<PAGE>

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
     THE SECURITIES ACT OF 1934

     For the quarterly period ended December 31, 1998

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
     THE SECURITIES ACT OF 1934

     For the transition period from ________ to _________

                         Commission file number: 0-14136

                                  Casmyn Corp.
              -----------------------------------------------------
             (Exact name of registrant as specified in its charter)


                Colorado                                  84-0987840
     -------------------------------                ----------------------
     (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                 Identification Number)


         28720 Canwood Street, Suite 207
             Agoura Hills, California                        91301
     ----------------------------------------              ----------
     (Address of principal executive offices)              (Zip Code)


                                 (818) 879-6501
               ---------------------------------------------------
              (Registrant's telephone number, including area code)

                      1500 West Georgia Street, Suite 1800
                   Vancouver, British Columbia, Canada V6G 2Z6
               ---------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report.)

         Indicate by check mark whether the registrant (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 [ ]

         As of April 15, 1999, the Company had 223,176,502 shares of common 
stock issued and outstanding.

         Documents incorporated by reference:  None.


                                       1

<PAGE>

                          CASMYN CORP. AND SUBSIDIARIES

                                      INDEX


PART I.   FINANCIAL INFORMATION

      Item 1.  Financial Statements

               Consolidated Balance Sheets (Unaudited) - December 31,
               1998 and September 30, 1998

               Consolidated Statements of Operations (Unaudited) -
               Three Months Ended December 31, 1998 and 1997

               Consolidated Statements of Comprehensive Income
               (Unaudited) - Three Months Ended December 31, 1998 and
               1997

               Consolidated Statements of Cash Flows (Unaudited) -
               Three Months Ended December 31, 1998 and 1997

               Notes to Consolidated Financial Statements (Unaudited) -
               Three Months Ended December 31, 1998 and 1997

      Item 2.  Management's Discussion and Analysis of Financial
               Condition and Results of Operations

      Item 3.  Quantitative and Qualitative Disclosures about Market
               Risk


PART II.  OTHER INFORMATION

         Item 2.  Changes in Securities and Use of Proceeds

         Item 3.  Defaults Upon Senior Securities

         Item 6.  Exhibits and Reports on Form 8-K


SIGNATURES



                                        2


<PAGE>


                          Casmyn Corp. and Subsidiaries
                     Consolidated Balance Sheets (Unaudited)
<TABLE>
<CAPTION>
                                          December 31,    September 30,
                                              1998             1998
                                           ----------       ----------
<S>                                        <C>              <C>
ASSETS

CURRENT

  Cash and cash equivalents               $ 3,693,004      $ 4,356,200
  Marketable securities                     1,363,786        1,588,536
  Accounts receivable                         282,937          301,456
  Inventories (Note 1)                        640,964          643,135
  Prepaid expenses and other
    current assets                              7,556           20,830
                                           ----------       ----------
                                            5,988,247        6,910,157
                                           ----------       ----------

PROPERTY AND EQUIPMENT                     20,350,035       20,214,581
  Less accumulated
    depreciation, depletion
    and amortization                       (2,354,258)      (2,053,079)
                                           ----------       ----------
                                           17,995,777       18,161,502
                                           ----------       ----------

Other assets                                    3,744           23,262
                                           ----------       ----------
                                          $23,987,768      $25,094,921
                                           ==========       ==========
</TABLE>



                                   (continued)

                                        3

<PAGE>

                          Casmyn Corp. and Subsidiaries
               Consolidated Balance Sheets (Unaudited) (continued)
<TABLE>
<CAPTION>
                                          December 31,    September 30,
                                              1998             1998
                                           ----------       ----------
<S>                                        <C>              <C>
LIABILITIES

CURRENT

Accounts payable                          $   521,374      $   518,823
Accrued liabilities                           670,332          893,236
Preferred Stock repurchase
  obligation (Note 2)                         642,248
Preferred Stock penalty (Note 2)            1,485,498          839,737
                                           ----------       ----------
                                            3,319,452        2,251,796
                                           ----------       ----------

PREFERRED STOCK (Note 2)                   20,296,557       44,440,451
                                           ----------       ----------


STOCKHOLDERS' EQUITY (DEFICIENCY)

Preferred stock, $0.10 par value
  Authorized - 20,000,000 shares
  Issued and outstanding -
    495,236 shares at December 31,
    1998 and 1,084,347 shares at 
    September 30, 1998 (Liquidation 
    preference - $20,296,557 at 
    December 31, 1998 and $44,440,451
    at September 30, 1998) (Note 2)
Common stock, $0.04 par value
  Authorized - 300,000,000 shares
  Issued and outstanding -
    223,176,502 shares at December
    31, 1998 and 217,751,710 shares
    at September 30, 1998 (Note 2)          8,927,060        8,710,068
  Additional paid-in capital               54,549,559       29,272,294
  Accumulated deficit                     (59,357,091)     (55,866,898)
  Accumulated other comprehensive
    income (Note 1)                        (3,747,769)      (3,712,790)
                                           ----------       ----------
                                              371,759      (21,597,326)
                                           ----------       ----------
                                          $23,987,768      $25,094,921
                                           ==========       ==========
</TABLE>

          See accompanying notes to consolidated financial statements.


                                        4


<PAGE>

                          Casmyn Corp. and Subsidiaries
                Consolidated Statements of Operations (Unaudited)
<TABLE>
<CAPTION>
                                    Three Months Ended December 31,
                                    -------------------------------
                                        1998                1997
                                    -----------         -----------
<S>                                 <C>                 <C>
REVENUE
  Gold sales                        $   978,830         $   977,030
                                      ---------           ---------
COSTS AND EXPENSES
  Mineral production                    660,964             649,186
  General and administrative
    expenses                            297,173             536,339
  Professional services                  45,467              36,401
  Compensatory stock options              4,331
  Depreciation, depletion and
    amortization                        300,735             157,275
  Mineral exploration expense             4,625             129,665
                                      ---------           ---------
                                      1,313,295           1,508,866
                                      ---------           ---------
LOSS FROM OPERATIONS                   (334,465)           (531,836)
                                      ---------           ---------

OTHER INCOME (EXPENSE)
  Minority interest in net
    loss of consolidated
    subsidiary                                               40,143
  Loss on foreign currency
    translation                          (4,967)            (76,626)
  Interest income, net                  109,489             301,669
  Loss on short-term
    investments                         (20,979)
                                      ---------           ---------
                                         83,543             265,186
                                      ---------           ---------
NET LOSS                             $ (250,922)         $ (266,650)
                                      =========           =========
</TABLE>

                                   (continued)


                                        5


<PAGE>

                          Casmyn Corp. and Subsidiaries
          Consolidated Statements of Operations (Unaudited) (continued)
<TABLE>
<CAPTION>
                                    Three Months Ended December 31,
                                    -------------------------------
                                        1998                1997
                                    -----------         -----------
<S>                                  <C>                 <C>
NET LOSS APPLICABLE TO COMMON
  STOCKHOLDERS
  Net loss                           $ (250,922)         $ (266,650)
  Less:
    Dividends on Preferred
      Stock (Note 2)                   (245,100)           (686,425)
    Amortization of discount
      on Preferred Stock
      (Note 2)                         (809,907)         (2,168,593)
    Preferred Stock penalty
      (Note 2)                       (2,184,259)
                                      ---------           ---------
NET LOSS APPLICABLE TO COMMON
  STOCKHOLDERS                      ($3,490,188)        ($3,121,668)
                                      =========           =========
LOSS PER COMMON SHARE - BASIC
  AND DILUTED (Note 1)                   ($0.02)             ($0.23)
                                           ====                ====
WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING         217,751,710          13,552,060
                                    ===========          ==========
</TABLE>



         See accompanying notes to consolidated financial statements.


                                        6

<PAGE>

                          Casmyn Corp. and Subsidiaries
           Consolidated Statements of Comprehensive Income (Unaudited)
<TABLE>
<CAPTION>
                                    Three Months Ended December 31,
                                    -------------------------------
                                        1998                1997
                                    -----------          ----------
<S>                                 <C>                  <C>
NET LOSS                            $  (250,922)         $ (266,650)

Other comprehensive income
  (Note 1):
  Foreign currency translation
    adjustment (Note 1)                 (34,979)            205,446
                                      ---------           ---------
COMPREHENSIVE INCOME (LOSS)         $  (285,901)         $  (61,204)
                                      =========           =========
</TABLE>


          See accompanying notes to consolidated financial statements.


                                        7


<PAGE>

                          Casmyn Corp. and Subsidiaries
                Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
                                    Three Months Ended December 31,
                                    -------------------------------
                                        1998                1997
                                    -----------         -----------
<S>                                  <C>                 <C>
OPERATING ACTIVITIES
  Net loss                           $ (250,922)        $  (266,650)
  Adjustments to reconcile
    net loss to net cash
    used in operating
    activities:
      Depreciation, depletion
        and amortization                300,735             157,275
      Foreign exchange loss               4,967              76,626
      Minority interest in net
        loss of consolidated
        subsidiary                                          (40,143)
      Compensatory stock option
        expense                           4,331
      Loss on short-term
        investments                      20,979
      Changes in operating
        assets and liabilities:
        (Increase) decrease in:
          Accounts receivable            18,519            (422,115)
          Inventories                     2,171            (133,929)
          Prepaid expenses and
            other current assets         13,274             225,368
          Other assets                   19,518              19,837
        Increase (decrease) in:
          Accounts payable                2,551            (104,052)
          Accrued liabilities          (222,904)             24,636
                                      ---------          ----------
  Net cash used in operating
    activities                          (86,781)           (463,147)
                                      ---------          ----------

INVESTING ACTIVITIES
  Purchase of property and
    equipment                          (135,010)           (988,781)
  Purchase of marketable
    securities                                           (2,053,343)
  Proceeds from disposition
    of marketable securities            203,771              43,361
                                      ---------          ----------
  Net cash provided by (used
    in) investing activities             68,761          (2,998,763)
                                      ---------          ----------
</TABLE>

                                   (continued)


                                        8


<PAGE>

                          Casmyn Corp. and Subsidiaries
          Consolidated Statements of Cash Flows (Unaudited) (continued)
<TABLE>
<CAPTION>
                                    Three Months Ended December 31,
                                    -------------------------------
                                        1998                1997
                                    -----------         -----------
<S>                                  <C>                 <C> 
FINANCING ACTIVITIES
  Increase in restricted cash                               (14,533)
  Repayments of long-term debt                              (58,418)
  Reduction in line of credit                               (56,104)
  Exercise of stock options                                   1,597
  Purchase and retirement of
    common stock                                         (2,037,157)
  Purchase and retirement of
    Preferred Stock                    (605,224)
                                      ---------          ----------
  Net cash used in financing
    activities                         (605,224)         (2,164,615)
                                      ---------          ----------

Effect of exchange rate changes
  on cash and cash equivalents          (39,952)            (71,816)
                                      ---------          ----------

CASH AND CASH EQUIVALENTS:
  Net decrease                         (663,196)         (5,698,341)
  At beginning of period              4,356,200          18,185,515
                                      ---------          ----------
  At end of period                   $3,693,004         $12,487,174
                                      =========          ==========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                        9



<PAGE>

                          Casmyn Corp. and Subsidiaries
             Notes to Consolidated Financial Statements (Unaudited)
                  Three Months Ended December 31, 1998 and 1997


1.    Organization and Basis of Presentation

      Basis of Presentation - The accompanying consolidated financial statements
      include the operations of Casmyn Corp. and its wholly-owned and controlled
      subsidiaries (the "Company"). All intercompany accounts and transactions
      have been eliminated on consolidation. The consolidated financial
      statements have been prepared in accordance with generally accepted
      accounting principles in the United States.

      Business - Substantially all of the Company's assets and operations are
      concentrated on mineral resource development. Subsequent to September 30,
      1998, the Company has been focusing on its gold mining operations in
      Zimbabwe.

      Foreign Currency Translation - Effective October 1, 1997, the United
      States dollar was adopted as the functional currency for the Company's
      operations in Zimbabwe. Non-monetary assets and liabilities are translated
      into United States dollars at historical rates, which for the pre-existing
      balances was the rate in effect at October 1, 1997 of approximately
      US$1.00 = ZIM$13.00. Amortization and other charges related to
      non-monetary items are translated into United States dollars using the
      same exchange rate. Revenue and expense accounts continue to be translated
      using the weighted average exchange rate prevailing during the reporting
      period. The average exchange rate for the three months ended December 31,
      1998 was approximately US$1.00 = ZIM$38.00. Translation adjustments
      arising from the Zimbabwe operations are reflected in the statement of
      operations.

      The Company's operations outside the United States, other than in
      Zimbabwe, are measured using the respective local currency as the
      functional currency. Assets and liabilities of these operations are
      translated into United States dollars at the weighted average rate of
      exchange prevailing during each period. Translation adjustments arising
      from differences in exchange rates from period to period are reflected in
      the accumulated foreign currency translation adjustment account, which is
      included as a component of other comprehensive income in stockholders'
      equity (deficiency).

      Comments - The accompanying consolidated financial statements are
      unaudited, but in the opinion of management of the Company, contain all
      adjustments, which include normal recurring adjustments, necessary to
      present fairly the financial position at December 31, 1998, results of
      operations for the three months ended December 31, 1997 and 1998,
      comprehensive income for the three months ended December 31, 1997 and
      1998, and cash flows for the three months ended December 31, 1997 and
      1998. The consolidated balance sheet as of September 30, 1998 is derived
      from the Company's audited financial statements.


                                        10

<PAGE>

      Certain information and footnote disclosures normally included in
      financial statements that have been prepared in accordance with generally
      accepted accounting principles have been condensed or omitted pursuant to
      the rules and regulations of the Securities and Exchange Commission,
      although management of the Company believes that the disclosures contained
      in these financial statements are adequate to make the information
      presented therein not misleading. For further information, refer to the
      consolidated financial statements and the notes thereto included in the
      Company's Annual Report on Form 10-K for the fiscal year ended September
      30, 1998, as filed with the Securities and Exchange Commission.

      The preparation of 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 at
      the date of the financial statements and the reported amounts of revenues
      and expenses during the reporting period. Actual results could differ from
      those estimates. The most significant estimates used by management in
      preparing the accompanying consolidated financial statements include
      estimates of future gold prices, recoverable reserves and estimated
      capital costs, which are utilized to assess the carrying value of the
      Company's mineral properties, plant and equipment and to calculate
      depreciation and depletion charges.

      The results of operations for the three months ended December 31, 1998 are
      not necessarily indicative of the results of operations to be expected for
      the full fiscal year ending September 30, 1999.

      Inventories - Inventories consist of mining supplies.

      Reclassification - Certain prior period amounts have been reclassified to
      conform to the current year presentation.

      Other Comprehensive Income - The foreign currency translation adjustment
      is the only component of other comprehensive income.

      Loss per Share - Basic earnings per share are calculated by dividing net
      income (loss) by the weighted average number of common shares outstanding
      during the period. Diluted earnings per share reflects the potential
      dilution that would occur if securities or other contracts to issue shares
      of common stock, including stock options, warrants and convertible
      preferred stock, were exercised or converted into shares of common stock.
      These potentially dilutive securities were anti-dilutive during the three
      months ended December 31, 1997 and 1998. Basic and diluted earnings per
      share are the same for all periods presented.


2.    Stockholders' Equity (Deficiency)

      Common Stock - During the three months ended December 31, 1997, the
      Company repurchased and retired 402,500 shares of common stock for
      $2,037,157.


                                        11

<PAGE>

      During the three months ended December 31, 1998, the Company issued
      5,424,792 shares of common stock upon conversion of 260 shares of First
      Convertible Preferred Stock (the "Preferred Stock").

      Preferred Stock - During the three months ended December 31, 1997 and
      1998, the Company issued 27,457 shares and 9,804 shares, respectively, of
      Preferred Stock as the quarterly payment of the 8% annual dividend on the
      Preferred Stock. The aggregate value of such shares of Preferred Stock of
      $686,425 and $245,100 for the three months ended December 31, 1997 and
      1998, respectively, was recorded at the stated value of $25.00 per share.
      During the three months ended December 31, 1998, the Company repurchased
      and retired 598,655 shares of Preferred Stock for $1,247,472, resulting in
      an increase to stockholders' equity (deficiency) of $26,083,215 as a
      result of the waiver by the sellers of the Preferred Stock of a penalty of
      $1,538,498 and the liquidation preference of $24,544,717.

      The Preferred Stock Investment Agreement dated April 11, 1997 and the
      Preferred Stock Investment Agreement dated September 2, 1997 (the
      "Investment Agreements") specify that the Preferred Stock is convertible
      into common stock at a discount to the common stock price ranging from
      8.5% to 39%, depending on the date on which such shares were converted.
      The discount is considered to be an additional Preferred Stock dividend.
      Accordingly, during the three months ended December 31, 1997 and 1998, the
      Company recorded a charge to accumulated deficit and a corresponding
      increase to additional paid-in capital of $2,168,593 and $809,907,
      respectively. The Company completed the recognition of this additional
      Preferred Stock dividend during October 1998.

      Pursuant to the Investment Agreements, a technical default occurred when
      the Company's common stock was delisted from the NASDAQ SmallCap Market on
      July 31, 1998. The Company may be obligated to pay the holders of the
      Preferred Stock a cash penalty of 3% of the total purchase price of the
      Preferred Stock during any period in excess of 30 days that the Company's
      common stock is not listed and traded on NASDAQ or a national securities
      exchange. The Investment Agreements provide the holders of the Preferred
      Stock with the opportunity to have their shares redeemed by the Company at
      the adjusted liquidation preference plus accrued but unpaid dividends if
      the 3% penalty is not paid within 30 days of when due. The Company
      believes that the exercise of such rights by the holders of the Preferred
      Stock would be subject to legal challenge by the Company.

      Since the Company's common stock was delisted from NASDAQ on July 31,
      1998, the Company has recorded a penalty of $3,023,996 through December
      31, 1998, which has not been paid. As a result of the repurchase or
      conversion of 618,863 shares of Preferred Stock through December 31, 1998,
      such stockholders have waived the right to claim their proportionate share
      of the penalty, thus reducing the corresponding potential penalty
      obligation to $1,485,498 at December 31, 1998.

      The Company is currently engaged in discussions with the holders of the
      remaining shares of Preferred Stock regarding various matters,


                                        12

<PAGE>

      including a waiver of the penalty and of their rights to require the 
      Company to redeem their shares of Preferred Stock. There can be no 
      assurances that the Company will be able to obtain a waiver or that the 
      holders of the Preferred Stock will not exercise their rights to require
      the Company to redeem their shares. Should the holders of the Preferred 
      Stock demand payment of the cash penalty or exercise their rights to 
      require the Company to redeem their shares, and should the Company not 
      prevail in its challenge to any such asserted rights, the Company may be 
      forced to file for protection under the United States Bankruptcy Code.

      Since the right to require the Company to redeem these shares of Preferred
      Stock outstanding at September 30, 1998 and December 31, 1998 is outside
      the control of the Company, the carrying value of the Preferred Stock at
      such dates has been recorded in the consolidated financial statements at
      their maximum liquidation preference of $44,440,451 and $20,296,557,
      respectively, and such shares have been reclassified out of the
      shareholders' equity (deficiency) section of the consolidated balance
      sheet. As a result of the repurchase or conversion of 618,863 shares of
      Preferred Stock through December 31, 1998, such shareholders have waived
      the right to claim their proportionate share of the liquidation
      preference, thus reducing the maximum liquidation preference, and the
      corresponding potential redemption obligation, to $20,296,557 at December
      31, 1998.

      Although the consolidated financial statements have been prepared on the
      basis of accounting principles applicable to a going concern, the rights
      of the holders of the Preferred Stock to require the Company to redeem
      their shares creates uncertainty with respect to the validity of this
      assumption. If the going concern assumption was determined to not be
      appropriate for these consolidated financial statements, then adjustments
      may be necessary to the carrying values of assets and liabilities, the
      reported net loss and the balance sheet classifications used, and their
      adjustments may be material.

      Stock Option - Effective January 18, 1999, the Board of Directors of the
      Company granted the Company's President and Chief Executive Officer an
      option to purchase 75,807 shares of Preferred Stock at an exercise price
      of $2.00 per share, which the Board of Directors believes approximates
      fair market value at the grant date. The stock option is exercisable
      immediately through December 23, 1999, and is subject to annual renewal if
      not terminated by the Board of Directors.


3.    Commitments and Contingencies

      On February 16, 1998, the Company entered into an agreement with a
      financial advisor to render certain financial advisory and investment
      banking services to the Company. The services to be provided included
      advice on strategic alternatives and implementation of the proposed
      restructuring of the Preferred Stock. Efforts to restructure the Preferred
      Stock through the assistance of the financial advisor were terminated
      during April 1998. Nonetheless, should the Company complete a
      restructuring of


                                        13

<PAGE>

      the Preferred Stock within two years from the termination date, the 
      financial advisor may assert that the structure or method of such 
      restructuring entitles it to a success fee of $1,000,000 plus potential
      additional amounts based on the post-restructuring enterprise value or 
      trading price of the Company's common stock as stated in the agreement. 
      If a restructuring were to occur, the Company does not believe that the 
      financial advisor would be entitled to this fee. Although the Company 
      would vigorously contest any claim by the financial advisor for payment,
      there can be no assurances that the Company would be successful in this 
      regard.

      The Company has recently been advised of the results of an examination
      report prepared by the Internal Revenue Service with respect to certain
      transactions during 1994 between the Company and a former officer of the
      Company. The findings, which indicate a tax liability of approximately
      $2,000,000, including penalties and interest, are preliminary in nature.
      The Company intends to contest this matter, and is currently in the
      process of preparing its response. As this matter is in an early stage,
      its ultimate resolution is not determinable at this time.

      Pursuant to severance agreements dated March 23, 1998, certain employees
      of the Company are entitled to compensation in the event that their
      employment is terminated as a result of a change in control. Under the
      terms of the severance agreements, the Company may be liable to pay
      severance payments of up to $525,000 and employee benefits for 18 months
      after the date of termination, and all legal fees and expenses incurred as
      a result of such termination. The severance agreements expire on May 31,
      1999.

      On October 1, 1998, the Company entered into a services agreement with a
      company controlled by a director and former President of the Company for
      the services of that director. The agreement provides for annual payments
      of $100,000, and is for a term of one year commencing October 1, 1998. The
      agreement continues indefinitely thereafter, and can be terminated by
      either party with thirty days notice.


4.    WaterPur International Inc.

      Effective September 30, 1997, the Company restructured its investment in
      an affiliated public company, WaterPur International Inc. ("WaterPur"),
      and received an aggregate of 7,900,004 shares of convertible preferred
      stock of WaterPur. Also effective September 30, 1997, the Company's Board
      of Directors approved the spin-off of the 7,900,004 shares of convertible
      preferred stock to the common and preferred stockholders of the Company of
      record on October 15, 1997, subject to compliance with regulatory
      requirements. Accordingly, at September 30, 1997, the Company had an
      investment in WaterPur of $4,574,368, and a corresponding dividend
      payable.

      During the fiscal year ended September 30, 1998, due to a significant and
      prolonged decrease in the market value of WaterPur's common stock,
      WaterPur's inability to repay amounts borrowed from the Company, and
      WaterPur's continuing need for 


                                        14

<PAGE>

      additional loans, management of the Company determined that there had 
      been an impairment in the value of the investment in WaterPur, and wrote
      off the entire investment in WaterPur. The corresponding dividend 
      payable has also been reduced to zero as a  result of the write-off.

      During the fiscal year ended September 30, 1998, the Company began
      implementation of a plan to separate the operations, personnel and
      executive management of the Company and WaterPur, which had been
      substantially completed by December 31, 1998. In December 1998, the Board
      of Directors determined not to effect the spin-off of the Company's
      preferred stock investment in WaterPur for several reasons, including
      WaterPur's inability to obtain regulatory approval to date and in the
      foreseeable future, and WaterPur's inability to complete its annual audit
      and to make other securities filings on a timely basis. As a result of
      WaterPur's being unable to accomplish certain actions and fulfill certain
      obligations to the Company, including the repayment of various advances,
      the Company is reviewing its options with respect to these matters.


                                        15

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

Cautionary Statement Pursuant to Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995:

This Quarterly Report on Form 10-Q for the quarterly period ended December 
31, 1998 contains "forward-looking statements" within the meaning of the 
Federal securities laws. These forward-looking statements include, but are 
not limited to, statements concerning the Company's expectations regarding 
the price of gold, estimated future production, estimated future production 
costs, currency, political and economic risks, exploration plans, and other 
statements of expectations, beliefs, future plans and strategies, anticipated 
events or trends, and similar expressions concerning matters that are not 
historical facts. The forward-looking statements in this Quarterly Report on 
Form 10-Q for the quarterly period ended December 31, 1998 are subject to 
risks and uncertainties that could cause actual results to differ materially 
from those results expressed in or implied by the statements contained herein.

Recent Developments:

During August 1998, the Board of Directors was reconfigured, with two members 
resigning and four new directors being appointed. On October 1, 1998, Amyn S. 
Dahya resigned as President and Chief Executive Officer and was replaced by 
Mark S. Zucker, one of the new directors. New management commenced a 
comprehensive review and evaluation of the Company's existing capital 
structure and business operations, with the objective of maximizing value for 
all of the Company's equity holders. In this regard, during the three months 
ended December 31, 1998, the Company purchased and retired 598,655 shares of 
Preferred Stock for $1,247,472, resulting in an increase to stockholders' 
equity (deficiency) of $26,083,215 as a result of the waiver by the sellers 
of the Preferred Stock of a penalty of $1,538,498 and the liquidation 
preference of $24,544,717.

During the three months ended December 31, 1998, the Company also began the 
implementation of a plan to streamline its operations worldwide, divest its 
interests in all non-core businesses, and focus its efforts on its mining 
operations in Zimbabwe. In this regard, the Company has implemented programs 
to evaluate ways to improve production and achieve production efficiencies, 
increase gold reserves, reduce capital expenditures and operating costs, 
maximize operating profits and operating cash flows, and evaluate future 
opportunities. The Company has reduced its executive management and corporate 
staff from seven to three people, eliminating standard employee benefits and 
utilizing part-time personnel as necessary. During this period, the Company 
closed its expensive corporate and administrative offices in Vancouver, 
British Columbia, Canada, significantly reducing occupancy costs, as well as 
travel and various other corporate expenses.

Overview:

The Company's short-term plan is to produce gold from the tailings dumps and the
surface materials, and to delay accessing underground production until gold
prices increase to a level that can justify the 


                                        16

<PAGE>

requisite capital expenditures. The Company anticipates that revenues from 
gold sales from its Zimbabwe mining operations will exceed mine operating 
expenditures, excluding depreciation, depletion and amortization, during the 
fiscal year ending September 30, 1999, based on current gold prices, currency 
exchange rates, and the continued ability of the Company to deliver and 
process ore at its mills. However, the Company expects that gold production 
for the fiscal year ending September 30, 1999 will be approximately 12,500 
ounces, as compared to 15,378 ounces produced during the fiscal year ended 
September 30, 1998. This expected decrease in gold production of 
approximately 20% is a result of a continuing decrease in the gold grade of 
the tailings dumps which the Company has been mining, as well as the 
Company's current expectation that certain mining operations may have to be 
reduced or temporarily shut down in mid to late 1999 as a result of a lack of 
available water supplies. The Company is currently developing plans for 1999 
and beyond with respect to the development of its mining properties and the 
related capital improvement budgets. Over the near term, the Company intends 
to focus on the development of its existing properties, while minimizing 
capital expenditures funded directly by the Company. Although the Company 
does not currently expect to engage in any significant property acquisition 
or exploration activities, it will consider acquisition or exploration 
opportunities on a case by case basis. The Company expects that continued 
development of its existing mining properties will result in periodic 
adjustments to the Company's gold reserves.

The Company currently expects that economically viable gold production from 
the Dawn mine and the Lonely mine will terminate during late 1999. These 
mines represent approximately one-third of the Company's current gold 
production, but do not represent a significant portion of the Company's 
current proven and probable gold reserves. It will be necessary to replace 
this production in order to maintain the economies of scale necessary to 
profitably produce gold at current gold prices. The Company is evaluating 
several short-term options to replace such production, including employing 
certain production techniques and entering into contracts with other tailings 
dumps, which could extend the lives of these mines by up to an additional two 
years. To expand gold production over the next few years from surface or 
underground mine development, the Company is evaluating the feasibility of 
accessing its proven and probable gold reserves at the Turk mine. A major 
development of the Turk mine is estimated to require capital expenditures of 
approximately $3,000,000 to $5,000,000 over a period of three years. Any such 
plan that the Company may adopt will require several months of planning and 
lead-time prior to its implementation. Given the current financial resources 
available to the Company, as well as the external factors that affect the 
values and financing of mineral producing properties in third-world 
countries, there can be no assurances that the Company would be able to 
obtain the required capital on a timely and cost effective basis, should the 
Company decide to implement a major mine development program. As an 
alternative to funding the direct development of the mine, the Company may 
also consider a joint venture or sale of its mining assets in order to 
preserve its capital and maximize shareholder value. However, there can be no 
assurances that the Company would be successful in forming such a joint 
venture or completing such a sale.

                                        17

<PAGE>

Consolidated Results of Operations - Three Months Ended December 31, 1998 and
1997:

Revenues for the three months ended December 31, 1998 were $978,830, 
reflecting the sale of 3,349 ounces of gold. Revenues for the three months 
ended December 31, 1997 were $977,030, reflecting the sale of 3,357 ounces of 
gold. The average selling price of gold for the three months ended December 
31, 1998 was approximately $292 per ounce, as compared to $291 for the three 
months ended December 31, 1997. Mineral operations expenses related to gold 
production for the three months ended December 31, 1998 were $660,964 or 
67.5% of revenues, as compared to $649,186 or 66.4% of revenues for the three 
months ended December 31, 1997. The average direct production cash cost per 
ounce of gold was $197 in 1998 as compared to $193 in 1997.

General and administrative expenses were $297,173 for the three months ended 
December 31, 1998, as compared to $536,339 for the three months ended 
December 31, 1997, a decrease of $239,166 or 44.6%. General and 
administrative expenses decreased in 1998 as compared to 1997 as a result of 
the effect of new management's cost reduction efforts, which included, among 
other things, a reduction in personnel and personnel related costs, as well 
as reductions in various other general and administrative expense categories.

Professional services expenses were $45,467 for the three months ended 
December 31, 1998, as compared to $36,401 for the three months ended December 
31, 1997, an increase of $9,066 or 24.9%, as a result of an effort by new 
management to evaluate the Company's past involvement and present position 
with regard to various transactions.

Depreciation, depletion and amortization expense was $300,735 for the three 
months ended December 31, 1998, as compared to $157,275 for the three months 
ended December 31, 1997, an increase of $143,460 or 91.2% reflecting 
additions to property, plant and equipment during 1998.

Mineral exploration expense was $4,625 for the three months ended December 
31, 1998, as compared to $129,665 for the three months ended December 31, 
1997, a decrease of $125,040 or 96.4%, primarily as a result of the Company 
reducing its exploration efforts to concentrate on developmental mining 
activities.

Loss from operations was $334,465 for the three months ended December 31, 
1998, as compared to a loss from operations of $531,836 for the three months 
ended December 31, 1997.

Total other income, net was $83,543 for the three months ended December 31, 
1998, as compared to $265,186 for the three months ended December 31, 1997, a 
decrease of $181,643 or 68.5%, primarily as a result of a reduction in 
interest income due to lower cash balances in 1998 as compared to 1997.

Net loss was $250,922 for the three months ended December 31, 1998, as 
compared to a net loss of $266,650 for the three months ended December 31, 
1997.

The Company recognized Preferred Stock dividends of $245,100 for the three 
months ended December 31, 1998, as compared to $686,425 for the 


                                        18

<PAGE>

three months ended December 31, 1997, reflecting the reduction in the 
outstanding shares of Preferred Stock in 1998 as compared to 1997. The 
Company recognized the amortization of discount on Preferred Stock, which is 
reflected as a return to the preferred stockholders and as an increase in the 
loss to common stockholders, of $809,907 for the three months ended December 
31, 1998, as compared to $2,168,593 for the three months ended December 31, 
1997, reflecting the reduction in outstanding shares of Preferred stock in 
1998 as compared to 1997. During the three months ended December 31, 1998, 
the Company recognized a Preferred Stock penalty of $2,184,259 relating to 
the delisting of the Company's common stock from NASDAQ on July 31, 1998.

Net loss applicable to common stockholders was $3,490,188 for the three 
months ended December 31, 1998, as compared to a net loss applicable to 
common stockholders of $3,121,668 for the three months ended December 31, 
1997.

Consolidated Financial Condition - December 31, 1998:

Liquidity and Capital Resources:

The Company's cash and cash equivalents were $3,693,004 at December 31, 1998, 
as compared to $4,356,200 at September 30, 1998, a decrease of $663,196, 
primarily as a result of the cash utilized to repurchase shares of Preferred 
Stock. As of December 31, 1998, the Company's working capital was $2,668,795, 
as compared to $4,658,361 at September 30, 1998, a decrease of $1,989,566, 
respectively, primarily as a result of the repurchase of shares of Preferred 
Stock and the recognition of the Preferred Stock penalty. As a result, the 
Company's current ratio was 1.8:1 at December 31, 1998, as compared to 3.1:1 
at September 30, 1998.

Operating. The Company's operations utilized cash resources of $86,781 during 
the three months ended December 31, 1998, as compared to $463,147 for the 
three months ended December 31, 1997, reflecting a reduction in cash 
resources utilized to support mining operations and related administrative 
costs in Zimbabwe, and reduced general and administrative expenses.

The Company's working capital resources consist primarily of cash and cash 
equivalents, marketable securities, and the net cash generated from the 
production and sale of gold. The Company anticipates that its working capital 
resources are adequate to fund operating expenditures during the remainder of 
the fiscal year ending September 30, 1999, excluding any major capital 
expenditures, the payment of a cash penalty to the holders of the Preferred 
Stock, or the redemption of the Preferred Stock at the maximum redemption 
obligation resulting from the technical default that occurred on July 31, 
1998.

Investing. During the three months ended December 31, 1998, the Company 
generated net cash from investing activities of $68,761, which consisted of 
the proceeds from the disposition of marketable securities of $203,771, which 
was offset in part by the purchase of property and equipment of $135,010. 
During the three months ended December 31, 1997, the Company utilized net 
cash in investing activities of $2,998,763, which consisted primarily of the 
purchase of marketable securities of $2,053,343 and the purchase of property 
and equipment of 


                                        19

<PAGE>

$988,781. As of December 31, 1998, the Company did not have any significant 
outstanding commitments for capital expenditures.

Financing. During the three months ended December 31, 1998, the Company 
utilized net cash in financing activities of $605,224 to repurchase and 
retire shares of Preferred Stock. During the three months ended December 31, 
1997, the Company utilized net cash in financing activities of $2,164,615, 
primarily to repurchase common shares aggregating $2,037,157.

Inflation and Currency Matters:

Foreign operations are subject to certain risks inherent in conducting 
business abroad, including price and currency exchange controls, and 
fluctuations in the relative value of currencies. Changes in the relative 
value of currencies occur periodically and may, in certain instances, 
materially affect the Company's results of operations.

The Company is required to sell its gold production from its mining 
operations in Zimbabwe to the Reserve Bank of Zimbabwe at the spot 2:00 p.m. 
London price on the day of delivery. Settlement of gold sales are in Zimbabwe 
dollars at the equivalent of the United States gold trading rate on the date 
of sale. The spot gold price on February 1, 1999 was $286.15 per ounce.

Approximately 80% of the Company's mine operating costs incurred in Zimbabwe 
are United States dollar based. The remaining 20% of mine operating costs 
incurred in Zimbabwe are denominated in Zimbabwe dollars, and are 
periodically subject to significant increases mandated by the Zimbabwe 
government, including costs such as wages and utilities, which are two of the 
major operating costs of the Company's mines.

Operating costs are affected in part by inflation rates in Zimbabwe. 
Inflation in Zimbabwe was approximately 40% in 1998. The Zimbabwe dollar fell 
approximately 60% against the United States dollar during 1998.

In response to this situation, the government of Zimbabwe is considering 
several actions, including reintroducing exchange controls, pegging the 
exchange rate at below free market rates, and banning remittance of profits 
from Zimbabwe. On an unofficial basis, the government of Zimbabwe has also 
recently implemented policies designed to restrict the ability of companies 
to convert Zimbabwe dollars into foreign currencies and transfer such amounts 
out of Zimbabwe. Subject to the terms of intercompany loan agreements 
approved by the Reserve Bank of Zimbabwe, the Company is currently able to 
convert Zimbabwe dollars into United States dollars and transfer such amounts 
to the United States, although there can be no assurances that the Company 
will be able to continue to do so in the future.

Year 2000 Issue:

The Year 2000 Issue results from the fact that certain computer programs have 
been written using two digits rather than four digits to designate the 
applicable year. Computer programs that have sensitive software may recognize 
a date using "00" as the year 1900 rather than


                                       20

<PAGE>

the year 2000. This could result in a system failure or miscalculations 
causing disruptions of operations, including, among other things, a temporary 
inability to process transactions, send invoices or engage in similar normal 
business activities. Based on a recent internal assessment, the Company does 
not believe that the cost to modify its existing software and/or convert to 
new software will be significant.

New Accounting Pronouncements:

In June 1997, the Financial Accounting Standards Board issued Statement No. 
130, "Reporting Comprehensive Income" ("SFAS No. 130"), which is effective 
for financial statements issued for fiscal years beginning after December 15, 
1997. SFAS No. 130 establishes standards for the reporting and display of 
comprehensive income, its components and accumulated balances in a full set 
of general purpose financial statements. SFAS No. 130 defines comprehensive 
income to include all changes in equity except those resulting from 
investments by owners and distributions to owners. Among other disclosures, 
SFAS No. 130 requires that all items that are required to be recognized under 
current accounting standards as components of comprehensive income be 
reported in a financial statement that is presented with the same prominence 
as other financial statements. The Company adopted SFAS No. 130 for its 
fiscal year beginning October 1, 1998. Adoption of SFAS No. 130 did not have 
a material effect on the Company's financial statement presentation and 
disclosures. Under SFAS No. 130, the Company reports the foreign currency 
translation adjustment as a component of comprehensive income.

In June 1997, the Financial Accounting Standards Board issued Statement No. 
131, "Disclosures about Segments of an Enterprise and Related Information" 
("SFAS No. 131"), which supersedes SFAS No. 14, "Financial Reporting for 
Segments of a Business Enterprise", and which is effective for financial 
statements issued for fiscal years beginning after December 15, 1997. SFAS 
No. 131 establishes standards for the way that public companies report 
information about operating segments in annual financial statements and 
requires reporting of selected information about operating segments in 
interim financial statements issued to the public. SFAS No. 131 also 
establishes standards for disclosures by public companies regarding 
information about their major customers, operating segments, products and 
services, and the geographic areas in which they operate. SFAS No. 131 
defines operating segments as components of an enterprise about which 
separate financial information is available that is evaluated regularly by 
the chief operating decision maker in deciding how to allocate resources and 
in assessing performance. SFAS No. 131 requires comparative information for 
earlier years to be restated. The Company adopted SFAS No. 131 for its fiscal 
year beginning October 1, 1998. Application of SFAS No. 131 to interim 
periods in the initial year of adoption is not required. The Company does not 
anticipate that adoption of SFAS No. 131 will have a material effect on its 
financial statement presentation and disclosures.

In February 1998, the Financial Accounting Standards Board issued Statement 
No. 132, "Employers' Disclosures about Pensions and Other Postretirement 
Benefits" ("SFAS No. 132"), which is effective for financial statements 
issued for fiscal years beginning after December


                                        21

<PAGE>

15, 1997. SFAS No. 132 revises employers' disclosures about pension and other 
postretirement benefit plans. SFAS No. 132 requires comparative information 
for earlier years to be restated. The Company adopted SFAS No. 132 for its 
fiscal year beginning October 1, 1998. The Company does not expect that 
adoption of SFAS No. 132 will have a material effect on its financial 
statement presentation and disclosures.

In June 1998, the Financial Accounting Standards Board issued Statement No. 
133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 
No. 133"), which is effective for financial statements for all fiscal 
quarters of all fiscal years beginning after June 15, 1999. SFAS No. 133 
standardizes the accounting for derivative instruments, including certain 
derivative instruments embedded in other contracts, by requiring that an 
entity recognize those items as assets or liabilities in the statement of 
financial position and measure them at fair value. SFAS No. 133 also 
addresses the accounting for hedging activities. The Company will adopt SFAS 
No. 133 for its fiscal year beginning October 1, 1999, and does not 
anticipate that its adoption will have a material effect on the Company's 
financial statement presentation and disclosures.


                                        22

<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of September 30, 1998 and December 31, 1998, the Company had an investment 
in marketable securities which consisted of United States government-backed 
mortgage securities of $1,588,536 and $1,371,804, respectively, bearing 
interest at 8% per annum, with an effective yield of approximately 7.7% per 
annum. Such investment is stated at market value, which approximates cost. 
This investment is the only investment of the Company whose market value is 
sensitive to changes in interest rates. The Company expects that the 
investment will be fully liquidated by December 2001. Although changes in 
short-term interest rates could affect the interim market value of this 
investment, the Company does not expect to incur any loss, since the 
investment is backed by the United States government and the Company intends 
to hold this investment to maturity.

As a result of the Company's assets and operations being concentrated in 
Zimbabwe, the Company is subject to substantial foreign currency exchange 
risk. The significant devaluation of the Zimbabwe dollar against the United 
States dollar during the past few years has had, and continues to have, a 
material adverse effect on the Company's consolidated financial position, 
results of operations and cash flows. The Company made its investment in its 
Zimbabwe assets and operations when the conversion rate of the United States 
dollar to the Zimbabwe dollars was approximately 1:13. At December 31, 1998, 
as a result of several factors, including significant inflation in Zimbabwe 
in 1997 and 1998, the conversion rate of the United States dollar to the 
Zimbabwe dollar was approximately 1:38. As a result, the Company's operations 
in Zimbabwe at current levels are profitable when measured in Zimbabwe 
dollars, but are not profitable when measured in United States dollars, as a 
result of the calculation of depreciation, depletion and amortization at 
historical conversion rates and the calculation of revenues and expenses at 
current conversion rates.

Due to the unique nature of the Company's Preferred Stock repurchase 
obligation and Preferred Stock penalty, the Company is unable to determine a 
market value for such obligations or their sensitivity to any external 
parameters.

The Company is required to sell its gold production from its mining 
operations in Zimbabwe to the Reserve Bank of Zimbabwe at the spot 2:00 p.m. 
London price on the day of delivery. Accordingly, the Company's revenues from 
the sale of its gold production is directly linked to the price of gold in 
world commodity trading markets. Furthermore, should the price of gold drop 
significantly, it may not be commercially feasible for the Company to 
continue to operate certain of its properties in the short-term. Under such 
circumstances, the Company may also be required to recognize a charge to 
operations to reflect a permanent impairment in the carrying value of its 
mineral properties and other assets related to gold production.


                                        23

<PAGE>


                           PART II. OTHER INFORMATION


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         (c)  Sales of Equity Securities

         During the three months ended December 31, 1998, the Company issued
         5,424,792 shares of common stock upon conversion of 260 shares of
         Preferred Stock. The shares of common stock were issued without
         registration in reliance upon the exemption afforded by Section 4(2) of
         the Securities Act of 1933, as amended, and Regulation D promulgated by
         the Securities and Exchange Commission thereunder, based on certain
         representations made to the Company by the converting stockholder. The
         stockholder is an investment fund that had originally purchased the
         shares of Preferred Stock in the Company's 1997 private placement.

         During the three months ended December 31, 1998, the Company issued
         9,804 shares of Preferred Stock as the quarterly payment of the 8%
         annual dividend on the Preferred Stock. The aggregate value of such
         shares of Preferred Stock of $245,100 was recorded at the stated value
         of $25.00 per share. The shares of Preferred Stock were issued without
         registration in reliance upon the exemption afford by Section 4(2) of
         the Securities Act of 1933, as amended, and Regulation D promulgated by
         the Securities and Exchange Commission thereunder, based on certain
         representations made to the Company by the stockholders. The
         stockholders were investors that had originally purchased the shares of
         Preferred Stock in the Company's 1997 private placement.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         (b)  Material Delinquency with Respect to Preferred Stock

         Pursuant to the Investment Agreements, a technical default occurred
         when the Company's common stock was delisted from the NASDAQ SmallCap
         Market on July 31, 1998. The Company may be obligated to pay the
         holders of the Preferred Stock a cash penalty of 3% of the total
         purchase price of the Preferred Stock during any period in excess of 30
         days that the Company's common stock is not listed and traded on NASDAQ
         or a national securities exchange. The Investment Agreements provide
         the holders of the Preferred Stock with the opportunity to have their
         shares redeemed by the Company at the adjusted liquidation preference
         plus accrued but unpaid dividends if the 3% penalty is not paid within
         30 days of when due. The Company believes that the exercise of such
         rights by the holders of the Preferred Stock would be subject to legal
         challenge by the Company.

         Since the Company's common stock was delisted from NASDAQ on July 31,
         1998, the Company has recorded a penalty of $3,023,996 through December
         31, 1998, which has not been paid. As a result of the repurchase or
         conversion of 618,863 shares of Preferred Stock through December 31,
         1998, such stockholders have waived


                                        24

<PAGE>

         the right to claim their proportionate share of the penalty, thus 
         reducing the corresponding potential penalty obligation to $1,485,498
         at December 31, 1998.

         The Company is currently engaged in discussions with the holders of the
         remaining shares of Preferred stock regarding various matters,
         including a waiver of the penalty and of their rights to require the
         Company to redeem their shares of Preferred Stock. There can be no
         assurances that the Company will be able to obtain a waiver or that the
         holders of the Preferred Stock will not exercise their rights to
         require the Company to redeem their shares. Should the holders of the
         Preferred Stock demand payment of the cash penalty or exercise their
         rights to require the Company to redeem their shares, and should the
         Company not prevail in its challenge to any such asserted rights, the
         Company may be forced to file for protection under the United States
         Bankruptcy Code.

         Since the right to require the Company to redeem these shares of
         Preferred Stock outstanding at September 30, 1998 and December 31, 1998
         is outside the control of the Company, the carrying value of the
         Preferred Stock at such dates has been recorded in the consolidated
         financial statements at their maximum liquidation preference of
         $44,440,451 and $20,296,557, respectively, and such shares have been
         reclassified out of the shareholders' equity (deficiency) section of
         the consolidated balance sheet. As a result of the repurchase or
         conversion of 618,863 shares of Preferred Stock through December 31,
         1998, such shareholders have waived the right to claim their
         proportionate share of the liquidation preference, thus reducing the
         maximum liquidation preference, and the corresponding potential
         redemption obligation, to $20,296,557 at December 31, 1998.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits:

              27  Financial Data Schedule (electronic filing only)

         (b)  Reports on Form 8-K:

              Three Months Ended December 31, 1998 - None


                                        25

<PAGE>



                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.




                                              CASMYN CORP.
                                        ------------------------
                                              (Registrant)



                                             /s/ MARK S. ZUCKER
DATE:  May 11, 1999                     By:  ________________________
                                             Mark S. Zucker
                                             President and Chief
                                             Executive Officer



                                             /s/ ROBERT N. WEINGARTEN
DATE:  May 11, 1999                     By:  ________________________
                                             Robert N. Weingarten
                                             Chief Financial Officer




                                        26