FORM 10-QSB


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

          [X] QUARTERLY REPORT PURUSANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended March 31, 1999
                                       OR
            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
        For the transition period from ______________ to _______________


                          GOLDEN QUEEN MINING CO. LTD.
             (Exact name of registrant as specified in its charter)


  Province of British Columbia            0-21777              Not Applicable
 (State or other jurisdiction     (Commission File Number)     (IRS Employer
      of incorporation)                                      Identification No.)

                          104 South Freya, Suite 211-A
                               Green Flag Building
                            Spokane, Washington 99202
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (509) 535-4022

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to section 12(g) of the Act:
                         Common Stock, without par value

Indicate by check mark whether the issuer (1) has filed all reports  required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

The number of outstanding shares of the issuer's common stock at May 7, 1999 was
34,796,641 shares.

Transitional Small Business Disclosure Format:  Yes [ ]   No [X]


<PAGE>

                          GOLDEN QUEEN MINING CO. LTD.
                QUARTERLY REPORT ON FORM 10-QSB FOR THE QUARTERLY
                           PERIOD ENDED MARCH 31, 1999


                                TABLE OF CONTENTS




PART I:  Financial Information                                           Page

    Item 1:  Consolidated Financial Statements ...........................  1
    Item 2:  Management's Discussion and Analysis or Plan of Operations .. 11


Part II:  Other Information

    Item 6:  Exhibits and Reports on Form 8-K ............................ 14

SIGNATURES ............................................................... 15

EXHIBIT NO. 27 ........................................................... 16


                                       i

<PAGE>

                                     PART I

ITEM 1.  FINANCIAL STATEMENTS


The unaudited  consolidated  financial statements of the Company for the periods
covered by this report are set forth at pages 2 through 9.





          [The balance of this page has been intentionally left blank.]

                                       1

<PAGE>

<TABLE>
<CAPTION>
                          GOLDEN QUEEN MINING CO. LTD.
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                                 (U.S. DOLLARS)



                                                        March 31,     December 31,
                                                          1999           1998
                                                       (unaudited)     (audited)
                                                      ------------    ------------
<S>                                                   <C>             <C>         
Assets
  Current assets:
   Cash and cash equivalents                          $  1,163,737    $  1,197,029
   Receivables                                               5,291          12,692
   Prepaid expenses and other current assets                38,039          72,942
                                                      ------------    ------------

   Total current assets                                  1,207,067       1,282,663

   Property and equipment, net                           1,074,520       1,090,536
   Mineral properties                                   24,617,828      24,148,316
   Other assets                                            921,576         921,576
                                                      ------------    ------------

                                                      $ 27,820,991    $ 27,443,091
                                                      ============    ============

Liabilities and Shareholders' Equity

  Current liabilities:
   Accounts payable                                   $     51,487    $     87,201
   Accrued liabilities                                      23,768          43,948
   Current maturities of long-term debt                     46,074          51,686
                                                      ------------    ------------

  Total current liabilities                                121,329         182,835

  Long-term debt, less current maturities                  799,123         807,750
                                                      ------------    ------------

  Total liabilities                                        920,452         990,585
                                                      ------------    ------------

  Commitments and contingencies

Shareholders' equity:
  Preferred shares, no par, 3,000,000 shares
   authorized; no shares outstanding                            --              --
  Common shares, no par, 100,000,000 shares
   authorized; 34,796,641 shares issued (Note 2)        34,168,458      30,805,074
  Receivable from sale of special warrants (Note 2)     (2,680,732)             --
  Deficit accumulated during the development stage      (4,587,187)     (4,352,568)
                                                      ------------    ------------

  Total shareholders' equity                            26,900,539      26,452,506
                                                      ------------    ------------

                                                      $ 27,820,991    $ 27,443,091
                                                      ============    ============
</TABLE>

                                       2

<PAGE>

<TABLE>
<CAPTION>
                          GOLDEN QUEEN MINING CO. LTD.
                          (A DEVELOPMENT STAGE COMPANY)
                         CONSOLIDATED STATEMENTS OF LOSS
                                 (U.S. DOLLARS)

                                   (UNAUDITED)


                                                                                      Cumulative
                                                                                     Amounts From
                                                                                        Date of
                                                                                       Inception
                                                Three Month          Three Month     (November 21,
                                               Period Ended         Period Ended     1985) through
                                                 March 31,            March 31,        March 31,
                                                   1999                 1998              1999
--------------------------------------------------------------------------------------------------

<S>                                             <C>                 <C>                <C>        
General and administrative expense              $   230,197         $  216,754        $ 4,469,059
Interest expense                                                        20,583            323,485

                                                         --
Interest income                                                         (9,047)          (949,669)
                                                     (9,299)
Other expense, net                                    5,838              3,636             47,113
Abandoned mineral properties                             --                               277,251
                                                -----------         -----------       -----------



Net loss                                        $  (226,736)        $  (231,926)      $(4,167,239)
                                                ===========         ===========       ===========

Net loss per share                              $     (0.01)        $     (0.01)
                                                ===========         ===========

Weighted average shares outstanding              34,796,641          25,821,455
                                                ===========         ===========
</TABLE>

                                       3

<PAGE>

<TABLE>
<CAPTION>
                          GOLDEN QUEEN MINING CO. LTD.
                          (A DEVELOPMENT STAGE COMPANY)
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                 (U.S. DOLLARS)

                                   (UNAUDITED)

                                                                            Deficit
 From the Date of Inception                                 Receivable    Accumulated
   (November 21, 1985)                                      From Sale      During the       Total
        through                    Common                   Of Special     Development   Shareholders'
     March 31, 1999                Shares        Amount      Warrants         Stage         Equity
------------------------------------------------------------------------------------------------------
<S>                               <C>         <C>           <C>            <C>            <C>         
November 21, 1985
Issuance of common
  shares for cash                 1,425,001   $   141,313   $        --    $        --    $    141,313
Net loss for the year                    --            --            --        (15,032)        (15,032)
                                  --------------------------------------------------------------------
Balance, May 31, 1986             1,425,001       141,313            --        (15,032)        126,281
Issuance of common
  shares for cash                   550,000       256,971            --             --         256,971
Issuance of common
  shares for mineral property        25,000        13,742            --             --          13,742
Net loss for the year                    --            --            --        (58,907)        (58,907)
                                  --------------------------------------------------------------------
Balance, May 31, 1987             2,000,001       412,026            --        (73,939)        338,087
Issuance of common
  shares for cash                 1,858,748     1,753,413            --             --       1,753,413
Net income for the year                  --            --            --         38,739          38,739
                                  --------------------------------------------------------------------
Balance, May 31, 1988             3,858,749     2,165,439            --        (35,200)      2,130,239
Issuance of common
  shares for cash                 1,328,750     1,814,133            --             --       1,814,133
Issuance of common
  shares for mineral property       100,000       227,819            --             --         227,819
Net loss for the year                    --            --            --       (202,160)       (202,160)
                                  --------------------------------------------------------------------
Balance, May 31, 1989             5,287,499     4,207,391            --       (237,360)      3,970,031
Issuance of common
  shares for cash                 1,769,767     2,771,815            --             --       2,771,815
Issuance of common
  shares for mineral property         8,875        14,855            --             --          14,855
Net loss for the year                    --            --            --       (115,966)       (115,966)
                                  --------------------------------------------------------------------
Balance, May 31, 1990             7,066,141     6,994,061            --       (353,326)      6,640,735
Net income for the year                  --            --            --         28,706          28,706
                                  --------------------------------------------------------------------
Balance, May 31, 1991             7,066,141     6,994,061            --       (324,620)      6,669,441
Net loss for the year                    --            --            --       (157,931)       (157,931)
                                  --------------------------------------------------------------------
Balance, May 31, 1992             7,066,141     6,994,061            --       (482,551)      6,511,510
</TABLE>


                                                 4

<PAGE>

<TABLE>
<CAPTION>
                                     GOLDEN QUEEN MINING CO. LTD.
                                    (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                            (U.S. DOLLARS)

                                             (UNAUDITED)


                                                                          Deficit
From the Date of Inception                                 Receivable   Accumulated
   (November 21, 1985)                                      From Sale    During the       Total
        through                     Common                 Of Special    Development   Shareholders'
     March 31, 1999                 Shares       Amount     Warrants       Stage          Equity
----------------------------------------------------------------------------------------------------
<S>                               <C>              <C>           <C>      <C>              <C>      
Net loss for the year                    --            --         --      (285,391)         (285,391)
                                 -------------------------------------------------------------------
Balance, May 31, 1993             7,066,141     6,994,061         --      (767,942)        6,226,119

Issuance of common
  shares for cash                 5,834,491     1,536,260         --            --         1,536,260
Share issue costs                        --            --         --       (18,160)          (18,160)
Issuance of common
  shares for mineral property       128,493        23,795         --            --            23,795
Net loss for the year                    --            --         --      (158,193)         (158,193)
                                 -------------------------------------------------------------------
Balance, May 31, 1994            13,029,125     8,554,116         --      (944,295)        7,609,821

Issuance of common
  shares for cash                   648,900       182,866         --            --           182,866
Net loss for the year                    --            --         --      (219,576)         (219,576)
                                 -------------------------------------------------------------------
Balance, May 31, 1995            13,678,025     8,736,982         --    (1,163,871)        7,573,111

Issuance of common
  shares for cash                 2,349,160     2,023,268         --            --         2,023,268
Issuance of common
  shares for debt                   506,215       662,282         --            --           662,282
Issuance of 5,500,000
  special warrants                       --     9,453,437         --            --         9,453,437
Special warrants issue
  cost                                   --            --         --      (100,726)         (100,726)
Net loss for the year                    --            --         --      (426,380)         (426,380)
                                 -------------------------------------------------------------------
Balance, May 31, 1996            16,533,400    20,875,969         --    (1,690,977)       19,184,992

Issuance of common
  shares for cash                    18,000        10,060         --            --            10,060
Issuance of common
  shares for special
  warrants                        5,500,000            --         --            --                --
Special warrants issue
  cost                                   --            --         --      (123,806)         (123,806)
Net loss for the period                  --            --         --      (348,948)         (348,948)
                                 -------------------------------------------------------------------
Balance, December 31, 1996       22,051,400    20,886,029         --    (2,163,731)       18,722,298
</TABLE>


                                                  5

<PAGE>


<TABLE>
<CAPTION>
                                     GOLDEN QUEEN MINING CO. LTD.
                                    (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                            (U.S. DOLLARS)

                                             (UNAUDITED)

                                                                                  Deficit
   From the Date of Inception                                      Receivable   Accumulated
      (November 21, 1985)                                          From Sale     During the      Total
            through                  Common                        Of Special   Development   Shareholders'
         March 31, 1999              Shares         Amount          Warrants       Stage         Equity
----------------------------------------------------------------------------------------------------------
<S>                                  <C>            <C>             <C>            <C>             <C>    
Issuance of common
  shares for cash                    157,000        157,050             --              --         157,050
Issuance of 3,500,000
  special warrants                        --      5,287,315             --              --       5,287,315
Issuance of common
  shares for special warrants      3,500,000             --             --              --              --
Options to non-
  employee directors                      --         70,200             --              --          70,200
Special warrants issue cost               --             --             --        (163,313)       (163,313)
Net loss for the year                     --             --             --      (1,047,869)     (1,047,869)
                                  ------------------------------------------------------------------------
Balance, December 31, 1997        25,708,400     26,400,594             --      (3,374,913)     23,025,681

Issuance of common
  shares upon exercise
  of warrants                      1,834,300        857,283             --              --         857,283
Issuance of common
  shares through
  conversion of debt               2,017,941      1,000,000             --              --       1,000,000
Share issuance cost                       --             --             --          (6,060)         (6,060)
Issuance of common
  shares for cash                  5,236,000      2,439,753             --              --       2,439,753
Options and re-priced
  options to non-
  employee directors                      --        107,444             --              --         107,444
Net loss for the year                     --             --             --        (971,595)       (971,595)
                                  ------------------------------------------------------------------------
Balance, December 31, 1998        34,796,641     30,805,074             --      (4,352,568)     26,452,506

Options to non-
  employee directors                      --         12,469             --              --          12,469
Issuance of 13,250,000
  special warrants (Note 2)               --      3,350,915     (2,680,732)             --         670,183
Special warrants issue cost               --             --             --          (7,883)         (7,883)
Net loss for the period                   --             --             --        (226,736)       (226,736)
                                  ------------------------------------------------------------------------
Balance, March 31, 1999           34,796,641   $ 34,168,458   $ (2,680,732)   $ (4,587,187)   $ 26,900,539
                                  ========================================================================
</TABLE>

                                                  6

<PAGE>

<TABLE>
<CAPTION>
                                     GOLDEN QUEEN MINING CO. LTD.
                                    (A DEVELOPMENT STAGE COMPANY)
                                 CONSOLIDATED STATEMENTS OF CASH FLOW
                                            (U.S. DOLLARS)

                                             (UNAUDITED)


                           Increase (Decrease) in Cash and Cash Equivalents



                                                                       Cumulative
                                                                        Amounts
                                                                      From Date of
                                                                        Inception
                                     Three Month     Three Month      (November 21,
                                     Period Ended    Period Ended     1985 through
                                       March 31,       March 31,        March 31,
                                        1999             1998             1999
                                     ------------    ------------    ------------
<S>                                  <C>             <C>             <C>          
Operating activities:
Net loss                             $   (226,736)   $   (231,926)   $ (4,167,239)
Adjustments to reconcile net
  loss to cash used in operating
  activities:
  Abandoned mineral properties                 --              --         277,251
  Amortization and depreciation            20,693          21,476         216,534
  Loss on disposition of property
   and equipment                               --              --          10,949
Options to directors                       12,469          10,900         190,113

Changes in assets and liabilities:
  Receivables                               7,401           9,830          (5,291)
  Prepaid expenses and other
   current assets                          34,903          35,592         (38,039)
  Accounts payable and accrued
   liabilities                            (55,894)       (328,822)         75,255
                                     ------------    ------------    ------------

Cash used in operating activities        (207,164)       (482,950)     (3,440,467)
                                     ------------    ------------    ------------

Investment activities:
  Deferred exploration and
   development expenditures              (295,505)       (473,696)    (19,926,780)
  Deposits on mineral properties               --          (5,434)       (921,576)
  Purchase of mineral properties         (174,007)        (74,323)     (4,838,088)
  Purchase of property and
   equipment                               (4,677)         (3,460)     (1,310,495)
  Proceeds from sale of property
   and equipment                               --              --           8,492
                                     ------------    ------------    ------------

Cash used in investment
  activities                             (474,189)       (556,913)    (26,988,447)
                                     ------------    ------------    ------------

Financing activities:
Borrowing under long-term debt                 --              --       3,766,502
Payment of long-term debt                 (14,239)        (10,834)     (1,109,023)
</TABLE>


                                                  7

<PAGE>


                          GOLDEN QUEEN MINING CO. LTD.
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOW
                                 (U.S. DOLLARS)

                                   (UNAUDITED)


                Increase (Decrease) in Cash and Cash Equivalents

                                                                    Cumulative
                                                                      Amounts
                                                                   From Date of
                                                                     Inception
                                    Three Month     Three Month    (November 21,
                                   Period Ended    Period Ended    1985 through
                                     March 31,       March 31,       March 31,
                                       1999            1998            1999
                                   ------------    ------------    ------------

Issuance of common stock for
 cash                                        --              --      13,086,902
Share issuance costs                     (7,883)           (452)       (419,948)
Net cash received from issuance
  of  special warrants                  670,183              --      15,410,935
Issuance of common shares upon
  exercise of warrants                       --         857,283         857,283
                                   ------------    ------------    ------------
Cash provided by financing
  activities                            648,061         845,997      31,592,651
                                   ------------    ------------    ------------

Net change in cash and cash
  equivalents                           (33,292)       (193,866)      1,163,737

Cash and cash equivalents,
  beginning balance                   1,197,029       1,127,234              --
                                   ------------    ------------    ------------

Cash and cash equivalents,
  ending balance                   $  1,163,737    $    933,368    $  1,163,737
                                   ============    ============    ============
Supplemental disclosures of cash
flow information:

Cash paid during period for:
  Interest                         $     15,455    $     73,398    $    690,632
  Income taxes                     $         --    $         --    $         --

Non-cash financing and
  investing activities:
  Exchange of notes for common
   shares                          $         --    $  1,000,000    $  1,662,282
  Exchange of note for future
   royalty payments                $         --    $         --    $    150,000
  Shares for mineral property      $         --    $         --    $    280,211
  Mineral property acquired
   through the issuance of long-
   term debt                       $         --    $         --    $  1,084,833


                                       8

<PAGE>

                          GOLDEN QUEEN MINING CO. LTD.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                   (UNAUDITED)


Note 1:  Significant Accounting Policies

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial information and the instructions to Form 10-QSB. Accordingly,  they do
not include all of the information and footnotes  required by generally accepted
accounting  principles for complete  financial  statements.  These  consolidated
financial  statements  should  be  read in  conjunction  with  the  consolidated
financial  statements  and related notes thereto  included in the Company's 1998
annual report on Form 10-KSB.  In the opinion of  management,  all  adjustments,
consisting only of normal recurring  accruals,  considered  necessary for a fair
presentation have been included.  Operating  results for the three-month  period
ended March 31, 1999 are not  necessarily  indicative of the results that may be
expected for the year ending December 31, 1999.


Note 2:  Share Capital

On January 19, 1999,  additional  stock  options to purchase up to 75,000 shares
were granted to a  non-employee  director.  The options are  exercisable  at the
price of C$0.50 per share and expire on January 19, 2004.

On March 15, 1999, in  connection  with a private  placement the Company  issued
13,250,000  special warrants,  exchangeable into common shares of the Company at
no  additional  cost at C$0.40 per warrant for gross  proceeds of  approximately
$3,472,500   (C$5,300,000).   At  closing,   the  Company  paid  agent  fees  of
approximately  $121,730 (C$185,500) and issued broker warrants to purchase up to
an aggregate of 463,750 common shares at a conversion  price of C$0.60 for a two
year period following the closing. The Company received  approximately  $670,183
(C$1,022,900)  on March 15, 1999 and the  remaining  funds  totaling  $2,680,732
(C$4,091,600)  were placed in escrow to be  released:  50%  pending  shareholder
approval of the transaction  which was received at the Annual General Meeting on
May 5, 1999;  and 50% upon  receipt of the final  prospectus.  If receipts for a
final prospectus  qualifying the distribution of the common shares issuable upon
the  exercise  of the  special  warrants  have not been  issued by the  relevant
securities regulatory authorities by July 13, 1999, each special warrant will be
exchangeable,  at the option of the holder, for 1.1 common shares. The number of
common shares issuable upon the exercise of each special warrant is also subject
to customary "anti-dilution"  provisions, as provided for in the special warrant
indenture  governing  the issuance of the special  warrants.  The Toronto  Stock
Exchange has approved the private placement.

                                       9

<PAGE>

                          GOLDEN QUEEN MINING CO. LTD.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)


                            FORWARD LOOKING STATEMENT


This report contains both historical and prospective  statements  concerning the
Company and its operations.  Historical statements are based on events that have
already happened; examples include the reported financial and operating results,
descriptions  of  pending  and  completed   transactions,   and  management  and
compensation matters.  Prospective  statements,  on the other hand, are based on
events that are reasonably  expected to happen in the future;  examples  include
the timing of projected  operations,  the likely  effect or  resolution of known
contingencies or other foreseeable events, and projected operating results.

Prospective  statements (which are known as  "forward-looking  statements" under
the Private Securities  Litigation Reform Act of 1995) may or may not prove true
with the passage of time  because of future risks and  uncertainties.  The risks
and  uncertainties  associated  with  prospective  statements  contained in this
report include, among others, the following:

THE LIKELIHOOD OF CONTINUED LOSSES FROM  OPERATIONS.  The Company has no revenue
from mining  operations and has incurred losses from inception through March 31,
1999 of approximately  $4,167,000.  It is anticipated that additional  financing
will be required in the first half of 2000 for continued operations.  This trend
is  expected  to  continue  for at least the next two years and is  expected  to
reverse only if, as and when gold is produced from the Soledad Mountain Project.

THE NEED FOR SIGNIFICANT  ADDITIONAL FINANCING.  The Company anticipates that it
will need approximately  $77,600,000 in additional  financing to put the Soledad
Mountain  Project into production;  an anticipated  $66,300,000 will be used for
capital  expenditures with an estimated  thirteen-month  construction period and
$11,300,000 will be used as working capital and for start-up  expenditures.  The
Company expects to finance  development  from additional  sales of common stock,
from bank or other borrowings or, alternatively,  through joint development with
another mining company.  However, it has no commitment for bank financing or for
the underwriting of additional  stock, and it is not a party to any agreement or
arrangement  providing  for  joint  development.  Whether  and  to  what  extent
financing can be obtained  will depend on a number of factors,  not the least of
which is the price of gold.  Gold prices  fluctuate  widely and are  affected by
numerous factors beyond the Company's control,  such as inflation,  the strength
of the United States dollar and foreign currencies,  global and regional demand,
and the political  and economic  conditions  of major gold  producing  countries
throughout the world. As of March 31 1999, world gold prices were  approximately
$280 per ounce, a reduction of  approximately 6% from prices a year ago. If gold
prices do not  strengthen,  it may not be economical  for the Company to put the
Soledad Mountain Project into production.

RISKS AND  CONTINGENCIES  ASSOCIATED  WITH THE MINING  INDUSTRY  GENERALLY.  The
Company  is  subject  to all of  the  risks  inherent  in the  mining  industry,
including environmental risks, fluctuating metals prices,  industrial accidents,
labor disputes,  unusual or unexpected geologic formations,  cave-ins,  flooding
and periodic interruptions due to inclement weather. These risks could result in
damage to, or  destruction  of, mineral  properties  and production  facilities,
personal  injury,  environmental  damage,  delays,  monetary  losses  and  legal
liability.  The Company is also subject to the uncertainty  about its ability to
identify and address all Year 2000 issues. Although the Company maintains or can
be expected to maintain  insurance  within  ranges of coverage  consistent  with
industry  practice,  no  assurance  can be given  that  such  insurance  will be
available at economically  feasible  premiums.  Insurance against  environmental
risks (including pollution or other hazards resulting from the disposal of waste
products generated from exploration and production  activities) is not generally
available  to the Company or other  companies in the mining  industry.  Were the
Company subjected to environmental liabilities,  the payment of such liabilities
would reduce the funds available to the

                                       10

<PAGE>

Company.  Were  the  Company  unable  to fund  fully  the cost of  remedying  an
environmental  problem, it might be required to suspend operations or enter into
interim compliance measures pending completion of remedial activities.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

RESULTS OF OPERATIONS.

OVERVIEW.  During the periods  indicated in the discussion  which  follows,  the
Company has been in the  exploration  stage of its  business and  therefore  has
earned no  revenue  from its  operations.  Variations  in the level of  expenses
between  periods  have been as a result of the  nature,  timing  and cost of the
activities  undertaken  in the  various  periods.  Financing  of  the  continued
exploration  of the  Soledad  Mountain  Project  during  such  periods  has been
obtained  through  the  sale  of  shares  of  common  stock  of the  Company  in
predominantly offshore transactions and through borrowings.

THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998.

General and  administrative  expenses increased to $230,000 for the three months
ended March 31, 1999, from $217,000 for the  three-month  period ended March 31,
1998. The increase is primarily due to the recognition of  compensation  cost on
stock options issued to non-employee directors of the Company.

No interest  expense was  recognized  for the three  months ended March 31, 1999
compared to interest  expense of $21,000 for the three-month  period ended March
31, 1998, as a result of the  conversion of convertible  debentures  into common
shares in March  1998.  Interest  incurred  on debt  relating  to the  Company's
investment in the Soledad  Mountain  Project is  capitalized  as part of mineral
properties.

Interest income was  approximately  $9,000 for both the three months ended March
31, 1999,  and the three month  period ended March 31, 1998.  As a result of the
foregoing  factors,  the Company  incurred a net loss of $227,000  for the three
months ended March 31, 1999,  versus a net loss of $232,000 for the  three-month
period ended March 31, 1998.


LIQUIDITY AND CAPITAL RESOURCES.

GENERAL.  The Company  acquired the Soledad Mountain Project in 1986. Since then
it has  solidified its land position,  conducted  several  drilling and sampling
programs  to  delineate  ore  reserves,  and taken  steps to secure  permits and
approvals needed for production activities. The Company previously reported that
it expected  to begin  producing  gold and silver  from the  project  during the
second half of 1998, once  permitting was completed.  Because of the downturn in
world gold prices during the second half of 1997,  however,  the Company has not
been able to obtain  financing for  construction.  As a consequence,  production
will be delayed until construction financing can be raised.

The Company has had no reported revenues from operations since inception, and is
in the  exploration  or  development  stage.  During the period  from  inception
through March 31, 1999,  the Company used  $3,440,000  in operating  activities,
primarily as the result of cumulative  losses of $4,167,000 for the same period.
During the same period,  the Company used  $26,988,000 in investing  activities;
these consisted of $25,686,000 in expenditures  related to the Soledad  Mountain
Project and fixed asset  purchases of $1,310,000.  These operating and investing
activities were financed by net borrowings of $2,657,000 under various long-term
debt arrangements, and from the sale of $28,078,000 of equity securities.

At March 31, 1999, the Company held $1,164,000 in cash and cash  equivalents and
a receivable  in the amount of $2,680,732  from the sale of special  warrants in
March  1999.  As is  discussed  below under the  heading  "Plan of  Operations",
significant  additional funds will be needed to put the Soledad Mountain Project
into  production.  These  funds are  expected to come from  additional  sales of
common stock and from bank or other borrowings.  Alternatively,  the Company may
decide to enter  into a joint  development  or other  similar  arrangement  with
another

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<PAGE>

mining  company to develop the  project.  The Company does not have a commitment
for bank financing or for the  underwriting  of additional  shares of its common
stock,  and is not a party to any  agreement or  arrangement  providing  for the
joint  development of the Soledad Mountain  Project.  Whether and to what extent
additional  or  alternative  financing  options are pursued by the Company  will
depend on a number of  important  factors,  including  the  results  of  further
development activities at the Soledad Mountain Project,  management's assessment
of the financial  markets,  the overall capital  requirements for development of
the  project,  and the  price of gold.  Gold  prices  fluctuate  widely  and are
affected by numerous  factors beyond the Company's  control,  such as inflation,
the  strength of the United  States  dollar and foreign  currencies,  global and
regional  demand,  and the  political  and  economic  conditions  of major  gold
producing  countries  throughout  the world.  As of March 31,  1999,  world gold
prices were  approximately  $280 per ounce, a reduction of approximately 6% from
prices a year ago,  and a reduction of  approximately  18% from prices two years
ago. The project may not be  economical at current world gold prices and may not
be economical until prices strengthen.


PLAN OF OPERATIONS.

PROPOSED ACTIVITIES AND ESTIMATED COSTS. The Company has substantially completed
exploration of the Soledad  Mountain  Project and intends to develop the project
as an open pit gold and silver  mine  employing  a cyanide  heap leach  recovery
system.  Development  plans  include  the  construction  of  infrastructure  and
processing facilities, mining by open pit methods and processing precious metals
ores at a rate of up to 5.76 million  tonnes (6.35 million tons) per year for at
least nine years. Concurrent heap detoxification will be employed, followed by a
reclamation of the project site.

The initial  capital costs of bringing the project into production are estimated
to be  $78,000,000;  these  include  costs  associated  with the purchase of all
necessary facilities and equipment,  construction costs, start-up costs, working
capital  and  contingency  costs over a  projected  thirteen-month  construction
period.  The Company  presently  cannot secure the financing needed to bring the
project  into  production,  and will not be able to do so unless gold prices and
the conditions in the gold equity markets improve. Based on current project cost
information,  the  Company  believes  world  gold  prices  would have to achieve
sustained  levels of $325 per ounce or better  before  such  financing  could be
obtained.  The Company believes it is  well-positioned  to obtain this financing
when market conditions improve.

The Company estimates that total average operating costs will be $6.03 per tonne
($5.47 per ton) of ore processed,  based on a stripping ratio of 4.1 to 1. These
operating  costs  consist  of mining  costs of $3.74 per tonne  ($3.39 per ton),
processing   costs  of  $1.73  per  tonne   ($1.57  per  ton)  and  general  and
administrative  costs of $0.56  per tonne  ($0.51  per ton).  The  Company  also
estimates  that average  annual  production  rates of 130,000 ounces of gold and
1,500,000  ounces of silver can be  maintained  for at least nine  years,  at an
average cash cost  (consisting of operating and royalty costs) of $176 per ounce
of gold, net of silver credits.

These  development plans are based on a February 1998 feasibility study that was
updated by the Company in December  1998.  The early 1998 study was prepared for
the Company by M3  Engineering  and  Technology  Corporation  incorporating  the
results of the Company's 1997 drilling program.  The updated study also included
the results of the 1998 program.  The study was  commissioned  by the Company to
obtain project financing,  and to provide basic project engineering information.
Ore reserve estimates and mine design features  incorporated into the study were
prepared by Mine Reserves Associates,  in collaboration with the Company;  basic
engineering   information  was  prepared  by  Bateman  Engineering,   Inc.,  and
supplemented by M3 Engineering and Technology. The total cost of the feasibility
study was $1,549,618.

The Company is currently  evaluating the production and sale of aggregates  from
the Soledad  Mountain  Project.  The Company believes waste rock and leached ore
have several construction-related applications, and that the project's proximity
to major north-south and east-west railroad lines enhances the potential of such
a business.  Neither  the  feasibility  studies  referred to above nor any other
revenue  and cost  figures  contained  in this report  take such  business  into
account.

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<PAGE>

PERMITTING.

All permitting  requirements  for the Soledad Mountain Project were completed in
late 1997.  Pending  the  procurement  of project  financing,  the  Company  can
commence construction of surface infrastructure and processing facilities,  and,
following  that,  can begin  commercial  production  of gold and silver from the
project.


YEAR 2000.

The "Year 2000" issue is the result of computer  systems that were programmed in
prior years using a two digit representation for the year. Consequently,  in the
Year 2000, date sensitive  computer programs may interpret the date "00" as 1900
rather than 2000 causing  varied and  uncertain  results.  The Company is in the
process of reviewing its business and  processing  systems and believes that the
majority  of its  systems are already  year 2000  compliant.  At this time,  the
internal exposure of the Company to the year 2000 problem,  due to the nature of
its  development  stage  activities  is  limited  to the  use of  computers  for
accounting, computer aided design, and general office and clerical applications.
As of March 31, 1999, the Company has incurred less than $5,000 of costs related
to year  2000  issues.  Management  believes  that  the cost of  completing  its
investigation  and remediation  activities in regard to the year 2000 issue will
not exceed $25,000.

The Company has  initiated  formal  communications  with all of its  significant
suppliers and vendors,  including site utility providers and project contractors
to  determine  the extent to which the  Company's  systems  and  activities  are
vulnerable  to those third  parties'  failure to  remediate  their own Year 2000
issues.  While the  Company  believes  that the Year 2000  issue will not have a
material  adverse  effect on the  Company's  financial  position,  liquidity  or
results of operations, there is no guarantee that the systems of other companies
on which the Company's  systems rely will be timely converted and would not have
an adverse effect on the Company's systems.



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                                     PART II


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

EXHIBITS.  A financial  data schedule is filed as exhibit no. 27 to this report.
No other exhibits are filed as part of this report.

FORM 8-K  REPORTS.  The  Company  filed no  reports on Form 8-K during the first
quarter of 1999.



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                                   SIGNATURES


In accordance  with section 13 or 15(d) of the Securities  Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.



                                      Golden Queen Mining Co. Ltd.

                                      By: /s/ BERNARD F. GOODSON
                                          --------------------------------------
                                              Bernard F. Goodson, its Vice
                                              President of Administration
                                              and Controller

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