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


                    ROYAL SILVER MINES, INC.
             (Formerly Celebration Mining Company)
                  (A Development Stage Company)

               Consolidated Financial Statements

           September 30, 1995 and November 30, 1994

         ----------------------- F-1 ------------------------

       Letter From Hein & Associates LLP Regarding 
              Change in Certifying Accountant
   
         ----------------------- F-2 ------------------------

            INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Royal Silver Mines, Inc.
(Formerly Celebration Mining Company)
(A Development Stage Company)
Spokane, Washington

We have audited the accompanying consolidated balance sheet 
of Royal Silver Mines, Inc. (Formerly Celebration Mining 
Company) (a development stage company) as of September 30, 
1995 and the related consolidated statements of operations, 
cash flows and stockholders' equity for the ten months then 
ended, and from inception of February 17, 1994 through 
September 30, 1995.  These consolidated financial statements 
are the responsibility of the Company's management.  
Our responsibility is to express an opinion on these 
consolidated financial statements based on our audits.  

We conducted our audits in accordance with generally
accepted auditing standards.  Those standards require that 
we plan and perform the audit to obtain reasonable assurance 
about whether the financial statements are free of 
material misstatement.  An audit includes examining, on 
a test basis, evidence supporting the amounts and disclosures 
in the financial statements.  An audit also includes assessing 
the accounting principles used and significant estimates 
made by management, as well as evaluating the overall 
financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements 
referred to above present fairly, in all material respects, 
the consolidated financial position of Royal Silver Mines, 
Inc. as of September 30, 1995 and the consolidated results 
of their operations and their cash flows for the ten months 
then ended and from inception on February 17, 1994 through 
September 30, 1995 in conformity with generally accepted 
accounting principles.

Jones, Jensen & Company
December 5, 1995

         ----------------------- F-3 ------------------------ 




                          C O N T E N T S


Independent Auditors' Report. . . . . . . . . . . . .   F-3

Consolidated Balance Sheets  . . . . . . . . . . . . .  F-5

Consolidated Statements of Operations  . . . . . . . .  F-7

Consolidated Statements of Stockholders' Equity. . . .  F-8

Consolidated Statements of Cash Flows  . . . . . . . .  F-10

Notes to the Consolidated Financial Statements . . . .  F-12


         ----------------------- F-4 ------------------------

<TABLE>
                     ROYAL SILVER MINES, INC.
              (Formerly Celebration Mining Company)
                  (A Development Stage Company)
                   Consolidated Balance Sheets
<CAPTION>
                            ASSETS

                                        September 30,       November 30, 
                                             1995               1994     
CURRENT ASSETS
<S>                                  <C>                 <C>             

  Cash                                $         151,698    $         30,076
  Prepaid expenses                                4,350              26,977
                                      -----------------     ---------------
      Total Current Assets                      156,048              57,053
                                         
MINERAL PROPERTIES (Notes 1, 2 and 3)         3,869,515             253,376
                                      -----------------     ---------------
PROPERTY AND EQUIPMENT (Note 4)

  Furniture and equipment                       11,629              -     
  Less - accumulated depreciation                 (589)             -     
                                     -----------------     ---------------
       Total Property and Equipment             11,040              -     

OTHER ASSETS

  Deferred debt issuance costs,
   net (Note 5)                                 19,736              55,748
  Organization costs, net (Note 5)                 359                 442
                                     -----------------     ---------------
       Total Other Assets                       20,095              56,190
                                         

       TOTAL ASSETS                  $       4,056,698    $        366,619
                                     -----------------     ---------------
</TABLE>
            THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
                THESE CONSOLIDATED FINANCIAL STATEMENTS

         ----------------------- F-5 ------------------------
<TABLE>

<CAPTION>
                          LIABILITIES AND STOCKHOLDERS' EQUITY

                                    September 30,      November 30,  
                                        1995               1994      
CURRENT LIABILITIES
<S>                                 <C>                <C>             
 Accounts payable                    $  60,026          $    6,299
 Payable to related parties (Note 9)       289                 -     
 Accrued expenses                       90,088                 -     
 Notes payable (Note 8)                670,919              25,000
                             -----------------     ---------------
                                         
       Total Current Liabilities       821,322              31,299
                                         

LONG - TERM DEBT (Note 8)               -                   59,000
                                         

COMMITMENTS AND CONTINGENCIES
  (Notes 3 and 10)                      -                     -    

                                         
STOCKHOLDERS' EQUITY
  
  Common stock, $.01 par value; 
   40,000,000 shares authorized, 
   7,757,063 and 3,450,000 
   shares issued and outstanding,
   respectively  (Note 6)               77,571              34,500
  Additional paid-in capital         4,120,540             453,616
  Deficit accumulated during the 
   development stage                  (962,735)           (211,796)
                             -----------------     ---------------
        Total Stockholders' Equity   3,235,376             276,320
                             -----------------     ---------------

        TOTAL LIABILITIES AND
         STOCKHOLDERS' EQUITY    $   4,056,698       $      366,619
</TABLE>
         ----------------------- F-6 ------------------------
<TABLE>

                              Consolidated Statements of Operations

                                                                               
                                                 From          From         
                                                 Inception on  Inception on
                                For the Ten      February 17,  February 17,
                                Months Ended     1994 Through  1994 Through
                                September 30,    November 30,  September 30,
                                1995             1994            1995    
<S>                          <C>                <C>            <C>           
REVENUE                      $        -         $        -      $      -     
                             ----------------  ---------------- -------------
  Total Revenue                       -                  -             -     
                             ----------------  ---------------- -------------

EXPENSES

  Mineral leases                         843            -                843
  Depreciation and amortization       59,822             2,511        62,333
  Officers and directors 
    compensation                     209,733           129,500       339,233
  General and administrative         273,246            79,785       353,031
                            ----------------  ---------------- -------------

     Total Expenses                  543,644           211,796       755,440
                            ----------------  ---------------- -------------

OPERATING INCOME (LOSS)             (543,644)         (211,796)     (755,440)
                            ----------------  ---------------- -------------
OTHER INCOME AND (EXPENSES)

  Interest expense                    (62,557)            -           (62,557)
  Loss on disposition of assets      (144,738)            -          (144,738)
                             ----------------  ---------------- -------------
     Total Other Income and
       (Expenses)                    (207,295)            -          (207,295)
                             ----------------  ---------------- -------------

NET INCOME (LOSS)             $      (750,939) $      (211,796)  $   (962,735)
                             ----------------  ---------------- -------------
NET INCOME (LOSS) PER SHARE   $         (0.17) $         (0.09)  $      (0.29)
                             ----------------  ---------------- -------------
WEIGHTED AVERAGE SHARES
 OUTSTANDING                        4,413,566         2,232,168     3,356,143
                             ----------------  ---------------- -------------
</TABLE>
         ----------------------- F-7 ------------------------
<TABLE>

                                     ROYAL SILVER MINES, INC.
                             (Formerly Celebration Mining Company)
                                  (A Development Stage Company)
<CAPTION>
                        Consolidated Statements of Stockholders' Equity

                                                        Deficit
                                                        Accumulated
                                          Additional    During the
                      Common Stock        Paid-in       Development
                    Issued      Amount    Capital       Stage      Total
<S>                 <C>        <C>          <C>         <C>        <C>      
Balance, 
 February 17, 1994     -       $     -      $     -     $    -     $    -  
                     
Issuance in May 1994 
 of shares at $.002 
 per share to officers 
 and directors in 
 exchange for assign- 
 ment of mining  
 property option     2,250,000     22,500       (18,500)      -        4,000

Issuance in July 
 1994 of shares for 
 cash at $.402 in
 private placement, 
 net of costs        1,050,000     10,500       411,116       -      421,616
                     
Issuance in August 
 1994 of shares to 
 a director in 
 exchange for services,
 valued at $.417 
 per share             150,000      1,500        61,000       -       62,500
                     
Net loss for the 
 year ended November 
 30, 1994                  -           -            -     (211,796)  (211,796)
                    -----------   ---------     -------- ---------  ---------
Balance,
 November 30, 1994   3,450,000      34,500      453,616   (211,796)   276,320

Issuance of shares 
 in debt offering 
 at $.03 per share     416,250       4,163        9,712        -       13,875
                     
Issuance of shares for
 mineral properties 
 valued at $1.00 
 per share             262,500       2,625      259,875        -      262,500
                     
Issuance of shares 
 for cash at $1.00 
 per share              15,000          15       14,850        -       15,000
                     
Stock issuance costs      -             -       (58,202)       -      (58,202)
                    -----------   ---------    --------   --------- ---------
Balance forward      4,143,750    $  41,438   $ 679,851  $ (211,796) $509,493
                    -----------   ---------    --------   --------- ---------
                     
         ----------------------- F-8 ------------------------
                                                                 
Issuance of shares to
 acquire Consolidated
 Royal Mines, Inc. at
 $0.15 per share    2,434,563       24,346     335,750         -      360,096

Issuance of shares to
 directors and employees
 for services at prices
 ranging from $2.00 to 
 $2.50 per share       12,750         127      29,473          -       29,600
                     
Issuance of shares in
 exchange for mineral
 properties at prices
 ranging from $3.13 
 to $3.25 per share   800,000       8,000   2,530,126          -    2,538,126
                     

Issuance of shares for 
 cash at prices ranging 
 from $1.50 to $2.00 
 per share            166,000       1,660     247,340          -      249,000
                     

Issuance of shares in 
 exchange for debt at 
 $1.50 per share      200,000       2,000     298,000          -      300,000
                     

Net loss for the ten 
 months ended 
 September 30, 1995       -            -           -    (750,939)    (750,939)
                   -----------   ---------   --------  ---------    ---------
Balance,
 September 30, 1995  7,757,063   $ 77,571  $4,120,540  $(962,735)  $3,235,376

</TABLE>
         ----------------------- F-9 ------------------------

<TABLE>
                                    ROYAL SILVER MINES, INC.
                            (Formerly Celebration Mining Company)           
                                 (A Development Stage Company)
<CAPTION>
                            Consolidated Statements of Cash Flows

                                                                   
                                                                               
                                              From              From
                                              Inception on      Inception on
                              For the Ten     February 17,      February 17,
                              Months Ended    1994 Through      1994 Through
                              September 30,   November 30,      September 30,
                              1995            1994              1995   
CASH FLOWS FROM               --------------  --------------    --------------
 OPERATING ACTIVITIES:
<S>                         <C>                <C>               <C>          
                                                     
 Net income (loss)          $     (750,939)    $   (211,796)      $  (962,735)
 Adjustments to reconcile 
  net income(loss)to net 
  cash provided (used)
  by operating activities:
   Depreciation and amortization    59,822            5,058            64,880
   Issuance of common stock 
     for services                   29,600           62,500             2,100
Change in assets and liabilities:
   Prepaid expenses                 22,627          (26,977)           (4,350)
    Other assets                   (23,137)            (500)          (23,637)
    Accounts payable                53,727            6,299            60,026
    Accrued expenses                90,088              -              90,088
    Payable to related parties     300,289              -             300,289
                              -------------    -------------     ------------

 Net Cash Provided (Used)
  By Operating Activities         (217,923)        (165,416)         (383,339)
                              -------------    -------------     ------------
CASH FLOWS FROM
 INVESTING ACTIVITIES:

 Purchase and development of 
  mineral properties              (455,418)        (170,375)         (625,793)
  Purchase of fixed assets         (11,629)           -               (11,629)

 Net Cash Provided (Used)
  By Investing Activities       $ (467,047)     $  (170,375)       $ (637,422)
                             -------------    -------------     -------------

         ----------------------- F-10 ------------------------

CASH FLOWS FROM
 FINANCING ACTIVITIES:

 Stock issuance costs          $   (58,202)     $   (71,633)       $ (129,835)
 Proceeds received on 
  long-term debt                   675,000           -                675,000
                                                     
 Payments made on notes payable    (74,206)           -               (74,206)
 Issuance of common stock 
  for cash                         264,000          437,500           701,500
                                                     
   Net Cash Provided (Used)
    By Financing Activities        806,592          365,867         1,172,459
                                                     

NET INCREASE (DECREASE) IN CASH    121,622           30,076           151,698
                             -------------    -------------     -------------
                                                     
CASH, BEGINNING OF YEAR             30,076           -                 -     
                             -------------    -------------     -------------
                                                     
CASH, END OF YEAR                  151,698           30,076           151,698
                             -------------    -------------     -------------
                                                     

SUPPLEMENTAL CASH FLOWS DISCLOSURE:

NET CASH PAID FOR:

 Income taxes                          250              100               350
 Interest                           17,683           -                 17,683

NON-CASH FINANCING ACTIVITIES:

 Common stock issued for services
  rendered                          29,600           62,500            92,100
                                                     
 Common stock issued for mineral
  properties                     2,800,626           -              2,800,626
                                                     
 Common stock issued in exchange 
  for debt                         313,875           -                313,875
                                                     
 Common stock issued in
  acquisition of Consolidated
  Royal Mines, Inc.                360,096           -                360,096
                                                     
 Option rights acquired in exchange 
  for a payable                      -               79,000            79,000
                                                     
 Common stock issued for assignment
  of mining property options         -                4,000             4,000
</TABLE>                                             

         ----------------------- F-11 ------------------------


                     ROYAL SILVER MINES, INC.
              (Formerly Celebration Mining Company)
                   (A Development Stage Company)
          Notes to the Consolidated Financial Statements
            September 30, 1995 and November 30, 1994

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Royal Silver Mines, Inc. (the Company) was incorporated 
in April 1969 under the laws of the State of Utah primarily 
for the purpose of acquiring and developing mineral 
properties.  The Company conducts its business as a 'junior' 
natural resource company, meaning that it intends to receive 
income from property sales or joint ventures with larger 
companies.

Celebration Mining Company (Celebration), currently a 
wholly-owned subsidiary of the Company, was incorporated for 
the purpose of identifying, acquiring, exploring and 
developing mining properties.  Celebration was organized on 
February 17, 1994 as a Washington Corporation.  Celebration 
has not yet realized any revenues from its planned operations.

On August 8, 1995, the Company and Celebration completed an 
Agreement and Plan of Reorganization whereby the Company issued 
4,143,750 shares of its common stock and 1,455,000 warrants 
in exchange for all of the outstanding common stock of 
Celebration.  Pursuant to the reorganization the name of the 
Company was changed to Royal Silver Mines, Inc.  Immediately 
prior to the Agreement and Plan of Reorganization, the 
Company had 2,375,463 common stock shares issued and 
outstanding.

The acquisition was accounted for as a purchase by 
Celebration of the Company, because the shareholders 
of Celebration control the Company after the acquisition.  
Therefore, Celebration is treated as the acquiring entity.  
There was no adjustment to the carrying value of the 
assets or liabilities of the Company in the exchange as the 
market value approximated the net carrying value.  The Company 
is the acquiring entity for legal purposes and Celebration 
is the surviving entity for accounting purposes.

The accompanying consolidated financial statements include 
the accounts of the Company and Celebration from August 8, 
1995 through September 30, 1995.  Prior to August 8, 1995 
only the accounts of Celebration are presented.  All 
transactions entered into subsequent to August 8, 1995 are 
those of Royal Silver Mines, Inc., the surviving company.

The $3,869,515 cost of mineral properties included in the
accompanying consolidated balance sheet as of September 30, 
1995 is related to exploration properties.  The Company 
has not determined whether the exploration properties 
contain ore reserves that are economically recoverable.  
The ultimate realization of the Company's investment in 
exploration properties is dependent upon the success of future 
property sales, the existence of economically recoverable 
reserves, the ability of the Company to obtain financing or 
make other arrangements for development and upon future 
profitable production.  The ultimate realization of the 
Company's investment in exploration properties cannot be 
determined at this time and, accordingly, no provision 
for any asset impairment that may result, in the event the 
Company is not successful in developing or selling these 
properties, has been made in the accompanying consolidated 
financial statements.

         ----------------------- F-12 ------------------------

The Company is actively seeking additional capital and 
management believes the properties can ultimately be sold 
or developed to enable the Company to continue its operations.  
However, there are inherent uncertainties in mining 
operations and management cannot provide assurances that it 
will be successful in this endeavor.  Furthermore, the Company 
is in the development stage as it has not realized any 
significant revenues from its planned operations.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a.  Accounting Method

The Company's financial statements are prepared using the 
accrual method of accounting.

b.  Loss Per Share
    
The computation of loss per share of common stock is based 
on the weighted average number of shares outstanding at the 
date of the financial statements.

c.  Cash Equivalents

The Company considers all highly liquid investments with a 
maturity of three months or less when purchased to be cash 
equivalents.

d.  Mineral Properties

Costs of acquiring, exploring and developing mineral 
properties are capitalized by project area.  Costs to 
maintain the mineral rights and leases are expensed as 
incurred.  When a property reaches the production stage, 
the related capitalized costs will be amortized, using the 
units of production method on the basis of periodic estimates 
of ore reserves.  Mineral properties are periodically 
assessed for impairment of value and any losses are charged to 
operations at the time of impairment.

Should a property be abandoned, its capitalized costs are 
charged to operations.  The Company charges to operations the 
allocable portion of capitalized costs attributable to 
properties sold.  Capitalized costs are allocated to 
properties sold based on the proportion of claims sold to 
the remaining claims within the project area.

e.  Principles of Consolidation

The consolidated financial statements include those of 
Royal Silver Mines, Inc. and Celebration Mining Company.  
All significant intercompany accounts and transactions 
have been eliminated.

         ----------------------- F-13 ------------------------

f.  Concentration of Risk

The Company maintains its cash accounts in primarily one 
commercial bank in Washington.  Accounts are guaranteed by 
the Federal Deposit Insurance Corporation (FDIC) up to 
$100,000.  The Company's cash balance exceeds that amount by 
$51,566 at September 30, 1995.

g.  Provision For Taxes

At September 30, 1995, the Company had net operating loss 
carryforwards of approximately $960,000 that may be offset 
against future taxable income through 2010.  No tax benefit 
has been reported in the consolidated financial statements 
because the Company believes there is a 50% or greater chance 
the net operating loss carryforwards will expire unused.  
Accordingly, the potential tax benefits of the net 
operating loss carryforwards are offset by a valuation 
allowance of the same amount.

NOTE 3 - MINERAL PROPERTIES

During the year ended September 30, 1993, the Company 
received approximately 800 mining claims from a related 
party, all located in the northern Oquirrh Mountain range in 
the State of Utah.  These mineral properties were received 
in lieu of payment of a receivable from the related party.

In May 1994, in exchange for 2,250,000 shares of the Company's 
common stock, the founders of the Company assigned to the 
Company the rights under an option agreement to acquire up 
to a 50% interest in the mineral rights on a property located 
in Madison County, Montana.

The option agreement was cancelled prior to September 30, 
1995.  The costs incurred on the property and capitalized 
in the financial statements were written off during the 
year ended September 30, 1995.  All rights under the option
agreement on the mineral properties reverted back to its 
original owners.

         ----------------------- F-14 ------------------------

In October 1994, the Company and United Silver Mine, Inc., 
(United) entered into a joint venture agreement whereby the 
Company may acquire up to an 80% interest in a mining property 
located in the State of Utah.  Under the terms of the agreement, 
United was to contribute real properties for an initial 75% 
interest in the joint venture, and the Company was to remove 
all liens associated with the real properties by paying 
$175,000 to a bank which was the primary lien holder for its 
initial 25% interest in the venture.  The Company will be 
granted an additional 25% interest upon providing a $300,000 
loan to United.  Terms of the loan call for 5% annual interest 
over a 15-year period with the principal and interest to be 
repaid from the sellers remaining interest in certain 
underground minerals, or the loan will be forgiven.  The 
Company will be granted an additional 30% interest if it 
expends $4,000,000 on underground development of the 
properties by June 1, 1998.  The Company is responsible 
for providing 100% of the operating capital of the joint 
venture until commercial production commences.  Thereafter, 
capital contributions will be based upon equity interest in 
the venture.

Prior to September 30, 1995, the Company expended $175,000 
to purchase the above mentioned promissory note.  The 
property was auctioned in a public auction in May, 1995 and 
by virtue of the Company's first position on the lien, the 
Company was able to successfully bid the full amount of the 
underlying promissory note.  Additional expenditures have 
been made on the property through September 30, 1995.

In February 1995, the Company entered into an agreement to 
acquire a mineral lease on a property in Shoshone County, 
Idaho.  In connection with this lease, the Company has paid 
$50,000 and issued 175,000 shares of common stock.  In 
addition, 10,000 share were issued to a new director for 
his assistance in obtaining this lease.  The Company was 
originally obligated to pay $950,000 by September 1, 1995, as 
'an advance royalty.'  This original due date has been 
extended indefinitely because of the proposed acquisition 
of Fausett International (See Note 12).  When, and if, the 
property achieves gross sales of $40,000,000, the Company 
will be obligated to pay an additional .5% royalty on 
future sales.  Furthermore, beginning after September 1, 1995, 
and at such time as the average price of silver has reached 
$6.00 per ounce for a 30-day period, the Company is obligated 
to spend not less than $2,000,000 during the subsequent 36 
months to dewater and repair the mine.  Thereafter, the 
Company will be required to maintain the mine in a condition 
to allow it to be put into production within sixty days.  
There are certain claims by the U.S. Environmental Protection 
Agency and the county on this property for which the lessor is 
obligated to pay.  In the event these claims are not 
satisfactorily resolved, they may effect the Company's 
rights to the property.

         ----------------------- F-15 ------------------------

In March 1995, the Company entered into a joint venture 
agreement with an Australian company for exploration of a 
certain mineral property in Australia.  Under the original 
terms of the joint venture agreement, the Company could acquire 
up to a 50% interest subject to a vesting schedule which 
required $100,000 to be paid by April 1995 (which was paid) 
for an initial 10% interest.  An additional interest can be 
obtained by payment of the following: $100,000 within 60 
days after receipt of assays from the first drill hole (10%); 
$1,000,000 not later than 6 months after the second drill hole 
(15%) and; $1,000,000 not later than 12 months after the 
prior payment (15%).

During the year ended September 30, 1995, the Company 
purchased through the issuance of 800,000 shares of its 
common stock, various mineral properties located in 
the States of Washington and Idaho.  The mineral properties 
were recorded at the fair market value of the shares on 
the date of issuance ranging from $3.13 to $3.25 per share 
for a total purchase price of $2,538,126.

The Company's proposed future mining activities will be subject 
to laws and regulations controlling not only the exploration 
and mining of mineral properties, but also the effect of such 
activities on the environment.  Compliance with such laws and 
regulations may necessitate additional capital outlays, 
affect the economics of a project, and cause changes or delays 
in the Company's activities.

The total mineral properties at September 30, 1995 and November 
30, 1994 are classified as follows:

<TABLE>
<CAPTION>
                                    September 30,       November 30,
                                        1995               1994    
                                    --------------     --------------
<S>                                 <C>                <C>          
Mineral properties under 
  joint ventures                    $    352,739       $     -     
  
Other mineral properties               3,516,776            253,376
                                    --------------     --------------
Total Mineral Properties            $  3,869,515       $    253,376
                                    --------------     --------------
 </TABLE>

The Company's mineral properties are valued at the lower of 
cost or net realizable value.

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost.  Major 
additions and improvements are capitalized.  Minor 
replacements, maintenance and repairs that do not increase 
the useful life of the assets are expensed as incurred.  
Depreciation of property and equipment is determined using 
the straight-line method over the expected useful lives of 
the assets of five years.

         ----------------------- F-16 ------------------------

NOTE 5 - INTANGIBLE ASSETS

Deferred debt issuance costs and organization costs are 
recorded at cost.  Amortization of these intangible assets 
is determined using the straight-line method over the 
expected useful lives of the assets as follows:

     Description                     Useful Lives
     --------------                   -------------
     Deferred debt issuance costs     1 year
     Organization costs               5 years

NOTE 6 - COMMON STOCK

During the year ended November 30, 1994, Celebration issued 
1,500,000 shares of common stock to directors for services 
rendered, valued at $.003 to $.625 per share, which is the 
fair market value of the shares on the date of issuance.

During the year ended September 30, 1995, the Company 
issued 12,750 shares of common stock to directors and 
employees for services rendered, valued at prices ranging 
from $2.00 to $2.50 per share, which is the fair market 
value of the shares on the date of issuance.

During the year ended September 30, 1995, Celebration 
issued 975,000 shares of common stock in exchange for 
mineral properties (See Note 3) and sold 176,000 shares 
of common stock for $264,000 cash.

The Company issued 200,000 shares of its common stock during 
the year ended September 30, 1995 in lieu of outstanding debt 
that was owed to Centurion Mines Corporation  (Centurion), 
a related entity.  The stock was issued at $1.50 per share in 
payment of $300,000 of the then outstanding debt (See Note 
9).  The Company also issued 277,500 shares in connection 
with the issuance of notes payable (See Note 8).  (See 
also the disclosure in Note 1).

         ----------------------- F-17 ------------------------

NOTE 7 - COMMON STOCK OPTIONS AND WARRANTS

In January 1992, the shareholders of Royal approved a 1992 
Stock Option and Stock Award Plan under which up to ten 
percent of the issued and outstanding shares of the 
Company's common stock could be awarded based on merit of 
work performed.  As of September 30, 1995, 12,750 shares of 
common stock have been awarded under the Plan.

Celebration, prior to the exchange agreement with Royal, 
had granted securities to certain shareholders which represented 
rights to purchase or receive shares of Celebration's 
common stock.  These options were assumed by the Company after 
the merger at a rate of 1.5 shares for each option still 
outstanding.  Thus, the Company has granted options, 
with varying conditions and requirements, to purchase a 
total of 1,455,000 shares of its common stock.  255,000 of 
the stock options are exercisable at $1.50 per share and expire 
March 21, 2000.  The remaining 1,200,000 stock options are 
exercisable at $0.93 per share and expire on August 31, 
2001.  As of September 30, 1995, none of these options 
have been exercised.

NOTE 8 - NOTES PAYABLE
    
In February 1995, the Company raised $555,000 through the 
issuance of promissory notes.  The notes bear interest at 10% 
per annum and will be due on the earlier of January 1, 1996 
or the closing of any public offering of equity securities 
by the Company.  If a public offering is not completed by  
January 1, 1996, the Company has the option to extend the 
term of the notes for one year.  The note holders also 
received 277,500 shares of Celebration's common stock.  In 
the case the notes are extended, the note holders will 
receive an additional 245,625 shares of the Company's 
common stock.  A 10% commission was charged by an underwriter 
on the sale of almost all of the notes.

In April 1995, the Company raised $120,000 in 10% convertible 
debentures.  Interest accrues to maturity in April 1996.  The 
debentures and accrued interest are convertible into common 
stock at a rate of $1.33 per common share.

The notes payable were recorded net of the discount on 
issuance of $13,875, which as of September 30, 1995 was 
$4,081.

NOTE 9 - RELATED PARTY TRANSACTIONS

The Company has received advances from a related party in 
order to pay ongoing operating expenses.  The amount owed 
eventually exceeded $300,000 during 1995.  Therefore, 
the Company approved the issuance of 200,000 shares of 
common stock in payment of $300,000 of the then outstanding 
balance (See Note 6).  The balance outstanding at September 
30, 1995 was $289.

         ----------------------- F-18 ------------------------

NOTE 10 -  FUTURE LEASE OBLIGATIONS

The Company is obligated under its lease arrangements to make 
additional lease payments subsequent to September 30, 1995 
as follows:
<TABLE>
<CAPTION>
      Year Ended                      
      September 30,                        Amount  
      -------------                        ---------
      <S>                                  <C>
      1996                                 $  7,800
      1997                                    5,000                           
      1998                                    5,000 
      1999                                    5,000
      2000 and thereafter                    25,000 
                                          ---------                        
      Total                                $ 47,800                    
</TABLE>

NOTE 11 -  PRIVATE STOCK OFFERING

The Company has initiated a private placement of its common 
stock of up to 2,000,000 shares at $1.50 per share.  The 
primary purpose of the offering by the Company is to provide 
the Company with the needed capital to commence its mining 
operations and joint ventures and for general corporate 
purposes.

NOTE 12 -  SUBSEQUENT EVENTS

Subsequent to September 30, 1995, the following material 
events have occurred:

1 -  On October 18, 1995, the Company entered into an 
agreement with Fausett International, an Idaho Corporation, 
whereby the Company would issue 850,000 shares of its common 
stock for 81% of the total outstanding shares of Fausett 
International.  The proposed acquisition had not been made 
final as of the date of this report. Management believes 
that the likelihood of completing the acquisition is less 
than 50% because of circumstances beyond their control.  
Fausett International is a prior shareholder of Celebration 
and is considered to be a related party at September 30, 
1995.

2 -  The Company sold 335,000 shares of its common stock at 
$1.50 per share for $502,500 cash.

3 -  The holders of the notes payable by the Company have 
converted $570,919 of the notes to common stock at $1.50 
per share.

         ----------------------- F-19 ------------------------

NOTE 13 - CONSOLIDATED PROFORMA STATEMENTS OF OPERATIONS

The historical information contained herein has been 
consolidated on a proforma basis.  The purchase of 
Celebration Mining Company as described in Note 1 was 
effective August 8, 1995.  The purchase has been presented as 
though it was effective September 30, 1994.  All significant 
accounting policies for Celebration Mining Company are the 
same as the Company's as defined in Note 1.  No proforma 
adjustments for depreciation and amortization have been 
recorded because the market value of Celebration Mining 
Company is approximately the same as predecessor cost.

<TABLE>

<CAPTION>

                                    For the                            
                               Period Ended
                                November 30,               For the Year Ended 
                                       1994                September 30, 1994
                             --------------    ------------------------------
                                Celebration       Royal Silver       Proforma 
                             Mining Company        Mines, Inc.       Combined 
                             --------------    ---------------   ------------
<S>                        <C>                <C>               <C>           
REVENUES                    $       -          $        -       $       -     

EXPENSES

 Mineral leases                     -                 1,661          1,661
 Depreciation and
  amortization                         58               -               58
 Officers and directors 
  compensation                    129,500           548,381         77,881
 General and administrative        82,238           162,200        244,438
                           --------------     -------------   ------------

    Total Expenses                211,796           712,242        924,038
                           --------------      ------------   ------------

INCOME (LOSS) FROM 
  OPERATIONS                     (211,796)        (712,242)      (924,038)
                           --------------     ------------   ------------

OTHER INCOME (EXPENSE)

 Interest income                   -                    12             12
 Interest expense                  -                  (551)          (551)
                           --------------     ------------   ------------
     Total Other Income 
      (Expense)                    -                  (539)          (539)
                           --------------     ------------   ------------

NET INCOME (LOSS)           $    (211,796)   $    (712,781)  $   (924,577)
                            -------------     ------------   ------------

EARNINGS (LOSS)
   PER SHARE                $       (0.07)   $       (0.35)  $      (0.42)
                            -------------     ------------   ------------

         ----------------------- F-20 ------------------------

</TABLE>