UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB

(Mark One)

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

For the quarterly period ended: June 30, 2002

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

Commission file number: 000-12761

                           J.A.B. INTERNATIONAL, INC.
             ------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

         NEVADA                                            88-0180496
-------------------------------                  -------------------------------
(State or Other Jurisdiction of                 (I.R.S. Employer
 Incorporation or Organization)                         Identification Number)


                2400 Augusta Place, Suite 295, Houston, TX 77057
                     --------------------------------------
                    (Address of principal executive offices)

                                 (713) 785-5224
                 ----------------------------------------------
                (Issuer's telephone number, including area code)

APPLICABLE  ONLY TO ISSUERS  INVOLVED IN BANKRUPTCY  DURING THE  PRECEDING  FIVE
YEARS Check whether the Registrant  filed all documents and reports  required to
be filed by Section 12, 13 or 15(d) of the  Securities  and Exchange Act of 1934
after the distribution of securities under a plan confirmed by a court.

Yes [X} No [ ]

APPLICABLE ONLY TO CORPORATE  ISSUERS State the number of shares  outstanding of
each of the  issuer's  classes of common  equity,  as of the latest  practicable
date: Transitional Small Business Disclosure Format (Check one): Yes [_] No [_]



<PAGE>


Part I - FINANCIAL INFORMATION

Item 1. Financial  Statements.

The accompanying  interim un-audited  financial statements have been prepared in
accordance  with the  instructions  to Form 10-QSB and do not include all of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal  recurring  adjustments)  considered  necessary for a fair
presentation  have been included,  and the  disclosures are adequate to make the
information  presented not  misleading.  Operating  results for the three months
ended March 31, 2002, are not necessarily  indicative of the results that may be
expected for the year ending December 31, 2002.

These statements should be read in conjunction with the financial statements and
notes  thereto  included  in the Annual  Report on Form  10-KSB  (filed with the
Securities and Exchange Commission) for the year ended December 31, 2001.

                          J. A. B. INTERNATIONAL, INC.
                          (a development stage company)

                              FINANCIAL STATEMENTS
                               AS OF June 30, 2002


Table of Contents                                                       Page #

Balance Sheet                                                            F-1
Statements of Operations                                                 F-2
Statement of Stockholders' Equity                                        F-3
Cash Flow Statements                                                     F-5
Notes to the Financial Statements                                        F-6



<PAGE>

<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                         ( A Development Stage Company)
                                  BALANCE SHEET
                               As of June 30, 2002
                              and December 31, 2001

                                          ASSETS
                                                                          June 30,               December 31,
                                                                            2002                     2001
                                                                      ------------------     --------------------
<S>                                                                   <C>                    <C>
CURRENT ASSETS

        Cash                                                          $            3,329     $              3,037
        Accounts receivable                                                            -                        -
                                                                      ------------------     --------------------
                    Total current assets                                           3,329                    3,037
                                                                      ------------------     --------------------

MINERAL PROPERTIES AND MINING EQUIPMENT

                    Properties and equipment, net                              3,836,249                3,836,249
                                                                      ------------------     --------------------
                    Total properties                                           3,836,249                3,836,249
                                                                      ------------------     --------------------

        TOTAL ASSETS                                                  $        3,839,578     $          3,839,286
                                                                      ==================     ====================

    LIABILITIES AND STOCKHOLDERS' EQUITY

CURENT LIABILITIES
        Accounts payable and accrued expence                          $          762,477     $            744,683
        Accrued legal & accounting                                               682,379                  676,733
        Accrued compensation                                                     950,000                  800,000
        Note payable                                                              96,349                   78,500
        Liability - default judgements and settlements                         2,179,482                2,179,482
                                                                      ------------------     --------------------

                    Total current liabilities                                  4,670,687                4,479,398
                                                                      ------------------     --------------------

LONG-TERM LIABILITIES

        Note payable                                                                   -                        -
                                                                      ------------------     --------------------
                    Total long-term liabilities                                        -                        -
                                                                      ------------------     --------------------

SHAREHOLDERS' EQUITY
        Common stock - $.001 par value;
           authorized 100,000,000 shares;
           issued and outstanding,  23,908,365 shares                         55,738,158               55,738,158
        Accumulated Deficit                                                  (11,260,214)             (11,260,214)
        Accumulated Deficit during the Development Stage                     (45,309,053)             (45,118,056)
                                                                      ------------------     --------------------

                    Total shareholders' equity                                  (831,109)                (640,112)
                                                                      ------------------     --------------------

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY                            $        3,839,578     $          3,839,286
                                                                      ==================     ====================
</TABLE>

                 The accompanying notes are an integral part of
                    these consolidated financial statements.

                                      F-1

<PAGE>




<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                        ( A Development Stage Enterprise)
                            STATEMENTS OF OPERATIONS
                 For the six months ended June 30, 2002 and 2001
                      and for the Period From July 1, 1989
        ( Date of Resumption of Development Stage Enterprise Activities)
                              Through June 30, 2002




                                                                                                      Period from
                                                                                                     July 1, 1989
                                                                                                        Through
                                                                                                        June 30,
                                                                  2002                2001                2002
                                                            ------------------  ------------------ -------------------
<S>                                                         <C>                 <C>                <C>
REVENUES

        Sale of Joint Venture                               $                -  $                - $         4,232,000
        Other Income - logging                                               -                   -             193,956
        Interest                                                           726               2,506             226,490
                                                            ------------------  ------------------ -------------------

        TOTAL REVENUES                                                     726               2,506           4,652,446
                                                            ------------------  ------------------ -------------------

 EXPENSES

        General and Administrative                                     190,699             223,737          21,783,184
        General Mining and Exploration                                       -                   -          13,622,893
        Impairment of Development Costs                                      -                   -           5,393,115
        Loss on Lease & Equipment Abandonments                               -                   -           1,586,623
        Depreciation and Amortization                                        -                   -           1,686,693
        (Gain) Loss on Sale of Mining Equipment                              -                   -             171,174
        Interest Expense                                                     -                   -             498,494
        Loss from Litigation & Settlement                                    -                   -           8,628,761
                                                            ------------------  ------------------ -------------------

        TOTAL EXPENSES                                                 190,699             223,737          53,370,937
                                                            ------------------  ------------------ -------------------

        Other expense - interest                                        (1,024)             (1,650)             (2,674)
                                                            ------------------  ------------------ -------------------

        Loss Before Extra-ordinary Item                               (190,997)           (222,881)        (48,721,165)
         Extra-ordinary Item, Net Gain from Debt
           Extinguishment, Net of Tax                                        -                   -           3,412,112
                                                            ------------------  ------------------ -------------------


NET INCOME (LOSS)                                           $         (190,997) $         (222,881)$       (45,309,053)
                                                            ==================  ================== ===================

NET LOSS PER COMMON SHARE                                   $               (0) $              (0)
                                                            ==================  ==================

WEIGHTED AVERAGE COMMON
   SHARES OUTSTANDING                                               23,908,365          20,958,366
                                                            ==================  ==================
</TABLE>

(Note: weighted averages are adjusted for 3 for 1 split during 2001)


                 The accompanying notes are an integral part of
                    these consolidated financial statements.

                                      F-2

<PAGE>


<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                        ( A Development Stage Enterprise)
                            STATEMENTS OF OPERATIONS
                For the three months ended June 30, 2002 and 2001


                                                                   2002                2001
                                                            ------------------- -------------------
<S>                                                         <C>                 <C>
REVENUES

        Sale of Joint Venture                                $                - $                 -
        Other Income - logging                                                -                   -
        Interest                                                            356               1,256
                                                            ------------------- -------------------

        TOTAL REVENUES                                                      356               1,256
                                                            ------------------- -------------------

 EXPENSES

        General and Administrative                                      101,724             85,268
        General Mining and Exploration                                        -                  -
        Impairment of Development Costs                                       -                  -
        Loss on Lease & Equipment Abandonments                                -                  -
        Depreciation and Amortization                                         -                  -
        (Gain) Loss on Sale of Mining Equipment                               -                  -
        Interest Expense                                                      -                  -
        Loss from Litigation & Settlement                                     -                  -
                                                            ------------------- -------------------

        TOTAL EXPENSES                                                  101,724             85,268
                                                            ------------------- -------------------

        Other expense - interest                                           (512)               (450)
                                                            ------------------- -------------------

        Loss Before Extra-ordinary Item                                (101,880)            (84,462)
         Extra-ordinary Item, Net Gain from Debt
         Extinguishment, Net of Tax                                           -                   -
                                                            ------------------- -------------------


NET INCOME (LOSS)                                           $          (101,880)$           (84,462)
                                                            =================== ===================
</TABLE>



                 The accompanying notes are an integral part of
                    these consolidated financial statements.

                                      F-3

<PAGE>



<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                         ( A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
                               As of June 30, 2002







                                                                              Deficit
                                  Number                                     During the
                                    of                       Accumulated    Development
                                  Shares         Amount        Deficit         Stage        Total
                                 ------------ -------------- -------------- -------------- ----------
<S>                              <C>            <C>          <C>             <C>           <C>

Balance, December 31, 2001         24,358,365     55,738,158   (11,260,214)   (45,118,056)  (640,112)

Net Loss                                                                         (190,997)  (190,997)
                                 ------------ -------------- -------------- -------------- ----------

Balance, June 30, 2002             24,358,365    $55,738,158 $ (11,260,214)  $(45,309,053) $(831,109)
                                 ============ ============== ============== ============== ==========
</TABLE>


                 The accompanying notes are an integral part of
                    these consolidated financial statements.

                                      F-4

<PAGE>




                 The accompanying notes are an integral part of
                    these consolidated financial statements.

                                      F-5

<PAGE>


                           J.A.B. INTERNATIONAL, INC.
                                AND SUBSIDIARIES

                          Notes to Financial Statements

                (Information with Respect to the Six Months Ended
                      June 30, 2002 and 2001 is Unaudited)




NOTE  1  -  OPERATIONS  AND  BASIS  OF  PRESENTATION

J.A.B.  International,  Inc. (the Company)  formerly known as Brush Creek Mining
and Development Company,  Inc. was incorporated in 1982 and operated as a mining
and mineral  development  company until April 17, 1989, at which time its mining
operations,  all of which  had been  conducted  through  the Brush  Creek  Joint
Venture  (BCJV) (40% owned) were  terminated.  Shortly  thereafter,  the Company
became actively  engaged in acquiring  additional  mineral  properties,  raising
capital,  and preparing  properties for resumed production.  The Company did not
have any  significant  operations or activities from April 17, 1989 through June
30, 1989 and suspended  all mining  operations  and reduced its  activities to a
care and maintenance level. Accordingly, the Company is deemed to have reentered
the development stage effective July 1, 1989.

During the year ended  December 31,  2001,  the Company  changed its  accounting
fiscal  year end from June 30th to a calendar  year end of  December  31st.  The
Company's financial statements reflect this change.

In February 1992, the Company began limited  production at the Ruby Mine under a
permit that limited mill capacity to 225 tons per day. Production was terminated
due to adverse weather  conditions in December 1992. The Company resumed limited
production  at the Ruby Mine in July  1993 and  gradually  increased  production
until October 1996 when  production  was  suspended.  In early 1997, the Company
began preparing the lower Brush Creek Mine for limited production. In June 1997,
the Company  received  interim approval from the United States Forest Service to
transport thirty tons of ore per day from the lower Brush Creek Mine to the Ruby
mill site. Some of the Company's  leases have been defaulted upon. See footnotes
5 and 11. The Company has not  commenced  economic  production  and is therefore
still considered to be in the development stage.

The Company's financial statements have been presented on the basis that it is a
going concern,  which contemplates the realization of the mineral properties and
other  assets  and the  satisfaction  of  liabilities  in the  normal  course of
business.  The Company has  incurred  losses of  $56,378,270  from  inception to
December 31, 2001.  The Company has not realized  economic  production  from its
mineral properties as of December 31, 2001.  Management is actively  negotiating
the terms for additional capital of $18,000,000 to fund operations in Mexico and
Northern  California.  These financial statements do not include any adjustments
that might result from the outcome of these uncertainties.

                                      F-6

<PAGE>



NOTE 2  - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The  preparation  of the  financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amount of assets and  liabilities,  and
disclosure of contingent  liabilities  at the date of the financial  statements,
and the reported  amount of revenues and expenses  during the reporting  period.
Actual results could differ from those results.


Mineral Properties and Mining Equipment

Mineral  properties  and  mining  equipment  include  land  (and in prior  years
development  costs)  and mining  equipment  carried  at cost.  Mining  equipment
including mill  facilities is depreciated  using the  straight-line  method over
estimated useful lives of 5 to 15 years, or the units-of-production method based
on  estimated  tons of ore  reserves if the  equipment is located at a producing
property with a shorter  economic life.  Mining  equipment not in service is not
depreciated.

In the past,  the Company  deferred  direct  costs  related to the  acquisition,
exploration and development of mineral properties pending determination of their
economic viability, which normally entails performing an in-depth geological and
geophysical study. If no minable ore body was discovered, previously capitalized
costs were  expensed  in the period the  property  was  abandoned.  Any  revenue
generated from pre-production activities was offset against the related deferred
development and  pre-production  costs. When a property was placed in commercial
production,  such  deferred  costs were depleted  using the  units-of-production
method.

During 1997,  the Securities and Exchange  Commission  (SEC) staff  reconsidered
existing accounting  practices for mineral  expenditures by United States junior
mining companies.  They now interpret  generally accepted  accounting policy for
junior mining companies to permit capitalization of acquisition, exploration and
development  costs only after  persuasive  engineering  evidence  is obtained to
support  recoverability  of these costs  (ideally upon  determination  of proven
and/or  probable  reserves  based upon dense  drilling  samples and  feasibility
studies  by  a  recognized  independent  engineer).  Although  the  Company  has
performed  drilling  samples,  and an  independent  engineer has deemed the gold
properties contain profitable reserves in excess of property and equipment costs
incurred,  management  has  chosen to  follow  the more  conservative  method of
accounting by expending the previously capitalized gold mineral costs, for which
there is no feasibility study.

                                      F-7

<PAGE>



Land Options

In prior years it was the Company's policy to record land options at cost during
the initial year of the lease on the mining  properties.  As noted above,  since
the  Company  interprets   generally  accepted  accounting  policies  to  permit
capitalization of acquisition costs including leases and land options only after
persuasive  engineering evidence has been obtained to support  recoverability of
these costs, these costs will now be expensed, effective July 1, 1996.


Asset Impairment

In  accordance  with  Statement  of  Financial  Accounting  Standards  No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of," (SFAS 121),  management of the Company reviews the net carrying
value of the Northern  California mines and development  properties on a regular
quarterly  basis.  Estimated future net cash flows from each mine are calculated
using estimated future prices,  operating  capital,  and reclamation costs on an
un-descended  basis.  Reductions in the carrying value of each mine are recorded
to the extent the net book  value of the  investment  exceeds  the  estimate  of
future discounted net cash flows.

The  recoverability  of the carrying value of development  projects is evaluated
based upon persuasive  engineering  evidence of estimated  future net cash flows
from each property,  determined as described above, using estimates of contained
mineralization expected to be classified as proven and/or probable reserves upon
completion of a  feasibility  study.  Reductions  in the carrying  value of each
property are recorded to the extent that the  Company's  carrying  value in each
property exceeds management's estimate of future discounted net cash flows. When
mining equipment is idle,  management decides if it will be used productively in
the  future.  For idle  equipment  that is unique to an  abandoned  or  impaired
property,  the Company  reduces its  carrying  value  following  the  impairment
accounting principle.

Management's estimates of gold prices, recoverable proven and probable reserves,
operating  capital,  and  reclamation  costs are  subject to  certain  risks and
uncertainties which may affect the recoverability of the Company's investment in
property,  plant, and equipment.  Although management has made its best estimate
of these factors  based on current  conditions,  it is reasonably  possible that
changes could occur in the near term which could adversely  affect  management's
estimate of the net cash flow expected to be generated from its operations.


Office Furniture and Equipment

Office furniture and equipment are recorded at cost. Depreciation is computed by
the straight-line method based upon the estimated useful lives of the respective
assets, generally three to five years.

                                      F-8

<PAGE>



Income  (Loss) per Common Stock

Income  (loss)  per  share of common  stock is  computed  based on the  weighted
average  number  of  shares  outstanding.   Warrants,  options  and  convertible
debentures  have not been included in the  calculation  as their effect would be
anti-dilutive.  All common shares included in the financial statements reflect a
reverse  stock  split of 1:12,  which the Board of  Directors  approved  and was
effective as of April 13, 1999.


Reclamation and Environmental Costs

Reclamation costs and related accruals are based on the Company's interpretation
of  environmental  and  regulatory  requirements.  Minimum  standards  for  mine
reclamation have been established by various governmental agencies. Reclamation,
site restoration, and closure costs for each producing mine are accrued over the
life of the mine  using  the  units-of-production  method.  Ongoing  reclamation
activities are expensed in the period incurred.


Income Taxes

The Company accounts for income taxes using the liability method, which requires
recognition of deferred tax liabilities,  and assets for the expected future tax
consequences  of events that have been included in the  financial  statements or
tax returns.  Deferred tax assets and  liabilities  are determined  based on the
difference  between  the  financial  statements  and tax  basis  of  assets  and
liabilities  using  enacted  tax  rates in  effect  for the  year in  which  the
differences are expected to reverse.

Inventory

Gold inventory is stated at net realizable value.


Stock Based Compensation

In October 1995, the Financial  Accounting  Standards Board issued  Statement of
Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation,"  (SFAS  123),  which is  effective  for periods  beginning  after
December  15,  1995.   SFAS  123  requires  that  companies   either   recognize
compensation  expense  for  grants of stock,  stock  options,  and other  equity
instruments based on fair value or provide pro forma disclosure of the effect on
net income and earnings per share in the Notes to the Financial Statements.  The
Company  intends to continue to account for its stock-based  compensation  under

                                      F-9

<PAGE>



Accounting  Principles  Board No. 25;  however,  the  Company  has  adopted  the
disclosure provisions of SFAS 123 for the fiscal year ended June 30, 1998.


Cash and Cash Equivalents

For purposes of reporting cash flows,  cash and cash equivalents  include highly
liquid debt instruments purchased with a maturity of three months or less.


Earnings Per Share

In February  1997,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement of Financial  Accounting  Standards No. 128 (SFAS 128),  "Earnings Per
Share",  which was adopted by the Company for the year ended June 30, 1997. SFAS
128 replaces the  presentation of primary earnings per share with a presentation
of basic  earnings  per share based upon the weighted  average  number of common
shares for the period.


Leases

The Company  leases office space in Houston,  Texas and plans to open offices in
New York, N.Y. in the near future.


New Accounting Pronouncements

In June 1997, the FASB issued  Statement of Financial  Accounting  Standards No.
130 (SFAS 130), Reporting Comprehensive Income. This statement requires that all
items  that  are  required  to  be  recognized  under  accounting  standards  as
components of comprehensive  income be reported in a financial statement that is
displayed with the same prominence as other financial statements.  SFAS 130 will
be adopted by the Company for the year ended  December  31,  1998.  Prior period
financial statements provided for comparative purposes will be reclassified,  as
required. Upon adoption, the Company does not expect SFAS 130 to have a material
effect upon the Company's financial condition or results of operations.

In June 1997, the FASB issued Statements of Financial  Accounting  Standards No.
131  (SFAS  131),  Disclosures  about  Segments  of an  Enterprise  and  Related
Information. The statement requires the Company to report income/loss,  revenue,
expense and assets by  business  segment  including  information  regarding  the
revenues derived from specific  products and services and about the countries in
which the Company is  operating.  The  Statement  also requires that the Company
report  descriptive  information  about  the way that  operating  segments  were
determined,  the  products  and  services  provided by the  operating  segments,
differences  between the measurements used in reporting segment  information and

                                      F-10

<PAGE>



those used in the Company's general-purpose financial statements, and changes in
the  measurement  of segment  amounts  from period to period.  SFAS 131 has been
adopted by the Company for the year ended December 31, 1998.  This statement has
no effect on financial  statements  traditionally  presented by the Company, but
increases required disclosures.


NOTE 3  - AFFILIATES AND RELATED PARTIES

Significant relationships with (1) companies affiliated through common ownership
and/or management, and (2) other related parties are as follows:

The Company has Joint ownership in the "Esperanza Gold Project". See Footnote #5
for a description of this Project and the joint ownership.


NOTE 4  - OFFICE FURNITURE AND EQUIPMENT

Office furniture and equipment have been written-off as a loss as the items were
repossessed, bartered, claimed or abandoned during the year ended June 30, 1999.
The Company  shall  reinstate  any  property  that is  recovered  if the Company
satisfies  amounts  that it is in default.  See  footnotes  6,7 and 12 regarding
commitments and contingencies with regard to the Company's property.


NOTE 5  - MINERAL PROPERTIES AND MINING EQUIPMENT

The Company's net investment in mineral  properties  and mining  equipment is as
follows:

<TABLE>
<CAPTION>
                                                    Development    Mining
                                        Land         Costs        Equipment       Total
                                     ------------  ------------  ------------   ------------
<S>                                  <C>            <C>           <C>           <C>
Carson Mine . . . . . . . . . . .    $ 2,199,858    $         -    $   42,835    $ 2,242,693
Brush Creek Mine. . . . . . . . .        408,496              -       403,171        811,667
Gardner's' Point and  Pioneer Mines      185,477        770,327       128,521      1,084,325
Ruby Mine . . . . . . . . . . . .              -              -     1,589,229      1,589,229 (*)
High Commission Mine. . .                101,875              -             -        101,875
Esperanza gold project and
Vocar S.A.R.L. Permits                     3,580              -             -          3,580
                                     ------------  ------------  ------------   ------------
                                       2,899,286        770,327     2,163,756      5,833,369
Accumulated depreciation. . . . .              -              -    (1,172,549)    (1,172,549)
                                     ------------  ------------  ------------   ------------
                                     $ 2,899,286    $   770,327    $  991,207    $ 4,660,820
Less abandoned During 1999                                           (991,207)      (991,207)(*)
                                     ------------  ------------  ------------   ------------
                                     $ 2,899,286    $   770,327    $        -    $ 3,669,613
                                     ============  ============  ============   ============
</TABLE>

(*) Note that the Company no longer holds a lease on Ruby Mine. The equipment on
the property remains with the former lessor.  The Company hopes to renegotiate a
lease or  purchase  the  property  at  which  time  equipment  may or may not be
returned. Equipment on other properties is either no longer on the properties or
is obsolete.

                                      F-11

<PAGE>



The  Company  owns or holds  claims and rights to the above  properties  but has
property taxes,  maintenance fees and reclamation  bonds outstanding with regard
to its  California  properties.  Those  amounts  have been  included in accounts
payable.

All of the Company's mineral properties in the U.S. contain mines, which were in
production  previously.  All such mines,  except for the Esperanza Gold Project,
Sabinas,  Mexico Coal Project and Vocar S.A.R.L.  Permits,  Gardner's  Point and
Pioneer Mines are located in the  Allegheny-Forest-Downieville  mining districts
on the western slope of the Sierra Nevada mountain range in Northern  California
and aggregate  approximately 6,300 acres.  Because of the close proximity of the
mines to each other,  the Company plans to centralize  milling  operations.  The
Gardner's  Point and  Pioneer  Mines  are  located  outside  this  district  and
management  has been  evaluating  alternatives  to  placing  them  into  current
production.  The Esparanza Gold Project is located in Southeastern Honduras. The
VOCAR  S.A.R.L.  mining  permits are located in the  Central  African  Republic.
Current developments and commitments related to certain properties follow:


Reverse Merger between Brush Creek Mining & Development Company
        and J.A.B. International, Inc.

On April 14,  1999 the  Company  completed  a merger  whereby  it  obtained  two
properties.  The company obtained a Central African Republic  registered company
named VOCAR S.A.R.L.  which holds the permits to a mining concession  located in
the  Southeastern  section of the  country.  This  company was formed in 1987 by
Robert  Hendry,  Esq. And Harold McQuire in 1994 and purchased by the Company in
1994.  The permits for the mining  property were granted in November of 1995 and
are in VOCAR S.A.R.L.  and the Company's name. The permits require a maintenance
fee of  $5,000  every 5 years,  of which no fees are  outstanding.  The  permits
require  that the  Company  pay an import  tax on mining  equipment  of  various
amounts  and an export  tax on  minerals  at 8.25% of the  value in the  Central
African  Republic.  The mining area is 3,500 square  kilometers in size with one
major river with  tributaries.  The Company has initiated test pits to determine
the  recoverability  of diamonds and gold.  A full  geological  and  engineering
report is planned.

In addition to this property,  the Company acquired the "Esperanza Gold Project"
from the Esperanza  Mining Company in 1997. 80% of the Esperanza  Mining Company
was purchased with 50,000 common shares of the Company's  stock and an agreement
to pay a 3% net smelter royalty. Through additional agreements,  the Company has
issued an additional  100,000 common shares of the Company's  stock.  The mining
company was formed in the US by 3 Honduran  natives who owned the property.  The
property is roughly  49,000 acres located in the North Central part of Honduras.
Only  minor  exploration  has  taken  place  to  date.  A  full  geological  and
engineering  report is planed.  The Honduran  Government changed the mining laws

                                      F-12

<PAGE>



during the year 2000  whereby the Company had its law firm in  Tegucigalpa  file
papers with the bureau of mines to keep current.  The Company is responsible for
filing  a  Mining  Plan of  Operations  with the  Government  in  order  stay in
compliance with the new law.


NOTE 6  - DEMAND NOTE PAYABLE AND LINES OF CREDIT

On February 1, 2001, the Company entered into a 120-day note payable for $12,000
with an interest rate of 15% for the 120-day period. Principal and interest were
due at the end of the term. The Company will extend the due date until such time
that alternative financing becomes available.

The Company  has an  additional  demand  note  payable in the amount of $50,000,
which has  100,000  shares of common  stock to be issued in lieu of an  interest
charge.  The note was incurred with  installment  receipts during the year ended
December 31, 2001.

No unused lines of credit exist.


NOTE 7  - INCOME TAXES

At December 31, 2001 the Company had available net operating loss carry forwards
for  financial  statement  and  federal  income tax  purposes.  These loss carry
forwards expire between 2002 and 2021.

The Company has reported income tax losses of approximately $56,349,770 in prior
years.  In  general,  income tax losses are carried  forward to future  years to
reduce  future  income  taxes,  however,  the full amount of these losses is not
available or has been reduced.

The  Company's  management  has decided a valuation  allowance  is  necessary to
reduce any tax benefits because the available  benefits are more likely than not
to expire before they can be used.


NOTE 8  - SHAREHOLDERS' EQUITY

For the year ended December 31, 2001,  the Company  changed from its fiscal year
end of June 30th to a calendar year end of December 31st. The accounting for the
years ended  December  31,  2001 and 2000 are  presented  comparatively  for the
respective  years.  The  shareholders'  equity  section  reflects this change in
year-end.

During the year ended December 31, 2001, the following major equity transactions
occurred:

On June 4, 2001, the Company acquired 100% of the stock in Gables Company, Inc.,
a Florida corporation,  in exchange for the transfer to Gables Company,  Inc. of
all personal and real  properties,  both secured and unsecured,  relating to the
Brush Creek property in California. As of June 4, 2001, Gables Company, Inc. has
had no assets or liabilities or operations since 1994,  therefore the Company is
not required to include separate financial statements.  Gables Company, Inc. has
adopted the same fiscal year end as the Company.

                                      F-13

<PAGE>



Pursuant  to a  non-binding  letter of intent  dated June 7, 2001,  the  Company
acquired the right to purchase certain mineral  properties located in Zacatacas,
Mexico.

Pursuant  to the  unanimous  written  consent of the Board of  Directors  of the
Company dated June 1, 2001, the Board authorized the creation or the acquisition
of  subsidiaries  to hold mining  properties.  On June 13, 2001,  the  following
documents were filed with the Florida Department of State:

         Articles of Incorporation for J.A.B. Central Africa, Inc.
         Articles of Incorporation for J.A.B. Honduras, Inc.
         Articles of Incorporation for J.A.B. Mexico, Inc.

On or about June 14,  2001,  the Company was issued 100% of the stock in each of
these new corporations. On or about June 14, 2001, the following acquisitions or
dispositions of assets were commenced:

The  Company  transferred  to J.A.B.  Central  Africa,  Inc.  all of the  assets
comprising its mining  operations in Central Africa,  including  permits related
thereto.  The Company  transferred  to J.A.B.  Honduras,  Inc. all of its assets
comprising the "Esperenza Gold Project," a 49,000-acre  placer gold mine located
in Southeastern Honduras. The Company assigned to J.A.B. Mexico, Inc. its rights
to acquire certain mineral properties  located in Zacatccas,  Mexico. All of the
above  assets have no recorded  value.  The assets will be valued in  accordance
with accounting standards after appropriate geological reports are comprised.

The Company  undertook a three for one stock split  during the third  quarter of
fiscal 2001. The earnings per share calculation have been retroactively adjusted
in consideration of this split.

The Company issued 1,700,000 common shares for services  provided to the Company
at a value of $51,000.  The President of the Company  received  1,000,000 of the
1,700,000 shares issued per his compensation  agreement with the Company.  These
shares were issued prior to the three for one stock split listed above.

During the year ended December 31, 2000, the following major equity transactions
occurred:

The Company  undertook an S-8  registration for the issuance of 1,330,000 common
shares with a value of $987,500 during the first quarter of the year. The shares
issued were used to reduce accrued  consulting  expenses  incurred during fiscal
year 1999.

The Company also issued 174,209 common shares with a value of $57,017 to convert
a demand note payable to common stock.

The Company sold 465,791  shares of common stock for $152,449 in cash during the
fiscal year 2000.

                                      F-14

<PAGE>



During fiscal 1999, the following major equity transactions occurred:

On March 1, 1999 the Company issued  3,730,861  common shares valued at $894,287
to Jefferson  Adams Bootes for services as a Director of the Company.  After the
issuance there were 9,235,040 shares issued and outstanding.

The Company  offered a 1 for 12 reverse  stock  split on April 13, 1999  leaving
869,455 common shares issued and outstanding.

In an exchange of 3,580,000  common shares of the  Company's  stock on April 14,
1999, the Company executed a tax-free reverse merger with a Florida  corporation
by the name of J.A.B. International, Inc. The merger was accounted for under the
purchase method.  The transaction was valued at the Company's par value.  When a
proper reserve study is completed of the acquired  assets,  the transaction will
be  revalued in  accordance  with  industry  standards.  The assets  transferred
included  VOCAR  S.A.R.L.,  a company that holds permits to a mining  concession
located in the  Southeastern  section of the Central African  Republic,  and the
Esperanza Gold Project, a 49,000-acre placer gold mine in Southeastern Honduras.
At the time of merger the Company  changed its name from Brush Creek  Mining and
Development Company, Inc. to J.A.B. International,  Inc. The Florida Corporation
was then dissolved leaving J.A.B. International, Inc., a Nevada corporation, the
surviving  company.  After this merger,  the Company had 4,449,455 shares issued
and outstanding.

During fiscal 1998, the following major equity transactions occurred:

The Company  affected a 10 for 1 reverse stock split.  To effect the split,  the
Company's  authorized,  issued,  and  outstanding  no par stock was reduced from
53,705,482 to 5,504,179.

At year-end,  the Company  shareholders'  equity had increased  2,673,600 and is
carried as subscribed common stock.

The Company sold 1,867,131  shares of Common Stock for $2,224,599.  These shares
were sold pursuant to Regulation S of the Securities Act of 1933.

The Company  issued  500,000  shares of Common Stock with a value of $3,250,001.
The shares were registered  with the Securities and Exchange  Commission on Form
S-8.

The  following  shares  were sold under  Regulation  D and  Section  4(2) of the
Securities  Act of 1933.  Investors  who acquire such shares were required to be
accredited investors.  The Company has agreed to register the shares pursuant to
a  registration   statement  to  be  filed  with  the  Securities  and  Exchange
Commission.  The Company sold 600,000 restricted shares of Common Stock at $.125
per share  wherein  the Company  received  net  proceeds  of $75,000;  1,822,221
restricted shares of Common Stock at $.15 per share wherein the Company received
net proceeds of $290,000;  4,300,000  restricted  shares of Common Stock at $.07

                                      F-15

<PAGE>



per share  wherein the Company  received  net  proceeds of  $301,000;  6,600,000
restricted shares of Common Stock at $.10 per share wherein the Company received
net proceeds of $660,000;  670,000 restricted shares of Common Stock at $.50 per
share wherein the Company received net proceeds of $335,000; 1,750,00 restricted
shares of Common  Stock at $.184 per share  wherein  the  Company  received  net
proceeds of $322,000; 60,000 restricted shares of Common Stock at $.50 per share
wherein the Company  received  net  proceeds  of $30,000;  1,150,000  restricted
shares of Common  Stock at $.184 per share  wherein  the  Company  received  net
proceeds of $211,600.  The Company sold  5,000,001  shares of Common Stock under
Regulation  S at $.65 per share  wherein the Company  received  net  proceeds of
$3,250,000.

During fiscal 1997, the following major equity transactions occurred:

The Company sold 286,756  shares of Common  Stock for  $1,016,250.  These shares
were sold pursuant to Regulation S of the Securities Act of 1933.

The  Company  issued  2,000  shares  of Common  Stock  with a value of $5,200 in
connection with its acquisition of the New California Placer Mine.

The Company  issued 16,500  shares of Common Stock with a value of $41,250.  The
shares were registered with the Securities and Exchange Commission on Form S-8.

Shareholders'  equity increased by $1,200,000 as shares issued in the prior year
were used to settle the Zuri Invest litigation.  See 100,000 shares below issued
in 1996.

The Company sold 360,001  restricted  shares of Common Stock at $.0625 per share
wherein the Company received net proceeds of $225,000; 660,000 restricted shares
of Common Stock at $.07 per share  wherein the Company  received net proceeds of
$460,600;  175,455  restricted  shares of Common Stock at $.11 per share wherein
the Company  received  net proceeds of $193,000;  140,000  restricted  shares of
Common  Stock at $.125 per share  wherein the Company  received  net proceeds of
$175,000.  All  shares  were sold under  Regulation  D and  Section  4(2) of the
Securities  Act of 1933.  Investors who acquired such shares were required to be
accredited investors.  The Company has agreed to register the shares pursuant to
a  registration   statement  to  be  filed  with  the  Securities  and  Exchange
Commission.

During fiscal 1996, the following major equity transactions occurred:

The Company sold 678,350  shares of Common  Stock for  $6,875,416.  These shares
were old pursuant to Regulation S of the Securities Act of 1933.

The  Company  issued  110,000  shares as partial  settlement  of the Zuri Invest
litigation.  These shares were held in trust by the adverse party. The stock was
forfeited  and was valued at fair market  value on the forfeit  date,  i.e.  the
trading price.

The Company  issued  21,667  shares as partial  settlement  of the Royal Bank of
Scotland litigation.

                                      F-16

<PAGE>



During fiscal 1995, the following major equity transactions occurred:

The Company sold 256,667  shares of Common  Stock for  $3,696,457.  These shares
were sold pursuant to Regulation S of the Securities Act of 1933.

During fiscal 1994, the following major equity transactions occurred:

The Company  issued 21,510 shares of Common Stock in exchange for certain legal,
engineering,  consulting,  and  employment  services  rendered  to  the  Company
totaling $938,159.(*)

The Company  issued shares of the Company's  Common Stock  pursuant to a service
agreement with James Anderson totaling $421,875.

The Board of Directors of the Company  approved a 15-for-1  reserve  stock split
effective November 29, 1993.

During fiscal 1993, the following major equity transactions occurred:

The  Company  issued  53,940  shares  of  Common  Stock in  connection  with its
acquisition  of  Trans-Russian.  Total  reduction  in equity in  relation to the
acquisition was $84,176.(*)

In connection  with its mining  properties,  the Company  issued 3,729 shares of
Common Stock for accrued lease payments of $107,710, prepayment of certain lease
expenses of $113,153, and acquisition of mining equipment of $34,375. (*)

The Company  issued  10,514  shares of Common  Stock with a value of $713,494 in
satisfaction of outstanding debt obligations amounting to $558,592.(*)

The Company  issued  10,026  shares of Common  Stock with a value of $500,285 in
satisfaction of the Company's obligation to CSGM of $574,750.(*)

The Company  issued 18,319 shares of Common Stock in exchange for certain legal,
engineering,  consulting,  and  employment  services  rendered  to  the  Company
totaling $1,616,659. (*)

The Company sold 1,066 shares of stock at $7.50 per share, totaling $80,000.

The Company  issued  3,334  shares of Common  Stock  pursuant to the exercise of
options in settlement of debt to CSGM of $250,000.(*)

During fiscal 1992, the following major equity transactions occurred:

The  Company  issued  15,534  shares  of  Common  Stock in  connection  with its
acquisition  of Sierra Gold and the related  options on mineral  properties  for
$74,807.(*)

                                      F-17

<PAGE>



The  Company  issued  1,031  shares  of  Common  Stock  in  connection  with its
acquisition of the  Kate-hardy  Mine for $88,667 and prepayment of certain lease
expenses of $66,000. (*)

In connection  with its lease on the Ruby Mine,  the Company issued 2,480 shares
of Common Stock for:  accrued  lease  payments of $72,502,  prepayment  of lease
obligation  of  $63,287,  and  modification  and  extension  to  lease  term  of
$154,836.(*)

In  connection  with its lease on the Rising Sun Mine,  the  Company  issued 533
shares of Common  Stock for accrued  lease  payments of $22,002,  prepayment  of
lease  obligation of $18,687,  and  modification  and extension to lease term of
$4,111.(*)

The Company issued 2,444 shares of Common Stock in  satisfaction  of outstanding
debt obligations amounting to $336,617.(*)

The Company issued 88000 shares of Common Stock with a value of $748,750 to CSGM
in satisfaction of the Company's obligation to CSGM of $900,000.(*)

The Company  issued 11,791 shares of Common Stock in exchange for certain legal,
engineering,   and  employment   services   rendered  to  the  Company  totaling
$1,286,852.(*)

In May 1992, the Company entered into a three-year  consulting contract with Mr.
Anderson in exchange  for issuing  6,667  shares of Common Stock with a value of
$531,250.(*)

Ms. Anderson paid expenses on behalf of the Company amounting to $105,055.  This
amount and the  proceeds  received  from the  extension  of warrants of $207,750
totaling $312,805 is accounted for as a contribution of capital.

The Company made several  private  placements of a total of 14,210 shares of its
Common Stock at prices ranging from $.90 to $1.50 per share totaling $2,298,451,
net of offering costs of $177,974.

During fiscal 1991, the following major equity transactions occurred:

On June 29,  1990,  the  Company  sold  13,173  units  for  $987,955.  Each unit
consisted  of one share of Common  Stock and a warrant to purchase  one share of
Common Stock. The Company's previous chairman,  Mr. Benarroch,  is the president
of the  underwriter,  Euro  Canadian,  in this  transaction,  which  received  a
commission of $98,796.  The underwriter also received warrants to purchase 3,334
shares of the  Company's  Common Stock at $.50 through July 1992.  In July 1990,
the Company sold an additional 14,161 units. The Company received $910,840 after
offering  expenses.  Warrants  covering  25,333 shares are  exercisable  at $.70
through June 1992, and warrants  covering  2,000 shares are  exercisable at $.90
through June 1992.

On June 26, 1990,  the  Company's  Board of  Directors  approved the issuance of
7,376 units to ISGM and CSGM in  satisfaction  of the Company's debt of $553,242

                                      F-18

<PAGE>



to these entities. Each unit consists of one share of the Company's Common Stock
and one  warrant to purchase  one share of stock at $.50 per share,  exercisable
through July 1992. As of December 31, 1990,  these units had not been  delivered
due to administrative delays. As an inducement to the approval of the consulting
agreement  described below, CSGM and ISGM agreed to cancel the units approved by
the Board of Directors on June 26, 1990.

On January 23, 1991,  the Company  entered into an agreement  with CSGM and ISGM
whereby CSGM and ISGM are obligated to render consulting services to the Company
to assist the Company in the acquisition of mining properties, identification of
and negotiation with the Company's creditors,  and other day-to-day business and
administrative tasks. In exchange for rendering consulting services, the Company
agreed to issue 12,000  shares of its Common Stock to CSGM.  As the market value
of the shares issued was approximately equal to that of the units canceled,  the
issuance  of the  shares  has been  treated  as a  replacement  of the units for
accounting purposes.(*)

In January 1991, an additional 4,927 shares of Common Stock were issued to third
parties. These shares, valued at fair market value of $630,568,  were issued for
legal and  consulting  services  rendered  and the  repayment  of a note payable
issued for services of $114,560.(*)

The Company  agreed to issue 2,000  shares of Common Stock valued at fair market
value of $581,250 to an engineering firm for past and future services.(*)

The Company  entered into a litigation  settlement with Mr.  Benarroch,  whereby
6,667 shares of the  Company's  outstanding  Common  Stock were  returned to the
Company and,  simultaneously,  the Company issued back to Mr.  Benarroch  10,000
shares,  valued at fair market value of $1.75 per share. The settlement resulted
in a net issuance of 3,333 shares of Common Stock valued at $875,000.(*)

During  fiscal  1990,  the Company  initiated a private  placement of its Common
Stock. In April 1990, the Company sold 15,000 shares for $450,000.

In March 1990,  Ms.  Anderson  sold 6,667  shares of her Common Stock to Sungold
Mining Corp.  (Sungold) for $10,000 as an inducement for an affiliate of Sungold
to lend the Company $140,000. (*)

In March and May 1990,  the  Company  issued  23,500  shares of Common  Stock in
exchange for legal services valued at $72,500. (*)

(*) For each issuance involving non-cash consideration, the Company recorded the
fair market value of the shares issued as the consideration received.


NOTE 9  - STOCK OPTIONS AND WARRANTS

Upon the merger that  occurred on April 14, 1999,  the Company  cancelled all of
its existing stock option agreements.

                                      F-19

<PAGE>



NOTE 10  - COMMITMENTS AND CONTINGENCIES

Compensation Agreement:

During March of 1999, the Company entered into a 5-year  compensation  agreement
compensation agreement with Jefferson Adams Bootes, the President and CEO of the
Company,  whereby he is to  receive  compensation  of $25,000  per month for his
duties as President and CEO.

Changes in management:

Recent  changes  in  management,  as  noted  in  footnote  18,  have  led to the
contingency  that all  transaction and liabilities may not have been recorded in
the Company's  accounting  records during fiscal year 1999. With the uncertainty
of  the  Company's  cash  flows,  the  Company's  management  chose  to  satisfy
liabilities that may or may not have been recorded with the bartering of company
assets  such as  equipment.  In  addition,  assets such as  equipment  have been
claimed by lessors of property in which the Company is in default.

The Company's management has inspected the mining locations for property and has
written-off  as an  abandonment  loss any assets not  observed.  In addition the
Company's  management has decided to leave accounts  payable amount as being due
if satisfaction has not been recorded in the Company's  accounting  records.  At
such time that the Company has funds to  research  these  amounts as having been
satisfied and possibly  additional  amounts due, the Company will  determine the
materiality of these amounts in order to determine if a prior period  adjustment
should be recorded and revised statements issued.


Contingencies:

The Company is currently in default of its property  taxes on the  properties in
Sierra  County,  CA. The Company has also had judgments  filed against it, which
have been accrued at $4,951,229.  The Company may have additional  suits brought
against it in the  future.  Currently  the Company is  negotiating  settlements,
however,  there is no assurance as to whether the Company will be  successful in
these negotiations.  The Company has reduced these accrued amounts in accordance
with the settlement agreements agreed to by the litigants.

Judgments  whereby a settlement  agreement has been agreed to have been recorded
at the minimum  amount due. The additional  judgment  liability that the Company
would record if a settlement were not in place is $5,850,000.

The  Company  is  currently  accruing  expense  reimbursements  for the  Company
president to retain all records for the Company.

The Company's  mining and exploration  activities are subject to various federal
and state laws and  regulations  governing the  protection  of the  environment.
These laws and regulations are continually  changing and are generally  becoming
more  restrictive.  The Company  conducts  its  operations  so as to protect the


                                      F-20
<PAGE>



public health and  environment and believes its operations are not in compliance
with all applicable laws and  regulations.  The Company has made, and expects to
make in the future,  expenditures to comply with such laws and regulations.  The
Company cannot predict such future expenditures.

The Company contracted with an outside consultant to develop a cost estimate for
future  reclamation  costs  on the  Gardner's  Point  Mine.  This  estimate  was
developed  pursuant to SMARA  guidelines and required for submission to the lead
agency and the  Department of  Conservation  as the Company  develops a plan for
future  mining  at this  site.  Future  reclamation  costs are  estimated  to be
$380,000.  Additional  bonding for  reclamation  will be required  subsequent to
final  approval  estimated to be  completed  in May of 1998.  As of this balance
sheet date, a contingent  liability  for the amount of the new  estimate,  which
exceeds the liability,  accrued in prior years was not included in the Company's
financial statements. Consistent with the Company's policy, as discussed in Note
1,  reclamation  costs  are  accrued  over  the  life  of  the  mine  using  the
units-of-production  method.  Once the mine enters the production stage,  should
the end of the mine's  production  life become  imminent,  the entire  estimated
liability would be expensed.

On April 1, 1997,  the Company sold certain  pieces of equipment with a net book
value of  $73,191  for  $60,000  pursuant  to a  sale-leaseback  agreement.  The
agreement  required a single $90,000 payment on July 31, 1997 to reacquire title
to the equipment.  The Company did not make the $90,000 payment and defaulted on
the agreement.  Subsequent to the default, the Company made a $10,000 payment to
continue to use the equipment.  No additional agreements or modifications to the
original agreement have been made. Due to the Company's default,  the assets are
not included on the books of the Company.


NOTE 11  - LEGAL PROCEEDINGS

Filing of Reorganization

On December 1, 2000,  the Company filed for  reorganization  under Chapter 11 in
the state of Florida. The court dismissed this filing on February 15, 2001.

On June 12, 2001, a subsidiary of the Company,  Gables Company,  Inc., filed for
reorganization under Chapter 11 in the state of Florida. The court had converted
the  filing to  Chapter 7 during  the month of  December  2001.  The  Company is
currently  reorganizing  its debt  issues and plans to  litigate  a  substantive
portion of litigation debt and convert the Chapter 7 filing to Chapter 11.


The Royal Bank Action.

During the quarter ended June 30, 2002, the Company has negoted a new settlement
agreement  to reduce the  amount due to  $250,000  also with  319,000  shares of
common stock due at the time payment is made. Prior agreements are as follows:

                                      F-21

<PAGE>



On December 13,  1995,  the Company  entered into an agreement  (the "Royal Bank
Agreement") to settle an action commenced by the Royal Bank of Scotland,  et al.
by delivering to the plaintiffs (the "Royal Bank Plaintiffs")  216,667 shares of
the Company's Common Stock and cash in the amount of $241,000.  The Company also
assigned  to the Royal Bank  Plaintiffs  a portion of its  interest in any total
recovery from claims against the law firm formerly known as Bartel,  Eng, Miller
& Torngren, the Company's formal legal counsel ("Bartel,  Eng"). On December 13,
1996,  the  Company  was  further  required to deliver to each of the Royal Bank
Plaintiffs,  at his or her option,  additional  shares of the  Company's  common
stock or additional  cash. The number of shares of Common Stock or the amount of
cash each Royal Bank  Plaintiff  was entitled to receive was based on the amount
of his or her pro rata  interest in amounts paid by the Company  pursuant to the
Royal Bank  Agreement.  If all Royal Bank  Plaintiffs  elected to receive Common
Stock,  then the Company would have been required to issue and deliver a maximum
of 300,000 shares in the aggregate and if all Royal Bank  Plaintiffs  elected to
receive  cash,  then the Company would have been required to deliver cash in the
maximum aggregate amount of $600,000.

Prior to  December  13,  1996,  the Royal  Bank  Plaintiffs  elected  to receive
$600,000  in cash  under  the  terms of the Royal  Bank  Agreement.  On or about
December 17, 1996, the Company  received  notice from the Royal Bank  Plaintiffs
that the  Company  was in  default of its  obligation  to pay them  $600,000  on
December  13, 1996.  Under the Royal Bank  Agreement,  such  default  caused the
Company to incur an immediate $3.25 million debt to the Royal Bank Plaintiffs.

Subsequently,  in January 1997, the Company entered into a Forbearance Agreement
(the "Forbearance Agreement") with the Royal Bank Plaintiffs which provided that
notwithstanding the $3.25 million  obligation,  the Royal Bank Plaintiffs agreed
to forbear  from  exercising  their  rights and  remedies  against  the  Company
provided  the Company made a payment of $629,100 on or before March 20, 1997 and
a payment of $175,000  on or before July 1, 1997.  The Company had the option to
postpone the second payment ($175,000) by delivering written notice to the Royal
Bank Plaintiffs no later than June 25, 1997, whereupon the second payment was to
have  been  paid no  later  than  December  15,  1997 and the  amount  was to be
increased  to  $250,000.  The Company  also agreed to  reimburse  the Royal Bank
Plaintiffs  for their  attorneys'  fees and  costs.  Thereafter,  the Royal Bank
Plaintiffs  agreed to extend the time  period for  paying the  $629,100  to them
until May 15, 1997.  In addition,  the second  payment was increased to $225,000
payable on July 1, 1997 subject to  postponement  until  December  15, 1997,  in
which event the amount was to be increased to  $300,000.  The amount,  which was
due May 15, 1997, was not paid by such date. However, effective on June 2, 1997,
the  Company  entered  into an  Amendment  No.  2 to the  Forbearance  Agreement
("Amendment  No. 2") which,  among other  things,  provided  that the Royal Bank
Plaintiffs  would continue to forbear from exercising  their rights and remedies
under the Royal Bank Agreement and related Forbearance  Agreement,  provided the
Company  performed the  following:  (a) paid $896,000 in eight  installments  of

                                      F-22

<PAGE>



$112,000 each on May 31, July 31, September 30 and November 30, 1997 and January
31,  March 31,  May 31 and July 31,  1998 (the  "Periodic  Payments"),  (b) paid
$250,000 on or before  September 30, 1998,  (c) made payments of $25,000  within
five  business days after any  closing(s)  since March 20, 1997 of any single or
series of  sale-leaseback  transaction(s)  in which the Company  received in the
aggregate of at least  $65,000 in proceeds,  and (d) made a final  payment on or
before  September 30, 1998 of the Judgment Amount (as defined in the Forbearance
Agreement) less the aggregate amount of the Periodic  Payments  previously paid;
provided,  however,  that if the Company timely performed its obligations  under
its settlement  documents with the Plaintiffs and either (i) Plaintiffs received
all of the Periodic  Payments,  or (ii) the Company made one final payment in an
amount set forth in Amendment  No. 2 which amount  ranged from  $950,000 if such
final  payment  was paid on or before  May 31,  1997 to  $350,000  if such final
payment was paid after May 31, 1998 and on or before July 31, 1998 (and assuming
all Periodic  Payments coming due prior to the final payment were made), in such
event the Plaintiffs  agreed to waive the  enforceability of the Judgment Amount
against the  Company  and the Company  would not be required to make any further
payments.

The Company  also agreed to issue  433,334  shares (the  "Forbearance  Agreement
Shares") of its Common Stock to the Royal Bank Plaintiffs and agreed to register
such shares for resale pursuant to a Registration Statement to be filed with the
Securities  and Exchange  Commission.  Also,  the Company agreed to issue to the
Plaintiffs,  from time to time until the  payments  referred  to above have been
completed,  .025 shares of its Common  Stock for each share  issued in excess of
24,000,000 of the Company's  outstanding  shares.  Amendment No. 2 also provided
that the Company reimburse  Plaintiffs for attorneys' fees and costs incurred in
connection with the preparation and negotiation of Amendment No. 2.

In fiscal 1999, the Company again amended the  Forbearance  Agreement to provide
for payment to Royal bank of $200,000 and 75,000 shares of the Company's  Common
Stock ("Amendment No. 3").

Effective on March 17, 1999, the Company  entered into an Amendment No. 4 to the
Forbearance  Agreement  ("Amendment No. 4") which, among other things,  provides
that the Royal Bank Plaintiffs  would continue to forbear from exercising  their
rights and  remedies  under the Royal Bank  Agreement  and  related  Forbearance
Agreement,  provided the Company performed the following: (a) on or before April
16, 1999 paid  $200,000 of the  Judgment  Amount (as defined in the  Forbearance
Agreement).  The Company also agreed to issue to the  plaintiffs an aggregate of
319,500 shares of the Company's common stock ("Additional  Forbearance  Shares")
pursuant  to an  exemption  from  registration  under Rule 506 of  Regulation  D
promulgated  under  Section 4(2) of the  Securities  Act. The Company  agreed to
register these shares with the Securities and Exchange Commission on Form S-3 no
later than December 31, 1999.  The plaintiffs  and the Company  executed  mutual
releases,  with the  release in favor of the  Company to be  effective  upon the
Company's  performance of all of its  obligations  under Amendment No. 4 and the
other settlement documents.

                                      F-23

<PAGE>



The Company's  obligations  under the Royal Bank  Agreement are secured by (1) a
deed of trust on all real property and patented and  un-patented  mineral claims
owned by the  Company;  (2) a first  priority  security  interest  in all of the
Company's  right,  title and  interest  in and to any and all  goods,  products,
yield,  receivables,  inventory (including any gold from any mines), any and all
exploration and drilling  information,  data, maps, reports or surveys,  and any
and all income and proceeds  derived from the  Company's  mining  operations  on
property  which the Company  presently  or  subsequently  owns or leases;  (3) a
first-priority  security interest in the Company's right,  title and interest in
and to any total recovery by the Company on the claims against Bartel,  Eng; and
(4) a stipulated judgment in the amount of $3,250,000.

In fiscal 1996, the Company  registered the 1,616,667  shares of Common Stock to
be issued and delivered pursuant to the Zuri Agreement the Royal Bank Agreement,
which included the 300,000  additional shares that may have been issued pursuant
to the Royal Bank Agreement as described above. This number does not include the
Forbearance Agreement Shares or the Additional  Forbearance Shares (as described
above).

The Anderson Matter.

The Company was  plaintiff in the matter of Brush Creek  Mining and  Development
Co., Inc. v. Anderson,  et al., United States District Court,  Northern District
of  California,  case no.  C94-3487 CAL, filed on September 24, 1994. The action
was  against  former  officers  and  directors  of the  Company  and  others for
violations of federal and state  securities  laws and common law torts. On April
3, 1998, the Company's counsel, the Hinton & Alfert firm, withdrew as counsel of
record.  Upon the  Company's  failure to obtain new  counsel as  directed by the
Court, the action was dismissed with prejudice on May 15, 1998.  Following entry
of judgment of dismissal,  two of the defendants  moved as purported  prevailing
parties for an award of attorney's fees and costs incurred in defending  against
the  Company's  claims.  The  defendants  sought  by  their  motion  to  recover
$63,782.14.  On August 21, 1998, the Court denied the  defendants'  motion.  The
Company is not actively pursuing this matter.

The Volcanic Matter.

On August 12,  1998,  Volcanic  Resources,  LLC filed a  complaint  against  the
Company,  its past CEO and Chairman of the Board,  and two of its directors.  On
September 16, 1998,  Plaintiff filed its First Amended Complaint alleging breach
of  contract  and breach of express  warranties  against  the  Company  only and
alleging fraud,  negligent  misrepresentation,  rescission,  constructive trust,
declaratory  relief and violation of Business and Professions Code section 17200
against  all  defendants.  The  underlying  contract  giving  rise to this  suit
involves a written Exploration, Development and Mine Operating Agreement entered
into November 20, 1997 between  Sterling Mining,  LLC and the Company.  Sterling
Mining,  LLC  assigned its rights under the  Exploration,  Development  and Mine

                                      F-23

<PAGE>



Operating  Agreement to  Plaintiff.  In  accordance  therewith,  the  individual
defendants filed three  preliminary  "motions":  (1) Motion to Change Venue; (2)
Demurrer; and (3) Petition to Compel Arbitration.

The Shareholder Suit.

In  August  1999,  Paul  Body and  other  shareholders  of the  Company  filed a
complaint against the Company,  its past CEO and Chairman of the Board and three
of its directors,  alleging fraudulent  misrepresentations,  breach of contract,
breach  of  express  and  implied  contractual  obligations,   defamation.   The
plaintiffs  purchased  shares of common  stock in a private  offering and allege
that the  defendants  fraudulently  misrepresented  the financial  condition and
business  prospects of the Company.  The defendants also allege that the Company
did not  register  the  common  stock  purchased  as it agreed to as part of the
private placements.  Certain plaintiffs also allege that they were obstructed in
their efforts to sell certain of their shares of common  stock.  With respect to
the defamation  allegations,  the plaintiffs  allege that the former chairman of
the Company posted publicly on the Internet defamatory  statements regarding the
plaintiffs and that the Company has never withdrawn or recanted such statements.
As of June 30, 2002 the Company has negotiated a settlement with the plaintiff's
for $113,500 in cash and 300,000 shares of the Company's common stock.

Other Matters.

In fiscal  1996 and 1997,  the Company was  requested  pursuant to a  non-public
informal  inquiry  by  the  staff  of the  Securities  and  Exchange  Commission
("Commission"), to provide information to the Commission regarding the Company's
financing activities in reliance upon Regulation S under the Securities Act. The
Commission  advised the Company  that the inquiry  should not be construed as an
indication  by the  Commission  or its  staff  that any  violations  of law have
occurred,  nor should it be considered a reflection upon any person.  No charges
were filed as a result of the inquiry.

On February 8, 1996, the Company filed a complaint against F. James Anderson and
Simone  Anderson in Superior  Court of the State of  California,  in and for the
County of  Sacramento,  Case No.  96AS  00513  (the  "Sacramento  Action").  The
complaint seeks (a) judicial determination and declarations that the Company (1)
has no further  obligations  to advance  defense fees and costs  incurred by the
Andersons in connection  with other settled  litigation  involving  Zuri Invest,
including on the  Andersons'  appeal of that judgment  (which fees and costs the
Company agreed to pay pursuant to a settlement in a previously resolved matter);
(2) is entitled to recoup  defense fees and costs  allocable  to the  Andersons'

                                      F-24

<PAGE>



defense of claims in the Zuri  Invest  matter for which they were found  liable;
(3) is not required to indemnify the  Andersons for their  liability in the Zuri
Invest  litigation;  (4) has no duty or  obligation  to the Andersons to account
for, replenish, and/or return monies to or pay interest on the $200,000 provided
by the Andersons as partial  indemnification  to the Company in connection  with
the Royal Bank  litigation;  and (5) is entitled to have all amounts returned to
the Company from the $200,000  which were  disbursed for the purposes other than
to indemnify the Company such that the Company  receives the full net benefit of
the $200,000,  and (b) equitable  indemnification  to collect from the Andersons
their proportionate share of the judgment in the Zuri Invest litigation.

On April 4, 1996,  the  Company  was served  with the  Andersons'  answer to the
Sacramento Action and they're  cross-complaint  against the Company.  The answer
generally denied the allegations of the Company's complaint and asserted various
affirmative  defenses.  The  cross-complaint  seeks judicial  determination  and
declarations that the Company (1) is obligated to advance the Andersons' defense
costs  (including  costs of appeal) in the Zuri  litigation and defense costs in
the Federal  Action and (2) is obligated to indemnify  them from the judgment in
the Zuri Invest  litigation and any judgment that might be rendered against them
in the Federal Action.

Also,  on April 4, 1996,  the Company was served with a motion by the  Andersons
for summary  adjudication  of two of their cross  claims which would have forced
the Company to advance the  Andersons'  defense cost in the Zuri  litigation and
the  Federal  Action.  On May 3, 1996,  the  Andersons'  motion was heard by the
superior court and denied.  The Company  answered the Andersons' cross complaint
on May 6, 1996 generally denying the allegations and asserting various defenses.
[Although the Company has not done so to date,  the Company may attempt to amend
its  original  complaint  to assert an  additional  claim to hold the  Andersons
liable for the entire amount of the Royal Bank of Scotland settlement.

The Company is a party to other various  claims,  legal  actions and  complaints
arising  in the  ordinary  course of  business.  In most cases the  Company  has
negotiated  settlement   agreements,   which  are  reflected  in  the  financial
statements.  In the opinion of  management,  the ultimate  disposition  of these
matters  will not have a material  adverse  effect on the  business or financial
position of the Company. The judgment amounts are as follows:

1. Ruby  Development  - Judgment for  $1,250,000,  default for breech of contact
associated  with lease of the mine. The Company was not properly served and will
ask the court to set aside the judgment.

2. Kate Hardy / Omega - Judgment for $401,606,  The Company has agreed to settle
for $100,000 in cash and 100,000 shares of the Companies common stock.

3. Rising Sun - Judgment for $250,000

                                      F-25

<PAGE>



4. Jean Gasperoni - Judgment for $105,000,  filed suit for commission on funding
that the  company  did not  receive.  The  company is  currently  appealing  the
judgment.

7. Robert Half Inter. - Judgment for $21,481.79,  dated 3/23/99, The company has
agreed to settle for $7,000 in cash.

8. Western  Capital  Group for  $300,000,  Financial  Public  Relations  firm in
Aurora, Co. had a consulting agreement with Brush Creek from May 1, 1998 through
October 1, 1998.  Award by Arbitrator on Dec. 30, 1998 of $209,211.00 Plus costs
of $2,323.50 and interest of 8% per month from Aug. 1, 1998. As of June 30, 2002
the Company has agreed to settle for $150,000 in cash.


NOTE 12  - SEGMENT INFORMATION

The Company's activities have been devoted to the acquisition,  development, and
production of mineral properties.  Accordingly,  the Company is considered to be
in a single  line of  business.  To  date,  substantially  all of the  Company's
identifiable  assets  and  operating  expenditures  are  in the  United  States,
Southeastern Honduras and Africa.

NOTE 13 - SUBSIQUENT EVENT

The  Company is  currently  anticipating  a  $10,000,000  funding for the mining
properties in Sabinas, Mexico. On May 16, 2002 a written commitment was received
by the Company with actual funding to be in place by the end of August 2002. The
Company was also in negotiations with M3K, Corporation of St. Louis, MO. to fund
the Gardner's Point project and to start a diamond buying program in Africa. The
Company has broken off all negotiations at this time with M3K.

                                      F-26

<PAGE>



Item 2. Changes in Securities.

None

Item 3. Defaults Upon Senior Securities.

None

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

None

Item 5. Other Information.

None

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

Exhibits.

(a)      Exhibits. There are no exhibits applicable to this Form 10-QSB.
(b)      Reports on Form 8-K.


<PAGE>



                                   SIGNATURES


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



                            JAB INTERNATIONAL, INC.
                             ---------------------
                                  (Registrant)


By: /s/ Jefferson A. Bootes                     Date: 19 August 02
---------------------------                     ------------------
Jefferson A. Bootes
Chief Executive Officer