CANYON RESOURCES CORP - 10-Q Quarterly Report

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

x Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the period ended September 30, 2003

o Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the transition period from to

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 o

Indicate by check mark whether registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.) Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 25,413,489 shares of the Company’s Common Stock were outstanding as of November 1, 2003.


PART I FINANCIAL INFORMATION
	Item 1. Financial Statements	Page 1
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	Page 18
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	Page 23
	Item 4. Controls and Procedures	Page 24
PART II OTHER INFORMATION
	Item 1. Legal Proceedings	Page 25
	Item 2. Changes in Securities	Page 25
	Item 3. Defaults Upon Senior Securities	Page 25
	Item 4. Submission of Matters to a Vote of Security Holders	Page 25
	Item 5. Other Information	Page 25
	Item 6. Exhibits and Reports on Form 8-K	Page 25

The following unaudited consolidated financial statements have been prepared by Canyon Resources Corporation (“the Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). 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 SEC rules and regulations.

These consolidated financial statements should be read in conjunction with the financial statements and accompanying notes included in the Company’s Form 10-K for the year ended December 31, 2002.

CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)


					September 30,			December 31,
					2003			2002

ASSETS
Cash and cash equivalents					$	5,821,300		$	430,800
Restricted cash						302,800			375,100
Accounts receivable						34,100			6,800
Metal inventories						6,407,600			8,787,700
Materials and supplies						135,000			187,900
Prepaid and other assets						572,900			802,400

			Total current assets			13,273,700			10,590,700

Property and equipment, at cost
			Producing properties			48,576,400			43,347,000
			Other			932,300			916,300

						49,508,700			44,263,300
			Accumulated depreciation and depletion			(43,398,600	)		(38,905,400	)

				Net property and equipment		6,110,100			5,357,900

Undeveloped mineral claims and leases, net						16,699,400			18,703,300
Restricted cash						2,812,800			2,294,700
Other assets						257,100			79,300

				Total Assets	$	39,153,100		$	37,025,900

LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable					$	2,592,100		$	3,908,700
Notes payable – current						891,700			1,355,600
Capital leases – current						15,900			167,400
Stock issuance obligation						245,000			–
Unrealized loss on derivative instruments						53,900			487,600
Other current liabilities						500,900			688,600

		Total current liabilities				4,299,500			6,607,900
Notes payable – long term						2,699,000			–
Capital leases – long term						18,800			28,400
Asset retirement obligations						4,113,700			3,894,200

		Total Liabilities				11,131,000			10,530,500

Commitments and contingencies (Note 10)
Common stock ($.01 par value) 50,000,000 shares authorized; issued and outstanding: 25,277,400 at September 30, 2003, and 18,853,400 at December 31, 2002						252,800			188,500
Capital in excess of par value						111,680,400			102,957,500
Deficit						(83,911,100	)		(76,650,600	)

	Total Stockholders’ Equity					28,022,100			26,495,400

		Total Liabilities and Stockholders’ Equity			$	39,153,100		$	37,025,900

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

CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)


		Three months ended September 30,						Nine months ended September 30,

		2003			2002			2003			2002

REVENUE					(Restated)						(Restated)
Sales		$	3,208,700		$	4,903,600		$	10,458,400		$	11,783,900

	EXPENSES
Cost of sales			3,449,400			4,459,100			11,251,100			11,651,700
Depreciation, depletion, & amortization			1,345,500			1,860,800			4,975,800			4,850,500
Selling, general & administrative			334,100			277,100			1,179,300			1,017,100
Exploration and development costs			252,500			188,600			642,700			480,300
Accretion expense			46,500			–			139,600			–
(Gain) loss on asset disposals			(9,500	)		(1,328,300	)		(85,200	)		(2,729,800	)

			5,418,500			5,457,300			18,103,300			15,269,800

	OTHER INCOME (EXPENSE)
Interest income			11,600			11,300			27,300			41,100
Interest expense			(66,500	)		(52,900	)		(214,900	)		(231,300	)
Unrealized gain (loss) on derivative instruments			(185,400	)		452,500			433,700			(599,700	)
Other			–			500			150,000			19,600

			(240,300	)		411,400			396,100			(770,300	)

Loss before cumulative effect of change in accounting principle			(2,450,100	)		(142,300	)		(7,248,800	)		(4,256,200	)
Cumulative effect of change in accounting principle			–			–			(11,700	)		–

Net loss			($2,450,100	)		($142,300	)		($7,260,500	)		($4,256,200	)

Basic and diluted loss per share:
Loss before cumulative effect of change in accounting principle			($0.11	)		($0.01	)		($0.34	)		($0.23	)
Cumulative effect of change in accounting principle			–			–			–			–

Basic and diluted net loss per share			($0.11	)		($0.01	)		($0.34	)		($0.23	)

Weighted average shares outstanding			23,107,200			19,766,100			21,480,400			18,420,200

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

CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)


			Nine months ended September 30,

			2003			2002

						(Restated)
Cash flows from operating activities:
	Net loss			($7,260,500	)		($4,256,200	)

	Adjustments to reconcile net loss to net cash used in operating activities:
		Depreciation, depletion and amortization		4,975,800			4,850,500
		Amortization of financing costs		12,200			44,200
		Cumulative effect of change in accounting principle		11,700			–
		Gain on asset dispositions		(85,200	)		(2,729,800	)
		Unrealized (gain) loss on derivative instruments		(433,700	)		599,700
		Reclassification adjustment of other comprehensive income		–			(963,800	)
		Other		77,900			66,200
	Changes in operating assets and liabilities:
		Increase in accounts receivable		(27,300	)		(1,300	)
		(Increase) decrease in inventories		2,179,300			(557,100	)
		Increase in prepaid and other assets		(104,600	)		(365,900	)
		Increase in accounts payable and accrued liabilities		475,900			95,100
		Increase (decrease) in other liabilities		(112,600	)		8,400
		(Increase) decrease in restricted cash		(386,200	)		98,100

		Total adjustments		6,583,200			1,144,300

		Net cash used in operating activities		(677,300	)		(3,111,900	)

Cash flows from investing activities:
	Purchases and development of property and equipment			(1,567,200	)		(1,032,000	)
	Proceeds from asset sales			229,300			4,261,900
	Earnest money applied			(27,600	)		–
	Increase in restricted cash			(59,600	)		(31,800	)

		Net cash provided by (used in) investing activities		(1,425,100	)		3,198,100

Cash flows from financing activities:
	Issuance of stock			6,156,700			2,171,500
	Proceeds from stock to be issued			245,000			–
	Proceeds from sale of debentures			3,299,000			–
	Payments on debt			(2,046,700	)		(2,061,700	)
	Payments on capital lease obligations			(161,100	)		(819,600	)

		Net cash provided by (used in) financing activities		7,492,900			(709,800	)

Net increase (decrease) in cash and cash equivalents				5,390,500			(623,600	)
Cash and cash equivalents, beginning of year				430,800			1,618,100

Cash and cash equivalents, end of period			$	5,821,300		$	994,500

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

CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS, continued
(Unaudited)

The Company paid $202,700 of interest during the first nine months of 2003, and $154,100 during the corresponding period of 2002.

The Company paid no income taxes during the first nine months of 2003 nor the corresponding period of 2002.

In connection with proceeds of $245,000 received from a September 2003 private placement, the Company, subsequent to September 30, 2003, issued 136,100 shares of common stock.

The Company financed an equipment lease buy-out in the amount of $1,582,800 during the first nine months of 2003.

The Company issued 2,099,600 shares of common stock with a fair market value of $1,952,600 to a creditor as payment for services during the first nine months of 2003. During the first nine months of 2002, the Company issued 1,881,000 shares of common stock with a fair market value of $2,679,200 to certain creditors as payment for goods and services.

The Company issued 83,700 shares of common stock with a fair market value of $77,900 to an employee as compensation for services during the first nine months of 2003. During the first nine months of 2002, the Company issued 66,600 shares of common stock with a fair market value of $61,200 to an employee as compensation for services.

The Company issued 434,800 shares of common stock in connection with the conversion of $600,000 debenture principal during the first nine months of 2003.

The Company issued 2,500 shares of common stock with a fair market value of $5,000 as consideration for a mining lease during the first nine months of 2002.

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

CANYON RESOURCES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)


					Common Stock			Capital in					Common
			Number of			At Par		Excess of Par		Retained			Shareholders'
			Shares			Value		Value		Deficit			Equity

Balances, December 31, 2002				18,853,400		$	188,500	$	102,957,500		($76,650,600	)	$	26,495,400
Stock issued for cash				2,171,300			21,700		3,886,600		–			3,908,300
Stock issued in payment of goods and services				2,099,600			21,000		1,931,600		–			1,952,600
Other stock issued				83,700			900		77,000		–			77,900
Exercise of stock options				31,800			300		25,700		–			26,000
Exercise of warrants				1,602,800			16,000		2,206,400					2,222,400
Conversion of debentures				434,800			4,400		595,600		–			600,000
Comprehensive loss
	Net loss										(7,260,500	)		(7,260,500	)
		Other comprehensive loss									–			–

	Comprehensive loss										(7,260,500	)		(7,260,500	)

Balances, September 30, 2003				25,277,400		$	252,800	$	111,680,400		($83,911,100	)	$	28,022,100

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

CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

As further discussed in Note 15, the Company has restated its financial statements for the three and nine months ended September 30, 2002. Overall, the adjustments decreased the Company’s net income in the third quarter of 2002 by $358,500, or $0.02 per share. For the nine months ended September 30, 2002, the adjustments increased the Company’s net loss by $1,395,700, or $0.07 per share. The adjustments were i) to expense previously capitalized costs for the McDonald Gold Project; ii) to commence amortizing the carrying values of the McDonald and Seven-Up Pete mineral property interests upon adoption on January 1, 2002 of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets; and iii) to include depreciation, depletion and amortization as a cost in inventories at the Company’s Briggs Mine. See also Note 19 to the Company’s Consolidated Financial Statements included in its 2002 Form 10-K filing for further discussion of the restatements.

During interim periods, Canyon Resources (the Company) follows the accounting policies set forth in its Annual Report to Stockholders and its Report on Form 10-K filed with the Securities and Exchange Commission. Users of financial information produced for interim periods are encouraged to refer to the footnotes contained in the Annual Report to Stockholders when reviewing interim financial results.

In the opinion of management, the accompanying interim financial statements contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial position, the results of operations, and the cash flows of Canyon Resources and its consolidated subsidiaries for interim periods. These interim results are not necessarily indicative of the results of operations or cash flows for the full year ending December 31, 2003.

See Note 13 for pro forma disclosures in accordance with the provisions of SFAS No. 123, Accounting for Stock Based Compensation.

Certain amounts included in or affecting the Company’s financial statements and related disclosures must be estimated, requiring that certain assumptions be made with respect to values or conditions which cannot be made with certainty at the time the financial statements are prepared. Therefore, the reported amounts of the Company’s assets and liabilities, revenues and expenses, and associated disclosures with respect to contingent assets and obligations are necessarily affected by these estimates. The Company evaluates these estimates on an ongoing basis, utilizing historical experience, consultation with experts, and other methods considered reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from the Company’s estimates.

CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

liability. The amortization of the additional property cost (using the units of production method) is included in depreciation, depletion and amortization expense and the accretion of the discounted liability is recorded as a separate operating expense in the Company’s Statement of Operations.

Prior to adoption of SFAS No. 143, an accrual for the Company’s estimated asset retirement obligations (site specific reclamation costs for earthwork, revegetation, water treatment and dismantlement of facilities) was made using the units of production method over the life of the property and was included in cost of sales. Upon adoption, the Company recorded a loss of $11,700 as the cumulative effect of a change in accounting principle.

The pro forma effects on net income and per share amounts before cumulative effect of a change in accounting principle for the three and nine months ended September 30, 2002 as if the Company had adopted SFAS No. 143 on January 1, 2002 are presented below.

The following provides a reconciliation of the Company’s beginning and ending carrying values for its asset retirement obligations in the current year:

CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(a)

In connection with the issuance of certain bonds for the performance of reclamation obligations and other contingent events at the Briggs Mine, a bank Letter of Credit was provided in favor of the Surety as partial collateral for such bond obligations. The Letter of Credit is fully collateralized with cash and will expire no earlier than December 31, 2003, and at the bank’s option, may be renewed for successive one-year periods.

(b)

Held directly by the Surety as partial collateral for reclamation and other contingent events at the Briggs Mine.

(c)

Held directly by the Montana Department of Environmental Quality in an interest bearing account for use in continuing reclamation at the Kendall minesite.

(d)

Held directly by the Montana Department of Environmental Quality for reclamation at the McDonald Gold Property.

(e)

The Briggs Mine loan facility required all proceeds from gold sales to be held in trust and disbursed from the collected credit balance in certain orders of priority. The outstanding balance on the loan facility was paid off on February 28, 2003.

(f)

In connection with the auction of certain properties, cash has been sequestered by court order. (See Note 10(e)).

(g)

Earnest money received in connection with contracted property sales in 2002 which have not yet closed are being held by the Company’s escrow agent.

CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The carrying value of the Company’s undeveloped mineral claims and leases consists of the following components at:

These properties are being amortized over eight years with no residual value. See Note 10(d) for a discussion of the legal status of the properties.

(a)

The outstanding balance on this facility was paid off on February 28, 2003. The weighted average interest rate during the first two months of 2003 was 4.9%.

(b)

In January 2003, the Company exercised a lease purchase option to buy the mining fleet at the Briggs Mine for approximately $1.6 million and has arranged to finance the purchase price for one year at an interest rate of 6.75%.

CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(c)

In March 2003, the Company completed a private placement financing of 6%, two year convertible debentures raising $3,299,000. The debentures require quarterly interest payments, and the holders have the right to convert principal to common stock of the Company, subject to certain adjustments, at any time at a conversion rate of $1.38 per share of common stock. In August 2003, $600,000 was converted to 434,800 shares of common stock.

In connection with proceeds of $245,000 received from a September 2003 private placement, the Company, subsequent to September 30, 2003, issued 136,100 shares of common stock.

The Kendall Mine operates under permits granted by the Montana Department of Environmental Quality (DEQ). In February 2002, the DEQ issued a decision that a comprehensive Environmental Impact Statement (EIS) is needed for completion of remaining reclamation at Kendall. The Company feels that it is crucial that reclamation proceed at Kendall without further delay and, therefore, disagrees with the agency decision, and is presently evaluating its course of action with regard to the DEQ’s decision. The Company’s estimate to achieve mine closure could be impacted by the outcome of an agency decision following an EIS. The Company has $1,912,200 on deposit in an interest bearing account with the DEQ for reclamation at the Kendall Mine.

The Briggs Mine operates under permits granted by various agencies including the U.S. Bureau of Land Management (BLM), Inyo County, the California Department of Conservation, and the Lahontan Regional Water Quality Control Board (Lahontan). These agencies have jointly required the Company to post a reclamation bond in the amount of $3,030,000 to ensure appropriate reclamation. Additionally, the Company was required by Lahontan to post a $1,010,000 bond to ensure adequate funds to mitigate any “foreseeable release”, as defined, of pollutants to state waters. Both bonds are subject to annual review and adjustment.

In 2000, in response to a demand for an increase in collateral by the Surety who issued the above described bonds, the Company granted a security interest in 28,000 acres of mineral interests in Montana. In addition, the Company agreed to make cash deposits with the Surety totaling $1.5 million over a three year period at the rate of $0.5 million per year, commencing June 30, 2001. The Company has not made any deposits to date, and is in discussions with the Surety to reschedule the deposit requirements. If an acceptable rescheduling of the deposit requirements cannot be agreed to, the Surety could seek to terminate the bonds which could result in the Company becoming liable for the principal amounts under its collateral agreement with the Surety.

CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

On September 25, 1997, the Company, together with its wholly-owned subsidiary, CR Montana Corporation (CR Montana), purchased a 72.25% participating interest and underlying assets in the Seven-Up Pete Venture (SPV) from CR Montana’s partner in the SPV, Phelps Dodge Corporation (Phelps Dodge). The Company and its wholly-owned subsidiary now own 100% of the SPV. The SPV includes the McDonald Gold Project near Lincoln, Montana.

The Company made an initial payment of $5 million and is required to make a final payment of $10.0 million upon issuance of all permits required for construction of the McDonald Gold Project, or alternatively, one-third of any proceeds received from a takings lawsuit. Due to the contingent nature of the transaction, the Company recorded only the initial payment of $5 million as additions to mining claims and leases.

The purchase payments are collateralized only by the 72.25% participating interest and underlying assets in the SPV transferred from Phelps Dodge to the Company and CR Montana in this transaction, and the 50% co-tenancy interest in certain real property also transferred to the Company and CR Montana.

In November 1998, the Montana electorate passed an anti-mining initiative (I-137) by a vote of 52% to 48%. I-137, as modified by the State Legislature in April 1999, bans development of new gold and silver mines, which use open-pit mining methods and cyanide in the treatment and recovery process. In April 2000, the SPV filed lawsuits in Montana State District Court and in the United States District Court, seeking to have I-137 declared unconstitutional, or, alternatively, to obtain a “takings” or damage award for the lost value of the McDonald, Seven-Up Pete and Keep Cool mineral properties. These lawsuits are based on, amongst others, (i) the right not to be deprived of property without due process of law; (ii) the right to equal protection under the laws; and (iii) the right to be protected against laws which impair the obligations of existing contracts. The United States District Court issued a ruling August 30, 2001 in which the Court dismissed the SPV’s substantive due process claim but, as requested by the SPV, ruled that the remainder of the SPV’s claims could be pursued at such time as the State lawsuit was concluded. The Montana State District Court issued a ruling November 1, 2001 in response to a Motion to Dismiss and a Motion For Summary Judgment by the State of Montana. In this ruling, the Court dismissed four of the SPV’s fourteen counts, including its substantive due process and equal protection challenges to I-137’s validity. The decision maintained for adjudication the contract impairment validity challenge, contract damage claims, and all of the takings claims. Following the November 2001 ruling by the State District Court, the State filed a new Motion for Summary Judgment as to all claims. In an Order dated December 9, 2002, the Court granted the State Summary Judgment on all of the remaining legal claims of the Company’s lawsuit. On January 14, 2003, the Company filed an appeal with the Montana State Supreme Court. Oral arguments were heard by the Montana Supreme Court on October 28, 2003. The Company expects a ruling during the first half of 2004.

CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

In October 2001, a Plaintiff group filed suit in Montana District Court against the Company and its wholly-owned subsidiary, CR Kendall Corporation, alleging violation of water rights and other torts in connection with the operation of the Kendall Mine. The Complaint seeks unspecified damages and punitive damages. The Company believes the allegations are completely without merit and that the Company will prevail in this matter.

In August 2002, a Preliminary Injunction was issued in Montana District Court on behalf of the Plaintiff group in connection with the Company’s auction of certain mineral rights and fee lands in western Montana. In October 2002, the Court issued a Supplemental Order which will sequester up to $528,000 of any proceeds realized from the auction until such time as the lawsuit is concluded. As of September 30, 2003, $267,800 had been remitted to the Court as required by the Order. The Company has filed an appeal to this Order with the Montana State Supreme Court.

In September 2003, the Company received a Sixty Day Notice of Intent to Sue pursuant to the Federal Clean Water Act from two environmental groups. In addition to naming the Company, the notice also named the State of Montana Department of Environmental Quality and the U. S. Environmental Protection Agency. The notice claims there have been unaddressed violations under the Clean Water Act at the Kendall Mine site. The Company believes these contentions to be without merit.

At September 30, 2003, the Company had 6,205 ounces outstanding on a gold forward sales contract at a price of approximately $377 per ounce. The fair market value of the contract at September 30, 2003, was $53,900 less than the contractual amount. Unrealized gains and losses on the Company’s forward contracts resulting from period to period changes in the mark-to-market calculations are as follows:

These unrealized gains and losses are shown as a separate line item in the other income (expense) section in the Statement of Operations.

On June 30, 1999, the Company converted its Briggs Mine gold loan to a cash loan. In connection with the conversion, the Company reduced the monetized amount of the debt to fair value, resulting in a gain of $2,528,000, which was deferred and reported as a liability in the consolidated balance sheet. On January 1, 2001, the Company adopted SFAS No. 133 and reclassified this amount as a cumulative effect adjustment in other comprehensive income. For the nine months ended September 30, 2002, $0.3 million of the gain was recognized and is included in revenues in the Statement of Operations. There was no comparable activity in the current year.

CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The Company computes EPS by applying the provisions of Financial Accounting Standards No. 128, Earnings per Share. As the Company reported net losses for the periods presented, inclusion of common stock equivalents would have an antidilutive effect on per share amounts. Accordingly, the Company’s basic and diluted EPS computations are the same for the periods presented. Common stock equivalents for the three and nine months ended September 30, 2003 that were not included in the computation of diluted EPS because the effect would be antidilutive were 4,337,700 and 4,159,500, respectively. For the three and nine months ended September 30, 2002, common stock equivalents that were not included in the computation of diluted EPS were 2,371,600 and 1,816,200, respectively.

In accordance with the provisions of SFAS No. 123, Accounting for Stock-Based Compensation (SFAS No. 123), the Company measures compensation cost using the intrinsic value based method prescribed by Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations to account for its stock option plans. As a result, no compensation cost has been recognized in the accompanying financial statements as the exercise price of all stock option grants is at least equal to 100% of the market price of the Company’s common stock at the date of grant. Had compensation cost been recorded under the fair value provisions of SFAS No. 123, the following pro forma net loss and per share amounts would have been recorded for the following periods:

The Company has not recorded a tax benefit for the current period as the benefit is not expected to be realized during the year. The benefit is also not expected to be realizable as a deferred tax asset at year end as the Company anticipates recording a full valuation allowance for all deferred tax assets, except to the extent of offsetting reversals of expected deferred tax liabilities.

CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The Company has determined that certain previously capitalized costs for the McDonald Gold Project should be expensed. In November 1998, the Montana electorate passed an anti-mining initiative, I-137, which prohibits development of new gold and silver mines which use open-pit mining methods and cyanide in the treatment and recovery process. As a result of the legal impediment, the Company cannot presently proceed with the development of the McDonald Gold Project. Accordingly, the Company has restated its prior financial information to remove all costs capitalized since I-137 took effect. This adjustment decreased the Company’s net income by $129,800, or $0.01 per share for the three months ended September 30, 2002. For the nine months ended September 30, 2003, the adjustment increased the Company’s net loss by $415,900 or $0.02 per share.

On January 1, 2002, the Company became subject to the accounting and reporting requirements of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (SFAS No. 142). As the Company’s mineral interests in the McDonald and Seven-Up Pete properties represent intangible assets as defined in this new standard, the Company has commenced amortizing the carrying values of these properties taking into account residual values over their useful lives. This adjustment decreased the Company’s net income by $668,000, or $0.03 per share for the three months ended September 30, 2002. For the nine months ended September 30, 2002, the adjustment increased the Company’s net loss by $2,004,000, or $0.11 per share.

The Company has restated its prior financial information to include depreciation, depletion and amortization (DD&A) as a cost in inventories at the Briggs Mine. Previously, the Company recorded DD&A as a period expense. In addition, the Company changed from recognizing units-of-production (UOP) DD&A based on the volume of gold sold to recognizing UOP DD&A based on estimated recoverable ounces mined or produced from proven and provable reserves to accommodate the capitalization of DD&A in inventory. This adjustment increased the Company’s net income by $439,300, or $0.02 per share, for the three months ended September 30, 2002. For the nine months ended September 30, 2002, the adjustment decreased the Company’s net loss by $1,024,200, or $0.06 per share.

The following sets forth the effects of the aforementioned adjustments to the Company’s Consolidated Statements of Operations for the three and nine months ended September 30, 2002, and Consolidated Statement of Cash Flows for the nine months ended September 30, 2002.

CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


		Three Months Ended September 30, 2002

		As Previously			McDonald			Briggs			As
		Reported			Property			Inventory			Restated

	REVENUE
Sales		$	4,903,600		$	–		$	–		$	4,903,600

	EXPENSES
Cost of sales			4,579,900			–			(120,800	)		4,459,100
Depreciation, depletion and amortization			1,503,700			675,600			(318,500	)		1,860,800
Selling, general and administrative			277,100			–			–			277,100
Exploration and development costs			66,400			122,200			–			188,600
Gain on asset disposals			(1,328,300	)		–			–			(1,328,300	)

			5,098,800			797,800			(439,300	)		5,457,300

	OTHER INCOME (EXPENSE)		411,400			–			–			411,400

Net income (loss)		$	216,200			($797,800	)	$	439,300			($142,300	)

Basic and diluted net income (loss) per share		$	0.01			($0.04	)	$	0.02			($0.01	)

	Weighted average shares outstanding		19,766,100			19,766,100			19,766,100			19,766,100


		Nine Months Ended September 30, 2002

		As Previously			McDonald			Briggs			As
		Reported			Property			Inventory			Restated

	REVENUE
Sales		$	11,783,900		$	–		$	–		$	11,783,900

	EXPENSES
Cost of sales			11,933,200			–			(281,500	)		11,651,700
Depreciation, depletion and amortization			3,566,400			2,026,800			(742,700	)		4,850,500
Selling, general and administrative			1,017,100			–			–			1,017,100
Exploration and development costs			87,200			393,100			–			480,300
Gain on asset disposals			(2,729,800	)		–			–			(2,729,800	)

			13,874,100			2,419,900			(1,024,200	)		15,269,800

	OTHER INCOME (EXPENSE)		(770,300	)		–			–			(770,300	)

Net income (loss)			($2,860,500	)		($2,419,900	)	$	1,024,200			($4,256,200	)

Basic and diluted net income (loss) per share			($0.16	)		($0.13	)	$	0.06			($0.23	)

	Weighted average shares outstanding		18,420,200			18,420,200			18,420,200			18,420,200

CANYON RESOURCES CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


			Nine Months Ended September 30, 2002

			As Previously			McDonald			Briggs			As
			Reported			Property			Inventory			Restated

Cash flows from operating activities:
	Net income (loss)			($2,860,500	)		($2,419,900	)	$	1,024,200			($4,256,200	)
	Adjustments to reconcile net income (loss) to net cash used in operating activities			141,700			2,026,800			(1,024,200	)		1,144,300

		Net cash used in operating activities		(2,718,800	)		(393,100	)		–			(3,111,900	)
Cash flows from investing activities:
		Net cash provided by investing activities		2,805,000			393,100			–			3,198,100
Cash flows from financing activities:
		Net cash used in financing activities		(709,800	)								(709,800	)

Net decrease in cash and cash equivalents				(623,600	)								(623,600	)
Cash and cash equivalents, beginning of year				1,618,100									1,618,100

Cash and cash equivalents, end of period			$	994,500								$	994,500

Effective January 1, 2003, the Company adopted Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (FIN No. 45). FIN No. 45 broadens the disclosures to be made by the guarantor about its obligations under certain guarantees. FIN No. 45 also requires a guarantor to recognize a liability for the fair value of the obligation undertaken in issuing the guarantee at the inception of a guarantee. Adoption of FIN No. 45 did not have an impact on the Company’s results of operations or financial position at September 30, 2003.

In January 2003, the Financial Accounting Standards Board (FASB) issued Interpretation No. 46, Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51 (FIN No. 46), which requires the consolidation of certain variable interest entities, as defined. FIN No. 46 is effective immediately for variable interest entities created after January 31, 2003, and as a result of a FASB position issued in October 2003, the effective date of FIN No. 46 for entities created before February 1, 2003 has been deferred if certain criteria are met. While this deferral is in place disclosures are required currently if a company expects to consolidate any variable interest entities. The Company believes it has no such variable interest entities and as a result FIN No. 46 will have no impact on its results of operations, financial position or cash flows.

In April 2003, the FASB issued Statement of Financial Accounting Standards No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities (SFAS No. 149). SFAS No. 149 amends and clarifies the accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 149 is generally effective for contracts entered into or modified after June 30, 2003, and for hedging relationships designated after June 30, 2003. The adoption of this statement did not have an impact on the Company’s results of operations or financial position at September 30, 2003.

circumstances). Many of those instruments were previously classified as equity. The statement is effective for financial instruments entered into or modified after May 31, 2003. A FASB position issued in October 2003 deferred the provision of paragraph 9 and 10 of SFAS No. 150 as they apply to certain mandatory redeemable financial instruments for an indefinite period. The adoption of this statement’s operational components did not have an impact on the Company’s results of operations or financial position at September 30, 2003.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995.

The matters discussed in this report on Form 10-Q, when not historical matters, are forward-looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially from projected results. Such factors include, among others, the speculative nature of mineral exploration, commodity prices, production and reserve estimates, environmental and government regulations, availability of financing, force majeure events, and other risk factors as described from time to time in the Company’s filings with the Securities and Exchange Commission. Many of these factors are beyond the Company’s ability to control or predict. The Company disclaims any intent or obligation to update its forward-looking statements, whether as a result of receiving new information, the occurrence of future events, or otherwise.

As further discussed in Note 15 to the Consolidated Financial Statements, the Company has restated its financial statements for the three and nine months ended September 30, 2002. Overall, the adjustments decreased the Company’s net income in the third quarter of 2002 by $358,500, or $0.02 per share. For the nine months ended September 30, 2002, the adjustments increased the Company’s net loss by $1,395,700, or $0.07 per share. The adjustments were i) to expense previously capitalized costs for the McDonald Gold Project; ii) to commence amortizing the carrying values of the McDonald and Seven-Up Pete mineral property interests upon adoption on January 1, 2002 of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets; and iii) to include depreciation, depletion and amortization as a cost in inventories at the Company’s Briggs Mine. Prior period amounts in the ensuing discussion have been adjusted for these restatements where applicable. See also Note 19 to the Company’s Consolidated Financial Statements included in its 2002 Form 10-K filing for further discussion of the restatements.

The Company recorded a net loss of $2.5 million, or $0.11 per share, on revenues of $3.2 million for the third quarter of 2003. For the nine months ended September 30, 2003, the Company recorded a net loss of $7.3 million, or $0.34 per share, on revenues of $10.5 million. This compares to a net loss of $0.1 million, or $0.01 per share, on revenues of $4.9 million for the third quarter of 2002 and a net loss of $4.3 million, or $0.23 per share, on revenues of $11.8 million during the first nine months of 2002.

For the three months ended September 30, 2003, the Company sold 8,705 ounces of gold and 1,500 ounces of silver at an average realized price of $369 per equivalent gold ounce. For the comparable period of 2002, the Company sold 16,700 ounces of gold and 2,500 ounces of silver at an average realized price of $294 per equivalent gold ounce. The New York Commodity Exchange (COMEX) gold price averaged $363 and $314 per ounce for the three months ended September 30, 2003 and 2002, respectively.

The following table summarizes the Company’s gold deliveries and revenues for the three months ended September 30, 2003 and the comparable period for 2002:

For the nine months ended September 30, 2003, the Company sold 30,936 ounces of gold and 9,843 ounces of silver at an average realized price of $338 per equivalent gold ounce. For the comparable period of 2002, the Company sold 38,938 ounces of gold and 11,554 ounces of silver at an average realized price of $303 per equivalent gold ounce. The New York Commodity Exchange (COMEX) gold price averaged $354 and $306 per ounce for the nine months ended September 30, 2003 and 2002, respectively.

The following table summarizes the Company’s gold deliveries and revenues for the nine months ended September 30, 2003 and the comparable period for 2002:

Cost of sales was $3.4 million for the three months ended September 30, 2003, as compared to $4.5 million in the prior period. For the nine months ended September 30, 2003, cost of sales was $11.3 million as compared to $11.7 million in the prior period. For the three and nine months ended September 30, 2003, cost of sales includes write downs of inventory to net realizable value of $0.4 million and $2.2 million, respectively.

Depreciation, depletion and amortization was lower in the current period due to a lower number of recoverable ounces mined and was not materially different for the nine months ended September 30, 2003.

Selling, general and administrative expense was not materially different for the third quarter and was approximately $0.2 million higher in the current year to date period due to higher legal and other professional services.

Exploration and development costs were not materially different for the third quarter and were approximately $0.2 million higher in the current year to date period due to higher costs at the Company’s McDonald Gold Project.

Interest income and expense were not materially different for the periods presented.

The following table summarizes certain gains on asset dispositions the Company recognized for the three and nine months ended September 30, 2003 and the comparable periods for 2002.

The Company recorded an unrealized loss on its forward gold contracts of approximately $0.2 million for the three months ended September 30, 2003. For the comparable period in 2002, the Company recorded an unrealized gain of approximately $0.5 million. For the nine months ended September 30, 2003, the Company recorded an unrealized gain of approximately $0.4 million. For the comparable period in 2002, the Company recorded an unrealized loss of approximately $0.6 million. These amounts are shown as a separate line item in the other income (expense) section on the Statement of Operations.

On January 1, 2003, the Company became subject to the accounting and reporting requirements of Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations (SFAS No. 143). SFAS No. 143 establishes accounting and reporting standards for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. Fair value is determined by estimating the retirement obligations in the period an asset is first placed in service and then adjusting the amount for estimated inflation and market risk contingencies to the projected settlement date of the liability. The result is then discounted to a present value from the projected settlement date to the date the asset was first placed in service. The present value of the asset retirement obligation is recorded as an additional property cost and as an asset retirement liability. The amortization of the additional property cost (using the units of production method) is included in depreciation, depletion and amortization expense and the accretion of the discounted liability is recorded as a separate operating expense in the Company’s Statement of Operations. Prior to adoption of SFAS No. 143, an accrual for the Company’s estimated asset retirement obligations (site specific reclamation costs for earthwork, revegetation, water treatment and dismantlement of facilities) was made using the units of production method over the life of the property and was included in cost of sales. Upon adoption of SFAS No. 143, the Company recorded a loss of $11,700 as the cumulative effect of a change in accounting principle. See Note 4 to the Consolidated Financial Statements for further disclosures regarding the Company’s adoption of SFAS No. 143.

For the nine months ended September 30, 2003, operating activities used $0.7 million of cash, investing activities used $1.4 million of cash and financing activities provided $7.5 million of cash resulting in a net increase in cash of $5.4 million. Cash and cash equivalents at September 30, 2003 was $5.8 million.

During the first nine months of 2003, the Company spent approximately $1.6 million on mine development and realized proceeds of approximately $0.2 million in connection with the sale of certain property interests.

During the first nine months of 2003, the Company raised approximately $3.3 million through a private placement of 6% convertible debentures, received approximately $1.9 million in connection with an offer to exchange certain

outstanding warrants for cash and issuance of new warrants, received approximately $0.3 million in connection with the exercise of warrants not tendered in the aforementioned tender offer, and raised approximately $4.2 million in connection with a private placement transaction. In addition, the Company paid down debt by approximately $2.0 million, (which included the final payoff of the Briggs Mine loan facility) and made capital lease payments of approximately $0.2 million.

The Company believes that its cash requirements over the next 12 months can be funded through a combination of existing cash and cash flow from operations. The Company’s long-term liquidity may be impacted by the scheduled wind down of operations at the Briggs Mine during 2004-2005, which is currently the only internal source of cash flow. The Company is continually evaluating business opportunities such as joint ventures and mergers and acquisitions with the objective of creating additional cash flow to sustain the corporation, provide a future source of funds for growth, as well as to continue its litigation efforts with respect to the McDonald Gold Project. While the Company believes it will be able to finance its continuing activities, including the McDonald litigation, there are no assurances of success in this regard or in the Company’s ability to secure additional financing through capital markets, joint ventures, or other arrangements in the future.

In November 1998, the Montana electorate passed an anti-mining initiative (I-137) by a vote of 52% to 48%. I-137, as modified by the State Legislature in April 1999, bans development of new gold and silver mines, which use open-pit mining methods and cyanide in the treatment and recovery process. In April 2000, the SPV filed lawsuits in Montana State District Court and in the United States District Court, seeking to have I-137 declared unconstitutional, or, alternatively, to obtain a “takings” or damage award for the lost value of the McDonald, Seven-Up Pete and Keep Cool mineral properties. These lawsuits are based on, amongst others, (i) the right not to be deprived of property without due process of law; (ii) the right to equal protection under the laws; and (iii) the right to be protected against laws which impair the obligations of existing contracts. The United States District Court issued a ruling August 30, 2001 in which the Court dismissed the SPV’s substantive due process claim but, as requested by the SPV, ruled that the remainder of the SPV’s claims could be pursued at such time as the State lawsuit was concluded. The Montana State District Court issued a ruling November 1, 2001 in response to a Motion to Dismiss and a Motion For Summary Judgment by the State of Montana. In this ruling, the Court dismissed four of the SPV’s fourteen counts, including its substantive due process and equal protection challenges to I-137’s validity. The decision maintained for adjudication the contract impairment validity challenge, contract damage claims, and all of the takings claims. Following the November 2001 ruling by the State District Court, the State filed a new Motion for Summary Judgment as to all claims. In an Order dated December 9, 2002, the Court granted the State Summary Judgment on all of the remaining legal claims of the Company’s lawsuit. On January 14, 2003, the Company filed an appeal with the Montana State Supreme Court of the State District Court Order. Oral arguments were heard by the Montana Supreme Court on October 28, 2003. The Company expects a ruling during the first half of 2004.

On September 24, 1998, the Montana Department of Natural Resources (DNRC), the entity that administers state mineral leases, unilaterally decided to cancel the permitting extension of the 10-year lease term of the state leases that pertain to the McDonald Gold Project which would require the Company, after a period of approximately seventeen months, to commence paying a delay rental of $150,000 per month in order to maintain the leases. In February 2000, pursuant to its September 1998 decision, the DNRC determined that the primary terms of the mineral leases had expired. The Company appealed the action of the DNRC in an administrative hearing process and the DNRC Hearing Examiner affirmed the DNRC action. It is the Company’s position that the permitting process has been interrupted by the threat and passage of I-137 and, thus, the permit extension is continued until the governmental impediment is resolved. As part of the I-137 lawsuit filed in April 2000 against the State of Montana, the Company asked the court to review and invalidate the DNRC’s action, however, the court, in its December 9, 2002 order as described in the preceding paragraph, denied the

Company’s petition for judicial review. On January 14, 2003, the Company filed an appeal with the Montana Supreme Court. Oral arguments were heard by the Montana Supreme Court on October 28, 2003. The Company expects a ruling during the first half of 2004.

In May 2003, the FASB issued Statement of Financial Accounting Standards No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (SFAS No. 150). SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those instruments were previously classified as equity. The statement is effective for financial instruments entered into or modified after May 31, 2003. A FASB position issued in October 2003 deferred the provision of paragraph 9 and 10 of SFAS No. 150 as they apply to certain mandatory redeemable financial instruments for an indefinite period. The adoption of this statement’s operational components did not have an impact on the Company’s results of operations or financial position at September 30, 2003.

The Company’s earnings and cash flow are significantly impacted by changes in the market price of gold. Gold prices can fluctuate widely and are affected by numerous factors, such as demand, production levels, economic policies of central banks, producer hedging, and the strength of the U.S. dollar relative to other currencies. During the last five years, the average annual market price has fluctuated between $271 per ounce and $331 per ounce.

At September 30, 2003, the Company had an outstanding forward contract on 6,205 ounces of gold at an average price of approximately $377 per ounce, approximately 16% of anticipated production over the next twelve months. At current production levels, a $10 per ounce change in the price of gold will impact the Company’s annual profitability and cash flow by approximately $0.3 million.

There are certain market risks associated with the forward contracts utilized by the Company. If the Company’s counterparties fail to honor their contractual obligation to purchase gold at agreed-upon prices, the Company may be exposed to market price risk by having to sell gold in the open market at prevailing prices. Similarly, if the Company fails

to produce sufficient quantities of gold to meet its forward commitments, the Company would have to purchase the shortfall in the open market at prevailing prices. In addition, the Company could be subject to cash margin calls by counterparties if the market price of gold significantly exceeds the forward contract price which would create additional financial obligations.

At September 30, 2003, the fair value of the Company’s forward gold contract was approximately $0.06 million lower than the contractual amount.

At September 30, 2003, the Company’s debt was approximately $3.6 million of which $2.7 million relates to its 6% convertible debentures and $0.9 million relates to a fixed rate (6.75%) financing of a lease buy-out of the mining fleet at the Briggs Mine. Thus, the Company is not presently subject to interest rate risk.

The price of gold is denominated in U.S. dollars, and the Company’s gold production operations are in the United States. The Company conducts only a minor amount of exploration activity in foreign countries and has minimal foreign currency exposure.

The Company maintains a system of disclosure controls and procedures. The term “disclosure controls and procedures,” as defined by regulations of the Securities and Exchange Commission (“SEC”), means controls and other procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits to the SEC under the Securities Exchange Act of 1934, as amended (the “Act”), is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits to the SEC under the Act is accumulated and communicated to the Company’s management, including its principal executive officer and its principal financial officer, as appropriate to allow timely decisions to be made regarding required disclosure. The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the Company’s disclosure controls and procedures as of the end of the period covering by this Quarterly Report on Form 10-Q and have concluded that the Company’s disclosure controls and procedures are effective as of the date of such evaluation.

The Company also maintains a system of internal controls. The term “internal controls,” as defined by the American Institute of Certified Public Accountants’ Codification of Statement on Auditing Standards, AU Section 319, means controls and other procedures designed to provide reasonable assurance regarding the achievement of objectives in the reliability of the Company’s financial reporting, the effectiveness and efficiency of the Company’s operations and the Company’s compliance with applicable laws and regulations. There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect such controls subsequent to the date the Company carried out its evaluation.

During the three months ended September 30, 2003, the Company issued 27,900 unregistered shares of its $0.01 par value common stock as compensation for services to a single sophisticated employee, John C. Doody. The shares were issued pursuant to the exemption provided by Section 4(2) of the Securities and Exchange Act of 1933, as amended.

During the period September – October 2003, the Company issued 2,307,392 unregistered shares of its $0.01 par value common stock and warrants to purchase 2,307,392 shares of common stock in connection with a private placement. The private placement consisted of the sale of 2,307,392 units, at $1.80 per unit, with each unit comprised of one share of common stock plus a warrant to purchase an additional share of common stock. The warrants have an expiration date of December 1, 2005, and may be exercised at a price of $1.98 per share through December 1, 2004, or at a price of $2.16 per share through December 1, 2005. The shares and warrants were issued to 31 accredited investors pursuant to the exemption provided by Section 4(2) of the Securities and Exchange Act of 1933, as amended.

Exhibits, as required by Item 601 of Regulation S-K, are listed on pages 26 – 27. The exhibit numbers correspond to the numbers assigned in Item 601 of Regulation S-K.

The following reports on Form 8-K were filed by the Company: i) under date of August 14, 2003, the Company’s press release concerning financial results for three and six months ended June 30, 2003, and ii) under date of October 7, 2003, the Company’s press release announcing the completion of a Pre-Feasibility Study and redesign of the McDonald Gold Project.


EXHIBIT
NUMBER		DESCRIPTION

3.1		Articles of Incorporation of the Company, as amended (1)
3.1.1		Executed Certificate of Designations, dated December 26, 1990, as filed with the Delaware Secretary of State on December 26, 1990 (2)
3.2		Bylaws of the Company, as amended (3)
4.1		Specimen Common Stock Certificate (4)
4.2		Specimen Warrant Certificate (5)
4.4		Rights Agreement dated March 20, 1997, between Canyon Resources Corporation and American Securities Transfer & Trust, Inc. (6)
4.5		Specimen Debenture (7)
10.1		Change of Control Agreements, dated December 6, 1991, between the Company and Richard H. De Voto and Gary C. Huber (8)
10.2		Loan Agreement dated December 6, 1995, among CR Briggs Corporation as Borrower and Banque Paribas as Agent (9)
10.2.1		Amendment No. 1 to Loan and Guarantee Agreements dated April 8, 1998, among CR Briggs Corporation, Canyon Resources Corporation, and Banque Paribas as Agent (10)
10.2.2		Amendment No. 2 to Loan and Guarantee Agreements dated August 19, 1998, among CR Briggs Corporation, Canyon Resources Corporation, and Banque Paribas as Agent (10)
10.2.3		Amendment No. 3 to Loan Agreement and Waiver dated July 8, 1999, among CR Briggs Corporation and Banque Paribas as Agent (11)
10.2.4		Amendment No. 4 to Loan Agreement and Waiver dated March 26, 2001, among CR Briggs Corporation and BNP Paribas, as successor-in-interest to Banque Paribas as Agent (12)
10.2.5		Amendment No. 5 to Loan Agreement and Waiver dated March 25, 2002, among CR Briggs Corporation, Canyon Resources Corporation, and Banque Paribas, as Agent (13)
10.2.6		Amendment No. 6 to Loan Agreement and Waiver dated June 14, 2002, among CR Briggs Corporation and BNP Paribas, as successor-in-interest to Banque Paribas as Agent (14)
10.3		Master Tax Lease dated December 27, 1995, between CR Briggs Corporation and Caterpillar Financial Services Corporation (9)
10.4		Purchase Agreement dated September 25, 1997, between Phelps Dodge Corporation, acting through its division, Phelps Dodge Mining Company, and CR Montana Corporation and Canyon Resources Corporation (15)
10.4.1		Second Amendment and Supplement to Purchase Agreement dated September 17, 1999, between Phelps Dodge Corporation, acting through its division, Phelps Dodge Mining Company, CR Montana Corporation and Canyon Resources Corporation, and Seven-Up Pete Joint Venture (11)
10.5		Assignment of Royalty Proceeds, effective as of April 1, 2001, between Canyon Resources Corporation and Franco-Nevada Mining Corporation, Inc. (16)
31.1*		Certification of Chief Executive Officer pursuant to Rule 13(a)-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Chief Financial Officer pursuant to Rule 13(a)-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of Chief Executive Officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of Chief Financial Officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)		Exhibit 3.1 is incorporated by reference from Exhibit 3.1(a) to the Company’s Amended Annual Report on Form 10-K/A for the fiscal year ended December 31, 2000.

(2)		Exhibit 3.1.1 is incorporated by reference from Exhibit 4 of the Company’s Report on Form 8-K filed with the Securities and Exchange Commission on December 26, 1990.

(3)		Exhibit 3.2 is incorporated by reference from Exhibit 3.2 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997.

(4)		Exhibit 4.1 is incorporated by reference from the Company’s Registration Statement on Form 8-A as declared effective by the Securities and Exchange Commission on March 18, 1986.

(5)		Exhibit 4.2 is incorporated by reference from Exhibit 4.2 of the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2002.

(6)		Exhibit 4.4 is incorporated by reference from Exhibit 4 of the Company’s Report on Form 8-K filed with the Securities and Exchange Commission on March 27, 1997.

(7)		Exhibit 4.5 is incorporated by reference from Exhibit 4.5 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002.

(8)		Exhibit 10.1 is incorporated by reference from Exhibit 10.20 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1992.

(9)		Exhibits 10.2 and 10.3 are incorporated by reference from Exhibits 4.9, 4.10, 10.22 and 10.23 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1995.

(10)		Exhibits 10.2.1 and 10.2.2 are incorporated by reference from Exhibits 10.2.1 and 10.2.2 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998.

(11)		Exhibits 10.2.3 and 10.4.1 are incorporated by reference from Exhibits 10.2.3 and 10.4.1 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999.

(12)		Exhibit 10.2.4 is incorporated by reference from Exhibit 10.2.4 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000.

(13)		Exhibit 10.2.5 is incorporated by reference from Exhibit 10.2.5 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.

(14)		Exhibit 10.2.6 is incorporated by reference from Exhibit 10.2.6 of the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2002.

(15)		Exhibit 10.4 is incorporated by reference from Exhibit 2 of the Company’s Report on Form 8-K filed with the Securities and Exchange Commission on October 9, 1997.

(16)		Exhibit 10.5 is incorporated by reference from Exhibit 1.1 of the Company’s Report on Form 8-K filed with the Securities and Exchange Commission on October 9, 2001.

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.


EXHIBIT
NUMBER		DESCRIPTION

3.1		Articles of Incorporation of the Company, as amended (1)
3.1.1		Executed Certificate of Designations, dated December 26, 1990, as filed with the Delaware Secretary of State on December 26, 1990 (2)
3.2		Bylaws of the Company, as amended (3)
4.1		Specimen Common Stock Certificate (4)
4.2		Specimen Warrant Certificate (5)
4.4		Rights Agreement dated March 20, 1997, between Canyon Resources Corporation and American Securities Transfer & Trust, Inc. (6)
4.5		Specimen Debenture (7)
10.1		Change of Control Agreements, dated December 6, 1991, between the Company and Richard H. De Voto and Gary C. Huber (8)
10.2		Loan Agreement dated December 6, 1995, among CR Briggs Corporation as Borrower and Banque Paribas as Agent (9)
10.2.1		Amendment No. 1 to Loan and Guarantee Agreements dated April 8, 1998, among CR Briggs Corporation, Canyon Resources Corporation, and Banque Paribas as Agent (10)
10.2.2		Amendment No. 2 to Loan and Guarantee Agreements dated August 19, 1998, among CR Briggs Corporation, Canyon Resources Corporation, and Banque Paribas as Agent (10)
10.2.3		Amendment No. 3 to Loan Agreement and Waiver dated July 8, 1999, among CR Briggs Corporation and Banque Paribas as Agent (11)
10.2.4		Amendment No. 4 to Loan Agreement and Waiver dated March 26, 2001, among CR Briggs Corporation and BNP Paribas, as successor-in-interest to Banque Paribas as Agent (12)
10.2.5		Amendment No. 5 to Loan Agreement and Waiver dated March 25, 2002, among CR Briggs Corporation, Canyon Resources Corporation, and Banque Paribas, as Agent (13)
10.2.6		Amendment No. 6 to Loan Agreement and Waiver dated June 14, 2002, among CR Briggs Corporation and BNP Paribas, as successor-in-interest to Banque Paribas as Agent (14)
10.3		Master Tax Lease dated December 27, 1995, between CR Briggs Corporation and Caterpillar Financial Services Corporation (9)
10.4		Purchase Agreement dated September 25, 1997, between Phelps Dodge Corporation, acting through its division, Phelps Dodge Mining Company, and CR Montana Corporation and Canyon Resources Corporation (15)
10.4.1		Second Amendment and Supplement to Purchase Agreement dated September 17, 1999, between Phelps Dodge Corporation, acting through its division, Phelps Dodge Mining Company, CR Montana Corporation and Canyon Resources Corporation, and Seven-Up Pete Joint Venture (11)
10.5		Assignment of Royalty Proceeds, effective as of April 1, 2001, between Canyon Resources Corporation and Franco-Nevada Mining Corporation, Inc. (16)
31.1*		Certification of Chief Executive Officer pursuant to Rule 13(a)-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Chief Financial Officer pursuant to Rule 13(a)-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of Chief Executive Officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of Chief Financial Officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)		Exhibit 3.1 is incorporated by reference from Exhibit 3.1(a) to the Company’s Amended Annual Report on Form 10-K/A for the fiscal year ended December 31, 2000.

(2)		Exhibit 3.1.1 is incorporated by reference from Exhibit 4 of the Company’s Report on Form 8-K filed with the Securities and Exchange Commission on December 26, 1990.

(3)		Exhibit 3.2 is incorporated by reference from Exhibit 3.2 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997.

(4)		Exhibit 4.1 is incorporated by reference from the Company’s Registration Statement on Form 8-A as declared effective by the Securities and Exchange Commission on March 18, 1986.

(5)		Exhibit 4.2 is incorporated by reference from Exhibit 4.2 of the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2002.

(6)		Exhibit 4.4 is incorporated by reference from Exhibit 4 of the Company’s Report on Form 8-K filed with the Securities and Exchange Commission on March 27, 1997.

(7)		Exhibit 4.5 is incorporated by reference from Exhibit 4.5 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002.

(8)		Exhibit 10.1 is incorporated by reference from Exhibit 10.20 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1992.

(9)		Exhibits 10.2 and 10.3 are incorporated by reference from Exhibits 4.9, 4.10, 10.22 and 10.23 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1995.

(10)		Exhibits 10.2.1 and 10.2.2 are incorporated by reference from Exhibits 10.2.1 and 10.2.2 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998.

(11)		Exhibits 10.2.3 and 10.4.1 are incorporated by reference from Exhibits 10.2.3 and 10.4.1 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999.

(12)		Exhibit 10.2.4 is incorporated by reference from Exhibit 10.2.4 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000.

(13)		Exhibit 10.2.5 is incorporated by reference from Exhibit 10.2.5 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.

(14)		Exhibit 10.2.6 is incorporated by reference from Exhibit 10.2.6 of the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2002.

(15)		Exhibit 10.4 is incorporated by reference from Exhibit 2 of the Company’s Report on Form 8-K filed with the Securities and Exchange Commission on October 9, 1997.

(16)		Exhibit 10.5 is incorporated by reference from Exhibit 1.1 of the Company’s Report on Form 8-K filed with the Securities and Exchange Commission on October 9, 2001.


		Three Months			Nine Months
		Ended			Ended
		September 30, 2002			September 30, 2002

Loss before cumulative effect of change in accounting principle as reported		(	$142,300	)	(	$4,256,200	)
Accretion expense			(45,800	)		(137,400	)
Additional depreciation expense			(56,200	)		(131,100	)
Reduction for reclamation accrual in cost of sales			61,800			144,100

Pro forma loss before cumulative effect of change in accounting principle		(	$182,500	)	(	$4,380,600	)

Basic and diluted loss per share before cumulative effect of change in accounting principle:
	As reported		($0.01	)		($0.23	)
	Pro forma		($0.01	)		($0.24	)


Balance, December 31, 2002	$	4,122,200
Impact of adopting SFAS No. 143		332,000
Settlement of liabilities		(252,100	)
Accretion expense		139,600

Balance, September 30, 2003		4,341,700
Current portion*		228,000

Non current portion	$	4,113,700


*Included in other current liabilities


	September 30,		December 31,
	2003		2002

Collateral for Letter of Credit (a)	$	250,000	$	249,000
Collateral for reclamation bonds and other contingent events (b)		150,600		149,400
Kendall Mine reclamation (c)		1,912,200		1,896,300
McDonald Gold Project cash reclamation bond (d)		500,000		–
Unexpended proceeds from gold sales (e)		–		131,900
Net proceeds from property sales (f)		267,800		182,000
Escrow deposits (g)		35,000		61,200

		3,115,600		2,669,800
Current portion		302,800		375,100

Noncurrent portion	$	2,812,800	$	2,294,700


	September 30, 2003		December 31, 2002

Broken ore under leach	$	6,104,600	$	8,428,200
Doré		303,000		359,500

	$	6,407,600	$	8,787,700


		September 30, 2003							December 31, 2002

		Gross		Accumulated					Gross		Accumulated
		Carrying Value		Amortization			Net Book Value		Carrying Value		Amortization			Net Book Value

Property:
	McDonald	$	16,200,200		($3,543,700	)	$	12,656,500	$	16,200,200		($2,025,000	)	$	14,175,200
	Seven-Up Pete		5,175,000		(1,132,100	)		4,042,900		5,175,000		(646,900	)		4,528,100

		$	21,375,200		($4,675,800	)	$	16,699,400	$	21,375,200		($2,671,900	)	$	18,703,300

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PART I FINANCIAL INFORMATION
	Item 1. Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
	Item 4. Controls and Procedures
PART II OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 2. Changes in Securities
	Item 3. Defaults Upon Senior Securities
	Item 4. Submission of Matters to Vote of Security Holders
	Item 5. Other Information
	Item 6(a) Exhibits
	Item 6(b) Reports on Form 8-K
SIGNATURES
INDEX TO EXHIBITS
EX-31.1 Certification of CEO - Section 302
EX-31.2 Certification of CFO - Section 302
Ex-32.1 Certification of CEO - Section 906
EX-32.2 Certification of CFO - Section 906


Consolidated Balance Sheets		Page 2

Consolidated Statements of Operations		Page 3

Consolidated Statements of Cash Flows		Page 4-5

Consolidated Statement of Changes in Stockholders’ Equity		Page 6

Notes to Interim Consolidated Financial Statements		Page 7-17

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		Page 18

Item 3. Quantitative and Qualitative Disclosures About Market Risk		Page 23

Item 4. Controls and Procedures		Page 24


	September 30, 2003		December 31, 2002

Briggs Facility (a)	$	–	$	1,355,600
Caterpillar Finance (b)		891,700		–
Debentures (c)		2,699,000		–

		3,590,700		1,355,600
Current portion		891,700		1,355,600

Notes payable – Noncurrent	$	2,699,000	$	–


	Three Monhts Ended					Nine Months Ended
	September 30,					September 30

	2003			2002		2003		2002

Unrealized gain (loss)		($185,400	)	$	452,500	$	433,700		($599,700	)


		Three Months Ended						Nine Months Ended
		September 30						September 30

		2003			2002			2003			2002

Net loss, as reported			($2,450,100	)		($142,300	)		($7,260,500	)		($4,256,200	)
Add: compensation expense determined under fair value based method			(38,000	)		(39,200	)		(88,700	)		(144,700	)

Pro forma net loss			($2,488,100	)		($181,500	)		($7,349,200	)		($4,400,900	)

Basic and diluted loss per share
	o As reported		($0.11	)		($0.01	)		($0.34	)		($0.23	)
	o Pro Forma		($0.11	)		($0.01	)		($0.34	)		($0.24	)


	$000s				$000s
	Three months ended September 30,				Nine months ended September 30,

	2003		2002		2003		2002

Sale of foreign exploration property		–	$	1,328		–	$	1,557
Sale of Briggs crusher		–		–		–		1,173
Sale of mineral property interests	$	10		–	$	85		–

	$	10	$	1,328	$	85	$	2,730


Item 4.		Submission of Matters to Vote of Security Holders		None


		CANYON RESOURCES CORPORATION

Date: November 14, 2003		/s/ Richard H. De Voto

		Richard H. De Voto Chief Executive Officer

Date: November 14, 2003		/s/ Gary C. Huber

		Gary C. Huber Chief Financial Officer