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Securities and Exchange Commission

Washington, D.C. 20549


FORM l0-Q

Quarterly Report Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934


(Mark one)

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

For the quarterly period ended  December 31, 2001   or

|       |  |                                                                                         
|------ |  | ----------------------------------------------------------------------------------------
|[    ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR l5(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from    to

Commission File Number  0-16097


BAY RESOURCES LTD

(Exact name of Registrant as specified in its charter)

|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Delaware                                                       |  | 98-0079697                       
|                                                               |  |                                  
|(State or other jurisdiction of
incorporation or organisation) |  | (IRS Employer
Identification No.)

210 Kings Way South Melbourne, Victoria, 3205 Australia

(Address of principal executive offices)                    (Zip Code)


Registrants telephone number, including area
code  0ll (613) 9234 - 1100

Securities registered pursuant to Section 12(b) of the Act :

|                    |  |                      
|------------------- |  | ---------------------
|                    |  | Name of each exchange
|Title of each class |  | on which registered  
|                    |  |                      
|                   
|                   
|                   
|                   
|N/A                 |  | N/A                  

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $.0001 per share


(Title of Class)


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

Yes  X    No


APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:


Indicate by check mark whether the restraint has filed all documents and
reports required to be filed by Section 12,13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.

Yes      No


APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date. There were 6,347,089
outstanding shares of Common Stock as of December 31, 2001.





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TABLE OF CONTENTS



|           |                                                                                               |  |  |  |  |  |  | 
|---------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART 1    
|           | Item 1. FINANCIAL STATEMENTS                                                                 
|           | Consolidated Balance Sheets                                                                  
|           | Consolidated Statements of Operations                                                        
|           | Consolidated Statements of Stockholders Equity                                              
|           | Consolidated Statements of Cash Flows                                                        
|           | Notes to Consolidated Financial Statements                                                   
|           | Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|           | Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                          
|PART II   
|SIGNATURES



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##### Table of Contents






PART 1

FINANCIAL INFORMATION




Item 1.  FINANCIAL STATEMENTS

Introduction to Interim Financial Statements.

The interim financial statements included here in have been prepared by
Bay Resources Ltd. (the Company) without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission (The Commission).
Certain information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the information
presented not misleading. These interim financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Companys Annual Report on Form 10-K for the year ended June 30 2001.

In the opinion of management, all adjustments, consisting of normal
recurring adjustments and consolidating entries, necessary to present fairly
the consolidated financial position of the Company and subsidiaries as of
December 31, 2001 and December 31, 2000, the results of its consolidated
operations for the three and six month periods ended December 31, 2001 and
December 31, 2000, and the changes in its consolidated cash flows for the three
and six month periods ended December 31, 2001 and December 31, 2000, have been
included. The results of consolidated operations for the interim periods are
not necessarily indicative of the results for the full year.

UNLESS OTHERWISE INDICATED, ALL FINANCIAL INFORMATION PRESENTED IS IN
AUSTRALIAN
DOLLARS.





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##### Table of Contents






BAY RESOURCES LTD. AND SUBSIDIARY

Consolidated Balance Sheets


December 31, 2001 and June 30, 2001


and December 31, 2000


(Unaudited)


|                                                                                              |                                      |        |         |          |  |          |         |          |  |   |         |   |  | 
|--------------------------------------------------------------------------------------------- | ------------------------------------ | ------ | ------- | -------- |  | -------- | ------- | -------- |  | - | ------- | - |  | 
|                                                                                              |                                      |        |         | A $000's |  | A $000's |         | A $000's
|                                                                                              |                                      |        |         | Dec 31   |  | June 30  |         | Dec 31  
|                                                                                              |                                      |        |         | 2001     |  | 2001     |         | 2000    
|                                                                                              |                                      |        |         |          |  |          |         |         
|                                                                                              |                                      | ASSETS |         |          |  |          |         |          |  |   |         |   |  | 
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Current Assets:                                                                               |                                      |        |         |          |  |          |         |          |  |   |         |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Cash                                                                                          |                                      | $      | 3       |          |  | $        | 1       |          |  | $ | 8       |  
|                                                                                              |                                      |        |         |          |  |          |         |          |  |   |         |  
|Total Current Assets                                                                          |                                      |        | 3       |          |  |          | 1       |          |  |   | 8       |  
|                                                                                              |                                      |        |         |          |  |          |         |          |  |   |         |  
|Other Assets:                                                                                 |                                      |        |         |          |  |          |         |          |  |   |         |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Investments                                                                                   |                                      |        |        |          |  |          |        |          |  |   | 49      |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Organisational Costs, net                                                                     |                                      |        |        |          |  |          |        |          |  |   |        |  
|                                                                                              |                                      |        |         |          |  |          |         |          |  |   |         |  
|Total Other Assets                                                                            |                                      |        |        |          |  |          |        |          |  |   | 49      |  
|                                                                                              |                                      |        |         |          |  |          |         |          |  |   |         |  
|Total Assets                                                                                  |                                      | $      | 3       |          |  | $        | 1       |          |  | $ | 57      |  
|                                                                                              |                                      |        |         |          |  |          |         |          |  |   |         |  
|                                                                                              | LIABILITIES AND STOCKHOLDERS EQUITY |        |         |          |  |          |         |          |  |   |         |   | 
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Current Liabilities:                                                                          |                                      |        |         |          |  |          |         |          |  |   |         |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Accounts Payable and Accrued Expenses                                                         |                                      | $      | 399     |          |  | $        | 264     |          |  | $ | 239     |  
|                                                                                              |                                      |        |         |          |  |          |         |          |  |   |         |  
|Total Current Liabilities                                                                     |                                      |        | 399     |          |  |          | 264     |          |  |   | 239     |  
|                                                                                              |                                      |        |         |          |  |          |         |          |  |   |         |  
|Long-Term Debt                                                                                |                                      |        | 731     |          |  |          | 641     |          |  |   | 586     |  
|                                                                                              |                                      |        |         |          |  |          |         |          |  |   |         |  
|Total Liabilities                                                                             |                                      |        | 1,130   |          |  |          | 905     |          |  |   | 825     |  
|                                                                                              |                                      |        |         |          |  |          |         |          |  |   |         |  
|Stockholders Equity (Deficit):                                                               |                                      |        |         |          |  |          |         |          |  |   |         |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Common Stock: $.0001 par value
25,000,000 shares authorised,
6,347,089 issued and outstanding |                                      |        | 1       |          |  |          | 1       |          |  |   | 1       |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|less Treasury Stock at Cost, 2,500 shares                                                     |                                      |        | (20     | )        |  |          | (20     | )        |  |   | (20     | )
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Additional Paid-in-Capital                                                                    |                                      |        | 25,175  |          |  |          | 25,175  |          |  |   | 25,175  |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Accumulated other Comprehensive Loss                                                          |                                      |        | (1,989  | )        |  |          | (1,989  | )        |  |   | (6,456  | )
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Retained Deficits                                                                             |                                      |        | (24,294 | )        |  |          | (24,071 | )        |  |   | (19,468 | )
|                                                                                              |                                      |        |         |          |  |          |         |          |  |   |         |  
|Total Stockholders Equity (Deficit)                                                          |                                      |        | (1,127  | )        |  |          | (904    | )        |  |   | (768    | )
|                                                                                              |                                      |        |         |          |  |          |         |          |  |   |         |  
|Total Liabilities and
Stockholders Equity                                                    |                                      | $      | 3       |          |  | $        | 1       |          |  | $ | 57      |  
|                                                                                              |                                      |        |         |          |  |          |         |          |  |   |         |  

The accompanying notes are an integral part of these

consolidated financial statements.






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##### Table of Contents






BAY RESOURCES LTD. AND SUBSIDIARY

Consolidated Statements of Operations


Three Months Ended December 31, 2001 and 2000


and six months ended December 31, 2001 and 2000


(Unaudited)


|                                                              |  |         |       |         |  |         |       |         |  |   |       |   |  |   |       |  
|------------------------------------------------------------- |  | ------- | ----- | ------- |  | ------- | ----- | ------- |  | - | ----- | - |  | - | ----- | -
|                                                              |  | A$000's |       | A$000's |  | A$000's |       | A$000's
|                                                              |  | Three   |       | Three   |  | Six     |       | Six    
|                                                              |  | Months  |       | Months  |  | Months  |       | Months 
|                                                              |  | Ended   |       | Ended   |  | Ended   |       | Ended  
|                                                              |  | Dec 31  |       | Dec 31  |  | Dec 31  |       | Dec 31 
|                                                              |  | 2001    |       | 2000    |  | 2001    |       | 2000   
|                                                              |  |         |       |         |  |         |       |        
|Revenues:                                                     |  |         |       |         |  |         |       |         |  |   |       |   |  |   |       |  
|                                                             
|                                                             
|                                                             
|                                                             
|Other Income:                                                 |  | $       |      |         |  | $       |      |         |  | $ |      |   |  | $ |      |  
|                                                              |  |         |       |         |  |         |       |         |  |   |       |   |  |   |       |  
|Costs and Expenses:                                           |  |         |       |         |  |         |       |         |  |   |       |   |  |   |       |  
|                                                             
|                                                             
|                                                             
|                                                             
|Interest Expense:                                             |  |         | 21    |         |  |         | 15    |         |  |   | 41    |   |  |   | 29    |  
|                                                             
|                                                             
|                                                             
|                                                             
|Legal, Accounting & Professional                              |  |         | 3     |         |  |         | 2     |         |  |   | 4     |   |  |   | 11    |  
|                                                             
|                                                             
|                                                             
|                                                             
|Administrative                                                |  |         | 99    |         |  |         | 128   |         |  |   | 178   |   |  |   | 280   |  
|                                                              |  |         |       |         |  |         |       |         |  |   |       |   |  |   |       |  
|                                                              |  |         | 123   |         |  |         | 145   |         |  |   | 223   |   |  |   | 320   |  
|                                                              |  |         |       |         |  |         |       |         |  |   |       |   |  |   |       |  
|Loss from Operations:                                         |  |         | (123  | )       |  |         | (145  | )       |  |   | (223  | ) |  |   | (320  | )
|                                                             
|                                                             
|                                                             
|                                                             
|Foreign Currency Exchange Gain (Loss)                         |  |         |      |         |  |         |      |         |  |   |      |   |  |   |      |  
|                                                              |  |         |       |         |  |         |       |         |  |   |       |   |  |   |       |  
|Income (Loss) before Income Tax                               |  |         | (123  | )       |  |         | (145  | )       |  |   | (223  | ) |  |   | (320  | )
|                                                             
|                                                             
|                                                             
|                                                             
|Provision for Income Tax                                      |  |         |      |         |  |         |      |         |  |   |      |   |  |   |      |  
|                                                              |  |         |       |         |  |         |       |         |  |   |       |   |  |   |       |  
|Net Income (Loss)                                             |  | $       | (123  | )       |  | $       | (145  | )       |  | $ | (223  | ) |  | $ | (320  | )
|                                                              |  |         |       |         |  |         |       |         |  |   |       |   |  |   |       |  
|Earnings Per Common Equivalent Share
From                     |  |         | (.02  | )       |  |         | (.02  | )       |  |   | (.03  | ) |  |   | (.05  | )
|                                                              |  |         |       |         |  |         |       |         |  |   |       |   |  |   |       |  
|Weighted Number of Common Equivalent
Shares Outstanding 000s |  |         | 6,347 |         |  |         | 6,347 |         |  |   | 6,347 |   |  |   | 6,347 |  
|                                                              |  |         |       |         |  |         |       |         |  |   |       |   |  |   |       |  

The accompanying notes are an integral part of these

consolidated financial statements.






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##### Table of Contents






BAY RESOURCES LTD. AND SUBSIDIARY

Consolidated Statements of Stockholders Equity


December 31, 2001 and June 30, 2001


and December 31, 2000


(Unaudited)


|                                             |  |        |       |         |  |         |   |           |  |          |     |          |  |               |        |       |  |   |         |   |  |             |        |   |  |   |        |  
|-------------------------------------------- |  | ------ | ----- | ------- |  | ------- | - | --------- |  | -------- | --- | -------- |  | ------------- | ------ | ----- |  | - | ------- | - |  | ----------- | ------ | - |  | - | ------ | -
|                                             |  |        |       |         |  |         |   |           |  |          |     |          |  |               |        |       |  |   |         |   |  | Accumulated |        |   |  |  
|                                             |  |        |       |         |  | Common  |   | Treasury  |  | Paid in  |     |          |  |               |        | Other |  |   |         |  
|                                             |  |        |       |         |  | Stock   |   | Stock at  |  | Capital  |     | Retained |  | Comprehensive |        |       |  |  
|                                             |  | Shares |       | Amount  |  | Cost    |   | (Deficit) |  | Earnings |     | Loss     |  |               |        |      
|                                             |  | 000s  |       | A$000s |  | A$000s |   | A$000s   |  | A$000s  |     | A$000s  |  | Total        
|                                             |  |        |       |         |  |         |   |           |  |          |     |          |  |              
|Balance June 30, 2000                        |  | $      | 6,347 |         |  | $       | 1 |           |  | $        | (20 | )        |  | $             | 25,175 |       |  | $ | (19,148 | ) |  | $           | (6,456 | ) |  | $ | (448   | )
|                                            
|                                            
|                                            
|                                            
|Comprehensive Income                         |  |        |       |         |  |         |   |           |  |          |     |          |  |               |        |       |  |   |         |   |  |             |        |   |  |   |        |  
|                                            
|                                            
|                                            
|                                            
|Net loss six months ending
12-31-00          |  |        |      |         |  |         |  |           |  |          |    |          |  |               |       |       |  |   | (320    | ) |  |             |       |   |  |   | (320   | )
|                                             |  |        |       |         |  |         |   |           |  |          |     |          |  |               |        |       |  |   |         |   |  |             |        |   |  |   |        |  
|Total Comprehensive Income                   |  |        |      |         |  |         |  |           |  |          |    |          |  |               |       |       |  |   |        |   |  |             |       |   |  |   | (320   | )
|                                             |  |        |       |         |  |         |   |           |  |          |     |          |  |               |        |       |  |   |         |   |  |             |        |   |  |   |        |  
|Balance December 31, 2000                    |  |        | 6,347 |         |  | $       | 1 |           |  | $        | (20 | )        |  | $             | 25,175 |       |  | $ | (19,468 | ) |  | $           | (6,456 | ) |  | $ | (768   | )
|                                             |  |        |       |         |  |         |   |           |  |          |     |          |  |               |        |       |  |   |         |   |  |             |        |   |  |   |        |  
|Comprehensive income                         |  |        |       |         |  |         |   |           |  |          |     |          |  |               |        |       |  |   |         |   |  |             |        |   |  |   |        |  
|                                            
|                                            
|                                            
|                                            
|Net loss six months ending
6-30-01           |  |        |      |         |  |         |  |           |  |          |    |          |  |               |       |       |  |   | (4,603  | ) |  |             | 4,516  |   |  |   | (87    | )
|                                            
|                                            
|                                            
|                                            
|Net unrealised loss on
marketable securities |  |        |      |         |  |         |  |           |  |          |    |          |  |               |       |       |  |   |        |   |  |             | (49    | ) |  |   | (49    | )
|                                             |  |        |       |         |  |         |   |           |  |          |     |          |  |               |        |       |  |   |         |   |  |             |        |   |  |   |        |  
|Total Comprehensive Income                   |  |        |      |         |  |         |  |           |  |          |    |          |  |               |       |       |  |   |        |   |  |             |       |   |  |   | (136   | )
|                                             |  |        |       |         |  |         |   |           |  |          |     |          |  |               |        |       |  |   |         |   |  |             |        |   |  |   |        |  
|Balance June 30, 2001                        |  |        | 6,347 |         |  |         | 1 |           |  |          | 20  |          |  |               | 25,175 |       |  |   | (24,071 | ) |  |             | (1,989 | ) |  |   | (904   | )
|                                            
|                                            
|                                            
|                                            
|Comprehensive Income                         |  |        |       |         |  |         |   |           |  |          |     |          |  |               |        |       |  |   |         |   |  |             |        |   |  |   |        |  
|                                            
|                                            
|                                            
|                                            
|Net loss six months ending
12-31-01          |  |        |      |         |  |         |  |           |  |          |    |          |  |               |       |       |  |   | (223    | ) |  |             |       |   |  |   | (223   | )
|                                             |  |        |       |         |  |         |   |           |  |          |     |          |  |               |        |       |  |   |         |   |  |             |        |   |  |   |        |  
|Total Comprehensive Income                   |  |        |      |         |  |         |  |           |  |          |    |          |  |               |       |       |  |   |        |   |  |             |       |   |  |   | (223   | )
|                                             |  |        |       |         |  |         |   |           |  |          |     |          |  |               |        |       |  |   |         |   |  |             |        |   |  |   |        |  
|Balance December 31, 2001                    |  |        | 6,347 |         |  | $       | 1 |           |  | $        | 20  |          |  | $             | 25,175 |       |  | $ | (24,294 | ) |  | $           | (1,989 | ) |  | $ | (1,127 | )
|                                             |  |        |       |         |  |         |   |           |  |          |     |          |  |               |        |       |  |   |         |   |  |             |        |   |  |   |        |  

The accompanying notes are an integral part of these

consolidated financial statements.






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##### Table of Contents






BAY RESOURCES LTD. AND SUBSIDIARY

Consolidated Statements of Cash Flows


Six Months Ended December 31, 2001 and 2000


and Year Ended June 30, 2001


(Unaudited)


|                                                  |  |            |      |          |  |            |        |   |  |   |       |  
|------------------------------------------------- |  | ---------- | ---- | -------- |  | ---------- | ------ | - |  | - | ----- | -
|                                                  |  | A $000's   |      | A $000's |  | A $000's  
|                                                  |  | Six Months |      | Year     |  | Six Months
|                                                  |  | Ended      |      | Ended    |  | Ended     
|                                                  |  | Dec 31     |      | June 30  |  | Dec 31    
|                                                  |  | 2001       |      | 2001     |  | 2000      
|                                                  |  |            |      |          |  |           
|Cash Flows from Operating Activities:             |  |            |      |          |  |            |        |   |  |   |       |  
|                                                 
|                                                 
|                                                 
|                                                 
|Net Income (Loss)                                 |  | $          | (223 | )        |  | $          | (4,923 | ) |  | $ | (320  | )
|                                                 
|                                                 
|                                                 
|                                                 
|Adjustments:                                      |  |            |      |          |  |            |        |   |  |   |       |  
|                                                 
|                                                 
|                                                 
|                                                 
|Permanent Decline of Investment                   |  |            |     |          |  |            | 4,516  |   |  |   |      |  
|                                                 
|                                                 
|                                                 
|                                                 
|A/P and Accrued Liabilities                       |  |            | 135  |          |  |            | (21    | ) |  |   | (46   | )
|                                                  |  |            |      |          |  |            |        |   |  |   |       |  
|Net Cash Provided (Used) in Continuing Operations |  |            | (88  | )        |  |            | (428   | ) |  |   | (366  | )
|                                                  |  |            |      |          |  |            |        |   |  |   |       |  
|Cash Flow from Investing Activities:              |  |            |      |          |  |            |        |   |  |   |       |  
|                                                 
|                                                 
|                                                 
|                                                 
|Investment in Treasury Stock                      |  |            |     |          |  |            |       |   |  |   |      |  
|                                                 
|                                                 
|                                                 
|                                                 
|Investment in Subsidiary                          |  |            |     |          |  |            |       |   |  |   |      |  
|                                                  |  |            |      |          |  |            |        |   |  |   |       |  
|Net Cash Provided (Used) in Investing Activities  |  |            |     |          |  |            |       |   |  |   |      |  
|                                                  |  |            |      |          |  |            |        |   |  |   |       |  
|Cash Flows from Financing Activities:             |  |            |      |          |  |            |        |   |  |   |       |  
|                                                 
|                                                 
|                                                 
|                                                 
|Net Borrowing under Credit Line Arrangements      |  |            |     |          |  |            |       |   |  |   |      |  
|                                                 
|                                                 
|                                                 
|                                                 
|Net Borrowing from Affiliates                     |  |            | 90   |          |  |            |       |   |  |   | 372   |  
|                                                  |  |            |      |          |  |            |        |   |  |   |       |  
|Net Cash Provided by Financing Activities         |  |            | 90   |          |  |            |       |   |  |   | (372  | )
|                                                  |  |            |      |          |  |            |        |   |  |   |       |  
|Net Increase (Decrease) in Cash                   |  |            | 2    |          |  |            | (1     | ) |  |   | 6     |  
|                                                 
|                                                 
|                                                 
|                                                 
|Cash at Beginning of Year                         |  |            | 1    |          |  |            | 2      |   |  |   | 2     |  
|                                                  |  |            |      |          |  |            |        |   |  |   |       |  
|Cash at End of Year                               |  | $          | 3    |          |  | $          | 1      |   |  | $ | 8     |  
|                                                  |  |            |      |          |  |            |        |   |  |   |       |  
|Supplemental Disclosures:                         |  |            |      |          |  |            |        |   |  |   |       |  
|                                                 
|                                                 
|                                                 
|                                                 
|Common Stock Issued in Lieu of
Debt Repayment     |  |            |     |          |  |            |       |   |  |   | 4,076 |  
|                                                 
|                                                 
|                                                 
|                                                 
|Interest Paid (Net Capitalised)                   |  |            | 41   |          |  |            | 69     |   |  |   | 7     |  
|                                                 
|                                                 
|                                                 
|                                                 
|Income Tax Paid                                   |  |            | 1    |          |  |            |       |   |  |   |      |  

The accompanying notes are an integral part of these

consolidated financial statements






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##### Table of Contents






BAY RESOURCES LTD. AND SUBSIDIARY

Notes to Consolidated Financial Statements


December 31, 2001, June 30, 2001 and


December 31, 2000


(1)  Organisation

Bay Resources Ltd. (Bay Resources) is incorporated in the State of Delaware.
The principal shareholder of Bay Resources is Edensor Nominees Proprietary
Limited (Edensor), an Australian corporation. Edensor owned 78.8% of Bay
Resources as of December 31, 2000.Bay Resources acquired a controlling interest on September 3, 1987 in former
subsidiary, Solmecs Corporation N.V. (Solmecs) and 100% ownership on January
2, 1992. Bay Resources sold its interest in Solmecs effective June 5, 1998.
During fiscal 1998, Bay Resources incorporated a further subsidiary, Baynex.com
Pty Ltd (formerly Bayou Australia Pty Ltd), under the laws of Australia.
Baynex.com Pty Ltd has not traded since incorporation.

(2)  Investment Securities

The following is a summary of Investment Securities at December 31, 2001,
June 30, 2001 and December 31, 2000:

|                                            |  |         |        |         |  |         |        |   |  |   |        |  
|------------------------------------------- |  | ------- | ------ | ------- |  | ------- | ------ | - |  | - | ------ | -
|                                            |  | A$000's |        | A$000's |  | A$000's
|                                            |  | Dec 31  |        | June 30 |  | Dec 31 
|                                            |  | 2001    |        | 2001    |  | 2000   
|                                            |  |         |        |         |  |        
|Investment Cost Method                      |  | $       | 4,516  |         |  | $       | 4,516  |   |  | $ | 4,516  |  
|                                           
|                                           
|                                           
|                                           
|Trading Securities:                         |  |         |        |         |  |         |        |   |  |   |        |  
|                                           
|                                           
|                                           
|                                           
|Marketable Equity
Securities, at cost       |  |         |       |         |  |         |       |   |  |   |       |  
|                                           
|                                           
|                                           
|                                           
|Gross Realised Loss or impairment           |  |         | (4,516 | )       |  |         | (4,516 | ) |  |   | (4,467 | )
|                                           
|                                           
|                                           
|                                           
|Gross Unrealised Losses                     |  |         |        |         |  |         |        |   |  |   |        |  
|                                            |  |         |        |         |  |         |        |   |  |   |        |  
|Marketable Equity Securities,
at fair value |  |         |       |         |  |         |       |   |  |   | 49     |  
|                                            |  |         |        |         |  |         |        |   |  |   |        |  

The investment using this cost method is carried at cost. Dividends received
from the investment carried at cost are included in other income. Dividends
received in excess of the Companys proportionate share of accumulated earnings
(return of capital dividends) are applied as a reduction of the cost of the
investment. No securities were sold during 2001 and 2000 and all securities
were treated as available for sale for 2001 and 2000. At June 30, 2001 the
Company determined that the decline in value of its investment was permanent
and has recorded a realised loss in the amount of A$4,516.





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##### Table of Contents



BAY RESOURCES LTD. AND SUBSIDIARY

Notes to Consolidated Financial Statements


December 31, 2001, June 30, 2001 and


December 31, 2000


(3)  Short Term and Long Term Debt

The following is a summary of Bay Resources borrowing arrangements as of
December 31, 2001,
June 30, 2001 and December 31, 2000.

|                                                                                                                                                                                                                            |  |         |     |         |  |         |     |  |  |   |     | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------- | --- | ------- |  | ------- | --- |  |  | - | --- | 
|                                                                                                                                                                                                                            |  | A$000's |     | A$000's |  | A$000's
|                                                                                                                                                                                                                            |  | Dec 31  |     | June 30 |  | Dec 31 
|Long-Term                                                                                                                                                                                                                   |  | 2001    |     | 2001    |  | 2000   
|                                                                                                                                                                                                                            |  |         |     |         |  |        
|Loan from corporations affiliated with the
President of Bay Resources. Interest accrues at
the ANZ Banking Group Limited rate
+ 1% for overdrafts over $100,000
Repayment of loan not required
before June 30, 2002. (1)(2) |  | $       | 731 |         |  | $       | 641 |  |  | $ | 586 | 
|                                                                                                                                                                                                                            |  |         |     |         |  |         |     |  |  |   |     | 
|Total Long-Term                                                                                                                                                                                                             |  | $       | 731 |         |  | $       | 641 |  |  | $ | 586 | 
|                                                                                                                                                                                                                            |  |         |     |         |  |         |     |  |  |   |     | 



---

|(1) |  | An amount of $7000 was repaid on January 20, 2000 partly through the
issuance of 8,000,000 options to purchase shares of the Company. Both
issuances were to a company affiliated with the President of Bay
Resources.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(4)  Affiliate Transactions

Bay Resources advances to and receives advances from various affiliates. All
advances between consolidated affiliates are eliminated on consolidation. At
December 31, 2001, Bay Resources had no outstanding advances to or from
unconsolidated affiliated companies.$368,000, $213,000 and $225,000 of accounts payable for the years shown is due
to an affiliated management company.

(5)  Going Concern

The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles, which contemplates
continuation of Bay Resources and Solmecs as a going concern. However, Bay
Resources has sustained recurring losses. In addition, Bay Resources has no
net working capital, which raises substantial doubts as to its ability to
continue as going concerns. Bay Resources anticipates that it will be able to
defer repayment of certain of its short term loan commitments until it has
sufficient liquidity to enable these loans to be repaid or other arrangements
to be put in place. In addition Bay Resources has historically relied on loans
and advances from corporations affiliated with the President of Bay Resources.
Based on discussions with these affiliate companies and the President. Bay
Resources believes this source of funding will continue to be available. Other
than the arrangements noted above, Bay Resources has not confirmed any other
arrangements for ongoing funding. As a result Bay Resources may be required to
raise funds by additional debt or equity offerings in order to meet its cash
flow requirements during the forthcoming year.





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##### Table of Contents



BAY RESOURCES LTD. AND SUBSIDIARY

Notes to Consolidated Financial Statements


December 31, 2001, June 30, 2001 and


December 31, 2000


(6)  Sale of Solmecs

Pursuant to a stock purchase agreement dated as of June 5, 1998, the Company
acquired 499,701 shares in SCNV Acquisition Corp (SCNV), representing
approximately 24% of the issued and outstanding share capital of SCNV, in
return for the whole of the share capital of Solmecs Corporation N.V., a
Netherlands Antilles company which prior to the exchange was formerly a wholly
owned subsidiary of the Company. The 499,701 shares has been valued at
US$2,800,000 or A$4,516,000 and will be accounted for using the cost method
because the Company does not exercise significant influences over SCNVs
operating and financial activities (see note 4). The sale resulted in a gain
of $5,899,000 which is included in other income.

SCNV is a Delaware corporation established May 1997 to select, develop and
commercially exploit proprietary technologies, in various stages of
development, invented primary by scientists who immigrated to Israel from and
by scientists and institutions in Russia and other countries that formerly
comprised the Soviet Union. Simultaneously with the SCNV stock acquisition by
the Company, SCNV completed an initial public offering of common stock and
warrants which resulted in gross proceeds of approximately US$5,900,000.

The Company has been granted certain demand and piggyback registration rights
with respect to the SCNV shares. Notwithstanding the foregoing, the Company
has agreed not to sell, grant options for sale or assign or transfer any of the
SCNV shares, for a period of 24 months from the closing of the (Lock-up)
agreement, which expired in June 2000. Bay Resources has requested SCNV to
take the necessary steps to register Bay Resources shareholding in SCNV.

(7)  Income Taxes

Bay Resources files its income tax returns on an accrual basis. Bay Resources
has carry forward losses of approximately US$17.5 million as of June 30, 2001
which expire in the years 1999 through 2012. Bay Resources will need to file
tax returns for those years of the NOL carryforwards. Due to the uncertainty
as to realisation of these losses, a valuation allowance of US$6.0 million has
been recorded to off set the tax benefit of the carry forward losses. During
the year ended June 30, 2001, Bay Resources provided an additional valuation
allowance of US$1.0 million. Due to the uncertainty as to realisation of these
losses, a valuation allowance of US$4.7 million has been recorded to off set
the tax benefit of the carry forward losses.





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##### Table of Contents






Item 2.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FUND COSTS CONVERSION

The consolidated statements of income and other financial and operating data
contained elsewhere here in and the consolidated balance sheets and financial
results have been reflected in Australian dollars unless otherwise stated.

The following table shows the average rate of exchange of the Australian dollar
as compared to the US dollar during the periods indicated:

6 months ended December 31, 2000 A$1.00 = U.S. $.5548

6 months ended December 31, 2001 A$1.00 = U.S. $.5128


RESULTS OF OPERATION

Three Months ended December 31, 2001 vs Three Months ended December 31, 2000.

Costs and expenses decreased from A$145,000 during the three months ended
December 31, 2000 to A$123,000 during the three months ended December 31, 2001.
The decrease is a net result of:



|a) |  | an increase in interest expense from A$15,000 for the three months ended
December 31, 2000 to A$21,000 for the three months ended December 31, 2001
as a result of an increase in long term interest bearing debt which was
offset by the reduction in interest rates.                                                                                           
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|b) |  | the decrease in administrative costs including salaries from A$128,000 in
the three months ended December 31, 2000 to A$99,000 in the three months
ended December 31, 2001. In the prior period costs were incurred in the
due diligence on St. Andrew which included consultants and travel and
accommodation and there were no comparable costs in this period.

As a result of the foregoing, the loss from operations decreased from A$145,000
for the three months ended December 31, 2000 to A$123,000 for the three months
ended December 31, 2001. There was no provision for income tax in either
period.

The net loss was A$123,000 for the three months ended December 31, 2001
compared to a net loss of A$145,000 for the three months ended December 31,
2000.

Six Months Ended December 31, 2001 vs. Six Months Ended December 31, 2000.

Costs and expenses decreased from A$320,000 in the six months ended December
31, 2000 to A$223,000 in the six months ended December 31, 2001. The decrease
is a net result of:



|a) |  | an increase in interest expense from A$29,000 for the six months ended
December 31, 2000 to A$41,000 for the six months ended December 31, 2001
as a result of an increase in long term interest bearing debt which was
offset by the reduction in interest rates.                                                                                                     
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|b) |  | the decrease in administrative costs including salaries from A$280,000 in
the six months ended December 31, 2000 to
A$178,000 in the six months ended December 31, 2001. In the prior period
substantial costs were incurred in the due diligence on St Andrew which
included consultants and travel & accommodation and there were no
comparable costs in this period.

As a result of the foregoing, the loss from operations decreased from A$320,000
for the six months ended December 31, 2000 to
A$223,000 for the six months ended December 31, 2001. There was no provision
for income tax in either period.

The net loss was A$223,000 for the six months ended December 31, 2001 compared
to a net loss of A$320,000 for the six months ended December 31, 2000.

Liquidity and Capital Resources

As of December 31, 2001 the Company had short-term obligations of A$399,000
comprising accounts payable and accrued expenses.

The Company anticipates that it will be able to defer repayment of certain of
its short term loan commitments until it has sufficient liquidity to enable
these loans to be repaid which there can be no assurance. In addition the
Company has historically relied upon loans and advances from affiliates to meet
a significant portion of the Companys cash flow requirements which the Company
believes based on discussions with such affiliates will continue to be
available during fiscal 2001 and 2002.

On October 7, 1999 Bay Resources authorised the issuance effective December 31,
1999 of 4,000,000 shares of its previously unissued stock to a company of which
the President of Bay Resources is a director and shareholder, in lieu of
repayment of the debt described in note (3). Balance due at the stock issuance
was approximately A$4,076,000.

On January 20, 2000 the Board of Directors authorised the issuance of 8,000,000
options to purchase previously unissued shares, to a company of which the
President of Bay Resources is a director and shareholder, partly in lieu of
repayment of the debt in note (3).





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##### Table of Contents



Balance at the date of issuance of options
was approximately $8000. Options are exercisable after two years for a period
of three years at US$1.00 per share.

Other than the arrangements above the Company has not confirmed any further
arrangements for ongoing funding. As a result the Company may be required to
raise funds from additional debt or equity offerings and/or increase the
revenues from operations in order to meet its cash flow requirements during the
forthcoming year.

Cautionary Safe Harbor Statement under the United States Private Securities Litigation Reform Act of 1995.

Certain information contained in this Form 10-Q is forward looking information
within the meaning of the Private Securities Litigation Act of 1995 (the Act)
which became law in December 1995. In order to obtain the benefits of the
safe harbor provisions of the act for any such forwarding looking statements,
the Company wishes to caution investors and prospective investors about
significant factors which among others have affected the Companys actual
results and are in the future likely to affect the Companys actual results and
cause them to differ materially from those expressed in any such forward
looking statements. This Form 10-Q report contains forward looking statements
relating to future financial results. Actual results may differ as a result of
factors over which the Company has no control including the strength of the
domestic and foreign economies, slower than anticipated completion of research
and development projects and movements in the foreign exchange rate.
Additional information which could affect the Companys financial results is
included in the Companys Form 10-K on file with the Securities and Exchange
Commission.




Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company is exposed to interest rate risk primarily through loans and
advances from affiliates. The Company utilizes these borrowings to meet its
working capital needs.

At December 31, 2001, the Company had outstanding borrowings of approximately
$731,000. In the event that interest rates associated with these borrowings
were to increase 100 basis points, the impact on future cash flows would be a
decrease of approximately $7,310 annually.





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##### Table of Contents






PART II

Item 1.    LEGAL



| |               
| | --------------
| | Not Applicable

Item 2.    CHANGES IN SECURITIES AND USE OF PROCEEDS



| |               
| | --------------
| | Not Applicable

Item 3.    DEFAULTS UPON SENIOR SECURITIES



| |               
| | --------------
| | Not Applicable

Item 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



| |                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------
| | The Company distributed an Information Statement dated as of
December 14, 2001 to its stockholders with respect to the election
of directors.

Item 5.    OTHER INFORMATION



| |               
| | --------------
| | Not Applicable

Item 6.    EXHIBITS AND REPORTS ON FORM 8-K



| | (a) |  | Reports
| | --- |  | -------



| |                                                                                                 
| | ------------------------------------------------------------------------------------------------
| | The Company did not file any Report on Form 8-K during the three
months ended December 31, 2001.



| | (b) |  | Exhibits
| | --- |  | --------



| |               
| | --------------
| | Not Applicable





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##### Table of Contents



(FORM 10-Q)




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereinto duly authorised.

|                         |                    |                                                                                                             
|------------------------ | ------------------ | ------------------------------------------------------------------------------------------------------------
|                         | BAY RESOURCES LTD.
|                        
|                        
|                         | By:                | /s/Joseph I. Gutnick                                                                                        
|                        
|                         |                    | Joseph I. Gutnick
Chairman of the Board, President and
Chief Executive Officer
(Principal Executive Officer)
|                        
|                        
|Dated: February 15, 2002 | By:                | /s/Peter Lee                                                                                                
|                        
|                         |                    | Peter Lee
Peter Lee, Director, Secretary and
Chief Financial Officer
(Principal Financial Officer)