FORM 10-QSB
                U.S. SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

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

For the quarterly period ended September 30, 1996
                         or
[    ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
          EXCHANGE ACT 

For the transition period from  to   

                    Commission file number  0-24610

                      GOLD CAPITAL CORPORATION               
(Exact name of small business issuer as specified in its charter)

    COLORADO                                      84-1251798
(State or other jurisdiction of               (I.R.S. Employer
incorporation or organization)              Identification No.)  
              
           1400 Guinness Tower, 1055 West Hastings Street
                Vancouver, B.C. Canada V6E 2E9  
            (Address of principal executive offices)

                      (604) 683-3613
               (Issuer's telephone number)
                                            
(Former name, former address and former fiscal year, if changed
since last report)

Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 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

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:

Class                            Outstanding as of November 11, 1996
Common Stock, $0.0001 par value             6,961,624


GOLD CAPITAL CORPORATION AND SUBSIDIARY
(A Development Stage Company)

Consolidated Balance Sheet
September 30, 1996 (unaudited)

ASSETS
CURRENT ASSETS, Cash                                        $7,338

PROPERTY, PLANT AND EQUIPMENT
  Milling, plant and production equipment                7,234,110
  Buildings                                              2,232,963
  Vehicles and trailers, net of depreciation               155,671
  Property development and mineral claim costs           2,916,620
    Subtotal                                            12,539,364

OTHER ASSETS
  Prepaid royalties                                        527,823
  Deposits and organization costs                           53,752
    Subtotal                                               581,575

TOTAL                                                  $13,128,277

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable and accrued expenses                   $350,165
  Accounts payable-U.S. Gold Corporation                   191,849
  Accounts payable-MCM Capital Management Corporation       95,000
  Accrued interest-TSVLP                                   101,192
  Note payable-TSVLP, current portion                      668,156
    Subtotal                                             1,406,362

ADVANCES PAYABLE-ROYALSTAR RESOURCES                       813,217
NOTE PAYABLE-TSVLP, LONG-TERM                              851,920
RECLAMATION RESERVE                                      1,469,900
MINORITY INTEREST IN JOINT VENTURE                       2,435,176
    Subtotal                                             6,976,577

STOCKHOLDERS' EQUITY
  Preferred stock $.01 par value; 5,000,000 shares
    authorized;300,000 shares issued and outstanding         3,000
  Common stock $.0001 par value; 25,000,000 shares
    authorized; 6,961,624 shares issued and outstanding        697
  Additional paid-in capital                             9,608,937
  Deficit accumulated during development stage          (3,460,933)
    Subtotal                                             6,151,701 

TOTAL                                                  $13,128,277

See accompanying notes to consolidated financial statements.


GOLD CAPITAL CORPORATION AND SUBSIDIARY
(A Development Stage Company)

Consolidated Statement of Operations for the Three and Nine Month
Periods Ended September 30, 1996 and 1995, and December 10, 1993
(inception) to September 30, 1996 (unaudited)

                                          Three Months Ended
                                             September 30,
                                          1996              1995

Costs and expenses:
General and administrative               $116,140         $159,164
Property maintenance                      297,773                0
Write off of mineral claims                     0          167,077
Interest expense, net                      57,065           40,819

Net loss                                 $470,978         $367,060

Preferred stock dividend                        0                0

Net loss applicable to
common shareholders                      $470,978         $367,060

Net loss per common share                   $0.09            $0.08

Weighted average of common
shares outstanding                      5,277,072        4,857,198


Consolidated Statement of Operations for the Three and Nine Month
Periods Ended September 30, 1996 and 1995, and December 10, 1993
(inception) to September 30, 1996 (unaudited), continued
                                                         For the 
                                                        Period from
                                                       December 10,
                                 Nine Months Ended        1993 to
                                   September, 30,      September 30,
                                  1996         1995         1996

Costs and expenses:
General and administrative     $396,770     $462,429    $1,392,227
Property maintenance            687,199            0     1,296,623
Write off of mineral claims           0      167,077       167,077
Interest expense, net           181,774      166,215       605,006

Net loss                     $1,265,743     $795,721    $3,460,933

Preferred stock dividend              0            0       517,500

Net loss applicable to
common shareholders          $1,265,743     $795,721    $3,978,433

Net loss per common share         $0.25        $0.24

Weighted average of common
shares outstanding            5,121,283    3,264,186

See accompanying notes to consolidated financial statements.

GOLD CAPITAL CORPORATION AND SUBSIDIARY
(A Development Stage Company)

Consolidated Statement of Stockholders' Equity
From December 10, 1993 (Inception) to September 30, 1996 (unaudited)

                                      Common
                               Stock Subscribed    Preferred Stock
                               Shares    Amount    Shares   Amount 

December 10, 1993
(Inception)                         -        $0         -       $0

Issuance of stock to
officers for cash,
December 22, 1993,
$.04 per share                      -         -         -        -

Issuance of Series A
Convertible Preferred
Stock for mining
properties, at $10.00
per share                                         300,000     3,000

Common stock
subscribed by officers
and affiliates, $1.00
per share                      200,000      20          -         -

Balance December 31,
1993                           200,000      20    300,000     3,000

Issuance of stock for
cash, $1.00 per share         (200,000)    (20)         -         -

Issuance of stock for
cash, $2.00 per share                -       -          -         -

Issuance of stock as
dividend on Series A
Convertible Preferred
Stock, $2.11 per share               -       -          -         -

Net loss                             -       -          -         -

Balance, December 31,
1994                                 0       0    300,000     3,000

Issuance of stock for
cash, $1.00 per share
(net of issuance cost)               -       -          -         -

Issuance of stock to
short-term lender,
$1.00 per share                      -       -          -         -

Exercise of stock
option for cash, $1.00
per share                            -       -          -         -

Issuance of stock
for legal fees, $1.00
per share                            -       -          -         -

Issuance of stock as
dividend on Series A
Convertible Preferred
Stock, $1.67 per share               -       -          -         -


Net loss

Balance, December 31,                0       0    300,000      3,000
1995

Issuance of stock for
conversion of cash
advances, $1.00 per share            -       -          -          -

Net loss                             -       -          -          -   

Balance, September
30, 1996                             0      $0    300,000     $3,000 

Consolidated Statement of Stockholders' Equity
From December 10, 1993 (Inception) to September 30, 1996
(unaudited), continued
                                                             Deficit
                                                            Accumulated
                                                Additional    During
                               Common Stock     Paid-In     Development
                               Shares Amount    Capital        Stage

December 10, 1993
(Inception)                           -    $0         $0              $0

Issuance of stock to
officers for cash,
December 22, 1993,
$.04 per share                  300,000    30     11,970               -

Issuance of Series A
Convertible Preferred
Stock for mining
properties, at $10.00
per share                             -     -  2,997,000               -

Common stock
subscribed by officers
and affiliates, $1.00
per share                             -     -    199,980               -  

Balance December 31,
1993                            300,000    30  3,208,950               0

Issuance of stock for
cash, $1.00 per share          1,350,000  135  1,134,285               -

Issuance of stock for
cash, $2.00 per share            248,396   25    483,499               -

Issuance of stock as
dividend on Series A
Convertible Preferred
Stock, $2.11 per share           127,702   13        (13)              -

Net loss                               -    -          -          (556,360)

Balance, December 31,
1994                           2,026,098  203  4,826,721          (556,360)

Issuance of stock for
cash, $1.00 per share
(net of issuance cost)         2,776,100  278  2,770,822                 -

Issuance of stock to
short-term lender,
$1.00 per share                    2,500    -      2,500                 -

Exercise of stock
option for cash, $1.00
per share                         75,000    8     74,992                 -

Issuance of stock
for legal fees, $1.00
per share                         15,000    1     14,999                 -

Issuance of stock as
dividend on Series A
Convertible Preferred
Stock, $1.67 per share           147,816   15        (15)                -

Net loss                               -    -          -        (1,638,830)

Balance, December 31,
1995                           5,042,515  505  7,690,019        (2,195,190)

Issuance of stock for
conversion of cash
advances, $1.00 per share      1,919,110  192  1,918,918                 -

Net loss                               -    -          -        (1,265,743)

Balance, September
30, 1996                       6,961,624 $697 $9,608,937       $(3,460,933)

See accompanying notes to consolidated financial statements.

GOLD CAPITAL CORPORATION AND SUBSIDIARY
(A Development Company)
Consolidated Statements of Cash Flows (unaudited)
                                                      For the Period from
                           For the Nine Months Ended    December 10, 1993
                                September 30,            (inception) to
                            1996            1995        September 30, 1996
Cash flows from
 operating activities:
Interest income              $1,420            $338            $16,878
Cash paid to suppliers
 and employees           (1,360,923)       (980,497)        (2,955,241)
Cash used in
 operating activities    (1,305,503)       (980,159)        (2,938,363)

Cash flows from
 investing activities:
Capital expenditures       (538,268)       (903,434)        (2,434,451)
Sale of Surplus
 Equipment, net                   0         630,000            630,000
Investment in Argentina
 claims                           0         (70,789)          (167,077)
Cash used in
 investing activities      (538,268)       (344,223)        (1,971,528)

Cash flow from
 financing activities:
Net advances from
 Royalstar                2,271,925               0          2,659,129
Funding of bank overdraft         0               0           (138,000)
Cash received from sale
 of common stock                  0       2,846,100          4,676,024
Principal payments on
 note payable              (431,844)     (1,148,080)        (2,279,924)
Cash provided by
 financing activities     1,840,081       1,698,020          4,917,229

Increase (decrease)
 in cash                     (3,690)        373,638              7,338
Cash, beginning              11,028          36,627                  0
Cash, ending                 $7,338        $410,265             $7,338

Reconciliation of net
 loss to cash used in
 operating activities:
Net loss                $(1,265,743)      $(795,721)       $(3,460,933)
Adjustments to reconcile
 net loss to net cash
 used in operating
 activities:
Amortization and
 depreciation                11,851           9,919             19,350
Interest expense            181,744         166,553            611,475
Write-off of investment
 in mineral claims                -         167,077             70,789
Increase (decrease) in
 current liabilities
 related to operations      217,917         (11,007)           383,409
(Increase) decrease in
 other assets,long-term    (173,981)        (79,903)          (745,564)
Increase (decrease) in
 liabilities, long-term    (277,291)        (437,077)           183,111

Net cash used in
operating activities    $(1,305,503)       $(980,159)       $(2,938,363)

See accompanying notes to consolidated financial statements.


GOLD CAPITAL CORPORATION AND SUBSIDIARY
Notes to Consolidated Financial Statements (Unaudited)

NOTE A  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Gold Capital Corporation (the "Company") was incorporated under the laws of the
state of Colorado on December 10, 1993 to engage in development of gold mining
projects.  The Company's activities have been primarily limited to its
formation, obtaining financing, acquisition of certain interests in mining
properties and management of a mining joint venture.    

The balance sheet of the Company as of September 30, 1996 and the results of
operations for the three and nine month periods ended September 30, 1996 and
1995, the cash flows for the nine month periods then ended, and period from
inception to September 30, 1996, have not been examined by independent certified
public accountants.  However, in the opinion of management, the accompanying
unaudited financial statements contain all necessary adjustments consisting
only of normal accruals in order to make the financial statements not
misleading.

The results of operations for the three and nine month periods ended September
30, 1996 and 1995 are not necessarily indicative of the results to be expected
for the full years.  These financial statements should be read in conjunction
with the Company's consolidated financial statements of the period ended
December 31, 1995, as these financial statements omit certain information
required by generally accepted accounting principles.

The preparation of the Company's consolidated financial statements in
conformity with generally accepted accounting principles requires the Company's
management to make estimates and assumptions that affect the amounts of assets
and liabilities, the 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.

NOTE B  - CONTINUED OPERATIONS AND RECOVERABILITY OF MINING
          PROPERTIES AND EQUIPMENT

The Company is in the development stage and has not realized any revenues from
its planned operations.  The Company does not expect any revenues will be
derived until a significant amount of additional capital is raised for further
development and start-up costs. The Company's financial statements have been
presented on the basis that it is a going concern which contemplates the
realization of assets and liquidation of liabilities in the ordinary course of
business.  In connection with its acquisition and future development of the
mining properties discussed above and in Notes C, D and E, the Company incurred
significant obligations and the Company continues to operate with the
forbearance of its secured debt holder and joint venture partner related to
certain technical events of payment and other defaults under various agreements,
which continued forbearance can not be assured.  The Company's continued
existence and recoverability of mining properties and equipment is dependent
upon its ability to raise additional capital or alternative funding, its ability
to correct its technical defaults under various agreements, and ultimately
achieve profitable operations.   

The Company's objective is to arrange additional financings.  Presently, the
Company is continuing essential operations through unsecured advances from
Royalstar Resources Limited ("Royalstar"), a principal shareholder of the
Company, and a corporation organized and existing under the laws of Canada with
shares publicly traded on the Vancouver Stock Exchange.  During the three
months ended September 30, 1996, Royalstar converted and aggregate of $1,919,110
in advances and accrued interest into 1,919,110 common shares at $1.00 per
share.  As of September 30, 1996, the balance of unconverted advances from
Royalstar with accrued interest totals $813,218.  Advances accrue interest at a
annual rate reflecting the monthly prime rate as reported in the Wall Street
Journal. Royalstar has indicated to the Company that it intends to continue to
make limited advances to the Company in order to allow the Company to continue
essential operations until alternative sources of funding can be secured.   

The ability of the Company to continue operations as a going concern is
dependent upon its success in (1) obtaining additional capital; (2) paying its
obligations timely; (3) developing its properties to the commercial production
stage; and (4) ultimately achieving profitable operations.  The financial
statements do not include any adjustments which might result from the outcome
of these uncertainties. 

NOTE C-  MINING PROPERTIES

Tonkin Springs:

On December 31, 1993 (the "Closing"), the Company entered into a Purchase and
Sale Agreement (Purchase Agreement) with Tonkin Springs Venture Limited
Partnership ("TSVLP") whereby the Company acquired a 60% undivided interest in
certain properties and obligations of the Project (the "Properties") located in
Eureka County, Nevada.  At closing the Company and TSVLP entered into the
Venture agreement to manage and develop mining operations on the Properties.   

The Company acquired its 60% interest in the Properties from TSVLP for a
purchase price and other consideration of approximately  $7,830,000
representing the estimated fair market value of the assets.  The purchase
price included $200,000 in cash at Closing; delivery of a mortgage note in
the amount of $3.8 million (the "Promissory Note") (see Note E); 300,000
shares of the Company's Series A Preferred Stock ("Preferred Stock") having
an assigned value of $3 million (see Note G) and the assumption of 60
percent of a reclamation obligation recorded at $829,900 (see Note D).  

As part of the Purchase and Venture Agreements, the Company agreed to fund 100%
of the holding, development and administrative costs relating to the Properties
up until commencement of commercial production.  The Company shall be
reimbursed for expenditures, up to $6 million ("Reimbursable Costs"), from a
preferential portion of cash flows from the operations of the Venture, if
any. Expenditures in excess of $6 million will be considered contributions to
the Venture.  Through September 30, 1996, the Company has incurred approximately
$3,538,000 in net Reimbursable Costs. 

Until the Company recovers its Reimbursable Costs, the Company will be entitled
to receive 84% of net cash flows of the Venture upon commencement of commercial
production. After recovery of such costs, the cash flows will be distributed to
the Company based upon its 60% interests in the Venture.  In the event that the
Company has advanced any portion of TSVLP's funding obligation after
commencement of commercial production, the Company shall be entitled to receive
92% of the Venture's net cash flows available for distribution until such
advances are recovered by the Company. 

As noted above, the Venture Agreement obligates the Company, among other things,
to fund all holding costs and capital costs of the Tonkin Springs project until
commencement of commercial production, and in addition, the Venture Agreement
requires that vendors be paid when invoices are due and that the property be
keep free of vendor liens.  As of September 30, 1996, the Company is in
technical default under the Venture Agreement with specific regard to balances
in arrears owed to vendors, and certain unpaid vendors could be eligible to
file liens against assets of the Properties.  While the Company has not received
written notice of default from TSVLP nor is the Company aware of liens being
filed on the assets of the Properties by vendors, there can be no assurance that
written default notice or liens will not be instituted against the Company or
the assets of the Properties.  The Security Agreement with TSVLP related to the
Secured Debt includes provisions requiring the Company to be in compliance with
the Venture Agreement.  Therefore, written notice of default or the filing of
liens on assets of the Properties could cause events of default under the
Security Agreement, as well.  

NOTE D-   RECLAMATION OBLIGATION

The Company agreed to assume a proportionate share of certain obligations of
TSVLP related to the Properties.  Included among these obligations is the
estimated cost of the reclamation of the Properties described in Note C.  The
total cost is currently estimated at approximately $1.47 million, of which the
Company's 60% share is approximately $829,900. The total obligation has been
reflected in the accompanying consolidated financial statements of the Company.
In order to secure the reclamation of the Properties, the Federal Bureau of Land
Management and the State of Nevada have required a $1.3 million bond to be
provided before mining operations are commenced.  If mining operations at the
Properties are commenced, which is the intent of the Venture, the agencies
described above may increase the bonding requirement due to changes from the
present reclamation plan. The amount required to be paid by the Company for
reclamation of the Properties after mining operations are commenced is not
considered to be a reimbursable expenditure under the Venture Agreement
described in Note C.  

NOTE E- NOTE PAYABLE

At September 30, 1996, the Company has a $1,520,076 amended note payable (the
"Note) to TSVLP as a result of its purchase of a 60% interest in the Properties
(Note C).  The Note is collateralized by the Company's 60% interest in the
Properties and the Venture and accrues interest at a fixed rate of 7.5% on the
unpaid principal balance, with interest payments due at the end of each
calendar year.  A portion of the August, 1996, and all of the September, 1996
monthly Note payments were past due at September 30, 1996.  The Company's
obligations under the promissory note and certain of the Company's
obligations under the Joint Venture agreement are subject to a Security
Agreement in favor of TSVLP, pursuant to which the Company has granted a
security interest in the assets constituting its interest in the Project. 
The Company is continuing operations with the forbearance of TSVLP and
although the Company has not received written notice of default from TSVLP,
the continued failure to satisfy the terms of the promissory note and the
Venture Agreement in the future could, if not cured subsequent to written
notice, cause the Company to forfeit its interest in the Project.  

The principal balance of $1,520,076 is payable as follows:

      (1)  Monthly installments of $50,000 until the Company has raised an
           aggregate of $4,000,000 in new financing, or until the Note is
           paid in full.

      (2)  Monthly installments of $75,000 subsequent to the Company raising
           an aggregate of $4,000,000 in new financing, including advances
           by Royalstar.

The future annual minimum principal payments as of September 30, 1996 are as
follows:

     1996         $218,156
     1997          600,000
     1998          600,000
     1999          101,920
         Total  $1,520,076

Note F -   ROYALSTAR ADVANCES

Commencing in the fourth quarter of 1995, the Company required additional
funding to maintain its operations and to meet its financial obligations. 
Royalstar agreed to fund the cash needs of the Company on a limited basis,
and the Company, in turn, agreed that such advances would bear interest at
an annual rate reflecting the prime rate as published monthly in the Wall
Street Journal commencing January 1, 1996, and further the balance of such
advances and accrued interest, up to $1,500,000, could be converted at the
discretion of Royalstar into common shares of the Company at a price of $1.00
per share or, alternatively, be required to be repaid to Royalstar from
subsequent financings, if any. Effective September 19, 1996, Royalstar converted
an aggregate $1,711,653 in advances plus accrued interest of $207,457 into
1,919,110 shares of common stock at $1.00 per share.  As of Septemer 30, 1996,
the aggregate net amount of the unconverted cash advances plus accrued interest
was $813,218, and is reflected on the balance sheet as a non-current liability.
Royalstar has also indicated to the Company that Royalstar intends to continue
to make limited advances to the Company in order to allow the Company to
continue in operations until alternative sources of funding can be secured.  

NOTE G   STOCKHOLDERS' EQUITY

Common Stock:

On March 9, 1995, the Company commenced sale of up to 600,000 shares of common
stock at a price of $1.00 per share under a private placement offering limited
to accredited investors.  The shares were offered pursuant to an exemption
from the registration requirements imposed by the Securities Act of 1933, as
amended ("1933 Act"), and applicable state security laws, and accordingly,
may not be resold without registration or an exemption from such registration.
The Company has agreed to register the shares included in this private placement
offering with other shares issued or issuable in the various transactions
entered into effective June 22, 1995, as discussed further below.  Through the
termination date of this offering, May 8, 1995, the Company sold a total of
576,100 shares and received gross proceed of $576,100 thereunder.   

On April 13, 1995, the Company entered into an option agreement with Royalstar
whereby Royalstar purchased, effective June 22, 1995, 2,200,000 shares of common
stock of the Company for an aggregate of $2.2 million (the "Option.") 
Concurrent with the Option, Royalstar purchased 300,000 shares of common stock
of the Company under the March 9, 1995 private placement offering discussed
above.  Effective June 22, 1995, the Company completed the sale of 2,200,000
shares of its common stock in a private placement to Royalstar pursuant to the
terms of the Option.  This private placement was completed pursuant to
Regulation D of the Securities Act of 1933, as amended, and the shares sold in
the transaction were "restricted" within the meaning of the 1933 Act and bore a
restrictive legend.  However, the Company undertook to register the shares of
common stock sold to Royalstar.  The price per share received by the Company
in the offering was determined in the Option agreement of April 13, 1995
which price represented a discount from the trading price of the Company's
common stock at that time.  This transaction resulted in a change in control
of the Company whereby Royalstar acquired voting control of the Company. 
With the issuance of shares to Royalstar effective September 19, 1996 (see Note
F), Royalstar owns an aggregate of 4,419,110 shares of common stock,
representing approximately 63.5% of the presently issued and outstanding voting
stock. Pending issuance of any additional stock, this provides Royalstar
effective control of the Company.  In addition, Royalstar may also vote
additional shares pursuant to a Shareholder's Agreement with TSVLP discussed
below.  

Preferred Stock:

As discussed in Note C, the Company issued 300,000 shares of Series A
Preferred Stock having an assigned value of $10 per share, or $3 million, to
TSVLP as part of the purchase price of its 60 percent interest in the
Properties.   The Series A Preferred Stock called for cumulative preferred
dividends of 9% per annum payable annually in cash or, at the discretion of
the Company, in common stock of the Company (based upon the average stock
price for the prior year), and, as noted below, the mandatory dividends
stopped accruing effective November 30, 1995.  The Company has issued an
aggregate of 275,518 shares of unregistered common stock in satisfaction of
the 1995 and 1994 preferred stock dividend of aggregate $517,500.  In
conjunction with the Royalstar private placement effective June 22, 1995,
TSVLP agreed to convert its 300,000 shares of Preferred  Stock issued by the
Company into 1,500,000 shares of common stock of the Company subsequent to
November 30, 1995.    Mandatory dividends on the Preferred Stock ceased to
accrue as of November 30, 1995. The Company has granted to TSVLP a one time
registration right for all shares of Common Stock then owned by TSVLP at the
time of the request for registration.   

NOTE H    Related Party Transactions

The Company has an agreement to pay $10,000 per month with a related party,
MCM Capital Management, Inc. (MCM), for secretarial and management services
for the Company in Colorado Springs, Colorado, as well as out-of-pocket
expenses incurred by MCM on behalf of the Company.  MCM is a stockholder and
has certain common directors with the Company.  As of September 30, 1996, the
Company has accrued $95,000 in payments in arrears under the MCM contract. 
The contract expires by its term effective December 31, 1996, unless mutually
extended by the parties.

The Company has a month-to-month agreement with U.S. Gold Corporation, the
parent of TSVLP, to provide the Company office space in Denver, Colorado, along
with staff support for accounting activities and certain permitting and other
aspects of the Tonkin Springs project.  During the nine months ended September
30, 1996, the Company has paid or accrued an aggregate of $160,942 pursuant to
this arrangement.

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF          
            OPERATION, FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

Plan of Operation

Subject to obtaining the necessary future funding, and obtaining necessary 
permits in a timely manner, the Company anticipates commencement of operations
at the Tonkin Springs Project within approximately six months after funding
is secured.  Pre-operating activities are anticipated to be accelerated upon
the Company obtaining the additional funding.  

The Company's plan of operation for the Project entails significant
expenditures before commencement of gold production and receipt of revenue. 
Engineering, construction, holding and start-up costs are currently
projected at approximately $8.5 million.  The most significant of these
pre-operating costs are construction of the bio-heap leach pad to process
sulfide ore and acquisition of ancillary machinery and equipment. 
Additional pre-production expenses include acquisition and installation of
portable crushing equipment and necessary plant modification, as well as
consulting fees for engineering and amendment to various permits necessary
to operate the Project.  An independent consultant has been retained to
assist the Company regarding permitting.  All of these expenses will need to
be paid from the proceeds of future financings.  Various permits must be in
place from various state and Federal agencies before mining can commence. 
Although many of these permits are current, some of the more important
require amending prior to commencement of operation.  In  August, 1995 the
Company received the necessary permits and authorizations to construct the
bio-heap pad. In August, 1996, the Company commenced construction work on the
bio-heap pad.  Management does not presently anticipate any special obstacles
to issuance of any of these permits. 

During 1996, the Company retained Behre Dolbear & Company, Inc., international
consultants to the mining industry, to perform a technical audit of the
feasibility study for the Tonkin Springs Project incorporating the initial 5
year plan of operations.  The scope of the technical audit included i) a site
visit by a three man Behre Dolbear team; ii) review of a series of documents
detailing ore reserves and costs, the design and description of the processing
facilities, the status of environmental permitting, and preliminary financial
evaluation of the project; and iii) discussions with the consultants who had
produced the above documents.  The feasibility study incorporated estimates,
projections and assumptions related to various items including ore grade, gold
recovery rates and operating and capital costs.  Actual results could differ
from those estimates, projections and assumptions.  The audit was completed in
April, 1996, and the Conclusion/Recommendation section of the Executive
Summary of the report estimates that the project, "on a 100 percent basis
and pre-tax, has strong economics and a quick payback of capital."  Subject
to the assumptions contained in the report, the Behre Dolbear audit
projected average cash operating costs for the initial 5 years of operations
at $243.43 per ounce of gold and indicates that the project economics and
technical factors indicate the project should proceed to commercial
production.  Actual results, however, could differ from these projections. 

The feasibility study included an updated estimate of gold ore reserves as
summarized below by operating processes:
                                                      Strip      Contained   
                                     Ore Tons  Grade  Ratio       Ounces    
                                     (000's)   (OPT)

     Sulfide Milling                 2,568      0.102              260,900
     Sulfide Heap Leaching           3,575      0.045              160,700
     Oxide Heap Leaching             3,690      0.036              132,100
       Total                         9,833      0.056    2.84      553,700   

Liquidity and Capital Resources

At September 30, 1996, the Company had negative working capital of
approximately $1,399,024, consisting of current assets of $7,338 and current
liabilities of $1,406,362.  A significant component of the Company's current
liabilities is the Company's promissory note to TSVLP which was issued in
connection with the Company's acquisition of its interest in the Tonkin Springs
Project on December 31, 1993.    Minimum principal payments required under the
promissory note during the next twelve months total $668,156.  The Company is
over one month in arrears in minimum note payments under the promissory note,
however, the Company has not received written notice of default concerning
payments in arrears.  

The Venture Agreement obligates the Company to fund all holding costs and
capital costs of the Tonkin Springs project until commencement of commercial
production, and in addition, the Venture Agreement requires that vendor
payables be paid when due and that the assets of the property be keep free
of other liens.  As of September 30, 1996, the Company is in technical default
under the Venture Agreement with specific regard to past due payments to
certain vendors, and certain unpaid vendors could be eligible to file liens
against assets of the property.  

The Company's obligations under the promissory note and certain of the
Company's obligations under the Venture Agreement are subject to a Security
Agreement in favor of TSVLP, pursuant to which the Company has granted a
security interest in the assets constituting its interest in the Project. 
While the Company has not received written notice of default under the
Venture Agreement nor the Security Agreement from TSVLP, nor is the Company
aware of any liens being filed on the Tonkin Springs by vendors of the joint
venture, the continued failure of the Company to comply with the terms and
conditions of its contractual obligations could subject the Company to
potential exposures, including possible forfeiture of its interest in the
Project. 

Presently, the Company is continuing essential operations through unsecured
advances from Royalstar (the "Advances").  In September, 1996, Royalstar
converted an aggregate of $1,919,110 in such Advances into 1,919,110 shares of
common stock at a conversion price of $1.00 per share.  As of September 30,
1996, the balalnce of unconverted additional Advances plus accrued interest
totals $813,218.  These advances bear interest at prime.  Royalstar has
indicated to the Company that Royalstar intends to continue to make advances
to the Company on a limited basis in order to allow the Company to continue
in operations until alternative sources of funding can be secured.  However,
there can be no assurance that Royalstar will be able to continue to fund the
Company's operations nor that other sources of funding will be available in a
timely manner.  

Other than the Royalstar advances, discussed above, the Company has not to date
secured the necessary funding required to meet its current obligations nor to
provide for development costs associated with future obligations and operations
relating to the Venture and other corporate objectives.  In order to pursue its
plan of operation, the Company will require additional working capital
significantly in excess of current resources. The Company requires approximately
$8.5 million, primarily to construct the bio-heap leach pad and otherwise
prepare to commence mining and processing of mineralized material and arranging
for reclamation bonding.  

In addition to start-up and other capital costs associated with recommencement
of operations at the Project, the Company will require capital for ongoing
operating expenses, debt service, and general and administrative expenses.
Total capital required including recommencement of operations at the Project,
acquisition debt repayment and working capital needs total approximately $9
million.   The ability of the Company to continue operations as a going concern
is dependent upon its success in (1) obtaining additional capital; (2) paying
its obligations timely; (3) developing its properties to the commercial
production stage; and (4) ultimately achieving profitable operations. The
financial statements do not include any adjustments which might result from the
outcome of these uncertainties.

In order to address these uncertainties and implement the Company's business
plan, management has focused considerable time and effort in investigating
sources of additional capital.  During the latter half of 1995 and first nine
months of 1996, representatives of the Company met with various financing
sources to discuss proposed commencement of operations at the Tonkin Springs
Project.  Potential financing sources include investment banking firms,
institutional lenders, industry participants and private individuals.  To that
end, the Company is currently negotiating with an investment firm and private
investors with a view to raising equity and debt financing.  However, no
specific arrangment for financing have been finalized to date.  The Company
believes that the Behre Dolbear audit in early 1996 will facilitate efforts to
obtain additional financing.  However, there can be no assurance that such
financing can be obtained.

Under the Mining Venture Agreement, the Company is responsible for funding
all holding, administrative, development and other costs associated with the
Venture until commercial production is achieved.  The Company is entitled to
recoup such costs, up to a maximum of $6 million, from a preferential
distribution of net cash flows from the Project (the "Recoupable Costs"),
entitling the Company to receive 84% of net cash flows, if any, of the
Venture.  Through September 30, 1996, the Company has advanced approximately
$3,538,000 of net Recoupable Costs to the Venture.  After recovery of
Recoupable Costs, the cash flows will be distributed to the Company and TSVLP
in proportion to their interests in the Venture.  In the event that the Company
has advanced any portion of TSVLP's funding obligation after commencement of
commercial production, the Company shall be entitled to receive 92% of the net
cash flows available for distribution until such advances are recovered by the
Company.  

The Company's only current sources of capital are cash on hand, and advances
from Royalstar as discussed above, as well as other possible equity offerings,
short-term and/or project debt financings, as well as anticipated cash from
future operations and possible receipt of proceeds from the exercise of the
Company's options and warrants.  

Results of Operations 

For the nine month period ended September 30, 1996, the Company recorded a net
loss of $1,265,743 or $(0.25) per share, compared to a net loss of $795,721 or
$0.24 per share for the corresponding nine month period of 1995.  The Company
had no operating revenues as the Tonkin Springs Properties are not in
production.  General and administrative expenses totaled $396,770 for the 1996
period compared with $462,429 in 1995, reflecting lower costs associated with
home office overhead and investor relations activities.  Interest expense for
the 1996 period totaled $181,774, including $109,953 related to the TSVLP
Promissory Note and $73,238 for the Royalstar Advances, compared to $166,215
in 1995 primarily representing interest on the Promissory Note.  During the
fourth quarter of 1995, the Company recognized $609,424 in property
maintenance costs at the Tonkin Springs Project for all of 1995 since the
project was in development upon the feasibility study completed in January,
1995.  During the nine months ended September 30, 1996, $687,199 in property
maintenance costs at the Tonkin Springs Project were expensed.  Since
inception (December 10, 1993), the Company has incurred $3,460,433 in losses.   

For the three month period ended September 30, 1996, the Company incurred a net
loss of $470,978 or $0.09 per share, while in the corresponding period of 1995,
the net loss totalled $367,060 or $0.08 per share.  The 1996 period included
property maintenance costs of $297,773.

The Company was also credited with approximately $1,004,400 of Tonkin Springs
net Recoupable Costs for the nine months ended September 30, 1996 bringing the
balance of net Recoupable Costs total approximately $3,538,000 as of that date.
The Company anticipates that it will continue to incur losses until such time,
if ever, that it obtains sufficient working capital to commence operations of
the Tonkin Springs Properties.  Net cash used in operations amounted to
$1,305,503 for the nine month period ended September 30, 1996, compared to
$980,159 for the same period of 1995, reflecting primarily, increased activities
at the Tonkin Springs Project offset, in part, by lower amounts of corporate
overhead.

Other

The preparation of the Company's consolidated financial statements in conformity
with generally accepted accounting principles requires the Company's management
to make estimates and assumptions that affect the amounts of assets and
liabilities, the 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.

Except for the historical information contained herein, the statements in this
report which relate to the Company's plans, objectives or future performance
may be deemed to be forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995.  Such statements are based on current
expectations of management.  Actual strategies and results may differ
materially from those currently expected because of factors including the
financial markets for equity or debt, governmental authorizations related to
operations, gold price, ore grades, metallurgical recovery, operating costs,
and market flucturations, as well as other risks and uncertainties.  This
report should be read in conjunction with the Company's annual report on Form
10-KSB filed with the Securities and Exchange Commission for the year ended
December 31, 1995.


                                    PART II

1.     No report required.
2.     No report required.
3.     No report required.
4.     No report required.
5.     No report required.
6.a    Exhibit 11 - Statement of Computation of Weighted Average
        Shares Outstanding.
6.b    Reports on Form 8-K.  None.

                                       SIGNATURES

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

GOLD CAPITAL CORPORATION



November 12, 1996           By /s/ John Young     
                          John Young, President, Chief Executive Officer and
                          Chief Financial Officer