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

(Mark One)

     [X]  QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
          EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1997

     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 ____

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
         Indicate by check mark whether the  registrant  has filed all documents
and reports  required  to be filed by Section 12, 13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court. Yes ____ No ____

                     (APPLICABLE ONLY TO CORPORATE ISSUERS)
         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                    26,778,491 on July 30, 1997

                                     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,
                                               ------------------    ------------------
                                                 1997       1996       1997      1996
                                               -------    -------    -------    -------
<S>                                            <C>        <C>        <C>        <C>    
Net sales                                      $18,675    $17,193    $33,537    $31,848
Cost of sales                                   21,726     18,436     41,537     35,014
                                               -------    -------    -------    -------
     Gross loss                                  3,051      1,243      8,000      3,166
General and administrative expenses                643      1,222      3,763      2,440
Exploration expenses                               424        731        996      1,583
                                               -------    -------    -------    -------
     Loss from operations                        4,118      3,196     12,759      7,189
Interest expense, net of capitalized interest     (221)      (301)      (442)      (534)
Interest and other income                        1,255      1,476      2,138      3,099
                                               -------    -------    -------    -------
      Loss before income taxes                   3,084      2,021     11,063      4,624
Income tax benefit                                   -          -          -        870
                                               -------    -------    -------    -------
     Net loss                                  $ 3,084    $ 2,021    $11,063    $ 3,754
                                               =======    =======    =======    =======

Loss per common share                          $  0.12    $  0.08    $  0.42    $  0.15
                                               =======    =======    =======    =======

Weighted average number of shares outstanding   26,775     25,716     26,358     25,705
                                               =======    =======    =======    =======
</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 per share data)
<TABLE>
<CAPTION>
                                                                                June 30,   December 31,
                                                                                  1997        1996
                                                                                --------   ------------
                                       ASSETS
<S>                                                                             <C>        <C>
Current assets:
     Cash and cash equivalents                                                  $ 82,448     $ 64,130
     Accounts receivable:
          Trade                                                                    2,853        2,478
          Employee                                                                   171          171
          Other                                                                       44          315
                                                                                --------     --------
               Total accounts receivable                                           3,068        2,964
                                                                                --------     --------
     Inventories:
          Ore and ore in process                                                   2,821        1,816
          Materials and supplies                                                   8,623        8,676
                                                                                --------     --------
               Total inventories                                                  11,444       10,492
                                                                                --------     --------
     Deferred hedging gains, net                                                       -          362
     Prepaid expenses                                                                599        1,098
                                                                                --------     --------
               Total current assets                                               97,559       79,046
Property, plant and equipment, net                                               149,340      129,762
Other                                                                                110            -
                                                                                --------     --------
               Total assets                                                     $247,009     $208,808
                                                                                ========     ========
                        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                                           $  7,255     $  8,378
     Accrued expenses                                                              1,569        1,740
     Current portion of capital lease obligations                                  2,037        1,753
     Stock Appreciation Rights liability                                           2,045            -
     Other                                                                           391            -
                                                                                --------     --------
               Total current liabilities                                          13,297       11,871
Long-term debt                                                                    26,187       25,336
Capital lease obligations, less current installments                               7,882        9,092
Deferred income taxes                                                              7,741        7,741
Reclamation liabilities                                                            2,650        2,694
Other liabilities                                                                  1,173          852
                                                                                --------     -------- 
               Total liabilities                                                  58,930       57,586
                                                                                --------     --------
Stockholders' equity:
     Preferred stock, par value $0.0001; 10,000 shares authorized; none issued          -            -
     Common stock, par value $0.0001; 100,000 shares authorized; issued and
         outstanding 26,778 at June 30, 1997 and 25,766 at December 31, 1996           3            3
     Contributed and paid-in capital                                             220,800      172,879
     Accumulated deficit                                                         (32,724)     (21,660)
                                                                                --------     --------
               Total stockholders' equity                                        188,079      151,222
                                                                                --------     --------
               Total liabilities and stockholders' equity                       $247,009     $208,808
                                                                                ========     ========
</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:                         1997        1996
                                                           ---------   --------
<S>                                                        <C>         <C>     
   Net loss                                                $(11,063)   $(3,754)
   Adjustments to reconcile net loss to net cash
      provided by (used in) operating activities:
       Depreciation, depletion and amortization               5,068      4,261
       Accrued interest converted to loan principal             772          -
       Deferred income taxes                                      -       (870)
       Deferred hedging gain, net                               362        990
       Other                                                    391          7
       Net change in operating assets and liabilities:
         Accounts receivable                                   (105)       875
         Inventories                                           (951)      (756)
         Prepaid expenses                                       499        161
         Accounts payable                                    (1,559)     1,356
         Accrued expenses                                      (170)     1,113
         Stock Appreciation Rights liability                  2,045          -
         Other liabilities                                      277        109
                                                           --------   --------
            Cash provided by (used in) operating activities  (4,434)     3,492
                                                           --------   --------

Cash flows from investing activities-
   Additions to property, plant and mine development        (24,120)   (19,888)
                                                           --------   --------

Cash flows from financing activities:
   Net proceeds from issuance of common stock                47,798        668
   Proceeds from long-term debt                                   -         31
   Principal payments under capital lease obligation           (926)      (749)
                                                            -------   --------
             Cash provided by (used in) financing activities 46,872        (50)
                                                            -------   --------

Net increase (decrease) in cash and cash equivalents         18,318    (16,446)
Cash and cash equivalents at beginning of period             64,130    114,633
                                                            -------   --------
Cash and cash equivalents at end of period                  $82,448   $ 98,187
                                                            =======   ========
</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, 1996.

         Certain prior year amounts have been  reclassified  to conform with the
current year presentation.

(2)  EARNINGS PER SHARE
         In  March  1997,  the  Financial   Accounting  Standards  Board  issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS
128"), which specifies the computation, presentation and disclosure requirements
for earnings per share.  SFAS 128 is effective for periods ending after December
15, 1997 and requires  retroactive  restatement  of prior  periods  earnings per
share. The statement  replaces the "primary earnings per share" calculation with
a "basic  earnings per share" and redefines  the  "dilutive  earnings per share"
computation.  Had earnings per share been determined in accordance with SFAS 128
for the three and six months ended June 30, 1997, the Company's  reported income
per common share would not have been affected.

(3)  $50 MILLION PUBLIC EQUITY OFFERING
         On March  17,  1997,  the  Company  completed  an  equity  offering  of
1,000,000  common shares which  resulted in net proceeds to the Company of $47.7
million after offering  costs and expenses of $2.3 million.  Net proceeds of the
offering will be used for the continued development of the Turquoise Ridge mine,
for exploration on the Getchell property and for general corporate purposes.

(4)  HEDGING AND OTHER PRECIOUS METAL CONTRACT COMMITMENTS
         Precious  metal  contracts  consist of spot  deferred and European call
option  contracts.  The  Company  uses the spot  deferred  contracts  to protect
earnings and cash flows from the impact of short-term drops in gold price.  Risk
of loss on the spot deferred contracts arises from the possible inability of the
counterparty to fulfill its obligations under the contracts and from

                                     Page 5

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

changes  in  the  Company's   potential   ability  to  deliver  gold,   although
nonperformance by any party to the contract is not anticipated.

         At June 30, 1997, the Company had outstanding  spot deferred  contracts
for 80,000  ounces at an average  price of $386 per ounce.  Of these  contracts,
20,000 ounces were for delivery in 1997 at a weighted  average price of $387 and
60,000 ounces were for delivery in 1998 at a price of $385.  Based on the market
price of gold at June  30,  1997,  the  unrealized  gains  on the spot  deferred
contracts were approximately $4.1 million.

         Recognition  of premiums  received  for call  options sold are deferred
until the option  expires or the  related  transaction  occurs at which time the
deferred amounts are recognized in income.  Risk of loss on European call option
contracts  exists if the market price were to exceed the  exercise  price of the
option on the date designated in the contract. At June 30, 1997, the Company had
outstanding  European  call option  contracts  for  175,000  ounces of gold at a
weighted  average  price of $367 per  ounce  and  50,000  ounces  of silver at a
weighted average price of $5.5 per ounce. All call option contracts expire prior
to January 1998.

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

                                                          At          At
                                                         June      December
                                                       30, 1997    31, 1996
                                                       --------    --------
Land and land improvements                             $  9,544    $  9,524
Buildings and equipment                                 117,655     115,550
Mine development                                         49,849      38,757
Construction-in-progress                                 60,345      48,916
                                                       --------    --------
         Total property, plant and equipment            237,393     212,747
Accumulated depreciation, depletion and amortization    (88,053)    (82,985)
                                                       --------    --------
         Net property, plant and equipment             $149,340    $129,762
                                                       ========    ========

         Depreciation  and  depletion  expense was $2.7 million and $2.5 million
for the  three  months  ended  June 30,  1997 and 1996,  respectively,  and $5.1
million  and $4.3  million  for the six  months  ended  June 30,  1997 and 1996,
respectively.


                                     Page 6

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

         Capitalized  interest  was $0.4  million and $0.3 million for the three
months  ended June 30, 1997 and 1996,  respectively,  and $0.8  million and $0.6
million for the six months ended June 30, 1997 and 1996, respectively.

(6)  EMPLOYEE BENEFITS
         On February 14, 1997,  the  Compensation,  Human  Resource and Director
Affairs  Committee  of the  Board of  Directors  of the  Company  granted  stock
appreciation rights ("SARS") under the Company's 1996 Long Term Equity Incentive
Plan with respect to 75,983 shares at a weighted  average  option price of $8.32
per share to certain executives and other employees of the Company,  as detailed
in the  Company's  Annual  Report on Form 10-K for the year ended  December  31,
1996. Compensation with respect to SARS is accounted for on a variable basis and
is  "marked to market"  at the end of each  fiscal  quarter  based on the market
price of the Company's  Common Stock.  Based on the $35.125  market price of the
Company's  Common Stock at June 30, 1997,  the Company  recognized  compensation
expense of $2.0  million,  or $0.08 per share,  in the six months ended June 30,
1997.   Of  the  $2.0   million,   $1.3  million  was  charged  to  general  and
administrative  expenses,  $0.5  million  was  charged to cost of sales and $0.2
million was charged to exploration.  The Company's future quarterly results will
reflect only compensation  expense or income with respect to these SARS based on
the change in the market  price of the Common  Stock as  compared  to the market
price at the end of the preceding quarter.  The Company recognized  compensation
income of $0.4  million in the second  quarter of 1997 related to the SARS based
on the change in the market price of the Company's Common Stock at June 30, 1997
from March 31, 1997.

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

                                             Six Months Ended
                                                  June 30,
                                             ----------------
                                               1997     1996
                                             ------    ------
Interest, net of amounts capitalized         $(356)    $(206)
Income taxes paid                            $   -     $   -

(8)  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

                                     Page 7

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

make in the future,  expenditures to comply with such laws and regulations.  The
Company cannot predict such future expenditures.

Internal Revenue Service Tax Claim
         In October 1996, the Internal Revenue Service ("IRS") filed a notice of
deficiency,  stating that the IRS is  proceeding  against the  Company's  former
Parent Company,  ChemFirst Inc.  ("ChemFirst") and, thus the Company (see Note 7
to Item 8 -  "Financial  Statements  and  Supplementary  Data"  as  found in the
Company's  Annual  Report  on Form 10-K for the year  ended  December  31,  1996
regarding the Amended Tax Sharing  Agreement between ChemFirst and the Company),
for income taxes  associated with  ChemFirst's  consolidated  income tax returns
filed  in 1989  and  1990.  The  Company's  share  of the  asserted  deficiency,
including interest,  totals  approximately $4.5 million. In response,  ChemFirst
and the Company  filed a petition  with the United  States Tax Court in December
1996. The Company believes it has adequately reserved for this tax matter.

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.  The Company is also obligated to pay a termination fee if the contract
were to be terminated prior to January 2004. The termination fee is $2.8 million
in 1997 and decreases each year until reaching $0.4 million in 2004.

Royalties
         The Company is obligated to pay a 2% royalty on net smelter  returns of
the current mineral production from certain of its mining properties. Royalties,
recorded as  operating  costs,  amounted to $0.2 million and $0.4 million in the
three  months ended June 30, 1997 and 1996,  respectively,  and $0.3 million and
$0.6 million in the six months ended June 30, 1997 and 1996, respectively.

Letter of Credit
         At December 31, 1996,  a $1.0  million  unsecured  letter of credit was
outstanding  for bonding of a reclamation  plan. In January 1997, this letter of
credit was increased to $4.5 million.  This letter of credit reflects fair value
as a condition of its  underlying  purpose and is subject to fees  competitively
determined in the market place.

                                     Page 8

<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 such
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,  1997  were a loss of $3.1
million,  or $0.12 per share versus a loss of $2.0 million,  or $0.08 per share,
for the same  quarter of 1996.  Results  for the six months  ended June 30, 1997
were a loss of $11.1 million,  or $0.42 per share,  compared with a loss of $3.8
million,  or $0.15 per share,  in the same period of 1996.  The following  table
highlights sales and production  information for the three and six month periods
ended June 30, 1997 and 1996:
<TABLE>
<CAPTION>

                                                 Three Months Ended             Six Months Ended
                                                      June 30,                      June 30,
                                              -------------------------    ---------------------------
                                                 1997          1996            1997           1996
                                              -----------   -----------    ------------   ------------
<S>                                           <C>           <C>            <C>            <C>   
Ounces of gold sold                             48,262        43,802          85,991         81,019
Average realized price per ounce                 $387          $393            $390           $393
Average market price per ounce                   $341          $388            $344           $395
Cash cost per ounce                              $393          $361            $423           $378
Total cost per ounce                             $450          $421            $483           $432
Ore milled (dry tons)                           283,437       291,016        553,682        559,241
Average grade of ore milled (ounces per ton)     0.188         0.162          0.173          0.153
Underground ore milled (dry tons)               136,956       98,400         241,118        187,011
</TABLE>

         Sales  revenue of $18.7  million  in the second  quarter of 1997 was up
from $17.2 million in the same period of 1996 and sales revenue of $33.5 million
in the first six months of 1997 was up from $31.8  million in the same period of
1996.

         The increases in the ounces sold in the 1997 periods as compared to the
1996 periods were the result of  improvements in underground  mining  operations
that led to improvements in

                                     Page 9

<PAGE>
the overall  grade of ore milled.  The increase in ounces sold  resulted in $1.7
million more in revenues in the second  quarter of 1997 and $1.9 million more in
revenues in the first six months of 1997,  as  compared  to the same  periods of
1996,  with each periods  revenue offset by $0.2 million due to the lower prices
in the 1997 periods as compared to 1996. Gold production in the first six months
of 1997,  although  higher than the previous  years  production,  was  adversely
affected by rain induced flooding of the Getchell  Underground mine access and a
fatality of a mine worker in the first quarter of 1997. Initial revenue from the
Turquoise  Ridge mine  development  ore,  expected  no  earlier  than the fourth
quarter of 1997, will be offset against the capital costs of the Turquoise Ridge
project  until  the  Turquoise  Ridge  mine  is  declared  to be  in  commercial
production, which is expected no earlier than the second half of 1998.

         The Company hedged a portion of its production which resulted in higher
realized  gold  prices of $387 and $390 than the  average  market gold prices of
$341 and $344  per  ounce in the 1997  second  quarter  and  first  six  months,
respectively.

         Cost of sales was $21.7 million in the second  quarter of 1997, up from
$18.4 million in the second  quarter of 1996,  and cash costs per ounce produced
were $393 and $361 for the two periods,  respectively. For the first six months,
cost of sales was $41.5 million in 1997, up from $35.0 million in 1996, and cash
costs per ounce  produced were $423 and $378 for the two periods,  respectively.
Underground mining costs, mine site general and administrative ("G&A") costs and
depreciation  and  depletion  were  higher in the second  quarter  and first six
months of 1997 as compared to the same  periods last year,  with  milling  costs
only higher in the first six months.  Increases in underground mining costs were
related to higher  maintenance costs, as well as the effects of the flooding and
fatality  in the first  quarter.  Higher  reagent and  maintenance  expenditures
associated with the harder and more carbonaceous  underground ore contributed to
increased mill costs.  Mine site G&A costs have risen primarily due to increased
support services as the Company expands its operations.  Higher depreciation and
depletion costs reflect the addition of assets  throughout  1996,  mostly at the
mill and in the Getchell Underground operation.

         On February 14, 1997,  the  Compensation,  Human  Resource and Director
Affairs Committee of the Company's Board of Directors granted stock appreciation
rights  ("SARS") under the Company's  1996 Long Term Equity  Incentive Plan with
respect to 75,983 shares at a weighted  average  option price of $8.32 per share
to certain  executives  and other  employees of the Company,  as detailed in the
Company's  Annual  Report on Form 10-K for the year  ended  December  31,  1996.
Compensation  with respect to SARS is accounted  for on a variable  basis and is
"marked to market" at the end of each fiscal  quarter  based on the market price
of the  Company's  Common  Stock.  Based  on the  $35.125  market  price  of the
Company's  Common Stock at June 30, 1997,  the Company  recognized  compensation
expense of $2.0 million, or $0.08 per share, in the first six months of 1997. Of
the $2.0  million,  $1.3 million was charged to G&A  expenses,  $0.5 million was
charged  to cost of sales and $0.2  million  was  charged  to  exploration.  The
Company's future  quarterly  results will reflect only  compensation  expense or
income with

                                     Page 10

<PAGE>
respect to these  SARS  based on the  change in the  market  price of the Common
Stock as compared to the market price at the end of the preceding quarter.

         Corporate  G&A costs  increased to $3.8 million in the first six months
of 1997 from $2.4 million in the same period of 1996 primarily due to the impact
of the  grant  of the  SARS.  Based on the  change  in the  market  price of the
Company's  Common Stock at June 30, 1997 from March 31, 1997, the second quarter
1997 G&A expenses  reflect  compensation  income of $0.3 million  related to the
SARS.

         Exploration  expenses  were  lower for the three  months and six months
ended June 30, 1997 as compared to the same periods of 1996 due to the Company's
current focus on the  delineation  and  expansion of known ore zones,  for which
drilling expenditures are capitalized.

         Interest  and other  income was lower in the 1997  second  quarter  and
first six  months  than in the same  periods  of 1996 due to lower cash and cash
equivalent balances throughout the periods in 1997.

         A $0.9  million tax benefit  was  recognized  on the pretax loss in the
first quarter of 1996 with no additional  benefits taken subsequent to the first
quarter of 1996.  Based upon tax  planning  strategies  and  estimates of future
operations, the Company anticipates being subject to the alternative minimum tax
in the future.  As such,  it is more  likely  than not that the Company  will be
unable to realize the benefit of federal net operating loss carryforwards.

Liquidity and Capital Resources
         During the first six months of 1997, the Company  consumed $4.4 million
of cash in operations and $24.1 million in capital  expenditures.  These capital
expenditures  included  $12.4 million on the Turquoise  Ridge mine  development,
$6.1 million on the Getchell  Underground  mine,  $1.8 million on the mill, $2.7
million  on  development  drilling  and  $1.1  million  on other  items.  On the
Turquoise Ridge mine construction,  sinking of the ventilation shaft had reached
a depth of 1,491 feet at June  30,1997,  with  expected  completion  for initial
development  ore  production no earlier than the end of 1997.  Production  shaft
sinking had reached a depth of 877 feet at June 30, 1997.  All surface  hoisting
and support facilities are completed.  Total expenditures on the Turquoise Ridge
mine construction through June 30, 1997 were $40 million,  with an estimated $49
million  more to be spent in 1997 and 1998 to  complete  the  project,  although
there can be no assurance that actual  expenditures  will not differ  materially
from this amount.

         In March 1997,  the Company  completed an equity  offering of 1,000,000
shares of Common  Stock which  resulted in net  proceeds to the Company of $47.7
million. As of June 30, 1997, cash and cash equivalents were $82.4 million.

         Approximately  $45 million is expected to be spent on capital  projects
in the  remaining  six months of 1997,  including  the  Turquoise  Ridge mine as
discussed, modifications to the mill,

                                     Page 11

<PAGE>
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  the  existing  cash  and  cash
equivalents.  Any  shortfalls  in funds  required  to meet  these  needs  may be
supplemented  by  additional  funds  raised  through  borrowings  or  securities
offerings.  In July 1997, the Company's S-3 shelf registration  statement for up
to $300 million in  securities  was declared  effective  by the  Securities  and
Exchange  Commission.  The  recoverability  of the  Turquoise  Ridge  assets and
completion  of the  underground  mine is dependent on the  Company's  ability to
raise sufficient funds to complete the  construction.  There can be no assurance
that funding will be available on favorable terms, if at all.

         The principal  balance of the Company's  promissory note with ChemFirst
was $26.1  million at June 30, 1997.  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 6-5/8% at June 30, 1997. Since
the inception of the promissory note,  interest has been capitalized to the note
at the end of each  interest  period.  An interest  period ended in May 1997, at
which time $0.8 million was capitalized to the note.

Risk Factors
         Readers should carefully  consider the risk factors set forth below, as
well as all  information  included in this document and the Annual Report of the
Company  on Form 10-K for the year ended  December  31,  1996 and the  documents
incorporated by reference therein.

Gold Price Volatility
         The Company's profitability is significantly affected by changes in the
price of gold.  Gold prices may  fluctuate  widely and 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
gold prices should decline below the Company's expected cash costs of production
and remain at such levels for any sustained period,  the Company could determine
that it is not economically feasible to continue commercial production.


                                     Page 12

<PAGE>
     The volatility of gold prices is illustrated in the following  table of the
annual high, low and average London P.M. Fix:
                                                       Price Per Ounce
                                             ----------------------------------
            Calendar Year                       High         Low       Average
------------------------------------------   ---------    --------    ---------
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 (through July 30)....................   $     367    $    317    $     344

         The London P.M. Fix on July 30, 1997, was $328 per ounce.

Continuing Losses
         The  Company  reported a net loss of $11.1  million  for the six months
ended June 30, 1997,  $14.0 million for the year ended  December 31, 1996,  $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 until higher grade ore from Turquoise Ridge or other sources is produced.
There can be no  assurance  that such higher  grade ores will be obtained by the
Company.

Funds Needed for Development of Turquoise Ridge
         If there are any shortfalls in funds required to meet the needs for the
development of Turquoise  Ridge,  they may be supplemented  by additional  funds
raised through  borrowings or securities  offerings.  The  recoverability of the
Turquoise Ridge assets and completion of the underground mine at Turquoise Ridge
is dependent on the Company's  ability to raise sufficient funds to complete the
construction.  There can be no  assurance  that  funding  will be  available  on
favorable terms, if at all.

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") and Mineral  Resource  Development,  Inc.
("MRDI").  The reserves  confirmed by MDA and 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 $400 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

                                     Page 13

<PAGE>
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
unless the utilization of forward sales contracts or other hedging techniques is
sufficient  to offset  the  effects  of a drop in the  market  price of the gold
expected to be mined from such  reserves.  If the Company's  realized  price per
ounce of gold, including hedging benefits,  were to decline  substantially below
the levels set for calculation of reserves for an extended  period,  there could
be material  delays in the  development  of new projects,  increased net losses,
reduced cash flow, reductions in reserves and asset impairments.

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 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 a production test are large,  particularly since the Company has
decided  to  proceed  with shaft  systems  capable  of being used in  full-scale
production  in order to save time and money  should trial mining be confirmed as
viable. Thus, to a large extent, expenditures which would usually

                                     Page 14

<PAGE>
be  supported  by a  feasibility  study  will  depend  on the data  in-hand  and
assumptions  made in the Company's mine plans with an attendant  higher level of
uncertainty. See "-Funds Needed for Development of Turquoise Ridge."

 Reserves.  There can be no assurance  that the  probable  reserves set forth in
reserve reports by MRDI and MDA for Turquoise Ridge and 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 0.6 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 mineable 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  cut-and-fill  stoping method used, could make achievement of the
assumed dilution impossible to achieve in practice.

 Production Shaft Completion.  The two-year assumed  construction period for the
Production  Shaft,  which was  started  in the  fourth  quarter  of 1996,  is an
aggressive  schedule.  Delay in  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 Costs. 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. Therefore, 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 for the study.
If the deposit is not drained and water remains in this  clay-rich  environment,
mining conditions could worsen, and ground support costs

                                     Page 15

<PAGE>
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.

 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,  additional  ground support may
be required.

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  mine or at any of the Company's  processing  facilities  were to be
reduced,  interrupted or curtailed,  the Company's  ability to generate revenues
and profits in the future would be materially adversely affected.

Exploration
         Mineral  exploration,  particularly for gold, is highly  speculative in
nature,  involves  many risks and  frequently  is  unsuccessful.  The Company is
seeking to expand its reserves only through  exploration  and development at the
Getchell  Property.  There can be no assurance  that 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
         The Company currently uses spot deferred  contracts to protect earnings
and cash  flows  from the  impact  of  short-term  drops in gold  prices.  These
transactions  have been  designated as hedges of the price of future  production
and are accounted for as such.

         Spot  deferred   contracts  are  agreements  between  a  seller  and  a
counterparty whereby the seller commits to deliver a set quantity of gold, on an
established  future date and at an agreed upon price.  The  established  forward
price is equal to the current spot gold price on the day the agreement is signed
plus  "contango."  Contango is equal to the  difference  between the  prevailing
market  interest rate for cash deposits less the gold lease rate, for comparable
periods.  The  contango  rate was from 3.7% to 3.9% per annum for  one-month  to
twelve-month periods at June 30, 1997.

         On the scheduled  future delivery date, the seller may deliver gold and
thereby  fulfill the contract or defer  delivery to a future  date.  If the spot
price on the delivery date is greater than the

                                     Page 16

<PAGE>
contract  price,  delivery on the  contract may be deferred to a new future date
and the gold is sold at the higher spot  price.  If the spot price is lower than
the contract price, the delivery may be made against the contract and the higher
contract price is realized.  In practice,  this  generally  allows the seller to
maximize the price  realized.  Each time a seller defers  delivery,  the forward
sales  price  is  increased  by the then  prevailing  contango  (assuming  it is
positive) for the next period out to the newly established future delivery date.
Generally,  the counterparty will allow the seller to continue to defer contract
deliveries  providing that there is sufficient  scheduled production from proven
and probable reserves to fulfill the commitment.

         At June 30, 1997, the Company's  outstanding  hedge  contracts were for
80,000 ounces at an average price of $386 per ounce. Of these contracts,  20,000
ounces are for  delivery in 1997 at an average  price of $387 and 60,000  ounces
are for  delivery  in 1998 at a price of $385.  Risk of loss from these  forward
sales agreements  arises from the possible  inability of a counterparty to honor
contracts and from changes in the Company's potential ability to deliver gold.

         The Company's  accounting  treatment for hedging is outlined in Notes 2
and 3 to Item 8 "Financial  Statements and  Supplementary  Data" as found in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996.

Other Precious Metal Contract Commitments
         The Company has entered into European call option  contracts.  European
call option contracts are agreements between a seller and a counterparty whereby
the  counterparty  has the right,  but not the obligation,  to buy gold from the
seller at a predetermined price on a predetermined date. The counterparty pays a
premium for this right.  The premiums are deferred  until the option  expires or
the related transaction occurs at which time the deferred amounts are recognized
in income.  Risk of loss on European call option  contracts exists if the market
price were to exceed the exercise price of the option on the date  designated in
the contract. At June 30, 1997, the Company had outstanding European call option
contracts  for 175,000  ounces of gold at a weighted  average  price of $367 per
ounce and 50,000 ounces of silver at a weighted average price of $5.5 per ounce.
All call option contracts expire prior to January 1998.

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 and its Chief Administrative Officer. 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 and Chief  Administrative  Officer  which provide for certain
payments upon termination or resignation  resulting from a change of control (as
defined in such agreements).


                                     Page 17

<PAGE>
         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.

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.

         On January 15, 1997, a mine site  accident  involving a Tamrock  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 vacated  subsequently.  The maximum  civil  penalties for which the
Company  could be assessed as the result of such actions is $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.  The result of that investigation is unknown, but could
result in additional criminal penalties for the Company and/or civil or criminal
penalties for agents, officers, or directors of the Company. While management of
the  Company  believes  that the  results of the  investigation  will not have a
materially  adverse  impact on the  financial  position,  operating  results  or
liquidity  of the Company,  no  assurance  can be given that the outcome of this
investigation will not have such effects.

         On May 26, 1997, a worker  employed by the  ventilation  shaft  sinking
contractor was killed in an accident at the bottom of the ventilation  shaft due
to a mechanical  failure of a safety  device.  As required by federal law,  MSHA
officials  investigated the cause of the accident.  Enforcement action was taken
against the  contractor,  but the Company  did not  receive any  citations  as a
result of that accident investigation.

 Current  Environmental  Laws and  Regulations.  The  Company  must  comply with
standards,  laws and  regulations  which may entail  greater or lessor 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,  regulations and
permits  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

                                     Page 18

<PAGE>
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 many other state and federal laws and regulations.

         The United States Environmental Protection Agency ("EPA") continues the
development of a solid waste regulatory  program  specific to mining  operations
under the Resource  Conservation  and Recovery  Act  ("RCRA").  EPA is currently
evaluating a Draft Hardrock Mining Framework  which, if ultimately  implemented,
could create a system of federal  regulation  of the entire mine site focused on
water quality and waste management. The requirements being considered by the EPA
are very similar to the existing  Nevada  regulations  concerning  environmental
controls at mine sites.  Many of the requirements  being considered by EPA could
be duplicative of existing Nevada  regulations.  The effect of compliance with a
new EPA  program  would  depend  on the  extent  to  which  the  substantive  or
procedural  requirements  of such  new  federal  regulations  would  exceed  the
existing requirements of the Nevada regulations.

         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
June 30, 1997, 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.  It is anticipated that similar  legislation
will  again  be  introduced  in  1997.  If  enacted,   such  legislation   could
substantially impair the ability of

                                     Page 19

<PAGE>
companies to economically develop mineral 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 difficult or 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 occur on
both  private  and  federal  lands.  Other  legislative   initiatives  regarding
environmental  laws  potentially  applicable  to  mining  include  proposals  to
substantially  alter  CERCLA,  the Clean  Water Act,  Safe  Drinking  Water Act,
Endangered  Species  Act and bills  which  introduce  additional  protection  of
wetlands.  Adverse  developments and operating  requirements in these acts could
impair  the  ability  of the  Company  as  well as  others  to  develop  mineral
resources.  Revisions  to current  versions  of these bills could occur prior to
passage.  Thus,  the  potential  impact  on  the  Company  of  such  legislative
initiatives is not clear at this time.

Environmental Matters and Safety
 Environmental  Liability.  Mining 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.  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.
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.

Pollution  Insurance.  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 to the
Company or to other companies within the industry.  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.

 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

                                     Page 20

<PAGE>
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.  For example,  the Company has applied for air permits required by
Title V of the 1990 Amendments to the Clean Air Act to maintain  compliance with
applicable  requirements for air emissions  sources of the types utilized by the
Company in its  operations.  It is possible  that future  changes in  applicable
laws, regulations and permits could have a significant impact on some portion of
the Company's business, causing those activities to be economically re-evaluated
at that time.

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 the  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 surface
disturbances or additional mineral  processing  facilities and the potential for
recognition in the future of additional  activities needed for restoration.  The
technologies  for  restoration  are evolving  during the life of the operations.
Periodic  review of the  activities  and costs for  restoration,  and consequent
adjustments  to  the  ongoing  accrual,  are  conducted.  The  Company  conducts
concurrent restoration of mining disturbances and anticipates an ongoing program
of  restoration  over the productive  life of the  operations.  Activities  have
included regrading, seeding and planting, monitoring, and restoration research.

         In  accordance  with the  State of  Nevada  Division  of  Environmental
Protection ("NDEP"),  the Company has posted a bond of $4.5 million to cover the
costs for reclamation of the Getchell  Property.  As of June 30, 1997, the total
estimated  restoration  costs for the Getchell  Property were $5.5  million,  of
which the  Company  had  accrued  $2.7  million.  The amount of total  estimated
restoration  costs  has  increased  over time due to more  stringent  regulation
requirements and expanded mining  activities and additional  increases may occur
in the future for the same reasons. The Company has begun reclamation of surface
mining disturbances and anticipates an

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<PAGE>
ongoing  program of  reclamation  over the next several years.  Activities  have
included  regrading,   revegetation  and  soil   stabilization.   This  includes
restoration  activities for which bonding must be provided and other restoration
costs not included in bonding calculations.

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  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 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.  See "Potential Legislation" under
"Government Regulation" above.


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

         At the Annual  Meeting of  Stockholders  on May 2,  1997,  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
R. Michael Summerford          16,771,158         3,813,639
J. Kelley Williams             16,769,994         3,814,803
Al Winters                     16,784,217         3,800,580
Continuing directors are:
Walter A. Drexel
Robert C. Horton
Pete Ingersoll
John Racich
Charles E. Stott, Jr.
G. W. Thompson
Robert L. Zerga


Proposal No. 2 - Increase in Authorized Common Share Capital
        For              Against            Abstain               Non Vote
    19,272,076          1,229,446            83,274              5,187,075

Proposal No. 3 - Ratification of Appointment of Independent Auditors
        For              Against            Abstain               Non Vote
    20,550,786           11,159              22,850               5,187,075

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibits
         The  following  exhibits  are filed  herewith  and are  referred to and
incorporated herein by reference to such filings.


27.                  -    Financial Data Schedule.

Reports on Form 8-K
         During the three months ended June 30, 1997 there were no reports filed
on Form 8-K.

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<PAGE>
                                   SIGNATURES

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

                            Getchell Gold Corporation

July 31, 1997   By:  /s/ G. W. Thompson
  Date          G. W. Thompson, President, Chief Executive Officer and Director


July 31, 1997   By: /s/ Donald S. Robson
  Date          Donald S. Robson, Vice President and Chief Financial Officer
                                         (Principal Financial Officer)



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