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: December 31, 2000


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

For the transition period from __________________ to _______________________

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)


                 1013 Fairway Drive, Winter Park, Florida 32792
                     --------------------------------------
                    (Address of principal executive offices)

                                 (407) 629-7373
                 ----------------------------------------------
                (Issuer's telephone number, including area code)


                  Brush Creek Mining and Development Co., Inc.
           -----------------------------------------------------------
               Former name, former address or former fiscal year,
                         if changed since last report.)

                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 Exchange Act 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 unaudited 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 six months ended
December 31, 2000,  are not  necessarily  indicative  of the results that may be
expected for the year ended June 30, 2001.  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 June 30, 2000.















<PAGE>



                           J.A.B. INTERNATIONAL, INC.
                     Financial Statements Table of Contents




         FINANCIAL STATEMENTS                                    Page #


            Balance Sheet                                          F-1


            Statements of Operations                               F-2


            Statement of Stockholders' Equity                      F-3


            Cash Flow Statements                                   F-10


            Notes to the Financial Statements                      F-12









<PAGE>



<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                         ( A Development Stage Company)
                                  BALANCE SHEET
                             As of December 31, 2000
                                and June 30, 2000





       ASSETS

                                                                 December 31,         June 30,
                                                                         2000             2000
                                                             ----------------   --------------
CURRENT ASSETS                                                (Unaudited)
<S>                                                          <C>                <C>

       Cash                                                    $        1,039   $       15,245
                                                             ----------------   --------------

                  Total Current Assets                                  1,039           15,245

       Mineral Properties and Mining Equipment, Net                 3,836,249        3,841,255
                                                             ----------------   --------------

                  Total Properties                                  3,836,249        3,841,255

       TOTAL ASSETS                                              $  3,837,288    $   3,856,500
                                                             ================   ==============

       LIABILITIES AND STOCKHOLDERS' EQUITY

CURENT LIABILITIES

       Accounts payable and accrued liabilities                  $  2,488,195    $   2,313,197
       Liability due to litigation                                  4,851,229        4,851,229
                                                             ----------------   --------------

                  Total current liabilities                         7,339,424        7,164,426

SHAREHOLDERS' EQUITY

       Common stock - $.001 par value;
          authorized 10,000,000 shares;
          issued and outstanding,  6,419,455 shares                55,738,158       55,738,158
       Accumulated Deficit                                       (11,260,214)     (11,260,214)
       Accumulated Deficit during the Development Stage          (47,980,080)     (47,785,870)
                                                             ----------------   --------------

                  Total shareholders' equity                      (3,502,136)      (3,307,926)

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY                       $  3,837,288    $   3,856,500
                                                             ================   ==============
</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 December 31,
                      2000 and 1999 and for the Period From
                                  July 1, 1989
        ( Date of Resumption of Development Stage Enterprise Activities)
                            Through December 31, 2000
                                   (Unaudited)





                                                                                                                Period from
                                                                                                               July 1, 1989
                                                                                                                    Through
                                                                                                               December 31,
                                                                                  2000              1999               2000
                                                                     ----------------- -----------------  -----------------
<S>                                                                   <C>               <C>                <C>

                                                                     ----------------- -----------------  -----------------
REVENUES
       Sale of Joint Venture                                          $              -  $              -   $      4,232,000
       Other Income                                                                176                 -            193,956
       Interest                                                                  2,873             4,879            222,413
                                                                     ----------------- -----------------  -----------------

       TOTAL REVENUES                                                            3,049             4,879          4,648,369
                                                                     ----------------- -----------------  -----------------

 EXPENSES

       General and Administrative                                              197,259           130,510         21,185,158
       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                                                          197,259           130,510         52,772,911
                                                                     ----------------- -----------------  -----------------

       Loss Before Extra-ordinary Item                                        (194,210)         (125,631)       (48,124,542)
        Extra-ordinary Item, Net Gain from Debt
          Extinguishment, Net of Tax                                                 -                 -            144,462
                                                                     ----------------- -----------------  -----------------

NET INCOME (LOSS)                                                             (194,210)         (125,631)       (47,980,080)
                                                                     ================= =================  =================

NET LOSS PER COMMON SHARE                                                        (0.04)             (0.27)
                                                                     ================= =================

WEIGHTED AVERAGE COMMON
   SHARES OUTSTANDING                                                        4,449,455           458,681
                                                                     ================= =================
</TABLE>

(Note: weighted averages are adjusted for reverse stock split during 1999)

              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 December 31, 2000 and 1999
                                   (Unaudited)



                                                                2000                  1999
                                                         ----------------        ----------------
REVENUES
<S>                                                       <C>                    <C>

                Other Income                              $            40        $              -
         Interest                                                   1,220                   2,941
                                                         ----------------        ----------------

                          TOTAL REVENUES                            1,260                   2,941
                                                         ----------------        ----------------

 EXPENSES

                             General and                           75,770                  16,545
                          Administrative
                                                         ----------------        ----------------

                          TOTAL EXPENSES                           75,770                  16,545
                                                         ----------------        ----------------

NET INCOME (LOSS)                                         $       (74,510)       $        (13,604)
                                                         ================        ================
</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 Enterprise)
                       STATEMENTS OF SHAREHOLDER'S EQUITY
                        For the Period From July 1, 1989
        ( Date of Resumption of Development Stage Enterprise Activities)
                            Through December 31, 2000
                                   (Unaudited)


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

Balance, June 30, 1989                                 123,304      12,318,877      (11,260,214)                 -     1,058,663

Issuance of stock for options
   on mining                                             1,567         117,500                -                  -       117,500
properties
Sales of stock in private placement,
   net of offering costs                                15,000         434,000                -                  -       434,000
Issuance of stock for services                           2,350          72,500                -                  -        72,500
Sale of stock in private
placement,
   net of offering costs                                13,173         828,110                -                  -       828,110
Issuance of units for debt
   to affiliates                                         7,376         553,242                -                  -       553,242
Net Loss                                                     -               -                -           (768,436)     (768,436)
                                                   ------------ --------------- -----------------  ---------------- -------------

Balance, June 30, 1990                                 162,770      14,324,229      (11,260,214)          (768,436)    2,295,579
</TABLE>


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

                                       F-4

<PAGE>





<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                        ( A Development Stage Enterprise)
                       STATEMENTS OF SHAREHOLDER'S EQUITY
                        For the Period From July 1, 1989
        ( Date of Resumption of Development Stage Enterprise Activities)
                            Through December 31, 2000


                                                                  COMMON STOCK
                                                            -----------------------                 Accumulated
                                                                                                      Deficit
                                                             Number                                  During the
                                                               of                    Accumulated    Development
                                                             Shares      Amount        Deficit         Stage          Total
                                                            ----------- -----------  -------------  --------------  -----------

<S>                                                         <C>          <C>         <C>              <C>            <C>
Balance, June 30, 1990                                          162,770  14,324,229  (11,260,214)       (768,436)     2,295,579


Issuance of stock for options on mining properties               15,474   2,283,020            -               -      2,283,020

Sales of stock in private placement, net of offering costs       14,161     910,840            -               -        910,840
Exercise of Warrants                                                333      35,000            -               -         35,000
Issuance of stock for debt                                        6,412   1,097,258            -               -      1,097,258
Issuance of stock for services                                      515     114,560                                     114,560
Cancellation of units from CSGM                                  (7,377)          -            -               -              -
Issuance of shares to CSGM                                       12,000           -            -               -              -
Issuance of stock for litigation settlement                       3,334     875,000            -               -        875,000

Net Loss                                                              -           -            -      (2,558,381)
                                                                                                                     (2,558,381)
                                                            ----------- -----------  -------------  --------------  -----------

Balance, June 30, 1991                                          207,622  19,639,907  (11,260,214)     (3,326,817)    5,052,876
</TABLE>




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


                                       F-5

<PAGE>






<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                        ( A Development Stage Enterprise)


                       STATEMENTS OF SHAREHOLDER'S EQUITY
                   For the Years Ended June 30, 2000 and 1999
                      and for the Period From July 1, 1989
         (Date of Resumption of Development Stage Enterprise Activities)
                           Through December 31, 2000

                                                          COMMON STOCK
                                                    ------------------------                      Accumulated
                                                                                                    Deficit
                                                     Number                                        During the
                                                       of                       Accumulated       Development
                                                     Shares       Amount          Deficit            Stage             Total
                                                    -----------  -----------   --------------  ----------------  ----------------
<S>                                                 <C>          <C>           <C>             <C>               <C>
                                                        207,622   19,639,907      (11,260,214)        (3,326,817)     5,052,876
Balance, June 30, 1991

Issuance of stock for options on mining properties       19,578      564,899                -                  -        564,899

Sales of stock in private placement,                     14,210    2,298,451                -                  -      2,298,451
   net of offering costs                                 12,483    1,250,750                -                  -      1,250,750
Exercise of warrants and options                         18,458    1,818,102                -                  -      1,818,102
Issuance of stock for services                            2,444      336,617                -                  -        336,617
Issuance of stock for debt                                8,800      748,750                -                  -        748,750
Issuance of shares to CSGM                                    -      312,805                -                  -        312,805
Capital contributions

Net Loss                                                      -            -                -         (3,178,878)    (3,178,878)
                                                    -----------  -----------   --------------  ----------------  ----------------

                                                        283,595   26,970,281      (11,260,214)        (6,505,695)     9,204,372
Balance, June 30, 1992
</TABLE>



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


                                       F-6

<PAGE>





<TABLE>
<CAPTION>

                           J.A.B. INTERNATIONAL, INC.
                        ( A Development Stage Enterprise)


                       STATEMENTS OF SHAREHOLDER'S EQUITY
                   For the Years Ended June 30, 2000 and 1999
                      and for the Period From July 1, 1989
         (Date of Resumption of Development Stage Enterprise Activities)
                           Through December 31, 2000

                                                          COMMON STOCK
                                                    ------------------------                      Accumulated
                                                                                                    Deficit
                                                     Number                                        During the
                                                       of                       Accumulated       Development
                                                     Shares       Amount          Deficit            Stage             Total
                                                    -----------  -----------   --------------  ----------------  ----------------
<S>                                                 <C>          <C>           <C>             <C>               <C>
                                                       283,595    26,970,281      (11,260,214)     (6,505,695)       9,204,372
Balance, June 30, 1992

Issuance of stock for options                            3,729       255,238                -               -          255,238
   on mining properties                                  1,066        80,000                -               -           80,000
Sale of stock in private placement,                      9,540       707,105                -               -          707,105
Exercise of warrants and options                         3,334       250,000                -               -          250,000
Exchange of options for debt, CSGM                      18,319     1,616,659                -               -        1,616,659
Issuance of stock for services                          10,514       713,494                -               -          713,494
Issuance of stock for debt                              10,026       500,285                -               -          500,285
Issuance of shares for CSGM                             53,940       (84,176)               -               -          (84,176)
Issuance of stock for acquisition of Trans-Russian           -             -                -      (3,420,220)
                                                                                                                    (3,420,220)
                                                    ----------  ------------   ---------------  --------------  --------------

Net Loss
                                                       394,063    31,008,886      (11,260,214)     (9,925,915)       9,822,757
Balance, June 30, 1993
</TABLE>




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


                                       F-7

<PAGE>



<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                        ( A Development Stage Enterprise)


                       STATEMENTS OF SHAREHOLDER'S EQUITY
                   For the Years Ended June 30, 2000 and 1999
                      and for the Period From July 1, 1989
         (Date of Resumption of Development Stage Enterprise Activities)
                           Through December 31, 2000

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

Balance, June 30, 1993                                  394,063    31,008,886     (11,260,214)       (9,925,915)      9,822,757

Sale of stock                                             8,248       241,139               -                 -         241,139
Exercise of warrants and options                          5,832       608,925               -                 -         608,925
Issuance of stock for services                           21,510       938,159               -                 -         938,159

Net income                                                    -             -               -           136,625         136,625
                                                    -----------  ------------  --------------  ---------------- ----------------

Balance as of June 30, 1994                             429,653    32,797,109     (11,260,214)       (9,789,290)     11,747,605

Sale of stock                                           256,667     3,696,457               -                 -       3,696,457

Net Loss                                                      -             -               -        (4,671,396)     (4,671,396)
                                                    -----------  ------------  --------------  ---------------- ----------------

Balance as of June 30, 1995                             686,320    36,493,566     (11,260,214)      (14,460,686)     10,772,666

Sale of stock                                           678,350     6,875,416               -                 -       6,875,416

Issuance of stock for  partial settlement of Royal
Bank agreement                                           21,667       223,436               -                 -         223,436

Compensation recognized on stock options granted
                                                              -       160,021               -                 -         160,021

Issuance of stock, held in trust  for                         -             -               -                 -               -
   partial settlement of Zuri Invest                    110,000             -               -                 -               -
   litigation                                                 -             -               -        (9,270,102)     (9,270,102)
                                                    -----------  ------------  --------------  ---------------- ----------------
Net loss
                                                      1,496,337    43,752,439     (11,260,214)      (23,730,788)      8,761,437
Balance, June 30, 1996
</TABLE>



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

                                       F-8

<PAGE>




<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                        ( A Development Stage Enterprise)


                       STATEMENTS OF SHAREHOLDER'S EQUITY
                   For the Years Ended June 30, 2000 and 1999
                      and for the Period From July 1, 1989
         (Date of Resumption of Development Stage Enterprise Activities)
                           Through December 31, 2000

                                                          COMMON STOCK
                                                    ------------------------                      Accumulated
                                                                                                    Deficit
                                                     Number                                        During the
                                                       of                       Accumulated       Development
                                                     Shares       Amount          Deficit            Stage          Total
                                                    -----------  -----------   --------------  ----------------  ----------------
<S>                                                 <C>          <C>           <C>             <C>               <C>
Balance, June 30, 1996                                1,496,337   43,752,439      (11,260,214)      (23,730,788)      8,761,437

Sale of stock                                         1,638,711    2,111,101                -                 -       2,111,101
Issuance of stock for                                         -            -                -                 -
   new California Placer mine.                            2,000        5,200                -                 -           5,200
Zuri Invest litigation Settlement                             -    1,200,000                -                 -       1,200,000
Compensation recognized on
   stock options granted                                      -       24,000                -                 -          24,000

Net Loss                                                      -            -                -        (9,681,535)     (9,681,535)
                                                    -----------  -----------   --------------  ----------------  ----------------

Balance, June 30, 1997                                3,137,048   47,092,740      (11,260,214)      (33,412,323)      2,420,203

Sale of stock                                         2,367,131    3,697,585                -                 -       3,697,585
Issuance of common stock subscribed                           -    2,673,600                -                 -       2,673,600
Zuri Invest litigation Settlement                             -      179,400                -                 -         179,400

Net loss                                                      -            -                -        (5,386,831)     (5,386,831)
                                                    -----------  -----------   --------------  ----------------  ----------------

Balance, June 30, 1998                                5,504,179   53,643,325      (11,260,214)      (38,799,154)      3,583,957
</TABLE>



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




                                       F-9

<PAGE>




<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                        ( A Development Stage Enterprise)
                       STATEMENTS OF SHAREHOLDER'S EQUITY
                        For the Period From July 1, 1989
        ( Date of Resumption of Development Stage Enterprise Activities)
                            Through December 31, 2000


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


Balance, June 30, 1998                                 5,504,179    53,643,325    (11,260,214)    (38,799,154)       3,583,957
Issuance of stock to Company Director                  3,730,861       894,287              -               -          894,287
Reverse stock split, 1-for-12                         (8,365,585)            -              -               -                -
Issuance of stock persuant to merger                   3,580,000         3,580              -               -            3,580
Net Loss                                                       -             -              -      (8,368,069)      (8,368,069)
                                                    ------------ ------------- --------------- ---------------  ----------------

Balance, June 30, 1999                                 4,449,455    54,541,192    (11,260,214)    (47,167,223)      (3,886,245)

Stock issued for retirment of debt
            accrued for services during prior year     1,330,000       987,500                                         987,500
Stock issued to retire demand note                       174,209        57,017                                          57,017
Stock issued for cash                                    465,791       152,449                                         152,449

Net Loss                                                                                             (618,647)        (618,647)
                                                    ------------ ------------- --------------- ---------------  ----------------

Balance,  June 30, 2000                                6,419,455    55,738,158    (11,260,214)    (47,785,870)      (3,307,926)

Net Loss                                                                                             (194,210)        (194,210)
                                                    ------------ ------------- --------------- ---------------  ----------------

Balance, December 31, 2000                             6,419,455   $55,738,158   $(11,260,214)   $(47,980,080)     $(3,502,136)
                                                    ============ ============= =============== ===============  ================
(Unaudited)
</TABLE>


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

                                      F-10

<PAGE>



<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                            STATEMENTS OF CASH FLOWS
                        For the six months ended December
                          31, 2000 and 1999 and for the
                            Period From July 1, 1989
        ( Date of Resumption of Development Stage Enterprise Activities)
                            Through December 31, 2000
                                   (Unaudited)




                                                                                                      Period From
                                                                                                      July 1, 1989
                                                                                                        Through
                                                                                                      December 31,
CASH FLOWS FROM OPERATING ACTIVITIES                                  2000            1999                2000
                                                                    -------------  --------------  ---------------
<S>                                                                   <C>            <C>            <C>
       Net  (loss)                                                       (194,210)       (125,631)     (47,980,080)
       Gain on debt restructuring                                                                        (144,462)
       Impairment of development costs                                                                   5,393,115
       Depreciation and amortization                                                                     1,686,693
       Loss on lease abandonments                                                                        1,638,665
       Loss on littigation settlement                                                                    8,598,761
       (Gain) loss on sale of mining equipment                                                              49,164
       Other                                                                                                43,576
       Shareholder payment of services                                                                     105,055
       Stock and debt for services                                                                       2,761,439
       Change in note receivable                                                                            47,462
       Change in inventory                                                                                   2,290
       Change in prepaid expenses                                                                          501,736
       Change in deposits and other current assets                                                       (115,961)
       Change in deposits                                                   5,006         (1,933)           22,057
       Change in accounts payable and accrued liabilities                 190,243         128,241        4,988,962
                                                                    -------------  --------------  ---------------

                  Total adjustments                                       195,249         126,308       25,578,552
                                                                    -------------  --------------  ---------------

       Net cash usded in operating activities                               1,039              677    (22,401,528)

CASH FLOWS FROM INVESTING ACTIVITIES

       Acquisition of mineral properties, equipment
          and deferred developments                                                                    (5,164,817)
       Acquisition of office equipment                                                                   (278,987)
       Proceeds from sale of equipment                                                                     384,356
       Proceeds from the acquisition of Trans-Russian                                                       20,060
                                                                    -------------  --------------  ---------------

       Net cash flows provided by (used in) investing activites                 -                  -   (5,039,388)
                                                                    -------------  --------------  ---------------
</TABLE>

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

                                      F-11

<PAGE>



<TABLE>
<CAPTION>
                           J.A.B. INTERNATIONAL, INC.
                            STATEMENTS OF CASH FLOWS
                        For the six months ended December
                          31, 2000 and 1999 and for the
                            Period From July 1, 1989
        ( Date of Resumption of Development Stage Enterprise Activities)
                            Through December 31, 2000
                                   (Unaudited)

                                                                                                          Period From
                                                                                                         July 1, 1989
                                                                                                              Through
                                                                                                         December 31,
CASH FLOWS FROM FINANCING ACTIVITIES                                               2000          1999            2000
                                                                       ---------------- -------------  --------------
<S>                                                                        <C>            <C>            <C>    <C>    <C>    <C>
       Advances from affiliates                                                                             2,009,127
       Payments made to                                                                                      (343,798)
       affiliates
       Proceeds from issuance of stock                                                                     26,488,964
       Proceeds from warrant extensions                                                                       207,750
       Proceeds from issuance of notes payable                                                                870,043
       Payments of long-term debt                                                                          (2,093,979)
       Proceeds from convertible debenture                                                                    300,000
                                                                       ---------------- -------------  --------------

       Net cash provided by (used in) financing activities                            -             -      27,438,107
                                                                       ---------------- -------------  --------------

CASH RECONCILIATION

       Net increase (decrease) in cash                                            1,039           677          (2,809)
       Cash at beginning of period                                                    -             -           3,848
                                                                       ---------------- -------------  --------------

       CASH AT END OF PERIOD                                                      1,039           677          1,039
                                                                       ================ =============  ==============



SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
       Cash paid during the year for interest
          (net of amounts capitalized)                                 $              -  $          -
                                                                       ================ =============
</TABLE>


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



                                      F-12

<PAGE>



                           J.A.B. INTERNATIONAL, INC.
                          Notes to Financial Statements
                   (Information with Respect to the Six Months
                 Ended December 31, 2000 and 1999 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.

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 and are
therefore  at risk.  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 $59,146,084 from inception to June
30, 2000.  The Company has not  realized  economic  production  from its mineral
properties as of June 30, 2000. These factors raise  substantial doubt about the
Company's  ability to  continue  as a going  concern.  Management  continues  to
actively  seek  additional  sources  of  capital  to  fund  current  and  future
operations.  There  is no  assurance  that the  Company  will be  successful  in
continuing  to raise  additional  capital,  establishing  probable or proven ore
reserves,  or determining if the mineral  properties can be mined  economically.
Additionally,  the  Company is in default on the leases of certain of its mining
properties.  The lessors  have taken  action to  foreclose on the leases and the
Company is making  every  effort to fulfill  the  agreements.  The loss of these
leases  would have a material  adverse  effect on the Company.  These  financial
statements do not include any adjustments  that might result from the outcome of
these uncertainties.

                                      F-13

<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-14

<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
undescended 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-15

<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-delusive.  All common shares included in the financial  statements  reflect
are verse 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 proforma  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
Accounting  Principles  Board No. 25;  however,  the  Company  has  adopted  the
disclosure provisions of SFAS 123 for the fiscal year ended June 30, 1998.

                                      F-16

<PAGE>



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.
SFAS128  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 and mining  properties  under operating  leases.
All of the Company's leased mining properties  contain certain  provisions which
provide the Company with the option to purchase the property at a  predetermined
price or to renew the lease at a predetermined price. The Company is required to
pay all taxes, insurance, and maintenance on leased mining properties.

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  those  used  in  the  Company's   general-purpose   financial
statements,  and changes in the  measurement  of segment  amounts from period to
period. SFAS

                                      F-17

<PAGE>



131 has  beenadopted 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
reposessed,  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
Gardners' 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>


                                      F-18

<PAGE>





(*) 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.

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 and
Vocar S.A.R.L.  Permits,  Gardners'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 Brushcreek 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 a 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.

                                      F-19

<PAGE>





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
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
            --------------------------------------------

The Company had a demand note payable in the amount of $57,017 with no interest
that was converted to 174,209 common shares of stock during fiscal 2000. The
amounts were loaned during fiscal year 1999.

No unused lines of credit exist.


NOTE  7  -  INCOME  TAXES
            -------------

At December 31, 2000, the Company had available net operating loss carryforwards
forfinancial statement and federal income tax purposes. These loss carryforwards
expire between 2001 and 2020.

The Company  has  reported  income tax losses of  approximately  $58,500,000  in
prioryears.  In general,  income tax losses are carried  forward to future years
toreduce  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
            ---------------------

During fiscal 2000, the following major equity transaction occurred:


                                      F-20

<PAGE>



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.

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 which 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 disolved 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  effected  a 10 for 1 reverse  stock  split.  To effect  the split,
theCompany's  authorized,  issued,  and  outstanding  no par stock  was  reduced
from53,705,482 to 5,504,179.

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

The  Company  sold  1,867,131  shares of  Common  Stock  for  $2,224,599.  These
shareswere 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 FormS-8.


                                      F-21

<PAGE>



The  following  shares  were  sold  under  Regulation  D  and  Section  4(2)  of
theSecurities  Act of 1933.  Investors who acquires such shares were required to
beaccredited  investors.  The Company has agreed to register the shares pursuant
toa   registration   statement   to   be   filed   with   the   Securities   and
ExchangeCommission.  The Company sold 600,000  restricted shares of Common Stock
at  $.125per  share  wherein  the  Company  received  net  proceeds  of $75,000;
1,822,221restricted shares of Common Stock at $.15 per share wherein the Company
receivednet proceeds of $290,000; 4,300,000 restricted shares of Common Stock at
$.07per   share   wherein  the  Company   received  net  proceeds  of  $301,000;
6,600,000restricted shares of Common Stock at $.10 per share wherein the Company
receivednet  proceeds of $660,000;  670,000 restricted shares of Common Stock at
$.50 pershare  wherein the Company  received net proceeds of $335,000;  1,750,00
restrictedshares of Common Stock at $.184 per share wherein the Company received
netproceeds of $322,000;  60,000  restricted  shares of Common Stock at $.50 per
sharewherein   the  Company   received  net   proceeds  of  $30,000;   1,150,000
restrictedshares of Common Stock at $.184 per share wherein the Company received
netproceeds  of  $211,600.  The Company  sold  5,000,001  shares of Common Stock
underRegulation  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 shareswere
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
inconnection with its acquisition of the New California Placer Mine.

The  Company  issued  16,500  shares of Common  Stock  with a value of  $41,250.
Theshares 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
yearwere  used to settle the Zuri Invest  litigation.  See 100,000  shares below
issuedin 1996.

The  Company  sold  360,001  restricted  shares  of Common  Stock at $.0625  per
sharewherein the Company received net proceeds of $225,000;  660,000  restricted
sharesof  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
whereinthe Company received net proceeds of $193,000;  140,000 restricted shares
ofCommon  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
theSecurities  Act of 1933.  Investors who acquired such shares were required to
beaccredited  investors.  The Company has agreed to register the shares pursuant
toa  registration  statement  to be  filed  with  the  Securities  and  Exchange
Commission.

During fiscal 1996, the following major equity transactions occurred:



                                                       F-22

<PAGE>


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

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

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

During fiscal 1995, the following major equity transactions occurred:

The Company sold 256,667 shares of Common Stock for $3,696,457. These shareswere
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
Companytotaling $938,159.(*)

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

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

During fiscal 1993, the following major equity transactions occurred:

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

In  connection  with its mining  properties,  the Company  issued  3,729  shares
ofCommon  Stock for accrued  lease  payments of $107,710,  prepayment of certain
leaseexpenses 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
insatisfaction of outstanding debt obligations amounting to $558,592.(*)

The  Company  issued  10,026  shares of Common  Stock  with a value of  $500,285
insatisfaction 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.(*)


                                      F-23

<PAGE>





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.(*)

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,

                                      F-24

<PAGE>



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
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 noncash consideration,  the Company recorded the
fair market value of the shares issued as the consideration received.

                                      F-25

<PAGE>



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.


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 lease  payments on mining  properties
and the  property  taxes on these  leases.  The Company has also had  judgements
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.

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


                                      F-26

<PAGE>



The Company holds no leases for office space. 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
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
             ------------------

The Royal Bank Action.

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

                                      F-27

<PAGE>



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
$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.

                                      F-28

<PAGE>



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.

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).



                                                       F-29

<PAGE>



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
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.



                                      F-30

<PAGE>



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'
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.



                                      F-31

<PAGE>



The Company is a party to other various  claims,  legal  actions and  complaints
arising in the ordinary  course of business.  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.

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 $401,606.46

3. Rising Sun - Judgment for $250,000

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.

5.  ACP-Laurich  - Judgment  for $50,000,  Default  judgment for lease on office
space that the company  never  occupied.  The company is  currently  planning to
appeal.

6. Robert Half Inter. - Judgment for $21,481.79,  dated 3/23/99, we have no idea
who they are.

7. 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.

The company plans to appeal all above-mentioned  suits through the law office of
Pillsbury, Madison & Sutro, LLP.


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  -  CHANGES IN MANAGEMENT
             ------------------

On April 14, 1999, in connection with the Company's merger, the Company accepted
as President  and CEO  Jefferson  Adams  Bootes,  replacing  Larry  Stocket.  On
November  16,  1998,  Brush  Creek  Mining and  Development  Inc.  received  the
resignation of its chief executive officer (C.E.O.),  James Chapin.  Brush Creek
has  accepted the proposal  submitted by Mr. Larry  Stockett,  President of U.S.
Cement Company and the Board  appointed him as the new President and C.E.O.  Mr.
Stockett had accepted these  positions  without  compensation  until the company
reaches its first

                                      F-32

<PAGE>



quarterly  after tax profit.  Upon resolution of Brush Creek's current legal and
financial  problems,  Mr.  Stockett had agreed to transfer his 51%  ownership in
U.S.  Cement  Company to Brush Creek.  In return,  Mr.  Stockett  would  receive
restricted  shares  of stock of Brush  Creek at a price of $5 per  share for the
audited book value of U.S. Cement.  In addition,  Mr. Stockett would receive one
million shares of Brush Creek  restricted stock if the BCMDE shares achieve a $5
per share closing price for 10 consecutive  days. The above  transfers of shares
in either company did not take place.

The above changes in management and additional  changes in employees have led to
certain  complication  that were  created with the  transfers  of the  Company's
records.  There remains a contingency  that all transactions and liabilities may
have not been recorded.




                                      F-33

<PAGE>



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

Introduction

The  following  discussion  should  be read in  conjunction  with the  Financial
Information  and Notes  thereto  included in this report and is qualified in its
entirety by the foregoing.

This report contains  information  relating to the Company that are based on the
beliefs and assumptions made by the Company's  management as well as information
currently available to the management. Such beliefs reflect the current views of
the Company  with  respect to future  events and are  subject to certain  risks,
uncertainties   and   assumptions.   Should  one  or  more  of  these  risks  or
uncertainties  materialize,  or should  underlying  assumptions prove incorrect,
actual results may vary materially  from those described  herein as anticipated,
believed,  estimated  or  expected.  The Company has no  obligation  to publicly
release the result of any  revisions  which may be made to any forward-  looking
statements  to reflect  anticipated  or  unanticipated  events or  circumstances
occurring after the date of such statements.

Liquidity and Capital Resources

The mining  industry  is capital  intensive  and the Company is  continuing  its
efforts to develop  active mining  operations.  During the fiscal  quarter ended
December 31, 2000, the Company raised  approximately  $0 from the sale of shares
of common stock.  Consistent  with prior years,  the Company derived no material
revenues from operations. The Company's accumulated deficit at December 31, 2000
was  $59,240,294,  compared  to  accumulated  deficit at  December  31,  1999 of
$58,553,068.  As of December 31, 2000, the Company had negative  working capital
of  $7,338,385,  compared  to  $7,338,447  as  of  December  31,  1999.  Mineral
properties  and mining  equipment,  net of  depreciation  was  $3,836,249  as of
December 31, 2000 and $3,841,255 as of December 31, 1999.

The  Company's  financial  resources  are limited and to date have been depleted
through  development  costs and losses  sustained  by the  Company  through  its
development  stage.  The Company has  virtually  no liquidity as a result of its
costs and  losses,  and the  Company  currently  is  experiencing  a severe cash
shortage. Additional financing continues to be required for the Company to cover
its mining and development costs and to commence  full-scale mining  operations.
At this time the Company has no definite plans regarding  additional  financing,
but  continues  to  consider  equity  financings  via stock  offerings  or joint
ventures.  There  can be no  assurance  that the  Company  will be able to raise
sufficient capital to cover its costs and commence mining operations, or that it
ever will be able to achieve profitable operations.  If the Company is unable to
obtain sufficient funding from future financings, the Company may not be able to
achieve  its  business  objectives  and may have to scale  back its  development
plans.  Additionally,  the  Company may be forced to seek  protection  under the
bankruptcy laws.

During the fiscal quarter ended  December 31, 2000, the Company  continued to be
in default with respect to certain  mining  properties and certain county taxes.
The lessors have taken action to foreclose on the leases. Default judgments were
entered against the company by Rising Sun,

                                       37

<PAGE>



Ruby Development and Kate Hardy Mines. The Company estimates mining  development
and operating costs will be  approximately  $4 million for the next fiscal year,
assuming the Company is able to obtain adequate financing on terms acceptable to
the  Company.  The  majority  of these  funds  will be used to  exploration  and
development  operations.  There can be no assurance that ht Company will be able
to obtain  such  financing,  or that such  financing,  or that the terms of such
financing will be acceptable to the Company.

Results Of Operations

The Company had total  revenues of 1,260 for the fiscal  quarter ended  December
31, 2000 as compared to total  revenues of $2,941 for the fiscal  quarter  ended
December 31, 1999.  Revenues were primarily derived from other income of $40 and
interest  income of $1,220 for the fiscal  quarter  ended  December 31, 2000, as
compared to $0 and $2,941, respectively,  for the fiscal quarter ended September
30, 1999. The Company had no material revenues from mining operations,  which is
consistent with the year ended June 30, 1999 and June 30, 1998.

The Company had a net loss of $74,510 for the fiscal  quarter ended December 31,
2000,  as  compared  to a net  loss of  $13,604  for the  fiscal  quarter  ended
September  30, 1999.  The increase in the size of the net loss of  approximately
$60,906 is largely  attributable  to an increase  in general and  administrative
expenses.  General and  Administrative  expenses  increased from $16,545 for the
fiscal  quarter ended  December 31, 1999 to $75,770 for the fiscal quarter ended
December 31, 2000.

                           Part II - OTHER INFORMATION

Item 1.  Legal Proceedings.

The Royal Bank Action.
---------------------

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.

                                       38

<PAGE>



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
$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

                                       39

<PAGE>



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   [additional?]  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.

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.

                                       40

<PAGE>



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
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.  [please describe better the
comments cross default w/Ruby, default and judgment][ Ruby sued both Brush Creek
and Volcanic and in defending itself Volcanic cross sued JAB.

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.
Agreement to settle for $200,000 cash and 125,000  (check this figure) shares of
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

                                       41

<PAGE>



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'
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 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.


                                       42

<PAGE>



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 $401,606.46,  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.

3. Rising Sun - Judgment for $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.

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.

5.  ACP-Laurich  - Judgment  for $50,000,  Default  judgment for lease on office
space that the company  never  occupied.  The company is  currently  planning to
appeal.

6. Robert Half Inter. - Judgment for $21,481.79,  dated 3/23/99, we have no idea
who they are.

7. 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.

The company plans to appeal all above-mentioned  suits through the law office of
Pillsbury, Madison & Sutro, LLP.


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


                                       43

<PAGE>


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. No reports on Form 8-K were filed by the Company for
the fiscal quarter ended December 31, 2000.





                                   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/ Stephen H. Durland                  Date: 8 May 01
   ---------------------------                  ----------------------
     Stephen A. Durland
     Chief Financial Officer





                                       44

<PAGE>