FORM 10-KSB
   SECURITIES AND EXCHANGE COMMISSION
        Washington, D.C.  20549
     [X]  15, ANNUAL REPORT UNDER SECTION 13 OR
          15(D) OF THE SECURITIES EXCHANGE ACT
          OF 1934 For the fiscal year ended:
          6/30/01
                                      OR
     [ ]  15, TRANSITION REPORT PURSUANT TO SECTION
          13 OR 15(D) OF THE SECURITIES EXCHANGE
          ACT OF 1934
          For the transition period from        to

          Commission file number: 0-22965

              Pinnacle Resources, Inc.
           (Exact name of Small Business Issuer in its charter)


      WYOMING                       84-1414869
(State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization                     Identification No.)

 9600 E. Arapahoe Road, Suite 260,
  Englewood, Colorado                   80112
(Address of principal executive offices)                (Zip Code)

Registrant's Telephone number, including area code:
  (303) 705-8600

Securities registered pursuant
 to Section 12(b) of the Act:       None
Securities registered pursuant
 to Section 12(g) of the Act:   Common  Stock,
                               $.00001 par value

Check whether Pinnacle (1) has filed all reports
required to be filed by Section 13 or 15(d) of the
Securities Exchange Act during the preceding 12
months (or such shorter period that Pinnacle was
required to file such reports), and (2) has been
subject to such filing requirements for at least
the past 90 days.
     Yes [x] No [ ]

Check if there is no disclosure of delinquent
filers in response to Item 405 of Regulation S-B is
not contained in this form, and no disclosure will
be contained, to the best of Company's knowledge,
in definitive proxy or information statements
incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.  [x]

Pinnacle's revenues for its most recent fiscal year
were $325,000. As of June 30, 2001, the market
value of Pinnacle's voting $.0001 par value common
stock held by non-affiliates of Pinnacle was
$720,000.

<PAGE>2

The number of shares outstanding of Company's only
class of common stock, as of June 30, 2001 was
11,950,050 shares of its $.00001 par value common
stock.

Check whether the Issuer has 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 [ ]

 No documents are incorporated into the text by
reference.

Transitional  Small  Business  Disclosure  Format
(check  one)
 Yes                No     x
     --------          --------














<PAGE>3

                                    PART I
ITEM  1.    BUSINESS  General

A.   Business Development.    Pinnacle Resources,
Inc. (the "Company") is a development stage
company, incorporated pursuant to the laws of the
State of Wyoming on January 6, 1995 under the name
of Claremont House, Corp.   On June 26, 1997, the
Articles of Incorporation were amended to change
the name of Pinnacle to Pinnacle Resources, Inc.
and to authorize 2,000,000 Preferred Shares with a
par value of $.01 per Preferred Share.
Additionally, Pinnacle effectuated a 1 for
3.3333 reverse stock split reducing the number of
outstanding common shares from 500,000 to 150,000.

Pinnacle has had limited operations since its
inception in 1995 due to its lack of working
capital.   Claremont House was originally
established with the idea of providing "Assisted
Living Facilities" to at risk (frail) senior
citizens.   Management never commenced operations
regarding this venture due to a lack of funding. In
June 1997, Pinnacle issued 4,000,000 (post split)
Common Shares for cash at $.025 per Common Share
for an aggregate of $100,000 to thirteen
individuals who were then non-affiliates.  The new
owners of Claremont House, Corp. did not acquire
Pinnacle in order to use Claremont House, Corp. or
its predecessors, as the object of a merger or
acquisition.  Claremont House, Corp. was acquired,
and its name changed to Pinnacle Resources, Inc.,
in order to more clearly identify its new mandated
business purpose, which is to evaluate, structure,
and complete a merger with, or acquisition of,
another unrelated privately-owned corporation. In
the course of its activities, Pinnacle plans to
arrange (or provide) funding for companies that it
evaluates and will try to structure merger or
acquisition opportunities so that conditions are
advantageous to Pinnacle.   Victory Minerals Corp.,
a holding company controlled by Glen Gamble,
purchased 2,000,000 of those Common Shares.
Currently, Pinnacle is engaged in the business of
providing financial services to emerging growth
companies in the United States, as well as
development stage companies located in selected
developing countries, primarily in Africa and South
America.

Pinnacle filed a Form 10-SB on a voluntary basis to
provide full disclosure to its shareholders and to
meet one of the requirements of a NASDAQ listing.
Until Pinnacle, if ever, meets all of the
requirements of a NASDAQ listing, Pinnacle intends

<PAGE>4

to maintain its quotation, granted on July 15,
1999, on the OTC Bulletin Board under the trading
symbol PNRR.

Pinnacle will voluntarily file periodic reports in
the event that its obligation to file such reports
is suspended under the Exchange
Act.

Many states limit the resales of securities of
shell companies.   As a result, such restrictions
may be placed upon Pinnacle's shareholders even
though Pinnacle now has a stated business purpose.
Pinnacle has not yet applied for secondary trading
in any specified states and does not know
specifically of any such restrictions.

Business of Pinnacle.   Pinnacle plans to continue
to engage in the business of financial services,
making small commercial loans to, and equity
investments in, emerging growth companies that are
unable to obtain financing from traditional
sources.   Pinnacle intends to be in the financial
services business and may also furnish financial
consulting services and advice as an incidental
part of any other agreement or arrangement.

Pinnacle will continue to focus its financing and
capital arrangement activities on emerging growth
companies, which plan to raise capital in the
public markets within a reasonably short period of
time, i.e., one to two years.   Although Pinnacle
will initially target small mining companies due to
its contacts in that industry, management has not
identified, nor precluded, any particular industry
within which the Company will focus its efforts.
Rather, management intends to identify any number
of candidates, which may be brought to its
attention through present associations or by word-
of-mouth.   However, Pinnacle will direct its
activities in seeking and evaluating suitable
candidates for financing both in the United States
and on companies operating in selected stable,
developing countries, principally in Africa and
South America.

In addition to domestic financing experience,
management's historical exposure has been in
Southern Africa and South America.     Even though
Pinnacle intends to review and evaluate a variety
of funding opportunities, the bulk of the
management's funding and financing experience has
been concentrated in the mineral and mining
industry; therefore management's experience would

<PAGE>5

be limited in the financing of projects outside the
mining industry.   In Africa and South America,
management assisted in funding a variety of mining
opportunities.  Management is of the opinion that
the need for outside sources of funding by mining
companies in these markets has potential.
Pinnacle is attracted to these areas because they
represent some of the most highly mineralized areas
in the world.   Additionally, Pinnacle's management
has some prior expertise and working knowledge in
these markets.   Pinnacle expects to encounter
normal timing difficulties with third world
governmental regulations and bureaucracy that could
slow down and encumber Pinnacle's planned business
activities.

In the third world countries it is not uncommon
during the application and approval process
relating to surface and mineral titles; drilling
and exploration permits; mineral and mining leases;
easements and rights-of-way; water or power access
and usage; environmental and restoration plans;
etc., to be exceedingly slow compared to United
States standards.  Based on management observation
and past experience, these third world countries
often have only one person qualified to process any
particular application; and sometimes they have no
one qualified to evaluate an application and the
department has to seek an outside consultant's
report prior to processing an application.   In
geographic areas where prospecting and mining
activity is abundant, regulatory departments can be
understaffed, resulting in delays in the
application process.

Management has over 70 years of combined business
experience involving a variety of situations where
financing and/or funding has been required in order
to effectuate a mining opportunity.   Individually,
management personnel has directly funded,
underwritten or brokered financing for a number of
mining prospects over the years, both in the
domestic market as well as South Africa and South
America.

Pinnacle's operating strategies will be to provide
financing solutions to privately-held corporations
and other companies which, in all likelihood, do
not meet the overall credit standards typically
required by commercial banks in today's restrictive
credit environment. Management believes that
commercial banks are reluctant to make loans to
small and newly organized companies and, in the
instances in which such loans are made, they are

<PAGE>6

heavily collaterized by homes and other personal
assets in virtually every case.   Commercial
bankers typically do not lend to companies with
limited assets, or which have been in business for
less than three or four years.   Most, if not all,
of the companies which will be candidates for loans
and/or equity investments by Pinnacle or for other
sources of capital known to management, will not
have an operating history which will support bank
loans. These companies, primarily privately-held
corporations to be targeted by Pinnacle, may have
negative working capital positions, negative cash
flow, recurring losses or other negative
characteristics relating to their past performance
which would result, in all probability, in a bank's
refusal to lend funds.   Pinnacle may consider as
candidates for financing, corporations and entities
which are affiliated with Pinnacle, or in which
Pinnacle or executive officers, directors and/or
controlling shareholders have an equity interest.

While Pinnacle may require, as a condition to
making a loan to any particular candidate, adequate
collateral as security, Pinnacle will rely upon the
expertise and experience of its management on a
case-by-case basis in making the determination
regarding the issue of collateral.   Management
will not employ any specific formula for collateral
coverage and may make unsecured signature loans
under circumstances deemed acceptable by
management.   Banks, on the other hand,
traditionally require collateral coverage of
approximately 133% for accounts receivable, 300%
for inventory and 200% of liquidation value for
real estate, equipment and other tangible assets.
Pinnacle intends to charge interest rates on loans
in a range from 5% to 18% and to obtain equity
participation in the form of warrants or options to
purchase shares of the common stock of the entity
financed or other forms of securities in order to
provide additional yield enhancement.   Where
Pinnacle receives such warrants, options or other
securities Pinnacle may distribute such securities
to its shareholders as a stock dividend, subject to
compliance with applicable state and federal
securities laws.   In addition to or in lieu of the
aforementioned types of securities, Pinnacle may
seek to obtain an interest in revenues, a carried
working interest or other carried interest in an
operating, producing mine or oil, gas or mineral
property owned by a mining or energy-related
company financed by Pinnacle or its other capital
sources.   Depending upon the nature of the legal



<PAGE>7

interest or right obtained, Pinnacle could become
subject to liability in addition to that of a
shareholder or holder of a debt instrument.

In June 1999 Pinnacle had arranged funding for
Plateau Resources (Pty)Ltd., a South African
development-stage corporation in order to initiate
a drilling and exploration program on their
undeveloped properties.  For this Pinnacle obtained
an option to merge with Plateau.  Pinnacle then
made a loan to Plateau in order to start the
drilling program with the view in mind that any
potential funding candidate would want to see some
drilling results.  This program was successful and
as a result Pinnacle attracted a world wide
respected drilling and exploration company to
conclude a joint venture on Plateau's properties.
Therefore, in September 1999 Pinnacle exercised its
option to merge Plateau Resources in as a wholly
owned subsidiary of Pinnacle and issued 1.5 million
shares of its common stock for 4,000 shares (100%)
of Plateau. Pinnacle is of the opinion that equity
participation in Plateau, either directly or
indirectly, could be advantageous to Pinnacle if
Plateau successfully encounters a commercially
feasible PGM ore reserve.

Plateau Resources (formerly Bougleigh 126 (Pty.)
Ltd.) was organized in February 1995 and its
business activities to date have been confined to
South Africa.  Plateau was awarded Prospecting
Rights on lands that have platinum group metals
(PGM) potential.  Plateau required operational
capital, which was provided by a third party
investor introduced to the Plateau opportunity by
the efforts of Mr. Gamble for a fee.

On January 22, 2000, Pinnacle secured $6.9 million
in funding for the Plateau Resources drilling and
exploration project, now referred to as the
Platreef project.  Under the terms of the Loan
Facility Agreement the Platreef project was to be
financed by Anooraq Resources, Inc.  Anooraq is a
Vancouver based company managed by Hunter-
Dickinson, Inc. Out of the closing with Anooraq
Pinnacle was able to retrieve $175,000 that it had
loaned to Plateau and was able to settle all
accounts with financiers and professionals using
Pinnacle stock.  In the final agreement, Anooraq
was entitled to earn ownership of Plateau by
expending certain monies on the project.  By April
of 2001 Anooraq had earned a 50% ownership
position in Plateau thus both Pinnacle and Anooraq
were holding 4,000 shares of Plateau stock.  Due

<PAGE>8

to a variety of reasons, namely relating to
financial markets, it became obvious to the
management of Pinnacle that ownership of Plateau
needed to be restructured.  Therefore, in May of
2001 Pinnacle accepted a loan advance of $150,000
from Anooraq and entered into an Exchange
Agreement whereby Pinnacle would conclude a tax
free exchange of its 4,000 shares of Plateau for
7.5 million shares of Anooraq common stock; and
then in an after closing transaction Pinnacle
would sell 500,000 shares of Anooraq stock to
cancel out the $150,000 cash advance.  This
transaction closed on August 28, 2001 and Pinnacle
received 7 million shares of Anooraq stock having
a current value of US$2.5 million.

In June, 2000 Pinnacle concluded negotiations to
acquire 100% ownership of Vanadium and Magnetite
Exploration and Development (Pty) Ltd.  (V-MED) a
South African corporation holding an exclusive 32-
year mineral lease on five contiguous farms near
Potgietersrus, South Africa.  These properties are
adjacent to, and run parallel to, Plateau's
platinum-palladium properties.

The farms cover 17,188 acres within the Bushveld
Complex, a region that accounts for 50 percent of
the world's vanadium supply.  They host a 6-metre
thick main layer magnetite, approximately 17
kilometers in strike length, which is believed to
be the largest underdeveloped resource of vanadium
in the world.  Indicated resource of the main
magnetite layer to a depth of only 80 meters is
estimated to be 100 million tonnes of magnetite
containing 1.67 million tonnes of vanadium
pentoxide.  Assays from diamond core drilling show
that the "run-of-mine ore" contains an average of
1.24% vanadium pentoxide and 11.88% titanium
dioxide.  The outcropping and shallow magnetite
layer constitutes a low cost open pit proposition.

Pinnacle allocated $300,000 of a Private Placement
to fund the closing of V-MED and first year's
operations.  The company issued 4,000,000 shares
of restricted stock for 4,000 shares (100%) of
VMED. Management is of the opinion that the
vanadium and titanium property represent an
excellent business opportunity for the
shareholders of Pinnacle.  As of June 30, 2001
Pinnacle has proceeded to obtain water rights on
the farms along with surface disturbance permits
but there is no definitive plan under negotiations
which would put the property into operation.

<PAGE>9

Other than these two opportunities Pinnacle is not
currently evaluating any development-stage
companies with a view to making a loan or stock
purchase or arranging funding or any loan proposal
and has no contingent loan agreements which are
subject to approval.

Pinnacle is attempting to raise additional equity
or debt capital to fund additional financing
activities in the future.   There is no assurance
that Pinnacle, or any of its brokering assistants,
will be successful in completing the placement of
the shares. Management therefore acknowledges that
Pinnacle may have insufficient capital with which
to implement its business plans on the scale
desired.  Accordingly, Pinnacle may be capable of
making only an extremely limited number of loans
to, and/or equity investments in, companies to
which traditional sources of capital are
unavailable.

The loan to Asset Partners was written off and is
no longer an account receivable. The loan made to
Plateau Resources was repaid by Hunter-Dickinson
Inc. when they closed on Plateau Resources.  An
additional loan to Froghair, LLC has also been
written off however management is confident this
loan will be repaid in due course.

A loan is being contemplated to Alpha Society Plus
(Pty) Ltd in order to fund the purchase of certain
mining equipment and start up operations for a
project called the Katenya River Diamond Recovery
Project which will be located on Alpha Society's
leases on the Katenya River in Guinea West Africa.
Under the terms of the contingent loan agreement
Pinnacle is scheduled to advance up to $400,000
and receive back 150% of the first proceeds until
$600,000 in net revenues has been realized. After
payout Pinnacle would then receive 20% of the
projects net revenues.  If Pinnacle fails to raise
the necessary funds to proceed with this project
then it is of no material consequence to Pinnacle
other than an opportunity lost and there are no
repercussions for failure to fund.

Additionally, Pinnacle has attracted the expertise
of Dr. Jan Becker, a professor of metallurgy and
an expert process chemistry.  Out of the possible
funds which may be raised, management intends to
allocate $350,000 toward the installation of a
processing plant that will refine tantalite to 99%
purity using jDr. Becker's process.  An



<PAGE>10

investigation is currently underway to determine
the availability of tantalite concentrates and the
market for refined tantalum oxide.  Should
Pinnacle fail to provide the funding for this
project there are no repercussions or liabilities
other than a lost opportunity.  A side benefit to
Pinnacle should it be able to establish an on-
going relationship with Dr. Becker is in his
expertise with vanadium and titanium recovery
processes as Dr Becker is a consultant to many of
the world's producers of these metals.
Other than the Vanadium property and managements
hope to be able to participate in the project with
Alpha Plus and it ambition to conclude a venture
with Dr. Becker to refine tantalite Pinnacle has
not performed any financial services for any
emerging growth clients or consummated or arranged
any loans, equity investments or other financing
transactions.  Further, no loans, stock purchases
or other non-traditional financing transactions
are pending or under consideration.

Prior to any affiliation with Pinnacle, Mr. Glen
Gamble, now President of Pinnacle, and Victory
Minerals Corp, a major shareholder of Pinnacle,
had arranged start-up financing for a South
African mining company by the name of Plateau
Resources (Pty) Ltd. When Plateau Resources was
acquired by Pinnacle all of the financial
contributions and professional contributions were
satisfied with the issuance of Pinnacle stock
consequently Pinnacle gained 100% ownership of
Plateau Resources with no further obligations to
any third parties.  Recently, Pinnacle entered
into a tax free exchange of its ownership of
Plateau for 7 million shares of Anooraq Resources.
Anooraq is traded on the Canadian Exchange under
the symbol ARQ and the price of ARQ as of June 30th
was 55 Canadian cents thus making the net value
US$2.5 million.

Company management remains most hopeful that the
continued efforts of Anooraq will establish a
proven ore reserve containing Platinum Group
Metals (PGM's) as well as expand the current
properties that Plateau has under lease.

When Pinnacle closed on its acquisition of
Vanadium and Magnetite Exploration and Development
(Pty) Ltd it took on the responsibility to pay
annually the minimum Mineral Lease fees of
approximately US$7,500.  Additionally, Pinnacle
plans to investigate certain process, promulgated
by Dr. Jan Becker, for beneficiating the vanadium
and titanium values from the magnetite ore.  This

<PAGE>11

effort, among other activities, management hopes
will attract a joint venture partner.  These
activities plus normal supervision have been
estimated into an overall annual budget of
$100,000.  Therefore, it is a priority of Pinnacle
to achieve sufficient funding to meet this need.

Other than Pinnacle's normal office overhead and
the commitment to the vanadium/titanium project,
Pinnacle has no other plans, arrangements or pre-
planned financing commitments for which it is
obligated.  Pinnacle has aspirations as stated
earlier but they are contingent upon the
successful obtainment of investment funds.

Pinnacle has no pre-arranged financing with any
other prospects. Pinnacle has not made any prior
commitments, or any understandings, with any third
parties, or any of its affiliated entities, such as
Victory Minerals or Re-Group, Inc. for financing or
participation. Additionally, Pinnacle does not have
any plans, arrangements, commitments or
understandings to pay any finders' fees to any
person or entity.

Pinnacle does not have any plans, arrangements,
commitments or understandings to obtain an interest
in an operating producing mine or oil, gas or
mineral property owned by a mining or energy-
related company.

Operating Strategy.

Management of Pinnacle will evaluate the future
potential, credit worthiness and, if required,
collateral of prospective candidates for funding by
Pinnacle or other sources, including corporate and
individual lenders and investors, known to
management.   The fact that a corporation or other
entity is affiliated with Pinnacle or an equity
interest in a prospective borrower is owned by one
or more of the executive officers, directors and/or
controlling shareholders of Pinnacle, will not
disqualify such entity from consideration as a
potential borrower or recipient of investment
capital.   In order to minimize conflicts of
interest, Pinnacle has adopted a policy that any
contracts or other transactions with entities with
whom management is affiliated, or in which they
have a financial interest, will be approved by a
majority of the disinterested members of the board
of directors and will be fair and reasonable, but
that no such transactions by Pinnacle shall be
affected or invalidated solely because of such

<PAGE>12

relationship or interest of directors or officers.
For purposes herein, the term "disinterested
directors" are those directors who have no direct,
pecuniary interest in a proposed transaction.   If
Pinnacle's Board of Directors is unavailable to
approve a financing transaction with an affiliated
or related party, Pinnacle will require that the
transaction be approved by a majority of Pinnacle's
shareholders, at a special meeting of shareholders
called for such purpose.

Prior to funding any loans or equity investments,
management will conduct a comprehensive credit
investigation of the potential financing candidate.
The investigation will generally include, but not
necessarily be limited to, the following:
   -  a review of the prospective candidate's
financial statements and operating and prior credit
history;
   -  an analysis of the prospect's projected cash
flow;
   -  a survey of the performance of other
companies engaged in the candidate's business;
   -  an analysis of the value of the collateral,
if any, proposed to secure a loan; and
   -  the source of repayment for the loan.

In addition, management intends, as part of its
credit procedures, to conduct a complete due
diligence review of the prospective candidate's
business at its offices, during which management
proposes to review the prospect's record keeping
systems and procedures, the historical and
projected financial condition of the
borrower/recipient of investment capital and its
industry and any collateral offered to secure a
loan.

 Management may, in its discretion, conduct a
formal, independent appraisal of any collateral
offered to assure that the collateral can be
liquidated without a loss in the event of a
downturn in the economy, which appraisal may
include an assessment of auction liquidation and/or
fair market value.  Management intends to make the
decision whether to arrange or fund a loan or
purchase common stock of a financing candidate only
after completing the number and type of credit
procedures described above and as deemed necessary
or appropriate, in the discretion of management, in
order to determine the candidate's business
potential and credit worthiness.



In instances deemed appropriate by management,
Pinnacle may require security in the form of
inventory, accounts receivable, manufacturing and
other operating equipment, other tangible assets
and/or real estate used in the financing
candidate's business.   With respect to asset-based
loans which Pinnacle may fund, management will have
no fixed policy as to the percentage of collateral
coverage required.   However, in almost every such
case, management envisions that the percentage of
collateral coverage required by it will be in
excess of 100% of the amount of the loan.
Additionally, management may require that any one
or more of the officers, directors and principal
shareholders of the borrower personally guarantee
the indebtedness and, depending upon the
prospective borrower's financial strength and the
nature and value of any collateral, require, in
addition, that the personal guarantees be
collateralized separately.

Management of Pinnacle will closely monitor the
borrower's performance after funding a loan or
equity investment and, with respect to a secured
loan, intends to monitor the adequacy of the
collateral at least on a monthly basis.   If the
primary collateral is accounts receivable,
management may require direct verification and a
monthly aging of the receivables.    Pinnacle's
management intends to conduct aspects of its
monitoring process, inducing, if necessary, a
reappraisal of any collateral, periodically at the
borrower's place of business.   Regardless of
whether the financing provided by Pinnacle takes
the form of a loan, stock purchase or a combination
thereof, management will maintain close contact
with management of the financing recipient to
ensure that the financial condition and overall
performance of the borrower are acceptable and that
any collateral remains adequate.   In the event of
default in the payment of principal or interest on
a loan, management may notify the borrower's
customers to make payments directly to Pinnacle via
a lock box established for the borrower.   In a
case where Pinnacle arranges financing for, but
does not itself fund, a development-stage company,
management will also endeavor to monitor the
borrower's performance if an equity interest in the
form of common stock, warrants, options or any
other type of security is received as part of the
finder's or consulting fee.

Management has not adopted any policy regarding the
maximum size of any loans or stock purchases which
it may make with respect to a single company.
Further, management has not determined any maximum
percentage of its loan or stock portfolio which may

<PAGE>14

be committed to loans or investments in excess of a
specified amount.   Management, in its sole
discretion, will determine guidelines for levels of
concentration as to the diversity of companies
which it funds and types of assets required as
collateral for loans, in order to attempt to
minimize credit losses.   However, management
intends to employ a policy of maintaining a
diversity of companies financed and types of
collateral accepted as security for loans in order
to minimize undue exposure.

Competition.    Pinnacle is, and will remain for
the foreseeable future, an insignificant
participant among those firms that are also engaged
in the business of Pinnacle.   There are many
established entities and financial concerns which
have significantly greater financial and personnel
resources and technical expertise than the
Company.   Management will rely upon their own
ability to generate potential lending candidates,
either through their own personal industries in
which management has had prior experience.  In view
of Pinnacle's extremely limited resources, it
should be expected that Pinnacle will continue to
be at a significant competitive disadvantage
compared to Pinnacle's competitors.

Federal and/or State Regulation.   Pinnacle is not
subject to any federal or state regulations
regarding its services.

Business Development Company.   As Pinnacle obtains
equity interests in companies who desire to become
public, Pinnacle may become subject to the
provisions of the Investment Company Act of 1940 or
the Investment Advisers Act of 1940.  It is
possible that Pinnacle may choose to elect to be
treated as a Business Development Company ("BDC")
pursuant to Section 54 of the Investment Company
Act of 1940 (the "1940 Act").   On October 21,
1980, the 1940 Act was amended by a series of
amendments, which added sections 59 through 65.
These sections comprise the Small Business
Investment Incentive development company is defined
as a domestic closed-end company which is operated
for the purpose of making certain types of
investments and which makes available significant
managerial assistance to the companies in which it
invests.   Generally, a company which elects to be
treated as a business development company, or
intends within 90 days to so elect, is exempt from
certain provisions of sections 1 through 53 of the
1940 Act.

<PAGE>8

To take advantage of these special regulatory
provisions, a BDC must comply with sections 59
through 65 of the 1940 Act, which require, among
other things, that:
   a.   a majority of the BDC's directors must not
be "interested persons" as defined in section
2(a)(19) of the 1940 Act;
   b.   A BDC is restricted in the kind of
investments it can make, i.e., at least seventy
percent of the BDC's assets (excluding assets
necessary to maintain the business, such as office
furniture) must consist of securities of small,
developing business or financially troubled
businesses and such liquid assets as cash or cash
items, Government securities or short-term, high
quality debt securities;
   c.   A BDC must annually furnish to its
shareholders a statement, in such form and manner
as the Securities and Exchange Commission may
prescribe, about the risks involved in investing in
a BDC due to the nature of its portfolio, and;
   d.   A BDC must have a class of equity
securities registered under the 1934 Act or have
filed a registration statement under that section
and must comply with the periodic reporting
requirements under the 1934 Act, including annual
reports, quarterly reports and reports of certain
material changes, rather than with those in section
30 of the 1940 Act.

Employees.    Pinnacle presently has two employees.
Mr. Gamble, President draws a $5,000 per month and
Terrilynn Gamble, office manager draws $2,500 per
month.

Seasonal Nature of Business Activities.  Pinnacle's
business activities are not seasonal.

ITEM 2.  PROPERTIES.

In January 2000, Pinnacle moved its offices to 9600
E. Arapahoe Road, Suite 260, Englewood, Colorado
80112, a space rented and occupied by Terryl K.
Jensen, a director and shareholder in Pinnacle.
Pinnacle pays $1,500 rent per month for its current
office space.  Pinnacle's offices consist of
approximately 1,500 square feet of executive office
space and secretarial area.   Management believes
that this space will meet Pinnacle's needs for the
foreseeable future.



<PAGE>16

ITEM  3.    LEGAL PROCEEDINGS.

Pinnacle recently became party to two legal
proceedings. The first is a dispute with an
investor relations firm that claims Pinnacle owes
an outstanding invoice totaling $8,000 for services
that were performed after the service contract was
terminated.  Pinnacle has disputed this claim and
rejected the plaintiff's offer to settle for $6,000
and has instead filed a counter claim to regain the
$12,000 that Pinnacle paid prior to termination of
the service contract. Pinnacle's basis is that the
IR firm did not fulfill any of its obligations for
which it was hired.

Secondly, Pinnacle entered into an agreement with
Petty International Development Corporation (PIDC)
to help create a European retail market for
Pinnacle's stock and to arrange for the closing and
completion of a private placement offering; and to
secure a variety of mining ventures in South
America for which Pinnacle deemed worth to procure.
Toward this end Pinnacle had issued 3,000,000
shares of its common Stock but by December 1, 2001
the PIDC was unable to perform and indeed had
damaged the retail market for Pinnacle stock.  In
lieu of litigation at the time, PIDC, and Pinnacle
voluntarily agreed to rescind the agreement calling
for the return of the 3,000,000 shares that PNRR
had issued.   As of June 30, 2001 only 1,835,000 of
the shares had been collected; 165,000 shares had
been distributed to 3rd parties not beneficial to
the company; and PIDC management had pledged
300,000 shares to a debtor of PIDC as collateral;
and 700,000 shares were being held by PIDC for no
valid reason.  Consequently, Pinnacle had no
alternative but to file legal action to stop PIDC
from further breaching its promise to return the
PNRR stock as per the December 1 rescission
agreement.  Currently all of the disputed shares
are being held by the Texas District Court which is
the jurisdiction covering this matter.

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

During the fourth quarter of the fiscal year ended
June 30, 2001, nomatters were submitted to a vote
of Pinnacle's security holders, through the
solicitation of proxies.





<PAGE>17

                                   PART II

ITEM  5.    MARKET FOR COMPANY'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS

Market Information.   Pinnacle has applied for the
trading of its common shares in the over-the-
counter market.   As of June 30, 2001, there is
only a limited market for Pinnacle's Common Shares.

The approximate number of holders of record of
Pinnacle's $.00001 par value common stock, as of
June 30, 2001, was 372.   As of September 30, 2001,
there are 391 holders of record.

Dividends.   Holders of Pinnacle's common stock are
entitled to receive such dividends as may be
declared by its board of directors. No dividends on
Pinnacle's common stock have ever been paid, and
Pinnacle does not anticipate that dividends will be
paid on its common stock in the foreseeable future.

ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Trends and Uncertainties.   The financial
statements have been prepared assuming that
Pinnacle will continue as a going concern.
Pinnacle is in the development stage and has no
operations as of June 30, 2001.   The deficiency in
working capital as of June 30, 2001 raises
substantial doubt about its ability to continue as
a going concern. In the course of its development
activities Pinnacle has sustained continuing losses
and expects such losses to continue for the
foreseeable future.   Pinnacle's management plans
on advancing funds on an as needed basis and in the
longer term to revenues from the operations of
which there is no assurance.   Pinnacle's ability
to continue as a going concern is dependent on
these additional management advances, and,
ultimately, upon achieving profitable operations.

Until revenues commence, Pinnacle shall raise funds
through equity financing, which may or not be
successful.   Pinnacle has tried to limit its
general and administrative expenses.    Pinnacle
has little or no control as to the demand for its
services and, as a result, inflation and changing
prices could have a material effect on the future
profitability of Pinnacle.



<PAGE>18

Pinnacle will focus its financing and capital
arrangement activities on emerging growth
companies, which plan to raise capital in the
public markets within a reasonable short period of
time, i.e., one to two years.   Although Pinnacle
will initially target small mining companies due to
its contacts in that industry, management has not
identified any particular industry within which
Pinnacle will focus its efforts.   Rather,
management intends to identify any number of
candidates, which may be brought to its attention
through present associations or by word-of-mouth.

Initially Pinnacle intends to arrange sources of
funding and finance for its prospective clients
through established sources for such funds by
acting as a finder or broker to the lender and as
an arranger or financial consultant to the
borrowing party.

In the emerging markets of South Africa and South
America, opportunities exist where small mining
companies seek funding from outside sources for
capitalization because it is not available locally.

Management has over 70 years of combined business
experience involving a variety of situations where
financing and/or funding has been required in order
to effectuate a mining opportunity.   Individually,
management personnel has directly funded,
underwritten or brokered financing for a number of
mining prospects over the years, both in the
domestic market as well as South Africa and South
America.

Management believes that Pinnacle will be able to
successfully seek out potential candidates who are
interested in obtaining loans from Pinnacle in the
immediate future.   This belief is based upon the
perceived difficulty of many development and growth
stage companies who require additional financing,
but are unable to obtain the same from established
sources, such as banking institutions and venture
capitalists.   As interest rates begin to rise,
management anticipates that those types of entities
earmarked by Pinnacle as possible clients will
continue to seek out Pinnacle as a lending source,
as management views a potential borrower's
borrowing base in a different light than banks.
For loans made by regulated commercial lenders,
there is normally a structured review and
evaluation of a prospective borrower's loan
application by the lender, including an in-depth
review of such application by a loan committee.
The loan committee will then approve or reject each

<PAGE>19

application as it is submitted.   The evaluation
and approval of loans depends on subjective factors
and judgments, as well as objective criteria, such
as loan to value ratios and independent appraisals,
when appropriate or available.   Pinnacle's loan
committee consists of substantially fewer persons
than a commercial lender and uses a less formal
procedure than more traditional lenders.   It is
possible that any such subjective factors and
judgments may prove to be incorrect with a
resulting loss of part or all of Pinnacle's
investment in any particular loan.   However, as
part of the consideration provided to Pinnacle for
issuance of its loans, Pinnacle receives its
interest and attempts to also obtain additional
consideration in the form of equity or options or
warrants in the borrower.   In the event the
borrower's business plan proves successful,
Pinnacle may receive substantial returns as a
result of this equity enhancement.

Most venture capitalists take an aggressive equity
position far in excess of that of Pinnacle and in
many instances, take an active role in the
management of their clients.   Management believes
that this makes venture capitalists unattractive to
those types of entities with whom Pinnacle does
business.

Pinnacle's ability to become a significant lender
is impaired primarily by its own lack of capital
with which to make loans.   While management would
welcome the opportunity to make more loans for
larger amounts, management finds itself in the same
predicament as that of its prospective clients.
That is, the lack of capital with which to fully
implement Pinnacle's business plan.    Management
hopes that as Pinnacle begins to make successful
loans, its track record will allow Pinnacle to
attract either private investors seeking to invest
in the business of Pinnacle on a private basis, or
that Pinnacle will be able to attract an investment
banker willing to underwrite a secondary offering
of Pinnacle's securities to generate additional
capital.  There are no assurances that Pinnacle
will be able to attract either of the aforesaid
entities to increase Pinnacle's working capital.
If Pinnacle is unable to obtain additional working
capital, it is unlikely that Pinnacle will generate
any substantial growth in the near future.



<PAGE>20

Capital Resources and Source of Liquidity.
Pinnacle currently has no material commitments for
capital expenditures.   Pinnacle pays $1,500 rent
per month for its current office space.    An
increase in lease payments could have negative
effect on the cash flow and liquidity of Pinnacle.

In October, 1999 Pinnacle issued 1,500,000 Shares
of common stock from its treasury for the
acquisition of 4,000 shares of Plateau
Resources (Pty) Ltd. that made Plateau a 100%
wholly owned subsidiary of Pinnacle.  Then on
August 28, 2001 Pinnacle accepted 7 million shares
of Anooraq Resources Corp common stock in a tax
free exchange of the 4,000 shares of Plateau.  The
Anooraq stock has a current market value of $2.5
million.

On October 1, 1999 Pinnacle issued 140,000 shares
of common stock for cash of $137,500, or $.50 per
share, resulting in net cash flows from financing
activities of $137,500.

Pinnacle received a loan of $100,000 in March of
1998 and then converted that loan together with
accumulated interest to equity by issuing 300,000
shares of common stock from its treasury.
A loan of $75,000 was made to Plateau Resources
(Pty) Ltd in May of 1999 was repaid when Pinnacle
closed on a Loan Facility Agreement with
Anooraq Resources, Inc.   Another loan made
September of 1998 to Asset Partners, Ltd in the
amount of $40,000 was written off.  There is a
narrow probability that third party funding of
Vanadium and Magnetite Exploration and Development
(Pty) Ltd will be finalized in the short term and
it is highly unlikely that Pinnacle will find a
joint venture partner at any time in the near
future. This acquisition has caused a financial
burden of approximately US$7,500 per year for
Pinnacle and if Pinnacle is unsuccessful in
meeting those financial obligations then a partial
asset sale of VMED would become a necessity.

At June 30, 2001, Pinnacle had a negative working
capital of $(     ) consisting _________ in current
assets and $1,725,955 in liabilities.  Pinnacle has
no long-term liabilities.

At June 30, 2000, Pinnacle had a negative working
capital of $(1,599,680) consisting $126,275 in
current assets and $1,725,955 in liabilities.
Pinnacle had no long-term liabilities.



<PAGE>21

Results of Operations.   Pinnacle expects to earn
consulting fees, commissions, brokerage points and
equity participation for having acted as an
arranger and go-between from having effectuated a
financing package on behalf of a client and a
funding source.

To date, Pinnacle has not yet commenced operations
but has received revenues on advances made by
Anooraq as it pertains to the transactions relating
to Plateau, namely an initial option payments
totaling $175,000 and a loan advance of $150,000
against the transfer of 500,000 shares of
Anooraq stock.   Pinnacle had a net loss for the
year ended June 30, 2001 of $3,407,886.   Pinnacle
had an increase of $80,041 in receivables for the
year ended June 30, 2001, an increase in accounts
payable and accrued liabilities of $469,417.  As a
result, Pinnacle had net cash flows used in
operating activities of $(492,529).

For the year ended June 30, 2001, Pinnacle had
prospecting costs of $738,624, general and
administrative expenses of $157,718, legal and
accounting fees of $40,965, travel of $39,592,
depreciation and amortization of $68,564 and
foreign currency transaction loss of $0.

Pinnacle had a net loss for the year ended June 30,
2000 of $1,725,955.   Pinnacle had an increase of
$41,319 in receivables for the year ended June 30,
2000, an increase in accounts payable and accrued
liabilities of $53,580.  As a result, Pinnacle had
net cash flows used in operating activities of
$(1,559,875)

For the year ended June 30, 2000, Pinnacle had
prospecting costs of $1,018,795, general and
administrative expenses of $224,391, legal and
accounting fees of $155,061, travel of $142,087,
depreciation and amortization of $96,344 and
foreign currency transaction loss of $42,770.

Plan of Operation.    Pinnacle is not delinquent on
any of its obligations even though Pinnacle has not
yet begun to generate revenue.  Pinnacle will
identify and subsequently qualify prospective
clients.   Current operations require minimal cash
infusions.   Pinnacle may borrow funds or obtain
equity financing from affiliated persons or
entities to continue operations, if necessary.
Pinnacle intends to market its services utilizing
cash made available from the recent private sale of
its common hares.   Pinnacle is of the opinion that
revenues from its services along with proceeds of

<PAGE>22

the private sale of its securities will be
sufficient to pay its expenses until receipt of
revenues at a level to sustain operations.


ITEM  7.    FINANCIAL  STATEMENTS  AND
SUPPLEMENTARY  DATA

PINNACLE RESOURCES, INC.
 (A Development Stage Company)


Page

Independent auditors' reports..............    F-2

Consolidated balance sheet
  as of June 30, 2001......................    F-4

Consolidated statements of operations,
  for the years ended June 30, 2001
  and 2000 (Unaudited).....................    F-5

Consolidated statements of shareholders'
  equity (deficit) for the period
  from January 6, 1995 (inception)
  through June 30, 2001....................    F-6

Consolidated statements of cash flows,
  for the years ended June 30, 2000
  and 1999 and for the period
  January 6, 1995 (inception) through
  June 30, 2001 (Unaudited)................    F-7

Notes to consolidated financial
  statements...............................    F-8





<PAGE>23
INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders
Pinnacle Resources, Inc.

We have audited the accompanying consolidated
balance sheet of Pinnacle Resources, Inc. (a
development stage company) and subsidiaries as of
June 30, 2001 and the related consolidated
statements of operations, shareholders' equity
(deficit), and cash flows for the years ended June
30, 2001 and 2000.  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 auditing
standards generally accepted in the United States.
Those standards require that we plan and perform
the audit to obtain reasonable assurance about
whether the consolidated financial statements are
free of material misstatements.  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 financial position of
Pinnacle Resources, Inc. and subsidiaries as of
June 30, 2001 and the results of their operations
and their cash flows for the years ended June 30,
2001 and 2000 in conformity with accounting
principles generally accepted in the United
States.

The accompanying consolidated financial statements
have been prepared assuming that the Company will
continue as a going concern.  As discussed in Note
A to the consolidated financial statements, the
Company has suffered recurring losses since
inception and has a net capital deficiency at June
30, 2001.  These factors raise a substantial doubt
about the ability of the Company to continue as a
going concern.  Management's plans in regard to



<PAGE>24

these matters are also described in Note A.  The
consolidated financial statements do not include
any adjustments that might result from the outcome
of these uncertainties.



Cordovano and Harvey, P.C.
Denver, Colorado
September 21, 2001

                       F-2


<PAGE>25
PINNACLE RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
June 30, 2001
                                     ASSETS
<TABLE>
<CAPTION>
CURRENT ASSETS:

                                                                       <c>
Cash                                                                 $      78,269
Receivables, other                                                           1,369
                                                                      ------------
     TOTAL CURRENT ASSETS                                                   79,638

PROPERTY AND EQUIPMENT, net of
accumulated depreciation of $26,637                                         64,447
                                                                       -----------
                                                                          $144,085
                                                                       ===========
LIABILITIES AND SHAREHOLDERS'DEFICIT

CURRENT LIABILITIES:
  Accounts payable, trade                                                 $580,217
  Line of credit (Note E)                                                    3,297
  Advances payable (Note 1)                                                150,000
  Current maturities on capital lease obligation (Note F)                    1,910
  Accrued expenses                                                           3,361
  Advances payable to shareholder and officer of subsidiary,
   subordinated to claims of general creditors (Note B)                  1,602,664
                                                                      ------------
     TOTAL CURRENT LIABILITIES                                           2,341,449

LONG-TERM DEBT:
  Capital lease obligation, less current maturities (Note F)                 1,274
                                                                      ------------
     TOTAL LIABILITIES                                                   2,342,723
                                                                      ------------
MINORITY INTEREST                                                              352
SHAREHOLDERS'DEFICIT (Note G):
  Preferred stock, $.Old par value, 2,000,000 shares authorized
   -0- shares issued and outstanding                                             -
  Common stock, $.00001 par value; 500,000,000 shares authorized
   11,950,050 shares issued and outstanding                                    120
  Outstanding stock options - 19,000                                        47,165
  Additional paid in capital                                             2,764,603
  Cumulative translation adjustment                                        287,068
  Deficit accumulated during development stage                          (5,297,946)
                                                                       -----------
           TOTAL SHAREHOLDERS'DEFICIT-                                  (2,198,990)
                                                                       -----------
                                                                          $144,085
                                                                       ===========
</TABLE>
See accompanying notes to the consolidated
   financial statements
                      F-3
<PAGE>26

PINNACLE RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                   January 6, 1995
                                                                      (inception)
                                For the Years Ended June 30,            through
                                ---------------------------
                                      2001         2000              June 30, 2001
                                 -----------    -----------         --------------
 
                                 <c>            <c>                  <c>
(Unaudited)
OPERATING EXPENSES
  Prospecting costs              $   738,624    $ 1,018,795        $    1,757,419
  General and administrative         157,718        157,744               388,862
  Consulting, related party (Note B)  51,300         66,647               117,947
  Legal and accounting fees           40,965        155,061               217,916
  Travel                              39,592        142,087               207,044
  Depreciation and amortization       68,564         96,344               164,908
  Stock-based compensation (Note G):
    Professional services          1,954,695              -             1,956,195
  Loss on asset impairment (Note G)  337,535              -               337,535
  Foreign currency transaction loss        -         42,770                42,770
                                  ----------     ----------         -------------
      TOTAL OPERATING EXPENSES     3,388,993      1,679,448             5,190,596
                                  ----------     ----------          ------------
                OPERATING LOSS    (3,388,993)    (1,679,448)           (5,190,596)

NON-OPERATING INCOME (EXPENSE)
  Write-down of notes receivable      (5,105)       (37,517)              (91,398)
  Interest expense                   (19,977)       (48,710)              (75,112)
  Other income                         6,189         16,908                59,160
                                  -----------    -----------         -------------
NET LOSS BEFORE INCOME TAXES      (3,407,886)    (1,748,767)           (5,297,946)

INCOME TAXES                                -             -                     -
                                  -----------    -----------         -------------
     NET LOSS                    $(3,407,886)   $(1,748,767)          $(5,297,946)
                                  ===========    ===========         =============

NET LOSS PER COMMON SHARE:
  Basic and diluted              $     (0.36)   $     (0.31)
                                 ===========    ============
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:

Basic and diluted                  9,540,933       5,574,167
                                 ===========    ============
</TABLE>

See accompanying notes to the consolidated financial statements

                                       F-4



<PAGE>27

PINNACLE RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED STATMENS OF SHAREHOLDERS'
     EQUITY (DEFICIT)
From January 6, 1995 through June 30, 2001
<TABLE>
<CAPTION>

                                             Preferred Stock        Common Stock
                                             ---------------        ------------
                                             Shares     Amount       Shares     Amount
                                             -------    ------      -------   --------

                                            <c>       <c>         <c>        <c>
Balance, January 6, 1995                          -  $      -            - $        -
January 1995 issuance of common Stock in
   exchange fore cash advances made on
    behalf of the Company and services
    at $0.01 per common share                     -         -      150,000          1
Net loss for the year ended June 30, 1995         -         -            -          -
                                           --------  ---------     -------  ---------
       BALANCE, June 30, 1995 and 1996            -         -      150,000          1

June 1997 sale of common stock at $.025
   Per share                                      -         -    4,000,000         40
Net loss for the year ended June 30, 1997         -         -            -          -
                                           --------  --------   ----------   --------
       BALANCE, June 30, 1997                     -         -    4,150,000         41

Net loss for the year ended June 30, 1998         -         -            -          -
                                          ---------  --------   ----------   --------
       BALANCE, June 30, 1998                     -         -    4,150,000         41

January 1999 sale of common stock at $.50
  Per share                                       -         -      100,000          1
Net loss for the year ended June 30, 1999         -         -            -          -
                                          ---------  --------  -----------  ---------
       BALANCE, June 30, 1999                     -         -    4,250,000         42

August 30, 1999 issuance of common stock
   Valued at $.25 per share in exchange for
   Plateau Resources, Inc. shares                 -         -    1,500,000         15
September 1999 sale of common stock at
   $.50 per share                                 -         -       85,000          1
October 1999 sale of common stock at $.50
   Per share                                      -         -       10,000          -
June 2000 sale of common stock at $2.00
   Per share                                      -         -       45,000          1
Comprehensive loss:
 Net loss for the year ended June 30,2000         -         -            -          -
 Cumulative translation adjustment                -         -            -          -
Comprehensive loss                                -         -            -          -
                                          ---------  --------  ----------  ---------
     BALANCE, JUNE 30, 2000                       -         -   5,890,000         59



<PAGE>28
PINNACLE RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
     EQUITY (DEFICIT)
From January 6, 1995 through June 30, 2001
     Continued

August 2000 issuance of common stock into
  Escrow (Note G)                                 -         -    1,165,000         12
September 2000 issuance of issuance of
   Common Stock in exchange for Vanadium
   And Magnetite Exploration & Development
   Co. (S.A.) Proprietary Limited shares
   Note G                                         -         -    4,000,000         40
October 2000 sale of common stock at
   $2.00 per share (Note G)                       -         -       10,000          -
November 2000 sale of common stock at
   $2.00 per share (Note G)                       -         -        6,500          -
November 2000 issuance of common stock
   In exchange for services at $5.00
   Per share (Note G)                             -         -      305,000          3
November 2000 stock options granted to
   Non-employees in exchange for
   Services (Note G)                              -         -            -          -
December 2000 issuance of common stock
   In exchange fore services $3,3125
   Per share (Note G)                             -         -       30,000          -
January 2001 sale of common stock at
   $2.00 per share (Note G)                       -         -        2,500          -
January 2001 issuance of common stock in
   Exchange for services at $3.50 per
   Share (Note G)                                 -         -       15,000          -
March 2001 issuance of common stock in
   Exchange for cash ($92,283) and
   Services at $1,875 per share
   (Note G)                                       -          -       91,500          1
March 2001 issuance of common stock in
   Exchange for services at $1.875 per
   Share (Note G)                                 -          -       15,000          -
April 2001 issuance of common stock in
   Exchange for services at $.97 per share
   (Note G)                                       -          -       35,000          -
June 2001 issuance of common stock in
   Exchange for services at $1.11 per
   Share (Note G)                                 -          -       50,000          1
June 2001 issuance of common stock in
   Exchange for services at $.99 per
   Share (Note G)                                 -          -       35,000          1
June 2001 issuance of common stock in
   Exchange for debt and accrued interest
   (Note G)                                       -          -      300,000          3
From January 6, 1995 through June 30, 2001




<PAGE>29
PINNACLE RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
     EQUITY (DEFICIT)
From January 6, 1995 through June 30, 2001
     continued


Comprehensive loss:
  Net loss for the year ended June 30, 2001       -          -            -          -
  Cumulative translation adjustment               -          -            -          -
Comprehensive loss                                -          -            -          -
                                         ----------  ---------  ----------   ---------
BALANCE, June 30, 2001                            -  $       -   11,950,050  $     120
                                         ==========   ========  ===========  =========
</TABLE>



<PAGE>30
PINNACLE RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
     EQUITY (DEFICIT)
From January 6, 1995 through June 30, 2001
     continued
<TABLE>
<CAPTION>
                                                                          Cumulative
                                                                         Translation
                                                                          Adjustment
                                                                         -----------
                                       Outstanding  Additional             Other
                                      Stock      Paid-in  Accumulated  Comprehensive
                                      Options    Capital     Deficit        Income
                                      -------    -------     ----------    ---------

                                     <c>         <c>          <c>         <c>
Balance, January 6, 1995              $      -  $        -   $        -     $      -

January 1995 issuance of common Stock in
   exchange fore cash advances made on
    behalf of the Company and services
    at $0.01 per common share                -        1,499            -           -
Net loss for the year ended June 30, 199     -           -        (1,500)          -
                                      --------  ----------  ----------  -----------
       BALANCE, June 30, 1995 and 1996       -        1,499       (1,500)          -

June 1997 sale of common stock at $.025
   Per share                                 -       99,960            -           -
Net loss for the year ended June 30, 1997    -            -            -           -
                                      --------  -----------  -----------  ----------
       BALANCE, June 30, 1997                -      101,459       (1,500)          -

Net loss for the year ended June 30, 1998    -            -      (63,601)          -
                                      --------   ----------  ------------  ---------
       BALANCE, June 30, 1998                -      101,459      (65,101)          -

January 1999 sale of common stock at $.50
  Per share                                  -       49,999            -           -
Net loss for the year ended June 30, 1999    -            -      (76,192)          -
                                      --------  -----------  ------------  ---------
       BALANCE, June 30, 1999                -      151,458     (141,293)          -

August 30, 1999 issuance of common stock
   Valued at $.25 per share in exchange for
   Plateau Resources, Inc. shares            -      374,985            -           -
September 1999 sale of common stock at
   $.50 per share                            -       42,499            -           -
October 1999 sale of common stock at $.50
   Per share                                 -        5,000            -           -
June 2000 sale of common stock at $2.00
   Per share                                 -       89,000            -           -
</TABLE>



<PAGE>31

PINNACLE RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
     EQUITY (DEFICIT)
From January 6, 1995 through June 30, 2001
     continued
<TABLE>
<CAPTION>
                                                                          Cumulative
                                                                         Translation
                                                                          Adjustment
                                                                         -----------
                                     Outstanding  Additional                 Other
                                        Stock      Paid-in  Accumulated  Comprehensive
                                       Options    Capital     Deficit        Income
                                       -------    -------     ----------    ---------

                                       <c>       <c>         <c>           <c>


Comprehensive loss
 Net loss for the year ended June 30,2000    -            -   (1,748,767)          -
 Cumulative translation adjustment           -            -            -      91,192
Comprehensive loss                           -            -            -           -
                                      --------  -----------  -----------  ----------
     BALANCE, JUNE 30, 2000                  -      663,941   (1,890,060)     91,192

August 2000 issuance of common stock into
  Escrow (Note G)                            -          (12)           -           -
September 2000 issuance of issuance of
   Common Stock in exchange for Vanadium
   And Magnetite Exploration & Development
   Co. (S.A.) Proprietary Limited shares
   Note G                                     -      (60,561)           -           -
October 2000 sale of common stock at
   $2.00 per share (Note G)                   -       20,000            -           -
November 2000 sale of common stock at
   $2.00 per share (Note G)                   -       13,000            -           -
November 2000 issuance of common stock
   In exchange for services at $5.00
   Per share (Note G)                         -    1,524,997            -           -
November 2000 stock options granted to
   Non-employees in exchange for
   Services (Note G)                     47,165            -            -           -
December 2000 issuance of common stock
   In exchange fore services $3,3125
   Per share (Note G)                         -       99,375            -           -
January 2001 sale of common stock at
   $2.00 per share (Note G)                   -        5,000            -           -
January 2001 issuance of common stock in
   Exchange for services at $3.50 per
   Share (Note G)                             -       52,500            -           -
</TABLE>



<PAGE>32
PINNACLE RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
     EQUITY (DEFICIT)
From January 6, 1995 through June 30, 2001
     continued
<TABLE>
<CAPTION>
                                                                          Cumulative
                                                                         Translation
                                                                          Adjustment
                                                                         -----------
                                       Outstanding  Additional               Other
                                         Stock      Paid-in  Accumulated Comprehensive
                                        Options    Capital     Deficit        Income
                                        -------    -------     ----------    ---------

                                       <c>       <c>         <c>           <c>


March 2001 issuance of common stock in
   Exchange for cash ($92,283) and
   Services at $1,875 per share
   (Note G)                                 -      170,718            -           -
March 2001 issuance of common stock in
   Exchange for services at $1.875 per
   Share (Note G)                           -       28,125            -           -
April 2001 issuance of common stock in
   Exchange for services at $.97 per share
   (Note G)                                 -       33,950            -           -
June 2001 issuance of common stock in
   Exchange for services at $1.11 per
   Share (Note G)                           -       55,499            -           -
June 2001 issuance of common stock in
   Exchange for services at $.99 per
   Share (Note G)                           -       34,649            -           -

June 2001 issuance of common stock in
   Exchange for debt and accrued interest
   (Note G)                                 -      123,422            -           -
Comprehensive loss:
  Net loss for the year ended June 30, 2001 -            -   (3,407,886)          -
  Cumulative translation adjustment         -            -            -     195,876
Comprehensive loss                          -            -            -           -
                                     --------   ----------  -----------   ---------
BALANCE, June 30, 2001               $ 47,165   $2,764,603  $(5,297,946)  $ 287,068
                                     ========   ==========  ===========   =========
</TABLE>



<PAGE>33
PINNACLE RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
     EQUITY (DEFICIT)
From January 6, 1995 through June 30, 2001
     continued
<TABLE>
<CAPTION>
                                                                Total
                                                          Shareholders'
                                                               Deficit
                                                          ---------------

                                                             <c>
Balance, January 6, 1995                                  $             -
January 1995 issuance of common Stock in
   exchange fore cash advances made on
    behalf of the Company and services
    at $0.01 per common share                                       1,500
Net loss for the year ended June 30, 1995                          (1,500)
                                                             -------------
       BALANCE, June 30, 1995 and 1996                                  -

June 1997 sale of common stock at $.025
   Per share                                                      100,000
Net loss for the year ended June 30, 1997                               -
                                                                ---------
       BALANCE, June 30, 1997                                     100,000

Net loss for the year ended June 30, 1998                         (63,601)
                                                                ---------
       BALANCE, June 30, 1998                                      36,399

January 1999 sale of common stock at $.50
  Per share                                                        50,000
Net loss for the year ended June 30, 1999                         (76,192)
                                                                ----------
       BALANCE, June 30, 1999                                      10,207

August 30, 1999 issuance of common stock
   Valued at $.25 per share in exchange for
   Plateau Resources, Inc. shares                                 375,000
September 1999 sale of common stock at
   $.50 per share                                                  42,500
October 1999 sale of common stock at $.50
   Per share                                                        5,000
June 2000 sale of common stock at $2.00
   Per share                                                       90,000
Comprehensive loss:
 Net loss for the year ended June 30,2000                      (1,748,767)
 Cumulative translation adjustment                                 91,192
                                                               -----------
Comprehensive loss                                             (1,657,575)
                                                               -----------
     BALANCE, JUNE 30, 2000                                    (1,134,868)



<PAGE>34
   PINNACLE RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
     EQUITY (DEFICIT) continued

August 2000 issuance of common stock into
  Escrow (Note G)                                                       -
September 2000 issuance of issuance of
   Common Stock in exchange for Vanadium
   And Magnetite Exploration & Development
   Co. (S.A.) Proprietary Limited shares
   Note G                                                         (60,521)
October 2000 sale of common stock at
   $2.00 per share (Note G)                                        20,000
November 2000 sale of common stock at
   $2.00 per share (Note G) )                                      13,000
November 2000 issuance of common stock
   In exchange for services at $5.00
   Per share (Note G)                                           1,525,000
November 2000 stock options granted to
   Non-employees in exchange for
   Services (Note G)                                               47,165
December 2000 issuance of common stock
   In exchange fore services $3,3125
   Per share (Note G)                                              99,375
January 2001 sale of common stock at
   $2.00 per share (Note G)                                         5,000
January 2001 issuance of common stock in
   Exchange for services at $3.50 per
   Share (Note G)                                                  52,500
March 2001 issuance of common stock in
   Exchange for cash ($92,283) and
   Services at $1,875 per share
   (Note G)                                                       170,719
March 2001 issuance of common stock in
   Exchange for services at $1.875 per
   Share (Note G)                                                  28,125
April 2001 issuance of common stock in
   Exchange for services at $.97 per share
   (Note G)                                                        33,950
June 2001 issuance of common stock in
   Exchange for services at $1.11 per
   Share (Note G)                                                  55,500
June 2001 issuance of common stock in
   Exchange for services at $.99 per
   Share (Note G)                                                  34,650
June 2001 issuance of common stock in
   Exchange for debt and accrued interest
   (Note G)                                                       123,425
Comprehensive loss:
  Net loss for the year ended June 30, 2001                    (3,407,886)
  Cumulative translation adjustment                               195,876
                                                               ----------



<PAGE>35

   PINNACLE RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
     EQUITY (DEFICIT) continued



Comprehensive loss                                             (3,212,010)
                                                              -----------
BALANCE, June 30, 2001                                        $(2,198,990)
                                                              ===========
</TABLE>

See accompanying notes to the consolidated
  financial statements

                      F-6





<PAGE>36
PINNACLE RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                    January 6, 1995
                                                                      (inception)
                                 For the Years Ended June 30,            through
                                 ---------------------------
                                       2001         2000              June 30, 2001
                                  -----------    -----------         --------------
                                                                      (Unaudited)

                                    <c>            <c>                 <c>
OPERATING ACTIVITIES
  Net loss                         (3,407,886)    (1,748,767)           (5,297,946)
  Transactions not requiring cash:
  Common stock issued for services
    (Note G)                        1,954,695              -             1,956,195
  Depreciation and amortization        68,564         96,344               164,908
  Foreign currency transaction loss         -         42,770                42,770
  Write-down of notes receivable        5,105         37,517                91,398
  Loss on asset impairment (Note G)   337,535              -               337,535
  Changes in current assets and
    current liabilities:
                                       80,041        (41,319)                2,660
  Increase in accounts payable
     and accrued liabilities          469,417         53,580               545,220
                                     --------     -----------         ------------
NET CASH USED IN OPERATING
 ACTIVITIES                          (492,529)    (1,559,875)           (2,157,260)
                                     --------     ----------          ------------
INVESTING ACTIVITIES
  Cash received for sale of options to
   purchase interest in subsidiary          -         42,708                42,708
  Purchase of equipment                (5,383)       (84,450)              (89,833)
  Advances made to related parties
    as notes receivable                     -              -              (145,000)
  Purchase of subsidiary, cash received     -          1,151                 1,151
                                      -------      ---------          ------------
NET CASH USED IN INVESTING ACTIVITIES  (5,383)       (40,591)             (190,974)
                                     --------      ---------          ------------
FINANCING ACTIVITIES
  Advances from officer/shareholder    54,058      1,416,495             1,470,553
  Proceeds from loans                 150,000              -               250,000
  Principal payments on capital lease  (2,198)             -                (2,198)
  Proceeds from line of credit         49,984              -                49,984
  Principal payments on line of credit(46,687)             -               (46,687)
  Proceeds from sale of common stock  130,283        137,500               417,783
                                     --------      ---------          ------------
NET CASH PROVIDED BY FINANCING
  ACTIVITIES                          335,440      1,553,995             2,139,435
                                     --------      ---------          ------------
Cumulative translation adjustment     195,876         91,192               287,068
                                     --------      ---------          ------------


<PAGE>37

PINNACLE RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
     Continued

Net change in cash and cash
    Equivalents                        33,404         44,721                78,269
Cash and cash equivalents, beginning   44,865            145                     -
                                     --------     ----------        --------------
Cash and cash equivalents, ending     $78,269        $44,866        $       78,269
                                     ========     ==========        ==============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest              $   5,071     $        -        $       5,071
                                    ==========    ===========       =============
Cash paid for income taxes          $       -     $         -       $           -
                                    ==========    ===========       =============
Non-cash financing and investing
   activities:
Acquisition of subsidiary in
  Exchange for 1,500,000 shares
  of common stock                  $        -     $   375,000       $     375,000
                                   ==========     ===========       =============
Acquisition of subsidiary in
  Exchange for 4,000,000 shares
  of common stock                   $ (60,521)    $         -       $     (60,521)
                                   ==========     ===========       =============
Equipment acquired under capital
  lease                             $   5,382     $         -       $       5,382
                                   ==========     ===========       =============
</TABLE>

See accompanying notes to the consolidated
       financial statements


                      F-7




<PAGE>38

PINNACLE RESOURCES, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements

Note A:  Organization, business, liquidity and
summary of significant accounting policies

Organization

Pinnacle Resources, Inc. (the "Company") was
incorporated under the laws of Wyoming as
Claremont House, Corp. on January 6, 1995.  On
June 26, 1997 the Company changed its name to
Pinnacle Resources, Inc. The Company was formed to
engage in all aspects of the financial services
industry or any other lawful business.  The
Company has been in the development stage since
its inception.

Nature of business

Beginning with the acquisition of a subsidiary in
August 1999, Plateau Resources (Proprietary)
Limited ("Plateau") a South African corporation,
the Company's principal business has been to
obtain mining rights, mining concessions and to
explore such grants towards the mining and
marketing of mineral products produced and all
facets thereto.  The Company acquired a second
subsidiary, Vanadium and Magnetite Exploration &
Development Co. (S.A.) Proprietary Limited
("Vanadium"), a South African corporation, in
September 2000 (See Note G).

Basis of presentation

The accompanying consolidated financial statements
have been prepared on a going concern basis, which
contemplates the realization of assets and the
satisfaction of liabilities in the normal course
of business.  As shown in the accompanying
consolidated financial statements, the Company has
suffered significant losses since inception and at
June 30, 2001, has a substantial net capital
deficit.  These factors among others may indicate
that the Company will be unable to continue as a
going concern.

The consolidated financial statements do not
include any adjustments relating to the
recoverability and classification of liabilities
that might be necessary should the Company be
unable to continue as a going concern. The

<PAGE>39

Company's continuation as a going concern is
dependent upon its to meet its obligations on a
timely basis, and, ultimately to attain
profitability.  The Company plans to sell assets
(including subsidiaries) and restructure its debt
to improve its financial position.  The Company
also plans to continue to finance its operations
and satisfy cash requirements with a combination
of debt financing, stock sales and, in the longer
term, revenues from operations.

Summary of significant accounting policies

Development stage company

The Company is in the development stage in
accordance with Financial Accounting Standards
Board Statements of Financial Accounting Standards
(SFAS) No. 7 "Accounting and Reporting by
Development Stage Enterprises".

Basis of consolidation

The consolidated financial statements include the
accounts of the Company, its majority-owned
subsidiary, Plateau, and its wholly owned
subsidiary, Vanadium.  All significant
intercompany balances and transactions have been
eliminated in consolidation.

Use of estimates

The preparation of the financial statements in
conformity with generally accepted accounting
principals requires management to make estimates
and assumptions that affect certain reported
amounts and disclosures.  Accordingly, actual
results could differ from those estimates.

Cash equivalents

For the purposes of the statements of cash flows,
the Company considers all highly liquid debt
instruments purchased with an original maturity of
three months or less to be cash equivalents.  The
Company had no cash equivalents at June 30, 2001.

Other receivables

Other receivables consist of taxes (VAT) for which
the Company has filed for the refund and expects
reimbursement within ninety days.



<PAGE>40

Equipment and depreciation

Property and equipment are stated at cost less
accumulated depreciation.  Depreciation is
provided using the straight-line method over the
estimated useful lives of the assets, which is
estimated to be three to five years.  Expenditures
for repairs and maintenance are charged to expense
when incurred.  Expenditures for major renewals
and betterments, which extend the useful lives of
existing equipment, are capitalized and
depreciated.  Upon retirement or disposition of
property and equipment, the cost and related
accumulated depreciation are removed from the
accounts and any resulting gain or loss is
recognized in the consolidated statements of
operations.

Net loss per share

The Company reports net loss per share in
accordance with SFAS No. 128, "Earnings Per
Share".  Under SFAS 128, net loss per share-basic
excludes dilution and is determined by dividing
loss available to common shareholders by the
weighted average number of common shares
outstanding during the period.  Net loss per
share-diluted reflects the potential dilution that
could occur if securities and other contracts to
issue common stock were exercised or converted
into common stock.  As of June 30, 2001, the
Company had 19,000 stock options outstanding that
were not included in the calculation of net loss
per share-diluted because the options were
antidilutive.

Income taxes

Income taxes are provided for the tax effects of
transactions reported in the financial statements
and consist of taxes currently due plus deferred
taxes related primarily to differences between the
recorded book basis and tax basis of assets and
liabilities for financial and income tax
reporting.  The deferred tax assets and
liabilities represent the future tax return
consequences of those differences, which will
either be taxable or deductible when the assets
and liabilities are recovered or settled.
Deferred taxes are also recognized for operating



<PAGE>41

losses that are available to offset future taxable
income and tax credits that are available to
offset future income taxes.

Fair value of financial instruments

SFAS 107, "Disclosure About Fair Value of
Financial Instruments," requires certain
disclosures regarding the fair value of financial
instruments.  The Company has determined, based on
available market information and appropriate
valuation methodologies, the fair value of its
financial instruments approximates carrying value.
The carrying amounts of cash, receivables,
accounts payable, and other accrued liabilities
approximate fair value due to the short-term
maturity of the instruments.

Impairment of long-lived assets and certain
identifiable intangibles

The Company evaluates the carrying value of its
long-lived assets under the provisions of SFAS No.
121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed
Of".  SFAS 121 requires impairment losses to be
recorded on long-lived assets used in operations,
including goodwill, when indicators of impairment
are present and the undiscounted future cash flows
estimated to be generated by those assets are less
than the assets' carrying amount.  In addition,
the recoverability of goodwill is further
evaluated under provisions of APB Opinion No. 17,
"Intangible Assets", based upon estimated fair
value.  If such assets are impaired, the
impairment to be recognized is measured by the
amount by which the carrying amounts of the assets
exceed the fair value of the assets.  Assets to be
disposed of are reported at the lower of the
carrying value or fair value, less costs to sell.

Foreign currency translation

Assets and liabilities of non-U.S. subsidiaries
are translated to U.S. Dollars at end-of-period
exchange rates.  The effects of this translation
for non-U.S. subsidiaries are reported in other
comprehensive income (loss).  Remeasurement of
assets and liabilities of non-U.S. subsidiaries
that use a currency other than the U.S. dollar as
their functional currency are included in income
as transaction gains and losses.  Income statement


<PAGE>42

elements of all non-U.S. subsidiaries are
translated to U.S. Dollars at average-period
exchange rates and are recognized as part of
revenues, costs and expenses.  The functional
currency of the Company's foreign subsidiary is
the local currency, the South African Rand.

Note B:  Related party transactions

During the years ended June 30, 2001 and 2000, the
Company paid an affiliated company $51,300 and
$66,647, respectively, for consulting services.
The president of the Company controls the
affiliate.

During the year ended June 30, 2000, a
shareholder/officer of Plateau advanced Plateau
$1,362,879.  At June 30, 2000, the
shareholder/officer had advanced Plateau a total
of $1,548,606.  During the year ended June 30,
2001, the shareholder/officer advanced Plateau an
additional $54,058.  At June 30, 2001, the
shareholder/officer had advanced Plateau a total
of $1,602,664. The advances are unsecured and are
non-interest bearing.  The advances are included
in the accompanying financial statements as
advances payable to shareholder and officer of
subsidiary.  The Plateau shareholder/officer has
subordinated repayment of the advances in favor of
the creditors of Plateau until such time as the
assets of Plateau, fairly valued, exceed its
liabilities.

Note C:  Property and equipment

Equipment consisted of the following:
Office furniture and fixtures             $  3,077
Equipment                                 $ 29,441
Motor Vehicles                            $ 58,566
                                        ----------
                                          $ 91,084
Less accumulated depreciation            $(26,637)
                                         ---------
                                          $ 64,447
                                           =======
Depreciation expense for the years ended June 30,
2001 and 2000 totaled $16,712 and $9,925,
respectively.



<PAGE>43

Note D:  Note payable

On March 18, 1998 the Company signed a one-year
loan agreement for $100,000 at five percent
interest. The loan was collateralized by an
individual interest in the Drenthe, Wirivier,
Dortsland platinum concession as arranged by the
Company.  On June 22, 2000 the Company renewed the
loan at an interest rate of 12 percent for one
year with interest to be settled with common stock
of the Company at $.50 per share.  On June 25,
2001, the Company issued 300,000 shares of its
common stock in exchange for loan principal of
$100,000 and accrued interest of $23,425.

Note E:  Line of credit

The Company has a line of credit for $50,000, of
which, $46,703 was unused at June 30, 2001.
Advances made under the line of credit carry an
interest rate of prime plus one percent and may be
extended annually with the consent of the
financial institution.  The credit line is
personally guaranteed by the president of the
Company.

Note F:  Capital lease obligation

The capital lease obligation consisted of the
following at June 30 2001:
<TABLE>

                                                            <c>
Lease payable, net of imputed interest of
 $483, due in 36 equal installments of $193
 per month, collaterized by equipment.                        $  3,184
                                                              --------
Less current maturities                                         (1,910)
                                                              --------
                                                              $  1,274
                                                              ========
Interest expense on the capital lease for the year
 ended June 30, 2001 totaled $652.

Maturities on the capital lease obligation
subsequent to June 30, 2001 are as follows:

June 30,
2002                                                              $2,316
2003                                                               1,351
Less imputed interest                                              (483)
                                                                   -----


<PAGE>44

Present value of net minimum less payments                        $3,184
                                                                  ======
</TABLE>
Note G:  Shareholders' Equity

Vanadium acquisition

On September 25, 2000, the Company purchased all
of the outstanding common stock of Vanadium, a
South African corporation, in exchange for
4,000,000 shares of the Company's common stock.

The Company has recorded the transaction as a
purchase in accordance with the Accounting
Principles Board Opinion No. 16.  The accompanying
consolidated financial statements include the
results of operations of Vanadium from the date of
acquisition through June 30, 2001.  The
transaction was valued at $(60,521), or $(.015)
per share based on the book value of Vanadium's
net liabilities, in accordance with paragraph 26
of Accounting Principles Board Opinion No. 26.
Vanadium was acquired from an independent and
unaffiliated third party.  No goodwill was
recorded in the transaction.

The following pro forma condensed, consolidated
statements of operations gives effect to the
acquisition of Vanadium as if it occurred on July
1, 2000.  The pro forma condensed, consolidated
statement of operations is not necessarily
indicative of results of operations had the
acquisition occurred at the beginning of the
period.

Year Ended June 30, 2001
<TABLE>
<CAPTION>
                                                                             Pro Forma
                                Pinnacle      Plateau      Vanadium       Consolidated
                              ----------      --------   -----------      ------------

                                <c>          <c>          <c>              <c>
Revenues                     $         -     $        -    $       -      $         -
Operating Expenses           $ 2,235,374     $ 1,170,956   $  5,514       $ 3,411,844
Operating loss               $(2,235,374)    $(1,170,956)  $ (5,514)      $(3,411,844)
Non Operating Income
  And Expenses               $ (  17,116)    $       941   $     14       $   (16,161)
Net Income                   $(2,252,490)    $(1,170,015)  $ (5,500)      $(3,428,005)
                             ===========     ==========     =======       ===========
Basic and diluted loss
  Per Common Share           $     (0.24)    $   (190.12)  $  (1.38)      $     (0.34)
                             ===========     ===========   ========       ===========



<PAGE>45

Basic and diluted weighted
  Average common shares
  Outstanding                  9,540,933          6,154      4,000         10,207,600
                               =========      =========   ========        ===========

</TABLE>
There were no pro forma adjustments for the year
ended June 30, 2001.

Plateau acquisition

On August 30, 1999 the Company purchased all of
the outstanding common stock of Plateau in
exchange for 1,500,000 shares of the Company's
common stock valued at $375,000. The common stock
was valued at $.25 per share based on
contemporaneous transactions. Plateau was acquired
from an independent and unaffiliated third party.
Net liabilities of Plateau as of the date of
acquisition was $143,514. The excess of the
purchase price over the fair value of the assets,
in the amount of $518,514 was allocated to
goodwill and is being amortized over a 60-month
period. Amortization expense of $86,419 was
recorded in the accompanying consolidated
financial statements for the year ended June 30,
2000.

During the year ended June 30, 2000 the Company
entered into an agreement with Anooraq Resources
Corporation ("Anooraq"), whereby Anooraq could
purchase up to 70 percent of the Company's
interest in Plateau.  In exchange for this
agreement, Anooraq paid the Company $42,708.
Accordingly, the Company recorded the cash payment
of $42,708 as a reduction of its investment in
Plateau.  As of June 30, 2001, Anooraq had
acquired a 35 percent interest in Plateau (see
Note I).  Anooraq's share of Plateau's net losses
exceed Anooraq's equity in Plateau, therefore the
minority losses have been charged to the Company
until such time as Anooraq's equity in Plateau
exceeds the losses.

Impairment of Plateau goodwill

During the second quarter of the fiscal year ended
June 30, 2001, the Company recorded a charge of
$337,535, or $.04 per basic and diluted common
share, for the write-off of the remaining goodwill
related to the acquisition of Plateau.  Yearly
amortization of such goodwill totaled $103,704.


<PAGE>46

The Company forecast Plateau's fully undiscounted
cash flows at below the carrying value of the
long-lived asset.  Accordingly, the Company
adjusted the carrying value to fair value, less
costs to sell.

Common stock

During the year ended June 30, 2001, the Company
sold 19,000 shares of its common stock for
$38,000, $2.00 per share.

During the year ended June 30, 2001, the Company
issued 485,000 shares of its common stock in
exchange for professional services.  The
transactions were valued at the market price of
the stock on the date of issuance, which ranged
from $.97 to $5.00 per share.  As a result, the
Company recognized a stock-based compensation
expense totaling $1,829,100 based on the fair
value of the common stock.

During the year ended June 30, 2001, the Company
issued 91,050 shares of its common stock in
exchange for $92,283 and financial consulting
services.  On the date of the issuance the market
price of the stock was $1.875 per share.  As a
result, the Company recognized a stock-based
compensation expense for the market value of the
stock, $78,436.

On June 25, 2001, the Company issued 300,000
shares of its common stock in exchange for loan
principal of $100,000 and accrued interest of
$23,425 (see Note D).

On September 30, 1999 the Company sold 85,000
shares of its restricted common stock at $.50 per
share for total proceeds of $42,500.

In October of 1999 the Company sold 10,000 shares
of its restricted common stock at $.50 per share
for total proceeds of $5,000.

In June of 2000, the Company sold 45,000 shares of
its restricted common stock at $2.00 per share for
total proceeds of $90,000.



<PAGE>47

Stock options

Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation"
requires the use of the fair value based method of
accounting for stock issued to non-employees in
exchange for services.

During the three months ended December 31, 2000,
the Company granted options to purchase 19,000
shares of common stock to a vendor in exchange for
brokerage and investor relations services.  The
options were granted with exercise prices below
the market price of the common stock on the date
of grant.  The weighted average exercise price and
weighted average fair value of these options as of
June 30, 2001 were $4.00 and $2.48, respectively.

All stock options were fully vested on the date of
grant.  The following schedule summarizes the
changes in the Company's outstanding stock
options:
<TABLE>
<CAPTION>
                             Options Outstanding and Exercisable      Weighted Average
                            Number of           Exercise Price         Exercise Price
                             Shares              Per Share              Per Share

                            <c>                 <c>                     <c>
Balance at June 30,2000           -                 $     -                 $     -
Options Granted              19,000                 $  4.00                 $  4.00
Options Exercised                 -                 $     -                 $     -
Options Canceled                  -                 $     -                 $     -
                             -------              ---------               ---------
Balance at June 30, 2001     19,000                 $  4.00                 $  4.00
                           ========               =========               =========
</TABLE>
The fair value for these options was
estimated at the date of grant using the
Black-Scholes option-pricing model with the
following assumptions:

Risk-free interest rate                    5.78%
Dividend yield                             0.00%
Volatility factor                         50.00%
Weighted average expected life            1 year

The Black-Scholes options valuation model was
developed for use in estimating the fair value of
traded options, which have no vesting restrictions
and are fully transferable.  In addition, option
valuation models require the input of highly
subjective assumptions including the expected
stock price volatility.  Because the Company's


<PAGE>48

stock options have characteristics significantly
different from those of traded options, and
because changes in the subjective input
assumptions can materially affect the fair value
estimate, in management's opinion, the existing
models do not necessarily provide a reliable
single measure of the fair value of its stock
options.  However, the Company has presented the
pro forma net loss and pro forma basic and diluted
loss per common share using the assumptions noted
above.

Shares in escrow

As of June 30, 2001, 1,165,000 shares of the
Company's common stock outstanding were held in
escrow with Harris County Circuit Court in
Houston, Texas, pending resolution of a dispute
between the Company and Petty International
Development Corporation.

Note H:  Income taxes

A reconciliation of the U.S. statutory federal
income tax rate to the effective tax rate is as
follows:
<TABLE>
<CAPTION>
                                                         For the Years Ended
                                                             June 30,
                                                     2001                2000
                                                     ----                ----

                                                  <c>                  <c>
U.S. federal statutory graduated rate                34.00%              34.00%
State income tax rate net of
    Federal benefit                                   3.14%               3.14%
Net operating loss for which no tax
    Benefit is currently available                  -37.14%             -37.14%
                                                   --------             -------
                                                      0.00%               0.00%
                                                   ========             =======
</TABLE>
At June 30, 2001, deferred tax assets consisted of
a net tax asset of $1,977,187, due to operating
loss carryforwards of $5,297,946, which was fully
allowed for, in the valuation allowance of
$1,977,187.  The valuation allowance offsets the
net deferred tax asset for which there is no
assurance of recovery.  The change in the
valuation allowance for the years ended June 30,
2001 and 2000, and from January 6, 1995
(inception) through June 30, 2001 totaled



<PAGE>49

$1,285,334, $649,405 and $1,977,187, respectively.
The current tax benefit also totaled $1,285,334,
$649,405 and $1,977,187 for the years ended June
30, 2001 and 2000, and from January 6, 1995
(inception) through June 30, 2001, respectively.
The net operating loss carryforward expires
through the year 2021.

The valuation allowance will be evaluated at the
end of each year, considering positive and
negative evidence about whether the deferred tax
asset will be realized.  At that time, the
allowance will either be increased or reduced;
reduction could result in the complete elimination
of the allowance if positive evidence indicates
that the value of the deferred tax assets is no
longer impaired and the allowance is no longer
required.

Should the Company undergo an ownership change as
defined in Section 382 of the Internal Revenue
Code, the Company's tax net operating loss
carryforwards generated prior to the ownership
change will be subject to an annual limitation,
which could reduce or defer the utilization of
these losses.

Note I:  Subsequent event

Sale of Plateau subsidiary

The Company sold its Plateau investment to Anooraq
in exchange for 7 million shares of Anooraq's
common stock and debt forgiveness totaling
$150,000 on August 28, 2001.  Following the sale,
the Company owned approximately 28 percent of
Anooraq's issued and outstanding common stock.
The Company's investment in Plateau totaled
$332,292 at June 30, 2001.  The $332,292 Plateau
investment was eliminated in consolidation.

The following pro forma condensed, consolidated
balance sheets give effect to the disposition of
Plateau as if it occurred on July 1, 2000.  The
pro forma condensed, consolidated balance sheet is
not necessarily indicative of the financial
position had the disposition occurred at the
beginning of the period.



<PAGE>50
<TABLE>
<CAPTION>
June 30, 2001                 Pinnacle
                              Consolidated                         Pro Forma
                              (As reported)      Adjustments      Consolidated
                              ------------       -----------      ------------

                             <c>                 <c>                <c>
Cash                          $   78,269        $  (60,689)1      $     17,580
Receivables                        1,369            (1,369)2                 -
Property and equipment, net       64,447           (57,747)3             6,700
                              ----------        ------------        ----------
Total assets                  $  144,085        $  (119,805)       $    24,280
                              ==========        =============      ===========
Current liabilities           $2,341,449        $(2,329,035)4,5,6  $    12,414
Long term debt                     1,274                  -              1,274
                              ----------         ----------        -----------
Total liabilities              2,342,723         (2,329,035)            13,688
                              ----------         -----------       -----------
Minority interest                    352               (352)7                -
Shareholders' deficit         (2,198,990)        (2,209,582)            10,592
                              -----------        -----------        ----------
Total liabilities and
  Shareholders' deficit       $  144,085         $ (119,805)       $    24,280
                              ==========         ===========       ===========
</TABLE>
Condensed, consolidated balance sheet adjustments:
1.  Elimination of Plateau's cash balance;
2.  Elimination of Plateau's receivable balance;
3.  Elimination of Plateau's net property and
equipment;
4.  Elimination of Plateau's trade payables;
5.  Elimination of Plateau's shareholder advances;
6.  Elimination of Anooraq's advance to Pinnacle;
7. Elimination of the minority interest
established in the consolidation of Plateau's
financial statements.

The pro forma condensed, consolidated balance
sheet was adjusted for the $150,000 advance, which
was eliminated in the Plateau disposition.

The following pro forma condensed, consolidated
statements of operations give effect to the
disposition of Plateau as if it occurred on July
1, 2000.  The pro forma condensed, consolidated
statement of operations is not necessarily
indicative of results of operations had the
disposition occurred at the beginning of the
period.



<PAGE>51

Year ended June 30, 2001
<TABLE>
<CAPTION>
                               Pinnacle
                              Consolidated                         Pro Forma
                              (As reported)      Adjustments      Consolidated
                              ------------       -----------      ------------

                               <c>                 <c>              <c>
Revenues                      $          -       $         -       $         -
Operating expenses            $  3,388,993       $ (1,170,956)1    $ 2,218,038
Operation loss                $( 3,388,993)      $ (1,170,956)     $(2,218,037)
Non-operating income
  And expenses                $    (18,893)      $       (941)2    $   (19,832)
Net income                    $( 3,407,886)      $  1,170,015       (2,237,871)
                              ============       ============      ===========
Basic and diluted loss per
  common share                $      (0.36)                        $     (0.23)
                              ============                         ===========
Basic and diluted weighted
  Average common shares
  Outstanding                    9,540,933                           9,540,933
                              ============                         ===========
</TABLE>
Condensed, consolidated statement of operations
adjustments:
1.  Elimination of Plateau's operating expenses;
2.  Elimination of Plateau's interest income.

Common stock issued into escrow

The Company issued an additional 1,835,000 shares
of its common stock into escrow on July 5, 2001
(see Note G).




<PAGE>52

ITEM  8.   CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There have not been any changes in or disagreements
with accountants on accounting and financial
disclosure.













<PAGE>53

                                  PART III

ITEM  9.    DIRECTORS  AND  EXECUTIVE  OFFICERS  OF
THE  COMPANY

Board of Directors.  The following persons listed
below have been retained to provide services as
director until the qualification and election of
his successor.  All holders of Common Stock will
have the right to vote for

Directors of Pinnacle.  The Board of Directors has
primary responsibility for adopting and reviewing
implementation of the business plan of Pinnacle,
supervising the development business plan, review
of the officers' performance of specific business
functions.  The Board is responsible for monitoring
management, and from time to time, to revise the
strategic and operational plans of the Company. A
director shall be elected by the shareholders to
serve until the next annual meeting of
shareholders, or until his or her death, or
resignation and his or her successor is elected.
Presently, Directors receive no compensation or
fees for their services rendered in such capacity.

The Executive Officers and Directors are:
<TABLE>
<CAPTION>
Name                        Position                 Term(s) of Office

                            <c>                        <c>
Glen R. Gamble, age 53     President, Director       From June 26, 1997
                        Chief Executive Officer        to present

Robert A. Hildebrand,
   age 71              Vice President, Director       From Inception
                         Secretary/Treasurer             to present
                       Chief Financial Officer
                           President                  From Inception
                                                     to June 26, 1997

Terryl K. Jensen, age 58         Director             From June 26, 1997
                                                      to present
</TABLE>

Resumes:

Glen R. Gamble.     Mr. Gamble has served as an
officer and director of variety of companies
engaged in the fields of mining, oil and gas,
cattle, real estate and resource financing.
Currently, Mr. Gamble is the Manager of Viatica
Fund, LLC; a Director of Natural Buttes Gas


<PAGE>54

Corp.; Manager of Desert Flower Mining, LLC; and
President and Chairman of Victory Minerals Corp.
and Pinnacle.   Offshore, Mr. Gamble also
serves as a Director on the Board of Directors of
Plateau Resources (Pty) Ltd., a South African
corporation. Mr. Gamble assisted the management in
setting up an offshore parent holding company in
the Cayman Islands. Additionally, Mr. Gamble
recently facilitated Plateau Resources (Pty) Ltd.
in obtaining mineral rights on South African
properties. He helped to fund, via private sources,
Plateau's start-up and operating capital to date.
Similarly, Mr. Gamble served on the Board of Vanmag
Exploration and Development (Pty) Ltd., also a
South African corporation. He also assisted this
company in obtaining mineral rights on a major
vanadium deposit, and facilitated in setting up its
parent offshore company in the Cayman Islands.  Mr.
Gamble resigned from the Vanmag Board of Directors
when the Cayman parent company sold the South
African entity. Currently he is a Director with
Zebediela Platinum (Pty) Ltd., another South
African corporation which is awaiting approval of
its applications on farms having platinum
potential.

In mid-1979, Mr. Gamble affected a sale and
financing package on a ranch in Russell, Kansas on
which were several producing oil and gas wells.
This opportunity led to the creation of a new
entity, Petro-Package Brokerage Co., which Mr.
Gamble owns.   For the next few years Mr. Gamble
specialized in packaging, financing and selling
producing oil and gas properties.  Additionally, he
managed several oil properties for investors and
drilled over 20 wells in Central Kansas. He moved
the Petro-Package operation to Denver in 1985 and
created a new Wyoming company called Victory
Minerals Corp. which is the flagship company for
Mr. Gamble's mineral interest both in the United
States and in Africa.

Mr. Gamble graduated from Lakewood High School in
1962, performed three years of military service in
the U.S. Army from which he was Honorably
Discharged in May 1966.  Mr. Gamble attended the
University of Colorado and graduated with a
Bachelor of Science degree in Accounting and
Finance in 1970.

Robert A. Hildebrand.   Since 1991, Mr. Hildebrand
has been Vice President of Environmental Assurance
corporation, a company offering financial solutions
to owners of contaminated real estate.   Mr.
Hildebrand served as the President and a director

<PAGE>55

of Resource Finance Group, Ltd., a public Colorado
corporation engaged in the business of acquiring
revenue interest in producing mines in selected
developing countries in exchange for mining and
processing equipment and training provided by
Resource Finance Group, Ltd., from August 1991
until that company merged, in April 1993, with Onyx
Systems, Ltd.   From June 1987 through October
1991, Mr. Hildebrand served as a director and an
officer, holding various positions including
President, of General Mining Company ("General
Mining"), a small, inactive public mining company.
General Mining was active, from 1987 through early
1991, in exploring for surface sulfur deposits in
Bolivia, which did not result in viable operations.
In November 1996 Mr. Hildebrand served as a
consultant to Mr. Glen Gamble and Victory Minerals
S.A. (Pty) Ltd. to assist Plateau Resources (Pty)
Ltd. and Vanmag Exploration (Pty) Ltd. with its
applications to be awarded mineral rights and
surface rights on certain farms having
platinum/palladium and vanadium potential,
respectively.  He has accepted a directorship with
Zebediela Platinum (Pty) Ltd., another South
African corporation which has pending applications
in on farms with platinum potential.

Mr. Hildebrand attended the U.S. Naval Academy from
1947 through 1949 and received his Geological
Engineering Degree from the Colorado School of
Mines in 1954.   He has been a registered Colorado
Professional Engineer since 1958.

Terryl K. Jensen.    Mr. Jensen has been with
Horton Cavey Company since 1969 and is currently
President of Horton Cavey Realty Company and has
twenty-eight years of experience in real estate as
a broker, manager and owner.   He has held his real
estate broker license since 1972.   His experience
includes the sale of land and investment real
estate, syndication of investment property,
development of commercial and residential projects
and management of Pinnacle.

Mr. Jensen has participated in the development and
marketing of twelve residential projects of over
800 lots; the development of a small office park,
two apartment buildings and one office building.
He was executive vice president of a company that
developed 5,200 acres in Kentucky into a large
equestrian community.   In addition, he has
participated in the forming, marketing and
management of over thirty investment partnership



<PAGE>56

projects, which included apartments, land, land
development, mobile home parks and residential
subdivisions.

Mr. Jensen served as a Director of Paragon Mortgage
Corporation, a mortgage company from June 1994 to
September 1994.

Mr. Jensen received a Bachelor of Science degree
with a major in Business from Dakota State
University in 1964; and he is a licensed real
estate broker in the State of Colorado.   Mr.
Jensen is a member of the Denver Board of Realtors
Commercial Division, Colorado Association of Real
Estate Boards, National Association of Real Estate
Boards, Home Builders Association of Metropolitan
Denver, Colorado Association of Home Builders and
the National Association of Home Builders.

Conflicts of Interest.   Pinnacle will be subject
to various conflicts of interest between Pinnacle
and its Affiliates.  Since the executive officers
and directors will control the daily operations of
Pinnacle and its Affiliates, there may be occasions
when the interests of Pinnacle's Affiliates may be
inconsistent with the interests of Pinnacle.

Allocation of Management Time.  Pinnacle will rely
on its officers to manage Pinnacle's business
operations.  Currently the officers are devoting a
minimal amount of their time for the operation of
Pinnacle.   Pinnacle may obtain additional
officers, as necessary.   As such, and until all of
their positions become "full time," there will be
conflicts of interest in allocating management
time, services and functions between Pinnacle and
its Affiliates.   These individuals may engage for
their own account, or for the account of others in
other business ventures for which Pinnacle shall
not be entitled to any interest.

Pinnacle may, at some time in the future, compete
with others for the management services of the
current and future officers of Pinnacle.  As a
result, these individuals may be placed in a
position where their decision to favor other
operations in which they are associated over those
of Pinnacle will result in a conflict of interest.
It should also be noted that it may be expedient
for them to favor one operation over another since
their participation in such operations will vary.



<PAGE>57

In allocating their time, they will recognize their
fiduciary obligations to Pinnacle, the prevailing
industry standards and the financial situation of
Pinnacle.

   Conflicts of Interest Policy.  Pinnacle has
adopted a policy that any transactions with
directors, officers or entities of which they are
also officers or directors or in which they have a
financial interest, will only be on terms
consistent with industry standards and approved by
a majority of the disinterested directors of
Pinnacle's board of directors.    No such
transactions by Pinnacle shall be either void or
voidable solely because of such relationship or
interest of directors or officers or solely because
such directors are present at the meeting of the
Board of Directors of Pinnacle or a committee
thereof which approves such transactions, or solely
because their votes are counted for such purpose
if: (i) the fact of such common directorship or
financial interest is disclosed or known by the
Board of Directors or committee and noted in the
minutes, and the Board or committee authorizes,
approves or ratifies the contract or transaction in
good faith by a vote for that purpose without
counting the vote or votes of such interested
directors; or (ii) the fact of such common
directorship or financial interest is disclosed to
or known by the shareholders entitled to vote and
they approve or ratify the contract or transaction
in good faith by a majority vote or written consent
of shareholders holding a majority of the common
shares entitled to vote (the votes of the common or
interested directors or officers shall be counted
in any such vote of shareholders), or (iii) the
contract or transaction is fair and reasonable to
Pinnacle based on the material similarity of terms
to recent consulting agreements not involving
interested parties, or in all other agreements by
competitive bids, at the time it is authorized or
approved.  In addition, interested directors may be
counted in determining the presence of a quorum at
a meeting of the board of directors of Pinnacle or
a committee thereof which approves such
transactions.

Non-Qualified and Incentive Stock Option Plans.
Pinnacle does not currently have any stock option
plans, however, Pinnacle does intend to pursue the
adoption of a non-qualified stock option plan in
the fourth quarter of 2001.  Pinnacle filed an S-8



<PAGE>58

registration to have 1,000,000 shares of common
stock available for an anticipated  employee
benefits plan.

ITEM  10.    EXECUTIVE  COMPENSATION

Commencing July 1, 1997, the officers of Pinnacle
receive $800 per month (aggregate) for services.
As operations increase, Pinnacle intends to enter
into employment agreements with its officers.
Upon funding, either through revenues from
operations, a private placement or initial public
offering, should the amount justify the salary
demands, the key management of Pinnacle would be
compensated according to their duties.  No specific
details have been determined.

Mel Keller, a 10.37% shareholder of Pinnacle loaned
$100,000 to the Company on March 18, 1998 at the
interest rate of Five Percent (5%) per Annum.  The
funds were to be used to advance the permitting
process on platinum ore properties of Plateau
Resources (Pty) Ltd located in the Republic of
South Africa.  The loan was unsecured by
Pinnacle but was instead secured by an undivided
five percent (5%) interest in the Drenthe,
Witrivier, Dortsland Platinum concession as
arranged by Pinnacle on behalf of Mr. Keller. The
loan was made to Pinnacle instead of directly to
Plateau Resources (Pty) Ltd. because Mr. Keller
insisted his funds be placed in a domestic entity
as opposed to a foreign company.  In June 2001 the
loan and its accumulated interest were converted
into equity and Mr. Keller was issued 300,000
shares of Pinnacle common stock.

ITEM  11.    SECURITY  OWNERSHIP  OF  CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following tabulates holdings of shares of
Pinnacle by each person or entity who, subject to
the above, as of June 30, 2001, holds of record or
is known by management to own beneficially more
than 5.0% of the common shares and, in addition, by
all directors and officers of Pinnacle individually
and as a group.   Each named beneficial owner has
sole voting and investment power with respect to
the shares set forth opposite his name.


<PAGE>59

<TABLE>
<CAPTION>
                                Percentage of
                              Number & Class(1)            Outstanding
Name and Address                   of Shares              Common Shares

                                  <c>                       <c>
Glen R. Gamble
12892 Sierra Circle
Parker, CO 80134                 2,200,000                    53.01%

Terryl K. Jensen
9600 E. Arapahoe Road
#260
Englewood, CO 80112                 50,000                     1.2%

Robert A. Hildebrand
7345 E. Peakview
Englewood, CO 80111                 50,000                     1.2%

Beverly Jo Gamble
12892 Sierra Circle
Parker, CO 80134                   200,000                    4.82%

Mel Keller
R.R. 1 Box
Blairsburg, IA                     840,000                   20.24%

Victory Minerals Corp.
7345 E. Peakview
Englewood, Co 80111              2,000,000                   48.19%

Re-Group, Inc.
9600 E. Arapahoe Road
#260
Englewood, CO 80112                266,000                    6.41%

All Directors & Officers
as a group (3 persons)           3,606,000                   86.89%
</TABLE>
[FN]
Pursuant to Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, beneficial
ownership of a security consists of sole or shared
voting power (including the power to vote or direct
the voting) and/or sole or shared investment power
(including the power to dispose or direct the
disposition) with respect to a security whether
through a contract, arrangement, understanding,
relationship or otherwise.  Unless otherwise
indicated, each person indicated above has sole
power to vote, or dispose or direct the disposition
of all shares beneficially owned, subject to
applicable community property laws.


<PAGE>60

Beverly Jo Gamble is married to Glen R. Gamble, an
officer and director of Pinnacle.  As a result,
Glen R. Gamble would be deemed to be a beneficial
owner of the Common Shares owned of record by
Beverly Jo Gamble.   Nevertheless, Glen R. Gamble
disclaims any beneficial ownership of the Common
Shares owned of record by his wife.

Victory Minerals Corp. is a corporation controlled
by Glen R. Gamble, an officer and director of
Pinnacle.   As a result, Glen R. Gamble would be
deemed to be a beneficial owner of the 2,000,000
common shares owned of record by Victory Minerals
Corp.

Daniel J. Boone and Jerry Welch Boone are
principals of Re-Group, Inc.

The balance of Pinnacle's outstanding Common Shares
are held by 3 persons, not including those persons
who hold their shares in street name.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS

Pinnacle maintains a mailing address at located at
9600 E. Arapahoe, Suite 260, Englewood, CO 80112
and shares that office space with a director,
Terryl K. Jensen, who operates a Real Estate
business on the premises.

Glen Gamble, president of Pinnacle, is also an
officer and director of Victory Minerals
Corporation, a significant shareholder of
Pinnacle's common stock.

Mr. Gamble is also a director on the Board of
Directors of Plateau Resources (Pty) Ltd., a South
African corporation. Further, Mr. Gamble has been
appointed as a Director to the Board of Directors
of Anooraq Resources Corporation that is the 100%
owner of Plateau Resources.  Likewise Mr. R.A.
Hildebrand who is a Pinnacle Director also holds
Directorship positions with Plateau and Anooraq.

In March 1998, monies ($75,000) were advanced to
Plateau Resources (Pty) Ltd.   These funds were
accruing interest at a rate of 10% per annum. In
January 2000 the loan was repaid by Anooraq
Resources from  closing proceeds.

In October 1997, monies ($40,000) were advanced to
Asset Partners LLC. whose managing partner is a
minority shareholder of Pinnacle (holding 3,000
common shares or .07% of Pinnacle's outstanding

<PAGE>61

common shares).  These funds are accruing interest
at a rate of 13% per annum.  The funds were
originally due to be repaid on April 22, 1998.
The note has been extended until October 22, 1998
and then subsequently written off.

ITEM  13.    EXHIBITS,  FINANCIAL STATEMENT
SCHEDULES, AND REPORTS ON FORM 8-K
     (A)    FINANCIAL  STATEMENTS  AND  SCHEDULES

The following  financial  statements  and schedules
are filed as part of this report:

Report of Independent Public Auditors
Balance Sheet
Statement of Operations
Statement of Stockholder's  Equity
statement  of Cash  Flows
Notes to Financial Statements

Schedules Omitted:    All schedules other than
those shown have been omitted because they are not
applicable, not required, or the required
information is shown  in  the  financial
statements  or  notes thereto.

(b)    List of Exhibits

            The following of exhibits are filed
with this report:

 (3.1)  Articles of Incorporation incorporated by
referenced to Form 10SB filed August 7, 1997, File
No. 0-22965
 (3.2)  Amendment to Articles of Incorporation
incorporated by referenced to Form 10SB filed
August 7, 1997, File No. 0-22965
 (3.3)  Bylaws incorporated by reference to Form
10SB filed August 7, 1997, File No. 0-22965
 (3.4)  Amendment to Bylaws dated July 1, 1997
incorporated by reference to Form 10SB filed
October, 1997.
 (4.1)  Specimen Common Stock Certificate
incorporated by reference to Form 10SB filed August
7, 1997, File No. 0-22965
 (10.1)  Loan Agreement between Pinnacle and Asset
Partners, LLC dated October 22, 1997 incorporated
by reference to Amendment 3 to Form 10SB.
(10.2)  Loan Agreement between Pinnacle and Plateau
Resources (PTY) Ltd. dated March 22, 1998
incorporated by reference to Amendment 3 to
Form 10SB.


<PAGE>62

(10.3)  Loan Agreement between Pinnacle and Mel
Keller dated March 18, 1998 incorporated by
reference to Amendment 3 to Form 10SB.


(B)    REPORTS  ON  FORM  8-K

On May 18, 2001, Pinnacle filed Form 8-K including
Item 2 and Item 7

Pinnacle Resources, Inc. (OTC Bulletin Board: PNRR;
Frankfurt: PIN) has completed its acquisition of
Vanadium and Magnetite Exploration and Development
(Pty) Ltd. (V-MED).  V-MED, a South African
corporation, that holds an exclusive 30-year
mineral lease on five contiguous farms covering
17,188 acres adjacent to Pinnacle's platinum-
palladium properties near Potgietersrus, South
Africa.  Pinnacle issued 4,000,000 shares of two
year restricted common stock for 100% of VMED, the
vanadium and titanium holding company.





<PAGE>63

                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended,
Pinnacle has duly caused this Report to be signed
on its behalf by the undersigned duly authorized
person.

Date:    October 8, 2001

Pinnacle Resources, Inc.

/s/ Glen R. Gamble
------------------------------------
By:     Glen R. Gamble, President

Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, this report has
been signed below by the following persons on
behalf of Pinnacle and in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>

                                                  <c>
/s/ Glen R. Gamble                                 10/8/01
- ------------------------------
Glen R. Gamble
President  and  Director
(chief executive officer)


/s/ Robert A. Hildebrand                            10/8/01
- ------------------------------
Date:
Robert A. Hildebrand
Secretary/Treasurer  and  Director
(Chief Financial Officer)


/s/ Terryl F. Jensen                                10/8/01
- ------------------------------
Terryl F. Jensen
Director
</TABLE>