SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
         OF 1934
For the quarterly period ended June 30, 1998

                                       OR
[  ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
         EXCHANGE ACT OF 1934
For the transition period from ________ to ___________

Commission file number: 0-16484

                            Getchell Gold Corporation
             (Exact name of Registrant as specified in its charter)

                       Delaware                   64-0748908
          (State or other jurisdiction of       (I.R.S. Employer
          incorporation or organization)        Identification No.)

                            5460 South Quebec Street
                                    Suite 240
                         Englewood, Colorado              80111
               (Address of principal executive offices) (Zip code)

                                 (303) 771-9000
               (Registrant's telephone number including area code)

                                 Not applicable
(Former name,former address,and former fiscal year,if changed since last report)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ____

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date.

Title                                          Outstanding
Common Stock, par value $0.0001                30,793,026 on July 30, 1998

                                     Page 1
<PAGE>
PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                    GETCHELL GOLD CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                      (In thousands, except per share data)
<TABLE>
<CAPTION>
                                                       Three Months Ended      Six Months Ended
                                                             June 30,              June 30,
                                                       -------------------    -------------------
                                                         1998        1997        1998     1997
                                                       -------     -------    -------    --------
<S>                                                    <C>         <C>        <C>        <C>     
Net sales                                              $11,808     $18,675    $22,611    $ 33,537
Cost of sales                                           14,142      21,726     29,175      41,537
                                                       -------     -------    -------    --------
     Gross margin                                       (2,334)     (3,051)    (6,564)     (8,000)
General and administrative expenses                        715         643      1,636       3,763
Exploration expenses                                       189         424        287         996
                                                       -------     -------    -------    --------    
     Loss from operations                               (3,238)     (4,118)    (8,487)    (12,759)
Interest expense, net of interest capitalized             (171)       (221)      (363)       (442)
Interest and other income                                1,071       1,255      1,606       2,138
                                                       -------     -------    -------    --------
     Net loss                                          $(2,338)    $(3,084)   $(7,244)   $(11,063)
                                                       =======     =======    =======    ========

Basic loss per common share                            $ (0.08)    $ (0.12)   $ (0.25)   $  (0.42)
                                                       =======     =======    =======    ========

Weighted average number of shares outstanding           30,788      26,775     29,353      26,358
                                                       =======     =======    =======    ========
</TABLE>

        The accompanying notes are an integral part of these statements.


                                     Page 2
<PAGE>
                    GETCHELL GOLD CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                        (In thousands, except share data)
<TABLE>
<CAPTION>
                                                                                June 30,     December 31,
                                                                                  1998           1997
                                                                                --------     ------------
                                       ASSETS
<S>                                                                             <C>          <C>
Current assets:
     Cash and cash equivalents                                                  $ 57,757       $ 34,247
     Accounts receivable:
          Trade                                                                    3,893          1,790
          Employee                                                                   269            182
          Other                                                                      310            261
                                                                                --------       -------- 
               Total accounts receivable                                           4,472          2,233
                                                                                --------       --------
     Inventories:
          Ore and ore in process                                                   1,323          1,873
          Materials and supplies                                                  10,982         10,873
                                                                                --------       --------
               Total inventories                                                  12,305         12,746
                                                                                --------       --------
     Prepaid expenses                                                                603            808
                                                                                --------       --------
               Total current assets                                               75,137         50,034
Property, plant and equipment, net                                               228,469        188,242
Other                                                                                125            211
                                                                                --------       --------
               Total assets                                                     $303,731       $238,487
                                                                                ========       ========
                        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                                           $ 10,118       $ 13,506
     Accrued expenses                                                              1,888          2,258
     Current portion of capital lease obligations                                  3,391          2,248
     Stock appreciation rights                                                       536          1,238
     Other                                                                           403            198
                                                                                --------       --------
               Total current liabilities                                          16,336         19,448
Long-term debt, principally ChemFirst Inc.                                        26,966         27,057
Capital lease obligations, less current portion                                   11,714          6,685
Deferred income taxes                                                              1,809          1,809
Reclamation liabilities                                                            2,653          2,701
Other liabilities                                                                  1,853            892
                                                                                --------       --------
               Total liabilities                                                  61,331         58,592
                                                                                --------       --------
Commitments and contingencies                                                        -              -
Stockholders' equity:
    Preferred stock, par value $0.0001; 10,000,000 shares authorized;none issued     -              -
    Common stock, par value $0.0001; 100,000,000 shares authorized; issued and
    outstanding 30,791,146 at June 30, 1998 and 26,784,351 at December 31, 1997        3              3
     Contributed and paid-in capital                                             290,728        220,979
     Accumulated deficit                                                         (48,331)       (41,087)
                                                                                --------       --------
               Total stockholders' equity                                        242,400        179,895
                                                                                --------       --------
               Total liabilities and stockholders' equity                       $303,731       $238,487
                                                                                ========       ========
</TABLE>
        The accompanying notes are an integral part of these statements.

                                     Page 3
<PAGE>
                    GETCHELL GOLD CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                  Six Months Ended
                                                                      June 30,
                                                               ---------------------
Cash flows from operating activities:                             1998        1997
                                                               --------    ---------
<S>                                                            <C>         <C>      
     Net loss                                                  $ (7,244)   $(11,063)
     Adjustments to reconcile net loss to net cash
          provided by (used in) operating activities:
          Depreciation, depletion and amortization                5,386       5,068
          Accrued interest converted to loan principal              -           772
          Deferred hedging gain, net                                205         362
          Other                                                       4         391
          Net change in operating assets and liabilities:
               Accounts receivable                               (2,240)       (105)
               Inventories                                          442        (951)
               Prepaid expenses                                     206         499
               Accounts payable                                  (1,498)     (1,559)
               Accrued expenses                                    (371)       (170)
               Stock appreciation rights liability                 (702)      2,045
               Other liabilities                                    913         277
                                                                -------    --------
                    Cash used in operating activities            (4,899)     (4,434)
                                                                -------    --------

Cash flows from investing activities:
     Additions to property, plant and mine development          (39,673)    (24,120)
     Other                                                          123         -
                                                                -------    --------
                    Cash used in investing activities           (39,550)    (24,120)
                                                               --------    --------

Cash flows from financing activities:
     Net proceeds from issuance of common stock                  69,748      47,908
     Principal payments under capital lease obligation           (1,784)       (926)
     Other                                                           (5)       (110)
                                                               --------    --------
                    Cash provided by financing activities        67,959      46,872
                                                               --------    --------

Net increase in cash and cash equivalents                        23,510      18,318
Cash and cash equivalents at beginning of period                 34,247      64,130
                                                               --------    --------
Cash and cash equivalents at end of period                     $ 57,757    $ 82,448
                                                               ========    ========
</TABLE>
        The accompanying notes are an integral part of these statements.
 
                                    Page 4
<PAGE>
                   GETCHELL GOLD CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1)  GENERAL
         The financial  statements  included  herein are unaudited and have been
prepared in accordance with generally accepted accounting principles for interim
financial reporting and Securities and Exchange Commission regulations.  Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance with generally accepted  accounting  principles have been
condensed or omitted pursuant to such rules and regulations.

         In the opinion of  management,  the  financial  statements  reflect all
adjustments  of a normal and  recurring  nature  which are  necessary to present
fairly the  financial  position,  results of  operations  and cash flows for the
interim periods.  These financial  statements should be read in conjunction with
the Annual Report of Getchell Gold  Corporation (the "Company") on Form 10-K for
the year ended December 31, 1997.

(2)  $73 MILLION PUBLIC EQUITY OFFERING
         In March 1998,  the Company  completed an equity  offering of 4,002,000
common  shares which  resulted in net  proceeds to the Company of $69.8  million
after offering costs and expenses of $3.2 million.  Net proceeds of the offering
will be used for the  completion of the Company's  Turquoise  Ridge mine, for an
increase in mill  capacity,  for  exploration  on its Getchell  property and for
general corporate purposes.

(3)  HEDGING AND OTHER PRECIOUS METAL CONTRACT COMMITMENTS
         Precious metal contracts consist of spot deferred,  forward sales, call
option and lease rate swap contracts.  The Company  currently uses spot deferred
and forward sales contracts to mitigate the impact on earnings and cash flows of
decreases in gold prices.  Risk of loss on the spot  deferred and forward  sales
contracts  arises from the possible  inability of a counterparty  to fulfill its
obligations  under the contracts and from the Company's  potential  inability to
deliver gold,  although  non-performance by the counterparty to the contracts is
not anticipated.

         At June 30, 1998,  the Company's  outstanding  spot deferred  contracts
were for 230,000 ounces at a projected average price of $322 per ounce. Of these
contracts,  60,000  ounces were for  delivery  in 1998 at a  projected  weighted
average price of $337 per ounce,  130,000  ounces were for delivery in 1999 at a
projected  weighted  average  price of $314 per ounce and 40,000 ounces were for
delivery in 2000 at a projected  weighted average price of $326 per ounce. Based
on the market price of gold at June 30, 1998, the  unrealized  gains on the spot
deferred contracts were $5.9 million.


                                     Page 5
<PAGE>
                    GETCHELL GOLD CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         Additionally,  in November  1997,  the Company  entered  into a forward
sales contract covering the sale of 250,000 ounces of gold with an option by the
counterparty to purchase up to an additional 225,000 ounces of gold, if the gold
price equals or exceeds  certain price  increments.  The agreement calls for the
Company to deliver  50,000  gold ounces on December 31 in each of the years 1998
through 2002 and up to an additional  75,000 ounces of gold in each of the years
2000 to 2002. Deliveries in 1998 and 1999 will be at approximately $355 per gold
ounce,  while deliveries in 2000 through 2002 will be at approximately  $343 per
ounce.  These forward selling prices assume a constant future gold lease rate of
2%. The actual  forward  prices under the contract are adjusted up or down based
on the actual  future gold lease  rate.  The option  feature of the  contract is
similar to a written call option.  The premium  related to the option feature is
included  in the  forward  sales  price  of the  250,000  ounces  of  gold.  For
accounting purposes, the contract sales price of the 250,000 ounces of gold will
be allocated between the forward sales component of the contract and the premium
for the embedded option. The revenue associated with the forward sales component
of the  contract  will be  recognized  when the gold is  delivered.  The  option
premium portion of the forward sales price is deferred,  adjusted for changes in
market value of the option,  and  recognized in earnings when the option expires
or is exercised.  This  transaction is further  detailed in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997.

         Deferred revenue includes  premiums received for call options sold. The
deferred amounts are recognized in income when the option expires or the related
transaction occurs. At June 30, 1998, the Company had outstanding  European call
option  contracts for 100,000  ounces of gold at a price of $309 per ounce which
expire in 1998 and  contracts  for 60,000  ounces of gold at a price of $400 per
ounce  which  expire in 1999.  Risk of loss on European  call  option  contracts
exists if the Company is unable to deliver the required quantity of gold and the
market  price  were to  exceed  the  exercise  price of the  option  on the date
designated in the contract.



                                     Page 6
<PAGE>
                    GETCHELL GOLD CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(4)  PROPERTY, PLANT AND EQUIPMENT (In thousands)

                                                           At            At
                                                        June 30,    December 31,
                                                          1998          1997
                                                        --------    ------------
Land and land improvements                              $ 14,214     $ 14,214
Buildings and equipment                                  132,032      124,249
Mine development                                          60,300       54,929
Construction-in-progress                                 121,260       88,742
                                                        --------      -------
         Total property, plant and equipment             327,806      282,134
Accumulated depreciation, depletion and amortization     (99,337)     (93,892)
                                                        --------     --------
         Net property, plant and equipment              $228,469     $188,242
                                                        ========     ========

         Capitalized mine development and  construction-in-progress  at June 30,
1998 and December 31, 1997 are comprised of the following (in thousands):


                                                   At             At
                                                June 30,    December 31,
             Project                              1998          1997
                                                --------    ------------
Mine Development:
  Getchell Underground mine                     $ 48,690       $45,043
  Turquoise Ridge mine                             5,682         4,079
  Other projects                                   5,928         5,807
                                                --------       -------
                                                $ 60,300       $54,929
                                                ========       =======

Construction in Progress:
  Getchell Underground mine                     $  1,068       $ 1,486
  Turquoise Ridge mine                           108,947        72,075
  Mill improvements                               11,004        15,015
  Other projects                                     241           166
                                                --------       -------
                                                $121,260       $88,742
                                                ========       =======

         Depletion of mine  development  and  construction  costs related to the
Turquoise  Ridge mine and other projects will begin once  commercial  production
has been achieved.  Depreciation and depletion expense was $2.8 million and $2.7
million for the three  months  ended June 30, 1998 and 1997,  respectively,  and
$5.4  million and $5.1  million for the six months ended June 30, 1998 and 1997,
respectively.


                                     Page 7
<PAGE>
                    GETCHELL GOLD CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         Capitalized  interest  was $0.6  million and $0.4 million for the three
months  ended June 30, 1998 and 1997,  respectively,  and $1.0  million and $0.8
million for the six months ended June 30, 1998 and 1997, respectively.

(5)  SUPPLEMENTAL CASH FLOW INFORMATION
         Net cash provided by operating  activities  includes the following cash
payments (in thousands):

                                                        Six Months Ended
                                                            June 30,
                                                   ---------------------------
                                                      1998            1997
                                                   -----------     -----------
Interest, net of amounts capitalized               $     (538)     $     (356)
Income taxes                                       $         -     $         -

         Capital  lease  obligations  of $8.0 million  were  incurred to acquire
equipment during the six months ended June 30, 1998.

(6)  COMMITMENTS AND CONTINGENCIES
Environmental Obligations
         The Company's mining and exploration  activities are subject to various
federal  and  state  laws  and  regulations  governing  the  protection  of  the
environment.  These  laws  and  regulations  are  continually  changing  and are
generally  becoming more restrictive.  The Company conducts its operations so as
to protect the public health and  environment and believes its operations are in
compliance with all applicable laws and  regulations.  The Company has made, and
expects  to make in the  future,  expenditures  to  comply  with  such  laws and
regulations. The Company cannot predict such future expenditures.

Internal Revenue Service Tax Claim
         The Internal Revenue Service ("IRS") has filed notices of deficiencies,
stating that the IRS is proceeding  against  ChemFirst Inc.  ("ChemFirst"),  the
Company's   former  parent,   for  income  taxes   associated  with  ChemFirst's
consolidated  income tax returns  filed for fiscal  years 1989,  1990,  1991 and
1992.  In  addition,  ChemFirst  has  received  memos from the IRS which  assert
additional  claims for periods  subsequent  to fiscal year 1992.  The  Company's
share of these asserted deficiencies and additional claims,  including interest,
totals  approximately $5.8 million.  In response to the notices of deficiencies,
ChemFirst and the Company filed a petition with the United States Tax Court and,
subsequently, the Company met with IRS representatives and presented information
supporting the Company's  position on all matters.  The Company  believes it has
adequately  provided  for any  liabilities  that may result  from the outcome of
these matter. The tax sharing agreement between ChemFirst and the Company is

                                     Page 8
<PAGE>
                    GETCHELL GOLD CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

further  detailed in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997.

Major Contracts
         The  Company  has an  agreement  with  an  independent  contractor  who
provides oxygen for the autoclave  process in the mill. The agreement  requires,
among other things,  that the Company must pay the  independent  contractor at a
rate (subject to future adjustments for inflation) of approximately $0.2 million
a month.  If the Company no longer has a need for oxygen,  it may  terminate the
contract  but is obligated to a  termination  fee if the contract is  terminated
prior to January 2004. The termination fee is $2.4 million in 1998 and decreases
each year until reaching $0.4 million in 2004.

Royalties
         The  Company is  obligated  to pay to a third party a 2% royalty on net
smelter  returns of the current  mineral  production  from certain of its mining
properties.  Royalties are recorded as operating costs,  except for royalties on
ounces produced in the  development  phase of the Turquoise Ridge mine, in which
case such  royalties  are offset  against the revenue from these  ounces.  Total
royalties amounted to $0.2 million for both the three months ended June 30, 1998
and 1997 and $0.4  million and $0.3  million  for the six months  ended June 30,
1998 and 1997, respectively.

Letter of Credit
         At June 30,  1998,  a $4.5  million  unsecured  letter  of  credit  was
outstanding for bonding of a reclamation plan.


                                     Page 9
<PAGE>
ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS

Introduction
         The information set forth in this discussion and analysis includes both
historical  information and  "forward-looking  statements" within the meaning of
Section 21E of the Securities  Exchange Act of 1934, as amended,  and is subject
to the safe  harbor  created by that  section.  To the extent  that this  report
contains forward-looking statements regarding the financial condition, operating
results,  business  prospects  or  any  other  operations  of the  Company,  the
Company's actual financial  condition,  operating results and business prospects
may  differ  materially  from that  projected  or  estimated  by the  Company in
forward-looking  statements.  Factors that realistically  could cause results to
differ materially from those projected in the forward-looking statements are set
forth in "Risk Factors" below.

Results of Operations
         Results  for the  quarter  ended June 30,  1998 were a net loss of $2.3
million, or $0.08 per share,  compared with a net loss of $3.1 million, or $0.12
per share, for the quarter ended June 30, 1997. Results for the six months ended
June 30, 1998 were a loss of $7.2 million,  or $0.25 per share,  compared with a
loss of $11.1  million,  or $0.42 per share,  in the same period of 1997.  Lower
operating and exploration  expenses more than offset lower sales revenue for the
second  quarter and first six months of 1998 as compared to the same  periods of
1997,  while the first six months of 1998 also  benefited from lower general and
administrative  ("G&A") expenses.  Lower sales revenues resulted from lower gold
prices and the Company's December 1997 decision to suspend the processing of low
grade stockpile ore.

         Sales revenues of $11.8 million in the second quarter of 1998 were down
from $18.7  million in the second  quarter of 1997 and sales  revenues  of $22.6
million in the first six months of 1998 were down from $33.5 million in the same
period of 1997.

<TABLE>
<CAPTION>
                                                   Quarter Ended               Six Months Ended
                                                      June 30,                     June 30,
                                             --------------------------   --------------------------
                                                1998           1997           1998          1997
                                             -----------    -----------   ------------   -----------
<S>                                            <C>            <C>           <C>            <C>   
Ounces of gold sold                            35,192*        48,262        66,213*        85,991
Average realized price per ounce                $336           $387           $341          $390
Average market price per ounce                  $298           $341           $298          $344
</TABLE>

         * Does not  include  3,828  and  5,379  ounces  of gold  sold  from the
         development  of  Turquoise  Ridge for the quarter and six months  ended
         June 30, 1998, respectively,  for which the revenues, net of production
         expenses, were offset against the capital costs of the project.


                                     Page 10
<PAGE>
<TABLE>
<CAPTION>
                                                                        Quarter           Six Months
Change in sales revenue (in millions) in 1998 versus 1997 due to:    Ended June 30,     Ended June 30,
                                                                    ----------------   ----------------
<S>                                                                      <C>               <C>    
Change in  price per ounce of gold sold                                  $ (2.5)           $ (4.2)
Change in ounces of gold sold                                              (4.4)             (6.7)
                                                                         ------            ------ 
     Total change in sales revenues                                      $ (6.9)           $(10.9)
                                                                         ======            ======
</TABLE>

         The Company has hedged a portion of its  production,  which resulted in
higher  realized  prices than the average market  prices.  At June 30, 1998, the
Company  had  outstanding  spot  deferred  contracts  for  230,000  ounces  at a
projected  average price of $322 per ounce.  Of these  contracts,  60,000 ounces
were for  delivery in 1998 at a  projected  weighted  average  price of $337 per
ounce,  130,000 ounces were for delivery in 1999 at a projected weighted average
price of $314 per  ounce  and  40,000  ounces  were  for  delivery  in 2000 at a
projected weighted average price of $326 per ounce.

         Additionally,  in November  1997,  the Company  entered  into a forward
sales contract covering the sale of 250,000 ounces of gold with an option by the
counterparty to purchase up to an additional 225,000 ounces of gold, if the gold
price equals or exceeds certain price increments.  For accounting purposes,  the
contract sales price of the 250,000 ounces of gold will be allocated between the
forward sales component of the contract and the premium for the embedded option.
The revenue  associated with the forward sales component of the contract will be
recognized when the gold is delivered. The option premium portion of the forward
sales price is deferred, adjusted for changes in market value of the option, and
recognized in earnings when the option expires or is exercised. This transaction
is further  detailed in the  Company's  Annual  Report on Form 10-K for the year
ended December 31, 1997.

         Cost  reductions per ton at the Getchell  Underground  mine during both
the second  quarter and first six months of 1998 compared to the same periods of
1997 were the result of lower  backfill  and  maintenance  charges and  improved
mining practices.  Development of the second northwest ore zone continued during
the second  quarter of 1998 with  approximately  1,700 feet of footwall ramp and
ore access  drifting  completed.  Following are the  operating  results from the
Getchell Underground mine.

                                                      Page 11
<PAGE>
<TABLE>
<CAPTION>
                                                        Quarter Ended              Six Months Ended
                                                           June 30,                    June 30,
                                                   ------------------------   --------------------------
                                                      1998          1997         1998           1997
                                                   -----------   ----------   ----------    ------------
<S>                                                  <C>          <C>          <C>            <C>    
Ore mined (dry tons)                                 95,857       147,271      183,464        252,849
Ore mined per operating day (dry tons)                1,065        1,636        1,031          1,421
Average grade of ore mined (ounces per ton)           0.394        0.304        0.384          0.295
Contained ounces (before recoveries)                 37,808        44,698       70,417         74,512
Underground mining costs per ton                     $47.74        $49.58       $49.55         $51.28
</TABLE>

         Through April 1998,  the Company ran only one autoclave in the mill. In
May 1998,  production from the Getchell  Underground  mine and development  ores
from the  Turquoise  Ridge mine  exceeded  the  capacity of one  autoclave.  The
decision was then taken to bring the second autoclave on line, mixing the higher
grade underground ores with 16,834 tons of low grade stockpile ore, representing
14% of total ore milled for the second  quarter of 1998.  This  resulted  in the
blended  milled  recoveries  listed below for the 1998 periods,  whereas  milled
recoveries for the  underground  and low grade  stockpile ores  separately  were
91.5% and 87%,  respectively,  for the second  quarter of 1998. As production of
ore from underground  sources increases,  the Company  anticipates  bringing the
third autoclave into service as early as the end of 1998.  Operating  results at
the mill,  including the  processing of  development  ore from  Turquoise  Ridge
during the second quarter and first six months of 1998, are as follows:

<TABLE>
<CAPTION>
                                                  Quarter Ended             Six Months Ended
                                                     June 30,                   June 30,
                                             ------------------------    ----------------------
                                                1998          1997          1998        1997
                                             ----------    ----------    ----------   ---------
<S>                                           <C>           <C>           <C>          <C>    
Ore milled (dry tons)                         123,891       283,437       223,974      553,682
Average grade of ore milled (ounces per ton)   0.353         0.188         0.353        0.173
Average gold recovery                          90.8%         88.5%         90.7%        87.6%
</TABLE>

         Cost of sales was $14.1  million  in the second  quarter of 1998,  down
from $21.7  million in the second  quarter of 1997.  For the first six months of
1998,  cost of sales was $29.2  million  compared with $41.5 million in the same
period of 1997.  Cash costs per ounce in the second  quarter of 1998 improved to
$322 from $393 in the second quarter of 1997 and in the first six months of 1998
improved to $358 from $423 in the first six months of 1997.

         Milling,  underground  mining costs and mine site G&A were lower in the
1998  periods  as  compared  to the  same  periods  in  1997.  Decreases  in the
underground mining and milling costs

                                     Page 12
<PAGE>
were  primarily  due to the lower volume of ore processed  with the  underground
mining costs also reflecting lower backfill and maintenance charges and improved
mining  practices.  Mine  site  G&A  costs  in the 1998  periods  reflected  the
capitalization of the portion of those costs associated with the Turquoise Ridge
mine while development ore is being processed.

         The decreases in corporate and mine site G&A and  exploration  costs in
the first six months of 1998 as compared  to the same  period of 1997  reflected
adjustments to reduce non-cash  compensation expense recorded in connection with
the grant in February  1997 of stock  appreciation  rights  ("SARS") for certain
corporate  executives  and key employees.  The SARS are further  detailed in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997. Lower
exploration  expenses in the second  quarter and the first six months of 1998 as
compared  to the same  periods  of 1997  reflected  the  Company's  focus on the
delineation   and  expansion  of  known  ore  zones,   for  which  the  drilling
expenditures are capitalized.  Such drilling expenditures  capitalized were $1.4
million and $1.7  million  for the second  quarter and first six months of 1998,
respectively.  Interest  and other  income was lower in the second  quarter  and
first six months of 1998  compared to the same periods of 1997 due to lower cash
and cash equivalent  balances throughout the second quarter and first six months
of 1998 as compared to the same periods of 1997.

Liquidity and Capital Resources
         During the first six months of 1998,  the Company  used $4.9 million of
cash in  operations  and $39.7  million  for capital  expenditures.  The capital
expenditures  included $29.4 million on Turquoise Ridge mine  development,  $3.8
million on the Getchell Underground mine, $3.5 million on the mill, $1.7 million
on development  drilling and $1.3 million on other items.  Total expenditures on
the Turquoise Ridge mine  construction  through June 30, 1998 were $85.5 million
with an additional  $8.0 million of mobile  equipment  leased.  An estimated $10
million  is  expected  to be spent to  complete  the  construction  of the mine,
although  there can be no assurances  that actual  expenditures  will not differ
materially from this amount.

         In March 1998,  the Company  completed an equity  offering of 4,002,000
common shares at $18.25 per share which  resulted in net proceeds to the Company
of $69.8 million after offering  costs and expenses of $3.2 million.  As of June
30, 1998, cash and cash equivalents were $57.8 million.

         The principal  balance of the Company's  promissory note with ChemFirst
was $26.9  million at June 30, 1998.  The  promissory  note is due September 22,
2000 or upon a change in  control  of the  Company  and may be  prepaid  without
penalty.  The interest rate on the loan is the London Interbank Offered Rate for
a  period  selected  by the  Company,  plus an  applicable  margin  based on the
Company's leverage ratio. The interest rate was 6-22/32% at June 30, 1998. Since
the inception of the promissory note,  interest has been capitalized to the note
at the end of each interest period.


                                     Page 13
<PAGE>
         The  Company  does  not  expect   positive  cash  flow  from  operating
activities  earlier  than the third  quarter of 1998,  although  there can be no
assurance  that  there  will  be  cash  flow  from   operations  at  that  time.
Approximately  $20 million is  expected  to be spent on capital  projects in the
last six  months of 1998,  including  the  Turquoise  Ridge  mine as  discussed,
modifications to the mill, the Getchell Underground mine development,  equipment
and  development  drilling,  although  there  can be no  assurance  that  actual
expenditures will not differ  materially from this amount.  The Company plans on
financing  these  capital  development  projects  and its  operations  from  its
existing cash  resources.  The Company  believes that cash flows from operations
and current cash  balances will be  sufficient  to fund  operations  and capital
investments through 1998. However, if there are any shortfalls in funds required
to meet these needs,  such funds may be supplemented by additional  funds raised
by issuing debt or equity securities.  There can be no assurance that additional
funding will be available on favorable terms, if at all.

         In June  1998,  the  Financial  Standards  Board  issued  Statement  of
Financial Accounting  Standards No. 133, "Accounting for Derivative  Instruments
and Hedging Activities" ("SFAS 133") which establishes  accounting and reporting
standards for derivative  instruments  and for hedging  activities.  SFAS 133 is
effective for all fiscal  quarters of all fiscal years  beginning after June 15,
1999. The Company has not assessed the impact SFAS 133 may have in the future.

                                     Page 14
<PAGE>
Risk Factors
         Readers should carefully  consider the risk factors set forth below, as
well as all of the other  information  in this document and the Annual Report of
the Company on Form 10-K for the year ended December 31, 1997.

Gold Price Volatility
         The Company's profitability is significantly affected by changes in the
price of gold.  Gold prices may fluctuate  widely.  In January 1998,  the market
price of gold declined to levels that were the lowest in over eighteen years and
has remained  below $300 for most of 1998.  Gold prices are affected by numerous
industry  factors,  such as demand  for  precious  metals,  forward  selling  by
producers,  central  bank sales and  purchases of gold and  production  and cost
levels in major gold-producing regions.  Moreover, gold prices are also affected
by  macro-economic  factors such as expectations for inflation,  interest rates,
currency   exchange  rates  and  global  or  regional   political  and  economic
situations.  The current demand for and supply of gold affects gold prices,  but
not  necessarily  in the same  manner as current  demand  and supply  affect the
prices of other  commodities.  The potential supply of gold consists of new mine
production  plus  existing  stocks  of  bullion  and  fabricated  gold  held  by
governments,  financial institutions,  industrial organizations and individuals.
Since mine production in any single year constitutes a very small portion of the
total potential supply of gold, normal  variations in current  production do not
necessarily have a significant  effect on the supply of gold or on its price. If
the Company's  realized price should  decline below the Company's  expected cash
costs of production  and remain at such levels for any sustained  period,  there
could be material  delays in the  development  of new  projects,  increased  net
losses,  reduced  cash  flow,  reductions  in  reserves,  asset  impairments  or
cessation of production.

     The volatility of gold prices is illustrated in the  following table of the
annual high, low and average London P.M. Fix:

Calendar Year                                          High     Low      Average
                                                            Price Per Ounce
1987...............................................     $500     $390     $446
1988...............................................     $484     $395     $437
1989...............................................     $416     $356     $381
1990...............................................     $424     $346     $383
1991...............................................     $403     $344     $362
1992...............................................     $360     $330     $344
1993...............................................     $406     $326     $360
1994...............................................     $396     $370     $384
1995...............................................     $396     $372     $384
1996...............................................     $415     $367     $387
1997...............................................     $367     $283     $331
1998 (Through July 30).............................     $313     $279     $296

                                    Page 15
<PAGE>
         The London P.M. Fix on July 30, 1998, was $290 per ounce.

Continuing Losses
         The  Company  reported  net  losses  of $2.3 and $7.2  million  for the
quarter and six months ended June 30, 1998,  and $19.4 million and $14.0 million
for the years ended December 31, 1997 and 1996,  respectively,  $5.0 million for
the six months  ended  December  31, 1995 and $18.4  million for the fiscal year
ended June 30, 1995.  The Company  expects to continue to  experience  losses at
least until higher grade ore from Turquoise  Ridge or other sources is produced,
which other sources could include sources  presently being explored or developed
by the Company. There can be no assurance that sources of higher grade ores will
be developed by the Company.

Reserves
         The ore reserves described by the Company are, in large part, estimates
made by the Company and confirmed by  independent  mining  consultants  known as
Mine  Development  Associates  ("MDA") or  Mineral  Resource  Development,  Inc.
("MRDI"). The reserves confirmed by MDA or MRDI are subject to certain risks and
assumptions,  including those discussed in "Certain  Turquoise Ridge Mine Risks"
below.  Additionally,  no  assurance  can be given that the  indicated  level of
recovery of gold will be  realized  or that the  assumed  gold price of $350 per
ounce will be obtained.  Reserve  estimates may require revision based on actual
production  experience.  Market price fluctuations of gold, as well as increased
production costs or reduced  recovery rates, may render ore reserves  containing
relatively lower grades of  mineralization  uneconomic and may ultimately result
in a restatement of reserves. Moreover, short-term operating factors relating to
the ore reserves,  such as the need for sequential development of ore bodies and
the  processing  of new or  different  ore  grades,  may  adversely  affect  the
Company's profitability in any particular period.

         Declines  in the  market  price of gold may also  render  ore  reserves
containing relatively lower grades of gold mineralization uneconomic to exploit.

Project Development Risks
         The Company  from time to time  engages in the  development  of new ore
bodies.  Specific  risks  associated  with  the  Company's  development  of  the
Turquoise Ridge mine are discussed  below.  The Company's  ability to sustain or
increase  its  present  level of gold  production  is  dependent  in part on the
successful  development  of such new ore bodies  and/or  expansion  of  existing
mining operations. The economic feasibility of any such development project, and
all such projects collectively,  is based upon, among other things, estimates of
reserves,  metallurgic recoveries,  capital and operating costs of such projects
and future gold prices.  Development projects are also subject to the successful
completion of feasibility studies,  issuance of necessary permits and receipt of
adequate financing.

         Development  projects  have no  operating  history  upon  which to base
estimates  of  future  cash  operating  costs  and  capital   requirements.   In
particular, estimates of reserves, metal

                                     Page 16
<PAGE>
recoveries  and  cash  operating  costs  are to a large  extent  based  upon the
interpretation  of geologic data  obtained  from drill holes and other  sampling
techniques  and  feasibility  studies which derive  estimates of cash  operating
costs  based  upon  anticipated  tonnage  and  grades  of  ore to be  mined  and
processed,  the configuration of the ore body, expected recovery rates of metals
from the ore,  comparable  facility and  equipment  costs,  anticipated  climate
conditions  and other  factors.  As a result,  it is  possible  that actual cash
operating  costs and economic  returns of any and all  development  projects may
materially differ from the costs and returns initially estimated.

Certain Turquoise Ridge Mine Risks
         The Turquoise  Ridge mine involves  numerous  risks.  These include the
following:

 Capital Requirements. Expenditures required to advance the Turquoise Ridge mine
to the point of commercial  production  were estimated to be $10 million at June
30, 1998. As of June 30, 1998, cash and cash equivalents were $57.8 million. The
Company  intends to finance the completion of the Turquoise  Ridge mine with its
existing  cash  resources.  There can be no assurance  that the cash required to
advance  the  Turquoise  Ridge  mine to  commercial  production  and to fund the
ongoing  Turquoise  Ridge  operations  will  be  available.  If  there  are  any
shortfalls in funds required to meet these needs, such funds may be supplemented
by additional funds raised by issuing debt or equity secruities. There can be no
assurance that  additional  funding will be available on favorable  terms, if at
all.

 Reserves.  There can be no assurance  that the  probable  reserves set forth in
MRDI and MDA's  reserve  reports  for  Turquoise  Ridge and the Shaft  Zone will
actually be mined and milled on an economic  basis,  if at all. The MDA and MRDI
reports are based upon many  assumptions,  some or all of which may not prove to
be accurate. The failure of any such assumptions to prove accurate may alter the
conclusions  of MDA's and/or  MRDI's  report on reserves and may have a material
adverse affect on the Company.  The resource and reserve estimates were prepared
using  geological  and  engineering  judgment  based on available  data.  In the
absence of underground development, such estimates must be regarded as imprecise
and some of the assumptions  made may later prove to be incorrect or unreliable.
The grade distribution at Turquoise Ridge is between 0.2 to 0.75 ounces per ton.
Small  changes  in cutoff  grade  can cause  large  shifts in the  reserves.  If
dilution  and/or mining costs related to poor ground  conditions are higher than
expected, the reserves could be substantially reduced, resulting in a shortening
of mine life and a reduced or negative cash flow.

 Dilution.  The tonnage and grade of the mill feed  material  was  estimated  by
applying  dilution  factors to certain  resource data.  The dilution  agents are
backfill,  waste from the back of overcut  crosscuts  and  drifts,  and from the
walls.  In the case of the latter  two,  MRDI  assumed  that  there  would be an
average  of one foot of back  and wall  dilution.  MDA  used  approximately  15%
dilution and 95% recovery of the minable  reserve.  If this dilution  increases,
there will be  corresponding  negative effects on the tonnage and grade to mill.
This risk is related to the irregular  configuration of the ore body which, even
with the tight

                                     Page 17
<PAGE>
cut-and-fill stoping method used, could make achievement of a dilution thickness
of one foot impossible to achieve in practice.

 Production  Shaft  Completion.  Completion of the  production  shaft,  which is
expected no earlier than the fourth quarter of 1998, is an aggressive  schedule.
Delay  in  this  construction   would  necessitate   removing  ore  through  the
Ventilation  Shaft,  which is  basically  designed for waste and the limited ore
from early production.  Additionally,  the availability of the final ventilation
circuit required for mining depends upon the completion of the Production Shaft.

 Mining Cost. As part of the project risk assessment,  sensitivities were run on
various mining costs.  Due to uncertainties  about actual ground  conditions and
productivities,  these costs are only  predictable  within a broad range and the
predictions may not be valid.  Increased actual mining costs may have a material
adverse  effect on the  viability  of the  Turquoise  Ridge  project  and on the
Company.

 Hydrology.  Drainage of the ore body and  surrounding  rock will be critical to
the achievement of the mining  efficiencies and costs estimated by the study. If
the  deposit is not  drained and water  remains in this  clay-rich  environment,
mining conditions could worsen, and ground support costs will increase.  If, due
to the  presence  of fine  clays,  the  deposit  drains  slowly,  the  start  of
production may be delayed,  and the build-up to full production may be of longer
duration.  Additionally,  depending  upon  the  quantity  and  quality  of water
encountered,  the water  treatment/disposal  options presently  available to the
Company may be  insufficient  to meet  estimated  amounts  needed to treat water
pumped from  Turquoise  Ridge during  dewatering.  Currently,  the  infiltration
basins are accepting and disposing of all water delivered from both the Getchell
Underground  and the Turquoise  Ridge mines,  although there can be no assurance
that these conditions will continue.

 Geotechnical  Considerations.  The  Turquoise  Ridge ore zones contain areas of
poor ground conditions due to a high percentage of the ground being comprised of
low rock mass rating rock and clay. As a result,  the Company may be required to
make expenditures on additional ground support.

Dependence on a Single Property
         All of the  Company's  revenues are derived from its mining and milling
operations  at  the  Getchell  Property.  If  the  operations  at  the  Getchell
Underground  or Turquoise  Ridge mines,  or at any of the  Company's  processing
facilities, were to be reduced,  interrupted or curtailed, the Company's ability
to generate future revenues and profits could be materially adversely affected.

Exploration
         Mineral  exploration,  particularly for gold, is highly  speculative in
nature,  involves  many risks and is  frequently  unsuccessful.  The  Company is
seeking to expand its reserves only through  exploration  and development at the
Getchell Property. There can be no assurance that

                                     Page 18
<PAGE>
the Company's exploration efforts will result in the discovery of any additional
gold  mineralization  or that any  mineralization  discovered  will result in an
increase of the Company's  reserves.  If reserves are  developed,  it may take a
number of years and substantial expenditures from the initial phases of drilling
until  production  is possible,  during which time the economic  feasibility  of
production may change. No assurance can be given that the Company's  exploration
programs will result in the replacement of current  production with new reserves
or that the Company's development program will be able to extend the life of the
Company's existing mines.

Hedging Activities and Other Precious Metal Contract Commitments
         Precious   metals   contracts   between   the   Company   and   various
counterparties  involve the  requirement  that the Company  deliver  gold to the
counterparty at agreed-upon prices. Should the counterparty be unable to fulfill
its purchase obligations, there is no guarantee that the Company will be able to
receive the  agreed-upon  sales  price in the open  market.  Should  Getchell be
unable to produce sufficient gold to meet its hedging contract obligations,  the
Company may be obligated to purchase such gold at the then market  price.  There
can be no assurance  that the Company will have the funds  necessary to purchase
such gold or that it will be able to do so without  causing a  material  adverse
effect on the Company.

         The Company's accounting treatment for hedging and other precious metal
contract commitments is outlined in Notes 2 and 3 to the Company's  consolidated
financial statements included in Item 8 "-Financial Statements and Supplementary
Data" of the Company's  Annual  Report on Form 10-K for the year ended  December
31, 1997.

Dependence on Key Personnel
         The Company is  dependent  on the  services of certain key officers and
employees,  including its Chief Executive Officer,  its Chief Financial Officer,
its Chief  Operating  Officer,  its Chief  Administrative  Officer  and its Vice
President of  Exploration.  Competition  in the mining  industry  for  qualified
individuals is intense,  and the loss of any of these key officers or employees,
if not replaced,  could have a material adverse effect on the Company's business
and its operations.  The Company  currently does not have key person  insurance.
The Company has entered into  Termination  Agreements  with its Chief  Executive
Officer,  Chief Financial Officer, Chief Operating Officer, Chief Administrative
Officer and Vice  President of  Exploration  which provide for certain  payments
upon  termination or resignation  resulting from a change of control (as defined
in such agreements).

         In connection  with the  development  of Turquoise  Ridge,  the Company
expects  that it  will  require  a  significant  number  of  additional  skilled
employees.  The Company faces intense competition from other mining companies in
connection with the  recruitment and retention of such employees.  Additionally,
although the Company does not currently have any unionized employees,  there can
be no assurance that unionization will not occur in the future.

                                     Page 19
<PAGE>
Government Regulation
 Safety.  The mining  operations  of the Company are subject to  inspection  and
regulation  by the Mine Safety and Health  Administration  of the United  States
Department of Labor  ("MSHA") under the provisions of the Mine Safety and Health
Act of 1977. The Occupational Safety and Health Administration ("OSHA") also has
jurisdiction  over safety and health  standards  not covered by MSHA.  It is the
Company's  policy to comply with  applicable  directives and regulations of MSHA
and OSHA.

         On January 15, 1997, a mine site accident  involving a loader  resulted
in the death of a Company  employee.  As required by federal law, MSHA officials
investigated the accident.  MSHA issued seven enforcement  actions, one of which
was  subsequently  vacated.  Civil  penalties  for  which the  Company  has been
assessed as the result of such actions were $120,817. A contest of the penalties
and  underlying  violations  was  filed on  March  12,  1998.  The case has been
forwarded to the Office of Administrative  Law Judges of the Federal Mine Safety
and Health Review Commission for a hearing. The Company is currently engaging in
settlement   discussions   with   the   Solicitor's   Office.   The   Commission
Administrative  Law Judge may vacate the  penalties,  reduce  them,  or increase
them, but in no case will the maximum exceed $0.3 million. MSHA also conducted a
special  investigation to determine whether knowing and/or willful violations on
the part of the  Company  or any  agent,  officer  or  director  of the  Company
occurred.  That  investigation has been concluded and no further violations were
alleged.

 Current  Environmental  Laws and  Regulations.  The  Company  must  comply with
environmental standards, laws and regulations which may entail greater or lesser
costs and delays  depending  on the  nature of the  regulated  activity  and how
stringently the regulations are implemented by the regulatory  authority.  It is
possible that the costs and delays associated with compliance with such laws and
regulations  could  become  such that the  Company  would not  proceed  with the
development of a project or the operation or further development of a mine. Laws
and regulations  involving the protection and remediation of the environment and
the governmental  policies for  implementation  of such laws and regulations are
constantly changing and are generally becoming more restrictive. The Company has
made, and expects to make in the future, significant expenditures to comply with
such laws and regulations. These requirements include regulations under: (i) the
Comprehensive  Environmental  Response,  Compensation  and Liability Act of 1980
("CERCLA" or  "Superfund")  which  regulates and  establishes  liability for the
release of hazardous  substances;  (ii) the Endangered Species Act ("ESA") which
identifies  endangered species of plants and animals and regulates activities to
protect  these species and their  habitats;  (iii) the Clean Water Act; (iv) the
Clean Air Act;  (v) the Resource  Conservation  and Recovery Act for disposal of
hazardous  waste;  (vi) the Migratory  Bird Treaty Act;  (vii) the Safe Drinking
Water Act;  (viii) the Federal Land Policy and Management Act; (ix) the National
Environmental  Policy Act; (x) the National Historic  Preservation Act; and (xi)
many other state and federal laws and regulations.


                                     Page 20
<PAGE>
         The United States Environmental Protection Agency ("EPA") continues the
development of a solid waste regulatory  program  specific to mining  operations
such as the Company's, whose mineral extraction and beneficiation wastes are not
regulated as hazardous  wastes under the Resource  Conservation and Recovery Act
("RCRA").  In  September  1997,  the EPA issued  its  National  Hardrock  Mining
Framework.  The Framework  focuses on the EPA's use of its existing  authorities
other than RCRA to address environmental  concerns posed by hardrock mining. The
Company does not  anticipate  that the  Framework  will have a material  adverse
effect on the Company.  Recent regulations  promulgated under RCRA, the Phase IV
Land Disposal  Restrictions,  could  potentially  alter regulatory  requirements
applicable  to the  storage  and  management  of mining  wastes.  The Company is
currently  reviewing these  regulations and assessing  whether such changes will
materially impact its operations.

         New regulations promulgated under Section 313 of the Emergency Planning
and Community  Right to Know Act ("EPCRA")  have  significantly  expanded  Toxic
Release  Inventory  ("TRI")  reporting  requirements to include the metal mining
industry.  The Company expects to incur  additional  costs in complying with the
new TRI reporting  requirements and could be adversely affected,  along with the
rest of the metal mining  industry,  by the public  availability  of the reports
required.

         Environmental  laws and regulations may also have an indirect impact on
the Company,  such as increased cost for electricity due to acid rain provisions
of the  Clean Air Act  Amendments  of 1990.  Charges  by  refiners  to which the
Company  sells  its  metallic   concentrates  and  products  have  substantially
increased over the past several years because of requirements that refiners meet
revised  environmental  quality  standards.  The Company has no control over the
refiners'   operations  or  their   compliance  with   environmental   laws  and
regulations.

 Potential Legislation. Several recent legislative developments have affected or
may in the future affect the cost of and the ability of mining  claimants to use
the Mining Law of 1872,  as amended (the "General  Mining Law"),  to acquire and
use federal lands for mining  operations.  Since October 1994, a moratorium  has
been imposed on  processing  new patent  applications  for mining  claims.  This
moratorium  should not affect the status of the patent  applications made by the
Company under the General Mining Law before the  moratorium  was imposed.  Also,
since  1993,  a rental  or  maintenance  annual  fee of $100 per  claim has been
imposed by the Federal  government  on  unpatented  mining claims in lieu of the
prior   requirement  for  annual   assessment  work.  During  the  last  several
Congressional  sessions,  bills  have  been  repeatedly  introduced  in the U.S.
Congress which would  supplant or radically  alter the General Mining Law. As of
July 28, 1998, no such bills have been passed.  Such bills have proposed,  among
other things,  to permanently  eliminate or greatly limit the right to a mineral
patent,  impose  royalties,  and impose new Federal  reclamation,  environmental
control and other restoration requirements. Royalty proposals have ranged from a
2% royalty on "net  profits"  from  mining  claims to an 8% royalty on  modified
gross  income/net   smelter  returns.   If  enacted,   such  legislation   could
substantially impair the ability of companies to economically develop mineral

                                     Page 21
<PAGE>
resources on federal lands. The extent of the changes, if any, which may be made
by Congress to the General Mining Law is not presently  known, and the potential
impact on the Company as a result of future  Congressional  action is impossible
to predict.  Although a majority of the  Company's  existing  mining  operations
occur on private or  patented  property,  the  proposed  changes to the  General
Mining Law could adversely affect the Company's ability to economically  develop
mineral  resources  on  federal  lands.   Disposal  of  overburden  and  mineral
processing  wastes by the  Company  occur on both  private  and  federal  lands.
Exploration activities also occur on both private and federal lands.

         BLM is considering revisions to its Surface Mining Regulations under 43
C.F.R.  Section 3809. BLM anticipates  that an  environmental  impact  statement
evaluating the potential effects of these regulatory revisions will be issued in
November  1998.  The  proposed   revisions   address   reclamation  and  bonding
requirements  for the industry.  The impact of these potential  revisions,  when
finalized, is not know at this time.

         Other   legislative   initiatives   relating  to   environmental   laws
potentially  applicable  to mining  include  proposals  to  substantially  alter
CERCLA,  the Clean Water Act, Safe Drinking  Water Act, and the ESA, bills which
introduce additional  protection of wetlands and various initiatives to increase
the  regulatory  control  over  exploration  and  mining   activities.   Adverse
developments and operating  requirements  resulting from these initiatives could
substantially  impair the economic ability of the Company, as well as others, to
develop mineral  resources.  Because none of these bills have passed and because
revisions to current  versions of these bills could occur prior to passage,  the
potential impact on the Company of such legislative  initiatives is not known at
this time.

Environmental Matters
 Environmental  Liability.  The  Company  is  subject  to  potential  risks  and
liabilities  associated  with pollution of the  environment  and the disposal of
waste  products  that  could  occur  as  a  result  of  the  Company's   mineral
exploration, development and production.

         The gold ore located on the Getchell Property and the existing tailings
ponds and waste dumps located on the Getchell  Property contain  relatively high
levels of arsenic,  and the milling of such ore  involves the use of other toxic
substances,  including,  but not limited to, sodium cyanide,  sodium  hydroxide,
sulfuric acid and nitric acid.

         Environmental   liability  also  may  result  from  mining   activities
conducted by others  prior to the  Company's  ownership of a property.  Historic
mining  disturbances,  facilities,  waste  materials and other discrete areas of
potential   contamination   associated  with  gold,  tungsten,   and  molybdenum
production   between  1937  and  1969  by  previous  owners  and  operators  are
encompassed within the area of the Company's Getchell Property operations. Under
CERCLA and other federal,  state and local environmental laws,  ordinances,  and
regulations,  a current or previous  owner or operator of real  property  may be
liable for the costs of removal or remediation of hazardous or toxic  substances
on, under or in such property or other

                                     Page 22
<PAGE>
property  to which  such  substances  may have  migrated.  Such laws may  impose
liability  whether or not the owner or operator knew of, or was responsible for,
the  presence of such  hazardous or toxic  substances.  In  connection  with its
current or prior  ownership or operation of property or facilities,  the Company
may be  potentially  liable  for any such  costs or  liabilities.  Although  the
Company is currently not aware of any material  environmental  claims pending or
threatened  against it, no assurance can be given that a material  environmental
claim will not be asserted against the Company.

         Restoration of certain areas of historic  disturbance and contamination
has been undertaken in conjunction  with current mining  operations and has been
incorporated  into the Company's state permits in coordination  with the federal
land management agency.  Such restoration will not necessarily result in removal
of all hazardous substances located on the Getchell Property nor will it relieve
the Company of all  potential  liability  for such  substances  under  CERCLA or
similar laws.

         To the extent the Company is subject to environmental liabilities,  the
payment  of such  liabilities  or the costs  which  must be  incurred  to remedy
environmental  pollution would reduce funds  otherwise  available to the Company
and could have a material  adverse effect on the Company.  Should the Company be
unable to fully remedy an environmental  problem,  the Company might be required
to  suspend  operations  or  enter  into  interim  compliance  measures  pending
completion of the required remedy. The potential exposure may be significant and
could have a material adverse effect on the Company. Insurance for environmental
risks (including  potential liability for pollution or other hazards as a result
of the disposal of waste products occurring from exploration and production) has
not  been  purchased  by the  Company  as it is  not  generally  available  at a
reasonable price.

 Environmental  Permits.  All  of the  Company's  exploration,  development  and
production activities are subject to regulation under one or more of the various
state  and  federal  environmental  laws and  regulations.  These  laws  address
emissions to the air, discharges to water,  management of wastes,  management of
hazardous substances, protection of natural resources, protection of antiquities
and restoration of lands which are disturbed by mining.  Many of the regulations
require  permits  to be  obtained  for the  Company's  activities.  The  Company
maintains  permits  required for its facilities and operations which provide for
ongoing  compliance and  monitoring.  Some of the permits include Bureau of Land
Management Plan of Operations No. N24-87-003P;  EPA Hazardous Waste Facility No.
NVD986774735;  Nevada water pollution  control permits  NEV86014 (for mining and
mineral  processing)  and  NEV95113  (for  excess mine water  disposal);  Nevada
reclamation  permit  0105;  and Nevada air  quality  permit  AP1041-0292.  These
permits must be updated and reviewed from time to time, and normally are subject
to  environmental  impact analyses and public review processes prior to approval
of the  activity.  It is  possible  that  future  changes  in  applicable  laws,
regulations   and  permits  or  changes  in  their   enforcement  or  regulatory
interpretation  could have a significant impact on some portion of the Company's
business, causing those activities to be economically re-evaluated at that time.

                                     Page 23
<PAGE>
 Restoration.  The Company accrues expenses over the productive life of its mine
for anticipated  costs associated with restoration of the mine site.  Activities
which result in  restoration  costs include the permanent  closure of the mining
and mineral processing operations and the reclamation of the disturbed land to a
productive  use. This includes  restoration  of historic and current  mining and
mineral  processing  operations and associated  land  disturbances.  Restoration
takes place concurrent with and after the productive life of mining  operations.
Activities  which  result in  restoration  costs  after  permanent  closure  and
reclamation  primarily  relate to  monitoring  and other post mining  management
activities.

         The  uncertainties  related to future  restoration  costs  result  from
unknown future additional regulatory requirements, significant new facilities or
surface  disturbances,  and the  potential  for  recognition  in the  future  of
additional  activities needed for restoration.  The technologies for restoration
are evolving.  Periodic review of the activities and costs for restoration,  and
consequent  adjustments to the ongoing accrual,  are conducted.  The Company has
programs  of  evaluating  various  restoration  technologies  during  mining and
milling operations.  The Company has begun restoration of the Getchell property,
conducts concurrent restoration and anticipates an ongoing program of concurrent
restoration  over the  productive  life of the  mining  operations.  Restoration
activities  have  included  regrading,  fertilizing,   mulching,  seeding,  live
planting, monitoring and restoration research.

         In accordance with  applicable  State and Federal laws, the Company has
posted a reclamation  bond of $4.5 million to cover the costs for reclamation of
the  Getchell  property.  Current  submittals  to expand  the  existing  tailing
facility are expected to increase the bond  requirements to  approximately  $9.0
million.  As of June 30, 1998,  the total  estimated  restoration  costs for the
Getchell  Property  were $8.7  million,  of which the Company  had accrued  $2.7
million. The amount of total estimated restoration costs has increased over time
due to expanded mining  activities,  requirements for restoring expanded tailing
disposal areas, and more stringent regulatory requirements. Additional increases
may occur in the future for the same reasons.

Mining Risk and Insurance
         The gold ore located on the Getchell Property and the existing tailings
ponds and waste dumps located on the Getchell  Property contain  relatively high
levels of arsenic,  and the milling of such ore  involves the use of other toxic
substances, including sodium cyanide, sodium hydroxide, sulfuric acid and nitric
acid. In addition,  the business of gold mining is generally subject to a number
of risks and hazards,  including  environmental  hazards,  industrial accidents,
labor disputes,  the encounter of unusual or unexpected  geological  conditions,
slope failures, changes in the regulatory environment and natural phenomena such
as  inclement  weather  conditions,  floods,  blizzards  and  earthquakes.  Such
occurrences could result in damage to, or destruction of, mineral  properties or
production facilities, personal injury or death, environmental damage, delays in
mining,  monetary  losses and possible legal  liability.  The Company  maintains
insurance  against  risks that are  typical in the gold mining  industry  and in
amounts that the Company  believes to be  reasonable,  but which may not provide
adequate

                                     Page 24
<PAGE>
coverage in certain unforeseen circumstances. However, insurance against certain
risks  (including  certain  liabilities  for  environmental  pollution  or other
hazards as a result of exploration and production) has not been purchased by the
Company as such coverage is not generally  available at a reasonable price to it
or to other companies within the industry.

Title to Properties
         Certain of the Company's  mineral rights  consist of unpatented  mining
claims.  Unpatented  mining  claims  are  unique  property  interests  that  are
generally  considered  to be  subject  to  greater  title  risk than  other real
property interests. The greater title risk results from unpatented mining claims
being  dependent on strict  compliance  with a complex body of federal and state
statutory  and  decisional  law,  much of  which  compliance  involves  physical
activities on the land, and from the lack of public  records which  definitively
control the issues of validity and ownership.



                                     Page 25
<PAGE>
PART II.  OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         At the Annual  Meeting of  Stockholders  on May 14,  1998,  the Company
stockholders,  pursuant to proxies solicited under Regulation 14A, cast votes on
proposals as follows:


Proposal No. 1 - Election of Directors
                                     For                  Withhold Authority
Pete Ingersoll                    22,699,542                   500,973
William E. Nettles                22,970,291                   230,224
G. W. Thompson                    22,700,149                   500,366
Continuing directors are:
Walter A. Drexel
John Racich
Charles E. Stott, Jr.
R. Michael Summerford
J. Kelley Williams
Al Winters
Robert L. Zerga



Proposal No. 2 - Approval of the 1998 Stock Option Plan for Outside Directors
             For            Against          Abstain        Non Vote
         22,246,193         881,163          73,159        7,585,836

Proposal No. 3 - Amendment of the 1996 Long Term Equity Incentive Plan
             For            Against          Abstain         Non Vote
         19,395,853        3,721,123         83,539        7,585,836

Proposal No. 4 - Ratification of Appointment of Independent Auditors
             For            Against          Abstain          Non Vote
         23,163,946         11,192           25,377         7,585,836

ITEM 5.  OTHER INFORMATION
         New  Securities and Exchange  Commission  rules  regarding  stockholder
proposals became effective on June 29, 1998. Pursuant to these new rules, if the
Company has not received notice by February 17, 1999 of any matter a stockholder
intends to propose for a vote at the 1999 annual meeting of stockholders, then a
proxy solicited by the board of directors

                                     Page 26
<PAGE>
may be voted on such  matter  in the  discretion  of the proxy  holder,  without
discussion  of the  matter  in the proxy  statement  soliciting  such  proxy and
without such matter appearing as a separate item on the proxy card.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibits
27.  -  Financial Data Schedule.

Reports on Form 8-K
         No  reports  on Form 8-K were filed by the  registrant  in the  quarter
ended June 30, 1998.

                                     Page 27
<PAGE>
                                   SIGNATURES

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

                              Getchell Gold Corporation

       July 30, 1998          By:  /s/ G. W. Thompson
           Date               G. W. Thompson, President, Chief Executive Officer
                                        and Director



       July 30, 1998          By: /s/ Donald S. Robson
           Date               Donald S. Robson, Vice President and Chief 
                                        Financial Officer
                                        (Principal Financial Officer)


                                     Page 28