<PAGE>   1


                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-QSB

(Mark One)

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

         For the quarterly period ended June 30, 1998

                                       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 0-16436

                          PIEDMONT MINING COMPANY, INC.
        (Exact name of small business issuer as specified in its charter)

         NORTH CAROLINA                                    56-1378516
  (State or other jurisdiction                         (I.R.S. Employer
of incorporation or organization)                     Identification No.)

                         4101-G Stuart Andrew Boulevard
                         Charlotte, North Carolina 28217
                    (Address of principal executive offices)

                                 (704) 523-6866
                           (Issuer's telephone number)

                                 NOT APPLICABLE
              (Former name, former address and former fiscal year,
                          if changed since last report)

         Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act 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 [X]     NO [ ]


                      APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:

            COMMON STOCK, NO PAR VALUE--17,188,787 SHARES OUTSTANDING
                              AS OF JUNE 30, 1998

           Transitional Small Business Disclosure Format (check one)

                             YES [ ]     NO [X]



<PAGE>   2



PIEDMONT MINING COMPANY, INC.

INDEX


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements.                                             Page

Consolidated Condensed Balance Sheets--June 30, 1998                         3
         (unaudited) and December 31, 1997

Consolidated Condensed Statements of Operations (unaudited)--                4
         Three months ended June 30, 1998 and June 30, 1997 and
         Six months ended June 30, 1998 and June 30, 1997

Consolidated Condensed Statements of Cash Flows                              5
         (unaudited)--Six months ended June 30, 1998 and
         March 31, 1997

Notes to Consolidated Condensed Financial Statements                         6
         (unaudited)--June 30, 1998

Item 2.  Management's Discussion and Analysis or Plan of Operation           9



PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                  11


Item 6.  Exhibits and Reports on Form 8-K.                                  13


SIGNATURES                                                                  14



<PAGE>   3


PIEDMONT MINING COMPANY, INC.

PART I.  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                 At                    At
                                                              June 30              December 31
CONSOLIDATED CONDENSED BALANCE SHEETS                           1998                  1997
                                                            ------------          ------------
<S>                                                         <C>                   <C>
ASSETS  (unaudited)
CURRENT ASSETS
  Cash and cash equivalents (including $0 and
   $0 relating to the Haile Mining Venture)                 $      2,000          $     21,000
   Prepaid expenses                                                2,000                 2,000
                                                            ------------          ------------
          TOTAL CURRENT ASSETS                                     4,000                23,000
                                                            ------------          ------------

PROPERTY AND EQUIPMENT (including $186,000
   and $194,000 relating to the Haile
   Mining Venture)                                               180,000               228,000

OTHER ASSETS
  Deferred costs, net of accumulated
   amortization of $3,377,000 (including
   $1,536,000 relating to the Haile Mining Venture)            1,754,000             1,754,000
 Other                                                             2,000                 2,000
                                                            ------------          ------------
                  TOTAL OTHER ASSETS                           1,756,000             1,756,000
                                                            ------------          ------------
                  TOTAL ASSETS                              $  1,940,000          $  2,007,000
                                                            ============          ============

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable (including $379,000 and
   $246,000 relating to Haile Mining Venture)                    398,000               281,000
  Accrued venture costs (Note C)                               1,374,000             1,237,000
  Accrued salaries and wages                                       2,000                 1,000
  Loans Payable Directors                                         40,000                   -0-
                                                            ------------          ------------
          TOTAL CURRENT LIABILITIES                            1,814,000             1,519,000
                                                            ------------          ------------

ACCRUED RECLAMATION COSTS                                        125,000               125,000
                                                            ------------          ------------

SHAREHOLDERS' EQUITY
     Common Stock                                             12,015,000           12, 015,000
     Contributed capital                                         317,000               317,000
     Accumulated deficit                                     (12,331,000)          (11,969,000)

                                                            ------------          ------------
          TOTAL SHAREHOLDERS' EQUITY                               1,000               363,000
                                                            ------------          ------------
                  TOTAL LIABILITIES AND
                  SHAREHOLDERS' EQUITY                      $  1,940,000          $  2,007,000
                                                            ============          ============
</TABLE>

            See notes to consolidated condensed financial statements.



<PAGE>   4


PIEDMONT MINING COMPANY, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)


<TABLE>
<CAPTION>
                                                                 June 30                                    June 30
                                                            Three Month Ended                           Six Month Ended
                                                     -------------------------------          ----------------------------------
                                                        1998                 1997                  1998                  1997
                                                     ----------         ------------          ------------          ------------

<S>                                                  <C>                  <C>                   <C>                   <C>       
NET SALES                                            $      -0-         $        -0-          $     28,000          $        -0-

COST OF SALES:
 Depreciation expense                                       -0-                  -0-                   -0-                 1,000
 Haile Mining Venture expenses (Notes B,C)              191,000              163,000               312,000               259,000
 Amortization-deferred gain (Notes B,C)                     -0-              (61,000)                  -0-              (157,000)
                                                     ----------         ------------          ------------          ------------

      GROSS LOSS FROM OPERATIONS                        191,000              102,000               284,000               103,000
OTHER (INCOME) EXPENSES:
 General and administrative                              40,000              115,000                76,000               215,000
 Exploration                                                -0-               (2,000)                  -0-                   -0-
 Professional fees                                       29,000              116,000                85,000               164,000
 Interest and other, net                                    -0-                5,000                (5,000)               (2,000)
 Gain on sale of assets                                     -0-                  -0-               (78,000)                  -0-
                                                     ----------         ------------          ------------          ------------

                                                         69,000              234,000                78,000               377,000
                                                     ----------         ------------          ------------          ------------

      LOSS BEFORE INCOME TAXES                          260,000              336,000               362,000               480,000

  Income tax provision                                      -0-                  -0-                   -0-                   -0-

      NET LOSS                                       $  260,000         $    336,000          $    362,000          $    480,000
                                                     ==========         ============          ============          ============


NET LOSS PER COMMON SHARE                            $      .02         $        .02          $        .03          $        .03
                                                     ==========         ============          ============          ============

CASH DIVIDENDS PER SHARE                                   None                 None                  None                  None

WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING                           17,188,787           16,443,869            17,188,787            16,443,869
                                                     ==========         ============          ============          ============

</TABLE>


            See notes to consolidated condensed financial statements.



<PAGE>   5


PIEDMONT MINING COMPANY, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)


<TABLE>
<CAPTION>
                                                                    Six Months Ended
                                                                         June 30,
                                                              --------------------------
                                                                 1998               1997

<S>                                                           <C>                <C>       
OPERATING ACTIVITIES
     Net loss                                                 $(362,000)         $(480,000)
     Adjustments to reconcile net loss to net cash
      used in operating activities:
      Depreciation                                               16,000             18,000
      Amortization of deferred gain                                 -0-           (157,000)
      (Gain) Loss on sale of assets                             (78,000)               -0-
      Changes in operating assets and liabilities:
      Decrease in Note Payable                                      -0-           (290,000)
      Increase (decrease) in accounts payable
      and accrued expenses                                      255,000            279,000
      Other                                                         -0-             (2,000)
                                                              ---------          ---------

NET CASH USED IN OPERATING ACTIVITIES                          (169,000)          (632,000)
                                                              ---------          ---------

INVESTING ACTIVITIES
  Proceeds from sales of land, property and equipment           110,000                -0-
  Proceeds from issuance of common stock                            -0-            298,000
  Proceeds from Director loans                                   40,000                -0-
                                                              ---------          ---------
NET CASH PROVIDED BY INVESTING ACTIVITIES                       150,000            298,000
                                                              ---------          ---------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                (19,000)          (334,000)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                 21,000            700,000
                                                              ---------          ---------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                    $   2,000          $ 366,000
                                                              =========          =========
</TABLE>



            See notes to consolidated condensed financial statements.



<PAGE>   6


PIEDMONT MINING COMPANY, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 1998

NOTE A - BASIS OF PRESENTATION

The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The consolidated condensed financial statements include
the accounts of the Registrant and its wholly-owned subsidiaries, Kershaw Gold
Company, Inc. (formerly Mineral Mining Company, Inc.) and Piedmont Gold Company,
Inc. In the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation have been
included. Certain reclassifications of prior year amounts have been made to
conform to current year presentation. Operating results for the six-month period
ended June 30, 1998 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1998. For further information, refer
to the financial statements and footnotes thereto included in the Registrant's
audited consolidated financial statements on Form 10-KSB for the year ended
December 31, 1997.

NOTE B - HAILE MINING VENTURE

On March 15, 1991, the Registrant entered into an option and earn-in agreement
with Amax Gold Exploration, Inc. (AGEI), a wholly-owned subsidiary of Amax Gold
Inc. (AGI), pursuant to which AGI acquired an option to purchase a 62.5%
interest in the Registrant's Haile Property located in South Carolina. Pursuant
to this agreement and as part of the earn-in conditions, AGEI paid the
Registrant $1,000,000 in cash; assumed the Registrant's obligations to make
payments on its notes to MMC Holding, Inc. and its sole shareholder through May
1, 1992 (a total of $1,072,000); provided financial support for a $750,000
reclamation bond increase; agreed to fund all exploration costs during the
option period and prepared at its sole cost a preliminary feasibility study for
the Haile Property which was delivered to the Registrant in December, 1991.

On May 1, 1992, AGI through its wholly-owned subsidiary, Lancaster Mining
Company, Inc., exercised its option and acquired a 62.5% undivided interest in
the Registrant's Haile Property. Upon the exercise of the option, the Registrant
received $1,750,000 in cash and 1,000,000 unregistered shares of AGI's common
stock (AGI Common Stock), all of which had been sold by the Registrant by
December 31, 1996.

Pursuant to the terms of the option and earn-in agreement, Kershaw Gold Company,
Inc. and Lancaster Mining Company, Inc. formed the Haile Mining Venture (the
Venture) to further explore, evaluate and, if warranted, develop and operate a
gold mine at the Haile Property. Lancaster Mining Company, Inc. owns a 62.5%
undivided interest and Kershaw Gold Company, Inc. owns a 37.5% undivided
interest in the Venture's assets and liabilities. Costs of the Venture have been
borne by each party based on their respective interests, and the ultimate gold
production by the Venture, if any, will be taken by the parties in kind.

<PAGE>   7

In contemplation of the formation of the Venture described above, the Registrant
suspended its mining and hauling operations in August 1991. On June 30, 1992,
leaching and recovery of gold ceased for the Registrant's account and commenced
for the account of the Venture.

The Venture agreement between Kershaw Gold Company, Inc. and Lancaster Mining
Company, Inc. provided that the Venture participants jointly decide whether to
commence production at the Haile Property. Until a production decision is made,
the Registrant is accruing its share of the Venture's costs and expenses.

The 1994 program and budget called for total Venture expenditures of
approximately $6,300,000, including $1,900,000 for additional drilling and
$150,000 for completion of a bankable feasibility study. However, no further
drilling was conducted in 1994, the bankable feasibility study has not yet been
provided to the Registrant, and actual Venture expenditures for 1994 were
approximately $2,415,000. In September 1994, the Registrant was advised by AGI
that AGI had decided to pursue the sale of its interest in the Venture.

Total Venture expenditures for 1996 and 1997 were $1,099,000 and $1,549,000
respectively, of which 37.5% would be approximately $412,000 in 1996 and
$581,000 in 1997. The 1998 program and budget calls for total Venture
expenditures of approximately $1,435,000, of which 37.5% would be approximately
$538,000.

The Registrant had amortized the deferred gain to income in amounts equal to the
sum of the Registrant's share of the Venture's costs and expenses and the
Registrant's other direct costs of participation in the Venture until May 1997
when all remaining deferred gain was amortized. There was no amortization
recorded in the
six month period ended June 30, 1998. However, as discussed in Note C, no cash
calls have been paid by the Registrant since February 1995.

On March 29, 1995, the Registrant filed a lawsuit in South Carolina against AGI
and certain of its affiliates, claiming, among other things, that AGI's failure
to implement the 1994 program and budget was in breach of its obligations under
the Venture Agreement and Management Agreement for the Venture, and seeking
damages. The Registrant intends to vigorously pursue its claims. (See Part II,
Item 1--Legal Proceedings)

The failure of AGI to implement the 1994 work plan and budget, the decision by
AGI to pursue the sale of its interest in the Venture, and the pending
litigation between the Registrant and AGI are expected to further delay a
decision whether to commence production at the Haile property. Preliminary
estimates of the total costs of developing and commencing operations, based upon
the Preliminary Feasibility Study prepared by AGI in December 1991 pursuant to
the Option and Earn-In Agreement, ranged up to approximately $80,000,000, of
which the Registrant's 37.5% share would have been approximately $30,000,000.


<PAGE>   8

NOTE C - ACCRUED VENTURE COSTS

In February 1995, the Registrant advised AGI of its position that AGI was in
breach of the Haile Mining Venture Agreement and Management Agreement. In March
1995, the Registrant further advised AGI of its position that it was not
obligated to continue to pay the monthly cash calls for the Venture. Subsequent
to the filing of the lawsuit against AGI described in Note B, the Registrant,
through its counsel, again advised AGI of its position that it is not required
to and does not intend to pay any further cash calls until the litigation is
resolved.

The cash calls for March 1995 through June 1998 are reflected as accrued venture
costs on the Registrant's balance sheet at June 30, 1998 and December 31, 1997
and are included in the Haile Mining Venture expenses. However, the Registrant
has not paid such cash calls and maintains its position that it is not obligated
to make such payments.

NOTE D - CONTINGENCIES

Pursuant to the Option and Earn-In Agreement, the Venture Agreement between the
subsidiaries of the Registrant and AGI that are the Venture participants, and
certain related agreements, the Registrant and its subsidiary agreed to
indemnify AGI and its affiliates from all environmental and other liabilities
arising from matters occurring or existing at the Haile Property prior to March
15, 1991, or arising from acts, omissions and operations of the Registrant and
its subsidiary from March 15, 1991 to July 1, 1992 (the date of formation of the
Venture).

Venture expenditures incurred from its formation through June 30, 1998 totaled
approximately $14,280,000 of which the Registrant has paid 37.5% through
February 1995. AGI has identified approximately $2,970 ,000 of these Venture
expenditures through June 30, 1998 ($290,000 for the second half of 1992,
$681,000 for 1993, $674,000 in 1994, $488,000 for 1995, $279,000 for 1996 and
$391,000 for 1997 and $167,000 for the six months ending June 30,1998) that it
now claims are subject to such indemnification provisions and should be
reallocated 100% to the Registrant. The Registrant has paid 37.5% of such costs
through December 31, 1994 (which totaled approximately $617,000). A substantial
part of such costs relate to ongoing water treatment and property maintenance at
the Haile Mine property, as well as certain reclamation costs. The Venture's
financial statements do not reflect the amount of such costs as Venture
expenditures.

The Registrant disputed the cost reallocation asserted by AGI and arbitration
proceedings were commenced by AGI in May 1995. On March 5, 1996, an arbitration
panel of the American Arbitration Association rendered an award in connection
with the Registrant's dispute with AGI over such cost reallocation. Pursuant to
the award, the Registrant paid approximately $1,370,000 to a subsidiary of AGI.
In addition, approximately $33,000 in administrative expenses were borne by the
Registrant. The Registrant believes that it is not responsible for any cost
allocations in excess of the $1,370,000 that was the subject of the arbitration
award. However, AGI has taken the position that the Registrant should be
responsible for 100% of similar ongoing expenses in the future.

The Registrant has not funded its share of the Venture's expenditures since
February 1995 as a result of the litigation commenced against AGI in March 1995,
but such costs have been accrued. AGI has indicated that it intends to activate
the dilution of interest provisions of the Venture Agreement as a result of the
Registrant's failure to pay its share of Venture expenditures since March 1995.
Dilution of the Registrant's interest in the Venture, if any, would result in a
proportionate adjustment to the accounts on the Registrant's balance sheet
relating to the Venture.

On March 29, 1995, the Registrant filed a lawsuit in South Carolina against AGI
claiming, among other things, that AGI's failure to implement the approved 1994
Program and Budget for the Venture was in breach of its obligations under the
Venture Agreement and Management Agreement for the Venture, and seeking actual
and punitive damages. See Part II, Item 1 -- Legal Proceedings. No amounts have
been recorded in the accompanying financial statements relating to this gain
contingency.



<PAGE>   9


PIEDMONT MINING COMPANY, INC.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS

GENERAL

         The Registrant's principal operations prior to mid-1992, other than its
exploration activities, were mining and production of gold at the Haile
Property, which accounted for most of the Registrant's revenues to date. On
March 15, 1991, the Registrant entered into an Option and Earn-In Agreement with
Amax Gold Inc. (AGI) pursuant to which AGI was granted an option to acquire a
62.5% undivided interest in the Haile Property. In connection with its entering
into the Option and Earn-In Agreement and AGI's exploration activities at the
Haile Property during the option period thereunder, the Registrant began to
phase out its shallow, open-pit mining operations at the Haile Property in March
1991 and suspended mining and hauling in August 1991. AGI exercised its option
on May 1, 1992, and the Registrant and AGI formed the Venture on July 1, 1992 to
further explore, evaluate, and, if warranted, develop and operate a large-scale
mining operation at the Haile Property. The Registrant has an undivided 37.5%
interest in the Venture's assets and revenues. Recovery and production of gold
from the leaching of ore previously mined continued until July 1, 1992 for the
account of the Registrant until the formation of the Venture on July 1, 1992,
after which AGI commenced taking its 62.5% of the gold production.

THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THE
THREE MONTHS ENDED JUNE 30,1997.

         There were no sales for the three month period ended June 30,1998.
There were no sales for the same period in 1997. Also there was no mine
operating expenses for the three-month periods ended June 30, 1998 and 1997 due
to the suspension of mining in 1991 and the completion in 1992 of recoveries of
gold from leaching of ore previously mined.

         Depreciation expense was less than $1,000 and because of rounding in
thousands it is shown as zero this quarter.

         General and administrative expense decreased by 65.2% for the
three-month period ended June 30, 1998 due to reduced office and salary
expenses.

         Professional fees decreased 75.0% principally due to the increase in
required legal and consulting services related to the litigation against AGI.

         There was no exploration expense this quarter as the Registrant has
dropped all its lease obligations for its North Carolina properties.

         There was no interest and other, for the three-month period ending June
30,1998 compared to $5,000 for the three-month period ending June 30, 1997. This
was a result of interest income on invested cash declining as the Registrant
uses its invested cash to fund its operating costs.

<PAGE>   10

         The Registrant had been amortizing the deferred gain, recorded as a
result of the AGI option exercise, to income in amounts equal to the sum of
37.5% of the Venture's costs and expenses and the Registrant's other direct
costs of participation in the Venture. In May 1997 all remaining deferred gain
was fully amortized. Thus there was no amortization recorded in the three month
period ending June 30, 1998 compared to $61,000 for the same period in 1997
while actual Venture costs increased 21.0% for the same period.

         The Registrant's net loss of $260,000 for the three-month period ended
June 30, 1998 was due to the factors set forth above.

SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO
THE SIX MONTHS ENDED JUNE 30,1997.

         There were $28,000 in gold sales for the six month period ended June
30,1998. These sales were the result of cleaning the processing area rather than
active production. There were no sales for the same period in 1997. Also there
was no mine operating expenses for the six-month periods ended June 30, 1998 and
1997 due to the suspension of mining in 1991 and the completion in 1992 of
recoveries of gold from leaching of ore previously mined.

         Depreciation expense was less than $1,000 and because of rounding in
thousands it is shown as zero for the six month period ending June 30, 1998..

         General and administrative expense decreased by 65.0% for the six-month
period ended June 30,1998 due to reduced office and salary expenses.

         Professional fees decreased 48.2% principally due to the increase in
required legal and consulting services related to the litigation against AGI.

         There was no exploration expense this quarter as the Registrant has
dropped its lease obligations for its North Carolina properties compared to
$2,000 for the same period in 1997.

         Interest and other, net declined 28.6% for the six-month period ending
June 30,1998 compared to the six-month period ending June 30, 1997. This was a
result of interest income on invested cash declining as the Registrant uses its
invested cash to fund its operating costs.

         The Registrant recorded a $78,000 gain on the sale of land in North
Carolina and a warehouse in Kershaw, SC during the six-month period ending June
30, 1998. For the six-month period ended June 30, 1997, the Registrant recorded
no gain on the sale of assets.

         The Registrant had been amortizing the deferred gain, recorded as a
result of the AGI option exercise, to income in amounts equal to the sum of
37.5% of the Venture's costs and expenses and the Registrant's other direct
costs of participation in the Venture. In May 1997 all remaining deferred gain
was fully amortized. Thus there was no amortization recorded in the six month
period ending June 30, 1998 compared to $157,000 for the same period in 1997
while actual Venture costs increased 21.0% for the same period.

         The Registrant's net loss of $362,000 for the six-month period ended
June 30, 1998 was due to the factors set forth above.


<PAGE>   11

Financial Condition, Liquidity and Capital Resources

         The Company's financial condition and liquidity continued to decline in
the first six months of 1998 due primarily to the accounting charge for 37.5% of
the costs and expenses of the Haile Mining Venture, and various corporate costs
without any offsetting revenues except the sale of assets. The working capital
deficit increased to $(1,810,000) at June 30, 1998, compared with $(1,496,000)
at the end of 1997.

         The Company's principal source of liquidity during 1997 was from the
sale in December 1996 of 1,400,000 shares of its Common Stock and the issuance
of $290,000 of Notes convertible into Common Stock. In June 1997, the $290,000
in notes were converted into Common Stock. The net proceeds from such sales were
approximately $850,000, a portion of which was used to pay the remainder of the
arbitration award. At June 30, 1998, the Company had approximately $2,000 in
cash or cash equivalents.

         The Company believes that its current cash position will not provide
sufficient capital resources for its continued operations (including the costs
of pursuing the lawsuit against AGI) through the end of 1998. Certain directors
of the Registrant have agreed to provide the Registrant with unsecured loans in
the aggregate principal amount of $120,000 and a 10% interest rate, which mature
on October 31, 1998. Additional financing will also be required to develop and
commence mining operations at the Haile Property or if there is no favorable
resolution of the litigation during 1997. Additional financing for such purposes
could be sought through the issuance of additional shares of the Company's
Common Stock or other equity securities, through debt financing, or through
various arrangements (including joint ventures or mergers) with third parties.
However, the Company currently has no commitments for any such additional
financing, and there is no assurance that the Company could obtain any such
additional financing if and when needed.


<PAGE>   12

PIEDMONT MINING COMPANY, INC.

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings.

         On March 29, 1995, the Registrant and its wholly-owned subsidiary,
Kershaw Gold Company, Inc., as plaintiffs, filed a complaint in the Court of
Common Pleas for Lancaster County, South Carolina (Case No. 95-155) against Amax
Gold Inc., Lancaster Mining Company, Inc. and Haile Mining Company, Inc.,
alleging breach of contract by defendants Amax Gold Inc., Lancaster Mining
Company, Inc. and Haile Mining Company, Inc., and tortious interference with
contractual rights by defendant Amax Gold Inc. The complaint asked for actual
and punitive damages as the Court and jury shall determine. A trial by jury was
demanded.

         A hearing on pending motions in the state court proceeding was held on
October 5, 1995. On November 2, 1995, the court issued an order dismissing the
claims of Piedmont Mining Company, Inc. (but not those of Kershaw Gold Company)
against the defendants, and dismissing both plaintiffs' claims for breach of
contract against Amax Gold Inc. (but not Kershaw Gold Company's claims against
Lancaster Mining Company, Inc. and Haile Mining Company, Inc.), on the grounds
that only the subsidiaries of the Registrant and of Amax Gold Inc. are parties
to the contract in question. The order also stayed Kershaw Gold Company's claims
for breach of contract against the two Amax Gold Inc. subsidiaries pending a
determination of arbitrability by the arbitrators. Kershaw Gold Company's claim
against Amax Gold Inc. for tortious interference with contract (including the
Venture Agreement) was allowed to proceed. Amax Gold Inc.'s motion for a more
definite statement of the tortious interference claim was granted. Discovery on
the tortious interference claim was also authorized. The Registrant intends to
vigorously prosecute its claims against Amax Gold Inc. and the two subsidiaries.
The Registrant timely moved for reconsideration of the court's November 2, 1995
order. The motion for reconsideration was denied in April 1998, and the
Registrant has filed a notice of appeal.

         Following the court's November 2, 1995, order, the defendant, Amax Gold
Inc., removed the claim against it by Kershaw to the Federal District Court for
the District of South Carolina. Kershaw filed its amended complaint in this
action on January 29, 1996 alleging tortious interference and civil conspiracy.
In August 1997, a jury awarded $9,000,000 in damages to Kershaw; however, the
District Judge reversed the jury verdict. This reversal order has been appealed
to the U.S. Fourth Circuit Court of Appeals in Richmond, Virginia and is
scheduled for oral argument for the week of September 21, 1998.

         On May 24, 1995, Lancaster Mining Company, Inc. ("Lancaster") filed a
demand for arbitration with the American Arbitration Association alleging the
breach by plaintiffs of obligations under the Venture Agreement. The defendant
sought to recover costs incurred, and has taken the position that "future costs
are not waived, but are specifically preserved." The Registrant has taken the
position before both the court and the American Arbitration Association that the
dispute is not arbitrable under the terms of the Venture Agreement, and objected
to the arbitration proceedings. Nevertheless, the arbitration proceedings were
conducted in early 1996 before an arbitration panel of the American Arbitration
Association.

<PAGE>   13

         On March 5, 1996, the arbitration panel rendered an award calling for
the Registrant to pay approximately $1,370,000 of the disputed expenses to
Lancaster According to the award, the administrative and arbitrators' fees and
expenses, totalling approximately $66,000, were to be borne equally by the
parties. In August 1996, the award was confirmed by the U.S. District Court in
South Carolina and judgment was entered on the award.

         On September 9, 1996, the Registrant and its wholly-owned subsidiary,
Kershaw Gold Company, Inc., filed petitions for relief under Chapter 11 of the
U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Western District of
North Carolina. Such filings automatically stayed the enforcement of the
judgement on the arbitration award. After a hearing, the Bankruptcy Court
dismissed the petitions on October 30, 1996, thereby terminating the automatic
stay. Following dismissal of the bankruptcy proceedings, Lancaster commenced
proceedings to enforce its judgement. The Registrant paid the judgement in full
in December 1996.

         Amax Gold and its subsidiary Lancaster have taken the position that the
Registrant is liable for future environmental expenses under the terms of the
Venture Agreement, which currently total $3,226,000 (of which $1,370,000 has
been paid to Lancaster pursuant to the March 5, 1996 award). Amax Gold filed a
second demand for arbitration with the American Arbitration Association on
November 5, 1997. The arbitration hearing is being held on August 17-19, 1998.


<PAGE>   14


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

         (a)      Exhibits

                  27       Financial Data Schedule 
                           (filed in electronic format only)

         (b)      Reports on Form 8-K

                  None



                                   SIGNATURES

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



                                   PIEDMONT MINING COMPANY, INC.



Date: August 19, 1998              By /s/ Robert M. Shields, Jr.
                                   ------------------------------------
                                   Robert M. Shields, Jr.
                                   Chairman and Chief Executive Officer