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:
                   6/30/03
                      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]



<PAGE>2

Pinnacle's revenues for its most recent fiscal year were $0.00, but
Pinnacle had gains on the sale of an asset totaling $3,224,219 as of
June 30, 2003. The market value of Pinnacle's voting $.00001 par value
common stock held by non-affiliates of Pinnacle was approximately
$330,000.

The number of shares outstanding of Company's only class of common
stock, as of June 30, 2003 was 17,388,383 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. was 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 to Pinnacle Resources,
Inc. and to authorize 2,000,000 Preferred Shares with a par value of
$.01 per Preferred Share.

Pinnacle has had limited operations since its inception in 1995 due to
its lack of working capital. 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. Victory Minerals Corp., a holding company controlled by
Glen Gamble, purchased 2,000,000 of those Common Shares. 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 mergers with, or
acquisition of, other unrelated privately-owned corporations. 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.   Currently, Pinnacle in mining ocean diamonds, refining
tantalum, and developing its vanadium/titanium property.  All these
activities are located in South Africa.

Company History/Operating Strategy

In 1995 the Company's principals, Glen Gamble and Robert Hildebrand,
two experienced mining industry experts, saw an opportunity for a
quick-footed aggressive company that could benefit from the changing
political and economic climate in South Africa.  The post apartheid
government forced a restructuring of South Africa's world-renowned
mining industry by decreeing that major monopolistic mining companies
had to divest themselves of some of their mineral holdings.

In anticipation of being able to acquire promising mineral prospects
and the need for financing of acquisitions, the company's principals
filed a Form 10 Registration with the U.S. Securities Exchange
Commission to take Pinnacle public.  That approval and subsequent
listing as a Bulletin Board stock was obtained in July 1996.

A South African business group that had formed Plateau Resources Pty
Ltd presented the first attractive mineral prospect to Pinnacle.
Pinnacle's management evaluated the opportunity and acquired Plateau
for 2,000,000 million shares of Pinnacle common stock and made a
capital infusion commitment to Plateau of US$300,000. Then, in October
1996 Pinnacle caused its subsidiary, Plateau Resources, to file an
application for Prospecting Rights with the Lebowa Mineral Trust, and
by March 1997 Pinnacle had been awarded four claims on the world famous
Platreef which hosts a platinum bearing reef.  In the following two
years the company's exploration and drilling program resulted in the
discovery of platinum group mineralization.

<PAGE>4

Pinnacle has pursued a strategy of identifying and acquiring mineral
interests in an environment of emerging opportunities. This approach of
building its asset portfolio was successful because the results were
the platinum properties as well as five contiguous claims, 17
kilometers in length, on what has been reported to be the largest
undeveloped vanadium/titanium ore body in the world. These properties
are held by a new subsidiary, Vanadium and Magnetite Exploration and
Development Pty Ltd. (Vanmag) and the company has been awarded a 32
year Mineral Lease over these properties and recently the company
completed a two year effort to secure sufficient water for the
operation of a 40,000 ton per month processing plant on the property.
Currently, the Company is pursuing a Mining Authorization which, when
granted, will allow the Company to go forward with plans to produce the
property.

In February of 2003, Pinnacle accepted Corridor Mining of South Africa
as a Black Empowerment 1/3 equity partner in order to help gain a
Mining Authorization and to further comply with the new South African
government legislation which called for black ownership participation
on State owned minerals.

Having achieved success in its initial effort on the platinum property
the company was able to attract an industry partner to further develop
the platinum prospect without further demand on Pinnacle's financial
resources.  The company accepted a joint-venture arrangement and
drilling expenditure commitment from Hunter Dickinson Inc of Vancouver,
Canada wherein the company realized cash and stock in a Canadian public
company, Anooraq Resources, Inc. After eighteen months HDI offered to
take over Plateau Resources completely and the company received further
stock considerations in Anooraq and a cash consideration of US$500,000.
This money and the placement of Anooraq stock has enabled Pinnacle to
fund its administrative overhead as well as to finance it present
ventures.

The next opportunity of high interest was certain proprietary and
patented know-how and technology that would separate vanadium and
titanium from magnetite ore. This capability is also applicable for the
separation and processing of tantalite ore. Consequently, the Company
acquired the technology via a merger with Titan Intellectual and then
licensed the technology to a new South African company, Titan
Processors (Pty) Ltd, and agreed to finance Titan's start up with a
financial loan commitment of up to $500,000.  As of this date, Titan
has commenced its first processing runs and expects to start showing
sale receipts with the next few months.

Simultaneously, with the commitment to Titan, Pinnacle reviewed, and
then agreed to fund, a new, patented ocean diamond recovery platform
called "Aqua Walker".  This invention was housed in Diamonaire Pty Ltd
and the Company has loaned US$320,000 to Diamonaire to date.  The Aqua
Walker made its maiden walk at Seal Beach on the west coast of South
Africa on April 10, 2003 and is expected to start commercial operations
once the operating manual and crew training has been completed,
probably toward the end of 2004.

<PAGE>5

The Market Opportunity

The Company has (1) obtained mineral rights and is in the process of
obtaining regulatory approval to begin mining and production of
vanadium and titanium in the Northern Province of South Africa, (2)
sold its platinum rights in South Africa prior to beginning a massive
drilling and exploration effort; (3) agreed to  fund a diamond recovery
joint venture in the ocean off South Africa's west coast; and (4)
funded the construction of a tantalum refinery in Johannesburg, South
Africa.

Vanadium/Titanium Project

In June 2000 Pinnacle concluded negotiations to acquire 100% ownership
of Vanadium and Magnetite Exploration and Development (Pty) Ltd.
(Vanmag) a South African corporation holding an exclusive 30-year
mineral lease on five contiguous farms near Potgietersrus, South
Africa.

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-
meter thick main bed of magnetite, approximately 17 kilometers in
strike length, which is believed to be the largest undeveloped 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 beds offer the
potential of low cost open pit mining.

Ross Glanville & Associates of Vancouver, Canada used the results of
investigations undertaken by The Department of Mining Engineering and
University of Witwatersrand for an economic valuation of the Vanadium
properties. They concluded that over a 20-year project life, at an
Annual Production Rate of 4,120 (four thousand one hundred and twenty)
tonnes of ferrovanadium (FeV) and a price of $15 /kg FeV, the operation
showed a net present value (NPV) of  $73.6 million USD (Seventy Three
Million Six Hundred Thousand US Dollars).

Management is of the opinion that the vanadium and titanium property
represents an excellent business opportunity, for the shareholders of
Pinnacle. As of June 30, 2002, Pinnacle had succeeded in obtaining
water rights on the farms sufficient to accommodate a 40,000 tonne per
month processing plant.   Additionally Vanmag applied for a Mining
Authorization, which is presently pending.  In early 2003, Pinnacle
concluded a sale of 1/3 of its Vanmag shares to Corridor Mining Ltd a
Black Empowerment Group thus complying with South Africa's new mandate
for black partners on State owned minerals.

Platinum

In 1995 the Company acquired Plateau Resources Pty Ltd, a South African
corporation, which had been awarded Prospecting Rights on four farms,
which had platinum mineralization.  The Company funded an exploratory

<PAGE>6

drilling program and was able to demonstrate that there was sufficient
platinum mineralization to initiate a thorough drilling and development
program. The Company sold 50% of Plateau to Anooraq Resources Inc of
Vancouver Canada for cash and stock, and then two years later completed
a tax-free exchange for seven million shares of Anooraq stock.
Pinnacle sold parcels of the Anooraq stock over the last 18 months to
cover overhead and fund the start-up of the tantalum refinery and the
Aqua-Walker and then the Company recently concluded a sale of the
balance of it Anooraq stock for US$800,00.

Diamond Recovery Project

In March 2002 Pinnacle entered in to a 50/50 joint venture with Ocean
Options Pty Ltd of South Africa to form Diamonaire Pty Ltd, which was
formed to hold the patents and designs for the "Aqua Walker", a walking
platform that walks into the ocean and performs the recovery of
diamondiferous gravels from the ocean floor.  This technology enables
the company to mine certain offshore deposits that were previously
inaccessible by conventional methods, i.e. boat and diver operations or
beach operations.  Diamonaire built the first "Aqua-Walker" platform
that has begun producing diamondiferous gravels off the southwest coast
of South Africa.

Tantalum Refinery

In February 2002, the Company acquired certain intellectual property
from a South African inventor for cash and common stock equivalents.
The intellectual property consists of a method to refine tantalum,
vanadium, and titanium ores. Tantalum is a precious metal used in
electronics and space industry.

The Company licensed the intellectual property to Titan Processors
(Pty) Limited (Titan), a newly formed South African company, owned by a
South African mining group in exchange for a royalty of $1.00 per pound
of tantalum oxide produced and sold under the license and a percentage
of Titan's net profits. In addition, the Company agreed to fund the
start up of a refinery and employ the inventor. A South African mining
group agreed to provide the equipment and mining license to build a
tantalite refinery utilizing the licensed technology in  South Africa.
The licensing agreement expires in ten years.

The Company funded the construction of the tantalum refinery which is
processing tantalite mined throughout southern Africa and will begin
producing high purity tantalum pentoxide and niobium oxide for the
electronics industry before the end of October 2003.

Employees

Pinnacle presently has three employees. Mr. Gamble, the President draws
a $5,000 per month; Mr. Hildebrand, Vice President of Finance draws
$4,000 per month and Anne Guarnera, Administrative Assistant manages
the office and draws $3,000 per month.



<PAGE>7

Subsidiaries

Vanadium and Magnetite Exploration and Development (Pty) Ltd. (Vanmag),
a South African Corporation is owned 66.7% by Pinnacle; Diamonaire Pty
Ltd is owned 50% by the Company and Ocean Options Pty Ltd; and Titan
Intellectual Limited, a Nevada Corporation is wholly owned by Pinnacle.

Other Information

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.

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

<PAGE>8

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.

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.

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. Pinnacle pays $2,600 rent per
month for its current office space and subleases two offices for $3,000
per month including copier, fax, telephone and secretarial.  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.

Through its subsidiary, Vanmag, Pinnacle holds an exclusive 32-year
Mineral Lease on five contiguous farms near Potgietersrus, South
Africa.

Through Diamonaire Pty Ltd the Company holds Mining Contract Rights on
four Offshore Diamond Concessions.



<PAGE>9

ITEM 3.    LEGAL PROCEEDINGS.

Pinnacle entered into an agreement with Petty International Development
Corporation 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.

Toward this end Pinnacle had issued 3,000,000 shares of its common
stock but by December 1, 2001  PIDC had not performed 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.  When PIDC subsequently refused to return the shares, Pinnacle
had no alternative but to file legal action to stop PIDC from further
breaching its agreement.  A jury trial in July 2003 in the Houston
District Court resulted in a verdict favorable to Pinnacle as the jury
awarded the Company court costs of $50,000 plus $810,000 in damages as
well as the return of the shares.  The attorney must file with the
courts to obtain a judgment and has an appointment date of September
29, 2003 to perfect or amend the jury award.  Largely, the outcome is
in the hands of the presiding judge.

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

During the fourth quarter of the fiscal year ended June 30, 2003, no
matters were submitted to a vote of Pinnacle's security holders,
through the solicitation of proxies.






<PAGE>10

                    PART II

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

Market Information.   Pinnacle's common shares are listed in the over-
the-counter market.   As of June 30, 2003, there is only a limited
market for Pinnacle's common shares.

The following table sets forth the range of high and low bid quotations
for Pinnacle's common stock for each quarter of the last two fiscal
The quotations represent inter-dealer prices without retail markup,
markdown or commission, and may not necessarily represent actual
transactions.
<TABLE>
<CAPTION>
Quarter  Ended       High Bid            Low Bid

                    <c>                 <c>
3/31/01                 2.69               1.16
6/30/01                 1.31                .94
9/30/01                 1.48               1.02
12/31/01                1.02                .52
3/31/02                  .25                .09
6/30/02                  .18                .05
9/30/02                  .12                .04
12/31/02                 .07                .03
3/31/03                  .05                .03
6/30/03                  .05                .03
</TABLE>
The approximate number of holders of record of Pinnacle's $.00001 par
value common stock, as of June 30, 2003 and September 30, 2003 was 391.

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.

General Information Concerning the Company

Since inception, we have acquired interests in four South African
entities:

-   Plateau Resources (Pty) (Ltd), (Plateau);
   -   Vanadium and Magnetite Exploration and Development (Pty) (Ltd),
(VanMag);
-   Titan Processors (Pty) (Ltd), (Titan); and
-   Diamonaire Pty Ltd, a Joint Venture.

In fiscal 2002, we sold our interest in Plateau to Anooraq Resources
(Pty) (Ltd), a South African company for 7 million shares of Anooraq
common stock.   Anooraq is exploring the property.

<PAGE>11

Basis of presentation of the financial statements

Our consolidated financial statements include the financial statements
of Vanmag because we own a controlling interest in their common stock.
Our consolidated financial statements also include the financial
statements of Titan Processors even though we own no Titan voting
stock. We exercise control over Titan through a majority of the seats
on Titan's Board of Directors and through the impact of certain
commercial arrangements that give us control over their operations.  In
our view, the consolidated financial statements would be incomplete
without Titan.  Our consolidated financial statements do not include
the financial statements of Diamonaire because we share control of
Diamonaire with our joint venture partner.  Instead, we account for our
interest in Diamonaire on an equity basis.  Each accounting period, we
adjust our investment in Diamonaire to equal our 50 percent interest in
Diamonaire's net equity and we include our share of their loss in our
operations.  When we initially invested in Diamonaire, they were just
starting up and had no assets; therefore we recorded goodwill for the
excess of our investment over Diamonaire's net equity.  We review our
joint venture investment periodically for impairment.

In last fiscal year's financials, we identified ourselves as a
development stage enterprise because our planned principal operations
had not commenced.  We were devoting our time to exploring for natural
resources, raising capital and acquiring operating assets.  This fiscal
year, we have generated substantial revenues from the sale of Plateau
and have commenced operations.  Accordingly, we are no longer
considered a development stage enterprise.

Results of operations

We reported a net profit of $2,518,579 ($.14 per share) for the year
ended June 30, 2003, as compared to a net loss of $43,281 ($-0- per
share) for the year earlier period. Our net profit resulted from the
sale of a subsidiary, Plateau Resources.  When we sold Plateau last
year, we deferred our gain of approximately $3.7 million on the sale
because we received as consideration 7 million shares of stock in
Anooraq and no cash.   Our accounting policy is to recognize a portion
of the deferred gain when we sell the Anooraq stock for cash
consideration.  We also recognized a gain on the stock itself, as we
originally calculated our gain based on an Anooraq stock price of
approximately $.18 per share.  However, sales of Anooraq stock have
averaged approximately $.33 per share.  Through June 30, 2003, we have
sold 4,457,000 shares of Anooraq stock.  We had 2,543,000 shares of
Anooraq common stock remaining at June 30, 2003.  We sold those shares
in August 2003 for $.33 per share.

General and administrative expenses increased approximately 130
percent, from $239,477 for the year ended June 30, 2002, to $551,929
for the year ended June 30, 2003 primarily due to the readying for
start-up of Titan commercial operations.



<PAGE>12

Consulting expenses paid to related parties increased approximately 77
percent, from $59,000 for the year ended June 30, 2002, to $104,435 for
the year ended June 30, 2003 primarily due to the increased activity of
both Titan and Diamonaire.

Interest expense related party decreased 100 percent, from $32,500 for
the year ended June 30, 2002, to $-0- for the year ended June 30, 2003
as the underlying related party loan was repaid.

Inflation has not affected our operation.

However, the impact of a weakening US dollar has impacted our
operations.  In 2001, we could purchase 13 South African Rand for
$1.00.  As of June 30, 2003, the exchange rate was 8.5 Rand to $1.00,
seriously eroding our ability to finance South African operations.
Unrealized losses from foreign currency translations are included in
income.

Liquidity

In fiscal 2003, our ability to generate adequate amounts of cash to
meet our needs came from the sale of Anooraq common stock. Our
subsidiary (Van Mag), affiliate (Titan) and joint venture (Diamonaire)
used liquidity in the fiscal year.  Sales of Anooraq common stock
provided us with $1,533,872 in cash in fiscal 2003.   Our cash position
increased from $4,835 at June 30, 2002 to $215,919 at June 30, 2003 as
a result.

Vanmag
Pinnacle provided Vanmag with approximately $16,000 in financing during
the fiscal year.  Vanmag also sold a one third interest in its common
stock during the fiscal year which provided approximately $35,000 in
liquidity.  This subsidiary is not expected to generate cash flow until
such time as we sell it or we commence mining operations.  We are
currently applying for a mining authorization from the South African
government.  We expect the authorization to be granted in fiscal year
2004.  Subsequent to authorization, we will commence mining operations.
Profits from a sale or from mining operations would be shared (1/3rd)
with our minority interest holder.

Titan Processors
Pinnacle provided Titan with approximately $245,212 in financing during
the fiscal year which was used to complete construction of a $250,000
tantalum refinery in Johannesburg, South Africa.  Titan is expected to
begin refining tantalum and niobium early in fiscal 2004.  Pinnacle's
financing must be repaid prior to the payment of dividends to
shareholders.

Diamonaire Joint Venture
We loaned Diamonaire approximately $339,607 in during the fiscal year
which paid for the construction of diamond recovery equipment that will
be used to recover diamonds along the coastline of Africa.   Diamonaire
began diamond recovery operations in August 2004.  Our venture partner
has agreed that our loan would be repaid prior to any cash



<PAGE>13

distributions to the venture partners.  We own 50 percent of
Diamonaire.  Diamonaire in turn owns 80 percent of the operating
company, Ocean Exploration, also a South African company.

Financial condition

Investments

Our trading and available-for-sale securities are comprised exclusively
of Anooraq stock.  The fair value of our Anooraq investment decreased
from $2,975,000 (5,950,000 shares) to $819,148 (2,543,000 shares)
during the year ended June 30, 2003 due to the sale of 3,407,000 shares
of Anooraq stock and to fluctuation in the market price of the stock.
At June 30, 2003, the carrying value of the Anooraq stock is equal to
the amount we sold it for shortly after fiscal year-end.

Property and Equipment
Property and equipment increased from $5,552 at June 30, 2002 to
$246,203 at June 30, 2003.  Provisions for depreciation in fiscal 2003
and 2002 were $42,623 and $4,336, respectively.  Net property additions
were $93,369 in fiscal 2003.  We completed construction of the
aforementioned tantalum refinery in fiscal 2003.

Deferred revenue

Deferred revenue decreased from $3,258,281 at June 30, 2002 to
$1,265,549 at June 30, 2003.  We recognized the difference in fiscal
2003.  Our remaining deferred gain will be recognized in fiscal 2004,
as we sold the remaining shares of Anooraq stock in August 2003.

Net deficit of affiliate

This refers to the net deficit in equity of our affiliate, Titan
Processors.

Our strategy in the near future is to focus on developing a substantial
share of the world tantalum market and recovering diamonds using our
new equipment.  We will continue to study the feasibility of mining
magnetite and recovering the contained vanadium and titanium. Through
our association with Dr. Jan Becker, we possess a proprietary
technology to separate and recover these co-products from the iron ore.

We believe that our future success will depend on our ability to
develop our current businesses and to invest wisely in new businesses.



<PAGE>14

ITEM 7.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

   PINNACLE RESOURCES, INC.

                                                                 Page

Independent auditors' report                                     F-2

Consolidated balance sheet
  at June 30, 2003                                               F-3

Consolidated statements of operations for the years ended
   June 30, 2003 and 2002                                        F-4

Consolidated statements of changes in shareholders' equity
  for the period from July 1, 2002 through June 30, 2003         F-5

Consolidated statements of cash flows, for the years ended
  June 30, 2003 and 2002                                         F-6

Notes to consolidated financial statements                       F-7





<PAGE>15




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. and subsidiaries as of June 30, 2003 and the related
consolidated statements of operations, changes in shareholders' equity,
and cash flows for the years ended June 30, 2003 and 2002.  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, 2003 and the
results of their operations and their cash flows for the years ended
June 30, 2003 and 2002 in conformity with accounting principles
generally accepted in the United States.

Cordovano and Harvey, P.C.
Denver, Colorado
August 15, 2003

                       F-2


<PAGE>16
                PINNACLE RESOURCES, INC.
               Consolidated Balance Sheet
                        June 30, 2003
                          Assets
<TABLE>
<CAPTION>
Current assets:

                                                              <c>
 Cash                                                          $215,919
 Investment in trading securities, at fair value (Note 3)       819,148
 Accounts receivable                                             10,881
 Inventory, at cost                                              21,168
                                                              ---------
      Total current assets                                    1,067,116
Property and equipment, net of accumulated
 depreciation (Note 4)                                          246,203
Other assets:
 Investment in Joint Venture(Note 6)                            156,378
 Goodwill (Note 6)                                              177,150
 Due from related party(Note 2)                                  10,487
                                                            -----------
                                                            $ 1,657,334
                                                            ===========
            Liabilities and Shareholders' Deficit

Current liabilities:
 Accounts payable and accrued liabilities                    $   13,856
 Other current liabilities                                      128,303
 Due to related party (Note 2)                                   12,000
 Deferred revenue (Note 3)                                    1,265,549
                                                            -----------
      Total current liabilities                               1,419,708

Minority interest in net deficit of
   consolidated subsidiary                                      (21,090)
                                                            -----------

Shareholders' deficit (Note 6 & 7):
 Net deficit of affiliate                                       (34,842)
 Preferred stock , $.01 par value;  authorized 2,000,000 shares,
  issued and outstanding -0- shares                                   -
 Common stock , $.00001 par value;  authorized 500,000,000
   shares, issued and outstanding 17,543,050 shares                 175
 Additional paid-in capital                                   3,060,173
 Accumulated comprehensive income(loss)                          (4,833)
 Accumulated deficit                                         (2,761,957)
                                                            -----------
      Total shareholders' equity                                258,716
                                                            -----------
                                                            $ 1,657,334
                                                            ===========
</TABLE>
See accompanying notes to consolidated
   financial statements
                             F-3


<PAGE>17
                         PINNACLE RESOURCES, INC.
                   Consolidated Statements of Operations
<TABLE>
<CAPTION>
                                        Years Ended June 30,
                                        --------------------
                                        2003            2002
                                        ----            ----

                                      <c>            <c>
Operating expenses:
 Prospecting costs                      $ 13,399     $ 22,934
 General and administrative costs        551,929      411,757
 Consulting expenses paid to
    related parties (Note 2)             104,435       59,000
 Equity in losses of joint venture        42,922            -
 Stock-based compensation:
  Professional services                    2,700       48,000
                                       ---------    ---------
       Total operating expenses          715,385      541,692
                                       ---------    ---------
Income/loss before income taxes,
  nonoperating income, interest expense
  and minority interest                 (715,385)    (541,692)
Non-operating income:
 Gain on sale of subsidiary (Note 3)   1,722,031      522,543
 Gain on sale of securities,
   net (Note 3)                        1,502,188            -
 Other nonoperating income
   (expense), net                              -       13,525
 Interest income(expense), net:
  Related party (Note 2)                  24,445      (32,500)
  Other                                   (8,009)      (5,158)
                                       ---------    ---------
     Income/loss before
       income taxes and
         minority interest             2,525,269      (43,281)

 Income tax provision (Note 8)                 -            -
                                       ---------    ---------
     Income/loss before
       Minority interest               2,525,269    $ (43,281)

Minority interest in net loss
   of consolidated subsidiary(Note 6)     (6,690)           -
                                      ==========    =========
      Net income/loss                 $2,518,579    $ (43,281)

Basic and diluted loss per share      $     0.14    $   (0.00)
                                      ==========    =========
Weighted average common shares
   Outstanding                        17,388,383   15,254,717
                                      ==========   ==========
</TABLE>
See accompanying notes to consolidated financial statements
                                 F-4

<PAGE>18

            PINNACLE RESOURCES, INC.
      CONSOLIDATED STATEMENTS OF CHANGES IN
             SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                  Common Stock
                                                     Titan       ------------
                                                  Processors      Shares     Amount
                                                  ----------      -------   --------

                                                   <c>            <c>        <c>
     BALANCE, July 1, 2001                             -         11,950,050  $     120

July 2001, shares of common stock placed
  in escrow (Note 7)                                   -          1,835,000         18
January 2002, shares of common stock placed
  in escrow Note 7)                                    -          3,000,000         30
February 2002, exercise of options at $.01
 (Note 7)                                              -            100,000          1
March 2002, conversion of debenture (Note 7)           -                  -          -
March 2002, issuance of common stock in
  payment of interest at $.13 per share (Note 2)       -            250,000          2
April 2002, issuance of common stock in
  exchange for property at $.07 per share
   (Note 2)                                             -            18,000          1
June 2002, conversion of debenture (Note 8)             -           100,000          1
Comprehensive income
  Net loss for the year ended June 30, 2002             -                 -          -
  Net unrealized holding gain                           -                 -          -
  Cumulative translation adjustment                     -                 -          -
Comprehensive loss                                      -                 -          -
                                                ---------        ----------  ---------
       Balance, June 30, 2002                           -        17,253,050   $    173

Issuance of common stock in
   exchange for joint venture at $.03 per
   share (Note 7)                                       -           200,000          1
Issuance of common stock in
   exchange for services at $.03 per share
   (Note 7)                                             -            90,000          1
Expiration of common stock options                      -                 -          -
Net deficit of affiliate                          (34,842)                -          -
Comprehensive income:
   Net income for the year ended June 30, 2003          -                 -          -
   Net unrealized holding gain                          -                 -          -
   Cumulative translation adjustment                    -                 -          -
Comprehensive loss                                      -                 -          -
                                                ---------        ----------   --------
        Balance, June 30, 2003                  $ (34,842)       17,543,050   $    175
                                                =========        ==========   ========
</TABLE>



<PAGE>19

              PINNACLE RESOURCES, INC.
      CONSOLIDATED STATEMENTS OF CHANGES IN
             SHAREHOLDERS' EQUITY
                   continued
<TABLE>
<CAPTION>
                                                                             Other
                                                                         Comprehensive
                                                                            Income
                                                                         -----------
                                       Outstanding  Additional              Foreign
                                         Stock      Paid-in  Accumulated    Currency
                                        Options    Capital     Deficit    Translation
                                        -------    -------     ---------- -----------

                                       <c>       <c>         <c>           <c>
BALANCE, July 1, 2001               $ 47,165   $2,764,603  $(5,237,255)  $ 287,068

July 2001, shares of common stock
  placed in escrow (Note 7)                -           (18)           -           -
January 2002, shares of common stock
  placed in escrow Note 7)                 -           (30)           -           -
February 2002, exercise of options
  at $.01 (Note 7)                         -        24,999            -           -
March 2002, conversion of debenture
  (Note 7)                                 -       156,000            -           -
  Payment of interest at $.13 per
   share (Note 2)                          -        32,498            -           -
April 2002, issuance of common stock in
  exchange for property at $.07 per share
   (Note 2)                                -         1,259            -           -
June 2002, conversion of debenture
   (Note 8)                                -        24,999            -           -
Comprehensive income
  Net loss for the year ended
    June 30, 2002                          -             -      (43,281)          -
  Net unrealized holding gain              -             -            -           -
  Cumulative translation adjustment        -             -            -    (280,160)
Comprehensive loss                         -             -            -           -
                                   ---------    ----------  -----------   ---------
       Balance, June 30, 2002         47,165    $3,004,310  $(5,280,536)   $  6,908

Issuance of common stock in
   exchange for joint venture at
   $.03 per share (Note 7 )                 -         5,999            -           -
Issuance of common stock in
   exchange for services at
   $.03 per share (Note 7)                 -         2,699            -           -
Expiration of common stock options   (47,165)       47,165            -           -
Net deficit of affiliate                   -             -            -           -
Comprehensive income:
   Net income for the year ended
      June 30, 2003                        -             -    2,518,579           -
   Net unrealized holding gain             -             -            -           -



<PAGE>20

             PINNACLE RESOURCES, INC.
      CONSOLIDATED STATEMENTS OF CHANGES IN
             SHAREHOLDERS' EQUITY
                   continued

   Cumulative translation adjustment       -             -            -     (11,741)
Comprehensive loss                         -             -            -           -
                                     -------    ----------  -----------     -------
        Balance, June 30, 2003             -     3,060,173  $(2,761,957)    $(4,833)
                                     =======    ==========  ===========     =======
</TABLE>


<PAGE>21

            PINNACLE RESOURCES, INC.
      CONSOLIDATED STATEMENTS OF CHANGES IN
             SHAREHOLDERS' EQUITY
                   continued
<TABLE>
<CAPTION>
                                                           Other
                                                        Comprehensive
                                                           Income
                                                        -------------
                                                          Unrealized
                                                           Holding
                                                            Gain             Total
                                                       ---------------    -----------

                                                          <c>              <c>
BALANCE, July 1, 2001                                              -       (2,138,299)
July 2001, shares of common stock
  placed in escrow (Note 7)                                        -                -
January 2002, shares of common stock
  placed in escrow Note 7)                                         -                -
February 2002, exercise of options
 at $.01 (Note 7)                                                  -           25,000
March 2002, conversion of debenture
  (Note 7)                                                         -          156,000
  Payment of interest at $.13 per
   share (Note 2)                                                  -           32,500
April 2002, issuance of common stock in
  exchange for property at $.07 per share
   (Note 2)                                                        -            1,260
June 2002, conversion of debenture
   (Note 8)                                                        -           25,000
Comprehensive income
  Net loss for the year ended
    June 30, 2002                                                  -          (43,281)
  Net unrealized holding gain                              2,100,000        2,100,000
  Cumulative translation adjustment                                -         (280,160)
                                                                            ---------
Comprehensive loss                                                 -        1,776,559
                                                         -----------        ---------
       Balance, June 30, 2002                              2,100,000        $(121,980)
                                                         ===========        =========
Issuance of common stock in
   exchange for joint venture at
   $.03 per share (Note 7)                                         -            6,000
Issuance of common stock in
   exchange for services at
   $.03 per share (Note 7)                                         -            2,700
Expiration of common stock options                                 -                -
Net deficit of affiliate                                           -          (34,842)
Comprehensive income:
   Net income for the year ended
      June 30, 2003                                                -        2,518,579
   Net unrealized holding gain                            (2,100,000)      (2,100,000)



<PAGE>22

              PINNACLE RESOURCES, INC.
      CONSOLIDATED STATEMENTS OF CHANGES IN
             SHAREHOLDERS' EQUITY
                   continued

   Cumulative translation adjustment                                -         (11,741)
                                                                            ---------
Comprehensive loss                                                  -         406,838
                                                          -----------       ---------
        Balance, June 30, 2003                                      -         258,716
                                                          ===========         =======

</TABLE>

See accompanying notes to the consolidated
  financial statements

                      F-6





<PAGE>23

PINNACLE RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                        For the Years Ended June 30
                                        ---------------------------
                                              2003        2002
                                         -----------    -----------

                                           <c>            <c>
Cash flows from operating activities:
 Net income/loss                            $2,518,579 $ (43,281)
  Adjustments to reconcile net loss
  to cash flows from operating
  activities:
   Common stock issued for services
    (Note 8)                                     2,700    48,000
   Depreciation and amortization                42,623     4,336
   Share of loss in joint venture               42,922         -
   Cash received from the sale of
      trading securities                     1,533,872   297,155
   Changes in current assets and
    current liabilities:
     Gain on sale of trading securities
       (Note 3)                             (1,502,188)        -
     Gain on sale of
       subsidiary                           (1,722,031) (522,543)
     Purchase of Inventory                     (21,168)        -
     Increase in receivables and other
       Current assets                         (124,282)  (82,905)
     Increase in accounts payable
      and accrued liabilities                 (325,251)  459,573
                                             ---------   -------
        Net cash provided by (used
         in) operating activities              445,776   160,335
                                             ---------   -------
Cash flows from investing activities:
  Purchase of equipment                        (98,369)   (3,182)
 Net advances made to joint venture
   partners                                   (339,607) (150,000)
 Purchase of subsidiary, cash
   received                                      6,090         -
                                              --------   -------
        Net cash used in investing
         activities                           (431,886) (153,182)
                                              --------   -------
Cash flows from financing activities:
 Advances from officer/shareholder                   -   250,000
 Repayment of advances                               -  (250,000)
 Proceeds from loans                           252,418         -
 Principal payments on capital lease                 -    (1,910)
 Proceeds from line of credit                        -    90,816
 Principal payments on line of credit          (43,483)  (47,333)



<PAGE>24

PINNACLE RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Continued

 Cash proceeds from sale of common
  stock                                              -   158,000
                                              --------   -------
        Net cash provided by
         financing activities                  208,935   199,573
                                              --------   -------
   Cumulative translation adjustment           (11,741) (280,160)
                                              --------   -------
       Net change in cash                      211,084   (73,434)

Cash:
 Beginning of period                             4,835    78,269
                                              --------   -------
 End of period                                $215,919   $ 4,835
                                              ========   =======
Supplemental disclosure of cash
   flow information:
 Cash paid during the year for:
  Interest                                    $  8,009   $     -
                                              ========   =======
  Income taxes                                $      -   $     -
                                              ========   =======
Non-cash financing and investing activities:

 Acquisition of subsidiaries in
   exchange for common stock                  $  6,000   $     -
                                              ========   ========
Sale of subsidiary for marketable
   securities                                 $      - $3,780,775
                                              ======== ==========
 Acquisition of property and
   equipment for common stock                 $      - $   (1,262)
                                              ======== ==========
</TABLE>

See accompanying notes to the consolidated
       financial statements

                      F-7



<PAGE>25

Note 1:  Organization, business and summary of significant accounting
policies

Pinnacle Resources, Inc. (the "Company") was incorporated under the
laws of Wyoming in January 1995.  The Company is engaged in (1)
exploring for and developing natural resources; and (2) chemical
refining.

Basis of presentation

The consolidated financial statements include the accounts of the
Company, its and its wholly owned subsidiary; Vanadium and Magnetite
Exploration & Development Co. (Pty) (Ltd) (a South African Company)
("Van Mag").   The consolidated financial statements also include the
accounts of Titan Processors (Pty) (Ltd), a South African company,
which is controlled by the Company's Board of Directors.  All
significant intercompany balances and transactions have been eliminated
in consolidation and combination.

Prior to July 1, 2002, the Company was in the development stage.

Use of estimates

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

Cash equivalents

For the purposes of the consolidated 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, 2003.

Marketable equity securities

Investments in marketable equity securities are initially recorded at
acquisition cost.  In August 2001, through the sale of a consolidated
subsidiary, the Company received 7.5 million shares of Anooraq common
stock.  Anooraq is a small company whose stock is traded on the
Canadian Stock Exchange (see Note 3).  The acquisition cost of the
investment was calculated using the collateral value of the Anooraq
shares.  The quoted market price was not used because of a restrictive
covenant imposed through the exchange agreement on the Company's
ability to sell its shares.  The restriction was lifted in April 2002,
at which time the Company valued its investment at fair value using the
quoted market price of the Anooraq shares of common stock.



<PAGE>26

The Company classified all shares of Anooraq common stock held for
current resale as "trading securities" and reported those shares at
their fair value (or, quoted market price) at June 30, 2003.  The fair
value was determined using the price at which the final tranche was
sold shortly after our fiscal year's end.  Unrealized holding gains and
losses are included in the determination of current period earnings.

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.

Investment in joint venture

Investments in joint ventures are accounted for using the equity method
of accounting.  The Company reports its investment in joint ventures on
the consolidated balance sheet as "Investment in joint venture" and its
share of the joint venture's earnings or losses as "Equity in losses of
joint venture, net" on the consolidated statements of operations.  The
difference between the acquisition cost of the joint venture interest
and the Company's amount of equity in the net assets of the joint
venture was accounted for as goodwill.  Goodwill is an intangible asset
not subject to amortization.  Instead, each year the Company tests the
goodwill for impairment by evaluating the remaining useful life of the
investment in the joint venture.

Net income per share

The Company reports net income per share in accordance with SFAS No.
128, "Earnings per Share".  Under SFAS 128, net income (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 income (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, 2003, the Company had
1,000,000 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

<PAGE>27

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 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

The Company's financial instruments, including cash and accounts
payable and other accrued liabilities are carried at cost, which
approximates their fair value due to the short-term maturity of these
instruments.  The capital lease obligation is carried at cost, which
approximates fair value due to the prevailing market rate for similar
instruments.

Short and long-term investments include marketable securities which are
classified as trading and available-for-sale and are reported at fair
value.

Concentrations of operations outside the Company's home country

Substantially all of the Company's development stage activities were
conducted in the Republic of South Africa.  As such the Company is a
foreign corporation and is subject to the laws and rules, including the
currency restrictions and tax laws, of that country.

Foreign currency translation

Assets and liabilities of non-US. subsidiaries are translated to US
Dollars at end-of-period exchange rates.  The effects of this
translation for non-US. subsidiaries are reported in other
comprehensive income (loss).  Remeasurement of assets and liabilities
of non-US. subsidiaries that use a currency other than the US dollar as
their functional currency are included in income as transaction gains
and losses.  Income statement elements of all non-US. subsidiaries are
translated to US Dollars at average-period exchange rates and are
recognized as part of revenues, costs and expenses.  The functional
currency of the Company's foreign subsidiaries is the local currency,
the South African Rand.

Note 2:  Related party transactions

During the year ended June 30, 2003, the Company provided venture debt
financing totalling $339,607 to Diamonaire Exploration (Pty) (Ltd) to
fund its start up costs.  Diamonaire is a joint venture with Ocean
Options (Pty) (Ltd).  According to the joint venture agreement, the
advances carry an interest rate of 10 percent and are to be repaid in
US dollars.  The loan must be repaid prior to any distributions to the
joint-venturers.  The Company accrued approximately $24,500 in interest
receivable through June 30, 2003.



<PAGE>28

During the years ended June 30, 2003 and 2002, the Company paid an
affiliated company $66,000 and $51,000, respectively, for consulting
services.  The president of the Company controls the affiliate.

During the years ended June 30, 2003 and 2002, a director of the
Company was paid $38,435 and $8,000, respectively, for consulting
services.  The consulting services were for due diligence
investigations on potential mining projects and other administrative
services.

During the year ended June 30, 2002, the Company paid $10,487 in legal
expenses on behalf of the president of the Company.  These payments were
recorded as due from related party in the accompanying financial statements.

The president of the Company guarantees a $20,000 line of credit with a
financial institution.   The president of the Company and an officer,
together, guarantee a $50,000 line of credit with a financial institution.
See Note 5 for details of the lines of credit.

Note 3:  Investments

Investments as of June 30, 2003, consisted of the following:

                              No. of          Fair        Cost
                              Shares         Value        Basis
                              ------         -----        -----

Anooraq Resources (Pty)
  common stock              2,543,000     $819,148     $819,148
                            =========     ========     ========

The fair value is equal to the cost basis because management valued the
remaining 2,543,000 shares of Anooraq common stock at $.33 per share
based on a subsequent sale.  The Company received proceeds of $819,148
from the sale of all 2,543,000 shares on August 8, 2003 (See Note 9).

                              No. of                      Available-
                              Shares          Trading      for-Sale
                              ------          -------     ----------
Gross realized gain from
   Sales                    3,407,000         $1,502,188   $      -
                            =========         ==========   ========

On August 30, 1999 the Company purchased all of the outstanding common
stock of Plateau Resources (Pty) (Ltd) in exchange for 1,500,000 shares
of the Company's common stock valued at $375,000. 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 August 2001,
after Anooraq had acquired approximately 35 percent of Plateau's common
stock, the Company exchanged its remaining shares of Plateau's common
stock (65 percent) for 7 million shares of Anooraq's common stock.  The
transaction was accounted for as a tax-free exchange.  The Company and



<PAGE>29

Anooraq signed a Cooperative Agreement as part of the sale, which put
significant restrictions on the Company's ability to (1) sell its
Anooraq common stock in the open market; and (2) vote its ownership
shares.

Initially, the Company deferred all of its gain, totaling $3,780,775,
on the sale of Plateau.  The Company recognized a pro-rata portion of
the gain as it sold its Anooraq shares.  Deferred tax liabilities
related to the sale of Plateau in the amount of $1,219,267 were offset
by prior years' income tax asset allowances.

As of June 30, 2003, the Company's deferred gain from the disposition
of Plateau totaled $1,265,549.  The Company sold 3,407,000 shares for
$1,533,872 and recognized a gain on the sale of Plateau of $1,722,031
during fiscal year 2003.  The Company sold 1,050,000 shares for
$297,155 and recognized a gain on the sale of Plateau of $522,543
during fiscal year 2002.

Note 4:  Property and equipment

Property and equipment, at June 30, 2003, consisted of the following:

Plant and equipment               $  252,428
Office equipment                      21,525
Furniture                             28,830
                                  ----------
                                     302,783
Less accumulated depreciation        (56,580)
                                  ----------
                                  $  246,203
                                  ==========

Depreciation expense for the years ended June 30, 2003 and 2002 totaled
$42,623 and $4,336, respectively.

Note 5:  Credit lines

The Company has four lines of credit totaling $100,000 of which
$100,000 was unused at June 30, 2003.  Advances made under the lines of
credit carry interest rates of prime plus from one to three percent and
may be extended annually with the consent of the financial institution.
The credit lines are personally guaranteed by the president of the
Company and an officer of the Company.

Note 6:  Foreign operations

Titan Processors (Pty) (Ltd)

In February 2002, the Company acquired certain intellectual property
from a South African inventor for cash, shares of the Company's common
stock and options to purchase the Company's common stock.



<PAGE>30

The stock options granted vest based on the following performance
schedule:

 Number of      Option
  Shares         Price                     Performance Target
 ---------      ------                     ------------------
   100,000      $  0.01    Execution of intellectual property licensing
                             agreement
   100,000      $  0.01    Tantalite refinery becoming operational
   100,000      $  0.01    Repayment of project funding
   700,000      $  0.01    1 million options for each $1 million in
   -------                   Titan profits
 1,000,000
 =========

Any exercised shares have a resale restriction period of two years and
a restriction on the number of shares to be sold during a certain time
period. In February 2002, the inventor exercised an option to purchase
100,000 shares upon execution of the intellectual property licensing
agreement and 100,000 shares upon the tantalite refinery becoming
operational.   The Company recorded $48,000 in stock-based compensation
related to the vesting of the options.  The intellectual property
consisted of a method to refine vanadium, titanium and tantalum ores.
Tantalum is a precious metal material used in electronics and space
industry.

In July 2002, the Company licensed the intellectual property to Titan
Processors (Pty) Limited (Titan), a newly formed South African company,
100 percent owned by a South African mining group in exchange for a
royalty of $1.00 per pound of tantalum oxide produced and sold under
the license and a percentage of Titan's net profits.  In addition, the
Company agreed to fund the start up cost of a refinery.   The South
African mining group agreed to provide the equipment and mining license
to build a tantalite refinery utilizing the licensed technology in the
Northern Province of South Africa.  The licensing agreement expires in
ten years.  The Company also obtained control of Titan's board of
directors.   Although the Company owns no Titan voting stock, the
Company's control of the Board of Directors and the impact of certain
commercial arrangements result in the Company having control over the
operations of the affiliate.  Accordingly, Titan's financial statements
are combined and included in the accompanying consolidated financial
statements.

Vanadium and Magnetite Exploration & Development Co. (Pty) (Ltd)

On September 25, 2000, the Company purchased all of the outstanding
common stock of Vanadium and Magnetite Exploration & Development Co.
(Pty) (Ltd) ("Vanmag"), a South African corporation, in exchange for
4,000,000 shares of the Company's common stock. Vanmag holds a mineral
lease on land in South Africa that contains known quantities of
vanadium.  The Company has paid certain prospecting and lease costs
since its purchase.  However, Vanmag is awaiting regulatory approval to
commence mining operations.


<PAGE>31

In January 2003, Vanmag sold 1,500 shares of its common stock to
Corridor Mining Resources (Pty) (Ltd), a South African corporation.  As
a result, the Company's percentage ownership of Vanmag decreased from
100 percent to approximately 67 percent.  The Company recorded an
unrealized gain on the sale of Vanmag's stock representing the
difference between the Company's carrying basis and the fair value of
the portion of the Vanmag investment deemed to have been sold.
Accordingly, the consolidated financial statements recognize Corridor's
interest in Vanmag's net assets and Corridor's pro-rata share of
Vanmag's net losses.

Joint Venture

In July 2002, the Company and Ocean Options (Pty) (Ltd), a South
African corporation, formed Diamonaire Exploration (Pty) (Ltd),
pursuant to the terms of a joint venture agreement.   The Company and
Ocean Options each own 50 percent of the outstanding common stock of
Diamonaire.  Diamonaire owns 80 percent of the outstanding common stock
of Ocean Exploration (Pty) (Ltd), a South African corporation, formed
to explore for and mine diamonds in the ocean using certain new
technology called the "Aqua Walker."  Ocean Options provided the
engineering for the Aqua Walker and the Company agreed to contribute
the construction funds.  Ocean Exploration, the Operating company, is
presently conducting trial runs of the Aqua Walker off the west coast
of South Africa.

At June 30, 2003, the difference between the amount at which the
investment was carried on the Company's books and the amount of
underlying equity in net assets of Diamonaire was treated as goodwill.
Goodwill will not be amortized but will be tested for impairment as
often as necessary and at the end of each accounting period.

Following is the summarized financial information of Diamonaire as of
June 30, 2003 and for the period then ended:

Property and equipment, net     $318,762
Receivables                     $ 25,205
Total assets                    $343,966
Current liabilities             $    676
Long-term debt                  $ 89,527
Net assets                      $253,764
Interest income                 $  6,798
Expenses                        $ 57,366
Net deficit for the period      $(85,853)

Note 7:  Shareholders' equity

During the year ended June 30, 2003, the Company issued 200,000 shares
to Ocean Options in exchange for its stock in Diamonaire, a joint
venture.  The shares were valued at the quoted market price on the day
of issuance.

During the year ended June 30, 2003, the Company issued 90,000 and
shares to consultants for valued at $2,700.  The shares were valued at
the quoted market price on the day of issuance.

<PAGE>32

In July 2001, the Company placed an additional 1,835,000 shares of
common stock in escrow with Harris County Circuit Court in Houston,
Texas.  As of June 30, 2002, there are a total of 2,835,000 shares of
the Company's common stock in escrow with the Court pending resolution
of a dispute between the Company and Petty International Development
Corporation.

In September 2001, the Company placed 3,000,000 shares of its common
stock in escrow to secure debentures to be issued by Titan.  On
February 25, 2002, Titan issued an 8 percent $200,000 convertible
redeemable debenture which was due February 25, 2004. The $1 million
debenture was subscribed by RIM Capital Holdings, LLC., RCG, LLC and
RIM CG LLC.  Titan received $156,000 during the quarter ended March 31,
2002, for the first tranche of the debenture net of $44,000 in related
debt issue costs. The debenture holders subsequently requested
conversion of the $200,000 debenture.  A dispute arose regarding the
number of shares to be converted. The Company settled the matter by
agreeing to issue the 3,000,000 shares in escrow to the purchasers and
discontinue the remaining debentures. This transaction was recorded as
a sale of 3,000,000 shares of the Company's common stock for $156,000.

Stock options

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 Company recorded an expense for the
estimated fair value of the options.   All of the stock options were
fully vested on the date of grant.  The options expired on November
2002.

On October 2, 2002, the Company granted a Director an option to acquire
1,000,000 shares of the Company's common stock at $.05 per share.  The
option vested on the date of grant and expires in October 2007.  The
quoted market price of the Company's stock on the date of grant was
$.04 per share.  The Company elected to not expense the option.  The
fair value of the option was estimated at $11,000.  The effect of
expensing the stock option on reported net income and earnings per
share would have been:

                                Net      Earnings per
                              Income       Share
As reported                  $2,518,579   $  0.14
                             ==========   =======
Pro forma                    $2,507,579   $  0.14
                             ==========   =======

The fair value for these options was estimated at the date of grant
using the Black-Scholes option-pricing model with the following
assumptions:





<PAGE>33

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 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.

The following schedule summarizes the changes in the Company's
outstanding stock options:

                                   Options Outstanding and
                                        Exercisable            Weighted
                                   -----------------------     Average
                                 Number of   Exercise Price  Exercise
Price
                                  Shares      Per Share       Per Share
                                 ---------   --------------  ----------
Balance at June 30, 2001          19,000      $   4.00        $   4.00
  Options granted                200,000      $      -        $      -
  Options exercised             (200,000)     $   0.01        $   0.01
  Options expired                      -      $      -        $      -
                                 -------      --------        --------

Balance at June 30, 2002          19,000      $   4.00        $   4.00
  Options granted              1,000,000      $    .05        $    .05
  Options exercised                    -      $      -        $      -
  Options expired                (19,000)     $   4.00        $   4.00
                               ---------      --------        --------

Balance at June 30, 2003       1,000,000      $   0.05        $   0.05
                               =========      ========        ========

Note 8:  Income taxes

A reconciliation of the US statutory federal income tax rate to the
effective tax rate is as follows:



<PAGE>34

                                     For the years Ended
                                          June 30,
                                     -------------------
                                     2003            2002
                                    ------          ------
U.S. federal statutory graduated
   rate                              34.00%        34.00%
Deferred income related to
   Consolidated subsidiary          -14.57          0.00%
State income tax rate,
   net of federal benefit             3.14%         3.14%
Net operating loss for which no tax
   benefit is currently available   -22.57%       -37.14%
                                    ------         -----
                                      0.00%         0.00%
                                    ======         =====


At June 30, 2003, deferred tax assets consisted of a net tax asset of
$1,428,798, due to operating loss carry forwards of $1,197,629, which
was fully allowed for, in the valuation allowance of $1,197,629.  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, 2003 and 2002 totaled $(568,389) and
$1,285,344, respectively.  The current tax benefit also totaled
$568,389 and $1,285,344 for the years ended June 30, 2003 and 2002,
respectively.  The net operating loss carry forward expires through the
year 2023.

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.

Note 9:  Subsequent events

In August 2003, the Company sold all of its remaining shares of Anooraq
common stock at $.33 per share for gross proceeds of $819,148.





<PAGE>35

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>36

                                  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 59     President, Director       From June 26, 1997
                        Chief Executive Officer        to present

Robert A. Hildebrand,
   age 77              Vice President, Director       From Inception
                         Secretary/Treasurer             to present
                       Chief Financial Officer
                           President                  From Inception
                                                     to June 26, 1997

</TABLE>
On August 7, 2002, Terryl K. Jensen resigned as a director of Pinnacle
for personal reasons.

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
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

<PAGE>37

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.
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, Professional Engineer, B.Sc., -Vice President,
Chief Financial Officer and Director

R.A. Hildebrand is a registered professional mining engineer.  He holds
a geological engineering degree from the Colorado School of Mines and a
completion certificate from LaSalle University in business
administration.  He has been active in mineral exploration and
production for 49 years having held operating and executive positions
with both major and junior, publicly-held mining companies operating in
Africa, South America, China and North America.

From 1996 to 1998 Mr. Hildebrand served as vice president and treasurer
for the Environmental Assurance Corporation, a private company engaged
in the reclamation and financing of contaminated real estate.  He also
acted for eleven years (1980 to 1991) as the Consul (Hon.) of the
Netherlands for Colorado, New Mexico and Wyoming.  In 1991, Her Majesty
Queen Beatrix appointed Mr. Hildebrand a knight in The Order of Oranje-
Nassau.

Mr. Hildebrand is, or was within the past years, an officer and/or
director of the following public companies:  Anooraq Resources, General
Mining Company, Resource Finance Group Ltd., International Methane
Company and Polaris Resources, Inc.

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.

<PAGE>38

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.

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

ITEM  10.    EXECUTIVE COMPENSATION

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

<PAGE>39

the amount justify the salary demands, the key management of Pinnacle
would be compensated according to their duties.  No specific details
have been determined.

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, 2002, 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.
<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                    12.75%

Robert A. Hildebrand
405 Detroit Street
Englewood, CO 80206                 50,000                     .29%*

Beverly Jo Gamble
12892 Sierra Circle
Parker, CO 80134                   200,000                    1.16%

Mel Keller
R.R. 1 Box
Blairsburg, IA                     840,000                   4.87%

Victory Minerals Corp.
7345 E. Peakview
Englewood, Co 80111              2,000,000                   11.59%%

Re-Group, Inc.
9600 E. Arapahoe Road
#260
Englewood, CO 80112                266,000                    1.54%

All Directors & Officers
as a group (2 persons)           4,450,000                   25.79%

* Mr. R.A. Hildebrand has an option to acquire 1,000,000 common shares
at $.05      per share.
</TABLE>



<PAGE>40

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.

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.

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
former 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.

During the years ended June 30, 2003 and 2002, Pinnacle paid Victory
Minerals, an affiliated company $51,000 and $51,300, respectively, for
consulting services.  Mr. Gamble, president of Pinnacle controls the
affiliate.

During the years ended June 30, 2003 and 2002, R.A. Hildebrand, an
officer of Pinnacle was paid $18,000 and $8,000.00, respectively for
consulting services.  The consulting services were for due diligence
investigations on potential mining projects and administrative
services.

Terryl Jensen, a former director of Pinnacle lent $250,000 to Pinnacle
in December 2001.   Pinnacle repaid the loan in April 2002, plus
250,000 common shares valued at $32,500 representing interest.

<PAGE>41

During the year ended June 30, 2002, Pinnacle paid $3,843 in personal
debt of Glen R. Gamble, president of Pinnacle.  These payments were
recorded as compensation expense in the financial statements.

During the year ended June 30, 2002, Pinnacle paid $2,864 in legal
expenses on behalf of Glen R. Gamble, president of Pinnacle.   These
payments were recorded as due from related party in the financial
statements.

During the year ended June 30, 2002, Mr. Gamble guaranteed a $20,000
loan agreement and a $20,000 line of credit with a financial
institution.   Mr. Gamble and R.A. Hildebrand, an officer, together,
guaranteed a $50,000 line of credit with a financial institution.

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 non-interest bearing.   The advances are
included in the financial statements as advances payable to shareholder
and officer of subsidiary.   The Plateau shareholder/officer
subordinated repayment of the advances in favor the creditors of
Plateau until such time as the assets of Plateau, fairly valued, exceed
its liabilities.   Pinnacle sold its subsidiary, Plateau in August
2001.

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.



<PAGE>42

(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.
 (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
None



<PAGE>43

                 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:    September 30, 2003

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                                 9/30/2003
- ------------------------------
Glen R. Gamble
President  and  Director
(chief executive officer)


/s/ Robert A. Hildebrand                            9/30/2003
- ------------------------------
Date:
Robert A. Hildebrand
Secretary/Treasurer and Director
(Chief Financial Officer)
</TABLE>