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 March 31, 1997
                                                        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 incorporation            (I.R.S. Employer
             or organiza                                Identification No.)


                         5525 Erindale Drive, Suite 201
                        Colorado Springs, Colorado 80918
                     --------------------------------------
                    (Address of principal executive offices)

                                 (719) 260-8509
                            ------------------------
                           (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 May 12, 1997
 ------------------------------               -------------------------------

 Common Stock, $0.0001 par value                        9,073,653


<PAGE>


GOLD CAPITAL CORPORATION AND SUBSIDIARY
(A Development Stage Company)

Consolidated Balance Sheet
March 31, 1997 (unaudited)


ASSETS
CURRENT ASSETS, Cash                                               $    100,669

PROPERTY, PLANT AND EQUIPMENT
  Milling,  plant and production equipment                            7,234,110
  Buildings                                                           2,232,963
  Vehicles and trailers, net of depreciation                            148,560
  Property  development and mineral claim costs                       3,176,369
                                                                   ------------
                                                                     12,792,002
                                                                   ------------
OTHER ASSETS
  Prepaid royalties                                                     694,604
  Deposits                                                               42,097
                                                                   ------------
                                                                        736,701
                                                                   ------------
                                                                   $ 13,629,372
                                                                   ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable and accrued expenses                            $    580,448
  Accrued interest-TSVLP                                                 28,065
  Note payable-TSVLP, current portion                                   550,000
  Advances payable-Royalstar Resources                                  874,796
  Note payable-Globex                                                   836,664
  Other obligations, net                                                135,864
                                                                   ------------
                                                                      3,005,837

NOTE PAYABLE-TSVLP, LONG-TERM                                           789,644
RECLAMATION RESERVE                                                   1,469,900
MINORITY INTEREST IN JOINT VENTURE                                    2,435,178
                                                                   ------------
                                                                      7,700,554
                                                                   ------------
STOCKHOLDERS' EQUITY
  Common stock $.0001 par value; 25,000,000 shares
    authorized; 9,073,653 shares issued and
    outstanding                                                             922

  Additional paid-in capital                                          9,973,741
  Deficit accumulated during development stage                       (4,045,850)
                                                                   ------------
                                                                      5,928,813
                                                                   ------------

                                                                   $ 13,629,372
                                                                   ============



          See accompanying notes to consolidated financial statements.


                                       2
<PAGE>


GOLD CAPITAL CORPORATION AND SUBSIDIARY
(A Development Stage Company)

  

Consolidated Statement of Operations for the Three Month Periods Ended March 31,
1997 and 1996, and December 10, 1993 (inception) to March 31, 1997 (unaudited)
<TABLE>
<CAPTION>


                                                                                               For the Period
                                          Three Months                Three Months             from December
                                              Ended                      Ended                   10, 1993
                                          March 31, 1997              March 31, 1996           (Inception) to
                                          --------------              --------------           March 31, 1997
                                                                                               --------------
Costs and expenses:

<S>                                         <C>                       <C>                       <C>        
General and administrative                  $    69,022               $   111,703               $ 1,597,130

Property maintenance                            107,251                   212,072                 1,560,808

Write off of Argentina
  Mineral Claims                                   --                        --                     167,077

Interest expense, net                            68,054                    56,358                   720,835
                                            -----------               -----------               -----------

Net loss                                       (244,327)                 (380,133)               (4,045,850

Preferred stock dividend                           --                        --                     517,500
                                            -----------               -----------               -----------

Net loss applicable to
common shareholders                         $  (244,327)              $  (380,133)              $(4,563,350)
                                            ===========               ===========               ===========

Net loss per common share                   $     (0.03)              $     (0.08)
                                            ===========               ===========

Weighted average of
common shares outstanding                     9,073,653                 5,042,514
                                            ===========               ===========










                         See accompanying notes to consolidated financial statements.

                                                     3
</TABLE>

<PAGE>


GOLD CAPITAL CORPORATION AND SUBSIDIARY
(A Development Stage Company)

Consolidated Statement of Stockholders' Equity
From December 10, 1993 (Inception) to March 31, 1997 (unaudited)
<TABLE>
<CAPTION>


                                                                                                                          Deficit
                                              Common                                                                    Accumulated
                                    Stock   Subscribed    Preferred   Stock         Common      Stock     Additional       During
                                    -----   ----------   ---------   -----         ------      -----       Paid-In      Development
                                    Shares    Amount       Shares     Amount        Shares      Amount      Capital         Stage
                                    ------    ------       ------     ------        ------      ------      -------         -----

<S>                                 <C>        <C>         <C>        <C>           <C>         <C>        <C>            <C> 
December 10, 1993
(Inception)                              -     $   -           -      $   -              -       $ -       $      -       $     -

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

Issuance of Series A
Convertible Preferred
Stock for mining
properties, at
$10.00/share                             -         -      300,000      3,000              -        -      2,997,000             -

Common stock subscribed
by officers and affiliates,
$1.00/share                        200,000        20            -          -              -        -        199,980             -
                                  --------   -------     --------      -----      ---------      ---      ---------      --------

December 31, 1993                  200,000        20      300,000      3,000        300,000       30      3,208,950             0  

Issuance of stock for cash,
$1.00/share                       (200,000)      (20)           -          -      1,350,000      135      1,134,285             -

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

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

Net loss                                 -         -            -          -              -        -              -      (556,360)
                                  --------   -------     --------      -----     ----------      ---      ---------      --------

December 31, 1994                        0         0      300,000      3,000      2,026,098      203      4,826,721      (556,360)
</TABLE>

continued on next page

                                                                              4

<PAGE>


GOLD CAPITAL CORPORATION AND SUBSIDIARY
(A Development Stage Company)

Consolidated Statement of Stockholders' Equity
From December 10, 1993 (Inception) to March 31, 1997, continued

<TABLE>
<CAPTION>


                                                                                                                          Deficit
                                              Common                                                                    Accumulated
                                    Stock   Subscribed    Preferred   Stock         Common      Stock     Additional       During
                                    -----   ----------   ---------   -----         ------      -----       Paid-In      Development
                                    Shares    Amount       Shares     Amount        Shares      Amount      Capital         Stage
                                    ------    ------       ------     ------        ------      ------      -------         -----

<S>                                 <C>        <C>         <C>        <C>           <C>         <C>        <C>            <C> 
Balance, December 31, 1994               0          0      300,000     3,000       2,026,098      203      4,826,721      (556,360)

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

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

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

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

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

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

December 31, 1995                        0          0      300,000    $3,000       5,042,514     $505     $7,690,019   $(2,195,190)

Issuance of stock in
conversion of accounts
payable to affiliates,
$1.00/share                              -          -            -         -       2,281,139      242      2,280,897             -

Conversion of Preferred Stock
into Common Stock, $1.72/share           -          -     (300,000)   (3,000)      1,750,000      175          2,825             -

Net loss                                 -          -            -         -               -        -              -    (1,606,332)
                                    ------     ------      -------    ------       ---------     ----     ----------   -----------

December 31, 1996                        -      $   0            0    $    0       9,073,653     $922     $9,973,741   $(3,801,522)

continued on next page


                                                                     5
                                                              
</TABLE>

<PAGE>


GOLD CAPITAL CORPORATION AND SUBSIDIARY
(A Development Stage Company)


Consolidated Statement of Stockholders' Equity
From December 10, 1993 (Inception) to March 31, 1997, continued

<TABLE>
<CAPTION>


                                                                                                                          Deficit
                                              Common                                                                    Accumulated
                                    Stock   Subscribed    Preferred   Stock         Common      Stock     Additional       During
                                    -----   ----------   ---------   -----         ------      -----       Paid-In      Development
                                    Shares    Amount       Shares     Amount        Shares      Amount      Capital         Stage
                                    ------    ------       ------     ------        ------      ------      -------         -----

<S>                                 <C>        <C>         <C>        <C>           <C>         <C>        <C>            <C> 

Balance, December 31, 1996               -          -           -      $    -      9,073,653     $175     $9,973,741    $(3,801,522)

Net loss                                 -          -           -           -              -        -              -       (244,327)
                                    ------     ------       -----      ------      ---------     ----     ----------    -----------

Balance, March 31, 1997                  -     $    -           -      $    -      9,073,653     $175     $9,973,741    $ 4,045,850
                                    ======     =======      =====      ======      =========     ====     ==========    ===========








                                                See accompanying notes to consolidated financial statements.



                                                                               6
</TABLE>

<PAGE>


GOLD CAPITAL CORPORATION AND SUBSIDIARY
(A Development Stage Company)


Consolidated Statements of Cash Flows (unaudited)
<TABLE>
<CAPTION>

                                                                                                     For the Period from
                                                            For The Three         For The Three       December 10, 1993
                                                            Months Ended          Months Ended         (Inception) to
                                                              March 31,             March 31,             March 31,
                                                                1997                  1996                   1997
                                                             -----------           -----------           -----------
<S>                                                         <C>                   <C>                    <C> 
Cash flows from operating activities:
  Interest income                                            $       434           $       534           $    17,765
  Cash paid to suppliers                                        (537,789)             (534,989)           (2,787,037)
                                                             -----------           -----------           -----------
    Cash used in operating activities                           (537,355)             (534,446)           (2,769,272)


Cash flows from investing activities:
  Capital expenditures                                            (6,168)             (304,533)           (2,700,157)
  Sale of surplus equipment, net                                    --                    --                 630,000
  Investment in Argentina claims                                    --                    --                (167,077)
                                                             -----------           -----------           -----------
    Cash used in investing activities                             (6,168)             (304,533)           (2,237,234)


Cash flow from  financing  activities:
  Net advances from  Royalstar                                      --                 991,669             2,494,583
  Borrowings                                                     803,709                  --                 958,003
  Funding of bank overdraft                                         --                    --                (138,000)
  Cash received from sale of common stock                           --                    --               4,676,024)
  Obligations paid with common stock                                --                    --                (423,080)
  Principal payments on note payable                            (161,431)              (76,844)           (2,460,355)
                                                             -----------           -----------           -----------
    Cash provided by financing activities                        642,278               914,825             5,107,175


  Increase (decrease) in cash                                     98,755               (75,846)              100,669
  Cash, beginning                                                  1,914                11,028                  --
                                                             -----------           -----------           -----------

  Cash, ending                                               $   100,669           $    86,874           $   100,669
                                                             ===========           ===========           ===========
Reconciliation of net loss to cash used
in operating activities:
  Net loss                                                   $  (244,327)          $  (380,132)          $(4,045,849)
  Adjustments to reconcile net loss to net cash
  used in operating activities:
    Amortization and depreciation                                  4,641                 4,741                33,283
    Interest expense                                              63,629                36,118               724,780
    Expenses paid with common stock                                 --                    --                 514,293
    Write-off of investment in mineral claims                       --                    --                  70,789
    (Increase) decrease in other assets                         (166,780)                2,251              (765,143)
    Increase (decrease) in current liabilities                   (44,518)                 (699)              388,173
      related to operations
  Increase (decrease) in liabilities, long-term                 (150,000)             (196,725)              310,402
                                                             -----------           -----------           -----------

  Net cash used in operating activities                      $  (537,355)          $  (534,446)          $(2,769,272)
                                                             ===========           ===========           ===========




                                           See accompanying notes to consolidated financial statements.

                                                                               7

</TABLE>


<PAGE>


GOLD CAPITAL CORPORATION AND SUBSIDIARY
(A Development Stage Company)


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. For the period from inception to March 31,
1997, the Company had no operations.

The balance sheet of the Company as of March 31, 1997, results of operations and
the cash flows for the three month  periods  ended March 31, 1997 and 1996,  and
inception  to March 31, 1997,  and  statement  of  stockholders'  equity for the
period from  inception to March 31, 1997,  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 month  period ended March 31, 1997 are
not  necessarily  indicative  of the results to be  expected  for the full year.
These  financial  statements  should be read in  conjunction  with the Company's
consolidated  financial  statements  for the  period  ended  December  31,  1996
included in the Company's annual report on Form 10-KSB filed with the Securities
and Exchange Commission,  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
--------------------------------------------------------------------------------

In connection  with the merger  agreement  with Globex Mining  Enterprises  Inc.
("Globex"),  a publicly traded corporation organized and existing under the laws
of the Province of Quebec, Canada, discussed further below, Globex has agreed to
fund the financial  obligations of the Company pending  completion of the Merger
(the  "Globex  Loan").  Subject to the terms and  conditions  of the Globex Loan
agreement between the parties, Globex has agreed to make advances to the Company
to  maintain,  preserve  and protect the assets of the Tonkin  Springs  Project,
service the promissory note payable to U.S. Gold Corporation  ("U.S.  Gold") and
pay other necessary and proper  obligations and commitments of the Company.  The
Globex Loan accrues  interest at 2% over prime,  is secured by all the assets of
the Company and is due on or before August 30, 1997. Continued funding under the
Globex Loan is subject to the right of Globex to accept or reject  each  funding
request  made by the  Company,  as well as the right of  Globex  to  discontinue
funding  altogether.  In that event,  the Company has the right to terminate the
Merger  Agreement.  Without  continued  funding  from the Globex Loan or finding
other  sources  of  funding,  the  Company  is not  able  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.  Through  March 31,  1997,  the  balance of  borrowings  and accrued
interest  under the Globex  Loan is  $836,664,  including  accrued  interest  of
$12,995.  As of May 5, 1997, the principal and accrued  interest  balance of the
Globex Loan is approximately $955,864.

Note C  -  PROPOSED MERGER
------  -  ---------------

On December  20,  1996,  the Company and Globex  entered  into an  agreement  in
principal  regarding  a  conditional  offer by Globex to finance the Company and
merge it with a subsidiary of Globex.  Effective March 13, 1997, the Company and
Globex executed an agreement (the "Merger  Agreement" or "Merger") to merge with
Globex. By virtue of the Merger, and subject to certain conditions,  the Company
would become a wholly-owned subsidiary of Globex.



                                        8

<PAGE>


GOLD CAPITAL CORPORATION AND SUBSIDIARY
(A Development Stage Company)



Note C - PROPOSED MERGER (cont.)
--------------------------------

The Merger is part of two separate, but related,  transactions pursuant to which
Globex proposes to acquire 100% of the Company's  issued and outstanding  Common
Stock. Pursuant to the terms of the Merger Agreement, GME Merger Corporation,  a
Colorado  corporation wholly owned by Globex,  would be merged with and into the
Company (the  "Surviving  Corporation"),  which  corporation  would  survive the
Merger.   The  4,654,543  shares  of  the  Company's  Common  Stock  issued  and
outstanding  prior to the  Merger  and not  owned by  Royalstar  Resources  Ltd.
("Royalstar")  would be converted into the right to receive  1,285,067 shares of
Globex  Common  Stock.  The  shares  proposed  to be issued  by Globex  would be
registered under relevant  provisions of the Securities Act of 1933, as amended,
and qualified  under  applicable  state Blue Sky laws. The Common Stock owned by
Royalstar, the Company's single largest shareholder, would be acquired by Globex
in a separate  transaction  (the  "Acquisition"),  anticipated  to be  completed
contemporaneously with the Merger. When both transactions are completed,  Globex
would own 100% of the  issued  and  outstanding  shares  of Common  Stock of the
Company.

Both the Merger and  Acquisition  are  subject to certain  conditions.  Prior to
consummation  of the Merger,  the following  conditions,  among others,  must be
satisfied:  i)  receipt  of an  effective  date  by  Globex  for a  registration
statement  covering  its stock  proposed  to be issued  in  connection  with the
Merger;  ii) receipt of financing by Globex;  iii) approval of the Merger by the
Company's  shareholders;  and (iv) approval of various regulatory agencies.  The
consummation  of the  Acquisition is subject to  shareholder  approval and other
conditions  precedent.  The  respective  Boards of  Directors of the Company and
Globex  intend to proceed  promptly  and use their  reasonable  best  efforts to
complete the Merger and Acquisition.

NOTE D  -  NOTE PAYABLE
------     ------------

At March 31, 1997 the Company has a $1,339,644  amended note payable (the "Note)
to TSVLP as a result of its  purchase of a 60% interest in the  Properties.  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.  Accrued
interest  for 1996 of $129,569  was paid  January  16,  1997.  Interest  expense
accrued  related to the Note for the three  months ended March 31, 1997 and 1996
were $28,065 and $36,118, respectively. TSVLP has agreed in conjunction with the
Globex  Loan,  that  monthly  note  payments  commencing  February 1, 1997 would
continue  at $50,000  per month  until the  earlier  of August 1,  1997,  or the
completion of the Globex  Merger,  after which monthly  payments  under the Note
would be subject to the existing terms of the Note.

The principal balance of $1,339,644 is payable as follows:

(1)  Monthly  installments  of $50,000 per month until the Company has raised an
aggregate of $4,000,000  in financing  subsequent to June 22, 1995, 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  (approximately  $3.8 million in new
financing has been arranged through March 31, 1997).

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. The Company is in technical
default in its  performance  as manager of the  Venture.  The  inability  of the
Company 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 future  annual  minimum  principal  payments as of December  31, 1996 are as
follows:

                      1997             $ 400,000
                      1998               600,000
                      1999               339,644
                                      ----------
                                      $1,339,644
                                      ==========


                                       9

<PAGE>


Note E  -  OTHER OBLIGATIONS
------     -----------------

On  November  1, 1996,  the  Company  received  funds in the amount of  $185,350
(Canadian $250,000) from Sea Gull Leasing Ltd., a private company (the "Sea Gull
Obligation").  This  transaction  with Sea Gull was  arranged  on  behalf of the
Company by its former president and chief executive officer, Mr. John Young, who
resigned  all his  positions  with the Company  effective  December 4, 1996.  On
November 1, 1996, the Company disbursed  $74,140 (Canadian  $100,000) of the Sea
Gull proceeds directly to Attwood Gold Corporation  ("Attwood").  In addition to
the funds  directly  received by the Company from Sea Gull, a payment of $20,284
by Sea Gull  directly  to a vendor  of the  Venture  was made on  behalf  of the
Company.  No  note  or  other  documentation  exists  related  to the  Sea  Gull
Obligation.  Sea Gull has  initiated  legal  actions  to recover  $205,634  plus
interest  and costs from the Company.  Royalstar  provided the Company a written
but conditional  commitment of indemnity dated January 14, 1997,  concerning and
related to the Sea Gull  Obligation  (the  "Indemnity").  The  Company has given
Royalstar  notice  that it intends to invoke the  Indemnity  with  regard to the
legal  action  initiated  by Sea Gull and has further  requested  Royalstar  and
Attwood to  resolve  the  claim.  The  Company  intends  to defend  this  action
vigorously but has included the Sea Gull Obligation, reduced by the claim of the
Company  against  Attwood,  on the  balance  sheet as of March 31, 1997 in Other
obligations, net.

In addition, there are a number of creditors who are owned monies by the Company
which  creditors  could bring various legal actions  against the Company and the
Tonkin Springs Project Joint Venture,  some of which could involve the filing of
liens.





                                       10

<PAGE>


GOLD CAPITAL CORPORATION AND SUBSIDIARY
(A Development Stage Company)

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

     Plan of Operation.  The plan of operation of Gold Capital  Corporation (the
"Company")  for the current year is to obtain  sufficient  capital to recommence
production of gold at its Tonkin Springs Project.  Management  believes that the
Company has conducted  sufficient testing to warrant  commencement of efforts to
produce gold at the Project.  To that end,  efforts were undertaken  during late
1996  to  commence   construction   of  the  asphalt  pad   necessary  to  begin
bio-oxidation of the sulfide ore. The Company also commissioned preparation of a
technical  audit  of  plans  to  commence  production.  However,  the  Company's
immediate  efforts to commence  production were curtailed in late 1996, with the
cessation  of funding from its largest  shareholder,  Royalstar  Resources  Ltd.
Further  efforts to  commence  production  may be  modified as the result of the
proposed Merger with Globex.


     Effective  March 13,  1997,  the  Company  and Globex  executed  the Merger
Agreement which, if successfully concluded, would result in the Company becoming
a  wholly-owned  subsidiary  of  Globex.  The  Merger is  subject to a number of
contingencies,  including approval by the Company's  shareholders and continuing
due diligence. Pending completion of the Merger, management is unable to predict
with any degree of certainty a specific plan with regard to  development  of the
Project.

     Management of the Company has been advised that if the Merger is completed,
Globex intends to conduct additional development at the Project prior to further
efforts to commence production.  Due to a lack of available working capital, the
Company  has been  unable  to  continue  efforts  directed  to  commencement  of
production.  As a consequence,  all efforts are currently directed to completion
of the Merger.

     Liquidity  and Capital  Resources.  During the three (3) months ended March
31, 1997,  the Company  relied  entirely upon advances from Globex for necessary
working  capital.  Under a Loan  Agreement  dated  January 16, 1997  executed in
connection with the Merger  negotiations,  Globex has agreed to make advances to
the Company to maintain, preserve and protect the assets of the Project, service
the  promissory  note  payable  to TSVLP  and pay  other  necessary  and  proper
obligations  and  commitments of the Company.  As of March 31, 1997, the Company
had borrowed  $836,664  from Globex under this  arrangement.  As of May 5, 1997,
such amount has  increased  to $955,864,  including  all accrued  interest.  The
Globex loan accrues  interest at two percent (2%) over prime, is due and payable
on or before August 30, 1997 and is secured by all of the assets of the Company.
Continued  funding  under the  Globex  Loan is subject to the right of Globex to
accept or reject each funding request made by the Company,  as well as the right
of Globex to discontinue funding altogether.  In that event, the Company has the
right to terminate the Merger Agreement.

     On  March  31,  1997,   the  Company  had  negative   working   capital  of
approximately  $2,905,168,  consisting of current assets of $100,669 and current
liabilities  of  $3,005,837.  The primary  components of the  Company's  current
liabilities  are the  promissory  note and  accrued  interest  payable  to TSVLP
($550,000),  accounts  payable  to  creditors  ($608,513,  primarily  related to
vendors and contractors for the Project), advances from Royalstar ($874,796) and
the Globex Loan with a balance of $836,664 at March 31,  1997.  If the Merger is
completed,  it is anticipated such obligations will be funded by Globex.  If the
Merger is not  completed or Globex  decides to terminate  funding under the Loan
Agreement,  the Company would be forced to pursue other sources of financing, of
which there is no assurance. Historically, the Company has relied on private and
public equity  financings and advances from  Royalstar for its working  capital.
Until  efforts to complete  the Merger are  completed,  it is unlikely  that any
additional sources of financing will be available.

     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  administrative
expenses.  Total capital required including  recommencement of operations at the
Project, debt repayment and additional working capital needs total approximately
$10,000,000.  The  ability of the  Company  to  continue  operations  as a going
concern is  dependent  upon its  success in  competing  the Merger or  obtaining
additional capital to pay its obligations and develop its properties to commence
production and ultimately, achieving profitable operations.

     Under the Mining  Venture  Agreement  between the  Company  and TSVLP,  the
Company is responsible for funding of all holding,  administrative,  development
and other costs  associated  with the Venture until  commencement  of commercial
production  is achieved.  The Company is entitled to recoup such costs,  up to a
maximum of  $6,000,000,  from a preferential  distributions  from net cash flow,
entitling the Company to receive eighty four percent (84%) of net cash flow from

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<PAGE>

GOLD CAPITAL CORPORATION AND SUBSIDIARY
(A Development Stage Company)

the Venture prior to payback.  Through March 31, 1997,  the Company has advanced
approximately  $4,069,000 of recoupable costs to the Venture.  After recovery of
recoupable  costs,  cash flow will be  distributed  to the  Company and TSVLP in
proportion to their interest in the Venture.

     Subject to the completion of the Merger,  TSVLP and the Company have agreed
to modify the Joint Venture Agreement. These proposed modifications include, but
are not limited to, an increase in the recoupable amount to $8,050,000.

     Results of Operations. For the three month period ended March 31, 1997, the
Company recorded a net loss of $244,327 or $(0.03) per share,  compared to a net
loss of $380,133 or $0.08 per share for the corresponding  three month period of
1996. The Company had no operating revenues as the Tonkin Springs Properties are
not in production.  General and administrative expenses totaled $69,022 for 1997
compared with $111,703 in 1996, reflecting lower levels of allocated staff costs
from Royalstar.  Interest  expense for 1997 totaled $68,054  compared to $56,358
for 1996,  reflecting increased debt under the Royalstar Advances and the Globex
Loan,  partially offset by the reduced balance  outstanding under the TSVLP Note
during the 1997 period.  During the three months ended March 31, 1997,  $107,251
in  property  maintenance  costs at the Tonkin  Springs  Project  were  expensed
compared  to  $212,072  for  the  corresponding  three  month  period  of  1996,
reflecting  lower  levels  of  activity  during  the 1997  period as a result of
limited financial resources available.  Since inception (December 10, 1993), the
Company has incurred $4,045,849 in losses.

     The Company was also credited with approximately $344,000 of Tonkin Springs
net  recoupable  costs for the three  months  ended March 31, 1997  bringing the
balance of net recoupable costs total approximately  $4,045,849 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 Project. Net cash used in operations amounted to $537,355 for
the three month period  ended March 31, 1997,  compared to $534,446 for the same
period of 1996.


                                     PART II

ITEM 1. LEGAL PROCEEDINGS

     In certain legal  proceedings first reported in the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1996, the Company filed an Answer
to a Complaint  commencing  a civil  action.  Sea Gull  Leasing  Ltd. and Budget
Rent-A-Car Ltd. v. Gold Capital  Corporation is a civil action currently pending
in the Arapahoe County District Court, State of Colorado,  Case No. 97CV921. The
Complaint  seeks damages from the Company for money  allegedly  advanced under a
loan  agreement  with the two Plaintiff  entities.  On May 8, 1997,  the Company
filed an Answer to the Complaint,  denying the material  allegations thereof and
raising certain affirmative  defenses.  The Company intends to vigorously defend
this action and may file claims against third parties which the Company believes
may  be  responsible  for  all  or a  portion  of  the  damages  claimed  by the
Plaintiffs.

ITEM 2. No report required.

ITEM 3. No report required.

ITEM 4. No report required.

ITEM 5. No report required.

ITEM 6.a   Exhibits:
           (i)    Exhibit 11 - Statement of Computation of Weighted
                  Average Shares Outstanding.

ITEM              6.b Reports on Form 8-K.  Effective  March 13,  1997,  Item 1.
                  Change in Control of Registrant reporting the execution by the
                  Company of the merger agreement with Globex Mining Enterprises
                  Inc.


                                       12

<PAGE>



GOLD CAPITAL CORPORATION AND SUBSIDIARY
(A Development Stage Company)




                                   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



May 15, 1997                                      By /s/ Bill M. Conrad 
                                                  -----------------------------
                                                  Bill M. Conrad, President and
                                                  Chief Financial Officer


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