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

                                   FORM 10-QSB

(Mark One)

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

     For the quarterly period ended March 31, 2000

[_]  TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

     For the transition period from ___________________ to ___________________

     Commission file number 0-26531

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

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

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 March 31, 2000.

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 Sheets                              3

    Consolidated Statements of Stockholders' Equity          4

    Consolidated Statements of Operations                    5

    Consolidated Statements of Cash Flows                    6

    Notes to the Consolidated Financial Statements           7-11


<PAGE>


PATAGONIA GOLD CORPORATION
(An exploration stage enterprise)

Consolidated Balance Sheets  - (Unaudited)
March 31, 2000 and December 31, 1999
(Expressed in US Dollars)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
                                                                  2000            1999
-----------------------------------------------------------------------------------------

ASSETS
<S>                                                            <C>            <C>
Current
   Cash                                                        $     5,473    $    22,913
   Receivables                                                          14              7
   Investments (Note 3)                                          1,250,738        921,332
                                                               --------------------------
                                                                 1,256,225        944,252

Mineral property costs (Note 4)                                     12,250         12,250
-----------------------------------------------------------------------------------------
Total assets                                                   $ 1,268,475    $   956,502
-----------------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

Current
   Accounts payable and accrued liabilitie                     $    38,000    $    35,000
   Notes payable (Note 5)                                           87,179         76,879
-----------------------------------------------------------------------------------------
Total liabilities                                                  125,179        111,879
-----------------------------------------------------------------------------------------

Stockholders' Equity
   Share capital,
         Authorized (Note 6)
             50,000,000 common shares, par value $0.001 each
1         Issued
           13,000,000 common shares (1997 - 13,000,000)             13,000         13,000
Additional paid in capital                                       1,827,000      1,827,000
Accumulated deficit                                               (655,901)      (625,168)
Accumulated other comprehensive income (loss)
    Unrealized (loss) gains on securities available for sale       (40,803)      (370,209)
                                                               --------------------------
                                                                 1,143,296        844,623
-----------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                     $ 1,268,475    $   956,502
-----------------------------------------------------------------------------------------
</TABLE>

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


                                        3
<PAGE>


PATAGONIA GOLD CORPORATION
(An exploration stage enterprise)

<TABLE>
<CAPTION>
Consolidated Statements of Stockholders' Equity
Three months ended March 31, 2000 and the years ended December 31, 1999 and 1998 (Unaudited)
(Expressed in US Dollars)
------------------------------------------------------------------------------------------------------------------------------------


                                                                                                         Accumulated
                                                                             Compre-                        Other
                                      Common Stock           Additional     hensive                       Compre-         Total
                                 ------------------------     Paid-In       Income       Accumulated      hensive      Stockholder's
                                   Shares        Amount       Capital       (loss)         Deficit     Income (loss)      Equity
-----------------------------------------------------------------------------------------------------------------------------------

<S>                              <C>          <C>           <C>           <C>            <C>            <C>            <C>
Balance, January 1, 1998         13,000,000   $    13,000   $ 1,827,000   $        --    $   (28,577)   $   151,673    $ 1,963,096
-----------------------------------------------------------------------------------------------------------------------------------

Net loss for the year                    --            --            --      (135,708)      (135,708)            --       (135,708)
Change in unrealized gains               --            --            --        98,086             --         98,086         98,086
-----------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income               --            --            --       (37,622)      (135,708)        98,086        (37,622)
-----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998       13,000,000        13,000     1,827,000                     (164,285)       249,759      1,925,474
-----------------------------------------------------------------------------------------------------------------------------------

Net loss for the year                    --            --            --      (460,883)      (460,883)            --       (460,883)
Change in unrealized loss                --            --            --      (619,968)            --       (619,968)      (619,968)
-----------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income               --            --            --    (1,080,851)      (460,883)      (619,968)    (1,080,851)

-----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999       13,000,000        13,000     1,827,000                     (625,168)      (370,209)       844,623
-----------------------------------------------------------------------------------------------------------------------------------

Net loss for the period                  --            --            --       (30,733)       (30,733)            --        (30,733)
Change in unrealized loss                --            --            --       329,406             --        329,406        329,406
-----------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income               --            --            --       298,673        (30,733)       329,406        298,673
-----------------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2000          13,000,000   $    13,000   $ 1,827,000                  $  (655,901)   $   (40,803)   $ 1,143,296
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

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


                                       4
<PAGE>



PATAGONIA GOLD CORPORATION
(An exploration stage enterprise)

Consolidated Statements of Operations
Three months ended March 31, 2000 and 1999 (Unaudited)
(Expressed in US Dollars)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                                                                       Three months
                                                        March 31                          Ended
                                                    1993 (inception)                     March 31
                                                      to March 31           ----------------------------------
                                                          2000                  2000                   1999
--------------------------------------------------------------------------------------------------------------
<S>                                                   <C>                   <C>                   <C>
General and administrative expenses
  Administration and general                          $     54,910          $      9,843          $      3,845
  Professional fees - accounting and legal                  71,659                 1,255                 9,220
  Salaries and consulting fees                              96,959                18,463                11,767
--------------------------------------------------------------------------------------------------------------

                                                           223,528                29,561                24,832

Exploration expenses                                       152,419                 1,135                 5,142

Writedown of mineral property costs                        297,000                    --                    --
--------------------------------------------------------------------------------------------------------------

                                                           672,947                30,696                29,974
--------------------------------------------------------------------------------------------------------------

Less: Income (loss)
  Interest income                                           33,529                    84                   397
  Dividend income                                            2,835                    --                    --
  Realized gain (loss) on sale of investments               (1,875)                   --                    --
  Interest expense                                         (14,793)                 (121)                 (186)
  Foreign exchange loss                                     (2,650)                   --                    --
--------------------------------------------------------------------------------------------------------------

                                                            17,046                   (37)                  211
--------------------------------------------------------------------------------------------------------------

Net loss for the period                                   (655,901)         $    (30,733)         $    (29,763)
--------------------------------------------------------------------------------------------------------------

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

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

The accompanying notes are an integral part of these financial statements


                                       5
<PAGE>


PATAGONIA GOLD CORPORATION
(An exploration stage enterprise)

Consolidated Statements of Operations
Three months ended March 31, 2000 and 1999 (Unaudited)
(Expressed in US Dollars)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                 March 31,                    Three months
                                                                              1993 (inception)                   Ended
                                                                              to December 31                   March 31
                                                                                                    --------------------------------
                                                                                   2000                 2000                1999
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                 <C>                 <C>
Cash flows from (used in)
      operating activities
      Net loss for the period                                                   $  (655,901)        $   (30,733)        $   (29,763)
      Adjustments to reconcile net loss to net
            cash used in operating activities:
            - realized loss (gain on sale of investments                             (1,875)                 --                  --
            - writedown of mineral properties                                       297,000                  --                  --
------------------------------------------------------------------------------------------------------------------------------------
                                                                                   (360,776)            (30,733)            (29,763)
      Changes in assets and liabilities
            - decrease (increase) in accounts receivable                                (14)                 (7)               (113)
            - increase (decrease) in accounts payable                                38,000               3,000               1,184
------------------------------------------------------------------------------------------------------------------------------------

                                                                                   (322,790)            (27,740)            (28,692)
------------------------------------------------------------------------------------------------------------------------------------

Cash flows from (used in)
      investing activities
      Purchase of available for sale securities                                  (2,178,119)                 --                  --
      Proceeds on sale of available-for-sale securities                             888,453                  --                  --
      Mineral property costs                                                        (12,250)                 --                  --
------------------------------------------------------------------------------------------------------------------------------------

                                                                                 (1,301,916)                 --                  --
------------------------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities
      Proceeds from issuance of common stock                                      1,540,000                  --                  --
      Proceeds from notes payable                                                    90,179              10,300                  --
------------------------------------------------------------------------------------------------------------------------------------

                                                                                  1,630,179              10,300                  --
------------------------------------------------------------------------------------------------------------------------------------

Increase (decrease) in cash for the period                                            5,473             (17,440)            (28,692)
Cash, beginning of period                                                                --              22,913              73,651
------------------------------------------------------------------------------------------------------------------------------------
Cash, end of period                                                             $     5,473         $     5,473         $    44,959
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

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


                                       6
<PAGE>


Notes to Interim Consolidated Financial Statements (Unaudited)

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 June 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  share of
     PGM in exchange for 5,500,000  common shares of the Company.  There were no
     operations  of the companies  prior to June 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 the legal subsidiary.

     The  acquisition  was recorded using the purchase  method.  As the net book
     value of the  Company at the date of the  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.  During the year ended  December  31,
     1999, the Company  determined  that the carrying  value of the  Argentinean
     mineral  properties  exceeded  the  future  projected  cash  flows from the
     mineral properties.  Consequently, the mineral properties were written down
     to their estimated fair value of $3,000.

     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.

2.   Significant Accounting Policies

     (a)  Basis of Consolidation

          These consolidated  financial statements,  prepared in accordance with
          accounting principles generally accepted in the United States, include
          the accounts of the Company and its wholly-owned subsidiary, Patagonia
          Gold  Mines  Ltd.,  a company  incorporated  in 1994 under the laws of
          Bermuda. Significant inter-company accounts and transactions have been
          eliminated.

     (b)  Cash and Cash Equivalents

          Cash  equivalents  are comprised of certain highly liquid  instruments
          with a maturity of three months or less when purchased.  There were no
          cash equivalents as of March 31, 2000.

     (c)  Mineral Properties and Exploration Expenses

          Exploration  costs are charged to operations as incurred as are normal
          development costs until such time that proven reserves are discovered.
          From that time forward,  the Company will  capitalize all costs to the
          extent that future cash flow from reserves equals or exceeds the


                                       7
<PAGE>


          costs  deferred.  As at March 31,  2000 and  December  31,  1999,  the
          Company did not have proven reserves.  Cost of initial  acquisition of
          mineral rights and concessions  are  capitalized  until the properties
          are abandoned or the right expires.

          Exploration  activities conducted jointly with others are reflected at
          the Company's proportionate interest in such activities.

          Costs related to site  restoration  programs are accrued over the life
          of the project.

     (d)  Investments

          Available-for-sale  securities  are carried at fair market  value with
          unrealised holding gains and losses included in stockholders'  equity.
          Realized gains and losses are determined on an average cost basis when
          securities are sold.

     (e)  Concentration of Credit Risk

          The  Company  places its cash and cash  equivalents  with high  credit
          quality  financial  institutions.   The  Company  routinely  maintains
          balances in a financial  institution  beyond the insured amount. As of
          March 31, 2000 the Company had $ nil in a bank beyond insured limits.

     (f)  Foreign Currency Transactions

          Foreign currency accounts are translated into U.S. dollars as follows:

          At the transaction date, each asset, liability, revenue and expense is
          translated into U.S. dollars by the use of the exchange rate in effect
          at that date. At the period end,  monetary  assets and liabilities are
          translated  into U.S.  dollars by using the exchange rate in effect at
          that  date.  The  resulting  foreign  exchange  gains and  losses  are
          included in operations.

     (g)  Advertising Expenses

          The Company expenses advertising costs as incurred.  Total advertising
          costs  charged to expenses  for the three  months ended March 31, 2000
          and 1999 were $Nil and $Nil, respectively.

     (h)  Impairment

          Certain  long-term  assets of the Company are reviewed when changes in
          circumstances  require as to whether their  carrying  value has become
          impaired,  pursuant to guidance  established in Statement of Financial
          Accounting  Standards ("SFAS") No. 121, "Accounting for the Impairment
          of  Long-Lived  Assets and for  Long-Lived  Assets to be Disposed of".
          Management  considers  assets to be  impaired  if the  carrying  value
          exceeds  the  future  projected  cash flows  from  related  operations
          (undiscounted and without interest  charges).  If impairment is deemed
          to exist, the assets will be written down to fair value.

     (i)  Accounting Estimates

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


                                       8
<PAGE>


     (j)  Fair Value of Financial Instruments

          The respective  carrying value of certain  on-balance-sheet  financial
          instruments   approximated   their  fair   values.   These   financial
          instruments  include  cash,  receivables,   investments  and  accounts
          payable  and  accrued   liabilities.   Fair  values  were  assumed  to
          approximate  carrying values for these financial  instruments,  except
          where  noted,  since they are short term in nature and their  carrying
          amounts  approximate  fair values or they are receivable or payable on
          demand.  Management  is of the opinion that the Company is not exposed
          to significant  interest,  credit or currency risks arising from these
          financial instruments.

     (k)  Income Taxes

          The Company has adopted  Statement of Financial  Accounting  Standards
          (SFAS") No. 109,  "Accounting  for Income  Taxes",  which requires the
          Company  to  recognize  deferred  tax  liabilities  and assets for the
          expected  future tax  consequences of events that have been recognized
          in the  Company's  financial  statements  or  tax  returns  using  the
          liability  method.  Under this method,  deferred tax  liabilities  and
          assets are determined based on the temporary  differences  between the
          financial  statement  and tax bases of assets  and  liabilities  using
          enacted tax rates in effect in the years in which the  differences are
          expected to reverse.

     (l)  Loss Per Share

          Loss per share is computed using the weighted average number of shares
          outstanding during the year. Effective for the year ended December 31,
          1997, the Company adopted SFAS No. 128, "Earnings Per Share".

     (m)  Comprehensive Income

          In 1998, the Company  adopted SFAS No. 130,  "Reporting  Comprehensive
          Income",  which  establishes  standards  for  reporting and display of
          comprehensive  income,  its components and accumulated  balances.  The
          Company  is   disclosing   this   information   on  its  Statement  of
          Stockholders'  Equity.  Comprehensive  income  comprises equity except
          those  resulting  from  investments  by owners  and  distributions  to
          owners. SFAS No. 130 did not change the current accounting  treatments
          for components of comprehensive income.

     (n)  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 derivatives 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 objective 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 or (ii)
          the  earnings  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 fiscal quarters of fiscal years beginning after June
          15, 2000.

          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-activities and organization costs to be expensed as incurred.
          SOP 98-5 is effective for


                                       9
<PAGE>


          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  has no material  effect on the  financial
          statements.

3.   Investments

     Investments consist of available-for-sale  securities and are summarized as
     follows:

                                             Gross        Gross
                                           unrealized   unrealized      Market
                                 Cost        gains        losses        value
     ---------------------------------------------------------------------------

     March 31, 2000
       Equity securities      $1,291,541   $  224,943   $  265,746   $1,250,738
     ===========================================================================

     December 31, 1999
       Equity securities      $1,291,541   $   22,434   $  392,643   $  921,332
     ===========================================================================

     Unrealised  losses totalling $73,440 (December 31, 1999 - $7,949) relate to
     investments held by the Company's Bermuda subsidiary and are not subject to
     income tax.

4.   Mineral Property Costs

     (a)  Argentina

          Mineral  concessions  in the Province of La Rioja,  Argentina,  are as
          follows:

     o    Piloncho 1, Sierra de Chepes

     o    Piloncho 2, Sierra de Chepes

     o    Piloncho 20, Sierra de Chepes

     o    Piloncho 21, Sierra de Chepes

     o    Carmelita 16, Sierra de Chepes

     o    Carmelita 17, Sierra de Chepes

     o    Carmelita 18, Sierra de Chepes

     (b)  Guatamala

          On October 1, 1999,  the Company  entered into an agreement that gives
          the Company the right to earn a 50% interest in the San Diego  Mineral
          Exploration Reconnaissance Licence by paying:

     o    A $9,250 acquisition fee (paid); and

     o    $18,617 towards the Phase I exploration program.

5.   Notes Payable

     Loans payable are unsecured, non-interest bearing and are due on demand.

6.   Share Capital

     On April 9, 1997,  the Company  amended its  Articles of  Incorporation  to
     provide for the  authorization  of  50,000,000  common shares at $0.001 par
     value.  Previously,  the authorized capital was 200 common shares of no par
     value.


                                       10
<PAGE>


     Also, on April 9, 1997, the Company forward split its common stock 5,000:1,
     thus increasing the number of issued and outstanding common shares from 200
     shares to 1,000,000 shares. This split has been reflected  retroactively in
     these financial statements. Income

7.   Taxes

     (a)  The Company has  estimated net losses for tax purposes to December 31,
          1999, totalling approximately  $614,000,  which may be applied against
          future taxable income. Accordingly, there is no tax expense charged to
          the Statement of Operations  for the years ended December 31, 1999 and
          1998. The Company evaluates its valuation allowance requirements on an
          annual basis based on projected future operations.  When circumstances
          change and this causes a change in  management's  judgement  about the
          realizability of deferred tax assets,  the impact of the change on the
          valuation allowance is generally reflected in current income.

          The right to claim these losses is expected to expire as follows:

                           2008                     $ 10,000
                           2012                       16,000
                           2018                      128,000
                           2019                      460,000
                           ---------------------------------
                                                    $614,000
                           =================================

     (b)  The  tax  effects  of  temporary  differences  that  give  rise to the
          Company's deferred tax asset (liability) are as follows:

                                               1999                     1998
          ----------------------------------------------------------------------

          Tax loss carry forwards          $  157,000                $  52,000
          Valuation allowance                (157,000)                 (52,000)
          ----------------------------------------------------------------------

                                           $       --                $      --
          ======================================================================

          No tax effect haseen recorded on the accumulated  other  comprehensive
          income  unrealized gains on securities  available-for-sale  due to the
          existence of U.S. tax loss carry forwards.

8.   Comparative Figures

     Certain 1999 comparative figures have been reclassified to conform with the
     financial statement presentation adopted for 2000.


9.   Related Party Transactions

     Related  party  transactions  not  disclosed  elsewhere in these  financial
     statements for the three months ended March 31, 2000,  include  salaries of
     $10,000  (1999 - $Nil),  which were paid to a director  of the  Company and
     were charged to operations in 2000.



ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

(A)  General

     Patagonia Gold  Corporation (the "Company" or "Patagonia") was incorporated
under the laws of the State of Florida on March 31, 1993, under the name "Cayman
Purchasing & Supply, Inc." The


                                       11
<PAGE>


Company  was  inactive  until it  redirected  its  business  efforts in mid 1997
following  a change of  management,  which  occurred  on June 25,  1997,  to the
acquisition,  exploration and, if warranted, the development of mineral resource
properties.  The  Company  changed its name to  Patagonia  Gold  Corporation  on
October 13, 1997 to more fully reflect its business activities.

     Since its redirection, the Company's activities have been limited primarily
to  the   acquisition   of  rights  to  certain   mineral   properties  and  the
implementation of preliminary  exploration programs on these properties in which
it has acquired an interest.

     The Company is engaged in the location,  acquisition,  exploration  and, if
warranted,  development  of  mineral  resource  properties.  All of the  mineral
properties  in which  the  Company  has an  interest  or a right to  acquire  an
interest in are currently in the exploration  stage. None of the properties have
a known body of Mineral Reserves.  The Company's primary objective is to explore
for gold,  silver,  base metals and  industrial  minerals and, if warranted,  to
develop those existing mineral properties. Its secondary objective is to locate,
evaluate, and acquire other mineral properties, and to finance their exploration
and  development  either  through equity  financing,  by way of joint venture or
option agreements or through a combination of both.

     Currently,   the  Company's   activities  are  centered  in  Argentina  and
Guatemala.

     During 1999 and the first quarter of 2000,  the Company  conducted  initial
exploration  programs for gold mineralization on its properties in Argentina and
Guatemala.

     In  Guatemala,  the Company  entered into a joint  venture  agreement  with
Aurora Gold  Corporation in October 1999 to conduct initial mineral  exploration
on the San Diego Exploration  Reconnaissance Licence. The licence was granted to
Aurora Gold  Corporation in September 1999.  Initial  exploration  work begun in
1999 continued during the first quarter of 2000.

     None of the Company's properties contain any known Mineral Reserves.

     The Company's common stock is traded on the NASD's OTC Bulletin Board.

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

     The Company's offices are located at 1505 - 1060 Alberni Street, Vancouver,
British Columbia, Canada, V6E 4K2.

(B)  Significant developments during the first quarter of 2000

     In October 1999 the Company  entered into a joint  venture with Aurora Gold
Corporation for preliminary  exploration of the San Diego reconnaissance license
located in Guatemala.  The reconnaissance  licence covers 800 square kilometers.
An exploration  program funded by Patagonia  Gold  Corporation  commenced on the
most prospective  areas during the last quarter of 1999 and continued during the
first quarter of 2000.

(C)  Financial Information

Three Months Ended March 31, 2000 versus Three Months Ended March 31, 1999

For the three months ended March 31, 2000 the Company recorded a loss of $30,733
or $0.00 per share, compared to a loss of $29,763 or $0.00 per share in 1999.

General and administrative  expenses - For the three months ended March 31, 2000
the Company recorded general and administrative  expenses of $9,843, compared to
$3,845 in 1999.



                                       12
<PAGE>


Professional  fees - accounting and legal - For the three months ended March 31,
2000 the  Company  recorded  accounting  and legal fees of $1,255,  compared  to
$9,220 in 1999. The 1999 costs reflect the costs associated with the preparation
and filing of the Company's Form 10-SB Registration Statement.

Exploration expenditures - For the three months ended March 31, 2000 the Company
recorded exploration expenses of $1,135, compared to $5,142 in 1999.

(D)  Financial Condition and liquidity

     At March 31,  2000,  the  Company had cash of $5,473  (1999 - $44,959)  and
working  capital  of  $1,131,046   (1999  -  $1,490,622)   respectively.   Total
liabilities  as of March 31, 2000 were  $125,179 as compared to $17,037 on March
31, 1999, an increase of $108,142.  During the three months ended March 31, 2000
financing  activities  consisted  of the  following,  proceeds  from  notes  and
advances  payable $10,300 (1999 - $0). For the three months ended March 31, 2000
investing  activities  consisted $0 (1999 - $0). The Company recorded a loss for
the three months ended March 31, 2000 of $30,733,  or $0.00 per share,  compared
to a loss of $29,763 ($0.00 per share) in 1999.

     The Company has sufficient  working  capital to (i) pay its  administrative
and general  operating  expenses  through  December 31, 2000 and (ii) to conduct
preliminary exploration programs. However, without cash flow from operations, it
may need to obtain additional funds (presumably  through equity offerings and/or
debt  borrowing) in order,  if warranted,  to implement  additional  exploration
programs on its  properties.  Failure to obtain such  additional  financing  may
result in a reduction  of the  Company's  interest in certain  properties  or an
actual   foreclosure  of  its  interest.   The  Company  has  no  agreements  or
understandings with any person as to such additional financing.

     None of the Company's  properties has commenced  commercial  production 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 "Year  2000  problem",  as it has come to be known,  refers to the fact
that many computer programs use only the last two digits to refer to a year, and
therefore recognize a year that begins with "20" as instead beginning with "19".
For  example,  the  year  2000  would be read as being  the  year  1900.  If not
corrected, this problem could cause many computer applications to fail or create
erroneous results.

     The Company has modified and tested all the  critical  applications  of its
information  technology  ("IT"),  the result of which is that all such  critical
applications  are now Year 2000 compliant.  The Company  believes that virtually
all of the  non-critical  applications  of its IT are Year 2000  compliant.  The
Company is using  independent  consultants  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.  New
equipment  and software was  installed  during the third and fourth  quarters of
1999.  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.  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.


                                       13
<PAGE>


     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  affect 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.  The  Company  intends to  monitor  the  progress  of its  vendors  and
customers  in  becoming  Year 2000  compliant.  The  Company  has  formulated  a
contingency  plan to deal  with the  potential  non-compliance  of  vendors  and
customers.

     As of April 30, 2000 the Company has not experienced any year 2000 problems
nor has any of the Company's vendors or others with whom it transacts business.

                           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:

3.1  Article of Incorporation of Cayman Purchasing & Supply, Inc.              *

3.2  Company By-laws for Cayman Purchasing & Supply, Inc.                      *

3.3  Notice of reinstatement for Cayman Purchasing & Supply, Inc.              *

3.4  Amendment to the Articles of Incorporation  of Cayman  Purchasing
     & Supply, Inc.                                                            *


                                       14

                                       4
<PAGE>


3.5  Notice of filing of Amendment to the  Articles of  Incorporation
     of Cayman Purchasing & Supply, Inc.                                       *

3.6  Notice of filing of Amendment to the  Articles of  Incorporation
     of Cayman Purchasing & Supply, Inc. changing its name to Patagonia
     Gold Corporation                                                          *

10.1 Agreement   dated  July  30,  1997  between  The  Company  and
     Carrington International Limited                                          *

10.2 Joint Venture Agreement between the Company and Aurora Gold Corporation   *

27.1 Financial Data Schedule

--------
* Previously Filed

(b)  Reports on Form 8-K

     None.


                                   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:  April 30, 2000             BY:  /s/ David Jenkins
                                       ---------------------------
                                       David Jenkins
                                       Director and President

Date:  April 30, 2000             BY:  /s/ Cosme M. Beccar Varela
                                       --------------------------
                                       Cosme M. Beccar Varela
                                       Director


                                       15