAGE>

                         SOLV-EX CORPORATION AND SUBSIDIARIES
                           (DEVELOPMENT STAGE ENTERPRISES)

                      Notes to Consolidated Financial Statements
                                     (Unaudited)

In October, 1996, the Company acquired a 3,782 square foot office building in
Albuquerque, New Mexico, to allow for the expansion of technical and
professional staff.  The Company acquired the building for $249,305, of which
$108,000 was financed by a mortgage payable to private individuals.  The debt is
payable in monthly installments of $1,383, bears interest at a rate of 9.25%,
and matures October 31, 2006.  The debt is secured by the acquired land and
building.       

On November 15, 1996, the Company issued $13 million in debt which was
convertible into common stock of the Company at the option of the holder at a
price which is equal to the lesser of $14.50 per share or 82% of the closing bid
price per share at a date immediately preceding the date of the conversion.  As
of March 31, 1997, the entire $13 million of debt had been converted by debt
holders into common stock of the Company, pursuant to the conditions of the
agreement.

As of March 31, 1997, the Company agreed to issue $12 million in debentures 
which are convertible into shares of Common Stock.  The Company received $12 
million over the period through April 11, 1997. The Company has recorded the 
$12 million obligation as outstanding on March 31, 1997, with a related 
receivable for the amounts of the debentures, less fees.  Approximately $2 
million of the debentures were purchased by Solv-Ex Chairman and CEO John S. 
Rendall.  Pursuant to the subscription agreements, an additional $10 million 
through issuance of additional debentures, will be due in installments of $5 
million each from one of the investors on the 20th and 40th days respectively 
after a registration statement to be filed with respect to the debentures and 
underlying shares has become effective.  The debentures are convertible at a 
price which is equal to the lesser of 120% of market price per share on the 
date of issuance or 80% of the closing bid price per share at a date 
immediately preceding the date of conversion.  The debentures mature on March 
31, 1999 and bear interest at 5% per annum payable in arrears at maturity. 
The company can require conversion of the debentures in certain 
circumstances. 

Principal maturities of long-term debt at each of the next five years are as
follows:

YEAR ENDED  MARCH 31,
---------------------
1998                        $   624,125
1999                         13,253,911
2000                         33,462,772
2001                            333,580
thereafter                       10,356



                                    -7-

<PAGE>

                         SOLV-EX CORPORATION AND SUBSIDIARIES
                           (DEVELOPMENT STAGE ENTERPRISES)

                      Notes to Consolidated Financial Statements
                                     (Unaudited)


As a condition of one of its long-term financings, the Company is required under
covenant to maintain certain financial ratios on a quarterly basis. As of March
31, 1997 the Company may be in non-compliance with one of the financial ratios
required in the debt covenants and has requested either a waiver or
clarification from the lender with respect to that covenant.  The Company has
yet to receive a response from the lender with regards to the request.  The
Company has not shown the debt as current, as under the terms of its most recent
financing, the Company can require debenture holders to convert their debt to
common stock of the Company and thereby cure any non-compliance issues with debt
company. 

(4)  CONTINGENCY

The Company had terminated a contract with Fort McKay Metis Corporation 
("FMMC")and refused payment of certain invoices on the grounds that the 
invoice were excessive and unsubstantiated.  FMMC filed a Cdn$3,825,388 lien 
against the Company's oil sands lease as a result of the withheld payments 
and commenced an action for collection in the Province of Alberta courts.  A 
confidential settlement was reached on April 2, 1997.  Although the matter is 
settled, the settlement agreement provides for payment over several months, 
and therefore the action will remain of record until the Company completes 
the payment schedule, whereupon the lien will be released and the cause will 
be dismissed.

(5)  LEGAL PROCEEDINGS
    
The Company and certain officers of the Company are defendants in legal matters
pending in various jurisdictions.  The matters do not specify any amount of
damages.  The Company intends to vigorously defend the actions and believes that
the allegations made against the Company and its officers are without merit.

(6)  SUBSEQUENT EVENTS

Subsequent to December 31, 1996, a limited partnership agreement was formalized
by Solv-Ex Canada Limited, a wholly-owned Canadian subsidiary of the Company,
and United Tri-Star Resources Ltd. ("UTS").  The partnership will be engaged in
the operation and management of the facility currently under construction on the
Bitumount Lease.  UTS will hold a 10% interest in the partnership, with the
remaining partnership interest being held by a wholly-owned Canadian subsidiary
of the Company.


                                    -8-

<PAGE>

                         SOLV-EX CORPORATION AND SUBSIDIARIES
                           (DEVELOPMENT STAGE ENTERPRISES)

                      Notes to Consolidated Financial Statements
                                     (Unaudited)


To date, the Company has received approximately $7.0 million from UTS as payment
of its portion of the construction costs of the initial stage plant pursuant to
the terms of the partnership agreement.












                                     -9-

<PAGE>

                    SOLV-EX CORPORATION AND SUBSIDIARIES
                      (DEVELOPMENT STAGE ENTERPRISES)

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE
COMPANY'S FINANCIAL STATEMENTS AND NOTES THERETO.  INFORMATION DISCUSSED HEREIN,
AS WELL AS OTHER ITEMS OF THE QUARTERLY REPORT ON FORM 10-Q, MAY INCLUDE
FORWARD-LOOKING STATEMENTS REGARDING FUTURE EVENTS OR THE FINANCIAL PERFORMANCE
OF THE COMPANY, AND ARE SUBJECT TO A NUMBER OF RISKS AND OTHER FACTORS WHICH
COULD CAUSE THE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY
FORWARD-LOOKING STATEMENTS.  AMONG SUCH FACTORS ARE:  GENERAL BUSINESS AND
ECONOMIC CONDITIONS; NO REVENUES FROM OPERATIONS; COMMODITY PRICING; NEED FOR
ADDITIONAL FINANCING; THE COMPANY'S STATUS AS A DEVELOPMENT STAGE COMPANY; RISKS
INVOLVED IN COMMERCIALIZING THE TECHNOLOGY; THE COMPANY'S OVERALL ABILITY TO
DESIGN, CONSTRUCT AND OPERATE THE INITIAL STAGE PLANT ON A TIMELY BASIS AND THE
ABILITY OF THE PLANT TO PERFORM IN ACCORDANCE WITH EXPECTATIONS; COMPETITION;
LACK OF OR CHALLENGES TO PATENT PROTECTION OF KEY PROCESSES; POTENTIAL INABILITY
TO COMPLY WITH GOVERNMENT ENVIRONMENTAL REGULATIONS; DEPENDENCE ON KEY
PERSONNEL; HIGH VOLATILITY OF SHARE PRICE; LITIGATION IN WHICH THE COMPANY IS
CURRENTLY INVOLVED; AND OTHER RISK FACTORS LISTED FROM TIME TO TIME IN DOCUMENTS
FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION.

OPERATIONS

Research and development expenditures for the quarter and nine months ended
March 31, 1997, of $1,092,374 and $3,792,315, respectively, compared to the same
periods a year ago, reflect costs associated with continued refinement of the
bitumen and minerals extraction process from tar sands and tar sands tailings,
development of the electrolytic cell for the production of aluminum metal and
development costs associated with TiO2S. Included in research and development
expenses are non-cash compensatory expenses of $126,978 and $357,371, for the
three and nine month periods ended March 31, 1997.

General and administrative expense for the quarter and nine months ended March
31, 1997, were $1,100,631 and $3,438,761, respectively, compared to $495,814 and
$1,220,678 for the same periods in 1996.  Increases in 1997 from 1996 result
from significant legal expenditures associated with certain litigation (see Part
II - Other Information, Item 1),  additions to personnel needed as construction
activities on the Bitumount Lease increase, and normal salary adjustments. 
Included in general and administrative expenses are non-cash compensatory
expenses of $26,875 and $53,750, for the three and nine month periods ended
March 31, 1997.


                                     -10-

<PAGE>

                    SOLV-EX CORPORATION AND SUBSIDIARIES
                      (DEVELOPMENT STAGE ENTERPRISES)

Interest expense increased over the prior period as a result of project
financing.  Interest expense included non-cash amounts of $48,689 and
$1,501,230, for the three and nine month periods ended March 31, 1997 to record
the amortization of financing costs.

The Company recorded a net loss of $2,875,265 and $8,206,673 for the three and
nine months ended March 31, 1997, respectively. These compare to a net loss of
$1,224,547 and $3,218,073 for the same periods ended March 31, 1996. The 1997
net losses are substantially greater than the losses in the previous year
because of the increased level of corporate activities during the periods ended
March 31, 1997, including continued construction activity on the Bitumount Lease
and expanded research and development efforts at the pilot plant.

Revenues were generated from interest earned on cash balances. Interest income
for the three and nine months ended March 31, 1997 was $97,140 and $796,229,
respectively.

LIQUIDITY AND CAPITAL RESOURCES

The primary requirement for working capital is to fund the continuing
construction of the initial stage plant and the acquisition of heavy equipment
and processing equipment to be used in association with the Company's
anticipated commercial oil sands processing.

The Company's net working capital was $4,533,037 at March 31, 1997, compared 
to working capital of $47,501,243 at June 30, 1996. Expenditures exceeding 
$62.5 million for property, plant and equipment, account for a majority of 
the working capital used during the nine months ended March 31, 1997.  
Included in the $62.5 million is $49.8 million spent on site preparation, 
detailed engineering and procurement associated with the construction of the 
initial stage plant on the Bitumount Lease, and $5.3 million for buildings 
located on the Bitumount Lease and staging area sites.  An additional $5.2 
million has been spent to acquire heavy equipment to be used in the 
construction effort, and will be used in commercial operations on the 
Company's Bitumount Lease.

On November 15, 1996, the Company issued $13 million in debt which is
convertible into Common Stock of the Company at a price which is equal to the
lesser of $14.50 per share or 82% of the closing bid price per share at a date
immediately preceding the date of the conversion.  As of March 31, 1997, the
entire debt had been converted into common stock of the Company pursuant to the
conditions of the agreement.


                                     -11-

<PAGE>

                    SOLV-EX CORPORATION AND SUBSIDIARIES
                      (DEVELOPMENT STAGE ENTERPRISES)

As of March 31, 1997, the Company agreed to issue $12 million in debentures 
which are convertible into shares of Common Stock.  The Company received 
approximately $12 million over the period through April 11, 1997.  The 
Company has reflected the $12 million obligation as outstanding on March 31, 
1997, with a related receivable for the amount of the debentures, less fees.  
Approximately $2 million of the debentures were purchased by Solv-Ex Chairman 
and CEO John S. Rendall.  Pursuant to the subscription agreement, an 
additional $10 million through issuance of additional debentures, will be due 
in installments of $5 million each from one of the investors on the 20th and 
40th days respectively after a registration statement to be filed with respect 
to the debentures and underlying shares has become effective.  The debentures 
are convertible at a price which is equal to the lesser of 120% of market 
price per share on the date of issuance or 80% of the closing bid price per 
share at a date immediately preceding the date of conversion.  The debentures 
mature on March 31, 1999 and bear interest at 5% per annum payable in arrears 
at maturity.  The company can require conversion of the debentures in certain 
circumstances. 

As a condition of one of its long-term financings, the Company is required 
under covenant to maintain certain financial ratios on a quarterly basis. As 
of March 31, 1997 the Company may not be in compliance with one of the 
financial ratios required in the debt covenants and has requested either a 
waiver or clarification from the lender with respect to that covenant.  The 
Company has yet to receive a response from the lender with regards to the 
request.  The Company has not shown the debt as current, as under the terms 
of its most recent financing, the Company can require debenture holders to 
convert their debt to common stock of the Company and thereby cure any 
non-compliance issues with debt company. 

Pursuant to the limited partnership agreement between Solv-Ex Canada Limited, a
wholly-owned Canadian subsidiary of the Company, and United Tri-Star Resources
Ltd. ("UTS") the Company has received approximately of $7.0 million from UTS as
payment of its portion of the costs of the initial stage plant.  The partnership
will be engaged in the operation and management of the facility currently under
construction on the Bitumount Lease.  UTS will hold a 10% interest in the
partnership, with the remaining partnership interest being held by a
wholly-owned Canadian subsidiary of the Company.


                                     -12-

<PAGE>

                    SOLV-EX CORPORATION AND SUBSIDIARIES
                      (DEVELOPMENT STAGE ENTERPRISES)

The Company continues to record a receivable from UTS for 10% of the project
costs, along with certain monthly operating expenditures.  Payment by UTS for
these expenditures allows UTS to maintain its 10% working interest in the
development of the Company's co-production process and associated projects using
the Company's technology.  

As of March 31, 1997, total cash and receivables, including Canadian sales tax
refunds and funds due from UTS, totaled over $13.7 million.

The Company is in the process of commissioning and testing the first module 
of the initial stage plant, as well as completing ancillary construction 
matters in connection therewith.  Although the Company has experienced normal 
difficulties in commissioning and start-up, management believes that testing 
to date has established that the primary bitumen extraction equipment has 
performed at least as well as expected.  Testing to date has also indicated 
that certain modifications should be made to the water recirculation circuit 
for the purpose of simplifying removal of fine clays from process water, 
which was planned to occur in a large clarifier vessel after primary 
extraction.  The Company is implementing these modifications which, if 
successful, will reduce the amount of capital required to expand the 
facility, and will simplify the operation and permit better control of the
water circuit when processing lower grades of ore containing a higher percentage
of the fine clays.

The Company believes that most of the difficulties encountered in 
commissioning and start-up, which are not considered serious, result from not 
having a co-generation utilities plant in place to provide required 
electricity and by-product heat for generation of steam.  Commissioning 
operations have been conducted to date with back-up boilers fired by diesel 
fuel and with electric power purchased from Alberta Power Company.  The 
Company is working towards completion of natural gas hook-ups and 
installation of its large boiler in order to provide steam at higher pressure 
and temperature than the steam produced by the back-up boilers, which will 
facilitate continuous operations.  However, continuous operation of the 
extraction process can be demonstrated, if required, before these items of 
work have been completed.

The Company believes that demonstration of the bitumen extraction technology 
on a continuous basis in the commercially sized module currently being 
commissioned is extremely important for the purposes of (i) obtaining 
additional capital which will be required to complete and expand the plant 
and (ii) providing data to complete a feasibility study to significantly 
expand the plant.  In this regard, the Company and UTS are actively seeking 
financial partners to participate in expanded operations.

The Company also believes that it will be necessary to raise additional 
capital to complete the current commissioning and testing program in view of 
changes being made to the plant as described above and additional 
construction work being completed.  Solv-Ex is currently in the process of 
completing a revised estimate of the cost and time required to complete these 
programs.  There can be no assurance that the additional funding will be 
available.  The Company announced on April 30, 1997, that its objective was 
to establish continuous operations by the end of May, 1997.  However, minor 
delays in ordering and receiving necessary parts for the equipment required 
to complete the modifications to the water recirculation circuit, as well as 
other work proceeding slower than expected, could extend this target into 
mid-June.

The Company also believes its previously announced plans for expanding 
production to 15,000 barrels per day of pipelineable oil could change as a 
result of recent public announcements by and discussions with two pipeline 
companies which have stated their intentions to construct new common carrier 
pipeline capacity into the area north of Fort McMurray as early as late 1998. 
If these plans proceed as described, Solv-Ex has announced that it will 
endeavor to proceed with a much larger expansion (to 80,000 barrels per day) 
supported by a feasibility study based upon the results of continuous 
operation at the initial stage plant.

In this event, of which there can be no assurance, Solv-Ex does not believe 
that installation of the utilities plant and upgrader for the 15,000 barrel 
per day facility would be warranted because of: (i) the estimated cost -- 
previously reported at approximately $50 million; (ii) the utilities plant 
and upgrader could not be readily expanded to accommodate the larger plant; 
and (iii) the limited period of operation before the larger plant came on 
line would not justify the additional capital expenditure even if required to 
generate or enhance operating cash flow during the interim.  In addition, 
expenditure of capital required for truck haulage and tankage at 15,000 
barrels per day cannot be justified if pipeline capacity will be available as 
announced and operations at a lower level will probably be required within 
the limits of available haulage equipment and tankage.

The Company will evaluate all alternatives available to it upon completion of 
the current test program before making final decisions.

While the Company plans to undertake expansion of the initial stage oil plant
and complete the minerals extraction plant during 1997, its ability to do so
will depend upon the availability of additional capital and, to a large extent,
upon the successful operation of the initial stage plant.  Although there can be
no assurance that any additional financing can be arranged or arranged upon
acceptable terms and conditions, the Company believes it will be able to do so
through a combination of 


                                     -13-

<PAGE>

                    SOLV-EX CORPORATION AND SUBSIDIARIES
                      (DEVELOPMENT STAGE ENTERPRISES)

efforts or methods, including joint ventures, licensing agreements for the 
Company's technology, equity investors (public or private), venture capital 
groups, institutions, issuance of convertible or subordinated debt or a form 
of business combination, as well as operating cash flow which may be derived 
from the initial stage bitumen plant.
















                                     -14-

<PAGE>

                         SOLV-EX CORPORATION AND SUBSIDIARIES
                           (DEVELOPMENT STAGE ENTERPRISES)


                             PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company and certain officers of the Company are defendants in securities 
actions pending in the federal courts of New York and in the state courts of 
New Mexico.  In October 1996, the Company was served with a complaint in the 
SEDITA V. SOLV-EX CORPORATION, BUTLER, CAMPBELL, RENDALL AND DEUTSCHE MORGAN 
GRENFELL, INC., case #96CIV7575, U.S. District Court, Southern District of 
New York, and in December 1996, the Company was also served with a complaint 
in JOSEPH B. GROSSMAN AND STEPHEN DISCH V. BUTLER, RENDALL, CAMPBELL, 
DEUTSCHE MORGAN GRENFELL, INC., CHARLES MAXWELL, AND SOLV-EX CORPORATION, 
case #96CIV8744, United States District Court, Southern District of New York. 
On December 23, 1996 the New York federal court consolidated the two actions. 
The amended complaint in the consolidated action alleges, among other things, 
damage to shareholders of the Company by acts or conduct of the Company and 
its officers in violation of Section 10(b) of the Securities Exchange Act of 
1934 and Rule 10b-5 promulgated thereunder, and the New Mexico Securities Act 
and negligent misrepresentation.  The plaintiffs ask that the court accord class
action status to purchasers of the Company's common stock between February 
15, 1995 and September 30, 1996. Two similar actions were filed in U.S. 
District Court, District of New Mexico, and served upon the Company in 
November, 1996.  These two cases, FOURNIER V. SOLV-EX CORPORATION, BUTLER, 
CAMPBELL, RENDALL AND DEUTSCHE MORGAN GRENFELL, INC., case #CIV961526JC, and 
BOYER V. SOLV-EX CORPORATION, RENDALL AND DEUTSCHE MORGAN GRENFELL, INC., case 
#CIV96602JC, have been dismissed without prejudice. Plaintiffs in those 
actions have joined the pending consolidated actions in the U.S. District 
Court, Southern District of New York. 

In November 1996, the Company was served with a complaint in MURKEN V. 
SOLV-EX CORPORATION, RENDALL, BUTLER, DEUTSCHE MORGAN GRENFELL, INC., case 
CV9609869, Second Judicial District, Bernalillo County, New Mexico, in which 
plaintiffs seek class action treatment for purchasers of the Company's shares 
between February 15, 1995 and September 10, 1996, alleging that shareholders 
suffered damage as a result of violations of New Mexico securities laws and 
negligent misrepresentation.

In December 1996, the Company was served with a complaint in PHOENIX PACIFIC
PROPERTIES, LTD., JOHN C. PADELFORD III AND PATRICIA J. PADELFORD V. SOLV-EX
CORPORATION, RENDALL, AND CAMPBELL, case #CV96-20453, Superior Court, Maricopa
County, Arizona.  The plaintiffs allege violation of the Arizona Securities Act,
fraud, consumer fraud, negligent 


                                    -15-

<PAGE>

                         SOLV-EX CORPORATION AND SUBSIDIARIES
                           (DEVELOPMENT STAGE ENTERPRISES)


misrepresentation, and breach of contract resulting from the Plaintiffs' 
purchase of shares of Solv-Ex common stock in the open market and in a 
private placement directly from Solv-Ex.

None of the foregoing actions specifies the amount of damages requested.  The 
Company has only recently received the complaints and the proceedings are 
only in the initial stages of response and discovery.  The Company intends to 
vigorously defend the actions filed against it and believes that the 
allegations made against the Company and its officers  are without merit.

On May 12, 1997 the Company was served with a claim by Comco Pipe & Supply 
Company, a division of Russel Metals, Inc. for unpaid equipment charges in 
the courts of Alberta Province, Canada seeking the amount of CDN $112,901.02 
and foreclosure of a builders' lien. The Company is evaluating the claim and 
has made no evaluation of its validity.

The Company  brought an action,  SOLV-EX CORPORATION V. QUILLEN, QUILCAP
CORPORATION, ZWEIG, ZWEIG ADVISORS, WEIR JONES ENGINEERING CONSULTANTS, LTD.,
Cause # 96-6057(JSR), United States District Court, Southern District of New
York, on August 9, 1996.  The Company's complaint alleges, among other things,
defendants breach of Confidentiality Agreements, interference with prospective
economic advantage, fraud, breach of trust and unjust enrichment, and defendants
used information gained from the Company to damage the Company and further their
own short selling schemes.  Damages in excess of $12,000,000 are sought.  The
action is in the early stages of discovery and the Company is unable to predict
the outcome of the litigation, except that to date discovery has supported the
Company's position concerning the conduct of defendants.









                                    -16-

<PAGE>


                                      SIGNATURES

Pursuant to 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.


                                                           SOLV-EX CORPORATION 
                                                                  (Registrant)


                                                        By /s/ John S. Rendall
                                                          --------------------
                                      John S. Rendall, Chief Executive Officer 


                                                        By /s/ J. Brad Steward
                                                           -------------------
                                           J. Brad Steward, Vice-President and
                                                       Chief Financial Officer


DATE:  May 14, 1997











                                    -17-