UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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


þ		Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~March~~June 3130, 2007


o		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 1-11887

CANYON RESOURCES CORPORATION

(a Delaware Corporation)

I.R.S. Employer Identification Number 84-0800747

14142 Denver West Parkway, Suite 250
Golden, CO 80401
(303) 278-8464

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 þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. Large accelerated filer o Accelerated filer o Non-accelerated filer þ

Large accelerated filer o Accelerated filer o Non-accelerated filer þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 4453,~~133~~037,~~825~~824 shares of the Company’s common stock were outstanding as of ~~May~~August 48, 2007.

CANYON RESOURCES CORPORATION FORM 10-Q For the ~~Three~~Six Months ended ~~March~~June 3130, 2007

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION
Item 1. Financial Statements	Page 1
	Item 1.	Financial Statements	Page 1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	Page 16
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	Page 16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	Page 26
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	Page 27
Item 4. Controls and Procedures	Page 27
	Item 4.	Controls and Procedures	Page 28
PART II OTHER INFORMATION
Item 1. Legal Proceedings	Page 28
	Item 1.	Legal Proceedings	Page 29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	Page 28
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	Page 29
Item 3. Defaults Upon Senior Securities	Page 28
	Item 3.	Defaults Upon Senior Securities	Page 29
Item 4. Submission of Matters to a Vote of Security Holders	Page 28
	Item 4.	Submission of Matters to a Vote of Security Holders	Page 29
Item 5. Other Information	Page 28
	Item 5.	Other Information	Page 30
Item 6. Exhibits	Page 28
	Item 6.	Exhibits	Page 30
SIGNATURES	~~Page 29~~		Page 31
Certification of CEO Pursuant to Section 302
Certification of CFO Pursuant to Section 302
Certification of CEO Pursuant to Section 906
Certification of CFO Pursuant to Section 906

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

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~~applicable SEC rules and regulations.

These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Form 10-K for the year ended December 31, 2006.

Consolidated Balance Sheets		Page 2
Consolidated Statements of Operations		Page 3
Consolidated Statement of Changes in Stockholders’ Equity		Page 4
Consolidated Statements of Cash Flows		Pages 5-6
Notes to Interim Consolidated Financial Statements		Pages 7-15
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		Page 16
Item 3. Quantitative and Qualitative Disclosures About Market Risk		Page 2627
Item 4. Controls and Procedures		Page 2728

CANYON RESOURCES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited)

CONSOLIDATED BALANCE SHEETS (Unaudited)


	June 30,			December 31,
	2007			2006
ASSETS
Cash and cash equivalents	$	4,758,500		$	1,513,700
Short term investments		500,000			2,500,000
Accounts receivable		4,700			47,300
Metal inventories		163,100			47,300
Prepaid insurance		162,200			171,700
Other current assets		117,100			146,800

Total current assets		5,705,600			4,426,800

Property, plant and mine development, net		9,065,500			8,719,800
Restricted cash		3,262,600			3,431,300
Other noncurrent assets		246,200			246,700


Total assets	$	18,279,900		$	16,824,600


LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	412,700		$	659,000
Asset retirement obligations		1,088,200			1,180,100
Payroll liabilities		119,300			171,700
Legal settlement accrual		206,200			343,700
Other current liabilities		22,200			37,800

Total current liabilities		1,848,600			2,392,300

Notes payable		825,000			825,000
Capital leases		55,600			65,800
Asset retirement obligations		2,919,000			3,021,400

Total liabilities		5,648,200			6,304,500

Commitments and contingencies (note 10)
Common stock ($.01 par value) 150,000,000 shares authorized; issued and outstanding: 53,037,800 at June 30, 2007, and 44,161,800 at December 31, 2006		530,400			441,600
Capital in excess of par value		145,133,400			140,266,900
Retained deficit		(133,032,100	)		(130,188,400	)

Total stockholders’ equity		12,631,700			10,520,100


Total liabilities and stockholders’ equity	$	18,279,900		$	16,824,600

	March 31,			December 31,
	2007			2006
ASSETS
Cash and cash equivalents	$	572,600		$	1,513,700
Short term investments		1,500,000			2,500,000
Accounts receivable		38,300			47,300
Metal inventories		85,100			47,300
Prepaid insurance		76,900			171,700
Other current assets		172,200			146,800
Total current assets		2,445,100			4,426,800
Property, plant and mine development, net		8,962,600			8,719,800
Restricted cash		3,204,300			3,431,300
Other noncurrent assets		251,200			246,700
Total assets	$	14,863,200		$	16,824,600
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	404,900		$	659,000
Asset retirement obligations		1,132,400			1,180,100
Payroll liabilities		141,500			171,700
Legal settlement accrual		206,200			343,700
Other current liabilities		30,400			37,800
Total current liabilities		1,915,400			2,392,300
Notes payable		825,000			825,000
Capital leases		61,100			65,800
Asset retirement obligations		2,960,000			3,021,400
Total liabilities		5,761,500			6,304,500
Commitments and contingencies (note 10)
Common stock ($.01 par value) 100,000,000 shares authorized; issued and outstanding: 44,161,800 at March 31, 2007, and 44,161,800 at December 31, 2006		441,600			441,600
Capital in excess of par value		140,331,100			140,266,900
Retained deficit		(131,671,000	)		(130,188,400	)
Total stockholders’ equity		9,101,700			10,520,100
Total liabilities and stockholders’ equity	$	14,863,200		$	16,824,600

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

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

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


	Three months ended June 30,						Six months ended June 30,
	2007			2006			2007			2006
REVENUE
Sales	$	—		$	413,100		$	67,200		$	1,006,400


EXPENSES
Cost of sales		—			413,000			60,400			866,600
Depreciation, depletion and amortization		10,600			6,700			21,700			15,600
Selling, general and administrative		1,070,900			770,900			1,958,500			1,638,700
Exploration		299,100			424,100			871,600			733,200
Accretion expense		41,900			50,800			83,800			101,600
Loss on asset disposals		—			—			35,100			—

		1,422,500			1,665,500			3,031,100			3,355,700


Operating loss		(1,422,500	)		(1,252,400	)		(2,963,900	)		(2,349,300	)


OTHER INCOME (EXPENSE)
Interest income		76,600			78,600			150,400			136,300
Interest expense		(15,200	)		(13,400	)		(30,400	)		(26,400	)
Gain on sale of securities		—			66,200			—			882,200
Loss on derivative instruments		—			(164,600	)		—			(310,500	)
Other		—			(84,600	)		200			(84,600	)

		61,400			(117,800	)		120,200			597,000


Net loss	$	(1,361,100	)	$	(1,370,200	)	$	(2,843,700	)	$	(1,752,300	)


Basic and diluted net loss per share	$	(0.03	)	$	(0.03	)	$	(0.06	)	$	(0.05	)


Basic and diluted weighted-average shares outstanding		47,176,800			40,000,300			45,677,700			39,165,000

	Three months ended March 31,
	2007			2006
REVENUE
Sales	$	67,200		$	593,300
EXPENSES
Cost of sales		60,400			453,600
Depreciation, depletion and amortization		11,100			8,900
Selling, general and administrative		887,600			867,800
Exploration		572,500			309,100
Accretion expense		41,900			50,800
Loss on asset disposals		35,100			—
		1,608,600			1,690,200
Operating loss		(1,541,400	)		(1,096,900	)
OTHER INCOME (EXPENSE)
Interest income		73,800			57,700
Interest expense		(15,200	)		(13,000	)
Gain on sale of securities		—			816,000
Loss on derivative instruments		—			(145,900	)
Other		200			—
		58,800			714,800
Net loss	$	(1,482,600	)	$	(382,100	)
Basic and diluted net loss per share	$	(0.03	)	$	(0.01	)
Basic and diluted weighted-average shares outstanding		44,161,800			38,320,500

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)

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)


	Common Stock				Capital					Total
	Number of		At Par		in Excess		Retained			Stockholders’
	Shares		Value		of Par Value		Deficit			Equity

Balances, January 1, 2007		44,161,800	$	441,600	$	140,266,900	$	(130,188,400	)	$	10,520,100

Share-based compensation amortized		52,500		500		251,900		—			252,400
Stock and warrants issued for cash net of issuance costs of $247,200		8,823,500		88,300		4,614,600		—			4,702,900
Net loss		—		—		—		(2,843,700	)		(2,843,700	)


Balances, June 30, 2007		53,037,800	$	530,400	$	145,133,400	$	(133,032,100	)	$	12,631,700

	Common Stock				Capital					Total
	Number of		At Par		in Excess		Retained			Stockholders’
	Shares		Value		of Par Value		Deficit			Equity
Balances, January 1, 2007		44,161,800	$	441,600	$	140,266,900	$	(130,188,400	)	$	10,520,100
Share-based compensation		—		—		64,200		—			64,200
Net loss		—		—		—		(1,482,600	)		(1,482,600	)
Balances, March 31, 2007		44,161,800	$	441,600	$	140,331,100	$	(131,671,000	)	$	9,101,700

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

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

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Six months ended June 30,
	2007			2006
Cash flows from operating activities:
Net loss	$	(2,843,700	)	$	(1,752,300	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, depletion and amortization		21,700			15,600
Receivable write-off		—			13,800
Impairment of inventory		—			17,600
Loss on asset dispositions		35,100			—
Gain on sale of securities		—			(882,200	)
Share based compensation expense		252,400			279,600
Purchase of short term investments		—			(6,501,800	)
Warrant extension cost		—			70,800
Loss on derivative instruments		—			310,500
Accretion of asset retirement obligation		83,800			101,600
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable		42,600			(48,100	)
(Increase) decrease in inventories		(115,800	)		19,400
Decrease in prepaid and other assets		39,700			98,000
Decrease in accounts payable and accrued liabilities		(282,000	)		(288,800	)
Decrease in asset retirement obligations		(278,100	)		(642,700	)
Decrease (increase) in restricted cash		168,700			(84,100	)

Total adjustments		(31,900	)		(7,520,800	)


Net cash used in operating activities		(2,875,600	)		(9,273,100	)


Cash flows from investing activities:
Purchases and development of property and equipment		(572,900	)		(875,000	)
Redemption of short term investments		2,000,000			—
Proceeds on asset disposition		—			10,000
Proceeds from sale of securities		—			882,200


Net cash provided by investing activities		1,427,100			17,200


Cash flows from financing activities:
Issuance of stock and warrants		4,950,100			5,457,200
Issuance cost		(247,200	)		(302,900	)
Payments on capital lease obligations		(9,600	)		(3,900	)


Net cash provided by financing activities		4,693,300			5,150,400


Net increase(decrease) in cash and cash equivalents		3,244,800			(4,105,500	)
Cash and cash equivalents, beginning of period		1,513,700			5,649,200


Cash and cash equivalents, end of period	$	4,758,500		$	1,543,700

	Three months ended March 31,
	2007			2006
Cash flows from operating activities:
Net loss	$	(1,482,600	)	$	(382,100	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, depletion and amortization		11,100			8,900
Loss on asset dispositions		35,100			—
Gain on sale of securities		—			(816,000	)
Share based compensation expense		64,200			100,300
Loss on derivative instruments		—			145,900
Accretion of asset retirement obligation		41,900			50,800
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable		9,000			(3,300	)
(Increase) decrease in inventories		(37,800	)		47,500
Decrease (increase) in prepaid and other assets		64,900			(2,200	)
(Decrease) in accounts payable and accrued liabilities		(280,400	)		(231,000	)
(Decrease) in asset retirement obligations		(151,000	)		(322,300	)
Decrease (increase) in restricted cash		227,000			(52,600	)
Total adjustments		(16,000	)		(1,074,000	)
Net cash used in operating activities		(1,498,600	)		(1,456,100	)
Cash flows from investing activities:
Purchases and development of property and equipment		(437,800	)		(447,100	)
Redemption of short term investments		1,000,000			—
Proceeds from sale of securities		—			816,000
Net cash provided by investing activities		562,200			368,900
Cash flows from financing activities:
Payments on capital lease obligations		(4,700	)		(1,400	)
Net cash used in financing activities		(4,700	)		(1,400	)
Net decrease in cash and cash equivalents		(941,100	)		(1,088,600	)
Cash and cash equivalents, beginning of period		1,513,700			5,649,200
Cash and cash equivalents, end of period	$	572,600		$	4,560,600

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

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

Supplemental disclosures of cash flow information:

	Three Months Ended March 31,
	Six Months Ended June 30,
	2007		2006
Interest paid	$	1530,~~200~~400	$	1326,~~000~~400
Income taxes paid	$	—	$	—
Supplemental disclosures of noncash investing and financing activities:
Non-cash financing activities:
Issued 30,000 shares for option on the Suitcase/Mineral Hill properties	$	—	$	30,300
Fair value of amended warrants	$	—	$	271,700
Issued 535,000 series A warrants related placement agent fee	$	—	$	219,300
Issued 330,900 series A warrants related placement agent fee	$	50,100	$	—
Issued 992,600 series B warrants related placement agent fee	$	266,500	$	—

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. Nature of Operations and Liquidity:

Canyon Resources ~~Corporation,~~is a Delaware corporation, isbased ain Golden Colorado~~-based~~. ~~company,~~Canyon ~~which~~ was organized in 1979 to explore, acquire, develop, and mine precious metals, uranium and other mineral properties. References to “Canyon Resources”, “Canyon”, and the “Company”, mean Canyon Resources ~~Corporation~~ Corporation and all of the wholly-owned and majority-owned subsidiaries of Canyon Resources Corporation, or any one or more of them, as the context requires. Canyon is a ~~reporting~~non-accelerated ~~company~~filer onand its common stock is listed on the American Stock Exchange (“AMEX”).

The Company is involved in all phases of the mining business from early stage exploration, exploration drilling, development drilling, feasibility studies and permitting, through construction, operation and final closure of mining properties. The Company has gold production operations in the western U.S., and conducts exploration activities in the search for additional valuable mineral properties primarily in the western U.S. Canyon’s exploration and development efforts emphasize precious metals (gold and silver) and uranium, but base metals and industrial minerals may also be considered. The Company has conducted a portion of its mineral exploration and development through joint ventures with other companies.

The Company’s ~~has~~primary ~~gold~~focus ~~production~~continues ~~operations~~to inbe on increasing the ~~western~~value ~~U.S.,~~of ~~and~~its ~~conducts~~three ~~exploration~~core ~~activities~~properties of inBriggs, Reward and the ~~search~~uranium ~~for~~joint ~~additional~~ventures. ~~valuable~~The ~~mineral~~Briggs ~~properties~~Mine ~~primarily~~located in southeastern California, has successfully increased the ~~western~~total ~~U.S.~~mineralized ~~Canyon’s exploration~~material ~~and~~through ~~development~~both ~~efforts~~drilling ~~emphasize~~and ~~precious~~acquisitions. The ~~metals~~Company ~~(gold,~~has ~~silver~~commissioned ~~and~~a ~~uranium),~~feasibility ~~but~~study ~~base metals~~for ~~and~~the ~~industrial~~Reward ~~minerals~~property ~~may~~that ~~also~~is expected to be completed ~~considered~~during the fourth quarter of 2007. The ~~Company~~uranium ~~has~~joint ~~conducted~~ventures, awhich ~~portion~~are fully carried by our joint venture partners for the first $2.0 to $2.8 million of ~~its~~expenditures, are currently ~~mineral~~drilling ~~exploration~~in Wyoming and ~~development~~are ~~through~~considering ~~joint~~a ~~ventures~~substantial ~~with~~increase ~~other~~in ~~companies~~planned drilling for later in the year.

The ~~Company’s primary focus continues to be on re-starting the Briggs Mine located in southeastern California, where the Company successfully increased the total mineralized material through both~~ drilling ~~and acquisitions. The drilling~~ completed during 2006 and through the ~~first~~second quarter of 2007 at and around the Briggs Mine ~~highlighted~~was ~~its~~successful ~~previously~~in ~~underdeveloped~~developing underground potential and also increased the size and confidence of the Cecil R satellite deposit located 3 miles north of the Briggs Mine. The ~~Briggs~~initial Briggs feasibility study ~~is complete~~was ~~which~~completed ~~resulted~~ in early 2007 and established open pit and underground reserves. The ~~Canyon~~Company is ~~evaluating~~planning ~~its~~underground ~~options regarding~~test mining at the ~~production~~Briggs orMine ~~monetization~~intended ofto confirm the continuity ~~Briggs~~and ~~assets~~ore control procedures and to provide better deep exploration access to the Goldtooth structure.

~~The~~Year-to-date ~~Kendall~~exploration ~~Mine,~~activities ~~located~~at ~~near~~the ~~Lewistown,~~Reward ~~Montana~~Project included geotechnical diamond core drilling, ~~continued~~initiation ~~with~~of ~~reclamation~~both permitting and ~~closure~~the feasibility study. Exploration and development activities, ~~principally~~at ~~relating~~the toBriggs ~~collection,~~Mine ~~treatment~~were related to step-out and ~~disposal~~infill ofdrilling ~~water~~around ~~contained~~the Briggs Mine. Our operating partners in the ~~process~~ ~~system~~Converse and ~~mine~~Sand ~~area,~~Creek ~~and~~Uranium ~~re-contouring~~Joint Ventures have continued drilling the ~~leach~~known ~~pads~~uranium ~~and~~deposits ~~pit~~in ~~areas~~Wyoming during the second quarter of 2007.

~~Recent~~At ~~development~~Kendall ~~activities~~Mine, atlocated ~~our~~near ~~Reward~~Lewistown, ~~Project included diamond core drilling~~Montana, the ~~initiation of~~Company ~~permitting~~continued ~~and~~with ~~the~~reclamation ~~beginning~~and closure ~~of a feasibility study. Exploration~~ activities, ~~during~~principally ~~the~~relating ~~first quarter were related~~ to ~~infill~~collection, ~~and~~treatment ~~step-out drilling around the Briggs Mine~~ and ~~geotechnical (diamond~~disposal ~~core)~~of ~~drilling~~water ~~at the Reward Project. The Company expects that our joint venture partner~~contained in the ~~Converse~~process system and ~~Sand~~mine ~~Creek~~area, ~~Uranium~~and ~~Joint~~re-contouring ~~Ventures will continue to drill~~ the ~~known~~leach ~~uranium structures~~pads ~~in Wyoming in the second~~ and ~~third~~pit ~~quarters of 2007~~areas.

The Company believes that its cash requirements over the next 12 months can be funded through a combination of existing cash, revenue from operations, asset sales, ~~and~~equity ~~cash~~financing ~~raised~~and ~~from financing activities~~debt. The Company’s liquidity ~~may~~will continue to be negatively impacted by ~~the~~ decreasing residual gold ~~production~~ production from rinsing the heap leach pads at the Briggs Mine. During ~~2006~~2007 this residual gold production was the only internal source of cash flow other than asset sales.

The Company is continually evaluating strategic business opportunities such as joint ventures, mergers and acquisitions with the objective of creating additional cash flow to sustain the corporation, and to provide a future source of funds for ~~growth~~improving the core properties. While the Company believes it will be able to finance its continuing activities ~~and the possible re-start of the Briggs Mine~~, there are no assurances of success in this regard or inof its ability to obtain additional financing through capital markets, joint ventures, or other arrangements in the future. If management’s plans are not successful, the Company’s ability to operate would be adversely impacted.

2. Basis of Presentation:

Management Estimates and Assumptions: Certain amounts included in or affecting the Company’s consolidated 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 consolidated

~~financial statements are prepared~~2. ~~Therefore,~~Basis ~~the reported amounts~~ of ~~the Company’s assets and~~Presentation: 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. The more significant areas requiring the use of management estimates and assumptions relate to mineral reserves that are the basis for future cash flow estimates and units-of-production amortization determination; completion of feasibility studies, recoverability and timing of gold production from the heap leaching process; environmental, reclamation and closure obligations; asset impairments (including estimates of future cash flows); useful lives and residual values of intangible assets; fair value of stock based compensation; fair value of financial instruments and nonmonetary transactions; valuation allowances for deferred tax assets; and contingencies and litigation.

Management Estimates and Assumptions: Certain amounts included in or affecting the Company’s consolidated 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 consolidated 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. The more significant areas requiring the use of management estimates and assumptions relate to mineral reserves that are the basis for future cash flow estimates and units-of-production amortization determination; completion of feasibility studies, recoverability and timing of gold production from the heap leaching process; environmental, reclamation and closure obligations; asset impairments (including estimates of future cash flows); useful lives and residual values of intangible assets; fair value of stock based compensation; fair value of financial instruments and nonmonetary transactions; valuation allowances for deferred tax assets; and contingencies and litigation.

Short term investments are primarily auction rate certificates that are classified as available-for-sale securities with purchases and sales reflected in the consolidated statements of cash flows as investing activities.

Consolidation Principles: The Company’s consolidated financial statements include the accounts of Canyon and its significant active wholly-owned subsidiaries: CR Kendall Corporation; CR Briggs Corporation; CR Montana Corporation; CR Nevada; CR International Corporation; Judith Gold Corporation; and Industrial Minerals Corporation. All intercompany balances and transactions have been eliminated in the consolidated financial statements.

3. Restricted Cash:

Restricted cash related to the following properties were as follows:

	March 31,		December 31,
	June 30,		December 31,
	2007		2006
Kendall reclamation project	$	2,~~294~~324,700	$	2,401,300
Briggs Mine		~~823~~831,~~400~~000		442,900
Seven-Up Pete Joint Venture		52,500		553,400
Reward Project		33,700		33,700
		3,204,300		3,431,300
Other		20,700		—
		3,262,600		3,431,300
Current portion		—		—
Noncurrent portion	$	3,~~204~~262,~~300~~600	$	3,431,300

Restricted cash related to the Kendall reclamation project consisted of (i1) $2.1 million held directly by the Montana Department of Environmental Quality (“DEQ”); and (ii2) $0.2 million is sequestered by court order in connection with the sale proceeds of a portion of the Kendall property. The decrease from December 31, 2006 was due to a partial settlement of a pending lawsuit. See Note 10(d).

Restricted cash related to the reclamation bonds at the Briggs Mine and nearby satellite deposits consisted of (i1) a fully cash collateralized $0.2 million bank Letter of Credit benefiting the surety; (ii2) $0.4 million cash held directly by the bond surety, and (~~iii~~3) $0.2 million of other ~~cash~~ cash on deposit with ~~the~~ Inyo County, California. The increase from December 31, 2006 was due to a $0.3 ~~million~~ million collateral deposit with the surety and a $0.1 million inflation adjustment paid to Inyo County. Refer to note 10(b) for discussion of June 2007 lawsuit.

Restricted cash related to the Seven-Up Pete Joint Venture consists of cash held directly by the Montana DEQ for reclamation of exploration activities controlled by the Seven-Up Pete Joint Venture. The decrease from December 31, 2006 was due to the Company being reimbursed $0.5 million related to the McDonald property that was transferred to a third party.

Restricted cash related to the Reward Project consists of a cash bond held by the Bureau of Land Management (“BLM”) for environmental reclamation regarding exploration activities.

Other restricted cash related to Tuscarora consists of a cash bond held by the BLM for environmental reclamation regarding exploration activities.

4. Metal Inventories:

Metal inventories consisted of doré gold of $85163,100 and $47,300 as of ~~March~~June 3130, 2007 and December 31, 2006, respectively. The Company had no write downs of its metal inventory at the Briggs Mine to net realizable value during the ~~first~~second quarters of 2007 and 2006 of nil and 17,600, respectively and nil and 17,600 for the first six months of 2007 and 2006 respectively.

Briggs inventory included general and administrative expenses of approximately $5578,700 and $21,100 as of ~~March~~June 3130, 2007 and December 31, 2006, respectively.

5. Property, Plant and Mine Development:

The following is a summary of property, plant and mine development:

As of March 31, 2007

As of June 30, 2007

Depreciation

Asset Value

Accumulated

Net Book

Method

at Cost

Depreciation

Value

Buildings and equipment

1 -— 5 Years SL

5,~~984~~954,300

4,~~040~~051,~~600~~300

1,~~943~~903,~~700~~000

Mine development

UOP(a)

12,~~894~~033,~~600~~700

—

12,~~894~~033,~~600~~700

Mineral interest

UOP

8,~~745~~750,~~900~~400

3,820,900

4,~~925~~929,~~000~~500

Asset retirement cost

UOP

199,300

—

199,300

16,~~824~~937,~~100~~700

7,~~861~~872,~~500~~200

89,~~962~~065,~~600~~500

(a) Unit-of-Production, or UOP, is a depreciation method that calculates depreciation expense over the estimated proven and probable reserves of the related property.

		As of December 31, 2006
	Depreciation	Asset Value		Accumulated		Net Book
	Method	at Cost		Depreciation		Value
Buildings and equipment	1 -— 5 Years SL	$	6,004,800	$	4,047,200	$	1,957,600
Mine development	UOP(a)		1,637,900		—		1,637,900
Mineral interest	UOP		8,745,900		3,820,900		4,925,000
Asset retirement cost	UOP		199,300		—		199,300
		$	16,587,900	$	7,868,100	$	8,719,800

The year-to-date increase in property, plant and mine development was due primarily to the $0.34 million increase in mine development expenditures at Briggs, where the Company began capitalizing the direct costs of developing mining operations since January 1, 2006.

6. Asset Retirement Obligations:

The asset retirement obligations reconciliation from the beginning of the year to March 31, 2007 is as follows:

Balance, December 31, 2006	$	4,201,500
Settlement of liabilities		(151,000	)
Accretion expense		41,900
Balance, March 31, 2007		4,092,400
Current portion		1,132,400
Noncurrent portion	$	2,960,000

6. Asset Retirement Obligations:

The asset retirement obligations reconciliation from the beginning of the year to June 30, 2007 is as follows:


Balance, December 31, 2006	$	4,201,500
Settlement of liabilities		(278,100	)
Accretion expense		83,800

Balance, June 30, 2007		4,007,200
Current portion		1,088,200


Noncurrent portion	$	2,919,000

7. Notes Payable:

The notes payable reconciliation from the beginning of the year to ~~March~~June 3130, 2007 is as follows:

Balance, December 31, 2006	$	825,000
Conversions / retirements		—
Balance, March 31, 2007		825,000
Balance, June 30, 2007		825,000
Current portion		—
Noncurrent portion	$	825,000

The uncollateralized debentures require quarterly interest payments of 6% per year, and the holders have the right to convert principal to common stock of the Company, subject to adjustments for stock splits, reverse splits, and changes of control, at any time at a conversion rate of $1.38 per share of common stock.

Interest expense for the ~~first~~debentures ~~quarter~~ was approximately $12,~~200~~300 ~~none~~and $12,300 for the second quarters of ~~which~~2007 ~~was~~and ~~capitalized~~2006 and $24,500 and $24,500 for the first six months of 2007 and 2006, respectively.

8. Outstanding Warrants:

A summary of the outstanding warrants as of ~~March~~June 3130, 2007 is as follows:

Range of Exercise	Shares Underlying		Weighted Average	Weighted Average
	Shares Underlying		Weighted Average	Weighted Average
Prices	Warrants Outstanding		Remaining Contractual Life	Exercise Price
Range of Exercise Prices	Warrants Outstanding		Remaining Contractual Life	Exercise Price
$0.50-$1.00		~~281~~10,~~000~~428,061	13.52 years	$	0.7769
$1.01-$1.50		7,155,729	1.74 years	$	1.30
$1.51-$2.16		2,199,836	0.2 years	$	2.16
Total/average		17,583,790	2.4 years	$	0.94
Total/average		9,636,565	1.3 years	$	1.48

The Company adopted FASB Staff Position (“FSP”) EITF 00-19-2 on October 1, 2006, and recorded a cumulative-effect adjustment loss of $174,800 that was shown as a separate line on the consolidated statements of operations for the year ended December 31, 2006. The measurement of the contingent warrant liability related to registration payment arrangements as of ~~March~~June 3130, 2007 and December 31, 2006 is nil and nil, respectively, under the provisions of FASB Statement No. 5.

The Company has outstanding registration payment arrangements related to financing transactions that closed in May 2007, June 2006, and December 2005. For each of these transactions, the Subscription Agreement provided for certain registration rights associated with the issuance of the shares of common stock and shares of common stock issuable upon exercise of the warrants. Failure to meet the requirements of the Subscription Agreement, such as initial registration and effectiveness, maintaining effectiveness during the term of the warrants, and maintaining the trading status of the common shares, would result in liquidating damages. Liquidated damages are payable in cash equal to 2% of the purchase price for the first 30 day period or portion thereof and 1% of the purchase price for each subsequent 30 day period or portion thereof. The liquidated damages associated with the

registration payment rights are capped at 10% for the May 2007 and June 2006 financing transactions and payable only in cash. As of June 30, 2007, approximately 42% of the December 2005 financing transaction warrant holders executed an Amendment to the Subscription Agreement that capped such liquidated damages to 10% of the gross proceeds of the financing. All of the warrants have been accounted for as equity rather than as a liability.

9. Equity Transactions:

On May 25, 2007, the Company completed a private placement financing which raised $4.95 million (approximately $4.7 million net) through the sale of approximately 8.8 million units. The private placement consisted of the sale of approximately 8.8 million shares of the Company’s common stock, 2.5 million Series A Warrants with an exercise price of $0.640 and a term of one year from registration effectiveness, and 7.6 million Series B Warrants with an exercise price of $0.704 and a term of four years from closing. The Series A warrants have a redemption feature beginning six months from the closing date whereby the Series A Warrants can be redeemed by the Company for $0.01 per warrant upon ten trading day notice, if the price of the Company’s common stock exceeds $0.80 for a period of 10 consecutive trading days. The transaction was priced at $0.561 per share, representing a 10% discount to the 10 day volume weighted average of the closing price of the Company’s common stock prior to pricing. In connection with the financing, the Company paid a cash placement agent fee of approximately $0.2 million and 1.3 million warrants plus paid other legal and accounting fees associated with the financing and registration of the underlying shares. The broker warrants are at the same terms as the investors’ warrants. The Company filed a registration statement on June 29, 2007 with the SEC within 45 days of the closing date and it has not yet been declared effective. The estimated fair value of the new warrants issued was approximately $2.4 million and this amount is included in capital in excess of par value in the consolidated statement of changes in stockholders’ equity.

The Board of Directors adopted a new Stockholder Rights Plan (the “rights plan”) that became effective on March 23, 2007. Canyon Resources’ former rights plan, adopted in 1997, expired on March 20, 2007. The rights plan is designed to protect all stockholders of the Company against potential acquirers who may pursue coercive or unfair tactics aimed at gaining control of the Company without paying all stockholders of the Company a full and fair price.

In implementing the rights plan, the Board of Directors has declared a dividend of one common stock purchase right for each outstanding share of the Company’s common stock held of record as of the close of business on April 16, 2007. Each right initially would entitle the holder thereof to purchase one share of common stock. The rights will expire on March 23, 2017. The distribution of rights under the plan will not interfere with the Company’s business plans or be dilutive or affect our reported per share results.

Under the plan, the preferred purchase rights generally become exercisable upon the acquisition of 20% or more of the Company’s outstanding common stock, unless the Board of Directors redeems the rights. If exercised, all holders of rights, other than the acquiring person or group, would be entitled to acquire shares of the Company’s common stock at a 50% discount to the then-current market price. In addition, if the rights become exercisable and the Company is acquired in a merger, each right would entitle the holder to purchase shares of the acquiring company at a 50% discount to the then-current market price.

and the Company is acquired in a merger, each right would entitle the holder to purchase shares of the acquiring company at a 50% discount to the then-current market price.

10. Commitments and Contingencies:

(a) Kendall Mine Reclamation The Kendall Mine operates under permits granted by the Montana DEQ. In February 2002, the DEQ issued a decision that a comprehensive Environmental Impact Statement (“EIS”) was needed for completion of remaining reclamation at Kendall. The Montana DEQ has yet to complete its work on this EIS. The Company’s estimate to achieve mine closure could be impacted by the outcome of an agency decision following an EIS. The Company has deposited $2.1 million in an interest bearing account with the DEQ for reclamation at the Kendall Mine which is currently ongoing. The Company has spent approximately $11.5 million on Kendall mine reclamation from 1991 through the first quarter ended March 31, 2007. (b) Briggs Mine Surety Bonds The Briggs Mine operates under permits granted by various agencies including BLM, Inyo County, California, the California Department of Conservation, and the Lahontan Regional Water Quality Control Board (“Lahontan”). The Company has posted cash and reclamation bonds with these agencies in the amount of $4.3 million of which $4.2 million are reclamation bonds supported by a surety. In March 2007, the Company posted a $0.1 million cash reclamation bond with the County as an inflation adjustment. All surety bonds are subject to annual review and adjustment. In 1999, in response to a demand for an increase in collateral by the surety company 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 company 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 made a $0.3 million deposit in March 2007, after the Company received notice from the surety that Canyon is in default of its obligations under the collateral agreement. The Company continues to be in negotiations with the surety regarding the timing and the form of collateral. The surety’s request does not represent an expense to the Company and the Company has the available cash and investments to fund the request. If we funded the entire request in cash rather than with other collateral, it could impact the timing and cost of any future financings. The Company is reviewing its rights under the bond and collateral agreements and is in negotiations with the surety to reach an acceptable rescheduling of the deposit requirements. If an acceptable rescheduling cannot be agreed to, the surety company could seek to sue the Company to deposit the collateral under the collateral agreement with the surety. In April 2004, the Company ceased active mining at Briggs due to lack of development and began reclamation activities. The Company has spent approximately $4.0 million on Briggs reclamation from 2004 through the first quarter ended March 31, 2007. The Company has not requested release of liability for completion of certain reclamation tasks due to uncertainties related to the potential re-start of Briggs that may re-disturb portions of past reclamation activities. (c) McDonald Gold Project Phelps Dodge, a wholly-owned subsidiary of Freeport-McMoRan Copper & Gold Inc., retains a one-third interest in any proceeds which may be received from the currently active takings lawsuit with the State of Montana. The Montana lawsuit was filed to recover value lost due to changes in the mining law and the cancellation of mineral leases related to our wholly-owned Seven-Up Pete Joint Venture’s interest in the McDonald Gold Project. In April 2006, the Company’s complaint under the takings lawsuit was dismissed in U.S. District Court for the District of Montana and the Company filed a notice of appeal to the U.S. Court of Appeals for the Ninth Circuit. Briefs have been submitted to the U.S. Court of Appeals for the Ninth Circuit. In addition, the Company has filed a breach of contract complaint against the State of Montana related to the termination of the McDonald Gold Project’s state mineral leases.

	(d)		Kendall Mine Lawsuits
			In October 2001, a plaintiff group including members of the Shammel, Ruckman and Harrell families filed suit in the State of Montana District Court against the Company and its wholly-owned subsidiary, CR Kendall Corporation. The complaint alleges violation of water rights, property damage, trespass and negligence in connection with the operation of the Kendall Mine and seeks unspecified damages and punitive damages. In February 2007, the Company entered into a settlement and release agreement with eight of the twelve plaintiffs in this suit. The Company’s share of the settlement was $0.1 million and has a balance of $0.2 million recorded as a legal settlement accrual on the consolidated balance sheet as of March 31, 2007.
			In August 2002, a Preliminary Injunction was issued in Montana District Court on behalf of the Kendall Mine plaintiff group in connection with the Company’s auction of certain mineral rights and fee lands unrelated to the CR Kendall Corporation or its operation, but also in western Montana. In October 2002, the Court issued a Supplemental Order which sequesters any proceeds realized from the auction until such time as the lawsuit is concluded. As of March 31, 2007, $0.2 million is held by the Court as required by the Order. The Company’s share of the above mentioned settlement was paid out of the funds held by the Court.

	(b)		Briggs Mine Surety Bonds

			The Briggs Mine operates under permits granted by various agencies including BLM, Inyo County, California, the California Department of Conservation, and the Lahontan Regional Water Quality Control Board (“Lahontan”). The Company has posted cash and reclamation bonds with these agencies in the amount of $4.3 million of which $4.2 million are reclamation bonds supported by a surety. All surety bonds are subject to annual review and adjustment and in March 2007, the Company posted a $0.1 million cash reclamation bond with Inyo County as an inflation adjustment.

			In 1999, in response to a demand for an increase in collateral by the surety company who issued the above described bonds, the Company granted a security interest in 28,000 acres of mineral interests in Montana. The Company further agreed to make cash deposits with the surety company totaling $1.5 million over a three year period at the rate of $0.5 million per year, commencing June 30, 2001. The Company made a $0.3 million deposit in March 2007, after the Company received notice from the surety that Canyon was in default of its obligations under the collateral agreement. In June 2007, the surety company filed a civil action in the U.S. District Court for the District of Colorado against the Company for monies due of $1.25 million and unspecified costs, damages and legal expenses. The Company answered the complaint in July 2007 and expects that the complaint will be settled through negotiations regarding the timing and the form of collateral or by the court. The surety’s request for monies as collateral represents a reimbursable deposit to the Company to support required future reclamation of the Briggs Mine site and therefore no liability has been accrued. If the Company was required to fund all of the monies requested in the civil action, cash balances and the timing of mine development projects could be adversely impacted.

	(c)		McDonald Gold Project

			A lawsuit was filed against the State of Montana to recover value lost due to changes in the Montana mining law and the cancellation of mineral leases related to the Company’s wholly-owned Seven-Up Pete Joint Venture’s interest in the McDonald Gold Project. Phelps Dodge, a wholly-owned subsidiary of Freeport-McMoRan Copper & Gold Inc., retains a one-third interest in any proceeds which may be received from the currently active takings lawsuit.

			In April 2006, the Company’s complaint under the takings lawsuit was dismissed in U.S. District Court for the District of Montana and the Company filed a notice of appeal to the U.S. Court of Appeals for the Ninth Circuit. Briefs have been submitted to the U.S. Court of Appeals for the Ninth Circuit. In addition, the Company has filed a breach of contract complaint against the State of Montana related to the termination of the McDonald Gold Project’s state mineral leases.

	(d)		Kendall Mine Lawsuits

			In October 2001, a plaintiff group including members of the Shammel, Ruckman and Harrell families filed suit in the State of Montana District Court against the Company and its wholly-owned subsidiary, CR Kendall Corporation. The complaint alleges violation of water rights, property damage, trespass and negligence in connection with the operation of the Kendall Mine and seeks unspecified damages and punitive damages.

			In August 2002, a Preliminary Injunction was issued in Montana District Court on behalf of the Kendall Mine plaintiff group in connection with the Company’s auction of certain mineral rights and fee lands unrelated to the CR Kendall Corporation or its operation. In October 2002, the Court issued a Supplemental Order which sequesters any proceeds realized from the auction until such time as the lawsuit is concluded. As of June 30, 2007, $0.2 million is held by the Court as required by the Order. The Company’s share of the above mentioned settlement was paid out of the funds held by the Court.

			In February 2007, the Company entered into a settlement and release agreement with eight of the twelve plaintiffs in this suit. Settlement negotiations continue with the remaining four plaintiffs who have yet to

settle. The Company’s share of the settlement was $0.1 million and maintains a balance of $0.2 million recorded as a legal settlement accrual on the consolidated balance sheet as of June 30, 2007.

	(e)		Asset Exchange Agreement

			The Adelaide and Tuscarora properties were optioned as part of the Asset Exchange Agreement with Newmont. Under this agreement, we are required to spend a total of $3.0 million on both projects over five years to earn our interest in the properties, including a $250,000 firm commitment in 2007. The Company has the ability to sublease either property to third parties to meet its obligations under the agreement.

11. Fair Value of Financial Instruments:

The estimated fair values of the Company’s financial instruments approximate carrying values at ~~March~~ June 3130, 2007, and December 31, 2006. The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

Cash and Cash Equivalents, Receivables, Short-term Investments and Restricted Cash: Carrying amounts approximate fair value based on the short-term maturity of those instruments.

Long-term Debt: Carrying values approximate fair values based on discounted cash flows using the Company’s current rate of borrowing for a similar liability.

12. Income Taxes:

The Company has not recorded a tax benefit for the current period as the realization is not likely during the year. The benefit is not expected to be realizable as a deferred tax asset 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. There was no impact from the adoption of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes.

13. Share-Based Compensation:

The Company recorded $0.13 million of compensation expense during the ~~three~~six months ended ~~March~~June 3130, 2007, none of which was capitalized. All of the share-based compensation expense was recorded as selling, general and administrative costs in the consolidated statements of operations.

On June 6, 2006, the Company’s shareholders approved the Canyon Resources Corporation 2006 Omnibus Equity Incentive Plan (the “2006 Plan”) to provide more flexibility in the compensation of key personnel. All outstanding stock options under the old plans, the Amended and Restated Incentive Stock Option Plan and the Amended and Restated Non-Qualified Stock Option Plan, will remain active until all the options under those plans either expire or are exercised; however, no new options may be granted under such plans. As of ~~March~~June 3130, 2007, there were 1.4 million and 1.69 million ~~underlying~~ underlying shares outstanding under the old plans and the 2006 Plan, respectively, and 3.42 million ~~underlying~~ underlying shares available for future issuance under the 2006 Plan.

12The 2006 Plan is administered by the Compensation Committee of the Board of Directors consisting entirely of independent directors. The common stock issued or to be issued under the 2006 Plan consists of 5.0 million authorized shares and treasury shares. If any shares covered by an award are not purchased or are forfeited, the shares will again be available for future awards under the 2006 Plan. Directors and employees of, or consultants to, the Company or any of its affiliates are eligible to participate in the 2006 Plan. The Board of Directors may terminate or amend the 2006 Plan at any time and for any reason. The 2006 Plan shall terminate in any event ten years after its effective date of March 2, 2006. The exercise price of each stock option is based on and may not be less than 100% of the fair market value of its common stock on the date of grant. The fair market value is generally determined as the closing price of its common stock on the date of the grant. The term of each stock option is fixed by the Compensation Committee and may not exceed 10 years from the date of grant. The

~~The 2006 Plan is administered by the~~ Compensation Committee of the Board of Directors consisting entirely of independent directors. The common stock issued or to be issued under the 2006 Plan consists of 5.0 million authorized shares and treasury shares. If any shares covered by an award are not purchased or are forfeited, the shares will again be available for future awards under the 2006 Plan. Directors and employees of, or consultants to, the Company or any of its affiliates are eligible to participate in the 2006 Plan. The Board of Directors may terminate or amend the 2006 Plan at any time and for any reason. The 2006 Plan shall terminate in any event ten years after its effective date of June 6, 2006. The exercise price of each stock option is based on and may not be less than 100% of the fair market value of its common stock on the date of grant. The fair market value is generally determined as the closing price of its common stock on the date of the grant. The term of each stock option is fixed by the Compensation Committee and may not exceed 10 years from the date of grant. The Compensation Committee determines the vesting requirements of the grant which may be accelerated by the Compensation Committee.

The fair value of each option award is estimated on the date of grant using a Black-Scholes-Merton option valuation model that uses the assumptions noted in the following table. Expected market volatility is based on a number of factors including historical volatility of the Company’s common stock, the Company’s market capitalization, current options trading in the marketplace and other fair value related factors. The Company uses a simplified method of estimating the expected term where the expected term equals the average of the vesting period and contractual term. The forfeiture rate is estimated based on the ~~length~~number of ~~time~~options itor ~~takes~~shares ~~for~~that ~~the~~are ~~option~~expected ~~or share grant~~ to actually vest. Historical forfeiture rates ~~have~~are ~~been~~considered ~~near~~each ~~nil~~quarter ~~due~~and tofuture ~~the~~rates ~~short~~are ~~vesting~~adjusted ~~period~~so ~~of past~~that ~~grants,~~by ~~but~~the ~~grants~~end ~~issued~~of ~~during~~the ~~2006~~grant ~~have~~ vesting ~~periods~~period astotal ~~long~~expense asrecognized ~~three~~equals ~~years.~~total ~~Estimated~~vested expense. Estimated forfeiture rates for grants vesting within one year, ~~two~~to ~~years and~~ three years, ~~are~~currently ~~nil,~~range from 10% ~~and~~ to 20%, respectively. The risk-free rate is based on the yields of U.S. Treasury bonds. The ~~Company~~ Company has never paid a dividend and does not expect to in the future and estimates the expected ~~dividend~~ dividend yield to be nil.

The fair value of options issued during the ~~three~~six months ended ~~March~~June 3130, 2007 and 2006 were ~~determined~~ determined based on the following assumptions:

	2007			2006
Expected volatility		—60	%	~~50%~~	50	%
Expected option term	2.5 years	—		2.5-3.0 years
Weighted-average risk-free interest rate		—4.8%-5.0	%	~~4.3%-4.5%~~	4.3%-5.0	%
Forfeiture rate		—			—

Stock Options

Stock option activity during the ~~three~~six months ended ~~March~~June 3130, 2007 and 2006 were as follows:

	2007					2006
				Weighted					Weighted
				Average					Average
				Exercise					Exercise
	Number			Price		Number			Price
Outstanding — beginning of the year		2,580,526		$	1.30		1,757,526		$	1.77
Grants		—350,000		$	—0.64		~~350~~700,000		$	0.8495
Exercises		—			—		—			—
Forfeitures		—(50,000	)	$	—0.75		(~~145~~480,000	)	$	12.9400
Expirations		—(10,000	)	$	—2.30		—			—
Outstanding — end of the period		2,~~580~~870,526		$	1.3023		1,~~962~~977,526		$	1.5942
Exercisable — end of the period		2,~~095~~435,526		$	1.3827		1,~~782~~877,526		$	1.6745

13For the six months ended June 30, 2007, there was $0.1 million of compensation expense recognized related to options. The weighted-average remaining contractual lives of the outstanding and exercisable options as of June 30, 2007 were 3.4 and 3.1 years, respectively. The aggregate intrinsic values of the outstanding and exercisable options as of June 30, 2007 were nil and nil, respectively, based on a $0.56 market price per share. The weighted-average grant-date fair value of stock options granted during the six months ended June 30, 2007 and 2006 were $0.26 and $0.34 per option or total fair value of $0.1 million and $0.2 million, respectively. As of June 30, 2007, there was $0.1 million of total unrecognized compensation cost and the cost is expected to be recognized over a weighted-average period of 1.5 years.

For the three months ended March 31, 2007, there was $30,200 of compensation expense recognized related to options. The weighted-average remaining contractual lives of the outstanding and exercisable options as of March 31, 2007 were 3.5 and 3.0 years, respectively. The aggregate intrinsic values of the outstanding and exercisable options as of March 31, 2007 were $900 and $900, respectively, based on a $0.67 market price per share. The weighted-average grant-date fair value of stock options granted during the three months ended March 31, 2007 and 2006 were nil and $0.31 per option or total fair value of nil and $0.1 million, respectively. As of March 31, 2007, there was $0.1 million of total unrecognized compensation cost and the cost is expected to be recognized over a weighted-average period of 1.6 years.

Stock Grants

Stock grant activity during the ~~three~~six months ended ~~March~~June 3130, 2007 was as follows:

				Weighted-
				Average		Total
	Amount			Price		Fair Value
Nonvested — beginning of the year		202,500		$	0.93	$	188,950
Grants		—117,970			—0.64		—75,001
Vested		—(90,006	)		—0.68		—(60,909	)
Forfeitures		—(65,464	)		—0.90		—(58,842	)
Nonvested — end of period		~~202~~165,~~500~~000		$	0.9387	$	~~188~~144,~~950~~200

~~There~~For ~~was no stock grant activity during~~ the ~~three~~six months ended ~~March~~June 3130, 2007., ~~For~~there ~~the~~was ~~three months ended March~~$0.1 ~~31,~~million ~~2007, a total~~ of ~~$34,000 was recognized as~~ compensation expense ~~from~~recognized ~~amortization~~related ofto ~~previous~~shares ~~share~~ grants. ~~and~~There ~~there~~ was $0.1 million of total unrecognized compensation cost ~~that~~and the cost is expected to be recognized over a weighted-average period of 1.14 years. ~~As of March 31,~~ ~~2007, there were 0.4 million shares granted under the 2006 Plan net of forfeitures.~~

14. Earnings per Share:

The Company computes EPS by applying the provisions of SFAS No. 128, Earnings per Share. Because the Company reported net losses for all 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 all periods presented. Common stock equivalents, which include stock options, warrants to purchase common stock, stock grants and convertible debentures, in the three months ended ~~March~~June 3130, 2007 and 2006 that were not included in the computation of diluted EPS because the effect would be antidilutive were 1216.82 million and 1011.41 million, respectively. Common stock equivalents which include stock options, warrants to purchase common stock, and convertible debentures in the six months ended June 30, 2007 and 2006 that were not included in the computation of diluted EPS because the effect would be antidilutive were 14.5 million and 10.7 million, respectively.

15. Recently Issued Financial Accounting Standards:

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. This Statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of FASB Statement No. 157, Fair Value Measurements. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments. The Company expects to adopt SFAS No. 159 on January 1, 2008 and the Company does not expect a significant impact on the consolidated financial statements.

In September 2006, FASB issued SFAS No. 157, Fair Value Measurements. This standard provides guidance for using fair value to measure assets and liabilities. SFAS No. 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. The standard clarifies that for items that are not actively traded, fair value should reflect the price in a transaction with a markets participant, including an adjustment for risk. Under SFAS No. 157, fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market which the reporting entity transacts. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including financial statements for an interim period within that fiscal year. The Company expects to adopt SFAS No. 157 on January 1, 2008 and The Company does not expect a significant impact on the consolidated financial statements.

ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview of the ~~First~~Second Quarter 2007 and Future Outlook

What did we spend cash on during the quarter?

We ended the quarter with $25.13 million of unrestricted cash and short term investments. The ~~$1.5 million of~~ short term investments of $0.5 million consist of auction rate certificates ~~that have maturities ranging from seven to 28 days~~. Cash used in operations during the ~~first~~second quarter of 2007 amounted to $1.5 4 million and capital spending at the Briggs Mine totaled $0.41 million. Significant uses ~~and sources~~ of cash from operations are summarized as follows:

• Selling, general and administrative spending amounted to approximately $0.89 million. o Includes holding costs at the Briggs Mine of $0.3 million. • Exploration spending amounted to $0.6 million. • $0.4 million was reclassed to restricted cash for funding an inflation adjustment to our reclamation bonds and for additional bond collateral, offset by the return of $0.5 million of restricted cash from the reduction of reclamation liabilities related to the former McDonald Project. • Asset retirement obligation spending amounted to $0.2 million primarily for the Kendall Mine operations and continued leach pad dewatering at the Briggs Mine.

•

Includes holding costs at the Briggs Mine of $0.4 million.

	•		Exploration and development spending amounted to $0.4 million including amounts capitalized.

	•		Asset retirement obligation spending amounted to $0.1 million primarily for the Kendall Mine operations and continued leach pad dewatering at the Briggs Mine.

What are our results of operation?

During the ~~first~~second quarter of 2007, we had no significant gold production or sales. Further gold production and sales during 2007 is expected to be insignificant until wecompletion ~~have~~of ~~made~~the ~~a determination~~Briggs ofMine ~~our~~underground ~~options~~test ~~regarding~~mining ~~the~~and ~~possible~~resumption ~~re-start~~ of commercial production. orThe ~~monetization~~proposed ofunderground ~~the~~test mine ~~Briggs~~would ~~assets. We~~be ~~continue~~a tosignificant ~~evaluate~~step in evaluating our production options ~~including~~that ~~beginning~~may include beginning operations primarily as an underground mine tosupplemented ~~develop~~by ~~initial~~open pit reserves to provide ongoing cash flow and todevelop ~~provide~~better access for further exploration on the Goldtooth structure.

What have we done to increase shareholder value?

We ~~are~~have ~~continuing~~determined tothat ~~evaluate~~ the ~~best~~underground ~~method~~reserve ~~to monetize the Briggs reserves~~ and mineralized material toassociated ~~provide~~with ~~a cash flow opportunity without causing significant dilution of our existing~~the ~~shareholders.~~Goldtooth ~~During~~structure ~~the~~at ~~first~~Briggs ~~quarter~~represents ~~we continued to explore~~ the ~~Briggs~~strongest ~~underground~~ potential ~~by increasing~~for ~~the~~developing ~~drilled~~additional mineralization ~~extent~~for offuture ~~the~~cash ~~Goldtooth~~flow ~~fault~~from togold ~~4,900 feet~~production. Through surface sampling and reconnaissance we have tracked the Goldtooth fault for a distance of nearly six miles, most of which is under our control. We ~~have~~are ~~the possibility~~currently evaluating contract mining quotes to develop an underground drift primarily through ore along the Goldtooth fault, ~~in order~~which towill ~~generate~~also ~~cash~~provide ~~flows~~access for ~~from~~further ~~ore~~exploration ~~production~~and reserve development and provide ~~good~~valuable ~~access~~information ~~for~~concerning continuity ~~further~~of ~~exploration~~ the gold bearing structure and ~~development~~mining conditions. Any ore mined in this process would be stockpiled for later gold production.

We have ~~completed~~increased the ~~Briggs~~estimate ~~Mine~~of ~~feasibility~~mineralized ~~study~~material along the Goldtooth structure and ~~established~~we ~~both~~are optimistic ~~open~~about ~~pit~~its ~~and~~total underground potential. This structure remains open for extension of ~~reserves~~mineralization both along strike and to depth. The potential development of these initial reserves and mineralization may provide us with the cash flows and the production base necessary to increase shareholder value and grow the Company. See “How is the Briggs re-start going?” and “What progress have we made on the Briggs satellite deposits?”

The Reward Project ~~continues~~has toentered ~~grow~~the infeasibility ~~size~~stage ~~and~~with ~~quality~~the ~~and~~outsourcing weof ~~are~~the ~~making~~feasibility ~~progress~~study that onshould be completed in the ~~permitting~~ ~~process~~fourth ~~and~~quarter ~~hope~~of to2007. ~~have~~The permitting process for the project ~~permitted~~is well ~~during~~advanced ~~2007~~and is progressing as planned. See “What progress have we made on the Reward Project?”

Our partners in the uranium joint ventures ~~began~~continued their drilling in ~~late~~the ~~2006~~second quarter and ~~will~~ may continue to drill inthrough ~~the second quarter of~~ 2007. The initial results ~~were~~are promising and we hope to make significant progress during 2007 in locating an economic uranium ore body. See “What is happening on our uranium joint ventures?”

~~During~~In ~~the~~order ~~first~~to ~~quarter~~fund ofour ~~2007~~current asoperations, ~~part~~underground oftest mining at Briggs, and the ~~Newmont~~Reward feasibility ~~Exchange~~study, ~~Agreement~~we completed atan ~~the~~equity ~~end~~financing ~~of 2006~~which weraised ~~were~~a ~~returned~~net of $04.57 million. ofFurther funding ~~restricted~~will ~~cash~~be ~~related~~necessary for our development projects to ~~the~~reach ~~release~~commercial production and that may be derived from a combination of ~~McDonald~~existing cash, short-term investments, asset sales, equity ~~reclamation~~financing ~~bonds~~and debt.

Our Board of Directors adopted a new Stockholder Rights Plan (the “rights plan”) that became effective on March 23, 2007. The rights plan is designed to protect our stockholders against potential acquirers who may pursue coercive or unfair tactics aimed at gaining control of us without paying our stockholders a full and fair price. The rights will expire on March 23, 2017. The distribution of rights under the plan will not interfere with our business plans or be dilutive or affect our reported per share results.

How much property and mineralized material do we now control?

Our mining properties and associated in-place mineralized material represent our most important assets. A summary of the property acreages that we control is as follows:

	Fee		Fee
Property/Location	Surface		Mineral		Patented (b)		Unpatented
Briggs Mine — California		—		—		5		3,~~290~~280
Reward Project — Nevada		—		—		220		1,545
Seven-Up Pete — Montana		—		—		170		1,~~440~~390
CR Nevada — Nevada		560		840		—		86,~~040~~960
Industrial Minerals — Montana		—		—		—		210
CR Montana — Montana		—		901,167		—		—
Converse JV — Wyoming (a)		1,856		—		—		3,051
Sand Creek JV — Wyoming (a)		8,560		4,284		—		3,396
CR Kendall — Montana		—		—		1,085		—
Total acreage		29,~~416~~120		~~902~~906,~~007~~291		1,480		1716,~~576~~781

(a) Sand Creek JV lands not included in these totals. (b) Patented claims are owned fee simple which combine the surface and mineral estates.


(a)		Canyon currently controls 70% of the Sand Creek JV through the Converse JV.

(b)		Patented claims are owned fee simple which combine the surface and mineral estates.

A summary of the in-place mineralized material estimated to be contained on the above properties is as follows:

	Mineralized
	Material		Average Gold		Cut-off Gold
Property/Location	(Million Tons)		Grade (opt)		Grade (opt)
Briggs Mine — Inyo County, California		2326.6099		0.~~023~~031		0.~~010~~10-0.01
Cecil R — satellite deposit		5.75		0.024		0.015
Mineral Hill — satellite deposit		2.31		0.035		0.015
Suitcase — satellite deposit		0.33		0.052		0.015
		31.99		0.024
		35.38		0.030
Reward Project — Beatty, Nevada		12.74		0.025		0.010
Seven-Up Pete — Lincoln, Montana		17.00		0.035		0.020
Total mineralized material		6165.7312		0.~~027~~031

As of December 31, 2006, Briggs’s proven and probable reserves amounted to 130,000 ounces contained in 4.3 million tons at an average gold grade of 0.030 ounces per ton (“opt”). A gold cutoff grade of 0.08 opt was used for underground stope designs and a cutoff grade of 0.013 opt was utilized for open pit estimation and underground development material which must be mined regardless of grade. A $500 gold price was utilized for mine design purposes compared to the ~~first~~year-to-date ~~quarter~~ 2007 average gold price of approximately $~~650~~658 per ounce. We continually update our mineralized material estimates as we conduct additional drilling, complete feasibility studies or as the status of our land positions change.

We are constantly evaluating our properties for development. We have completed the feasibility study for the Briggs Mine and are evaluating the best use of our funds and potential financing to increase shareholder value. The Reward Project is in the process of developing a feasibility study which is dependant on acquiring key operating permits, detailed engineering and costing studies. The Seven-Up Pete Project requires significantly more progress before we can update the feasibility study that was completed in 1991. We update our mineralized material estimates from time to time as we conduct additional drilling or as the status of our land positions change.

How is the Briggs re-start going?

WeAt year-end 2006, we completed the initial Briggs Mine feasibility studies for both the open pit and underground mining options. ~~These~~and ~~studies~~recently ~~demonstrate~~increased ~~that~~the ~~re-starting~~size ~~mining~~and ~~operations~~quality atof ~~the~~our ~~Briggs~~estimate ~~Mine~~of isthe ~~economically~~underground ~~feasible~~mineralized material. ~~Additional~~We ~~upside~~are ~~may~~currently beseeking ~~available~~bids from mining contractors to develop a horizontal access into the Goldtooth structure ~~which remains~~to ~~open~~test ~~along~~ground ~~strike~~conditions, ~~and~~ore ~~possibly~~control methods, and to ~~depth.~~provide ~~The~~additional geologic information.

Significant potential is possible from the Goldtooth structure which remains open along strike and to depth. This potential has been tested over a distance of 4,900 feet and to a depth of approximately 500 feet. Test mining will provide better and more cost effective access for further exploration and reserve development. Adequate

~~first~~financing, ~~quarter~~availability ~~step-out~~of ~~drilling~~contract ~~successfully extended~~mining and crushing, and the ~~intercept~~availability of ~~gold~~adequately trained ~~mineralization~~personnel onare the ~~Goldtooth~~most ~~structure~~significant torisk ~~over~~factors ~~4,900~~that ~~feet~~may ~~of strike~~impact ~~length~~our plans.

A cash flow analysis was developed for the combined open pit and underground case without consideration of incremental underground reserve development or satellite deposit production. Total operating cash cost is estimated at around $434 per ounce of gold produced over approximately a three year mine life. A lower capital scenario that focuses on the development of the underground potential is currently being considered in order to minimize construction risk and to test dilution impacts. Adequate financing, availability of contract mining and crushing, and the availability of adequately trained personnel are the most significant risk factors that may impact our plans.

What progress have we made on the Briggs satellite deposits?

We control four satellite deposits located within four miles of the Briggs Mine site. Three of these deposits have been drilled to sufficient density to support estimates of mineralized material. The Cecil R deposit has estimated in-place mineralized material of 5.75 million tons at an average grade of 0.024 opt. Metallurgical testwork indicates that good gold recovery can be expected using heap leach technology. Evaluation of existing drill-hole and geologic information available for Mineral Hill and Suitcase supports an estimate of in-place mineralized material for Mineral Hill of 2.31 million tons at an average gold grade of 0.035 opt and for Suitcase an estimate of 0.33 million tons at an average grade of 0.052 opt. These estimates utilize a gold cutoff grade of 0.015 opt. ~~Metallurgical~~Additional ~~testwork~~drilling ~~indicates~~is ~~that~~required ato ~~good~~expand ~~gold~~or to further validate these ~~recovery~~results. ~~can~~These bethree ~~expected~~satellite ~~using~~deposits ~~heap~~remain ~~leach~~open ~~technology~~for potential expansion both along strike and at depth. These deposits are located outside of the existing Briggs Mine permit area and will required permitting before any production can be considered.

In July 2006, we acquired the Mineral Hill and Suitcase deposits located within four miles of our Briggs Mine. Evaluation of existing drill-hole and geologic information available for Mineral Hill and Suitcase supports an estimate of in-place mineralized material for Mineral Hill of 2.31 million tons at an average gold grade of 0.035 opt and for Suitcase an estimate of 0.33 million tons at an average grade of 0.052 opt. These estimates utilize a gold cutoff grade of 0.015 opt. Additional drilling would be required to expand or to further validate these results.

These three satellite deposits remain open for potential expansion both along strike and at depth. Through future drilling and feasibility studies, we hope to prove that the mineralized material contained in these deposits can be developed into economic reserves that could be processed at the Briggs Mine facilities to possibly extend the useful life of the operation. Continued exploration and permitting of these deposits will depend upon future allocations from our limited resources of which none is planned in 2007.

What progress have we made on the Reward Project?

Our Reward Project located near Beatty, Nevada, is ~~our~~currently ~~highest~~in ~~priority~~the ~~gold~~feasibility ~~project~~stage. ~~behind~~We ~~Briggs.~~have Ashired ~~the~~an ~~next~~engineering ~~step~~firm ~~towards~~to ~~completing~~complete athe feasibility study atto ~~Reward,~~determine weits ~~began~~economic apotential. This ~~diamond~~feasibility ~~core~~study ~~drill program~~will ~~during~~build upon the ~~first~~January 2006 ~~quarter~~positive ofpre-feasibility study and a May 2007 ~~designed~~report toshowing ~~justify~~a ~~the~~significant ~~use~~increase ofin ~~steeper~~mineralized ~~slope~~material. ~~angles~~Many inof the components of this ~~mine~~study ~~design,~~have ~~which~~already ~~could~~been ~~decrease~~completed ~~the~~or ~~strip~~are ~~ratio~~in ~~and~~process ~~improve~~including: ~~project~~heap ~~economics.~~leach ~~This~~pad ~~program~~design, ~~has~~electrical ~~subsequently~~supply, ~~been~~water ~~completed~~supply, ~~and~~geotechnical westudy ~~are~~and ~~waiting~~additional ~~for~~metallurgical ~~the~~test ~~results~~work. ~~Our~~The ~~goals~~Reward Project ~~for~~anticipates ~~this~~development ~~project~~by ~~are~~conventional toopen pit mining methods and standard crushing and ~~rapidly~~heap ~~complete~~leach ~~the~~technology ~~feasibility~~for ~~study,~~gold ~~establish~~recovery. aLeach ~~reserve~~solutions ~~estimate,~~would ~~obtain~~be ~~operating~~circulated ~~permits,~~through ~~and~~activated ~~secure~~carbon, ~~necessary~~concentrating ~~approvals~~the ~~for~~gold. ~~development~~This ~~and~~loaded ~~financing.~~carbon ~~Our~~would ~~intent~~then isbe transported to ~~place~~the ~~Reward~~Briggs ~~into~~Mine in ~~production~~California asor ~~soon~~to asa ~~possible~~third toparty ~~augment~~gold ~~the~~facility ~~potential~~for production ~~from~~of ~~the~~gold ~~Briggs~~doré ~~Mine~~for ~~and~~sale ~~its~~or shipment to a ~~satellite~~third ~~deposits~~party refiner.

~~During~~The ~~2006,~~permitting weprocess ~~developed~~for aReward ~~geologic~~is ~~model~~also proceeding as planned and ~~estimate~~is well advanced. A Plan of Operations ~~in-place~~was ~~mineralized~~submitted ~~material~~to the Las Vegas Field Office of ~~12.7~~the Bureau of Land Management (“BLM”) and ~~million~~found ~~tons~~to atbe complete. The BLM has completed an ~~average~~internal ~~grade~~scoping ofreview 0and Canyon is preparing an Environmental Assessment (“EA”) to support the BLM’s review.~~025~~ ~~opt~~Archeological ~~gold~~and ~~utilizing~~biologic assessment studies are being expanded to support the EA. Applications for a ~~cutoff~~Water ~~grade~~Pollution Control Permit and a Reclamation Permit have been submitted to the Nevada Division of 0Environmental Protection.~~010~~ ~~opt~~The Division has determined the applications are nearly complete and Canyon is providing additional information to support the Division’s technical review.

What are our plans for the Seven-Up Pete property?

Our portion of the Seven-Up Pete property contains in-place mineralized material estimated at 17.0 million tons ~~of mineralized material~~ at an average gold grade of 0.035 opt based on a cutoff grade of 0.02 opt. ~~We intend to move this project forward concentrating primarily on the evaluation of flotation or other “non-cyanide” processing techniques.~~ Preliminary testwork utilizing conventional flotation and gravity concentration recovery has returned positive results. No further work is planned during 2007.

What is happening on our uranium joint ventures?

In the early 1980s, Canyon and its joint venture partners conducted an aggressive exploration program for uranium in the southern Powder River Basin of Wyoming. This program included mapping and drilling that resulted in the discovery of several ~~instances of~~ uranium ~~mineralization~~deposits. Beginning in 2005 we reacquired land positions in this area through claim staking and leases with property holders.

Canyon entered into the Converse Uranium Joint Venture (“Converse JV”) with New Horizon Uranium Corporation (“New Horizon”) in January 2006. During 2006, the joint venture has been analyzing information provided by Canyon, consolidating land positions, and establishing drill targets around the known uranium deposits. New Horizon trades as NHU.V on the Toronto Venture Exchange. New Horizon has committed to spend $1.0 million over three years to earn their initial equity interest of 50% in the Converse JV; New Horizon may choose to spend an additional $1.0 million over the following two years to increase its interest in the Converse JV to 70%. After spending $2.0 million, New Horizon may also choose to complete a feasibility study in order to increase its interest in the Converse JV to 75%. At this time, New Horizon has not met its initial 50% earn-in hurdle and Canyon still controls a 100% interest in the Converse JV.

~~Canyon~~In ~~entered~~August 2006, ~~into~~ the Converse ~~Uranium~~JV ~~Joint~~joined ~~Venture~~with High Plains Uranium (“~~Converse~~High JVPlains”) ~~with~~to ~~New~~form ~~Horizon~~the ~~Uranium~~Sand ~~Corporation~~Creek Joint Venture (“~~New~~Sand ~~Horizon~~Creek JV”) ~~in January 2006~~. ~~During~~Sand ~~2006,~~Creek ~~the~~JV ~~joint~~is ~~venture~~owned ~~has~~70% ~~been analyzing information provided~~ by ~~Canyon,~~the ~~consolidating~~Converse ~~land~~JV ~~positions,~~ and ~~establishing~~30% ~~drill targets around~~by ~~known~~High ~~uranium occurrences~~Plains. ~~New~~High ~~Horizon~~Plains has ~~committed~~been toacquired ~~spend~~by ~~$0.2 million,~~Energy ~~$0.3 million~~Metals Corporation and ~~$0.5 million~~functions inas ~~each~~a wholly-owned subsidiary of ~~the~~Energy ~~first~~Metals. ~~three~~The ~~years~~purpose ~~respectively~~of tothese ~~earn~~two ~~their~~joint ~~initial~~ventures ~~equity~~is ~~interest~~to ofcombine property ~~50%~~positions inover ~~the~~a ~~Converse JV.~~portion Atof the ~~time~~total ~~New~~Converse ~~Horizon~~JV ~~earns~~area. ~~their~~The ~~initial~~area ~~equity~~of interest wefor ~~will~~the ~~earn~~Sand Creek ~~500,000~~JV ~~shares~~covers ofan ~~New Horizon~~area ~~and~~of aapproximately ~~warrant underlying 500~~92,000 ~~more~~acres, ~~shares~~located ~~exercisable~~east atand asouth ~~25%~~of ~~premium~~Douglas, ~~to New Horizon’s~~Wyoming. ~~current~~Canyon ~~stock~~will atnot ~~the~~be ~~time~~required ~~they~~to ~~earn~~provide ~~their~~funding ~~initial~~until ~~equity~~its ~~interest.~~partners ~~New~~have ~~Horizon~~contributed ~~trades~~between ~~as NHU~~$2.V0 onand ~~the Toronto Venture Exchange. New Horizon must expend an additional~~ $12.08 million ~~over~~of ~~the~~expenditures ~~following two years to earn up to a 70% interest~~ in ~~the~~these ~~project~~two ~~and~~joint ~~complete a feasibility study to earn a 75% interest~~ventures. ~~At this time, New Horizon has not met its earn-in hurdles and Canyon still controls~~ ~~100% interest in the Converse JV.~~

In ~~August~~November 2006, ~~the~~a ~~Converse~~drill JVprogram ~~joined~~began ~~with~~in ~~High~~the ~~Plains~~western ~~Uranium~~portion ~~(“High~~of ~~Plains”) to form~~ the Sand ~~Creek~~ ~~Joint Venture (“Sand~~ Creek JV~~”).~~ ~~Sand~~area ~~Creek~~and JVby isthe end ~~owned~~of ~~70%~~2006, by14 ~~the~~holes ~~Converse~~were JVcompleted ~~and~~totaling ~~30%~~10,395 ~~by High~~feet, ~~Plains.~~which ~~High~~clearly ~~Plains~~demonstrated ~~has~~the ~~been~~presence of ~~acquired~~“roll byfront” ~~Energy~~style ~~Metals~~uranium ~~Corporation~~mineralization. ~~The~~A ~~purpose~~follow ofup ~~these~~drill ~~two joint~~program ~~ventures~~consisting isof toapproximately 16 ~~combine~~drill ~~property~~holes ~~positions~~began ~~over~~in amid ~~portion~~2007. ofThe ~~the~~drilling ~~total~~program ~~Converse~~consists JVprimary ~~area~~ of wide-spaced, ~~interest~~reconnaissance ~~and~~style todrilling ~~explore~~with ~~for~~drill ~~and~~hole ~~potentially~~spacing ~~develop~~of ~~uranium~~500 ~~deposits~~to in1,000 anfeet. ~~area~~In ofaddition, ~~known~~the ~~uranium~~drill ~~occurrences.~~holes ~~The~~have ~~area~~provided ofconsiderable ~~interest~~additional ~~for~~information ~~the~~regarding ~~Sand~~both ~~Creek~~the JVlocation ~~covers~~of ~~approximately~~a uranium-bearing ~~92,000~~roll ~~acres~~front, ~~located east~~its ~~and~~apparent ~~south~~orientation ofand ~~Douglas,~~rock ~~Wyoming~~types. ~~Canyon~~Uranium ~~will~~mineralization ~~not~~has been bepreviously ~~required~~identified toin ~~provide~~sediments ~~funding~~of ~~until~~the ~~its partners~~White ~~have~~River ~~contributed~~Formation ~~between~~that ~~$2.0~~trends ~~and~~through ~~$2.8 million~~the ofSand Creek ~~expenditures~~JV ~~in these two joint ventures~~area.

In November 2006, a drill program began in the western portion of the Sand Creek JV area and by the end of 2006, 14 holes were completed totaling 10,395 feet. A follow up drill program consisting of approximately 16 drill holes is planned for mid 2007 as an extension of the initial 14 drill holes. The drilling program consisted of wide-spaced, reconnaissance style drilling on five fences of drilling over a strike length of 1.5 miles and with drill hole spacing of 500 to 1,000 feet. Of the 14 drill holes completed to date, 13 holes encountered intercepts of uranium mineralization indicative of a “roll front” style uranium deposit. In addition, the drill holes have provided considerable additional information regarding both the location of a uranium-bearing roll front, its apparent orientation and rock types. Uranium mineralization has been previously identified in sediments of the White River Formation that trends through the Sand Creek JV area.

What is the status of the Company’s legal cases?

InThe ~~October~~Briggs Mine is bonded with $4.3 ~~2001~~million of reclamation bonds of which $4.2 million is supported by a surety. In 1999, in response to a ~~plaintiff~~demand ~~group~~for ~~including~~an ~~members~~increase ofin collateral by the ~~Shammel~~surety, ~~Ruckman~~we granted a security interest in 28,000 ~~and~~acres ~~Harrell~~of ~~families~~mineral interests in Montana. In addition, we agreed ~~filed~~to ~~suit~~make incash deposits with the ~~State~~surety ofcompany ~~Montana~~totaling ~~District~~$1.5 million ~~Court~~over ~~against~~a usthree ~~and~~year ~~our~~period ~~wholly-owned~~at ~~subsidiary~~the rate of $0.5 million per year, ~~CR Kendall~~commencing ~~Corporation~~June 30, 2001. ~~The~~We ~~Complaint~~made ~~alleges~~a ~~violation~~$0.3 million ofdeposit ~~water~~in ~~rights~~March 2007, ~~property~~after ~~damage,~~we ~~trespass~~received ~~and~~notice from the surety that Canyon was in default of its obligations under ~~negligence~~the collateral agreement. In June 2007, the surety filled a civil action in ~~connection~~the ~~with~~U.S. District Court for the ~~operation~~District of ~~the~~Colorado ~~Kendall~~against ~~Mine~~us ~~and~~for ~~seeks~~monies due of $1.25 million and unspecified costs, damages and ~~punitive~~ ~~damages~~legal expenses. ~~The~~We ~~Kendall~~answered ~~Mine~~the ~~ceased~~complaint ~~operations~~ in ~~1996. In February~~July 2007, weand ~~entered~~expect ~~into~~that athe complaint ~~settlement~~will be settled through the court or through negotiations regarding the timing and ~~release~~the ~~agreement~~form ~~with~~of collateral. ~~eight~~The surety’s request for monies as collateral represents a reimbursable deposit by us to support required future reclamation of the ~~twelve~~Briggs ~~plaintiffs~~Mine site. If we were required to fund all of the monies requested in ~~this~~the ~~suit~~civil action it could adversely impact the timing of our mine development projects.

~~The~~In ~~former~~October 2001, ~~McDonald~~a ~~deposit~~plaintiff ~~was~~group ~~discovered~~including ~~and~~members ~~drilled~~of bythe ~~our now wholly-owned Seven-Up Pete Venture (“SPV”). This large~~Shammel, ~~low grade~~Ruckman, ~~deposit~~and isHarrell ~~highly amenable to gold recovery utilizing~~families, ~~cyanide~~filed ~~recovery~~suit ~~technology with heap leaching. Cyanide recovery technologies for new open pit gold and silver mines were made illegal~~ in the State of Montana inDistrict ~~1998~~Court ~~with~~against ~~the~~us ~~passage~~and ofour ~~the anti~~wholly-~~cyanide~~owned ~~ballot~~subsidiary, ~~initiative~~CR Kendall ~~I-137~~Corporation. ~~We,~~The ~~along~~Complaint ~~with~~alleges ~~the~~violation ~~other co-plaintiffs, filed suits against the State~~ of ~~Montana~~water ~~in state and federal courts in April 2000 seeking to overturn I-137 or~~rights, ~~alternatively,~~ toproperty ~~obtain a “taking”~~ damage, ~~award~~trespass ~~for~~and negligence ~~the~~in ~~value~~connection ofwith the ~~SPV~~operation ~~properties (Seven-Up Pete Venture, et al. v The State~~ of ~~Montana). On June 8, 2005,~~ the ~~Montana~~Kendall ~~Supreme~~Mine ~~Court~~and ~~upheld~~seeks ~~the I-137~~unspecified ~~initiative~~damages and punitive ~~denied that a taking had occurred~~damages. ~~This~~The ~~ruling~~Kendall ~~was~~Mine ~~appealed~~ceased ~~directly~~operations toin ~~the U~~1996.S. ~~Supreme Court.~~ In February ~~2006~~2007, ~~the~~we ~~U.S.~~entered ~~Supreme~~into ~~Court denied us~~ a ~~grant of certiorari. We~~ ~~then~~settlement ~~reinstated~~and ~~our~~release ~~federal~~agreement ~~lawsuit~~with ineight ~~the~~of ~~U.S. District Court for~~ the ~~District~~twelve ofplaintiffs ~~Montana, which later dismissed our taking claims stating,~~ in ~~part,~~this ~~because of a lack of jurisdiction~~suit. ~~We have~~Settlement ~~subsequently~~negotiations ~~filed~~continue awith ~~notice to appeal to~~ the ~~U.S.~~remaining ~~Court~~four ofplaintiffs ~~Appeals~~who ~~for the Ninth Circuit. All briefs before this Court~~ have ~~now~~yet ~~been filed and we are waiting on further action by the Court. In 2006, the Company filed a breach of contract complaint against the State of Montana related~~ to ~~the termination of the McDonald Gold Project’s state mineral leases~~settle.

The former McDonald deposit was discovered and drilled by our now wholly-owned Seven-Up Pete Venture (“SPV”). This large, low grade, deposit is highly amenable to gold recovery utilizing cyanide recovery technology with heap leaching. Cyanide recovery technologies for new open pit gold and silver mines were made illegal in the State of Montana in 1998 with the passage of the anti-cyanide ballot initiative I-137. We, along with the other co-plaintiffs, filed suits against the State of Montana in state and federal courts in April 2000 seeking to overturn I-137 or, alternatively, to obtain a “taking” damage award for the value of the SPV properties (Seven-Up Pete Venture, et al. v The State of Montana). This case has run its course in State and lower Federal courts and we have subsequently filed a notice to appeal to the U.S. Court of Appeals for the Ninth Circuit. All briefs before this Court have now been filed and we are waiting on further action by the Court. In 2006, the Company filed a breach of contract complaint against the State of Montana related to the termination of the McDonald Gold Project’s state mineral leases.

Liquidity & Capital Resources

In May 2007, we raised a total of $4.95 million in equity financing for general corporate purposes and underground test mining operations at the Briggs Mine. It is expected that our basic cash requirements over the next 12 months can be funded through a combination of existing cash, short-term investments, ~~and if necessary~~ asset sales~~. In 2007~~, weequity ~~may seek~~ financing ~~for~~and ~~general~~debt. ~~corporate~~The ~~purposes~~test ~~that may include the re-start of~~ mining operations atwill ~~the~~develop ~~Briggs~~a ~~Mine.~~portion Weof ~~do not have~~ the ~~capital~~underground ~~resources~~reserves ~~sufficient to re-start~~ and ~~operate~~stockpile ~~the~~ore ~~Briggs Mine~~mined ~~without~~for ~~additional~~possible ~~financing~~future production. InThe ~~order~~purpose toof dothe ~~so,~~underground wetest ~~could~~mining ~~seek~~is to ~~obtain~~test ~~funding~~ground ~~from~~conditions, ~~multiple sources~~ore ~~which might include private equity investments~~control methods, ~~public~~and ~~equity~~to ~~offering,~~provide ~~debt,~~additional orgeologic ~~asset sales~~information. ~~Based~~The onMay 2007 ~~our~~financing ~~current~~will ~~stock~~also ~~price,~~be weused to dofund ~~not expect~~ the ~~exercise~~Reward ofProject ~~options~~feasibility ~~and warrants to be a significant source of funds during 2007~~study.

WeIf ~~expect~~we ~~the~~are ~~old~~successful ~~leach~~in ~~solution~~our attest ~~Briggs~~underground tomining beoperations, ~~evaporated~~we ~~by mid-2007 and any related revenues from gold production~~ will berequire ~~minimal during 2007. Depending on our mode of operation, the estimated~~additional ~~capital~~resources ~~requirements would range from $3.0 million~~ to ~~$13.0 million~~fully ~~depending on the size and scope of the potential~~ re-start ofand operate the Briggs Mine. ~~Once~~In aorder ~~decision~~to isdo ~~made~~so, ~~and~~we ~~funding~~intend isto ~~obtained,~~market ~~the~~and ~~project~~sell ~~could~~non-core ~~begin~~assets toand ~~generate~~properties ~~operating~~to ~~cash~~fund ~~flow~~the ~~approximately~~re-start ~~six~~of ~~months~~the ~~from~~Brigg ~~re-start~~underground mine.

We ~~are~~expect ~~continually~~the ~~evaluating~~leach ~~business~~solution ~~opportunities~~remaining ~~such~~in asthe ~~joint~~leach ~~ventures,~~pad ~~mergers~~at ~~and/or acquisitions~~Briggs ~~with~~to ~~the~~be ~~objective~~evaporated ofin ~~increasing~~2007 ~~share~~and ~~value~~gold revenues bywill ~~creating~~be ~~additional~~substantially ~~cash~~less ~~flow~~than ~~both~~comparable ~~to sustain~~periods usfrom ~~and~~2006. toDepending ~~provide~~on the future ~~sources~~ plan of ~~funds~~operation ~~for~~adopted, ~~growth.~~the ~~While~~estimated wecapital ~~believe~~requirements wewould ~~will~~range befrom ~~able~~$8 million to $13 million ~~finance~~depending ~~our~~on ~~continuing~~the ~~activities~~size and scope of the ~~Briggs~~potential re-start ~~plans, there are no assurances~~ of ~~success in~~the ~~this~~Briggs ~~regard~~Mine. orOnce ina ~~our~~decision ~~ability~~is made toand ~~obtain~~funding ~~additional~~is ~~financing through the capital markets~~obtained, ~~joint ventures, or other arrangements in~~ the ~~future.~~project Ifcould ~~management’s~~begin ~~plans~~to ~~are~~generate ~~not~~operating ~~successful,~~cash ~~our~~flow approximately ~~ability~~six tomonths ~~operate~~from ~~could be adversely impacted~~re-start.

We ~~may~~are ~~also~~continually ~~require~~evaluating ~~additional~~strategic ~~funding~~business toopportunities ~~move~~such as joint ventures, mergers and/or acquisitions with the ~~Reward~~objective ~~Project~~of increasing share value by creating additional cash flow both to ~~feasibility.~~sustain ~~The~~us ~~source~~and to provide future sources of ~~that~~ ~~funding~~funds ~~will~~for ~~most~~growth. ~~likely~~While we believe we will be able ~~provided~~to byfinance ~~investors~~our incontinuing activities and the ~~form~~Briggs re-start plans, there are no assurances of success ~~equity~~in this regard or ~~debt,~~in ~~but~~our weability ~~may also~~to ~~include~~obtain ~~equipment~~additional financing ~~and~~through ~~possible~~the asset sales, capital markets, joint ventures, or ~~exchanges~~other asarrangements ~~additional~~in ~~forms~~the offuture. If management’s plans are not ~~financing~~successful, our ability to operate could be adversely impacted.

Financing Transactions

During the ~~first~~six ~~quarter~~months ofended June 30, 2007, there were no ~~financing transactions and there were no~~ exercises of warrants or options.

On ~~June~~May 225, ~~2006~~2007, we completed a private placement financing ~~that~~which raised $54.195 million (approximately $4.87 million net) through the sale of 5approximately 8.18 million units. ~~This~~The ~~included~~private placement consisted of the sale of 5approximately 8.18 million shares of the ~~Company’s~~our common stock, ~~and~~ 2.6 2 million Series A Warrants with an exercise price of $10.50640 and a term of ~~three~~one ~~years.~~year ~~The~~from ~~transaction~~registration effectiveness, ~~was~~and ~~priced at $1~~6.006 million ~~per~~Series B ~~unit,~~Warrants ~~representing~~with aan ~~15% discount~~exercise toprice ~~the~~of ~~twenty-day~~$0.704 ~~volume~~and ~~weighted~~a ~~average~~term of four ~~the~~years from closing. ~~price~~The ofSeries A ~~our~~warrants ~~common~~have ~~stock.~~a ~~In connection~~redemption ~~with~~feature beginning 6 months from the ~~financing,~~closing wedate ~~paid~~whereby the ~~placement~~Series A ~~agent~~Warrants acan ~~cash~~be ~~placement~~redeemed ~~agent~~by ~~fee~~us offor $0.201 per warrant upon 10 ~~million~~trading ~~and~~day ~~0.5 million~~notice, ~~warrants~~if ~~plus~~the ~~legal~~price ~~and~~of ~~accounting~~our ~~fees~~common ~~associated~~stock ~~with~~exceeds ~~the~~$0.80 ~~financing~~for ~~and registration~~a period of ~~the~~10 ~~underlying~~consecutive trading ~~shares~~days. The ~~placement~~transaction ~~agent~~was ~~warrants~~priced ~~were~~at ~~not~~$0.561 ~~exercisable~~per ~~for~~share, representing a ~~period~~ of10% ~~six~~discount ~~months~~to ~~from~~ the 10-day ~~date~~volume ofweighted ~~closing~~average ~~and~~of ~~had~~the anclosing ~~exercise~~ price of ~~$1.50~~our ~~and~~common astock ~~term~~prior ~~of three~~to ~~years~~pricing.

On June 2, 2006, we completed a private placement financing that raised $5.1 million (approximately $4.8 million net) through the sale of 5.1 million units. This included the sale of 5.1 million shares of our common stock and 2.6 million Series A Warrants with an exercise price of $1.50 and a term of three years. The transaction was priced at $1.00 per unit, representing a 15% discount to the 20-day volume weighted average of the closing price of our common stock. In connection with the financing, we paid the placement agent a cash placement agent fee of $0.2 million and 0.5 million warrants plus legal and accounting fees associated with the financing and registration of the underlying shares. The placement agent warrants were not exercisable for a period of 6 months from the date of closing and had an exercise price of $1.50 and a term of three years.

During 2006, certain outstanding warrants were exercised which resulted in the issuance of 0.3 million shares of common stock and $0.4 million in proceeds were received.

During 2006, 0.3 million shares of restricted common stock were issued to employees of which half vested immediately, 41,429 shares of vested restricted common stock were issued to Directors and 10,000 shares of ~~unvested restricted common stock were granted to non-employee consultants. During~~ ~~2006 there were no exercises of stock options.~~

Debt

There are $0.8 million of 6% convertible debentures convertible until March 2011 to common stock at any time at a conversion rate of $1.38 per share of common stock for a total of 0.6 million underlying shares of common stock.

unvested restricted common stock were granted to non-employee consultants. During 2006 there were no exercises of stock options.

Debt

Our 6% convertible debentures due March 2011 in the aggregate principal amount of $0.8 million and convertible into our common stock at any time at a conversion rate of $1.38 per share of common stock for a total of 0.6 million underlying shares of common stock are currently outstanding.

Capital Expenditures

Capital expenditures for the ~~three~~six months ended ~~March~~June 3130, 2007 totaled $0.46 million due primarily to to the capitalization of ongoing development costs at the Briggs Mine.

Outstanding Warrants

Warrants outstanding as of ~~March~~June 3130, 2007 were as follows:

	Underlying
Expiration Date	Shares		Exercise Price
June 1, 2007		2,199,836	$	2.16
August 31, 2007		50,000	$	0.80
March 14, 2008		2,304,726	$	1.03
Approximately September 1, 2008 (a)		2,536,766	$	0.64
December 1, 2008		1,765,503	$	1.30
December 1, 2008		231,000	$	0.76
June 1, 2009		3,085,500	$	1.50
Total/average		9,636,565	$	1.48
May 25, 2011		7,610,295	$	0.70
Total/average		17,583,790	$	0.94


(a)		These represent the Series A Warrants from the May 25, 2007 private placement financing that have an exercise date of twelve months after the effectiveness of the registration statement. The registration statement that was filed on June 29, 2007 has not yet been declared effective.

Surety Bonds

~~Certain~~The ~~bonds~~Briggs ~~have~~Mine ~~been~~is ~~issued~~bonded bywith a$4.3 million ~~surety~~of ~~company~~reclamation ~~aggregating~~bonds of which $4.2 million is supported by a surety. In 1999, in response to a demand for an increase in collateral by the ~~performance~~surety, ofwe ~~reclamation~~granted ~~obligations~~a ~~and~~security ~~other~~interest ~~contingent~~in ~~events~~28,000 atacres ~~the~~of ~~Briggs~~mineral ~~Mine~~interests in Montana. AtIn ~~March 31~~addition, ~~2007,~~we ~~the~~agreed ~~bonds~~to ~~were~~make ~~collateralized~~cash deposits with ~~cash~~the insurety ~~the~~company ~~amount~~totaling $1.5 million over a three year period at the rate of $0.75 million per year, ~~including~~commencing June 30, 2001. We made a ~~bank~~$0.3 million ~~Letter~~deposit in March 2007, after we received notice from the surety that Canyon was in default of its obligations under ~~Credit~~the collateral agreement. In June 2007, the surety filled a civil action in the ~~amount~~U.S. District Court for the District of Colorado against us for monies due of $01.225 million and aunspecified ~~security~~costs, damages ~~interest~~and legal expenses. We answered the complaint in ~~28,000~~July 2007 ~~acres~~and expect that the complaint will be settled through the court or through negotiations regarding the timing and the form of collateral. ~~real~~The ~~property~~surety’s request for monies as collateral represents a reimbursable deposit by us ~~mineral~~to ~~interests~~support required future reclamation of the Briggs Mine site and therefore no liability has been accrued. If we were required to fund all of the monies requested in ~~Montana~~the civil action it could adversely impact the timing of our mine development projects.

In 1999, we agreed to make additional 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. On February 26, 2007, we received notice from the surety that Canyon is in default of its obligations under the collateral agreement and we are in negotiations with the surety regarding the timing and the form of collateral. We made a $0.3 million deposit to the collateral account in March 2007. The surety’s request does not represent an expense to us and we have the available assets to fund the request. If we funded the entire request in cash rather than with other collateral, it could impact the timing and cost of any future financings. We are reviewing our rights under the bond and collateral agreements. If an acceptable rescheduling cannot be agreed to, the surety company could seek to sue us to deposit the collateral under the collateral agreement with the surety.

Results of Operations – Three Months Ended 2007 versus 2006

We recorded a net loss of $1.5 million, or negative $0.03 per share, on revenues of $0.1 million for the first quarter ended March 31, 2007. This compares to a net loss of $0.4 million, or negative $0.01 per share, on revenues of $0.6 million for the first quarter ended March 31, 2006. The negative variance of $1.1 million in net loss was due primarily to the following factors:

• Negative variance of $0.1 million in gross margin from gold sales due to the reduction in gold sales and production as a result of the depletion of gold ounces on the leach pad. • Negative variance of $0.3 million in exploration costs due to increased drilling activity at Briggs and Reward in the current quarter compared to last year. • Negative variance of $0.8 million related to last year’s gain on sales of securities. • Positive variance of $0.1 million related to last year’s fair market adjustment due to the increase in warrant liabilities.

For the first quarter ended March 31, 2007, we had gold sales of 100 ounces at an average price of $668. For the comparable period of 2006, we sold 1,045 ounces of gold at an average price of $567. The London PM Fix gold price averaged $650 and $555 per ounce for the first quarter 2007 and 2006, respectively. All of the revenues in 2007 and 2006 were from domestic activities.

~~The~~Results ~~following~~of ~~table~~Operations ~~summarizes~~— ~~our~~Three ~~gold~~Months ~~ounces~~Ended ~~sold~~June 30, ~~and~~2007 ~~revenues~~versus ~~for~~Three ~~the~~Months ~~three~~Ended ~~months ended March 31~~June 30, ~~2007 and~~ 2006:

	Three Months Ended						Three Months Ended
	March 31, 2007						March 31, 2006
			Average						Average
	Gold		Price Per		Revenue		Gold		Price Per		Revenue
	Ounces		Oz.		$000s		Ounces		Oz.		$000s
Gold sales		100	$	668	$	67		1,045	$	567	$	593
					$	67					$	593

We recorded a net loss of $1.4 million, or negative $0.03 per share, on revenues of nil for the second quarter ended June 30, 2007. This compares to a net loss of $1.4 million, or negative $0.03 per share, on revenues of $0.4 million for the second quarter of 2006. The total variance between the quarters was nil, but significant variances between cost categories are summarized below:

~~There~~• ~~was~~Negative novariance ~~current~~of or$0.4 ~~deferred~~million ~~provision~~in ~~for~~revenue ~~income~~was ~~taxes~~offset ~~during~~by ~~the~~$0.4 ~~first~~million ~~quarter~~positive ofvariance ~~2007~~in ~~or 2006~~cost of sales. ~~Additionally,~~• ~~although~~Negative wevariance ~~have~~of ~~significant~~$0.3 ~~deferred~~million ~~tax~~in ~~assets~~selling, ~~principally~~general inand administrative costs due primarily to the ~~form~~lack of ~~operating~~ ~~loss~~gold ~~carry~~production ~~forwards,~~to weallocate ~~have~~general ~~recorded~~and aadministrative ~~full~~costs. ~~valuation~~• ~~allowance~~Positive onvariance ~~our~~of ~~net~~$0.1 ~~deferred~~million ~~tax assets~~in asexploration costs due to decreased drilling activity at Briggs and Reward in the current quarter compared to last year. • Positive variance of ~~March 31,~~$0.2 ~~2007~~million related to last year’s fair market adjustment to the increase in warrant liabilities and ~~2006~~warrant extension expense.

~~Our~~For ~~cost~~the ~~for~~second ~~diesel~~quarter ~~fuel~~ended ~~continues~~June 30, to2007, ~~fluctuate~~we ~~with~~did ~~the~~not ~~market~~have ~~price~~any gold sales. For the comparable period of ~~oil~~2006, ~~and~~we ~~diesel~~sold ~~fuel~~690 isounces ~~a significant~~of ~~operating~~gold ~~and~~at ~~reclamation~~an ~~expense.~~average Weprice ~~expect~~of ~~continued~~$597. ~~high~~The ~~fuel~~London ~~costs~~PM ~~and~~Fix ~~increased~~gold ~~costs~~price ofaveraged ~~hiring~~$667 and ~~retaining~~$627 ~~qualified~~per ~~mining~~ounce ~~personnel~~for ~~with~~ the ~~required~~second ~~specialized~~quarter ~~skills~~2007 ~~to operate~~ and ~~manage~~2006, arespectively. ~~mining~~All ~~operation~~of the torevenues ~~have~~in a2007 ~~potential~~and ~~significant~~2006 ~~impact~~were onfrom ~~continuing operations~~domestic ~~in the future~~activities.

The following table summarizes our gold ounces sold and revenues for the three months ended June 30, 2007 and 2006:


	Three Months Ended						Three Months Ended
	June 30, 2007						June 30, 2006
			Average						Average
	Gold		Price Per		Revenue		Gold		Price Per		Revenue
	Ounces		Oz.		$000s		Ounces		Oz.		$000s

Gold sales		—	$	—	$	—		690	$	597	$	412
Silver sales						—						1


					$	—					$	413

There was no current or deferred provision for income taxes during the first quarter of 2007 or 2006. Additionally, although we have significant deferred tax assets, principally in the form of operating loss carry forwards, we have recorded a full valuation allowance on our net deferred tax assets as of June 30, 2007 and 2006.

Our cost for diesel fuel continues to fluctuate with the market price of oil, and diesel fuel is a significant operating and reclamation expense. We expect continued high fuel costs and increased costs of hiring and retaining qualified mining personnel with the required specialized skills to operate and manage a mining operation to have a potential significant impact on continuing operations in the future.

Results of Operations — Six Months Ended June 30, 2007 versus Six Months Ended June 30, 2006

We recorded a net loss of $2.8 million, or negative $0.06 per share, on revenues of $0.1 million for the six months ended June 30, 2007. This compares to a net loss of $1.8 million, or negative $0.05 per share, on revenues of $1.0 million for the six months ended June 30, 2006. The negative variance of $1.1 million in net loss was due primarily to the following factors:

	•		Negative variance of $0.1 million in gross margin from gold sales due to the reduction in gold sales and production as a result of the depletion of gold ounces on the leach pad.

	•		Negative variance of $0.1 million in exploration costs.

	•		Negative variance of $0.3 million in selling, general and administrative costs due primarily to the lack of gold production to allocate general and administrative costs.

	•		Negative variance of $0.9 million related to last year’s gain on sales of securities.

	•		Positive variance of $0.4 million related to last year’s fair market adjustment due to the increase in warrant liabilities and warrant extension expense.

For the six months ended June 30, 2007, we had gold sales of 100 ounces at an average price of $668. For the comparable period of 2006, we sold 1,735 ounces of gold at an average price of $579. The London PM Fix gold price averaged $658 and $590 per ounce for the six months ended June 30, 2007 and 2006, respectively. All of the revenues in 2007 and 2006 were from domestic activities.

The following table summarizes our gold ounces sold and revenues for the six months ended June 30, 2007 and 2006:


	Six Months Ended						Six Months Ended
	June 30, 2007						June 30, 2006
			Average						Average
	Gold		Price Per		Revenue		Gold		Price Per		Revenue
	Ounces		Oz.		$000s		Ounces		Oz.		$000s

Gold sales		100	$	668	$	67		1,735	$	579	$	1,005
Silver sales						—						1


					$	67					$	1,006

Contractual Obligations

The Company’s contractual obligations are as follows:

			Payments due by Period
			Less than						More than
			Less than 1						More than 5
	Total		1 year		1-3 years		3-5 years		5 years
Long term debt obligations	$	825,000	$	—	$	—	$	825,000	$	—
Capital lease obligations		8075,~~800~~600		1920,~~700~~000		6155,~~100~~600		—		—
Operating lease obligations		~~404~~385,~~000~~500		~~110~~121,000		~~294~~264,~~000~~500		—		—
Purchase obligations		~~240~~151,~~900~~700		~~240~~151,~~900~~700		—		—		—
Asset retirement obligations		4,~~092~~007,~~400~~200		1,~~132~~088,~~400~~200		2,~~783~~741,~~100~~400		106,~~000~~700		70,900
Total	$	5,~~643~~445,~~100~~000	$	1,~~503~~380,~~000~~900	$	3,~~138~~061,~~200~~500	$	931,~~000~~700	$	70,900

Off-Balance Sheet Arrangements

None.

2223

Critical Accounting Policies and Estimates

The ensuing discussion and analysis of financial condition and results of operations are based on our consolidated financial statements, prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.”) and contained within this Quarterly Report on Form 10-Q. Certain amounts included in or affecting our 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 our assets and liabilities, revenues and expenses, and associated disclosures with respect to contingent assets and obligations are necessarily affected by these estimates. The more significant areas requiring the use of management estimates and assumptions relate to mineral reserves that are the basis for future cash flow estimates and units-of-production amortization determination; completion of feasibility studies, recoverability and timing of gold production from the heap leaching process; environmental, reclamation and closure obligations; asset impairments (including estimates of future cash flows); useful lives and residual values of intangible assets; fair value of stock based compensation; fair value of financial instruments and nonmonetary transactions; valuation allowances for deferred tax assets; and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following significant assumptions and estimates affect our more critical practices and accounting policies used in the preparation of our consolidated financial statements.

Reserves and Mineralized Material: As of December 31, 2006, we have reported mineral reserves of 130,000 contained ounces of gold at our Briggs Mine and have reported mineralized material on a number of our properties. When we have producing mines or are developing a mine we estimate our ore reserves on at least an annual basis. We update our mineralized material estimates from time to time as we conduct additional drilling or as the status of our land positions change.

There are a number of uncertainties inherent in estimating quantities of reserves and mineralized material, including many factors beyond our control. Ore reserve and mineralized material estimates are based upon engineering evaluations of assay values derived from samplings of drill-holes and other openings. Additionally, declines in the market price of gold may render certain reserves containing relatively lower grades of mineralization uneconomic to mine. Further, availability of permits, changes in operating and capital costs, and other factors could materially and adversely affect ore reserves. We use our ore reserve estimates in determining the unit basis for mine depreciation and amortization of closure costs. Changes in ore reserve estimates could significantly affect these items.

Future gold production at our Briggs Mine would most likely utilize the heap leach process. This process involves the application of leach solutions by drip irrigation to ore stacked on an impervious pad. As the solution percolates through the heap, gold is dissolved from the ore into solution. This solution is collected and processed with activated carbon, which precipitates the gold out of solution and onto the carbon. Through the subsequent processes of acid washing and pressure stripping, the gold is returned to solution in a more highly concentrated state. This concentrated solution of gold is then processed in an electrowinning circuit, which re-precipitates the gold onto cathodes for melting into gold doré bars. No leach solutions have been added to the Briggs heap leach system since April 2005.

Impairments of Long-Lived Assets: The Company evaluates the carrying value of its mine development, mineral interest and mining properties when events or changes in circumstances indicate that the properties may be impaired. For these assets, an impairment loss is recognized when the estimated future cash flows (undiscounted and without interest) expected to result from the use of the asset are less than the carrying amount of the asset. Measurement of the impairment loss is based on discounted cash flows.

Intangible assets subject to impairment are assessed for impairment at least annually or more frequently when changes in market conditions or other events occur. Impairments are measured based on estimated fair value. Fair value with respect to such mineral interests, pursuant to Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, effective January 1, 2002, would generally be assessed with reference to comparable property sales transactions in the market place.

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Asset Retirement Obligations: Accounting for Asset Retirement Obligations is based on the guidance of SFAS No. 143 which 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 or to the change in estimate or timing. 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.

When a mine is shut down and begins the final reclamation, the Company may decide to record the reclamation liability on an undiscounted basis depending on the time frame and materiality of the expenditures. The asset retirement obligations of the Kendall mine and the Seven-Up Pete Venture are recorded on an undiscounted basis.

Warrant Liability: ~~Warrants~~Registration payment arrangements related to warrants issued in connection financing activities until October 1, 2006 were subject to the provisions of Emerging Issues Task Force Issue 00-19 (“EITF 00-19”), Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock. In December 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (“FSP”) No. EITF 00-19-2, Accounting for Registration Payment Arrangements which changed the way that a contingent obligation under a registration payment arrangement was recorded. EITF 00-19 describes the criteria under which warrants should be classified as either equity or as a liability. If the warrant is determined to be a liability due to a registration payment arrangement, under the old method described in EITF 00-19, the liability is fair valued each reporting period with the changes recorded through earnings in the consolidated statements of operations and under the new guidance provided in EITF 00-19-2, the contingent obligation under a registration payment arrangement should be separately recognized and measured in accordance with FASB Statement No. 5, Accounting for Contingencies. We adopted EITF 00-19-2 on October 1, 2006 and recorded a change in accounting principal through a non-retrospective cumulative-effect adjustment to the opening balance of retained earnings and to additional paid in capital in the fourth quarter of 2006. The measurement of the contingent liability related to registration payment arrangements as of ~~March~~June 3130, 2007, is nil under the provisions of FASB Statement No. 5.

Stock-Based Compensation: In December 2004, the FASB issued SFAS No. 123R, Share-Based Payment, which revised SFAS No. 123, Accounting for Stock-Based Compensation, and superseded Accounting Principles Board (“APB”) Opinion 25, Accounting for Stock Issued to Employees and its related implementation guidance. SFAS No. 123R requires that goods or services received in exchange for share-based payments result in a cost that is recognizable in the financial statements; that cost should be recognized in the income statement as an expense when the goods or services are consumed by the enterprise. We adopted SFAS No. 123R on January 1, 2006, using the modified prospective method. Accordingly, compensation expense will be recognized for all awards granted or modified after the effective date. The nonvested portion of awards will be recognized ratably over the remaining vesting period after the effective date.

The fair value of each award is estimated on the date of grant for current employees and Directors of the Board and on the closing share price on the day previous to the hire date for options granted to new employees using a Black-Scholes-Merton option valuation model. Expected market volatility is based on a number of factors including historical volatility of the Company’s common stock, the Company’s market capitalization, current options trading in the marketplace and other fair value related factors. The Company uses a simplified method of estimating the expected term where expected term equals the vesting period plus contractual term all divided by two. The forfeiture rate is expected to be nil for grants that vest immediately or within one year and ~~ten~~10% to ~~twenty~~20% ~~percent~~ for grants that vest after 24 and 36 months, respectively. The risk-free rate is based on the yields of U.S. Treasury bonds. The Company has never paid a dividend and does not expect to in the future and estimates the expected dividend yield to be nil.

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Income Taxes: We must use significant judgment in assessing our ability to generate future taxable income to realize the benefit of our deferred tax assets. The deferred tax assets are principally in the form of net operating loss carry forwards. A valuation allowance is to be provided for that fraction of the deferred tax assets that it is more likely than not that the deferred tax asset will not be realized. The “more likely than not” criterion of FAS 109 represents a probability of just over 50%. We currently have a valuation allowance equal to all of our deferred tax assets related to net operating loss carryforwards. There was no impact from the adoption of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes.

Potential Litigation Liabilities: We are subject to litigation as the result of our business operations and transactions. We utilize external counsel in evaluating potential exposure to adverse outcomes from judgments or settlements. To the extent that actual outcomes differ from our estimates, or additional facts and circumstances cause us to revise our estimates, net income may be affected.

Other Matters

Federal Legislation

Legislation has been introduced in prior and current sessions of the U.S. Congress to modify the ~~requirements~~ requirements applicable to mining claims on federal lands under the Mining Law of 1872. To date, no ~~such~~ such legislation has been enacted. The timing and exact nature of any mining law changes cannot presently be predicted; however, we will continue our active role in industry efforts to work with Congress to achieve responsible changes to mining law.

Dividends

Since our inception, no cash dividends have been paid nor do we expect any to be paid for the foreseeable future.

Recently Issued Accounting Standards

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. This Statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of FASB Statement No. 157, Fair Value Measurements. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments. WeThe ~~expect~~Company expects to adopt SFAS No. 159 on January 1, 2008 and wethe doCompany does not expect a significant impact on ~~our~~the consolidated financial statements.

In September 2006, FASB issued SFAS No. 157, Fair Value Measurements. This standard provides guidance for using fair value to measure assets and liabilities. SFAS No. 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. The standard clarifies that for items that are not actively traded, fair value should reflect the price in a transaction with a markets participant, including an adjustment for risk. Under SFAS No. 157, fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market which the reporting entity transacts. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including financial statements for an interim period within that fiscal year. WeThe ~~expect~~Company expects to adopt SFAS No. 157 on on January 1, 2008 and wethe doCompany does not expect a significant impact on ~~our~~the consolidated financial statements.

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ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Commodity Prices

Our future revenues, earnings and cash flow may be strongly influenced by changes in gold and uranium prices, which fluctuate widely and over which we have no control. We may, if market conditions justify, enter into gold or uranium price protection arrangements in the future, if necessary, to ensure that we generate enough cash flows to support our growth and exploration plans and any debt related to project financing. We had no gold or uranium related derivatives outstanding as of ~~March~~June 3130, 2007.

The risks associated with price protection arrangements include opportunity risk by limiting unilateral participation in upward prices; production risk associated with the requirement to deliver physical ounces against a forward commitment; and credit risk associated with counterparties to the hedged transaction. As of ~~March~~June 3130, 2007, we were not at risk related to gold related derivative instruments.

Our future earnings and cash flow may be significantly impacted by changes in the market price of gold, uranium and other commodities. Gold prices can fluctuate widely and are affected by numerous factors, such as demand, inflation, interest rates, and 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 London PM Fix gold price has fluctuated between a low of $~~272~~302 per ounce in ~~December~~August ~~2001~~2002 and a high of over $~~700~~725 per ounce in May 2006. We expect gold to be our primary product in the foreseeable future, but we cannot currently reasonably estimate our future production and therefore we cannot comment on the impact that changes in gold prices could have on our projected pre-tax earnings and cash flows over the next year.

Interest Rates

At ~~March~~June 3130, 2007, our convertible debentures balance was approximately $0.8 million at a fixed interest rate of 6%. Currently, we believe our interest rate risk is minimal except to the extent we might incur new debt.

Foreign Currency

The price of gold is denominated in U.S. dollars, and our current gold production operations and significant properties are located primarily in the U.S. We own foreign mineral rights primarily in the form of royalties which may create foreign currency exposure in the future when, and if, these foreign properties are placed in production.

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ITEM 4 CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in reports we file or submit under the Securities and Exchange Act of 1934 is processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Our Company’s Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934) as of the end of the period covered by this Quarterly Report on Form 10-Q, are effective based on their evaluation of these controls and procedures.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in our internal control over financial reporting for the period ended ~~March~~June 3130, 2007 that have materially effected, or are reasonably likely to materially affect, our internal control over financial reporting.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with policies and procedures may deteriorate.

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PART II OTHER INFORMATION

Item 1. Legal Proceedings

InOn ~~October~~June ~~2001~~29, a2007, ~~plaintiff~~St. ~~group~~Paul ~~including~~Fire ~~members~~and ofMarine ~~the~~Insurance ~~Shammel~~Company, ~~Ruckman~~et ~~and~~al., ~~Harrell~~filled ~~families filed~~a ~~suit~~civil action in the U.S. ~~State of Montana~~ District Court ~~against~~for the ~~Company~~District ~~and~~of ~~its~~Colorado ~~wholly-owned subsidiary,~~against CRus ~~Kendall~~for ~~Corporation.~~monies ~~The~~due ~~complaint alleges violation~~ of ~~water~~$1.25 million ~~rights, property~~and ~~damage~~unspecified costs, ~~trespass~~damages and ~~negligence~~legal inexpenses. ~~connection~~We ~~with~~answered the ~~operation~~complaint ofin ~~the~~July 2007 ~~Kendall Mine~~ and ~~seeks~~expect ~~unspecified~~that ~~damages~~the ~~and~~complaint ~~punitive~~will ~~damages.~~be Insettled ~~February 2007,~~through the ~~Company~~court ~~entered~~or ~~into~~through anegotiations ~~settlement~~regarding the timing and ~~release~~the ~~agreement~~form ~~with eight~~ of ~~the twelve plaintiffs in this suit~~collateral. The ~~Company~~surety’s ~~share~~request offor ~~the settlement~~monies ~~was~~as ~~$0.1 million~~collateral ~~and~~represents ~~has~~ a ~~balance~~reimbursable deposit ofby ~~$0.2 million~~us ~~recorded~~to assupport arequired ~~legal~~future ~~settlement accrual~~reclamation onof the ~~consolidated~~Briggs ~~balance~~Mine ~~sheet~~site asand oftherefore ~~March 31,~~no liability ~~2007~~has been accrued.

In October 2001, a plaintiff group including members of the Shammel, Ruckman and Harrell families filed suit in the State of Montana District Court against the Company and its wholly-owned subsidiary, CR Kendall Corporation. The complaint alleges violation of water rights, property damage, trespass and negligence in connection with the operation of the Kendall Mine and seeks unspecified damages and punitive damages. In February 2007, the Company entered into a settlement and release agreement with eight of the twelve plaintiffs in this suit. Settlement negotiations continue with the remaining four plaintiffs who have yet to settle. The Company’s share of the settlement was $0.1 million and has a balance of $0.2 million recorded as a legal settlement accrual on the consolidated balance sheet as of June 30, 2007.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2006, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to Vote of Security Holders

~~None~~On May 21, 2007, the Company held its Annual Meeting of Shareholders. The following items of business were voted upon by shareholders at the meeting.

Proposal I was the election of five Directors of the Company, Richard H. De Voto, James K. B. Hesketh, Leland O. Erdahl, David K. Fagin, and Ronald D. Parker. The proposal electing Mr. De Voto passed with votes of 35,064,321 shares “For” and 1,555,346 shares “Withheld”. The proposal electing Mr. Hesketh passed with votes of 35,062,434 shares “For” and 1,557,233 shares “Withheld”. The proposal electing Mr. Erdahl passed with votes of 35,035,169 shares “For” and 1,584,498 shares “Withheld”. The proposal electing Mr. Fagin passed with votes of 35,038,564 shares “For” and 1,581,103 shares “Withheld”. The proposal electing Mr. Parker passed with votes of 35,057,127 shares “For” and 1,562,540 shares “Withheld”.

The following individuals continued in their capacity as Directors of the Company subsequent to the Annual Meeting of Shareholders: Richard H. De Voto, James K. B. Hesketh, Leland O. Erdahl, David K. Fagin, and Ronald D. Parker.

Proposal II was to approve the increase in the number of authorized shares of common stock from 100,000,000 to 150,000,000. The proposal passed with votes of 33,851,185 shares “For”, 2,476,748 shares “Against”, and 291,734 shares “Abstained”.

Proposal III was to amend the Company’s Certificate of Incorporation to create a new class of stock designated as preferred stock and to authorize 15,000,000 shares of preferred stock. The proposal failed with votes of 3,200,402 shares “For”, 3,423,924 shares “Against”, and 46,827 shares “Abstained”.

Proposal IV was to amend the Company’s Certificate of Incorporation to permit shareholder action to be taken only at a duly called annual or special meeting of shareholders and eliminate shareholder action by written consent. The proposal passed with votes of 3,546,763 shares “For”, 3,011,126 shares “Against”, and 113,294 shares “Abstained”.

Proposal V was to ratify the Audit Committee’s appointment of Ehrhardt Keefe Steiner & Hottman PC as the Company’s independent auditors for 2007. The proposal passed with votes of 35,743,536 shares “For”, 641,103 shares “Against”, and 235,028 shares “Abstained”.

Item 5. Other Information

None

Item 6. Exhibits

	4.1		Rights Agreement, effective as of March 23, 2007, between the Company and Computershare Trust Company, N.A., as Rights Agent, which includes the form of Rights Certificate as Exhibit A and the Summary of Rights to Purchase Common Stock as Exhibit B (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-11887) on March 23, 2007, and incorporated by reference).
	3.1		Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-11887) on June 1, 2007, and incorporated herein by reference)
	3.2		Amended and Restated Bylaws (filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-11887) on June 1, 2007 and incorporated herein by reference)
	10.1		Form of Subscription Agreement and a Schedule of such Agreements (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-11887) on May 30, 2007, and incorporated by reference)
	10.2		Form of Series A Warrant and Schedule of such Warrants (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-11887) on May 30, 2007, and incorporated by reference)
	10.3		Form of Series B Warrant and Schedule of such Warrants (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K (File No. 001-11887) on May 30, 2007, and incorporated by reference)
	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

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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.

	CANYON RESOURCES CORPORATION
Date: May 9, 2007	/s/ James K. B. Hesketh
Date: August 13, 2007	/s/ James K. B. Hesketh
	James K. B. Hesketh
	President and Chief Executive Officer (Principal Executive Officer)
Date: August 13, 2007	/s/ David P. Suleski
	David P. Suleski
	Chief Financial Officer, Treasurer and Corporate Secretary (Principal Financial and Accounting Officer)

Date: May 9, 2007	/s/ David P. Suleski
	David P. Suleski
	Chief Financial Officer, Treasurer and Corporate Secretary (Principal Financial and Accounting Officer)

EXHIBIT INDEX

EXHIBIT
NUMBER		DESCRIPTION
4.1		Rights Agreement, effective as of March 23, 2007, between the Company and Computershare Trust Company, N.A., as Rights Agent, which includes the form of Rights Certificate as Exhibit A and the Summary of Rights to Purchase Common Stock as Exhibit B (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-11887) on March 23, 2007, and incorporated by reference).
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


EXHIBIT
NUMBER		DESCRIPTION

3.1		Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-11887) on June 1, 2007, and incorporated herein by reference)

3.2		Amended and Restated Bylaws (filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-11887) on June 1, 2007 and incorporated herein by reference)

10.1		Form of Subscription Agreement and a Schedule of such Agreements (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-11887) on May 30, 2007, and incorporated by reference)

10.2		Form of Series A Warrant and Schedule of such Warrants (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-11887) on May 30, 2007, and incorporated by reference)

10.3		Form of Series B Warrant and Schedule of such Warrants (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K (File No. 001-11887) on May 30, 2007, and incorporated by reference)

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

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Filing Compare · CANYON RESOURCES CORP