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

                                   FORM 10-QSB
(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, 1999

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

For the transition period from                     to
                               -------------------    -------------------
Commission file number 0-24393

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

Florida                                                      65-0401897
(State or other jurisdiction                                 (IRS Employer
of incorporation or organization)                            Identification No.)

1505 - 1060 ALBERNI STREET, VANCOUVER B.C. CANADA V6E 4K2
(Address of principal executive offices)

(604) 687-4432
(Issuer's Telephone Number)

--------------------------------------------------------------------------------
(Former  name,  former  address and former  fiscal year,  if changed  since last
report)

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

APPLICABLE  ONLY TO  ISSUERS  INVOLVED  IN  BANKRUPTCY  PROCEEDINGS  DURING  THE
PRECEDING FIVE YEARS

Check,  whether the  registrant  filed all documents and reports  required to be
filed by Section 12, 13 or 15 (d) of the Exchange Act after the  distribution of
securities under a plan confirmed by court.

YES [ ]  NO [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the latest  practicable  date:  13,000,000 shares of Common Stock
were outstanding as of September 30, 1999.

Transitional Small Business Disclosure Format (check one);

YES [ ]  NO [X]


<PAGE>


                           PATAGONIA GOLD CORPORATION

     This quarterly  report contains  statements that plan for or anticipate the
future and are not  historical  facts.  In this  Report  these  forward  looking
statements  are  generally  identified  by words such as  "anticipate",  "plan",
"believe",   "expect",   "estimate",  and  the  like.  Because  forward  looking
statements involve future risks and uncertainties,  these are factors that could
cause actual  results to differ  materially  from the estimated  results.  These
risks and uncertainties are detailed in Part 1 - Financial Information - Item 1.
"Financial Statements", Item 2. "Management's Discussion and Analysis or Plan of
Operation".

The Private  Securities  Litigation  Reform Act of 1995,  which provides a "safe
harbor" for such statements, may not apply to this Report.


                          PART 1. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                                                                            PAGE

     Consolidated Balance Sheet                                             3

     Consolidated Statements of Stockholder's Equity                        4

     Consolidated Statements of Operations                                  5

     Consolidated Statement of Cash Flows                                   6

     Notes to Financial Statements                                          7-8










                                       2
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
PATAGONIA GOLD CORPORATION
Consolidated Balance Sheets  - (unaudited)
(Expressed in U.S. Dollars)
                                                                September 30,   December 31
For the Periods Ended                                                 1999          1998
-------------------------------------------------------------------------------------------

Assets

<S>                                                              <C>            <C>
Current
   Cash                                                          $     2,679    $    73,974
   Receivables                                                           226            220
   Investments                                                     1,453,366      1,597,133
                                                                 --------------------------
                                                                   1,456,271      1,671,327

Mineral property costs                                                 3,000        300,000
                                                                 --------------------------
                                                                 $ 1,459,271    $ 1,971,327
-------------------------------------------------------------------------------------------

Liabilities and Stockholders' Deficiency

Liabilities

Current
   Accounts payable and accrued liabilities                      $    39,077    $    15,853
   Notes payable                                                     154,831             --
                                                                 --------------------------
                                                                     193,908         15,853
                                                                 --------------------------

Stockholders' deficiency,
   Share capital,
         Authorized
             50,000,000 common shares, par value $0.001
         Issued
           13,000,000 (1997 - 13,000,000)                             13,000         13,000
Additional paid in capital                                         1,827,000      1,827,000
Deficit accumulated during the development stage                    (547,274)      (164,285)
Accumulated other comprehensive income
    Unrealized gains/(losses) on securities available for sale       (27,363)       279,759
                                                                 --------------------------
                                                                   1,265,363      1,955,474
                                                                 --------------------------
                                                                 $ 1,459,271    $ 1,971,327
-------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.

APPROVED BY THE DIRECTORS


/s/ DAVID JENKINS   Director                /s/ COSME M. BECCAR VARELA  Director
----------------------------                ------------------------------------


                                       3
<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
Patagonia Gold Corporation
Statements of Stockholder's Equity
(Expressed in U.S. Dollars)
(Unaudited)

For the period ended September 30, 1999
-----------------------------------------------------------------------------------------------------------------------------------

                                                                                                       Accumulated
                                                                                                        Unrealized
                                               Common Stock               Additional                      Gain          Total
                              ------------------------------------         Paid-In     Accumulated      (Loss) on     Stockholder's
                                            Shares          Amount         Capital       Deficit       Investments      Equity
                              -----------------------------------------------------------------------------------------------------

<S>                                   <C>             <C>             <C>             <C>             <C>             <C>
Balance, January 1, 1997                         1    $         --    $         --    $         --    $         --    $         --

Issuance of common stock                   550,000       5,500,000              --              --              --         550,000

Recapitalization to effect
  the issuance of shares on
  reverse acquisition                      999,999        (543,500)        543,500              --                              --
                                    ----------------------------------------------------------------------------------------------
                                         6,500,000           6,500         543,500              --              --         550,000
                                                                                       -------------------------------------------
Net loss for the year                           --              --              --         (28,577)             --         (28,577)
Net change in unrealized gain
    (loss) on investments                       --              --              --              --         151,673         151,673
                                                                                       -------------------------------------------
    Total comprehensive income                                                             (28,577)        151,673         123,096

Issuance of common stock
    For cash
                                         3,500,000           3,500         986,500              --              --         990,000
    For mineral properties
                                         3,000,000           3,000         297,000              --              --         300,000
                                    ----------------------------------------------------------------------------------------------
Balance, December 31, 1997              13,000,000          13,000       1,827,000         (28,577)        151,673       1,963,096
                                                                                       -------------------------------------------

Net loss for the period                         --              --              --        (135,708)             --        (135,708)
Net change in unrealized gain
    (loss) on investments                       --              --              --              --         128,086         128,086
                                                                                       -------------------------------------------
    Total comprehensive income                                                            (135,708)        128,086          (7,622)
                                    ----------------------------------------------------------------------------------------------
Balance, December 31, 1998              13,000,000          13,000       1,827,000        (164,285)        279,759       1,955,474

Net loss for the period                         --              --              --        (382,991)             --        (382,991)
Net change in unrealized gain
    (loss) on investments                       --              --              --              --        (307,122)       (307,122)
                                                                                       -------------------------------------------
    Total comprehensive income                                                            (382,991)       (307,122)       (690,113)
                                    ----------------------------------------------------------------------------------------------
Balance, September 30, 1999           $ 13,000,000    $     13,000    $  1,827,000    $   (547,274)   $    (27,363)   $  1,265,363
</TABLE>

The accompanying notes are an integral part of these financial statements


                                       4
<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
PATAGONIA GOLD CORPORATION
Consolidated Statements of Operations
(Expressed in U.S. Dollars)                              March 31,
                                                           1993                      Nine months ended
                                                      (inception) to                   September 30,
                                                       September 30,        ----------------------------------
                                                          1999                   1999                  1998
                                                       (cumulative)           (Unaudited)           (Unaudited)
--------------------------------------------------------------------------------------------------------------

<S>                                                   <C>                   <C>                   <C>
General and administrative expenses
  Consultants                                         $     54,000          $     30,000                    --
  Depreciation and amortization                                 --                    --                    --
  Interest, bank charges and foreign exchange                9,870                 2,277                 6,417
  Office and miscellaneous, net of recoveries               16,954                 4,812                 6,920
  Professional fees - legal                                 28,853                19,825                 8,202
                    - accounting                            21,402                 5,299                10,000
  Rent and other                                             5,093                 1,622                 1,427
  Salaries and wages                                        16,920                 7,867                 4,543
  Shareholder relations, advertising and
      Promotion                                              4,162                 3,965                   113
  Transfer agents, listing and filing fees                  15,176                 2,045                   818
  Travel                                                        --                    --                    22
  Telephone                                                  3,651                   781                 1,378
                                                        ------------------------------------------------------

                                                           176,082                78,494                39,840
                                                                --
  Less - interest income                                    36,230                   839                19,598
          - realized gain on sale of investments                                      --                 6,613
                                                        ------------------------------------------------------

                                                           122,890                77,655                13,629

 Exploration expenses                                      127,386                 8,336                17,082
 Write-down of mineral property costs                      297,000               297,000                    --
                                                        ------------------------------------------------------

Net loss for the period                               $    547,276          $    382,991          $     30,711
--------------------------------------------------------------------------------------------------------------

Loss per share                                                              $      (0.03)         $      (0.00)
--------------------------------------------------------------------------------------------------------------

Weighted average common shares outstanding                                    13,000,000            13,000,000
--------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of these financial statements.


                                       5
<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
PATAGONIA GOLD CORPORATION
Consolidated Statements of Cash Flows
(Expressed in U.S. Dollars)
                                                                        1993
                                                                    (inception) to            September 30,
                                                                     September 30,    ----------------------------
                                                                         1999              1999            1998
                                                                     (cumulative)       (Unaudited)     (Unaudited)
------------------------------------------------------------------------------------------------------------------
Cash provided (used) by:

<S>                                                                  <C>              <C>              <C>
Cash flows from operating activities
   Net loss for the period                                           $  (547,276)     $  (382,991)     $   (30,711)

   Adjustments to reconcile net loss to net cash used
     in operating activities
      Depreciation and amortization                                           --               --               --
      Realized gain on sale of investments                               (16,962)              --           (6,613)
      Purchase mineral properties with common stock                      300,000               --               --
      Write-down of mineral properties                                   297,000          297,000               --
   Changes in assets and liabilities
      Decrease (increase) in accounts receivable                            (227)              (7)           1,409
      Increase (decrease) in accounts payable                             39,077           23,224           11,175
                                                                     ---------------------------------------------

                                                                          71,612          (62,774)         (24,740)
                                                                     ---------------------------------------------

Investing activities
   Deposits on mineral properties                                             --               --          (61,000)
   Mineral property costs                                               (300,000)              --               --
   Purchase of available for sale securities                          (1,992,413)        (163,352)      (1,095,419)
   Proceeds on sale of available-for-sale securities                     528,649               --           30,357
                                                                     ---------------------------------------------

                                                                      (1,763,764)        (163,352)      (1,126,062)
                                                                     ---------------------------------------------
Financing activities
   Proceeds from issuance of common stock                              1,540,000               --               --
   Proceeds from notes payable                                           154,831          154,831               --
                                                                     ---------------------------------------------

                                                                       1,694,831          154,831               --
                                                                     ---------------------------------------------

Increase (decrease) in cash for the period                                 2,679          (71,295)      (1,150,802)
Cash,  beginning of period                                                    --           73,974        1,301,165
                                                                     ---------------------------------------------
Cash,  end of period                                                 $     2,679      $     2,679      $   150,363
------------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of these financial statements.


                                       6
<PAGE>


Notes to Interim Consolidated Financial Statements (Unaudited)

Basis of Presentation

     In the opinion of management, the accompanying interim financial statements
contain all material adjustments consisting only of normal recurring adjustments
necessary to present  fairly the financial  position,  the results of operations
and cash flows of the Company and its consolidated  subsidiaries for the interim
period. Users of the financial  information produced for the interim periods are
encouraged  to  refer to the  footnotes  contained  in the  Annual  Report  when
reviewing interim financial results.

     These consolidated financial statements include the accounts of the Company
and its wholly owned  subsidiary  Patagonia  Gold Mines Ltd.  All  inter-company
transactions and balances have been eliminated.

     Exploration  costs are  charged to  operations  as  incurred  as are normal
development  costs until such time that proven mineral  reserves are discovered.
At  September  30,  1999 and  1998,  the  Company  did not have  proven  mineral
reserves.  Costs of initial  acquisition of mineral rights and  concessions  are
capitalized  until  the  properties  are  abandoned  or the right  expires.  The
recoverability of the capitalized  acquisition costs is monitored for indicators
of impairment  under SFAS 121, with  appropriate  impairment  charges taken when
warranted.

1.   Nature of Business and Going Concern

     The  Company  was  incorporated  under the laws of the State of  Florida on
     March 31, 1993 and is in the business of  exploration  and  development  of
     mineral  properties.  On October 13, 1997, the Company  changed its name to
     Patagonia Gold Corporation.

     The Company was  inactive  until July  30,1997 when it entered into a share
     exchange  agreement  with the  shareholders  of  Patagonia  Gold Mines Ltd.
     ("PGM"),  an  inactive  company  incorporated  in 1994  under  the  laws of
     Bermuda,  whereby the Company acquired all issued and outstanding shares of
     PGM in exchange for 5,500,000  common shares of the Company.  There were no
     operations  of the companies  prior to July 30, 1997. At the  conclusion of
     the transaction, the former shareholders of PGM controlled the Company and,
     thus, the  transaction  has been accounted for as a reverse  acquisition of
     the Company by PGM.  Consistent  with accounting  principles  governing the
     accounting  for  reverse   acquisitions,   these   consolidated   financial
     statements are accounted for as a continuation of then legal subsidiary.

     The  acquisition  was recorded using the purchase  method.  As the net book
     value of the Company at the date of  acquisition  was Nil, a nominal  value
     has  been  assigned  to  shares  issued  pursuant  to  the  share  exchange
     agreement.

     Also,  on July  30,  1997,  the  Company  acquired  mineral  properties  in
     Argentina  in exchange for the issuance of  3,000,000  common  shares.  The
     mineral properties were valued at $300,000.

     The recovery of the amounts  shown for  interests in mineral  properties is
     dependent  upon the  discovery  of  economically  recoverable  reserves  or
     proceeds  from  the  disposition  thereof,  confirmation  of the  Company's
     interest in the underlying  mineral  claims,  the ability of the Company to
     obtain  financing to complete  development  of the properties and on future
     profitable operations.


                                       7
<PAGE>


2.   Investments

     Investments  consist  of  available-for-sale   equity  securities  and  are
summarized as follows:
<TABLE>
<CAPTION>
                                    Cost                 Net Unrealized                   Market Value
                                                         Gains (Losses)
                             ----------------------------------------------------------------------------------
<S>                              <C>                       <C>                             <C>
September 30, 1999               $1,480,729                $(27,363)                       $1,453,366
Equity securities
                             ==================================================================================
December 31, 1998                $1,317,697                 $279,436                       $1,597,133
Equity securities
                             ==================================================================================
December 31, 1997                 $225,463                  $151,673                        $377,136
Equity securities
                             ==================================================================================
</TABLE>

Unrealized  losses  totaling  $3,167  (December  31,  1998  -  $174,043;  1997 -
$151,673) relate to investments held by the Company's Bermuda subsidiary and are
not subject to income tax.

     3.   Mineral Properties and Exploration Expenses

          Applications for mineral concessions in the Province of La Rioja filed
          with  the  Argentina  Director  of  Mines  arising  from  the  mineral
          properties acquired as disclosed in Note 1 are as Follows:

          a)   Piloncho 1, Sierra de Chepes
          b)   Piloncho 2, Sierra de Chepes
          c)   Piloncho 20, Sierra de Chepes
          d)   Piloncho 21, Sierra de Chepes
          e)   Carmelita 16, Sierra de Chepes
          f)   Carmelita 17, Sierra de Chepes
          g)   Carmelita 18, Sierra de Chepes

     4.   Related Party Transactions

          Related party transactions not disclosed  elsewhere in these financial
          statements include:

          a)   Included in accounts  payable is $0 (December  30, 1998 - $0) due
               to  directors  and a law firm in which a director is a principle,
               in respect of salaries,  consulting  fees and  reimbursement  for
               operating expenses.

          b)   During the  period,  consulting  fees,  salaries  and wages of $0
               (December 31, 1998 - $0) were paid or are payable to directors or
               a law firm in which a director is a principle.


                                       8
<PAGE>


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

A    General

          The  Company  is a mineral  exploration  company  based in  Vancouver,
     Canada and is engaged in the  exploration of precious  metals.  The Company
     was incorporated  under the laws of the State of Florida on March 31, 1993,
     under the name "Cayman Purchasing & Supply, Inc.". On October 13, 1997, the
     Company  changed  its  name to  Patagonia  Gold  Corporation  and is in the
     exploration stage.

          On July 30, 1997 the Company entered into a share exchange transaction
     with the  shareholders  of  Patagonia  Gold Mines Ltd.  ("PGM"),  a company
     incorporated  in 1994  under  the  laws of  Bermuda,  whereby  the  Company
     acquired  all the  issued and  outstanding  shares of PGM in  exchange  for
     5,500,000  common  shares of the Company.  The assets of PGM at the date of
     acquisition consisted of investments (available-for-sale equity securities)
     of $225,463 and cash of $324,417.

          The Company was inactive for the years ended December 31, 1993,  1994,
     1995 and 1996.

          Since commencement of its exploration  operations in 1997, the Company
     has undertaken a review of its mining properties in Argentina.  In addition
     to Argentina,  primary regions under  investigation  by the Company include
     Argentina, Canada, Cote D' Ivorie, Guatemala, Liberia, Mexico and Morocco.

          The management of the Company has developed the following  exploration
     objectives:  to acquire properties with large scale potential,  to minimize
     capital costs on leases or concessions,  to acquire properties  adjacent or
     in close proximity to recent  discoveries of large scale mineral  reserves,
     to be the  first-in  staking  where  possible,  to secure  repatriation  on
     mineral  rights  and  royalties  and to  establish  joint  ventures  and/or
     partnerships  with  established  companies  that  possess the  resources to
     complete  mine  development.  All of the  Company's  properties  are in the
     preliminary exploration stage without any presently known body of ore.

          The Company had no material  revenues during fiscal 1993,  1994, 1995,
     1996,  1997,  1998 and 1999.  Income  during  fiscal  1998 and 1997 was the
     result of  interest  earned on funds  raised  during  fiscal  1997,  as the
     Company has no mineral  properties  in  production.  Funds raised in fiscal
     1997  were  used  in the  exploration  and  development  of  the  Company's
     properties  and  the  purchase  of  short-term   available-for-sale  equity
     securities.

          The Company  believes that for the current  fiscal year ended December
     31,  1999  and  the  fiscal  year  ended  December  31,  2000  all  capital
     requirements  necessary  to  develop  existing  properties  and to  further
     develop the Company through the possible  acquisition or joint venturing of
     additional  mineral  properties  either in the  exploration  or development
     stage will be funded with present cash, cash  equivalents and  investments.
     Additional employees will be hired on a consulting basis as required by the
     exploration projects.

B    Exploration

          All of the Company's  properties  are in the  preliminary  exploration
     stage and do not contain a commercially viable mineral deposit.


                                       9
<PAGE>


     Acquisition of Property Interests or Options to acquire Property Interests

          Since commencement of its exploration  operations in 1997, the Company
     has undertaken a review of its mining properties in Argentina.  In addition
     to Argentina,  primary regions under  investigation  by the Company include
     Argentina,  Bolivia, Canada, Cote D' Ivorie, Guatemala, Liberia, Mexico and
     Morocco.

          The  Company  holds  100%   interest  in  seven  mineral   exploration
     concessions in Argentina of which two are cateos and the remaining five are
     mineral discovery concessions.

          In  Argentina,  a cateo  is a parcel  of land to  which  an  exclusive
     prospecting  right has been granted to an individual or a corporation.  The
     mineral  rights in Argentina  belong to the state.  The  government  grants
     these rights to applicants on a first come first serve basis.  Applications
     for cateos  (concessions) can typically take a number of years for approval
     with the bureaucratic process there. The application  process,  however, is
     rigidly  controlled  such that the  applicant has all the risks and rewards
     associated with legal ownership. During application stage, the applicant is
     permitted  to explore the  property  and can  transfer,  assign or sell the
     application to other parties.  Once the  application/right has been granted
     by  the   Argentina   government,   the  mineral   exploration   concession
     license/permit  gives the  Company  an  exclusive  right  over all  mineral
     discoveries  made  within  the  areas  concerned.  Exploration  rights  are
     temporary.  The title owner has a maximum of 1100 days (almost three years)
     to make  discoveries.  Portions of the area must be gradually  discarded so
     that at the end of the 1100 days the  whole  area  becomes  free and can be
     petitioned by another individual or company.  The 1100-day term has not yet
     commenced.  A change in the mining  regulations of the La Rioja  Provincial
     government requires all exploration concessions ("Cateos) to be re-oriented
     along north-south  east-west grid lines.  Patagonia's  original cateos were
     placed along  geographical  lines other than those,  to best cover areas of
     geological interest.  New cateo boundaries have been submitted to the Rioja
     Provincial  government and the company is awaiting  formal  approval (which
     has been assured by the provincial government) prior to the commencement of
     the 1100-day term. The commencement date is expected in the near future but
     no specific date has been supplied by the Rioja Provincial government.

          In Argentina,  a Mineral  Discovery  license/permit  is granted by the
     Argentina  government under the following  circumstances.  An explorer that
     finds   indications  of  the  presence  of  a  deposit  may  apply  for  an
     area/concession double the size of the maximum permitted.  The "indications
     of the presence of a deposit" to support the  application  for the "mineral
     discovery  license" is a legal concept of the Argentina Mining Law. It does
     not  necessarily  mean that an  economically  significant ore body has been
     discovered.  It  just  means  that  the  explorers  have  found  sufficient
     indications in the ground to justify the continuation of the work after the
     end of the 1100 days,  transforming the temporary exploration permit into a
     permanent  mining  right.  The  application  for a maximum  area/concession
     depends on the type of mineral found and the  regulations  in force in each
     province.  Upon receipt of the application,  the local authority checks the
     fulfillment of all corporate and legal  conditions of the  application  and
     registers an exclusive  zone of up to 3,000 or 6,000  hectares (a "Hectare"
     is a surface measurement of the metric system,  equivalent to 2.471 acres).
     The text of the registration is published three times on three  consecutive
     days in a local  newspaper to give an opportunity  to other  prospectors to
     claim a better or prior  right to the same area or to portions of the area.
     Quite  often  there  are  overlaps,  so that the  original  diagram  of the
     exclusive zone suffers amendments. The discoverer must reduce the exclusive
     zone to the actual size of the area that he intends to own. This depends on
     the exact location and  distribution  of the deposit in the ground.  As the
     exclusive zone has double the size of the maximum permitted,  the reduction
     will result in at least half the size.  Once reduced,  the  applicant  must
     stake  the  claim  by  putting  poles in its  angles.  This is  called  the
     "Mensura" (measurement) and must be done by land surveyors.


                                       10
<PAGE>


          During  Fiscal  1998,  the Company  continued  its  preliminary  field
     assessment  and sampling  programs on the five  exploration  license  areas
     ("ELAs" - "cateos"),  Carmela IV, Carmela VI, Carmela VII, Carmela VIII and
     Carmela IX, held in the  Province of La Rioja,  Department  of Rosario Vera
     Penaloza, District of Chepes. Each cateo consisted of 10,000 hectares for a
     total  of  50,000  hectares.   The  exploration  permits  for  the  mineral
     exploration  concessions  were  originally  acquired by the Company in July
     1997.  Based on an analysis of  geophysical  data  compiled  from  existing
     airborne geophysical surveys (magnetometer and radiometric surveys) carried
     out  jointly by the  Argentinean  and  Australian  surveys  and ground work
     completed by the Servicio Geologico Minero Argentino ("SEGMAR") the Company
     gradually  reduced the size of the five cateos and  reapplied  for the most
     prospective  areas of the cateos  under the  following  exploration/mineral
     discovery permits.

          During  1998  and  1999  the  Company   conducted   preliminary  field
     assessments of the properties.  This included  reconnaissance,  mapping and
     sampling of individual outcrops.  No significant anomalous values have been
     returned  to date,  however,  the area hosts  quartz  veins and  structural
     features  similar to  precious  and base  metal  mineralized  bodies  found
     throughout the general area. Recent sampling has returned  significant gold
     and silver  values from quartz  veining  and quartz  stockwork  material on
     ground immediately to the south of the companies concessions. The Sierra de
     las Minas area  continues  to be the focus of  successful  exploration  and
     drilling of similar  quartz vein bodies by such  companies  as Golden Peaks
     Resources in joint partnership with Mitsubishi Materials Corp.

     The Company  currently  holds the following  exploration/mineral  discovery
     permits:

          Piloncho 1
          Type of concession:       Cateo (exploration permit)
          Number of hectares:       9,975
          Location of claims:       Province  of La Rioja,
                                    Department of Rosario Vera Penaloza,
                                    District of Chepes.
          Current status:           Application filed with the government

          Piloncho 2
          Type of concession:       Cateo (exploration permit)
          Number of hectares:       9,450
          Location of claims:       Province  of La Rioja,
                                    Department of Rosario Vera Penaloza,
                                    District of Chepes.
          Current status:           Application filed with the government

          Piloncho 20
          Type of concession:       Mineral Discovery
          Number of hectares:       3,500
          Location of claims:       Province of La Rioja,
                                    Department of Rosario Vera Penaloza,
                                    District of Chepes.
          Current status:           Application filed with the government

          Piloncho 21
          Type of concession:       Mineral Discovery
          Number of hectares:       3,500
          Location of claims:       Province of La Rioja,
                                    Department of Rosario Vera Penaloza,
                                    District of Chepes.
          Current status:           Application filed with the government


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<PAGE>


          Carmelita 16
          Type of concession:       Mineral Discovery
          Number of hectares:       3,000
          Location of claims:       Province of La Rioja,
                                    Department of Rosario Vera Penaloza,
                                    District of Chepes.
          Current status:           Application filed with the government

          Carmelita 17
          Type of concession:       Mineral Discovery
          Number of hectares:       2,000
          Location of claims:       Province of La Rioja,
                                    Department of Rosario Vera Penaloza,
                                    District of Chepes.
          Current status:           Application filed with the government

          Carmelita 18
          Type of concession:       Mineral Discovery
          Number of hectares:       2,000
          Location of claims:       Province of La Rioja,
                                    Department of Rosario Vera Penaloza,
                                    District of Chepes.
          Current status:           Application filed with the government

          The  concessions  are located in Sierra de Chepes in the extreme south
     end of the  Province  of La Rioja,  1,000  Kilometers  Northwest  of Buenos
     Aires,  in the  departments  of  Rosario  Vera  Penaloza  and  San  Martin,
     immediately  north of the  town of  Chepes.  The  concessions  are  readily
     accessible by paved road from the city of La Rioja  situated  approximately
     200  kilometers  to the north.  Provincial  Highway 79 traverses the entire
     eastern  boundary  of  the  concessions  in  a  north-south  direction  and
     Provincial  Highway 29  parallels  the western  boundary.  A number of dirt
     roads and trails from the major highways provide  convenient  access to may
     parts of the concessions.

          The  Sierra  de Chepes  is  composed  principally  of  plutonic  rocks
     resulting  from a number of phases of magmatic  activity in the area.  Late
     Proterozoic   tonalite  and  granodiorite   (The  Chepes   Formation)  with
     migmatitic and  porphyroblastic  facies are predominant rock types with the
     concessions in the Sierra de Chepes.

          The basement complex throughout the Sierra de Chepes and Sierra de las
     Minas  consisting  of a varied  assemblage  of  metavolcanics,  migmatites,
     tonalites  and  granodiorites  with some mafic phases is cut by a series of
     north-south trending mylonite zones. A complex system of rectilinear faults
     and fractures  intersects  these  mylonite  zones and may be genetically or
     structurally  related to the  gold-bearing  quartz veins and shear zones in
     the area.

          During the next 24 months  the  company  intends  to  conduct  further
     geological, geochemical and geophysical work on the Argentina properties.


C    Financial Information

     (a)  Nine (9) Months Ended September 30, 1999 (Fiscal 1999) versus Nine (9)
          Months Ended September 30, 1998 (Fiscal 1998).

               Net loss  for the  nine  (9)  months  ended  September  30,  1999
          increased by $352,280 to $382,991 (September 30, 1998 - $30,711),  due
          to (a) Consultants increased by $30,000 to $30,000 (September 30, 1998
          - $0), (b) Professional  Fees - legal and accounting  increased $6,922
          to  $25,124   (September   30,  1998  -   $18,202),   (c)  office  and
          miscellaneous expenses decreased $2,108 to $4,812 (September 30,


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<PAGE>


          1998-  $6,920),   (d)  interest  income  decreased   $18,759  to  $839
          (September  30, 1998 - $19,598)  (e)  exploration  expenses  decreased
          $8,746 to $8,336  (September  30, 1998 - $17,082)  and  write-down  of
          mineral properties $297,000 (September 30, 1998 - $0).

D    Financial Condition

          For the nine (9) months ended  September 30, 1999 and the fiscal years
     ended December 31, 1998 and 1997, the Company met its capital  requirements
     through proceeds of the sale of common stock of the Company.

          At September  30, 1999,  the Company had cash of $2,679  (December 31,
     1998 - $73,651, December 31, 1997 - $1,301,165);  investments consisting of
     available-for-sale  equity  securities of  $1,453,366  (December 31, 1998 -
     $1,597,456,   December  31,  1997  -  $377,136);  and  working  capital  of
     $1,262,363   (December  31,  1998  -   $1,655,474,   December  31,  1997  -
     $1,663,096).   Total  liabilities  at  September  30,  1999  were  $193,908
     (December 31, 1998 - $15,853, December 31, 1997 - $16,883). During the nine
     (9)  months  ended  September  30,  1999  the  Company  purchased  $163,354
     additional  investments of  available-for-sale  equity  securities  (twelve
     months  ended,  December  31,  1998  -  $1,603,921,  December  31,  1997  -
     $225,463).  Proceeds from the sale of available-for-sale  equity securities
     for the nine (9) months  ended  September  30, 1999 were $0 (twelve  months
     ended, December 31, 1998 - $528,649, December 31, 1997 - $0).

          The Company  feels that its current cash  position is strong enough to
     fund  capital  requirements  in fiscal  1999 and 2000.  In the event that a
     production  decision  is  made  on  one of the  properties  or the  Company
     acquires  additional  mineral  properties  either  directly,  through joint
     ventures,  or through the  acquisition  of  operating  entities,  it is the
     Company's  intention to raise  additional  capital  either  through  equity
     offerings and/or debt borrowings.

          Management of the Company is committed to further  develop the Company
     through the possible  acquisition or joint venturing of additional  mineral
     properties  either in the  exploration  or  development  stage.  Additional
     employees  will  be  hired  on  a  consulting  basis  as  required  by  the
     exploration projects.

          None of the Company's  properties  has warranted  development  and the
     Company has no history of earnings or cash flow from its operations.  While
     the Company may attempt to generate  additional working capital through the
     operation,  development,  sale or possible joint venture development of its
     properties,  there is no assurance  that any such  activity  will  generate
     funds that will be available for operations.

          The Company has not  declared or paid  dividends  on its shares  since
     incorporation and does not anticipate doing so in the foreseeable future.

E    YEAR 2000 ISSUES.

          The company utilizes software and related technologies in its business
     that will be affected by the "Year 2000 computer problem",  which is common
     to many corporations and governmental  entities.  This problem concerns the
     inability of information systems,  primarily computer software programs and
     certain  hardware,   to  properly  recognize  and  process   date-sensitive
     information  as  the  Year  2000  approaches.  Absent  corrective  actions,
     computer  programs that have  date-sensitive  software may recognize a date
     using "00" as the year 1900 rather than 2000.  This could  result in system
     failure or  miscalculation  causing  disruptions to various  activities and
     organizations.

          The  Company has  modified  and tested all the  critical  applications
     along with all  non-critical  applications  of its  information  technology
     ("IT"),  the result of which is that all


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<PAGE>


     such  applications  have been either  modified or replaced and are now Year
     2000 compliant.  The Company used an independent  consultant to oversee the
     Year 2000  project as well,  as to  perform  certain  remediation  efforts.
     In-addition,  progress on the Year 2000 project is also monitored by senior
     management, and reported to the Board of Directors. The total amount of the
     payments  made  to-date  and  to be  made  hereafter  to  such  independent
     consultant are not expected to be material. Based on the Company's analysis
     to date, the Company  believes that its material  non-IT systems are either
     Year 2000 compliant, or do not need to be made Year 2000 compliant in order
     to continue to function in substantially  the same manner in the Year 2000.
     Contingency  plans are being developed for all major  components in case of
     system  failures  surrounding  the  Year  2000.  The  Company's  Year  2000
     compliance  work has not caused,  nor does the Company  expect that it will
     cause,  a deferral on the part of the Company of any  material IT or non-IT
     projects.

          The  Company  has  identified  critical  suppliers,  as well as  other
     essential service  providers,  and has surveyed their Year 2000 compliancy.
     Based on expected  compliance  dates  expressed  by some of these  critical
     suppliers  and  other  service  providers,  additional  follow-up  will  be
     required to fully assess their state of readiness for the Year 2000.  These
     follow-up  activities will occur  throughout  1999. For other suppliers and
     service providers,  risk assessments and contingency plans, where necessary
     were  developed.  The Company  has taken the above steps to address  issues
     surrounding  suppliers  and service  providers;  however the Company has no
     direct ability to influence other parties' compliance actions.  The Company
     believes it has taken the  necessary  actions to mitigate the effect of the
     Year  2000  risks,  however,  there  can be no  assurance  that  any of the
     Company's vendors or others, with whom it transacts business,  will be Year
     2000  compliant  prior to such date.  The  company is unable to predict the
     ultimate  effect that the Year 2000 problem may have upon the  Company,  in
     that  there is no way to  predict  the impact  that the  problem  will have
     nation-wide  or  world-wide  and how the Company  will in turn be affected,
     and, in addition,  the company  cannot predict the number and nature of its
     vendors and customers who will fail to become Year 2000 compliant  prior to
     January 1, 2000.  Significant Year 2000 difficulties on the part of vendors
     or  customers  could  have a material  adverse  impact  upon the  Company's
     operating results and financial condition.

          The Company's most likely  potential risk is a temporary  inability of
     third party assay labs to correctly  assay the mineral  content of the rock
     and soil samples sent to them for analysis. The Company has prepared a list
     of alternative  labs to use should the assay lab currently used not be able
     to correctly assay the material.

          Contingency plans for the Year 2000 related business  interruption are
     being  developed  and are expected to be completed by mid November 1999 and
     will include,  but not be limited to, the  development of emergency  backup
     recovery  procedures,  replacing  automated processes with manual processes
     and  identification  of  alternative  suppliers.  The  Company's  Year 2000
     efforts are ongoing and its overall plan, as well as the  consideration  of
     contingency  plans,  will  continue  to evolve as new  information  becomes
     available. While the Company is taking steps it believes to be necessary to
     prevent any major interruption to its business  activities that will depend
     in part, upon the ability of third parties to be Year 2000 compliant.

F    NEW ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
     "Accounting for Derivative  Instruments and Hedging  Activities".  SFAS No.
     133  requires  companies to recognize  all  derivative  contracts as either
     assets or  liabilities  in the  balance  sheet and to measure  them at fair
     value.  If certain  conditions  are met, a derivative  may be  specifically
     designated  as a hedge,  the object of which is to match the timing of gain
     or loss  recognition on the hedging  derivative with the recognition of (i)
     the  changes in the fair value of the hedged  asset or  liability  that are
     attributable  to the hedged risk of (ii) the earnings


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<PAGE>


     effect  of  the  hedged  forecasted  transaction.   For  a  derivative  not
     designated  as a  hedging  instrument,  the gain or loss is  recognized  in
     income in the period of change.  SFAS No. 133 is effective for all quarters
     of fiscal years beginning after June 15, 1999.

          Historically,  the Company has not entered into derivatives  contracts
     either to hedge existing risks or for  speculative  purposes.  Accordingly,
     the Company  does not expect  adoption of the new  standards  on January 1,
     2000 to affect its financial statements.

          In April 1998, the American  Institute of Certified Public accountants
     issued  Statement  of Position  98-5,  "Reporting  on the Costs of Start-Up
     activities",   ("SOP  98-5")  which  provides  guidance  on  the  financial
     reporting of start-up costs and  organization  costs.  It requires costs of
     start-up activities and organization costs to be expensed as incu ed.  SOP
     98-5 is effective for fiscal years  beginning  after December 15, 1998 with
     initial  adoption  reported  as  the  cumulative  effect  of  a  change  in
     accounting  principle.  Adoption of this  standard will not have a material
     effect on the financial statements.



                           PART 11. OTHER INFORMATION


ITEM 1.   Legal Proceedings

          The Company is not party to any  litigation,  and has no  knowledge of
          any pending or threatened litigation against it.


ITEM 2.   Changes in Securities

          Not Applicable


ITEM 3.   Defaults Upon Senior Securities

          Not Applicable


ITEM 4.   Submission of Matters to a Vote of Security Holders

          Not Applicable


ITEM 5.   OTHER INFORMATION

          None.


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits:

               None.

          (b)  Reports on Form 8-K

               None.


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<PAGE>


                                   SIGNATURES

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

Date:    November 15, 1999                   BY:     /s/ David Jenkins
         -----------------                           -----------------
                                                     David Jenkins
                                                     Director and President

Date:    November 15, 1999                   BY:     /s/ John A.A. James
         -----------------                           -------------------
                                                     John A.A. James
                                                     Director and Vice-President



















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