<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 March 31, 1999

[ ]  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)

                                 Not applicable
               ---------------------------------------------------
              (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) - March 31,
               1999 and September 30, 1998

               Consolidated Statements of Operations (Unaudited) -
               Three Months and Six Months Ended March 31, 1999 and
               1998

               Consolidated Statements of Comprehensive Income
               (Unaudited) - Three Months and Six Months Ended March
               31, 1999 and 1998

               Consolidated Statements of Cash Flows (Unaudited) -
               Six Months Ended March 31, 1999 and 1998

               Notes to Consolidated Financial Statements (Unaudited) -
               Six Months Ended March 31, 1999 and 1998

      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>
                                            March 31,     September 30,
                                              1999             1998
                                          -----------     -------------
<S>                                       <C>             <C>
ASSETS

CURRENT

  Cash and cash equivalents               $ 2,986,993      $ 4,356,200
  Marketable securities                     1,183,483        1,588,536
  Accounts receivable                         321,858          301,456
  Inventories (Note 1)                        602,546          643,135
  Prepaid expenses and other
    current assets                              3,826           20,830
                                          -----------      -----------
                                            5,098,706        6,910,157
                                          -----------      -----------

PROPERTY AND EQUIPMENT                     20,483,022       20,214,581
  Less accumulated
    depreciation, depletion
    and amortization                       (2,649,278)      (2,053,079)
                                          -----------      -----------
                                           17,833,744       18,161,502
                                          -----------      -----------

Other assets                                   10,244           23,262
                                          -----------      -----------
                                          $22,942,694      $25,094,921
                                          -----------      -----------
                                          -----------      -----------
</TABLE>

                                   (continued)

                                       3

<PAGE>

                          Casmyn Corp. and Subsidiaries
               Consolidated Balance Sheets (Unaudited) (continued)

<TABLE>
<CAPTION>
                                            March 31,     September 30,
                                              1999             1998
                                          -----------     -------------
<S>                                       <C>             <C>
LIABILITIES

CURRENT

Accounts payable                          $   439,877      $   518,823
Accrued liabilities                           682,969          893,236
Preferred Stock penalty
  (Note 2)                                  2,599,779          839,737
                                          -----------      -----------
                                            3,722,625        2,251,796

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

PREFERRED STOCK (Note 2)                   20,697,623       44,440,451
                                           ----------       ----------

STOCKHOLDERS' EQUITY (DEFICIENCY)

Preferred stock, $0.10 par value
  Authorized - 20,000,000 shares
  Issued and outstanding -
    505,022 shares at March 31, 1999 and 
    1,084,347 shares at September 30, 1998
    (Liquidation preference - $20,697,623 at 
    March 31, 1999 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 March
    31, 1998 and 217,751,710 shares
    at September 30, 1998 (Note 2)          8,927,060        8,710,068
  Additional paid-in capital               54,397,471       29,272,294
  Accumulated deficit                     (61,017,002)     (55,866,898)
  Accumulated other comprehensive
    income (Note 1)                        (3,785,083)      (3,712,790)
                                          -----------      -----------
                                           (1,477,554)     (21,597,326)

                                          -----------      -----------
                                          $22,942,694      $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 March 31,
                                    -------------------------------
                                        1999                1998
                                    ------------        -----------
<S>                                 <C>                 <C>
REVENUE
  Gold sales                         $  954,123          $1,224,376
                                     -----------         ----------
COSTS AND EXPENSES
  Mineral production                    727,035             775,724
  General and administrative
    expenses                            214,700             630,908
  Professional services                  59,013             147,145
  Compensatory stock options              4,331
  Depreciation, depletion and
    amortization                        298,488             150,691
  Mineral exploration expense             4,625              29,158
                                     -----------         ----------
                                      1,308,192           1,733,626
                                     -----------         ----------
LOSS FROM OPERATIONS                   (354,069)           (509,250)
                                     -----------         ----------

OTHER INCOME (EXPENSE)
  Minority interest in net
    loss of consolidated
    subsidiary                                               41,400
  Gain (loss) on foreign
    currency translation                (12,376)            134,830
  Interest income, net                   68,558             130,580
  Gain on sale of investments                               143,304
  Loan guarantee loss (Note 5)                           (4,978,424)
  Loss on short-term
    investments                          (3,098)
  Other expense, net                                        (18,928)
                                     -----------         ----------
                                         53,084          (4,547,238)
                                     -----------         ----------
NET LOSS                             $ (300,985)        ($5,056,488)
                                     -----------         ----------
                                     -----------         ----------
</TABLE>

                                   (continued)

                                       5

<PAGE>

                          Casmyn Corp. and Subsidiaries
          Consolidated Statements of Operations (Unaudited) (continued)

<TABLE>
<CAPTION>
                                      Three Months Ended March 31,
                                    -------------------------------
                                        1999                1998
                                    -----------         -----------
<S>                                 <C>                 <C>
NET LOSS APPLICABLE TO COMMON
  STOCKHOLDERS
  Net loss                           $  (300,985)       ($5,056,488)
  Less:
    Dividends on Preferred
      Stock (Note 2)                    (244,650)          (539,150)
    Amortization of discount
      on Preferred Stock
      (Note 2)                                           (1,896,660)
    Preferred Stock penalty
      (Note 2)                        (1,114,281)
                                     -----------         ----------
NET LOSS APPLICABLE TO COMMON
  STOCKHOLDERS                       ($1,659,916)       ($7,492,298)
                                     -----------         ----------
                                     -----------         ----------
LOSS PER COMMON SHARE - BASIC
  AND DILUTED (Note 1)                    ($0.01)            ($0.24)
                                     -----------         ----------
                                     -----------         ----------
WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING          223,176,502         30,914,485
                                     -----------         ----------
                                     -----------         ----------
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       6

<PAGE>

                          Casmyn Corp. and Subsidiaries
                Consolidated Statements of Operations (Unaudited)

<TABLE>
<CAPTION>
                                       Six Months Ended March 31,
                                    -------------------------------
                                        1999                1998
                                    -----------         -----------
<S>                                 <C>                 <C>
REVENUE
  Gold sales                         $1,932,953          $2,201,406
                                     -----------         ----------
COSTS AND EXPENSES
  Mineral production                  1,387,999           1,424,910
  General and administrative
    expenses                            511,873           1,167,247
  Professional services                 104,480             183,546
  Compensatory stock options              8,662
  Depreciation, depletion and
    amortization                        599,223             307,966
  Mineral exploration expense             9,250             158,823
                                     -----------         ----------
                                      2,621,487           3,242,492
                                     -----------         ----------
LOSS FROM OPERATIONS                   (688,534)         (1,041,086)
                                     -----------         ----------
OTHER INCOME (EXPENSE)
  Minority interest in net
    loss of consolidated
    subsidiary                                               81,543
  Gain (loss) on foreign
    currency translation                (17,343)             58,204
  Interest income, net                  178,047             432,249
  Gain on sale of investments                               143,304
  Loan guarantee loss (Note 5)                           (4,978,424)
  Loss on short-term
    investments                         (24,077)
  Other expense, net                                        (18,928)
                                     -----------         ----------
                                        136,627          (4,282,052)
                                     -----------         ----------
NET LOSS                             $ (551,907)        ($5,323,138)
                                     -----------         ----------
                                     -----------         ----------
</TABLE>

                                    (continued)

                                       7

<PAGE>

                          Casmyn Corp. and Subsidiaries
          Consolidated Statements of Operations (Unaudited) (continued)

<TABLE>
<CAPTION>
                                       Six Months Ended March 31,
                                    -------------------------------
                                        1999                1998
                                    -----------         -----------
<S>                                 <C>                 <C>
NET LOSS APPLICABLE TO COMMON
  STOCKHOLDERS
  Net loss                          $   (551,907)      ($ 5,323,138)
  Less:
    Dividends on Preferred
      Stock (Note 2)                    (489,750)        (1,225,575)
    Amortization of discount
      on Preferred Stock
      (Note 2)                          (809,907)        (4,065,253)
    Preferred Stock penalty
      (Note 2)                        (3,298,540)
                                     -----------        -----------
NET LOSS APPLICABLE TO COMMON
  STOCKHOLDERS                       ($5,150,104)      ($10,613,966)
                                     -----------        -----------
                                     -----------        -----------
LOSS PER COMMON SHARE - BASIC
  AND DILUTED (Note 1)                    ($0.02)            ($0.48)
                                     -----------        -----------
                                     -----------        -----------
WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING          220,464,106         22,138,838
                                     -----------        -----------
                                     -----------        -----------
</TABLE>



          See accompanying notes to consolidated financial statements.

                                       8

<PAGE>

                          Casmyn Corp. and Subsidiaries
           Consolidated Statements of Comprehensive Income (Unaudited)

<TABLE>
<CAPTION>
                                      Three Months Ended March 31,
                                    -------------------------------
                                        1999                1998
                                    -----------         -----------
<S>                                 <C>                 <C>
NET LOSS                            $  (300,985)        ($5,056,488)

Other comprehensive income
  (Note 1):
  Foreign currency translation
    adjustment (Note 1)                 (37,314)           (276,239)
                                    ------------        -----------
COMPREHENSIVE INCOME (LOSS)         $  (338,299)        ($5,332,727)
                                    ------------        -----------
                                    ------------        -----------
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       9

<PAGE>

                          Casmyn Corp. and Subsidiaries
           Consolidated Statements of Comprehensive Income (Unaudited)

<TABLE>
<CAPTION>
                                       Six Months Ended March 31,
                                    -------------------------------
                                        1999                1998
                                    -----------         -----------
<S>                                 <C>                 <C>
NET LOSS                            $  (551,907)        ($5,323,138)

Other comprehensive income
  (Note 1):
  Foreign currency translation
    adjustment (Note 1)                 (72,293)            (70,793)
                                    ------------        -----------
COMPREHENSIVE INCOME (LOSS)         $  (624,200)        ($5,393,931)
                                    ------------        -----------
                                    ------------        -----------

</TABLE>




          See accompanying notes to consolidated financial statements.


                                       10

<PAGE>

                          Casmyn Corp. and Subsidiaries
                Consolidated Statements of Cash Flows (Unaudited)

<TABLE>
<CAPTION>
                                       Six Months Ended March 31,
                                    -------------------------------
                                        1999                1998
                                    -----------         -----------
<S>                                 <C>                 <C>
OPERATING ACTIVITIES
  Net loss                           $ (551,907)        $(5,323,138)
  Adjustments to reconcile
    net loss to net cash
    used in operating
    activities:
      Depreciation, depletion
        and amortization                599,223             307,966
      Foreign exchange (gain)
        loss                             17,343             (58,204)
      Minority interest in net
        loss of consolidated
        subsidiary                                          (81,543)
      Compensatory stock option
        expense                           8,662
      Loss on short-term
        investments                      24,077
      Loan guarantee loss                                 4,978,424
      Changes in operating
        assets and liabilities:
        (Increase) decrease in:
          Accounts receivable           (20,402)           (299,779)
          Inventories                    40,589              45,982
          Prepaid expenses and
            other current assets         17,004             227,045
          Other assets                   13,018            (170,163)
        Increase (decrease) in:
          Accounts payable              (78,946)            227,243
          Accrued liabilities          (210,267)           (227,193)
                                    -----------         -----------
  Net cash used in operating
    activities                         (141,606)           (373,360)
                                    -----------         -----------

INVESTING ACTIVITIES
  Purchase of property and
    equipment                          (271,465)         (2,485,392)
  Purchase of marketable
    securities                                           (2,053,343)
  Proceeds from disposition
    of marketable securities            380,976             161,558
                                    -----------         -----------
  Net cash provided by (used
    in) investing activities            109,511          (4,377,177)
                                    -----------         -----------
                                    -----------         -----------

</TABLE>
                                   (continued)


                                       11

<PAGE>

                          Casmyn Corp. and Subsidiaries
          Consolidated Statements of Cash Flows (Unaudited) (continued)

<TABLE>
<CAPTION>
                                       Six Months Ended March 31,
                                    -------------------------------
                                        1999                1998
                                    -----------         -----------
<S>                                 <C>                 <C>
FINANCING ACTIVITIES
  Increase in restricted cash                             5,074,659
  Payment under loan guarantee                           (4,978,424)
  Repayments of long-term debt                              (58,418)
  Increase in line of credit                                 15,303
  Exercise of stock options                                   2,797
  Purchase and retirement of
    common stock                                         (2,037,157)
  Purchase and retirement of
    Preferred Stock                  (1,247,472)
                                    -----------         -----------
  Net cash used in financing
    activities                       (1,247,472)         (1,981,240)
                                    -----------         -----------
Effect of exchange rate changes
  on cash and cash equivalents          (89,640)            (12,589)
                                    -----------         -----------
CASH AND CASH EQUIVALENTS:
  Net decrease                       (1,369,207)         (6,744,366)
  At beginning of period              4,356,200          18,185,515
                                    -----------         -----------
  At end of period                   $2,986,993         $11,441,149
                                    -----------         -----------
                                    -----------         -----------

</TABLE>

          See accompanying notes to consolidated financial statements.

                                       12

<PAGE>


                          Casmyn Corp. and Subsidiaries
             Notes to Consolidated Financial Statements (Unaudited)
                    Six Months Ended March 31, 1999 and 1998

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 March 31,
      1999 was approximately US$1.00 = ZIM$39.00 and for the six months ended
      March 31, 1999 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 March 31, 1999, results of
      operations for the three months and six months ended March 31, 1999 and
      1998, comprehensive income for the three months and six months ended March
      31, 1999 and 1998, and cash flows for the six months ended March 31, 1999
      and 1998. The consolidated balance sheet as of September 30, 1998 is
      derived from the Company's audited financial statements.

                                       13

<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,
      disclosure of contingent 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 and six months ended March
      31, 1999 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 and six months ended March 31, 1999 and 1998. Basic and diluted
      earnings per share are the same for all periods presented.

2.    Stockholders' Equity (Deficiency)

      Common Stock - During the six months ended March 31, 1998, the Company
      repurchased and retired 402,500 shares of common stock for aggregate 
      cash payments of $2,037,157.

                                       14

<PAGE>

      During the six months ended March 31, 1999, the Company issued 5,424,792
      shares of common stock upon conversion of 260 shares of First Convertible
      Preferred Stock (the "Preferred Stock").

      Subsequent to March 31, 1999, the Company issued 20,401,640 shares of 
      common stock upon conversion of 1,664 shares of Preferred Stock.

      Preferred Stock - During the three months ended March 31, 1998 and 1999,
      the Company issued 21,566 shares and 9,786 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
      $539,150 and $244,650 for the three months ended March 31, 1998 and 1999,
      respectively, was recorded at the stated value of $25.00 per share.

      During the six months ended March 31, 1998 and 1999, the Company issued
      49,023 shares and 19,590 shares, respectively, of Preferred Stock as the
      aggregate quarterly payment of the 8% annual dividend on the Preferred
      Stock. The aggregate value of such shares of Preferred Stock of $1,225,575
      and $489,750 for the six months ended March 31, 1998 and 1999,
      respectively, was recorded at the stated value of $25.00 per share.

      During the six months ended March 31, 1999, the Company repurchased and
      retired 598,655 shares of Preferred Stock for aggregate cash payments 
      of $1,247,472, resulting in an increase to stockholders' equity 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 six months ended March 31, 1998 and 1999, the
      Company recorded a charge to accumulated deficit and a corresponding
      increase to additional paid-in capital of $4,065,253 and $809,907,
      respectively. During the three months ended March 31, 1998, the Company
      recorded a charge to accumulated deficit of $1,896,660 and a corresponding
      increase to additional paid-in capital of $1,896,660. The Company did not
      record any additional Preferred Stock dividend during the three months
      ended March 31, 1999, as 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

                                       15

<PAGE>

      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 $1,114,281 and $3,298,540 
      for the three months and six months ended March 31, 1999, respectively, 
      which has not been paid. As a result of the repurchase or conversion
      of 618,863 shares of Preferred Stock through March 31, 1999, such
      stockholders have waived the right to claim their proportionate share of
      the penalty, thus reducing the corresponding potential penalty obligation
      by $1,538,498.

      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 March 31, 1999 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 $20,697,623,
      respectively, and such shares have been reclassified out of the
      stockholders' equity (deficiency) section of the consolidated balance
      sheet. As a result of the repurchase or conversion of 598,915 shares of
      Preferred Stock during the six months ended March 31, 1999, 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, 
      by $24,544,717.

      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 these
      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,

                                       16

<PAGE>

      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 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.

                                       17

<PAGE>

      Effective September 30, 1997, subject to certain conditions, 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 and certain other
      conditions. 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 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.

5.    Loan Guarantee Loss

      As of September 30, 1998, the Company had $5,074,659 of restricted cash
      (including accrued interest of $74,659), which had been deposited with two
      financial institutions under the Company's guarantees of two short-term
      loans. Under agreements with such parties, the loans were secured by
      certain investment accounts that contained shares of common stock of the
      Company. During the three months ended March 31, 1998, the significant
      decline in the price per share of the Company's common stock created an
      impairment in the value of the shares of common stock in the accounts with
      such financial institutions. As a result, the financial institutions
      proceeded to call the guarantees provided by the Company, resulting in the
      Company incurring a loss of $4,978,424 during the three months and six
      months ended March 31, 1998.

                                       18

<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 March 31, 1999
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 March 31, 1999 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 six months 
ended March 31, 1999, the Company purchased and retired 598,655 shares of 
Preferred Stock for aggregate cash payments of $1,247,472, resulting in 
an increase to stockholders' equity 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.

Commencing October 1, 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 requisite capital expenditures.
The Company anticipates that revenues

                                       19

<PAGE>

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.

Consolidated Results of Operations:

                                       20

<PAGE>

Three Months Ended March 31, 1999 and 1998:

Revenues for the three months ended March 31, 1999 were $954,123, reflecting the
sale of 3,360 ounces of gold. Revenues for the three months ended March 31, 1998
were $1,224,376, reflecting the sale of 4,038 ounces of gold. The average
selling price of gold for the three months ended March 31, 1999 was
approximately $284 per ounce, as compared to $303 for the three months ended
March 31, 1998. Mineral operations expenses related to gold production for the
three months ended March 31, 1999 were $727,035 or 76.2% of revenues, as
compared to $775,724 or 63.4% of revenues for the three months ended March 31,
1998. The average direct production cash cost per ounce of gold was $216 in 1999
as compared to $192 in 1998.

General and administrative expenses were $214,700 for the three months ended
March 31, 1999, as compared to $630,908 for the three months ended March 31,
1998, a decrease of $416,208 or 66.0%. General and administrative expenses
decreased in 1999 as compared to 1998 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 $59,013 for the three months ended March 31,
1999, as compared to $147,145 for the three months ended March 31, 1998, a
decrease of $88,132 or 59.9%, as a result of new management's cost reduction
efforts.

Depreciation, depletion and amortization expense was $298,488 for the three
months ended March 31, 1999, as compared to $150,691 for the three months ended
March 31, 1998, an increase of $147,797 or 98.1%, reflecting additions to
property, plant and equipment during the fiscal year ended September 30, 1998.

Mineral exploration expense was $4,625 for the three months ended March 31,
1999, as compared to $29,158 for the three months ended March 31, 1998, a
decrease of $24,533 or 84.1%, primarily as a result of the Company reducing its
exploration efforts to concentrate on developmental mining activities.

Loss from operations was $354,069 for the three months ended March 31, 1999, as
compared to a loss from operations of $509,250 for the three months ended March
31, 1998.

As of September 30, 1998, the Company had $5,074,659 of restricted cash
(including accrued interest of $74,659), which had been deposited with two
financial institutions under the Company's guarantees of two short-term loans.
Under agreements with such parties, the loans were secured by certain investment
accounts that contained shares of common stock of the Company. During the three
months ended March 31, 1998, the significant decline in the price per share of
the Company's common stock created an impairment in the value of the shares of
common stock in the accounts with such financial institutions. As a result, the
financial institutions proceeded to call the guarantees provided by the Company,
resulting in the Company incurring a loss of $4,978,424 during the three months
ended March 31, 1998.

                                       21

<PAGE>

Interest income, net was $68,558 for the three months ended March 31, 1999, as
compared to $130,580 for the three months ended March 31, 1998, as a result of
lower cash balances in 1999 as compared to 1998.

Net loss was $300,985 for the three months ended March 31, 1999, as compared to
a net loss of $5,056,488 for the three months ended March 31, 1998.

The Company recognized Preferred Stock dividends of $244,650 for the three
months ended March 31, 1999, as compared to $539,150 for the three months ended
March 31, 1998, reflecting the reduction in the outstanding shares of Preferred
Stock in 1999 as compared to 1998. 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
$1,896,660 for the three months ended March 31, 1998. The Company did not
recognize any amortization of discount on Preferred stock for the three months
ended March 31, 1999, as the Company completed the recognition of this
additional Preferred Stock dividend during October 1998. During the three months
ended March 31, 1999, the Company recognized a Preferred Stock penalty of
$1,114,281 relating to the delisting of the Company's common stock from NASDAQ
on July 31, 1998.

Net loss applicable to common stockholders was $1,659,916 for the three months
ended March 31, 1999, as compared to a net loss applicable to common
stockholders of $7,492,298 for the three months ended March 31, 1998.

Six Months Ended March 31, 1999 and 1998:

Revenues for the six months ended March 31, 1999 were $1,932,953, reflecting the
sale of 6,709 ounces of gold. Revenues for the six months ended March 31, 1998
were $2,201,406, reflecting the sale of 7,395 ounces of gold. The average
selling price of gold for the six months ended March 31, 1999 was approximately
$288 per ounce, as compared to $298 for the six months ended March 31, 1998.
Mineral operations expenses related to gold production for the six months ended
March 31, 1999 were $1,387,999 or 71.8% of revenues, as compared to $1,424,910
or 64.7% of revenues for the six months ended March 31, 1998. The average direct
production cash cost per ounce of gold was $207 in 1999 as compared to $193 in
1998.

General and administrative expenses were $511,873 for the six months ended March
31, 1999, as compared to $1,167,247 for the six months ended March 31, 1998, a
decrease of $655,374 or 56.1%. General and administrative expenses decreased in
1999 as compared to 1998 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 $104,480 for the six months ended March 31,
1999, as compared to $183,546 for the six months ended March 31, 1998, a
decrease of $79,066 or 43.1%, as a result of new management's cost reduction
efforts.

                                       22

<PAGE>

Depreciation, depletion and amortization expense was $599,223 for the six months
ended March 31, 1999, as compared to $307,966 for the six months ended March 31,
1998, an increase of $291,257 or 94.6%, reflecting additions to property, plant
and equipment during the fiscal year ended September 30, 1998.

Mineral exploration expense was $9,250 for the six months ended March 31, 1999,
as compared to $158,823 for the six months ended March 31, 1998, a decrease of
$149,573 or 94.2%, primarily as a result of the Company reducing its exploration
efforts to concentrate on developmental mining activities.

Loss from operations was $688,534 for the six months ended March 31, 1999, as
compared to a loss from operations of $1,041,086 for the six months ended March
31, 1998.

As of September 30, 1998, the Company had $5,074,659 of restricted cash
(including accrued interest of $74,659), which had been deposited with two
financial institutions under the Company's guarantees of two short-term loans.
Under agreements with such parties, the loans were secured by certain investment
accounts that contained shares of common stock of the Company. During the three
months ended March 31, 1998, the significant decline in the price per share of
the Company's common stock created an impairment in the value of the shares of
common stock in the accounts with such financial institutions. As a result, the
financial institutions proceeded to call the guarantees provided by the Company,
resulting in the Company incurring a loss of $4,978,424 during the six months
ended March 31, 1998.

Interest income, net was $178,047 for the six months ended March 31, 1999, as
compared to $432,249 for the six months ended March 31, 1998, as a result of
lower cash balances in 1999 as compared to 1998.

Net loss was $551,907 for the six months ended March 31, 1999, as compared to a
net loss of $5,323,138 for the six months ended March 31, 1998.

The Company recognized Preferred Stock dividends of $489,750 for the six months
ended March 31, 1999, as compared to $1,225,575 for the six months ended March
31, 1998, reflecting the reduction in the outstanding shares of Preferred Stock
in 1999 as compared to 1998. 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 six
months ended March 31, 1999, as compared to $4,065,253 for the six months ended
March 31, 1998. The Company completed the recognition of this additional
Preferred Stock dividend during October 1998. During the six months ended March
31, 1999, the Company recognized a Preferred Stock penalty of $3,298,540
relating to the delisting of the Company's common stock from NASDAQ on July 31,
1998.

Net loss applicable to common stockholders was $5,150,104 for the six months
ended March 31, 1999, as compared to a net loss applicable to common
stockholders of $10,613,966 for the six months ended March 31, 1998.

Consolidated Financial Condition - March 31, 1999:

                                       23

<PAGE>

Liquidity and Capital Resources:

The Company's cash and cash equivalents were $2,986,993 at March 31, 1999, as
compared to $4,356,200 at September 30, 1998, a decrease of $1,369,207,
primarily as a result of the cash utilized to repurchase shares of Preferred
Stock. As of March 31, 1999, the Company's working capital was $1,376,081, as
compared to $4,658,361 at September 30, 1998, a decrease of $3,282,280,
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 1.4:1 at March 31, 1999, as compared to 3.1:1 at
September 30, 1998.

Operating. The Company's operations utilized cash resources of $141,606 during
the six months ended March 31, 1999, as compared to $373,360 for the six months
ended March 31, 1998, 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 six months ended March 31, 1999, the Company generated net
cash from investing activities of $109,511, which consisted of the proceeds from
the disposition of marketable securities of $380,976, offset in part by the
purchase of property and equipment of $271,465. During the six months ended
March 31, 1998, the Company utilized net cash in investing activities of
$4,377,177, which consisted of the purchase of marketable securities of
$2,053,343 and the purchase of property and equipment of $2,485,392, offset in
part by the proceeds from the disposition of marketable securities of $161,558.
As of March 31, 1999, the Company did not have any significant outstanding
commitments for capital expenditures.

Financing. During the six months ended March 31, 1999, the Company utilized net
cash in financing activities of $1,247,472 to repurchase and retire shares of
Preferred Stock. During the six months ended March 31, 1998, the Company
utilized net cash in financing activities of $1,981,240, primarily to repurchase
common shares aggregating $2,037,157. The loan guarantee loss of $4,978,424
recognized during the three months and six months ended March 31, 1998 was
funded by a reduction in restricted cash of $5,074,659.

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

                                       24

<PAGE>

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 April 30, 1999 was $286.55 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 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

                                       25

<PAGE>

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 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, 2000. 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

                                       26

<PAGE>

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, 
2000, and does not anticipate that its adoption will have a material effect 
on the Company's financial statement presentation and disclosures.

                                       27

<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of September 30, 1998 and March 31, 1999, the Company had an investment in
marketable securities which consisted of United States government-backed
mortgage securities of $1,588,536 and $1,183,483, 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 currently 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 March 31, 1999, 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 1:39. 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.

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                           PART II. OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         (c)   Sales of Equity Securities

         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. The stock option was
         issued without registration in reliance upon the exemption afforded by
         Section 4(2) of the Securities Act of 1933, as amended, based on
         certain representations made to the Company by the President and Chief
         Executive Officer.

         During the three months ended March 31, 1999, the Company issued 9,786
         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 $244,650 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 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 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 $1,114,281 and 
         $3,298,540 for the three months and six months ended March 31, 1999, 
         respectively, which has not been paid. As a result of the repurchase 
         or conversion of 598,915 shares of Preferred Stock

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         during the six months ended March 31, 1999, such stockholders have 
         waived the right to claim their proportionate share of the penalty,
         thus reducing the corresponding potential penalty obligation by 
         $1,538,498.

         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 March 31, 1999 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
         $20,697,623, respectively, and such shares have been reclassified out
         of the stockholders' equity (deficiency) section of the consolidated
         balance sheet. As a result of the repurchase or conversion of 598,915
         shares of Preferred Stock during the six months ended March 31, 1999,
         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, by $24,544,717.

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 March 31, 1999 - None

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                                   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)



DATE:  May 18, 1999                     By:  /s/ MARK S. ZUCKER
                                             -------------------------
                                             Mark S. Zucker
                                             President and Chief
                                             Executive Officer


DATE:  May 18, 1999                     By:  /s/ ROBERT N. WEINGARTEN
                                             -------------------------
                                             Robert N. Weingarten
                                             Chief Financial Officer

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