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 September 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                   30,792,454 on October 30, 1998

<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      Nine Months Ended
                                                         September 30,           September 30,
                                                       -------------------    -------------------
                                                         1998        1997        1998     1997
                                                       -------     -------    -------    --------
<S>                                                    <C>         <C>        <C>        <C>
Net sales                                              $14,631     $17,587    $37,242    $ 51,124
Cost of sales                                           16,106      21,661     45,281      63,198
                                                       -------     -------    -------    --------
     Gross margin                                       (1,475)     (4,074)    (8,039)    (12,074)
General and administrative expenses                      1,253       1,292      2,889       5,055
Exploration expenses                                       296         397        583       1,393
                                                       -------     -------    -------    --------
     Loss from operations                               (3,024)     (5,763)   (11,511)    (18,522)
Interest expense, net of interest capitalized             (159)       (204)      (522)       (646)
Interest and other income                                  634       1,065      2,240       3,203
                                                       -------     -------    -------    --------
     Net loss                                          $(2,549)    $(4,902)   $(9,793)   $(15,965)
                                                       =======     =======    =======    ========

Basic loss per common share                            $ (0.08)    $ (0.18)   $ (0.33)   $  (0.60)
                                                       =======     =======    =======    ========

Weighted average number of shares outstanding           30,789      26,779     29,837      26,499
                                                       =======     =======    =======    ========
</TABLE>

        The accompanying notes are an integral part of these statements.


                                     Page 1
<PAGE>
                    GETCHELL GOLD CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                        (In thousands, except share data)
<TABLE>
<CAPTION>
                                                                              September 30,  December 31,
                                                                                  1998           1997
                                                                                --------     ------------
                                       ASSETS
<S>                                                                             <C>          <C>
Current assets:
     Cash and cash equivalents                                                  $ 37,779       $ 34,247
     Accounts receivable:
          Trade                                                                    3,774          1,790
          Employee                                                                   213            182
          Other                                                                      206            261
                                                                                --------       --------
               Total accounts receivable                                           4,193          2,233
                                                                                --------       --------
     Inventories:
          Ore and ore in process                                                   2,300          1,873
          Materials and supplies                                                  11,248         10,873
                                                                                --------       --------
               Total inventories                                                  13,548         12,746
                                                                                --------       --------
     Prepaid expenses                                                              1,744            808
                                                                                --------       --------
               Total current assets                                               57,264         50,034
Property, plant and equipment, net                                               245,006        188,242
Other                                                                              3,525            211
                                                                                --------       --------
               Total assets                                                     $305,795       $238,487
                                                                                ========       ========
                        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                                           $  9,541       $ 13,506
     Accrued expenses                                                              2,780          2,258
     Current portion of capital lease obligations                                  3,464          2,248
     Stock appreciation rights                                                       942          1,238
     Other                                                                           821            198
                                                                                --------       --------
               Total current liabilities                                          17,548         19,448
Long-term debt, principally ChemFirst Inc.                                        26,998         27,057
Capital lease obligations, less current portion                                   11,316          6,685
Deferred income taxes                                                              1,809          1,809
Reclamation liabilities                                                            2,718          2,701
Deferred revenue                                                                   3,400            -
Other liabilities                                                                  2,111            892
                                                                                --------       --------
               Total liabilities                                                  65,900         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 30,792,454 at Sept. 30, 1998 and 26,784,351 at Dec. 31, 1997         3              3
    Contributed and paid-in capital                                              290,773        220,979
    Accumulated deficit                                                          (50,881)       (41,087)
                                                                                --------       --------
               Total stockholders' equity                                        239,895        179,895
                                                                                --------       --------
               Total liabilities and stockholders' equity                       $305,795       $238,487
                                                                                ========       ========
</TABLE>
        The accompanying notes are an integral part of these statements.

                                     Page 2
<PAGE>
                    GETCHELL GOLD CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                 Nine Months Ended
                                                                   September 30,
                                                               ---------------------
Cash flows from operating activities:                             1998        1997
                                                               --------    ---------
<S>                                                            <C>         <C>
     Net loss                                                  $ (9,793)   $(15,965)
     Adjustments to reconcile net loss to net cash provided
       by (used  in) operating activities:
          Depreciation, depletion and amortization                8,632       7,820
          Accrued interest converted to loan principal              -           772
          Unrealized hedging and call option gains/losses, net      288         362
          Other                                                       4         -
          Net change in operating assets and liabilities:
               Accounts receivable                               (1,960)       (375)
               Inventories                                         (801)     (1,912)
               Prepaid expenses                                    (936)        305
               Accounts payable                                    (430)       (885)
               Accrued expenses                                     522         280
               Stock appreciation rights liability                 (296)      2,492
               Other liabilities                                  1,571         592
                                                                -------    --------
                    Cash used in operating activities            (3,199)     (6,514)
                                                                -------    --------

Cash flows from investing activities:
     Additions to property, plant and equipment                 (61,102)    (41,070)
     Other                                                          123         -
                                                                -------    --------
                    Cash used in investing activities           (60,979)    (41,070)
                                                               --------    --------

Cash flows from financing activities:
     Net proceeds from issuance of common stock                  69,793      47,928
     Principal payments under capital lease obligation           (2,109)     (1,410)
     Other                                                           26        (202)
                                                               --------    --------
                    Cash provided by financing activities        67,710      46,316
                                                               --------    --------

Net increase (decrease) in cash and cash equivalents              3,532      (1,268)
Cash and cash equivalents at beginning of period                 34,247      64,130
                                                               --------    --------
Cash and cash equivalents at end of period                     $ 37,779    $ 62,862
                                                               ========    ========
</TABLE>
        The accompanying notes are an integral part of these statements.

                                    Page 3
<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)  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 $69.7  million  after
offering  costs and expenses of $3.3 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 September 30, 1998, the Company's  outstanding  spot deferred  contracts
were for 340,000 ounces at a projected average price of $313 per ounce. Of these
contracts,  30,000  ounces were for  delivery  in 1998 at a  projected  weighted
average price of $337 per ounce,  155,000  ounces were for delivery in 1999 at a
projected  weighted  average  price of $308 per ounce,  120,000  ounces were for
delivery in 2000 at a  projected  weighted  average  price of $313 per ounce and
35,000 ounces were for delivery in 2001 at a projected weighted average price of
$315 per ounce.  Based on the market  price of gold at September  30, 1998,  the
unrealized gains on the spot deferred contracts were $6.0 million.


                                     Page 4
<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  ounces of gold 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  ounce  of  gold,   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 has  been  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 of $3.4  million  was  recorded  as a long-term  receivable  and  deferred
revenue and is adjusted for changes in its market  value.  The  deferred  option
premium will be 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 also includes premiums received for call options sold. The
deferred  amounts  are  recognized  in  income  when the  option  expires  or is
exercised.  At September  30, 1998,  the Company had  outstanding  European call
option  contracts for 190,000  ounces of gold at a price of $333 per ounce which
expire in 1998.  Risk of loss on European  call option  contracts  exists if the
Company is unable to deliver the  required  quantity of gold or the market price
were to exceed the exercise  price of the option on the date  designated  in the
contract.


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

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

                                                         At              At
                                                     September 30,  December 31,
                                                        1998            1997
                                                      --------        --------
Land and land improvements                            $ 14,214        $ 14,214
Buildings and equipment                                132,382         124,249
Mine development                                        62,708          54,929
Construction-in-progress                               138,316          88,742
                                                      --------        --------
         Total property, plant and equipment           347,620         282,134
Accumulated depreciation, depletion and amortization  (102,614)        (93,892)
                                                      --------        --------
         Net property, plant and equipment            $245,006        $188,242
                                                      ========        ========

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


                                                          At            At
                                                     September 30,  December 31,
                      Project                            1998          1997
                                                      ---------       -------
Mine Development:
Getchell Underground mine..........................     $49,883       $45,043
Turquoise Ridge mine...............................       6,560         4,079
Other projects.....................................       6,265         5,807
                                                        -------       -------
                                                        $62,708       $54,929
                                                        =======       =======

Construction in Progress:
Getchell Underground mine..........................    $  1,192       $ 1,486
Turquoise Ridge mine...............................     123,362        72,075
Mill improvements..................................      13,723        15,015
Other projects.....................................          39           166
                                                       --------       -------
                                                       $138,316       $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 $3.2 million and $2.8
million for the three months ended  September  30, 1998 and 1997,  respectively,
and $8.6 million and $7.8 million for the nine months ended  September  30, 1998
and 1997, respectively.


                                     Page 6
<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  September  30,  1998 and 1997,  respectively,  and $1.7  million and $1.2
million for the nine months ended September 30, 1998 and 1997, respectively.

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

                                                        Nine Months Ended
                                                          Septeber 30,
                                                   ---------------------------
                                                      1998            1997
                                                   -----------     -----------
Interest, net of amounts capitalized               $     (834)     $     (588)
Income taxes                                       $         -     $         -

     Capital  lease  obligations  of  $8.0  million  were  incurred  to  acquire
equipment during the nine months ended September 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  correspondence  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

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

Company is 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 which 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 $0.3  million and $0.2 million for the three months ended
September 30, 1998 and 1997, respectively, and $0.7 million and $0.8 million for
the nine months ended September 30, 1998 and 1997, respectively.

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


                                     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, business prospects and
other  operations 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  September  30, 1998 were a net loss of $2.5
million, or $0.08 per share,  compared with a net loss of $4.9 million, or $0.18
per share, for the quarter ended September 30, 1997. Results for the nine months
ended  September  30,  1998 were a loss of $9.8  million,  or $0.33  per  share,
compared with a loss of $16.0 million, or $0.60 per share, in the same period of
1997.  Lower  operating  expenses  more than offset lower net sales and interest
income for the third  quarter  and first nine  months of 1998 as compared to the
same periods of 1997,  while the first nine months of 1998 also  benefited  from
lower general and administrative ("G&A") and exploration expenses.

     Net  sales of $14.6  million  in the third  quarter  of 1998 were down from
$17.6 million in the third quarter of 1997 and net sales of $37.2 million in the
first  nine  months of 1998 were down from $51.1  million in the same  period of
1997. Lower net sales resulted from lower gold prices and fewer ounces sold.

<TABLE>
<CAPTION>
                                                   Quarter Ended              Nine Months Ended
                                                   September 30,                September 30,
                                             --------------------------   --------------------------
                                                1998           1997           1998          1997
                                             -----------    -----------   ------------   -----------
<S>                                            <C>            <C>           <C>            <C>    
Ounces of gold sold                            44,982*        49,280        111,195*       135,271
Average realized price per ounce                $325           $357           $335          $378
Average market price per ounce                  $289           $325           $294          $337
</TABLE>

     * Does not include 3,931 and 9,310 ounces of gold sold from the development
       of Turquoise Ridge for the quarter and nine months ended September 30,
       1998, respectively, for which the revenues, net of production expenses,
       were offset against the capital costs of the project.

                                     Page 9
<PAGE>
<TABLE>
<CAPTION>
                                                                           Quarter          Nine Months
                                                                            Ended              Ended
Change in net sales (in millions) in 1998 versus 1997 due to:           September 30,      September 30,
                                                                       ----------------   ----------------
<S>                                                                      <C>                  <C>      
Change in  price per ounce of gold sold                                  $    (1.6)           $   (5.8)
Change in ounces of gold sold                                                 (1.4)               (8.1)
                                                                       ----------------   ----------------
     Total change in net sales                                           $    (3.0)           $  (13.9)
                                                                       ================   ================
</TABLE>

     The  Company  has hedged a portion of its  production,  which  resulted  in
higher  realized  prices than the average market prices.  At September 30, 1998,
the Company had  outstanding  spot deferred  contracts  for 340,000  ounces at a
projected  average price of $313 per ounce.  Of these  contracts,  30,000 ounces
were for  delivery in 1998 at a  projected  weighted  average  price of $337 per
ounce,  155,000 ounces were for delivery in 1999 at a projected weighted average
price of $308 per ounce, 120,000 ounces were for delivery in 2000 at a projected
weighted  average price of $313 per ounce and 35,000 ounces were for delivery in
2001 at a projected weighted average price of $315 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 has been 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 of $3.4 million was recorded as a long-term  receivable  and
deferred  revenue and is adjusted for changes in its market value.  The deferred
option  premium will be  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.

         Following are the operating results from the Getchell Underground mine.

<TABLE>
<CAPTION>
                                                        Quarter Ended             Nine Months Ended
                                                        September 30,               September 30,
                                                   ------------------------   --------------------------
                                                      1998          1997         1998           1997
                                                   -----------   ----------   ----------    ------------
<S>                                                  <C>          <C>          <C>            <C>    
Ore mined (dry tons)                                 122,268      122,270      305,732        375,119
Ore mined per operating day (dry tons)                1,359        1,359        1,141          1,400
Average grade of ore mined (ounces per ton)           0.437        0.346        0.405          0.312
Contained ounces (before recoveries)                 53,412        42,355      123,829        116,904
Underground mining costs per ton                     $44.72        $54.74       $47.62         $52.41
</TABLE>
                                    Page 10
<PAGE>
     Cost  reductions per ton at the Getchell  Underground  mine during both the
third quarter and first nine months of 1998 compared to the same periods of 1997
were the result of  improved  mining  practices  through  the use of bulk mining
methods and lower maintenance  expenses.  Underground  development of the second
Northwest Ore Zone continued  during the third quarter,  which is being accessed
from two working  levels.  The ground is amenable to long hole stoping,  and the
fifth long hole stope is currently being excavated.

     Operating results at the mill,  including the processing of development ore
from Turquoise Ridge during the third quarter and first nine months of 1998, are
as follows:

<TABLE>
<CAPTION>

                                                  Quarter Ended            Nine Months Ended
                                                  September 30,              September 30,
                                             ------------------------    ----------------------
                                                1998          1997          1998        1997
                                             ----------    ----------    ----------   ---------
<S>                                           <C>           <C>           <C>          <C>    
Ore milled (dry tons)                         170,515       281,495       394,489      835,177
Average grade of ore milled (ounces per ton)   0.323         0.195         0.340        0.181
Average gold recovery                          91.2%         87.8%         90.9%        87.7%
Milling costs per ton                          $40.75        $29.74        $45.11      $30.68
</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 made to bring the second  autoclave  on line,  mixing the higher  grade
underground  ores with 44,845  tons in the third  quarter and 66,806 tons in the
first nine  months of 1998 of low grade  stockpile  ore.  This  resulted  in the
blended  milled  grades and  recoveries  listed above for the 1998  periods.  As
production of ore from underground  sources increases,  the Company  anticipates
bringing the third autoclave into service as early as the end of 1998.

     Cost of sales was $16.1  million in the third  quarter  of 1998,  down from
$21.7 million in the third  quarter of 1997.  For the first nine months of 1998,
cost of sales was $45.3  million  compared with $63.2 million in the same period
of 1997. Cash costs per ounce (including royalties) in the third quarter of 1998
improved  to $285 from $383 in the third  quarter  of 1997 and in the first nine
months of 1998  improved  to $329 from  $408 in the first  nine  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 cost of sales and
the total  underground  mining and milling costs were primarily due to the lower
volume of ore  processed  with the  underground  mining  costs  also  reflecting
improved mining practices and lower maintenance expenses. Mine site G&A costs in
the 1998  periods  reflected  the  capitalization  of the portion of those costs
associated with the development of the Turquoise Ridge mine.

                                     Page 11
<PAGE>
     The decreases in corporate and mine site G&A and  exploration  costs in the
first  nine  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 third quarter and the first nine 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.  Capitalized  drilling  expenditures  were  $1.2
million and $2.9  million  for the third  quarter and first nine months of 1998,
respectively.

     Net  interest  expense in the 1998 third  quarter and first nine months was
lower  than  the  same  periods  of  1997  due to  higher  capitalized  interest
associated with the Turquoise  Ridge  construction  project.  Interest and other
income was lower in the third  quarter and first nine months of 1998 compared to
the  same  periods  of 1997  due to lower  cash  and  cash  equivalent  balances
throughout  the third  quarter  and first nine months of 1998 as compared to the
same periods of 1997.

Liquidity and Capital Resources
     During the first nine months of 1998, the Company used $3.2 million of cash
in  operations  and  $61.1  million  for  capital   expenditures.   The  capital
expenditures  included $44.6 million on Turquoise Ridge mine  development,  $5.2
million on the Getchell Underground mine, $6.3 million on the mill, $3.0 million
on development  drilling and $2.0 million on other items.  Total expenditures on
the Turquoise  Ridge mine  construction  through  September 30, 1998 were $100.7
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
$69.7 million after offering costs and expenses of $3.3 million. As of September
30, 1998, cash and cash equivalents were $37.8 million.

     The principal  balance of the Company's  promissory note with ChemFirst was
$26.9 million at September 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 6-11/16% at September 30, 1998.
Since the inception of the promissory note, interest has been capitalized to the
note at the end of each interest period.


                                     Page 12
<PAGE>
     Approximately  $15 million is  expected to be spent on capital  projects in
the last three months of 1998, including the Turquoise Ridge mine, modifications
to the mill,  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 had cash flow from  operating  activities  of $1.7  million in the third
quarter of 1998.  The  Company  believes  that cash flows  from  operations  and
current  cash  balances  will be  sufficient  to  fund  operations  and  capital
investments through 1999. 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.

Statement of Financial Accounting Standards No. 133
     In June 1998, the Financial  Accounting 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.

Statement of Position 98-5
     In April 1998,  the American  Institute of  Certified  Public  Accountant's
issued  Statement  of  Position  98-5,  "Reporting  on  the  Costs  of  Start-Up
Activities  ("SOP 98-5") which provides  guidance on the financial  reporting of
start-up costs and organization  costs. It requires costs of start-up activities
and organization costs to be expensed as incurred. SOP 98-5 is effective for all
fiscal years beginning after December 15, 1998 with initial application reported
as the cumulative  effect of a change in accounting  principle.  The Company has
not assessed the impact SOP 98-5 may have in the future.

The Year 2000 Issue
The Problem
     The Year 2000 Issue is the result of the  inability of  hardware,  software
and control  systems to  correctly  identify  two-digit  references  to specific
years,  beginning  with the year 2000.  This could result in system  failures or
miscalculations  causing  disruptions  of  operations  of the  Company  and  its
suppliers.

The Company's State of Readiness
     The Company has  instituted a Year 2000 Project  ("Project").  As a part of
the Project,  the Company has  completed an initial  evaluation  of its computer
systems  and  significant  software  programs.   This  evaluation  included  the
Company's network hardware and operating system,  software  operating the hoists
at Turquoise  Ridge,  the control system at the mill and accounting and business
process software.  It is currently  believed that the Company's network hardware
and operating system, software operating the hoists at Turquoise Ridge and

                                     Page 13
<PAGE>
accounting  and  business  process  software  are all Year 2000  compliant.  The
control  system at the mill,  and other less  critical  hardware  and  software,
require further evaluation,  which is expected to be completed by the end of the
first  quarter of 1999.  The  Company's  less  critical  software  programs  are
predominantly  "off-the-shelf"  products with Year 2000 versions now  available.
Therefore,  if the software  programs are not Year 2000  compliant,  the Company
will replace these software  programs by utilizing  vendor provided  upgrades by
the end of the  third  quarter  of 1999.  Based on work  performed  to date,  no
material  issues  have been  identified,  however,  subsequent  work may lead to
discovery of material issues.

     As part of the Company's  Year 2000  Project,  the Company plans to contact
its  significant  third-party  suppliers,  such as its refiners and suppliers of
power,  oxygen and  chemicals,  to determine  the extent to which the Company is
vulnerable to its refiner's or supplier's  failure to remediate  their Year 2000
Issue.  The contacts are planned to be completed by the end of the first quarter
1999.  However,  there can be no  assurance  that  third  party  suppliers  will
adequately  address  their  Year 2000 Issue or that  failure of the third  party
suppliers  to address  their Year 2000 Issue  would not have a material  adverse
effect on the Company or its operations.

The Costs to Address the Company's Year 2000 Issues
     Expenditures  through September 30, 1998 have been minimal.  Based upon the
findings at  September  30,  1998,  the  estimated  costs of becoming  Year 2000
compliant are less than $0.1 million.

The Risks Associated with the Company's Year 2000 Issues
     The Company's failure to resolve Year 2000 Issues on or before December 31,
1999 could result in system  failures or  miscalculation  causing  disruption in
operations  and  normal  business  activities.  Additionally,  failure to timely
remediate  Year 2000 Issues by third  parties upon whom the  Company's  business
relies  could  result  in  disruptions  in the  Company's  supply  of parts  and
materials or result in other problems related to the Company's daily operations.

                                     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 August 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  macroeconomic  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:

                                                    High     Low      Average
Calendar Year                                           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 October 30)......................     $296     $273         $294
                                    Page 15
<PAGE>
         The London P.M. Fix on October 30, 1998, was $292 per ounce.

Continuing Losses
         The Company  reported  net losses of $2.5  million and $9.8 million for
the quarter and nine months  ended  September  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
September  30, 1998.  As of  September  30, 1998,  the  Company's  cash and cash
equivalents were $37.8 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  generally  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 settlement  agreement has been
submitted to the Administrative  Law Judge for approval.  One order was vacated,
and a penalty of $85,000 for the remaining alleged violations has been proposed.
The Company  expects that the settlement will be approved in the near future and
the penalty will be required to be paid before year end.  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.  Regulations  promulgated under RCRA on May 29,1998,  the
Phase IV Land Disposal  Restrictions,  will not materially  impact the Company's
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.

         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
October 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
resources on federal lands. The extent of the changes, if any, which may be

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<PAGE>
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 43 C.F.R. Section 3809 which regulates
mining  activities on public lands managed by the BLM. BLM  anticipates  that an
environmental  impact  statement  evaluating  the  potential  effects  of  these
regulatory  revisions  will be issued in 1999.  The proposed  revisions  address
reclamation  and  bonding  requirements  for the  industry.  The impact of these
potential revisions, when finalized, is not known 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  rock  piles  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  property to which such  substances  may
have migrated. Such laws may impose liability

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<PAGE>
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 September 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 6.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibits
10(a)- Form of Termination Agreement between the Company and Sarah Jones Farmar.
27.  - Financial Data Schedule.

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

                                     Page 26
<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

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



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






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