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 June 30, 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 or             (IRS Employer
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 June 30, 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                   7-10




                                       2
<PAGE>


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
PATAGONIA GOLD CORPORATION
(An exploration stage enterprise)
Consolidated Balance Sheets
(Expressed in US Dollars)                                            June 30    December 31
(Unaudited, prepared by management)                                     2000           1999
-------------------------------------------------------------------------------------------
<S>                                                              <C>            <C>
ASSETS
Current
   Cash                                                          $     2,448    $    22,913
   Receivables                                                            21              7
   Investments                                                       901,196        921,332
-------------------------------------------------------------------------------------------
                                                                     903,665        944,252

Mineral property costs                                                12,250         12,250
-------------------------------------------------------------------------------------------
Total assets                                                     $   915,915    $   956,502
-------------------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

Current
   Accounts payable and accrued liabilities                      $    41,279    $    35,000
Notes payable                                                         87,579         76,879
-------------------------------------------------------------------------------------------
Total liabilities                                                    128,858        111,879
-------------------------------------------------------------------------------------------

Stockholders' deficiency,
Share capital
  Authorized:
    50,000,000 common shares, with par value of $0.001 each
  Issued:
    13,000,000 common shares                                          13,000         13,000
Additional paid-in capital                                         1,827,000      1,827,000
Accumulated deficit                                                 (662,598)      (625,168)
Accumulated other comprehensive income (loss)
    Unrealized gains/(losses) on securities available for sale      (390,345)      (370,209)
-------------------------------------------------------------------------------------------
Stockholders' equity                                                 787,057        844,623
-------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                       $   915,915    $   956,502
-------------------------------------------------------------------------------------------
</TABLE>

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




                                       3
<PAGE>


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Patagonia Gold Corporation
(An exploration stage enterprise)
Statements of Stockholder's Equity
(Expressed in US Dollars)
(Unaudited, prepared by management)
For the period ended June 30, 2000
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        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 gains             --            --            --         (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                --            --            --          (37,473)       (37,430)          --          (37,430)
Change in unrealized gains             --            --            --          (20,136)          --          (20,136)       (20,136)
------------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income             --            --            --          (57,609)       (37,430)       (20,136)       (57,566)
---------------------------------------------------------------------------===========----------------------------------------------
Balance, June 30, 2000           13,000,000   $    13,000   $ 1,827,000                   $  (662,598)   $  (390,345)   $   787,057
-----------------------------------------------------------------------                   ------------------------------------------
</TABLE>

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


                                       4
<PAGE>




<TABLE>
<CAPTION>
PATAGONIA GOLD CORPORATION
(An exploration stage enterprise)

Consolidated Statements of Operations
For the six month ended June 30, 2000 and 1999
(Expressed in US Dollars)
(Unaudited, prepared by management)
--------------------------------------------------------------------------------------------

                                                  March 31            Six months ended
                                              1993 (inception)             June 30
                                                 to June 30     ----------------------------
                                                   2000           2000            1999
--------------------------------------------------------------------------------------------
<S>                                             <C>             <C>             <C>
General and administrative expenses
  Administrative and general                    $     61,786    $      9,599    $      5,589
  Professional fees - accounting and legal            73,139           9,855           9,220
  Salaries and consulting fees                        95,475          16,979          19,810
--------------------------------------------------------------------------------------------

                                                     230,400          36,433          34,619

  Exploration expenses                               152,419           1,135           5,142
  Writedown of mineral property costs                297,000              --              --
--------------------------------------------------------------------------------------------
                                                     679,819          37,568          39,761
--------------------------------------------------------------------------------------------

Less: Income (loss)
  Interest income                                     33,562             117             642
  Dividend income                                      2,835              --              --
  Realized gain (loss) on sale of investments         (1,875)             --              --
  Interest expense                                   (14,884)           (212)         (2,143)
  Foreign exchange gain (loss)                        (2,417)            233            (921)
--------------------------------------------------------------------------------------------
                                                      17,221             138          (2,422)
--------------------------------------------------------------------------------------------

Net loss for the period                         $    662,598    $     37,430    $     42,183
============================================================================================

Loss per share                                                  $       0.00    $       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
(An exploration stage enterprise)

Consolidated Statements of Cash Flows
Six months ended June 30, 2000 and 1999
(Expressed in US Dollars)
(Unaudited, prepared by management)
---------------------------------------------------------------------------------------------------
                                                           March 31           Six months ended
                                                       1993 (inception)            June 30
                                                          to June 30     --------------------------
                                                             2000           2000           1999
---------------------------------------------------------------------------------------------------
<S>                                                       <C>            <C>            <C>
Cash flows from (used in) operating activities
     Net loss for the period                              $  (662,598)   $   (37,430)   $   (42,183)
     Adjustments to reconcile net loss to net
       cash used in operating activities :
          - realized loss (gain) on sale of investments        (1,875)            --             --
          - writedown of mineral property costs               297,000             --             --
---------------------------------------------------------------------------------------------------
                                                             (367,473)       (37,430)       (42,183)
     Changes in assets and liabilities
          - decrease (increase) in accounts receivable            (21)           (14)            52
          - increase(decrease) in accounts payable             41,279          6,279         33,657
---------------------------------------------------------------------------------------------------

                                                             (326,215)       (31,165)        (8,474)
---------------------------------------------------------------------------------------------------

Cash flows from (used in) investing activities
     Purchase of available for sale securities             (2,178,119)            --        (22,523)
     Proceeds on sale of available-for-sale securities        888,453             --             --
     Mineral property costs                                   (12,250)            --             --
---------------------------------------------------------------------------------------------------

                                                           (1,301,916)            --        (22,523)
---------------------------------------------------------------------------------------------------
Cash flows from financing activities
     Proceeds from issuance of common stock                 1,540,000             --             --
     Proceeds from notes payable                               90,579         10,700             --
---------------------------------------------------------------------------------------------------

                                                            1,630,579         10,700             --
---------------------------------------------------------------------------------------------------

Increase (decrease) in cash for the period                      2,448        (20,465)       (30,997)
Cash and cash equivalents, beginning of period                     --         22,913         73,974
---------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period                  $     2,448    $     2,448    $    42,977
===================================================================================================
</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 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 June 30, 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 costs
          deferred.  As at June 30, 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
          June 30, 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:



                                       7
<PAGE>

          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 six months ended June 30, 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.

     (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


                                       8
<PAGE>

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

June 30, 2000
  Equity securities            $1,291,541   $  215,525   $  605,870   $  901,196
================================================================================

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

     Unrealised losses totalling $303,598 (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



                                       9
<PAGE>

     (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.

          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.


7.   Comparative Figures

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


8.   Related Party Transactions

     Related  party  transactions  not  disclosed  elsewhere in these  financial
     statements for the six months ended June 30, 2000,  include  salaries of $0
     (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 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


                                       10
<PAGE>

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 it's property in 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 and second 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 and second quarter of 2000.

     The Company is currently reviewing its Argentina and Guatemala properties.

(C)  Financial Information

Six Months Ended June 30, 2000 versus Six Months Ended June 30, 1999

For the six months ended June 30, 2000 the Company recorded a loss of $37,430 or
$0.00 per share, compared to a loss of $42,183 or $0.00 per share in 1999.

General and administrative expenses - For the six months ended June 30, 2000 the
Company  recorded  general and  administrative  expenses of $9,599,  compared to
$5,589 in 1999.

Professional  fees - accounting and legal - For the six months ended June 30 the
Company recorded accounting and management fees of $9,855, compared to $9,220 in
1999. Of this amount  accounting and  management  fees of $8,375 (1999 - $8,375)
relate to the  management  of the  Company's  wholly  owned  Bermuda  subsidiary
Patagonia Gold Mines.

Exploration  expenditures  - For the six months  ended June 30, 2000 the Company
recorded exploration expenses of $1,135, compared to $5,142 in 1999.

(D)  Financial Condition and liquidity

     At June 30,  2000,  the  Company  had cash of $2,448  (1999 - $42,977)  and
working capital of $774,807 (1999 - $1,430,714) respectively.  Total liabilities
as of June 30,  2000 were  $128,858  (1999 -  $190,341),  a decrease of $61,483.
During the six months ended June 30, 2000 financing  activities consisted of the
following, proceeds from notes and


                                       11
<PAGE>

advances  payable  $10,700  (1999 - $0).  For the six months ended June 30, 2000
investing activities consisted $0 (1999 - $22,523).  The Company recorded a loss
for the six months ended June 30, 2000 of $37,430, or $0.00 per share,  compared
to a loss of $42,183 ($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",  passed  without  incident at any of the Company's
properties.

     The Year 2000 (YK2) issue is the result of  computerized  systems using two
digits  rather than four digits to identify an applicable  year.  Date-sensitive
systems  may  recognize  a date using "00" as the year 1900 rather that the year
2000. This could result in a system failure or miscalculation causing disruption
to  business  operations.  In  1999,  the  Company  completed  a  review  of its
computer-based information systems and, where needed, Y2K compliant upgrades for
the Company's core financial  systems were installed and tested. To date, no Y2K
problems have been encountered by the Company or the Company's vendors or others
with whom it transacts business and none are expected.  The Company's management
and operations staff will again monitor critical  operations during the December
31, 2000 - January 1, 2001 Y2K rollover dates.


                           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


                                       12
<PAGE>

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.                                            *

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

1.   Change in registrant's certifying accountants (filed February 7, 2000) *

--------
         * Previously Filed



                                   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:    August 10, 2000                   BY:  /s/ David Jenkins
         ---------------                        --------------------------
                                                David Jenkins
                                                Director and President

Date:    August 10, 2000                   BY:  /s/ Cosme M. Beccar Varela
         ---------------                        --------------------------
                                                Cosme M. Beccar Varela
                                                Director

                                       13