<PAGE>
                       U.S. SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C. 20549

                                     FORM 10-QSBA

(MARK ONE)
         [X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
                      SECURITIES EXCHANGE ACT OF 1934 
              FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997

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

         FOR THE TRANSITION PERIOD FROM             TO
                                        ------------   ----------------
   
                        COMMISSION FILE NUMBER 02-69494
                                                  -----

                               GLOBAL GOLD CORPORATION
                               -----------------------
                    (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
    
            DELAWARE                            13-3025550 
________________________________________________________________________________
   (STATE OR OTHER JURISDICTION OF          (I.R.S. EMPLOYER 
   INCORPORATION OR ORGANIZATION)           IDENTIFICATION NO.)

  438 WEST 37TH STREET, SUITE 5-G, NEW YORK, NEW YORK  10018     
________________________________________________________________________________
    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)     (ZIP CODE)

ISSUER'S TELEPHONE NUMBER          (212) 563-5933
                                   --------------

    Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes  X   No.
    ---     ---
  

    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      .  Not Applicable
                                                ---     ---

    As of September 30, 1997, there were 4,348,114 shares of the registrant's
Common Stock outstanding.  

    Transitional Small Business Disclosure Format (check one): Yes     No  X .
                                                                   ---    ---

                                       1
<PAGE>



                                  TABLE OF CONTENTS

PART I.  Financial Information 

Item 1.  Financial Statement: 
         Balance Sheet - September 30, 1997 and December 31, 1996..............3

         Statement of Income and (Loss) - for the period July 1, 1997 
         through September 30, 1997, for the period January 1, 1997 
         through September 30, 1997, and for the development stage period 
         January 1, 1995 through September 30, 1997............................4

         Statement of Changes in Stockholders Equity - for the period 
         January 1, 1995 through December 31, 1996 and for the period 
         January 1, 1997 through September 30, 1997............................5

         Statement of Cash Flow - for the period January 1, 1997 
         through September 30, 1997 and for the year January 1, 1996 
         through December 31, 1996.............................................7

         Notes to Financial Statement (unaudited) .............................8

Item 2.  Management's Discussion and Analysis
         of Financial Condition and Results
         of Operation.........................................................25

                                          2


<PAGE>

                               GLOBAL GOLD CORPORATION 
                            (A Development Stage Company)

                          CONSOLIDATED FINANCIAL STATEMENTS

                                    BALANCE SHEET


                                        ASSETS
<TABLE>
<CAPTION>

                                                            September 30,     December 31
                                                                1997              1996
                                                            (Unaudited)        (Audited)
                                                            -----------       -----------
CURRENT ASSETS
<S>                                                        <C>                <C>
  Cash                                                    $    27,830         $       369
  MoneyMarket Investment                                      150,000                  --
                                                            ---------           ---------
Noncurrent Asset
  Notes receivable - net of allowance for
    bad debts of $150,000 Note 9                              150,000             150,000
                                                            ---------           ---------

OTHER ASSETS
  Organization Costs                                            8,881               9,601
   Investment in certain mining interests 
     - Notes 6 and 8                                        1,003,494           1,003,494
   Deferred costs - Note 12                                 9,662,313             878,858
                                                            ---------           ---------
                                                          $10,674,688         $ 1,891,953
                                                          -----------         -----------
                                                          -----------         -----------

TOTAL ASSETS                                              $11,002,518         $ 2,042,322
                                                          -----------         -----------
                                                          -----------         -----------

CURRENT LIABILITIES
  Note Payable - First Dynasty Mines, Ltd. - Note 20      $10,257,124         $        --
  Note Payable - Officer                                           --             191,000
  Officer's compensation payable - Notes 10 and 16            120,834             300,000
  Accounts payable and accrued expenses - Note 11             136,883             979,719
                                                          -----------         -----------
                                                           10,514,841           1,470,719
                                                          -----------         -----------
STOCKHOLDERS EQUITY - EXHIBIT C
  Common Stock $.001 par 100,000,000 shares
    authorized 4,348,114 shares issued and outstanding         23,231              20,981

  Paid-in capital - Dormant period                          3,228,519           3,228,519
  Paid-in capital - Development stage                       1,482,423           1,259,673
  Retained earnings - Dormant period                       (2,907,648)         (2,907,648)
  Retained earnings - Development stage                    (1,338,848)         (1,029,922)
                                                          -----------         -----------
                                                              487,677             571,603
                                                          -----------         -----------

TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                 $11,002,518         $ 2,042,322
                                                          -----------         -----------
                                                          -----------         -----------
</TABLE>
See the accompanying notes

                                        3
<PAGE>

                               GLOBAL GOLD CORPORATION 
                            (A Development Stage Company)

                          CONSOLIDATED FINANCIAL STATEMENTS

                           STATEMENTS OF INCOME AND (LOSS)
<TABLE>
<CAPTION>

                                                            January 1,              January 1,
                                  July 1, 1997                1997                     1995
                                    through                  through               Development
                               September 30, 1997       September 30, 1997            Stage
                               ------------------       ------------------           through
                                  (UNAUDITED)              (UNAUDITED)          September 30, 1997
                               ------------------       ------------------      ------------------

<S>                            <C>                       <C>                    <C>
Revenue                           $     --                 $     --              $       --

Expenses
  Officers Compensation              37,500                   95,834                  395,834
  Administrative Fees                 2,436                   12,839                   33,997
  Legal                              16,080                  113,665                  436,994
  Accounting & Auditing               5,200                   30,100                  100,948
  Transfer Agent                         71                    1,534                   12,446
  Proxy Costs                            --                      --                    26,555
  Office Expense                     10,998                   19,653                   29,106
  Travel                                171                      171                   43,120
  Rent - Note 7                       9,000                   27,000                   63,000
                                   --------                 --------               ----------

OPERATING LOSS                      (81,456)                (300,796)              (1,142,000)
                                   --------                 --------               ----------
                                   --------                 --------               ----------

(OTHER INCOME (EXPENSES))
  Interest and royalty income           208                      208                    1,077
  Organization costs                   (240)                    (720)                  (5,520)
    Interest expense                     --                   (7,090)                 (14,821)
    Provision for bad debts
      - Note 9                           --                      --                  (175,000)
                                   --------                 --------               ----------
                                        (36)                  (7,602)                (194,264)
                                   --------                 --------               ----------

(Loss) Before Income Taxes          (81,488)                (308,398)              (1,336,264)

  Income Taxes                         (176)                    (528)                  (2,584)
                                   --------                 --------               ----------
  Net (Loss)                     $  (81,664)              $  308,926             $ (1,338,848)
                                 ----------               ----------             ------------
                                 ----------               ----------             ------------
  NET (LOSS) PER SHARE 
    (Note 18)                    $   (.0188)              $   (.0710)            
                                 ----------               ----------             ------------
                                 ----------               ----------             ------------
</TABLE>

                                       4

<PAGE>

                             GLOBAL GOLD CORPORATION

                          (A Development Stage Company)
                        Consolidated Financial Statements
             Statements of Changes in Stockholders' Equity - Note 19
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                PAID-IN     RETAINED       RETAINED       PAID-IN
                                 ISSUED AND     CAPITAL     EARNINGS       EARNINGS       CAPITAL
                                 OUTSTANDING    COMMON      (DORMANT       (DORMANT    (DEVELOPMENT   (DEVELOPMENT
                                   SHARES        STOCK       PERIOD)        PERIOD)       STAGE)         STAGE)             TOTAL
                                  ---------     -------    ----------    -----------    ---------      ----------        ----------
<S>                                <C>          <C>        <C>           <C>               <C>            <C>             <C>     
Stockholders' Equity
  January 1, 1995                  898,074      $89,807    $3,147,693    $(2,907,648)      $  --          $  --           $329,852

Net Loss-January 1,-
  December 31, 1995                  --           --           --             --         (361,345)         --             (361,345)

Adjustment re:restatement
  of par value-Note 1                --        (80,826)      80,826           --            --             --                --

Eyre acquisition-
  Note 5                          1,000,000     10,000         --             --            --           840,000           850,000

Proceeds through
  private offering-Note 14         200,000       2,000         --             --            --           419,573           421,573

                                  ---------     -------    ----------    -----------    ---------      ----------        ----------
Stockholders' equity
  December 31, 1995               2,098,074     $20,981    $3,228,519    $(2,907,648)   $(361,345)     $1,259,573        $1,240,080
                                  =========     =======    ==========    ===========    =========      ==========        ==========
</TABLE>

See the accompanying notes and Accountants' Compilation Report.


                                                                  5
<PAGE>

                             GLOBAL GOLD CORPORATION
                          (A Development Stage Company)
                        Consolidated Financial Statements
             Statements of Changes in Stockholders' Equity - Note 19
                                   (Unaudited)

<TABLE>
<CAPTION>
                                              PAID-IN     RETAINED      RETAINED        PAID-IN
                               ISSUED AND     CAPITAL     EARNINGS      EARNINGS        CAPITAL
                               OUTSTANDING    COMMON      (DORMANT      (DORMANT     (DEVELOPMENT     (DEVELOPMENT
                                 SHARES        STOCK       PERIOD)       PERIOD)        STAGE)           STAGE)             TOTAL
                                 ------        -----       -------       -------        ------           ------             -----
<S>                             <C>           <C>        <C>          <C>             <C>              <C>               <C>       
Stockholders' Equity
  December 31, 1995             2,098,074     $20,981    $3,228,519   $(2,907,648)    $(361,345)       $1,259,573        $1,240,080

Net Loss-January 1,-
  December 31, 1996                --           --           --            --          (668,577)           --             (668,577)

Warrants exercised                 40           --           --            --             --               100               100

Stockholders' equity
  December 31, 1996             2,098,114     $20,981    $3,228,519   $(2,907,648)   $(1,029,922)      $1,259,573          571,603

Net Loss-January 1-September
  30, 1997                                                              (308,926)                       (308,926)

Issuance of Common
  Stock-Note 16                 2,000,000      2,000                                    198,000          200,000

Note 20                          250,000        250                                                      24,750            25,000

Shareholders' Equity 
  September 30, 1997            4,318,114     $23,231    $3,228,519   $(2,907,648)   $(1,338,848)      $1,482,423         $487,677
</TABLE>

In 1996, 200,000 shares were issued to collateralize two guarantees by London
International Merchantile Ltd. The guarantees were rescinded and, therefore,
such shares were returned to the Company in 1997 and have not been reflected on
this statement.


See the accompanying notes


                                                                  6
<PAGE>

                            (GLOBAL GOLD CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                        CONSOLIDATED FINANCIAL STATEMENTS
                      STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                       JANUARY 1,              JANUARY 1,
                                                          1997                    1996
                                                        THROUGH                 THROUGH
                                                   SEPTEMBER 30, 1997       DECEMBER 31, 1996
                                                      (UNAUDITED)               (AUDITED)
                                                   ------------------       -----------------
<S>                                                   <C>                      <C>       
CASH FLOWS FROM DEVELOPMENT STAGE ACTIVITIES                                   
                                                                               
     NET LOSS - EXHIBIT B                             $  (308,926)             $(668,577)
                                                                               
     ADJUSTMENTS TO RECONCILE NET                                              
       LOSS TO NET CASH PROVIDED                                               
       BY OPERATING ACTIVITIES:                                                
                                                                               
     NON-CASH ITEMS INCLUDED IN LOSS                                           
       AMORTIZATION                                            --                     --
       PROVISION FOR BAD DEBT                                  --                 55,000
                                                                               
     CHANGE IN ASSETS AND LIABILITIES:                                         
        ORGANIZATION COSTS                                    720                 (6,401)
        ACCOUNTS PAYABLE AND ACCRUED EXPENSES          (1,022,002)               984,105
                                                       -----------              --------
     NET CASH PROVIDED (USED) BY DEVELOPMENT
         STAGE ACTIVITIES                              (1,330,208)               364,127
                                                                               
     CASH FLOWS FROM INVESTMENT ACTIVITIES
        INVESTMENT IN SHORT TERM SECURITIES              (150,000)                    --
        INVESTMENT IN CERTAIN MINING INTERESTS                 --                     --
        DEFERRED COSTS - MINING INTERESTS              (8,758,455)              (618,157)
                                                       -----------              ---------
     NET CASH (USED) BY INVESTING ACTIVITIES           (8,908,455)               618,157
                                                                               
     CASH FLOWS FROM FINANCING ACTIVITIES
        PROCEEDS FROM FIRST DYNASTY MINES LTD.         10,257,124                     --
        NET PROCEEDS FROM PRIVATE PLACEMENT               200,000                     --
        NOTES PAYABLE OFFICER                            (191,000)               191,000
        WARRANTS EXERCISED                                     --                    100
                                                       -----------              --------
     NET CASH PROVIDED BY FINANCING ACTIVITIES         10,266,124                191,100
                                                                               
     NET INCREASE (DECREASE) IN CASH                       27,461                 62,930
                                                                               
     CASH - BEGINNING                                         369                 63,299

     CASH - END                                            27,830                    369

     SUPPLEMENTAL CASH FLOW INFORMATION
        INCOME TAXES PAID                             $       528              $     324


                                       7
</TABLE>

<PAGE>

                             GLOBAL GOLD CORPORATION
                          (A Development Stage Company)

                        Consolidated Financial Statements
                          Notes to Financial Statements

                               September 30, 1997

NOTE 1: ORGANIZATION (AS A DEVELOPMENT STAGE COMPANY) AND ACCOUNTING POLICIES

        The Company was incorporated in the State of Delaware and as further
        described hereafter, had no operating or development stage history from
        its inception until January 1, 1995. Accordingly, the Company has been
        dormant until 1995. During 1995, the Company changed its name from Triad
        Energy Corp. to Global Gold Corporation. An Australian corporation, Eyre
        Resources N.L. and an affiliate (hereafter Eyre) presented to management
        an opportunity to develop certain gold and copper mining rights in the
        former Soviet Republics of Armenia and Georgia. As part of the plan to
        acquire the mining interests and raise venture capital, the Company
        increased the number of shares authorized to be issued from ten million
        to one hundred million. These Republics, which recently won their
        independence, may be prone to political and economic turmoil which may
        result in various adverse ramifications.

        The Company has offices in New York City which it leases from Penn Med
        Consultants, Inc., which is charging rent in the amount of $3,000 per
        month to the Company for use of the premises, office equipment,
        facilities, etc. commencing January 1, 1996. The Company has not paid
        any employees for services, except Mr. Gallagher and Mr. Garrison, as
        hereafter discussed.

        During 1995, the Company formed certain-wholly owned foreign
        subsidiaries. Any reference in these statements to Global (the Company)
        may also include one, some, or all of the subsidiaries. All intercompany
        transactions were eliminated.

        As a result of ownership changes, the Company will not be able to
        benefit from all of its net operating loss carryforwards. (Income tax
        matters -- Note 17)

        Management has made any necessary interim period accounting adjustments
        in order for the statements not to be misleading.


                                        8
<PAGE>
                             GLOBAL GOLD CORPORATION
                          (A Development Stage Company)

                        Consolidated Financial Statements

                          Notes to Financial Statements

                               September 30, 1997


NOTE 2: USE OF 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 balance sheet
        date, and also the reported amounts of revenues and expenses during the
        reporting period. Actual results could differ from those estimates.

NOTE 3: COMPANY HISTORY AND REPORTS WITH THE SECURITIES AND EXCHANGE COMMISSION

        The Company was incorporated on February 21, 1980, and closed a public
        offering of the common stock in January 1981. Several months after the
        closing of such offering, the Company withdrew the listing of the Common
        Stock for trading on Nasdaq because of the theft of substantially all of
        the cash funds of the Company derived from the proceeds of a public
        offering by its then president, Samuel McNeil in July, 1981. The case
        has long since gone through the judicial system and Mr. McNeil is no
        longer, an officer, director, employee or in any other fashion doing
        business with the company. After the consummation of the public
        offering, the Company failed to file any further annual or periodic
        reports required under the Exchange Act. The Company filed its Form
        10--KSB for the calendar years 1994, 1995 and 1996, its Form 10--Q for
        all quarters in 1995 and thereafter, and also filed audited financial
        statements covering the calendar years 1987, 1988, 1989, 1990, 1992,
        1993, 1994, 1995 and 1996. There can be no assurance that the SEC 
        might not assert claims against the Company and its present and former 
        directors and officers, which actions might adversely affect the future 
        conduct of the Company's business or be detrimental to future trading 
        of the Company's stock in the public markets.


                                       9
<PAGE>

                             GLOBAL GOLD CORPORATION
                          (A Development Stage Company)

                        Consolidated Financial Statements

                          Notes to Financial Statements

                               September 30, 1997




NOTE 4: DEVELOPMENT STAGE COMPANY

        The Company may encounter problems, delays, expenses and difficulties
        typically encountered in the development stage, many of which may be
        outside of the Company's control. These include, without limitation,
        unanticipated problems and additional costs relating to development,
        production, marketing, and competition. Management must also be
        successful in securing significant additional investor and/or lender
        financing and political risk insurance. The Company expects to incur
        operating losses for the near term and, in any event, until such time as
        it derives substantial revenues from the sale of concentrates containing
        gold and copper. Pursuant to the documents as hereafter summarized,
        different mining, processing, purifying, reprocessing and exploration
        endeavors are contemplated. Where appropriate, an endeavor will commence
        only after successful results of a feasibility study are rendered.

NOTE 5: ACQUISITION OF ARMENIAN MINING INTEREST FROM EYRE

        Pursuant to the Asset Purchase Agreement dated June, 1995, (the
        "Agreement"), the Company acquired from Eyre, an Australian corporation,
        all of its potential interest in its Armenian gold mining project and
        all of Eyre's potential interest in its Georgia gold and copper mining
        project (Note 8) . The Agreement closed April, 1996.

        The Company paid Eyre for the Armenian and Georgian interests as follows

                      Cash                                        $ 153,494
                      Note payable (Note 13)                        100,000
                      Note payable (Note 13)                         46,506
                                                                  ---------
                                                                  $ 300,000
                                                                  =========

        The Agreement initially provided for the Company to cause the delivery 
        to Eyre of two million shares of stock, with an estimated value of
        $850,000, and warrants to acquire an additional one million shares 
        (Note 15) . The Agreement left Eyre with two out of five seats on the 
        Board of Directors.


                                        10
<PAGE>

                             GLOBAL GOLD CORPORATION
                          (A Development Stage Company)
                        Consolidated Financial Statements

                          Notes to Financial Statements

                               September 30, 1997


NOTE 5: ACQUISITION OF ARMENIAN MINING INTEREST FROM EYRE (continued)

        As of December 1, 1995, the Company and Eyre entered into a
        Restructuring Agreement pursuant to which Eyre surrendered 1,000,000
        shares of common stock and acquisition warrants to purchase 600,000
        shares of common stock and acquired a 2% overriding production royalty
        subject to adjustment in the event the ownership of the Company were to
        become owned by less than 50% United States residents. If such were
        about to occur, Eyre would have the right to sell warrants to purchase
        the Company's common stock by U.S. residents, and, if that did not occur
        as prescribed, Eyre would surrender certain of their warrants in return
        for an increased royalty of potentially up to 1%. The initial Armenian 
        tailings project (Note 7) is excluded from the royalty arrangement. In 
        the event the Company undertakes any additional mineral extraction 
        projects in the Republics of Armenia or Georgia, Eyre will receive a 1%
        overriding production royalty from the Company's revenues, also subject
        to a similar adjustment which may total up to another 1/2%. The Company 
        shall pay to Eyre $8,333 per month to be applied against the royalty 
        arrangement commencing with the closing of the funding of the tailings
        project at Ararat, Armenia (Note 7).

        The Restructuring Agreement provided that Eyre may submit to the Company
        additional projects, and that the Company shall in good faith consider
        acquiring such projects by issuing additional shares of common stock;
        provided in no event shall Eyre own or control 50% or more of the
        outstanding common stock of the Company.

        Various prospective investment banking firms and potential investors who
        expressed an interest in providing funding for the Company's projects in
        the fall of 1996 requested that the Company undertake a reverse split of
        its Common Stock (see Note 19) to decrease the number of shares
        outstanding and to reduce the equity stake of certain shareholders who
        received shares pursuant to the Agreement essentially in their capacity
        as finders in order to facilitate possible future financings. In
        response thereto, by letter dated December 4, 1996, Eyre and the
        Parry--Beaumont Trust surrendered their Acquisition Warrants to purchase
        240,000 and 160,000 shares of the Company's Common Stock (a total of
        400,000 shares), surrendered their right to designate two members of the
        Board of Directors of the Company and in addition, Eyre agreed to waive
        its overriding royalties in the Armenian projects and to waive the
        approximately $146,000 due it under the promissory notes received at the
        closing (the "Second Restructuring Agreement"). While Eyre had 2%
        overriding royalty on the Armenian mining projects (other than the
        Tailings Project), the Second Restructuring Agreement referred to the
        waiver of a overriding royalty of 1.5% on the Armenian projects in
        reliance on Eyre's earlier agreement to reduce such royalty to 1.5% by
        virtue of its failure to secure financing from a designated mining
        company in November, 1996. Accordingly, the Company believes that all
        overriding royalties on the Armenian mining projects have been validly
        waived.

                                       11
<PAGE>

                             GLOBAL GOLD CORPORATION
                          (A Development Stage Company)

                        Consolidated Financial Statements

                          Notes to Financial Statements

                               September 30, 1997

NOTE 6: PATTERSON, BELKNAP, WEBB & TYLER LLP

        Global has retained the law firm of Patterson, Belknap, Webb & Tyler LLP
        (PBWT) to represent the Company in its dealings with the Armenian and
        Georgian Republics. PBWT has an international law practice involving
        commercial, non-profit and humanitarian issues and has offices in
        Moscow. Mr. Van Z. Krikorian (VZK), of counsel to PBWT, has been
        designated to conduct the negotiations with the Republics. VZK was
        formerly Armenia's Deputy Permanent Representative to the United
        Nations.

        In connection with preparation and negotiation of the Armenian Joint
        Venture Agreement and associated documents, as well as corporate, tax,
        strategic, regulatory, financing, political risk insurance and other
        miscellaneous matters, PBWT shall be compensated $930,000 plus expenses
        ratably over the period May 1, 1995 through May 1, 1999, with minimum
        quarterly payments of $25,000. The retainer arrangement is predicated on
        the total value of the deal reaching $93 million (1%), and is subject to
        adjustment if it falls short or exceeds that goal. In the event the
        contemplated financing is not consummated, PBWT will reduce its hourly
        charges by 50%.

        PBWT will also represent the Company in preparation and negotiation with
        the Georgian Government of a revised Joint Venture Agreement and
        associated documents, and other related matters similar to the
        aforementioned Armenian retainer agreement. The contemplated Georgian
        fee is $180,000 for the period July 1, 1995 to July 1, 1999, and the
        minimum quarterly payment is $10,000. The quarterly billing was
        discontinued as of June 30, 1997.

        As of June 30, 1997 unbilled contingent project charges in excess of the
        minimum $25,000 per quarter were assumed by First Dynasty Mines Ltd.
        payable upon receipt of an executed agreement assigning the rights to
        the Zod Mine to AGRC. Unbilled fees and expenses through September 30,
        1997 total approximately $300,000,

        In addition PBWT performs additional legal service for the Company as
        requested. Current payables and accruals are $99,000.

NOTE 7: THE ARMENIAN JOINT VENTURE AGREEMENT

        On February 2, 1996, the Company and Armgold, a division of the Ministry
        of Industry of the Government of the Republic of Armenia, initialed a
        Joint Venture Agreement entitled the Armenian Gold Recovery Company (the
        "Venture"). The Agreement was modified May 1, 1996. On June 29, 1996,
        the Republic of Armenia issued a decree authorizing Armgold's joint
        venture with the Company.

                                       12
<PAGE>

                             GLOBAL GOLD CORPORATION
                          (A Development Stage Company)

                        Consolidated Financial Statements

                          Notes to Financial Statements

                               September 30, 1997


NOTE 7: THE ARMENIAN JOINT VENTURE AGREEMENT (continued)

        The Venture may at times be required to obtain various approvals,
        licenses, permits, etc., on a timely basis. Failure to obtain such from
        the Government, may materially and adversely affect the Company.
        Pursuant to the May 1, 1996 Agreement, Armenia, in general, has agreed
        to have the cost of the approval process be borne against its share of
        joint venture profits.

        The initial stage calls for processing tailings at the Ararat site and
        for various studies for a gold mining operations at the Zod site.
        Management believes capacities at Zod will be significant. Mining at a
        third site, Meghradzor, will commence once Zod is operational. At each
        site, the Agreement calls for the Armenian Government to transfer to the
        Venture free and clear title in the mining rights. The Company will be
        required to provide administration, training, management, feasibility
        studies, technology and business plans, as appropriate.

        Pursuant to the Joint Venture Agreement, the Company has the following
        obligations:

                                                              Investment
               Endeavor                                       Requirement
               -------------------------------                -----------
               Delivery of tailings processing
               Operation equipment to Ararat                  $5,000,000

               Zod Complex prefeasibility study
               and commencement of full
               feasibility study on Zod Complex               $  500,000

               Operation of Tailings processing               $2,250,000

               Complete full feasibility study
               and business plan on Zod Complex               $  500,000

               Tailings processing operations
               at Ararat                                      $2,250,000


                                       13
<PAGE>

                             GLOBAL GOLD CORPORATION
                          (A Development Stage Company)

                        Consolidated Financial Statements

                          Notes to Financial Statements

                               September 30, 1997




NOTE 7: THE ARMENIAN JOINT VENTURE AGREEMENT (continued)

        The parties have begun to implement the Tailings Project. On October 7,
        1996, the Armenian Government issued a license for a five-year period of
        implementation of the development plan at Ararat, effective after the
        registration of the Venture with the appropriate Armenian governmental
        authorities, in accordance with applicable Armenian law. The
        registration of the Venture occurred en November 8, 1996. In addition,
        the mining engineering firm retained in connection with the Armenian
        Project obtained bulk ore samples from the tailings site for testing in
        Canada. An independent laboratory, which analyzed such samples, advised
        the Company, in its written report in February, 1997, that the test
        results showed that approximately one and one tenth gram of gold could
        be obtained from each metric tonne of ore with a 50% recovery at the
        site covered by the Tailings Project, although there can be no assurance
        thereof.

        Pursuant to the decree issued in connection with the Armenian Joint
        Venture Agreement, GGA was required to invest $5,000,000 in the Tailings
        Project on or before February 1, 1997. Such requirement was deemed
        satisfied by the parties.

        Pursuant to the Armenian Joint Venture Agreement, the Venture is now
        engaged in the final engineering and initial construction for the
        Tailings Project. The Venture entered into a Tailings Dam Construction
        Contract with Armhydro for $640,000 on January 31, 1997. AGRC also
        retained a Canadian engineering firm, under a contract for Engineering,
        Procurement and Construction Management Services dated January 31, 1997,
        under which the compensation payable to the contractor under Phase I of
        the project is $4,500,000.

        While the Company has been advised that proven reserves exist in the
        Tailings Project and that the mining thereof can be done on a profitable
        basis, there can be no assurance of such result.


                                       14
<PAGE>

                             GLOBAL GOLD CORPORATION
                          (A Development stage Company)

                        Consolidated Financial Statements

                          Notes to Financial Statements

                               September 30, 1997


NOTE 7: THE ARMENIAN JOINT VENTURE AGREEMENT (continued)

        Presently, it is not contemplated that the Armenian Government will be
        assigned a value for their contribution of the mine properties and
        rights to the venture. VZK has advised that profit computations are
        still to be resolved. International or other accounting standards have
        not been adopted in the Agreement. For the Ararat tailings project, once
        profits are determined, they shall be split 50/50 50 long as the
        Percentage of Recovery of Metals Per Gram Per Ton is 70% or more. Based
        upon a sliding scale, Global's profit share will increase to 66.67% If
        the recovery rate declines to 50% or less.

        Armenia has permitted a tax holiday for the contemplated venture as
        follows: for the first two years there shall be a complete exemption
        from profits tax. For the third through the tenth year, only 50% of the
        taxable income shall be taxable.

        Deterred Project Costs Through September 30, 1997 Total $9,592,244


NOTE 8: THE GEORGIAN AGREEMENT

        The Company also acquired from Eyre rights under a Foundation Agreement
        dated April 22, 1995 (including a Charter for a Joint Venture Company)
        with R.C.P.A. "Madneuli", a Georgian state enterprise, in connection
        with carrying out certain mining of the Madneuli deposit. The Company
        has been advised that the application for the license required to be
        filed with the Georgian government has not been tiled, and it has no
        definitive agreement granting it fixed rights to mining production or
        processing in Georgia. 

        The current Agreement calls for each partner to advance capital in a
        50/50 ratio. Neither international nor any other body of accounting
        standards have been adapted in the joint venture agreement. Cash flow
        initially is to be distributed as follows:

         RCPA Madneuli                  9.75%
         Eyre (now the Company)         9.75%
         Panquest                        .25%       (Georgian resource broker)
         Sinking Fund                    .25%       (Georgia)
         Capital Repayments            80.00%


                                       15
<PAGE>

                             GLOBAL COLD CORPORATION
                          (A Development Stage Company)

                        Consolidated Financial Statements

                          Notes to Financial Statements

                               September 30, 1997



NOTE 8: THE GEORGIAN AGREEMENT (continued)

        After recovery of capital, the net profit were to be distributed as
        follows:

        a)  RCPA - according to shareholdings (i.e. share of the Foundation
            Fund, which shares could be changed only by unanimous vote of the
            participants), less 2.5% to the Sinking Fund, and

        b)  The Company (or its wholly-owned subsidiary) -- according to
            shareholdings less 2.5% to Panquest.

        The Agreement calls for the Board of the Joint Venture Company to
        annually decide upon the amount of profit distributions.

        The Joint Venture Company will not be required to pay Georgian income
        tax on the profits obtained within the Company for the first two years
        after all capital and capital costs have been repaid. In the following
        two years, taxation shall be at 50% of the normal rate. Thereafter, the
        Joint Venture Company may apply to the Ministry of Finance for
        additional taxation privileges. Reinvested capital will be exempt from
        taxation.

        The Joint Venture Company may at times be required to obtain various
        approvals, licenses, permits, etc., on a timely basis. Failure to obtain
        such from the Government could materially and adversely affect the
        Company.

        The Company recently learned that the Georgian Government is planning to
        privatize the development of the Madneuli mine through a public bidding
        process which was slated to end on April 15, 1997. Since the structure
        of the Madneuli mining project under the public tender differs markedly
        from that contemplated under the Asset Purchase Agreement between the
        Company and Eyre dated as of June 30, 1995, the Company has decided not
        to submit a bid for the development of the Madneuli mining project.
        Accordingly, there can be no assurance that the Company will be
        successful in acquiring any rights or concluding any definitive
        agreements with respect to the Madneuli mining project, or, if so, on
        terms acceptable to it. Furthermore, if the Company does acquire any
        rights to the Madneuli mining project, there can be no assurance that it
        will be able to obtain financing for the acquisition or development
        thereof, or, if so, on terms acceptable to the Company.


                                       16
<PAGE>

                             GLOBAL GOLD CORPORATION
                          (A Development Stage Company)

                        Consolidated Financial Statements

                          Notes to Financial Statements

                               September 30, 1997

NOTE 9: NOTES RECEIVABLE

        The Company holds a note receivable as follows:

            Amount       Interest Rate                       Debtor
          ---------       ----------           ---------------------------------
          $ 300,000       Prime + 2%           Jet--Line Environmental Services,
                                               Inc. (Jet-Line)

           (150,000)                           Allowance for doubtful accounts
          ---------
          $ 150,000
          =========

        The Jet-Line note as more fully described in the documents, is
        convertible into at least 20% of Jet-Line's common stock and up to 30%
        under certain circumstances. Jet--Line has defaulted on prior balloon 
        payment obligations and is in default of its current interest 
        requirements. The note is secured by U.C.C.'s on certain equipment. 
        Jet-Line owns certain valuable assets. The Company pledged the 
        Jet-Line notes as collateral for loans to the Company from
        Drury Gallagher, which loan has now been repaid in full.

        Jet-Line advised the Company in early March, 1997 that it received a
        notice of the revocation of its license to do business in Massachusetts
        and a fine of $100,000 from the Massachusetts environmental authorities.
        Jet-Line contested such revocation and fine in the Massachusetts state
        courts unsuccessfully. As a result, Jet--Line has been requested by such
        authorities to sell its facility in Massachusetts, and Jet--Line is now
        engaged in negotiations with a potential buyer with respect to such
        sale. The Company sent Jet-Line a written notice of default and demand
        for payment on March 14, 1997, and further demands letters on April 2,
        1997, April 15, 1997 and November 11, 1997 and is now is attempting to 
        sell the assets in which it holds a first securit interest. The 
        Company has also requested Jet-Line to seek additional financing and 
        to use part of the proceeds therefrom to satisfy the Jet--Line Note 
        in full. However, there can be no assurance that Jet-Line will be 
        able to consummate such sale or obtain such financing.  Thus, there 
        can be no assurance that the Company will ultimately be paid the 
        full principal amount of, and accrued interest on, the  Jet-Line note.
        Management has not accrued interest on the note and revised its 
        allowance for doubtful accounts to $150,000.

                                       17
<PAGE>

                             GLOBAL GOLD CORPORATION
                          (A Development Stage Company)

                        Consolidated Financial Statements

                          Notes to Financial Statements

                               September 30, 1997

NOTE 10: OFFICERS' COMPENSATION PAYABLE

        Officers' compensation payable consists of the following:

                                                  September 30, 1997
                                                  ------------------

               Drury Gallagher                          $ 87,500
               Robert Garrison                            33,334
                                                       ---------
                                                       $ 120,834
                                                       =========

               (See Note 16)

NOTE 11: ACCOUNTS PAYABLE AND ACCRUED EXPENSES

        Accounts payable and accrued expenses include the following:

                                                             September 30, 1997
                                                             ------------------

               Legal-- General Counsel                            $   2,009
               Legal -- Patterson, Belkap, Webb
                  & Tyler LLP (Note 6)                               99,110
               Affiliates                                             9,000
               Other Miscellaneous                                   26,764
                                                                  ---------
                                                                  $ 136,883
                                                                  =========

NOTE 12: DEFERRED COSTS

        Deferred costs include the following:

                                                         September 30, 1997
                                                         ------------------
               Legal -- Patterson, Belknap, Webb
                 & Tyler LLP(Note 6)                        $   709,260
               Legal-- General Counsel                           81,747
               Engineering 5,                                   130,501
               Research and Analysis                             82,042
               Overseas travel                                   73,897
               Construction                                     556,504
               Other                                          3,028,362
                                                            -----------
                                                            $ 9,662,313
                                                            ===========

NOTE 13: NOTES PAYABLE

        On December 1, 1995, the Company closed the Eyre agreement to purchase
        certain mining rights (Note 5). Pursuant to the agreement, the


                                       18
<PAGE>

                             GLOBAL GOLD CORPORATION
                          (A Development Stage Company)

                        Consolidated Financial Statements

                          Notes to Financial Statements

                               September 30, 1997


NOTE 13: NOTES PAYABLE (continued)

        The first note bears interest at 6.36% per annum, and is payable
        contingent upon the Company obtaining financing of at least $2,000,000,
        whether from equity, debt or a combination of both. After this condition
        is met, the note is due within 10 business days.

        The second, with interest at 5.65% per annum, is payable in full no
        later than December 31, 1996. Pursuant to the Second Restructuring
        Agreement (Note 5) dated December 4, 1996 both promissory notes were
        cancelled.

        Drury Gallagher loaned the Company $192,000. The note evidencing the
        loan bears interest at 10% per annum and was due on or before June 30,
        1997 together with accrued and unpaid interest. The Note was repaid in
        full together with interest thereon.

NOTE 14: CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM

        Pursuant to a Private Placement Offering dated May 17, 1995, as amended,
        the Company issued $500,000 of 10% convertible senior notes due December
        31, 1996. Expenses in connection with the offering were $78,427.

        Each $1,000 convertible note entitled the holder to 400 shares of common
        stock, and warrants to purchase 800 shares of common stock at an
        exercise price of $.50 per share at any time before December 31, 1996.
        The expiration date was subsequently extended to December 31, 1997.

        In accordance with the Offering, interest was not payable on the notes
        so long as they were converted to equity within a specified time frame.
        After the December 1, 1995 Lyre closing, the entire $500,000 of
        convertible notes were exchanged for 200,000 shares of common stock.

NOTE 15: WARRANTS OUTSTANDING

        The Company had warrants outstanding as follows;

                                  # Shares Right    Price/Share     Expiration
              Warrant Holder(s)    to Purchase    Exercisable at        Date
              -----------------    -----------    --------------    ----------

          Stockholders through
            Note Conversion --
            Note 5                    400,000          $1.00          12/31/97
          Other                         4,000          $5.00          11/30/98
                                      -------
                                      404,000
                                      =======


                                       19
<PAGE>

                             GLOBAL GOLD CORPORATION
                          (A Development Stage Company)

                        Consolidated Financial Statements

                          Notes to Financial Statements

                               September 30, 1997



NOTE 16: OFFICERS' COMPENSATION, INCENTIVE STOCK OPTIONS AND STOCK APPRECIATION
         RIGHTS

        Management presently consists of Mr. Drury Gallagher and Mr. Robert
        Garrison. Mr. Gallagher had been President of the Company and a
        stockholder since 1981, he is currently Chairman of the Company. Mr.
        Garrison was subsequently hired to oversee mining and related financing
        activities and is currently President. Mr. Gallagher and Mr. Garrison
        entered into employment agreements with the Company effective July 1,
        1995. Each is entitled to receive a base salary of $100,000 per year,
        for 50% of their time, for a three year term. The agreements call for
        automatic annual increases as defined. The Board may award bonuses up to
        50% of base compensation.

        On January 3, 1997, the Board of Directors of the Company approved the
        issuance of 1,000,030 shares of its Common Stock to each of Messrs.
        Gallagher and Garrison in exchange for, (a) in Mr. Gallagher's case, the
        cancellation of $100,003 of accrued salary, and the cancellations of his
        options to acquire 175,000 shares of the Common Stock of the company and
        the cancellation of his stock appreciation rights (the "SARs") which,
        under certain circumstances, could have resulted in the issuance to him
        of up to 371500 shares of the Company's Common Stock and (b) in Mr.
        Garrison's case, the cancellation of $100,000 of accrued salary, the
        cancellation of his options to buy 75,000 shares of the Company's Common
        Stock and the cancellation of his SARs. The Company made such transfer
        to reward each of them for their efforts to secure financing for the
        Company and/or the Armenian mining project, for maintaining the
        Company's existence in the face of the Company's potential insolvency,
        and to increase their proprietary stake of the day-to-day management of
        the Company. In 1997, Lyre questioned the validity of the issuance by
        the Company of 1,000,000 shares of its common stock to each of Messrs.
        Gallagher and Garrison.

        Global Gold Armenia Limited ("GGA") agreed to retain Robert A. Garrison
        as a consultant for a three-year period commencing February 1, 1997 for
        $150,000 per annum pursuant to the terms of the consulting agreement
        entered into between such parties. Under such agreement, Mr. Garrison
        will serve as a Senior Vice President of GSA, will assist it in
        furtherance of its business interests under the supervision of the board
        of directors of GGA and provide ongoing management as the board of
        directors of GSA reasonably requests of him from time to time. Mr.
        Garrison agreed to devote 50% of his time and attention to the
        performance of his services under such agreement, in his capacity as an
        independent contractor. Such agreement is terminable by the consultant
        upon 90 days prior written notice to GGA (or lesser notice if GGA agrees
        to such shorter period) or for cause (as defined therein) or without
        cause, which, in such latter case, would require GGA to pay Mr. Garrison
        the amount of his consulting fees remaining unpaid under such agreement.
        Such agreement is in lieu of the above mentioned salary.


                                       20
<PAGE>

                             GLOBAL GOLD CORPORATION
                          (A Development Stage Company)

                        Consolidated Financial Statements

                          Notes to Financial Statements

                               September 30, 1997

NOTE 17: NON--UNITED STATES WHOLLY OWNED SUBSIDIARIES/INCOME TAX MATTERS

        On November 29, 1995, the Company formed global Gold Armenia Limited and
        Global Gold Georgia Limited, which were respectively assigned the
        Armenian and Georgian mining rights from Eyre at the closing on December
        1, 1995 (Note 5) . The two subsidiaries are Cayman Island entities which
        were granted a twenty year tax exemption from any law of that
        jurisdiction which hereafter imposes any tax to be levied on profits,
        income, gains or appreciation, commencing December 19, 1995.

        The Company experienced net operating losses for each of the two years
        ended December 31, 1996. The Company has elected to carryforward such
        losses for Federal income tax purposes and offset future taxable
        earnings. However, since the Company is a development stage company and
        its ability to obtain future earnings is uncertain, no deferred tax
        asset has been recorded.

        The off shore companies were formed in part, as a result of the concerns
        of Eyre, the previous Australian owner of the mining rights, and
        presently a substantial non--controlling stockholder group of the
        Company, that they not be exposed to two layers of corporate taxation,
        United States and Australia. The Company will obtain a tax opinion on
        the transaction, which will also seek to give greater comfort to current
        and future U.S. and non--U.S. shareholders, that the structure will in
        fact satisfy realistic income tax goals of all concerned parties.
        Inasmuch as management valued the shares of stock distributed to Eyre in
        exchange for acquiring the aforementioned mining interests at $.085 per
        share (such interests, described herein, were not substantially
        perfected at the time of the transaction), it is management's position
        that even if the Internal Revenue Service deemed the transaction to be a
        taxable event, there would nevertheless be insignificant income tax
        consequences. However, there can be no such assurance. Furthermore, the
        Company will determine that the structure will not in any way be a
        deterrent from obtaining future financing or political risk insurance.
        Management will consider future structural changes, if necessary.


                                       21
<PAGE>

                             GLOBAL GOLD CORPORATION
                          (A Development Stage Company)

                        Consolidated Financial Statements

                          Notes to Financial Statements

                               September 30, 1997


NOTE 18: NET LOSS PER SHARE

        Net loss per share is computed using the weighted average number of
        shares outstanding during the period. Common stock equivalents have not
        been included since the effect would be antidilutive.

NOTE 19: REVERSE STOCK SPLIT

        Various prospective investment banking firms and potential investors who
        expressed an interest in providing funding for the Company's projects in
        1996 requested that the Company undertake a reverse split of its Common
        Stock to decrease the number of shares outstanding and thereby
        facilitate possible future financings. Accordingly, the Company effected
        a 1 for 10 reverse split of its common stock effective as of December
        31, 1996. Such step was taken by the written consent of the holders of a
        majority of the Company's issued and outstanding shares of Common Stock.
        By virtue of the reverse split, each stockholder's number of shares of
        Common Stock became 1/10th of the number previously held. The Company
        filed its Certificate of Amendment to the Certificate of Corporation
        with respect to the reverse split with the Delaware Secretary of State
        on December 31, 1996.

        All share and per share data in this report have been restated to
        reflect the reverse stock split, unless otherwise noted.

NOTE 20: FIRST DYNASTY MINES LTD.

        The Company, GGA and First Dynasty Mines Ltd. ("First Dynasty"), a
        Canadian public company, entered into a preliminary agreement dated
        January 27, 1997 whereby First Dynasty agreed to advance funds in stages
        necessary for the development of the Armenian mining projects.

        The Company and First Dynasty entered into a definitive agreement dated
        May 13, 1997 reflecting the final agreement of the parties with respect
        to the Armenian mining projects (the "FDM Agreement"). The principal
        terms of the FDM Agreement are outlined as follows:


                                       22
<PAGE>

                             GLOBAL GOLD CORPORATION
                          (A Development Stags Company)

                        Consolidated Financial Statements

                          Notes to Financial Statements

                               September 30, 1997




NOTE 20: FIRST DYNASTY MINES LTD. (continued)

        First Dynasty agreed to advance a maximum of $24,510,000 under the FDM
        agreement. All funds advanced by First Dynasty will be advanced to GSA
        as debt, which is convertible into stock of GGA at First Dynasty's
        option or is automatically converted into such stock under certain
        circumstances, as follows:

        A.  The first $6,490,000 of debt is convertible into 25% of the capital
            stock of GSA.

        B.  The next $3,520,000 of debt together with the advance described
            above is convertible into 51% of the capital stock of GSA.

        C.  For every additional $.5 million advanced in respect of the
            development of the Zod and Meghradzor mines (excluding the $10
            million Tailings Project expenditure) as a loan to GSA, such debt is
            convertible into an additional 1% of the capital stock of GGA, up to
            a maximum of 80% of the issued and outstanding shares of capital
            stock of GGA.

        Upon obtaining 80% of the capital stock of GGA, or upon making aggregate
        advances of $24,510,000, First Dynasty would be entitled to acquire the
        remaining 20% of the outstanding of capital stock of GGA, within 18
        months after raking such total advances, by issuance of 4,000,000 of its
        common stock, except that such number of shares will be increased
        proportionately to the extent that the mineable reserves at the Zod and
        Meghradzor mines,(which are established at the end of such 18 month
        period), exceed five million ounces.

        First Dynasty will be entitled to appoint three of the five directors of
        GGA until First Dynasty shall acquire 80% of the issued and outstanding
        common stock of GSA.

        First Dynasty carried out certain initial commitments in February, 1997.
        They loaned GSA $675,000 to pay outstanding payables, agreed to fund the
        $640,000 Tailings Dam Construction contract and agreed to guarantee or
        co-sign up to $3,500,000 of the equipment purchase contract and up to
        $1,000,000 of the engineering, procurement, construction management
        agreement between the Venture and a Canadian engineering firm. First
        Dynasty further agreed to loan the Company an additional $675,000 to
        cover the balance of the outstanding payables. First Dynasty made direct
        payments of $7,151,807 on the Tailings contact and engineering agreement
        and an additional $1,414,162 in legal and administrative expenses in the
        first nine months of 1997.


                                       23
<PAGE>

                             GLOBAL GOLD CORPORATION
                          (A Development Stage Company)

                        Consolidated Financial Statements

                          Notes to Financial Statements

                               September 30, 1997




NOTE 20: FIRST DYNASTY MINES LTD. (continued)

        In addition, First Dynasty agreed to pay the Company $400,000 for use,
        at its option, to defray its expenses in participating in the
        negotiation of the second Armenian joint venture agreement, of which
        $200,000 was paid upon the execution and the delivery of the FDM
        Agreement and the balance of $200,000 will be paid on June 30, 1996.
        Although not reflected in the FDM Agreement, First Dynasty also paid the
        Company $141,155.02 on May 15, 1997 to defray the expenses incurred by
        GGA during the three-month period ending March 31, 1997.

        In connection with the First Dynasty financing the Company paid a
        finders fee of 125,000 shares of its common stock to each of Walker
        Investments Ltd. and Alpine Holdings Ltd.






                                       24


<PAGE>

                               GLOBAL GOLD CORPORATION 
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                              AND RESULTS OF OPERATIONS



(A) GENERAL OVERVIEW 

    The Company is presently engaged in the development of a gold mining
project in Armenia, and is currently considering pursuing a gold and copper
mining project in Georgia (both of which countries are members of Commonwealth
of Independent States).  The Company is currently in the pre-development stage
and has not received any revenues from mining activities.  Prior thereto, the
Company did not engage in any substantial business activities, except as
described in the section 1(D) entitled "Prior History of the Company" reflected
in the Form 10-KSB filed by the Company for the period ended December 31, 1996.

(B) ARMENIAN MINING PROJECT

    (a)  ARMENIAN JOINT VENTURE AGREEMENT  

    The Company, the Ministry of Industry of Armenia and Armgold, S.E., the
Armenian state gold enterprise ("Armgold"), executed and delivered the Armenian
Joint Venture Agreement, dated as of May 1, 1996.  The Company thereafter
assigned its rights and obligations thereunder to Global Gold Armenia Limited,
its wholly-owned Cayman Islands subsidiary ("GGA").  The Armenian Joint Venture
Agreement formed the Armenian Gold Recovery Joint Venture
Co., LLC, a limited liability company under Armenian law ("AGRC"), which will
construct, operate and market the gold production and provide capital and
financing in a multistage development of the Armenian gold industry.  Stage 1 of
the Armenian Joint Venture Agreement involves the processing of an estimated 12
million tonnes of tailings from the Ararat processing plant, which the Company
believes  average 1 gram of gold per tonne (based on the independent
metallurgical study obtained by the Company) (the "Tailings Project") and the
completion of a comprehensive feasibility study and business plans for the
development of the Zod mine.  Based on the business plans to be approved by all
parties, Stage 2 calls for the rehabilitation of the Ararat Gold Processing
Plant and for mine development and operation as well as engineering and building
a gold processing plant at the Zod mine, and Stage 3 calls for mine development
and operation at the Meghradzor mine, a feasibility study for a gold refinery,
and exploration activity.  GGA is currently negotiating a new agreement with the
Armenian authorities to expedite and modify stages 2 and 3.

    The Company, the Ministry of Armenia and Armgold executed and delivered 
the Second Armenian Gold Recovery Company Joint Venture Agreement, dated as 
of September 30, 1997, which, among other things, provides for the right of 
new joint venture companies to mine and process gold at Zod and Meghradzor 
mines and which also eliminated certain specific exploration sites from the 
original agreement, while still recognizing AGRC's right to participate in 
exploration activity at a future date. However, such

                                          25
<PAGE>

amendatory agreement does not become operative until passage of an Armenian 
government decree approving such agreement.  The parties anticipate that such 
decree will be issued within the next several months, although there can be 
no assurance of such result.   

    (b)  TAILINGS PROJECT

    The parties have begun to implement the Tailings Project.  As of February
1, 1997, GGA had a definitive agreement authorized by an Armenian government
decree granting it fixed rights to process tailings from the Ararat site as well
as a license and environmental approval for construction. 

    Pursuant to the Armenian Joint Venture Agreement, AGRC is now engaged in 
the construction of the Tailings Project.  AGRC entered into a Tailings Dam 
Construction Contract with Armhydro for $640,000 on January 31, 1997.  AGRC 
also retained a Canadian engineering firm, under a contract for Engineering, 
Procurement and Construction Management Services Agreement dated January 31, 
1997, under which the compensation payable to the contractor under Phase I of 
the project is $4,500,000, which was later increased to up to $10,000,000 
Operation of the tailings processing plant is now planned for December, 1997, 
although construction and other contingencies exist which  may delay meeting 
such target date.  In addition, independent engineering firms are now 
engaged in preparing a feasibility report with respect to the reserves at the 
Zod and Meghradzor, mines which the Company anticipates will be completed 
within the next six months, although there can be no assurance of such 
result. 

    While the Company has been advised that proven reserves exist in the
Tailings Project and that the mining thereof can be done on a profitable basis,
there can be no assurance of such result.

    (c)  FINANCING OF THE ARMENIAN MINING PROJECT  -  FIRST DYNASTY MINES LTD.

    Throughout 1996 and into January, 1997, the Company had discussions with
many unrelated parties in connection with arranging for the financing of the
Tailings Project.  As of January 31, 1997, the Company and GGA reached an
agreement with First Dynasty Mines Ltd. ("First Dynasty"), a Canadian public
company whose shares are traded on the Toronto Stock Exchange and on NASDAQ. 
Under such preliminary agreement, First Dynasty acquired the right, subject to
certain conditions, to advance funds in stages necessary for the implementation
of the Tailings Project and the preparation of engineering and business plan
materials for the remaining Armenian mining projects.  

    The Company, GGA and First Dynasty entered into a definitive agreement
dated May 13, 1997 reflecting the final agreement of the parties with respect to
the above projects  (the FDM Agreement").  The principal terms of the FDM
Agreement are set forth below:

    1.   First Dynasty agreed to advance a maximum of $24,510,000 to GGA under
the FDM Agreement, which amounts will be advanced as debt, which is convertible
into stock of GGA, at First Dynasty's option, or is automatically converted into
such stock under certain circumstances, as

                                          26
<PAGE>

described below:  

         (a)  Upon First Dynasty's making advances of $6,490,000, such amount
    will then be automatically converted into 25% of the capital stock of GGA
    (which occurred in October, 1997).

         (b)  The next $3,520,000 of debt, together with the advance described
    in 1(a) above, is convertible into 51% of the capital stock of GGA, at
    First Dynasty's option.  

         (c)  For every additional $.5 million invested for expenditures
    advanced in respect of the development of the Zod and Meghradzor mines
    (excluding the $10 million Tailings Project  expenditure) as a loan to GGA,
    such debt is convertible, at First Dynasty's option, into an additional 1%
    of the capital stock of GGA, up to a maximum of 80% of the issued and
    outstanding shares of capital stock of GGA.  Thus, upon advancing a total
    of $24,510,000 in the Armenian mining projects, First Dynasty would be
    entitled to acquire 80% of the shares of GGA, if First Dynasty elects to
    convert all of its debt into equity.

    2.   (a)  Upon obtaining 80% of the capital stock of GGA or upon making
aggregate advances of $24,510,000, First Dynasty would be required to acquire
the remaining 20% of the outstanding of capital stock of GGA, within 18 months
after making such total of advances,  by issuance of 4,000,000 shares of its
common stock except that such number of shares will be increased proportionately
to the extent that the mineable reserves at the Zod and Meghradzor mines (which
are established at the end of such 18-month period) exceed five million ounces.

         (b)  First Dynasty further agreed to use its best efforts to issue
freely tradeable FDM shares to GGA if it is feasible to do so in connection with
a contemporaneous public offering of shares of FDM stock or, alternatively,
special warrants to acquire shares of common stock of First Dynasty without
payment therefor (each of which would be exercisable into one share of First
Dynasty common stock) in a form and substance satisfactory to all parties,
pursuant to a prospectus filed with the applicable Canadian securities
regulatory authorities.  

         (c)  In the event of a violation of First Dynasty's obligations to pay
the Company 4,000,000 shares of its Common Stock or greater amount or to arrange
for the issuance of freely tradeable shares pursuant to the mechanisms
contemplated in the FDM Agreement, the Company would be able to require First
Dynasty to specifically perform its obligations pursuant to the grant of an
injunction or other appropriate decree of specific performance by any court
having equity jurisdiction over the parties.  

    3.   (a)  First Dynasty's agreement to continue funding under the FDM
Agreement is subject to the following conditions:  

              (i)  all of the representations and warranties of GGA were true
         as of the date of the execution and the delivery of the FDM Agreement; 


                                          27
<PAGE>

              (ii)      neither the Company nor GGA (prior to the actual
         implementation of the appointment of First Dynasty's designees as
         three directors of GGA) will have breached in any material respects
         any of its covenants under the FDM Agreement, and 

              (iii)     with respect to any advances in excess of $10,000,000
         or the issuance of any shares of First Dynasty stock, First Dynasty
         will have obtained the approval of The Toronto Stock Exchange. 

         (b)  First Dynasty right's under the FDM Agreement remain exclusive
for so long as First Dynasty continues to fulfill its obligations under the FDM
Agreement and GGA continues to fulfill its obligations under any joint venture
agreement in Armenia, except that FDM's rights will cease to be exclusive if (I)
the Company notifies First Dynasty in writing that First Dynasty is in default
under the FDM Agreement or that GGA is in default under any Armenian joint
venture agreement and (ii) First Dynasty fails to cure such default within 45
days thereafter, but, in any event, prior to the expiration of any cure period
to which GGA is subject if First Dynasty's default results in a default by GGA
under any joint venture agreement.  

    4.   (a)  First Dynasty agreed to pay the Company $400,000 for use, at its
option, to defray its expenses in participating in the negotiation of the second
Armenian joint venture agreement, which is now occurring, of which $200,000 was
paid upon the execution and the delivery of the FDM Agreement and the balance of
$200,000 will be paid on June 30, 1998.  

         (b)  Although not reflected in the FDM Agreement, First Dynasty also
agreed to pay up to $150,000 to defray the expenses incurred by GGA during the
three-month period ending March 31, 1997.   Such reimbursement in the amount of
$141,155 occurred in June, 1997.  

    5.   Upon the formation of AGRC Exploration, a limited liability company to
be formed under the laws of Armenia, and ending on December 31, 2009, the
Company will be entitled to elect to participate with GGA in any exploration
projects undertaken by AGRC Exploration up to a level of 20% of GGA's rights in
any exploration project.  GGA and the Company also agreed to enter into a
mutually acceptable participation agreement in respect of any exploration
project. 

    6.   GGA agreed to retain Robert A. Garrison as a consultant for a
three-year period commencing February 1, 1997 pursuant to the terms of the
consulting agreement entered into between such parties.  Under such agreement,
Mr. Garrison will serve as a Senior Vice President of GGA, will assist it in
furtherance of its business interests under the supervision of the board of
directors of GGA and provide ongoing management as the board of directors of GGA
reasonably requests of him from time to time.  Mr. Garrison agreed to devote 50%
of his time and attention to the performance of his services under such
agreement, in his capacity as an independent contractor.  Such agreement is
terminable by the consultant upon 90 days prior written notice to GGA (or lesser
notice if GGA agrees to such shorter period) or for cause (as defined therein)
or without cause, which, in such latter case, would require GGA to pay Mr.
Garrison the amount of his consulting fees

                                          28
<PAGE>

remaining unpaid under such agreement. 

    7.   The parties also entered into a shareholders agreement providing for,
among other things, the following: 

         (a)  From the inception of the agreement and until First Dynasty shall
    acquire 80% of the issued and outstanding common stock of GGA, First
    Dynasty's designees serve as three of the five directors of GGA, including
    Marcus Randolph, the President of First Dynasty, and Drury J. Gallagher and
    Robert A. Garrison, the Company's Chairman and Chief Executive Officer and
    the President and Chief Operating Officer, respectively, serve as the
    Company's designees.  If the size of the board is increased thereafter,
    each party will have the right to designate such number of its designees as
    members as the board of directors as shall be proportionate to the number
    of designees established under such agreement.  As a result of this
    provision, First Dynasty now controls the board of directors of GGA.  

         (b)  The board of directors of GGA will act by the vote of majority of
    its members, except that the unanimous vote of the board is required to
    take action on the following matters: 

              (i)  the sale, lease or any disposition of substantially all of
         the assets of GGA; 

              (ii) the sale or assignment of any interest of GGA in any joint
         venture company in which GGA is a shareholder or equity participant or
         has provided financing in excess of $250,000 or 

              (iii)     the financing of any of the projects contemplated under
         the FDM Agreement other than when such financing is provided solely by
         FDM.  

         (c)  In the event that the FDM Agreement becomes non-exclusive
    pursuant to the provisions thereof, then First Dynasty shall have the right
    to designate only one director of GGA, the Company shall have right to
    designate one director of GGA and the party or parties who provide
    financing required under the then applicable provisions of the contemplated
    second Armenian joint venture agreement will have the right to appoint
    three designees to the board of directors of GGA, simultaneously with the
    execution and delivery of any financing agreement relating thereto or upon
    the payment of the first funding thereunder (and the Company will have the
    right to participate in the financing described in such provision).

         (d)  Each party cannot sell, transfer  or pledge its shares of
    ordinary shares of GGA, except that each party may transfer its interest to
    a corporation, partnership or limited liability which is wholly owned by
    the transferring party.  During the period that First Dynasty rights under
    the FDM Agreement remain exclusive, neither shareholder has any right to
    sell or transfer the shares of GGA stock owned by it.  Furthermore, if a
    stockholder 


                                          29

<PAGE>

    receives a bona fide offer to sell its GGA's shares, GGA and thereafter the
    non-selling stockholder has the right to purchase the stock in question at
    the offered price, each for successive 30-day periods.  If such right of
    first refusal is exercised, the purchaser is required to pay the full
    purchase price in immediately available funds or by wire transfer. 
    Alternatively, the non-selling shareholder may exercise so-called tag along
    rights and participate on a pro rata basis in the sale of shares of GGA of
    both the recipient of the offer and the non-selling shareholder to the
    offeror.  If such right of first refusal or tag along right is not
    exercised, than the seller may sell its shares of GGA to the offeror on the
    terms described in the offer within 120 days after receipt of such offer
    and provided further that such third party signs an instrument in writing
    agreeing to be bound by all of the terms and conditions of the stockholders
    agreement.  

    The Company, GGA and First Dynasty amended the shareholders agreement, as 
of May 13, 1997, to provide, among other things, that it will be governed by 
the New York (instead of Cayman Islands) law.  

    8.   Each party is entitled to engage in any other activities or business
or mining or other investments outside of Armenia and will not be required to
account to any other party for any profits derived from such permitted
activities, businesses or investments.   

    Pursuant to the First Dynasty Agreement, First Dynasty carried out certain
initial commitments described below:

         a.   First Dynasty loaned $1,350,000 to GGA in two installments of
    $675,000 each to repay such amount of payables attributable to GGA and such
    amounts were disbursed according to the agreement (or are being disbursed
    in the case of the second installment).  

         b.   Upon the signing of the $640,000 Tailings Dams construction
    contract with Armhydro, First Dynasty funded $96,000, and, thereafter,
    First Dynasty has agreed to fund the balance.

         c.   First Dynasty agreed to guarantee or co-sign for up to $3,500,000
    of the equipment purchase contract and up to $1,000,000 of the engineering,
    procurement, construction management agreement between AGRC and a Canadian
    engineering firm.  Also, First Dynasty agreed to advance funding for
    expenditures thereunder as jointly  agreed by the Company and First Dynasty
    from time to time, subject to certain cancellation provisions agreed to by
    First Dynasty.

         d.   First Dynasty created a credit facility of up to $1,000,000 for 
    Armgold.

    As of September 30, 1997, First Dynasty claims it had advanced 
$10,257,124 in total project costs.  

                                          30

<PAGE>

    (d)  MINING PLANS 

    GGA, in conjunction with First Dynasty, negotiated with the Armenian 
Government to obtain for new joint venture companies the rights to mine and 
process gold at the Zod and Meghradzor mines on a schedule which is faster 
than anticipated by the May 1, 1996 Joint Venture Agreement, subject to the 
prior approval thereof by an Armenian parliamentary decree. In addition,  
GGA engaged independent engineering firms to conduct a feasibility report 
with respect to the reserves at such mines.

    (C)  JET-LINE ENVIRONMENTAL SERVICES, INC.

    Jet-Line Environmental Services, Inc. ("Jet-Line") is a privately-held
Delaware corporation organized in 1970, and is engaged in providing various
environmental clean-up services for a variety of customers, including fuel
service, laboratory services, disposable services, transportation and safety and
compliance services. A copy of Jet-Line's compiled and unaudited financial
statement for the calendar year ended December 31, 1996 showed a loss of
approximately $377,000 for such year.

    On April 21, 1993, the Company loaned $300,000 to Jet-Line, which is
evidenced by Jet-Line's promissory note that is convertible into 20% of
Jet-Line's common stock, and 25% of its common stock upon the payment (upon
conversion) to Jet-Line of $37,500, at the option of the Company, and 30% of its
common stock upon the payment (upon conversion) to Jet-Line of $100,000, at the
Company's option, as provided therein (the "Jet-Line Note").  The Jet-Line Note,
which matured on April 21, 1996 and which was restructured on May 13, 1996, is
secured by a pledge of transportation equipment  and machinery and equipment
used in Jet-Line's business and a Jet-Line owned warehouse and office laboratory
building totaling 22,500 square feet located on one acre of land.  The total
appraisal value of the assets when made in part in December, 1992 and in part in
early 1993 was in excess of a total of $1,500,000, but the Company does not know
the appraised value of such collateral at present since no updated appraisal of
such assets has been made.  Prior to such transaction, Jet-Line had no
affiliation of any kind with the Company or its stockholders.

    Since Jet-Line has been experiencing operating losses, and lacks adequate 
liquid resources, it is highly unlikely that Jet-Line will be able to pay the 
full amount of the principal and accrued interest on the Jet-Line Note, and 
defaulted under the May 13, 1996 loan extension agreement between the 
parties. In addition, Jet-Line advised the Company in early March, 1997 that 
it received a notice of the revocation of its license to operate its business 
in Massachusetts, and of a $100,000 fine, from the Massachusetts 
environmental authorities, and Jet-Line contested such revocation and fine in 
the Massachusetts state courts unsuccessfully.  As a result, Jet-Line has 
been requested by such authorities to sell its facility in Massachusetts, and 
Jet-Line is now engaged in negotiations with a potential buyer with respect 
to such sale.  The Company sent Jet-Line a written notice of default and 
demand for payment on March 14, 1997, sent further demand letters on April 2, 
1997, April 15, 1997 and November 11, 1997, had many telephonic discussions 
with the President of Jet-Line with respect to the payment of the Jet-Line 
Note, and is now attempting to sell the assets in which it holds

                                          31
<PAGE>

a first security interest.  The Company has also requested Jet-Line to seek an
additional financing and to use part of the proceeds therefrom to satisfy the
Jet-Line Note in full.  However, there can be no assurance that Jet-Line will be
able to consummate such sale or obtain such financing, or that the Company will
be able to realize proceeds from any sale of Jet-Line' assets sufficient for the
payment of the principal and accrued interest on Jet-Line.   

    In addition, the Company also learned that the Business Loan Center, 
another creditor of Jet Line, is also attempting to sell assets of Jet-Line 
in which its hold a security interest.   The Business Loan Center made a U.S. 
Small Business Administration guaranteed loan of approximately $550,000 to 
Jet-Line in 1994 and obtained a first lien on certain enumerated assets of 
Jet-Line, and the Company at such time subordinated its loan thereto, except 
with respect to certain automotive and trucks assets and other equipment as 
to which the Company retained its first security interest. 

    Thus, there can be no assurance that the Company will ultimately be paid
the full principal amount of, and accrued interest on, the Jet-Line Note. 

THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1996

    REVENUES: During the three month period ended September 30, 1997, the 
Company's interest and royalty income was $208, which was approximately the 
same amount for the same period last year.  

    ADMINISTRATIVE AND OTHER EXPENSES:  The Company's administrative and 
other expenses for the three-month period ended September 30, 1997 were 
$81,872, which represented a decree from the amount paid or accrued of 
$116,342 in  the same period last year.   Expenses were attributable to the 
Company's (a) accrual of officers' compensation and (b) the accrual and/or 
payment of legal and accounting fees and expenses in connection with its 
retention of counsel to implement the Company's transaction with First 
Dynasty pursuant to the agreement between such parties dated as of May 13, 
1997 in connection with the financing of the Tailings Project and the 
additional projects contemplated in Armenia (subject to miscellaneous 
contingencies), and to file the Company's 10-QSB for the periods ended March 
31, 1997 and June 30, 1997. 

NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1996

    REVENUES: During the nine months ended September 30, 1997, the Company's 
interest and royalty income was $208, which represented an increase from the 
interest and royalty interest of $183 for the same period last year, since 
more of the Company's assets were invested on an interest-paying basis.  

    ADMINISTRATIVE EXPENSES:  The Company's administrative expenses for the 
nine months ended September 30, 1997 were $309,109, which represented a 
decrease from the amount paid of $338,308 in  the same period last year.   
Expenses were attributable to the Company's (a) accrual of officers' 
compensation and (b) the accrual and/or payment of legal and accounting fees

                                          32

<PAGE>

and expenses in connection with its retention of counsel to implement the 
Company's transaction with First Dynasty pursuant to the agreement between 
such parties dated as of May 13, 1997 in connection with the financing of the 
Tailings Project and the additional projects contemplated in Armenia (subject 
to miscellaneous contingencies), and to file the Company's 10-QSB for the 
periods ended March 31, 1997 and June 30, 1997.

LIQUIDITY AND CAPITAL RESOURCES

    As of September 30, 1997, the Company's total assets were $11,002,578,
of which $177,830 consisted of cash or cash equivalents.  

    The Company's plan of operation for calendar year 1997 is: 

         (a)  To oversee the implementation of its definitive agreement with
    First Dynasty with respect to all of the Armenian mining projects
    contemplated under the Armenian Joint Venture Agreement, including, without
    limitation, completing any financing needed for the Tailings Project.

         (b)  To commence the mining of gold pursuant to the Tailings Project;  

         (c)  To earn the right to mine production and process gold at the Zod
    mine in Armenia in accordance with the terms of the Armenian Joint Venture
    Agreement or to negotiate obtaining such rights and, in preparation
    therefor, conclude an engineering feasibility study on the Zod mine; 

         (d)  To collect payments of accrued interest and principal on and/or
    restructure the $300,000 convertible note issued by Jet-Line to the
    Company; and 

         (e)  To commence the public trading of the Company's Common Stock. 

    As of September 30, 1997, the Company had liquid assets consisting of 
cash of approximately $177,830. It is anticipated that First Dynasty will 
provide or arrange for all of the financing needed in connection with the 
Tailings Project and such initial financing as is needed in connection with 
the development of the Zod and Meghradzor mines, although there can be no 
assurance of such result.  In addition, if the Company earmarks a portion of 
the $200,000 payment from First Dynasty under the FDM Agreement to cover 
administrative and professional costs, the Company should be able to meet its 
monthly administrative expenses during 1997 which average approximately 
$10,000 per month (exclusive of accrued officers' compensation), plus 
additional amounts for legal and accounting costs, although there can be no 
assurance that the Company will use all of such funds for such purpose.  
However, the Company may receive further  additional financing in 1997 from 
several sources to cover the latter types of costs (and for general corporate 
purposes) and its contemplated financing sources are as follows: 

                                          33
<PAGE>

         (i)  Pursuant to the Offering of $500,000 principal amount of the
    Convertible Notes of the Company, the Company issued Warrants to purchase
    4,000,000 shares of its Common Stock at an exercise price of $0.50 per
    share.   By virtue of the one for 10 reverse split of the Company's Common
    Stock effective as of December 31, 1996,  the Warrants were converted into
    Warrants to purchase 400,000 shares of the Company's Common Stock at an
    exercise price of $5 per share.  On January 23, 1997, the Company amended
    the Warrants to reduce the exercise price to $1 per share and to extend the
    expiration date until December 31, 1997.   If the Warrants were exercised
    in full, the Company would receive $400,000 in gross proceeds.   The
    Company does not know whether any of the Warrants will be exercised, and,
    accordingly, there can be no assurance of such result. 

         (ii) The Company anticipates that it will receive some payments of
    principal and interest on the Jet-Line Note, although there can be no
    assurance of such result.  

    Nevertheless, there can be no assurance that any one or more of the above
financings will be provided, or, if so, on terms acceptable to the Company.  In
the event that no contemplated financing is consummated, the Company believes
that it has sufficient financial resources to meet its obligations through April
30, 1998.  

    Based on the Company's needs for additional financing of its operations,
Mr. Gallagher agreed to continue to advance funds to the Company for such
purpose through June 30, 1997 if he was paid in full by such date or earlier out
of the proceeds of any financing received by the Company in excess of $500,000
and provided that the Company also secured his loan with the Jet-Line Note,
which the Company agreed to do.   The Company discharged its loan of $192,000
from Mr. Gallagher in full on May 19, 1997 by paying him such sum plus interest
thereon of $14,058.49 on such date.   The Company has no existing agreement with
Mr. Gallagher with respect to any financing of the Company's future operations.

    The Company does not intend to engage in any project research and
development during 1997 and does not expect to purchase or sell any plant or
significant equipment, except as contemplated in connection with the Tailings
Project and as additionally provided in the Armenian Joint Venture Agreement.  

    The Company does not expect to hire any additional full-time employees in
1997.  

                                       PART II

    Item 1.   LEGAL PROCEEDINGS 

    Except as noted below, there is no material pending legal proceeding to
which the Company is a party or to which any of its properties is subject.

    Eyre and the Parry-Beaumont Trust have questioned, in writing in February,
March and


                                          34
<PAGE>

April, 1997,  the validity of the Second Restructuring Agreement (as defined in
Item 12(B) of the Form 10-KSB filed by the Company for the year ended December
31, 1996) and the validity of the issuance by the Company of 1,000,000 shares of
its Common Stock to each of Messrs. Gallagher and Garrison.  The Company
believes that the Second Restructuring Agreement is valid and that Eyre and the
Parry-Beaumont have waived the rights covered thereby.  The Company further
believes that the Company properly issued the shares of its Common Stock to
Messrs. Gallagher and Garrison in exchange for valuable consideration and that
the claim of invalidity of such action has no merit.  For a further description
of the Second Restructuring Agreement and such transfers, see Item 12(B) as
described above. 

    The Company has also received requests from Panquest Lte. and from Eyre
relating to amounts alleged to be due to Panquest Lte. relating to the Company's
acquisition of rights from Eyre relating to the Armenian and Georgian projects. 
No evidence has yet been supplied to the Company in this regard.

    In addition, the United States Attorney for the Eastern District of 
Pennsylvania commenced an investigation of various nursing homes in 
Pennsylvania managed by PennMed Consultants, Inc. ("PennMed"), a corporation 
owned by Drury J. Gallagher, the Company's President, and John Hayman and 
Frank Hayman, who are also major stockholders of the Company, as to whether 
or not such nursing homes and their managers and affiliates engaged in 
potential violations of Federal health laws.  In the course of the execution 
of a search warrant, all documents relating to PennMed were seized on August 
6, 1997, as well as the books and records of other possible businesses 
located at such address, including all of the Company's books and records 
which were located at such address. In addition, the United States Attorney 
served a subpoena on the Company on such date to obtain additional 
information initially by August 29, 1997 and now on or before November 14, 
1997. At this time, the Department of Justice has informed the Company that it 
is not a target of such investigation.

    The Company is attempting to have itself removed completely from such
proceeding.   In addition, management is not aware of the basis of any potential
liability in such proceeding.  Although the Company believes that any claim of
the nature described above will not be asserted against it, or, if made, will
not be asserted successfully, there can be no assurance of such result.  


    Item 2.   CHANGES IN SECURITIES

    Not applicable. 

    Item 3.   DEFAULT UPON SENIOR SECURITIES

    Not applicable. 

    Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                                          35

<PAGE>

    Not applicable.  

    Item 5.   OTHER INFORMATION

    Not applicable. 

    Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

    1.   (a)  The following documents are filed as part of this report: 
Financial Statement of the Company (unaudited), including Balance Sheet,
Statement of Income and Loss, Statement of Changes in Stockholders Equity,
Statement of Cash Flow and Notes to Financial Statement as at and for the period
ended September 30, 1997.

         (b)  The Exhibits which are listed on the Exhibit Index attached
hereto:  Not applicable.  

    2.   No reports on Form 8-K were filed by the registrant during the period
covered by this report.  

                                      SIGNATURES


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

                             GLOBAL GOLD CORPORATION 


Dated:   November 14, 1997     By:  /S/   DRURY J. GALLAGHER
                                  ----------------------------
                                  Drury J. Gallagher, Chairman
                                  and Chief Executive Officer
                                  (Principal Executive and 
                                  Financial Officer)