VANDERBILT GOLD CORP, 10-K/A, 1995-04-27

VANDERBILT GOLD CORP
10-K/A, 1995-04-27
GOLD AND SILVER ORES

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-K/A

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the Fiscal Year Ended December 31, 1994

[ ] 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 : 1-9904

VANDERBILT GOLD CORPORATION
(Exact name of registrant as specified in its charter)

Delaware 88-0224117
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

4625 Wynn Road, Suite 103, Las Vegas NV 89103
(Address of principal executive offices) (Zip Code)

(702) 362-3152
(Registrant's telephone, including area code)

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $.01 per share
(Title of Class)

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.

[X] Yes [ ] No
<PAGE>

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained to the best
of Registrant's knowledge in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to the
Form 10-K.

[ ]

The aggregate market value of the common stock held by non-affiliates of the
Registrant as of March 22, 1995, based upon a price of $.25 per share, the
average of the bid and ask quotations as of such date was $7,244,053. As of
March 22, 1995 there were 28,976,210 issued and outstanding shares of common
stock of the registrant.

<PAGE>

PART I

Item 1. Description of Business.

General Development of Business

The Registrant, Vanderbilt Gold Corporation, a Delaware corporation
("Registrant", the "Company" or "Vanderbilt"), is in the business of acquiring,
developing, and producing precious metals properties. The Registrant has one
wholly-owned subsidiary --- Star Mining Corporation, a Nevada Corporation.
Vanderbilt and its subsidiary are hereinafter referred to as "Vanderbilt".

Vanderbilt is engaged in the mining business, primarily in the Western United
States and Mexico, with its principal operation at the Morning Star Mine
("Morning Star") which is located in San Bernardino County, California.
Morning Star is a gold and silver property which has produced significant
quantities of these precious metals. Vanderbilt has operated this mine
continuously since 1973. See "Properties."

In January 1995, Vanderbilt entered into a purchase and/or option agreement
covering approximately 67,000 acres in the western area of the State of
Durango, Mexico. Preliminary exploration indicates that the mineralization
contains gold, silver and copper in commercially mineable quantities. See
"Properties and Management's Discussion And Analysis".

Narrative Description of Business

Vanderbilt is a production oriented gold and silver mining company. Its
business activities include property evaluation, exploration, and if warranted,
acquisition, development, construction of facilities, and the mining,
processing, and sale of metals, principally gold and silver in the form of dore
bullion. All dore bullion is sold to outside companies for final processing.
Vanderbilt may enter into joint ventures or partnerships with other business
entities to accomplish these same purposes.

Morning Star Mine

The Morning Star Mine produces gold and silver dore bullion.

From 1973 through 1984, the Morning Star was developed and operated as an
underground mine. The ore was processed at a mill owned by Vanderbilt located
about 17 miles from the minesite. During late 1984, the Morning Star was
converted to an open pit operation and the ore was processed by heap leaching
commencing in 1985. In June, 1987, Management decided to add a fine crushing
plant to the facility in order to increase gold recovery rates. In March,
1990, production problems began which resulted in a sharp drop off in the
amount of gold and silver being recovered from the ores on the heap leach pads.
<PAGE>

As a result, Management suspended mining operations, except for the crushing of
previously mined ore, and concentrated its attention on the gold recovery
problems. The resultant drop in cash flows and liquidity caused the Company to
curtail its other activities, lay off personnel, defer payments to vendors, and
continue the moratorium on mining activity at Morning Star. Working capital
dried up and for two years the Company survived on loans and other extensions
of credit from the Company's President and others. During the three years
ended December 31, 1993, efforts at the Morning Star were directed to
reclamation and remediation. During that time, heap leach pad #1 was
detoxified (the cyanide was removed) and final reclamation commenced.

In late 1994 as funds became available, the Morning Star was made ready for
increasing levels of operations, equipment was tested and brought on-line, the
assay lab was equipped, stocked with supplies and staffed, and the solution in
the remaining heap leach pad (#2) started through the gold recovery and
detoxification system. During the first quarter of 1995, the Company removed
about 40 ounces of gold recovered in the carbon recovery tanks and delivered it
to market.

Sources and Availability of Raw Materials

The ultimate realization of value from Vanderbilt's properties is dependent
upon the existence of economically producible quantities of ore containing
significant amounts of precious metals, gold and silver. These quantities of
ore may be considered Vanderbilt's raw materials. The Registrant's continuing
search for suitable mining properties is subject to numerous uncertainties such
as locating commercially viable deposits, competition from other companies and
the ability to negotiate leases and other contracts with property owners on
terms favorable to Vanderbilt. Increased governmental regulation(s) as to the
location, exploration, and development of mineral prospects coupled with the
trend toward increased withdrawal of lands from mineral entry could possibly
limit Vanderbilt's access to both the source and availability of suitable
mineral prospects.

Seasonal Nature of Business

Vanderbilt's business is generally not seasonal in nature except for certain
times when weather conditions may adversely affect access to and operations of
its properties.

Major Customers

Vanderbilt sells the gold and silver dore bullion produced at the Morning Star
Mine to Englehard Industries West, Inc., Gerald Metals, Inc. and G D Resources,
Inc. Vanderbilt does not believe that the loss of these customers would
adversely affect its business since there are several other potential customers
for its products. Vanderbilt also may enter into forward sales contracts with
gold merchants, users and others.
<PAGE>

Competitive Conditions

Vanderbilt considers the exploration for, development, and acquisition of
precious metals and other mineable properties to be intensely competitive.
Companies with greater financial resources, existing staff and labor forces,
equipment for exploration and specialized experience may be in a better
position than Vanderbilt to compete for mineral properties. Vanderbilt
believes that such competition will continue to be intense. Also, the market
price for gold and silver depends upon factors beyond Vanderbilt's control,
including the production of gold and silver by other nations and by the
monetary and fiscal policies of the United States and other leading economic
powers.

Environmental/Energy/Governmental Regulations

Compliance with federal, state, and local provisions regarding the discharge of
materials and pollutants into the environment, has not materially affected, nor
is it expected to materially affect capital expenditures, earnings, or the
competitive position of Vanderbilt; although in certain cases Vanderbilt has
experienced substantial delays in implementing its mining plans with respect to
its mining properties because of the delays inherent in the environmental
permitting process.

Wastes generated in connection with the cyanide leach facility currently are
not considered to be hazardous wastes under either the Federal Resource
Conservation and Recovery Act or the State of California Hazardous Waste
Control Act. As a result, Vanderbilt's heap leach operation is not subject to
the regulations promulgated by the Environmental Protection Agency or the
California Department of Health Services with respect to hazardous wastes and
materials. However, the equipment used at the site generates small quantities
of waste oil, classified as a hazardous waste by the State of California, which
is stored at the site for later removal by a commercial disposal service.
Vanderbilt has obtained permits as a Hazardous Waste Generator and a Hazardous
Material Handler from the County of San Bernardino Environmental Health
Services Department in regard to the waste oil generated by the equipment on
site.

The cyanide leach facility is subject to review and regulation by the
California Regional Water Quality Control Board. As of March, 1995,
Vanderbilt's facilities at the minesite are being modified and leach pad No. 2
is in the process of detoxification. On August 11, 1994, the California
Regional Water Quality Control Board, Lahontan Region, met at Mammoth Lakes,
California, in formal session, and approved and adopted the amended waste
discharge requirements for Vanderbilt's Morning Star Mine. The effect of this
approval is that the Company may now continue operations at the mine and that
heap leach pad No. 1 is reclassified as detoxified. No cyanide is presently
being used by the Company at the Morning Star Mine.
<PAGE>

In addition, the following environmental requirements apply to various aspects
of the facility: (1) An air quality permit for the facility is required by the
San Bernardino Air Pollution Control District. An application for this permit
was filed in March, 1988, and continues to be under review by the District.
Vanderbilt is operating at the Morning Star under a temporary permit. (2) The
two underground storage tanks at the Morning Star Mine which were used to store
gasoline and diesel fuel for the trucks and other equipment used at the
minesite were removed. The tanks are now operated as surface tanks. (3) As
required by state law, Vanderbilt filed a Business plan with the County of San
Bernardino Environmental Health Services Department; this was approved in
August of 1988. (4) A Reclamation Plan for the mine was approved by the
Federal Bureau of Land Management ("BLM") in June, 1984. (5) Vanderbilt's
mining permit issued by San Bernardino County, California, expired in August,
1994 and the application process is underway for a new permit. A Revised Plan
of Operation was filed with the BLM in 1988 and as amended, an updated plan was
submitted in December 1990. A Revised Plan of Operation was filed with the BLM
pursuant to a request made in April, 1993, and is awaiting approval as of
March, 1995. The effect of the transfer of responsibility from the BLM to the
National Park Service as a result of the California Desert Protection Act of
1994 being enacted cannot be evaluated at this time. See the "Environmental"
section of "Management's Discussion and Analysis" for additional information.

Permits were obtained from the County of San Bernardino Environmental Health
Services Department and the Bureau of Land Management to drill two water wells
to the south of the Morning Star minesite. These wells were drilled in August
and October of 1988 and a Water Well Drillers Report was filed with the San
Bernardino County and the State of California Department of Water Resources.
In December, 1988, a right of way permit was obtained from the BLM and a five
mile pipeline from the wells to the Morning Star minesite was completed in
1989.

See Item 3. Legal Proceedings for information concerning misdemeanor
convictions in 1992 of Vanderbilt and its President for alleged violations of
environmental laws. These convictions are under appeal.

Governmental agencies having jurisdiction over the Morning Star Mine in San
Bernardino County have publicly announced a policy of aggressively enforcing
laws and regulations designed to protect the environment especially as they
relate to mining operations. Accordingly, it can be expected that the Morning
Star Mine will be under the scrutiny of such authorities. While the Company
will make every effort to scrupulously adhere to environmental laws and
regulations there can be no assurance as to the results such regulatory
scrutiny will have upon the operations of the Morning Star Mine.
<PAGE>

During 1991, monitor wells on heap leach pad No. 2 disclosed the existence of a
small leak of the leach solution from the top pad liner. The local regulatory
authorities prohibited the Company from adding any further cyanide to the
leaching solution. Heap leach pad No. 2 has three separate pad liners. The
leak is apparently confined to the top liner. Tests conducted indicate that
the other two pad liners have maintained their integrity and there has been no
contamination of any of the soil underneath the heap leach pad.

It is the Registrant's policy to comply with environmental and health laws and
regulations.

Employees

From January through November, 1994, Vanderbilt employed two persons. In
December, 1994, as the Morning Star Mine resumed operations 8 full time persons
were hired and as of December 31, 1994, Vanderbilt employed 10 persons.

Item 2. Properties

Morning Star Mine

The Morning Star Mine and surrounding claims are located in San Bernardino
County, California, approximately 70 miles south of Las Vegas, Nevada. As of
March 22, 1995, Vanderbilt controls a total of 59 unpatented lode claims in the
Morning Star area (approximately 1,200 acres). Nearly 124 acres comprise the
mine, leach pad, recovery plant, waste dumps and office, assay and maintenance
facilities.

Gold mineralization at the Morning Star ore body is hosted entirely within late
Jurassic Ivanpah Granite, and is associated with quartz plus calcite veins and
stringers localized in the upper plate of the Morning Star thrust fault. Ore
grade values typically persist 65 feet to 100 feet perpendicular from the
Morning Star thrust fault plane into the upper plate. Free gold (often high in
silver values) is associated with pyrite, chalcopyrite, galena, sphalerite, and
covellite (in the zone of secondary enrichment).

The ore reserve report prepared by independent geotechnical consultants,
Explorations and Development Associates, Inc. and Geomath, Inc., based upon
drill hole data obtained from 1984 through 1987, estimated that the drill
indicated reserves at the Morning Star Mine, prior to extraction, were
7,731,000 tons averaging approximately .047 ounces of gold per ton of ore.
Included within this reserve was an established 4,792,000 tons averaging
approximately .054 ounces of gold per ton. As of December 31, 1991,
approximately 2,000,000 tons of the proven reserve has been mined. The planned
production capacity of the leach and recovery facilities, assuming the
Company's Revised Plan of Operations pending with the BLM is approved, is
sufficient to produce between one and two thousand ounces of gold per month.
<PAGE>

Two unpatented lode mining claims are leased from unrelated parties. The
lease commenced on October 24, 1973, and continues for twenty years or so
long as the lessee continues to explore, develop, or produce minerals from
the property. During 1994, Vanderbilt paid royalties of $12,000. Under the
lease, the lessee is required to pay a monthly royalty equal to the greater
of $1,000 or 5% of the net smelter receipts.

La Sierra Concession, State of Durango, Mexico

In January, 1995, the Registrant entered into an agreement with Compania
Minera S. A. de C. V. ("Rosarence") wherein the Company will fund certain
development and exploration activities to be performed by Rosarence on a
67,000 acre concession, known as La Sierra, located near Tamazula, State of
Durango, Mexico. The exploration concession granted by the Mexican
government on September 23, 1992, specifically mentions that the minerals for
which the concession was granted are gold, silver, lead, copper, zinc,
tungsten and antimony. Preliminary sampling has definitely identified gold,
silver and copper potentials. The Registrant also acquired a one year option
to acquire a specified portion of the La Sierra Concession, including any and
all equipment purchased pursuant to the agreement, and, further, the option
to acquire all of the outstanding shares of Rosarence at no further cost.
These options expire simultaneously one year from January 13, 1995. See
"Conclusion" in "Management's Discussion and Analysis" for more details as to
the agreement and option.

As of the date of this Form 10-K, no data is available as to reserves for the
La Sierra concession, whether proven or probable.

Office Facilities

The Registrant currently leases its office space at 4625 Wynn Road, Suite
103, Las Vegas, Nevada, on a month-to-month basis at a rental of $700.00 per
month.

Risk Inherent in the Mining Business

Mineral exploration and development is highly speculative and involves
significant risks. The majority of exploratory projects fail to discover
mineralization sufficient to be commercially exploited. All mineral
properties are subject to hazards and risks normally incident to the
development of such property. These include unforeseen changes in the
subsurface geological structures which can abruptly terminate mineralization,
difficult metallurgical problems which can inhibit the economic recovery of
minerals, changes in the world prices for the mineral being mined and
produced, and environmental restraints and conditions imposed by Federal,
State, and County agencies which may make it economically impractical to
operate.
<PAGE>

Fluctuation in Metal Prices

The profitability of Vanderbilt's operations is often directly related to the
world market prices of gold and silver. The market price of both gold and
silver can fluctuate widely and are influenced by numerous factors beyond the
control of Vanderbilt, such as the rate of inflation (domestic and foreign),
interest rates, economic or political crisis, as well as a number of other
factors. If the market price of gold and silver should drop dramatically,
the value of Vanderbilt's properties could also drop and the Company may not
be able to recover its investment in these properties.

Item 3. Legal Proceedings

In October and November 1992 a misdemeanor jury trial was held in San
Bernardino County (California) Municipal Court, which resulted in ten guilty
verdicts against Vanderbilt and ten guilty verdicts against its President,
John F. Jordan, Jr., for environmental violations. These verdicts resulted
in fines totalling $90,000 for each of Vanderbilt and Mr. Jordan. Vanderbilt
and Mr. Jordan both have filed an appeal to an Appellate Panel of the
Superior Court of San Bernardino County to each of these convictions. The
final determination of this matter is uncertain.

The California Desert Protection Act of 1994 ("Act") was passed by Congress
and signed into law by the President. The Morning Star Mine ("Morning Star")
is located in the newly designated "Mojave National Preserve". In general,
the Morning Star's mining and processing operations, under the new Act, may
be conducted as provided in the existing Plan of Operations (Plan"). One
change will be that public land, including that occupied by the Morning Star,
will be administered by the National Park Service ("NPS") instead of the
BLM. The exact timetable for the transfer has not been announced. The NPS,
however, has notified the Company that existing operating mines, with
approved BLM Plans, that are now on lands to be administered by the NPS will
be temporarily allowed to continue until the approved BLM Plan can be
converted to an approved NPS Plan and a validity determination of its claims
can be made.

The land around the Morning Star will no longer be open to new mining claims,
but the new Act expressly provides that this withdrawal of land from mineral
entry is "subject to valid existing rights", which would obligate the United
States Government to honor the Morning Star's valid mining claims, permits
and the approved Plan of Operation.

Since the Morning Star has an approved Plan (Approved by BLM) and state water
permits, it appears that the mining and processing operations can proceed in
accordance with the Company's plans. However, it is not possible at this
time to assess the ultimate impact, if any, that the Act will have upon the
Company's operations at the Morning Star and the timing of such impact.
<PAGE>

In 1992 eight individual creditors instituted litigation to enforce
collection of amounts due to them. The aggregate principal amount of debt
owed by the Company was $236,184, not including interest and attorney's
fees. During 1992 all of the creditors obtained judgments against Vanderbilt
for the amounts due, including interest and attorney's fees. In 1993 and
1994, a corporation owned by two of the Company's directors, purchased
$158,875 of the original amount of the debt. This was then converted into
the Company's common stock at $.16 per share (703,382 shares).

Item 4. Submission of Matters to a Vote of Security Holders

No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year ended December 31, 1994.

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters

From June 16, 1988 until it was suspended from trading on July 24, 1992,
Vanderbilt's common stock was traded on the Pacific Stock Exchange.
Thereafter there has been limited and sporadic trading in the
over-the-counter market in common stock. However, as of December 31, 1994
(and March 22, 1995), the Company's common shares are traded upon the NASDAQ
Electronic Bulletin Board System. As of March 22, 1995 the reported price
quoted for the common stock was high $.25, low $.25, and close $.25. The
following table sets forth the range of high and low quarterly closing sales
prices for Vanderbilt's common stock, as reported by a principal market
makers for the Company's common stock, for the years ended December 31, 1993
and 1994.
<TABLE>

Years Ended December 31,

1993 High Low
<S> <C> <C>
First Quarter 1/8 1/32
Second Quarter 3/16 1/16
Third Quarter 3/16 1/16
Fourth Quarter 7/16 1/8

1994 High Low

First Quarter 3/8 1/4
Second Quarter 5/16 3/32
Third Quarter 3/8 3/32
Fourth Quarter 9/32 5/32
<FN>
As of March 22, 1994 there were approximately 3,623 identified holders of
record of the Registrant's common stock.

<PAGE>

The Company has never declared a dividend and does not anticipate doing so in
the foreseeable future.

Item 6. Selected Financial Data

The following selected financial data set forth for the years ended December
31, 1994, 1993, 1992, 1991 and 1990 have been derived from the financial
statements of the Company but is not covered by the accountant's reports on the
financial statements.

</TABLE>
<TABLE>

SELECTED FINANCIAL DATA
<CAPTION>

Years Ended December 31,
1994 1993 1992 1991 1990
(In thousands except per share amounts)
<S> <C> <C> <C> <C> <C>
Net Sales or
Operating Revenues $ 14 $ 61 $ 101 $ 689 $ 3,120
Loss from Continuing
Operations 708 420 1,031 2,590 8,830 (1)
Loss from Continuing
Operations per
Common Share .03 .03 .08 .21 .74
Net Loss 709 527 1,206 2,858 8,932
Net Loss per Common Share .03 .03 .09 .23 .75
Extraordinary item: Gain
on Sale of Investments - - - 10 -
Gain on Sale of Investments
per Common Share - - - - -
Cash Dividends Declared per
Common Share - - - - -
At Period or Year End:

Total Assets 3,292 3,028 3,280 3,905 5,918
Long Term Obligations 45 47 91 91 89
Working Capital
(Deficit) (698) (2,330) (1,624) 536 3,305
Accumulated Depreciation and
Amortization on Property,
Plant, Equipment, and
Mining Properties 6,910 6,860 7,572 7,187 7,818
Shareholders' Equity
(Deficit) 1,416 1,356 (11) 1,189 3,915

<FN>
(1) Includes charge of $6,154,000 related to write down of mine lease
intangible for Morning Star Mine.
</TABLE>
<PAGE>

Item 7. Management's Discussion and Analysis
of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the
audited financial statements starting at Page F-1.

General Commentary

1994 was a year of progress for Vanderbilt Gold Corporation. Vanderbilt held a
Shareholders' meeting for the first time in three years and at that meeting
four incumbent directors were reelected and three new directors were elected,
the number of authorized shares was increased from 25,000,000 to 45,000,000 and
the Company's Stock Option Plan was modernized and expanded. Another $148,000
in old debts was converted into the Company's common shares and $548,000 was
raised through private placements. The Company brought its filings current
with the United States Securities and Exchange Commission ("SEC") having been
delinquent for 1991 and 1992. Activity at the Morning Star Mine was increased
as of the year end; starting gold recovery from the leach solutions,
detoxifying the second heap leach pad and preparing for the resumption of
mining and vat leaching.

The $709,000 loss for 1994 is higher than the $527,000 loss for 1993,
reflecting increased operating costs in starting the gold recovery at the Mine,
greater reclamation and environmental expenses, and additional general and
administrative expenses related to the catch up in financial audits and Form
10-K preparation costs. The $14,000 in Bullion Sales for the year reflects the
proceeds realized from salvaging gold and silver from spent carbon.

1993 was a year of change for Vanderbilt. The 1993 loss of $527,000 was less
than 50% of the $1,206,000 loss realized for 1992 and only about 18% of the
$2,858,000 loss experienced for 1991. In the "Liquidity and Capital Resources"
section of this Management's Discussion and Analysis is a discussion concerning
the reduction of the Company's current liabilities by December 31, 1993 by
$1,575,000 or 49% from the December 31, 1992 level. Shareholder's equity was
restored by year end 1993 from a slight deficit position at year end 1992.
These improvements were accomplished without selling off corporate assets, in
fact, Vanderbilt retained a $3 million plus balance sheet at December 31, 1993
and ended the year with a small cash balance in the bank for the first time in
three years.

Operating results reflect a loss for 1993, the working capital at December 31,
1993 remained in a deficit position and virtually all available common shares
were utilized by December 31, 1993 indicating a need to obtain shareholder
approval to increase the number of authorized common shares.
<PAGE>

Results of Operations

The following financial and operational data highlight and summarize the
Company's results of operations and financial position, for the periods
indicated:
<TABLE>
<CAPTION>
Twelve Months Ended
December 31,
1994 1993 1992
(in thousands except
percentages, per share
and per ounce amounts)

<S> <C> <C> <C>
Overburden and waste removed (tons) -0- -0- -0-
Ore Mined (tons) -0- -0- -0-
Payable Gold (troy ounces):
Produced -0- -0- 232
Sold -36* 12 287
Payable Silver (troy ounces):
Produced -0- -0- 368
Sold -33* 1 368
Average Realization:
Gold (per payable ounce) $ 373.10 $ 334.02 $ 344.77
Silver (per payable ounce) 5.16 $ 3.64 4.00
Estimated troy ounces of recoverable
gold remaining on heap leach pads 2,449 2,449 2,450
Dore Bullion Sales 14 4 101
Operating Loss 708 420 1,031
Net Loss 709 527 1,206
Net Cash Used in Operations 329 87 9
Net Cash (Used in) Provided by
Investing Activities (93) 6 4
Net Cash Provided by Financing Activities 539 117 5
Loss per Common Share .03 .03 .09
Total Assets 3,292 3,028 3,280
Total Liabilities 1,876 1,672 3,291
Accumulated Deficit 23,418 22,709 22,182
Shareholders' Equity (Deficit) 1,416 1,356 (11)
Working Capital Deficit 698 726 2,330

<FN>
*Metals recovered from the spent carbon removed from the recovery tanks.

For 1994, Vanderbilt focused on bringing its filings current with the
Securities and Exchange Commission, raising working capital, holding a
shareholders' meeting, continuing the reclamation and environmental work at the
Mine, restructuring debts, and trying to locate a joint venture partner for the
Mine.
<PAGE>

For 1993, the Company concentrated its efforts on detoxifying heap leach pad
#1, mine site cleanup, general reclamation activities at the Mine,
restructuring its debts, raising limited funds through private placements and
working towards bringing its late SEC filings current.

The low level of gold production for 1991 through 1994 did not provide the
necessary revenues with which the Company could mine any new ore, remove any
waste or overburden, or fund day to day operations. Beginning in 1990 and
continuing in 1991 and 1992, numerous production difficulties were encountered
at the Morning Star Mine ("Mine"), which is Vanderbilt's principal operating
facility. These difficulties resulted in an obvious decline in the amount of
gold and silver recovered from the ore on the heap leach pads but continued to
consume costs at a high rate. In August, 1990, management suspended mining
operations (other than leaching), reduced the workforce and implemented other
cost reduction measures. These measures remained in effect through 1994.

Depreciation and amortization expense is $44,000 lower during 1994 than in 1993
and $382,000 lower in 1993 than in 1992, generally reflecting the lower levels
of activity at the Mine. At year end 1992, management changed its estimate as
to the total costs expected to remove the waste from the pit and the estimate
of the number of ounces of mineable gold ore. The effect of this change of
estimate was a onetime increase in amortization of $202,000 for 1992.

Vanderbilt entered into a joint venture during 1994 intended to finance
operations at the Mine. The other venturer funded only the first $50,000 of
its contribution obligation. The $25,000 Gain on Joint Venture Termination
reflects, in effect, Vanderbilt's cost recoveries to the extent of 50% of that
first $50,000. The joint venture was terminated by December 31, 1994.

The loss on sale or other disposal of assets of $166,000 for 1993 was primarily
related to the write off of the unamortized balance of heap leach pad #2
($43,000) and the write off of the remaining book value of the crushing plant
facility ($126,000).

The 1994 interest expense is composed of two negotiated settlement amounts on
old debts of $24,000 and the $13,000 remainder represents charges by general
trade creditors. The 1993 interest expense of $72,000 reflects principally the
interest charges imposed by San Bernardino County on past due property taxes,
some of which are in dispute. The 1992 interest expense of $183,000 is
composed of $134,000 in interest charged by CTI, a group of unrelated parties
who provided $300,000 in funding specifically for chemicals and other supplies
and personnel to restart the heap leach process on leach pad #2, $5,000 to
Internal Revenue Service, and $38,000 to the San Bernardino County Tax
Collector.
<PAGE>

Beginning in January, 1992, additional drilling and surface sampling were
undertaken. The results indicated a possible high grade ore zone within the
mine area which may more extensive than previously believed. On the basis of
this new data, the Company developed a new mining plan that maximizes efforts
to recover the ores in this high grade zone. The plan, if implemented and if
successful, could result in reasonable gold and silver profitability.

Liquidity and Capital Resources

The Company ended the year of 1994 with a working capital deficit of $698,000
as opposed to a year end deficit for 1993 of $726,000. However, 1994 saw an
increase in overall cash flow of $117,000 as compared to a cash flow increase
of $36,000 for 1993. The actual cash and cash equivalent balance at year end
1994 of $153,000 as opposed to $36,000 at year end 1993 is indicative of
management's dedication to turning the Company's fortunes around. During 1994,
as described above and in the Statements of Cash Flows, Vanderbilt was able to
raise $548,000 in private placements and reduce prior debts by some $148,000.

As stated in the general Commentary to this Management Discussion and Analysis,
Management was been able to reduce current liabilities by December 31, 1993 by
$1,575,000 or 49% from the December 31, 1992 level. While this was not enough
to restore working capital to a positive balance from a deficit position, the
working capital deficit was reduced by $1,604,000 by year end 1993 from the
1992 year end level. $133,000 in cash was raised through private placements;
the related commissions were paid in common stock. The Company was able to
negotiate with creditors and retire $902,000 in prior accounts payable, pay
$72,000 of current expenses, pay amounts due related parties by $19,000, reduce
notes payable - other by $400,000, reduce accrued interest by $60,000, and
settle deferred revenues - gold sales by $118,000 all with common stock in debt
restructuring. Another $100,000 in accounts payable and $48,000 in amounts due
to related parties were paid with Series A Preferred Stock. In total, the
Company issued approximately 11,000,000 common shares for a value of $1,846,000
(average $0.1678 per share) and 9,670 Series A Preferred Shares for a value of
$148,000 (average $0.153 per share).

The Company's continued existence and resumption of operations at the Mine and
the continuation of evaluation, exploration and development of other mineral
properties, including the Rosarence concessions, are dependent upon its ability
to raise additional capital for these purposes through private placements,
restructuring of debt, joint venture and other financing arrangements.
<PAGE>

Inflation and Other Factors Influencing Future Performance

The impact of inflation on Vanderbilt's operations can vary. The future price
of gold and the level of interest rates could directly affect the Company's
future operating revenues and/or net profits. Low interest rates and higher
gold prices may enhance the value of Vanderbilt's investment in the Mine.

Vanderbilt's future operating results, to a large degree, depend upon its
success in locating, acquiring and producing commercial quantities of gold and
other minerals.

Since Vanderbilt does not have any regular and dependable source of revenues,
increases in inflation could cause costs and expenses to exceed anticipated or
budgeted amounts.

Vanderbilt's management does not believe that inflation has or will, in the
foreseeable future, adversely affect its income or loss from continuing
operations. However, economic conditions, certain hazards and risks inherent
to the mining industry in general, as well as environmental factors, could
adversely affect income and cash flow from operations.

Other Matters

In February, 1992, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes, ("SFAS
109"). Among other things, SFAS 109 requires that deferred income tax balances
be adjusted to, and maintained thereafter at statutory rates in effect when the
taxes are expected to be paid. Under current rules, deferred income taxes are
established at tax rates in effect when the associated timing differences
arise. SFAS 109 was adopted by the Company in the first quarter of 1993. The
Company does not expect that SFAS 109 will have a material impact on its
financial position.

On September 1, 1992, the Equity Listing Committee of the Pacific Stock
Exchange voted to delist the securities of Vanderbilt. The Common Stock had
been suspended from trading on July 24, 1992. The basic cause of the delisting
and suspension was that Vanderbilt had not filed its Form 10-K with the United
States Securities and Exchange Commission for its year ended December 31, 1991,
which has now been filed. Vanderbilt's common stock is now traded on the
NASDAQ Electronic Bulletin Board System.

In 1992, eight separate creditors brought suit to enforce collection of amounts
due them. The aggregate principal amount involved totalled $236,000. Each
obtained a judgement against Vanderbilt for the amount of their respective
claims during 1992 or 1993. In 1994, a corporation owned by two of the
Company's directors purchased $156,875 of the debt, had the judgements assigned
and exchanged the debt for common shares at the original debt amount.
<PAGE>

Environmental

During 1991, monitor wells on heap leach pad #2 disclosed the existence of a
small leak of the leach solution from the top pad liner. The regulatory
authorities prohibited the Company from adding any further cyanide to the
leaching solution. Heap leach pad #2 has three separate pad liners. The leak
is apparently confined to the top liner. Tests indicate that the other two
have maintained their integrity and there has been no contamination of any of
the soil underneath the leach pad, itself.

In September and October, 1992, a misdemeanor jury trial was held in San
Bernardino County (California) Municipal Court, which resulted in ten guilty
verdicts against Vanderbilt and ten guilty verdicts against its president, Mr.
John F. Jordan, Jr., for environmental violations. These verdicts resulted in
fines totaling $90,000 for each (grand total $180,000). The Company and Mr.
Jordan have filed an appeal to an Appellate Panel in the Superior Court of San
Bernardino County against each of the ten misdemeanor convictions. It would be
premature to attempt to predict the eventual outcome of the Company's appeal.

In April, 1993, the Bureau of Land Management (BLM) served Vanderbilt with a
request that the Morning Star Mine "Plan of Operation" be amended. A "Plan of
Operation" filed with the BLM is, in effect, a permit to operate the mine which
is located on public land. Vanderbilt has filed a "Revised Plan of Operation"
with the BLM pursuant to that request.

During 1991 and continuing through early 1994, Vanderbilt had been actively
detoxifying the heap leach pad #1 and has now obtained reclassification and
closure from the regulatory authorities that it has been so detoxified. During
1992, the Company concentrated on reclamation activities, mine site cleanup,
and metallurgical testing.

Detoxification of heap leach pad #1 started in 1990 and continued through
1993. The pad was repeatedly flushed with fresh water which was recirculated
to expose it to air and sunlight. This lowered the liquid volume and reduced
the contained cyanide to below benchmark drinking water standards. Heap leach
pad #1, which contained over 1,400,000 tons of spent ore, was tested in
January, 1992, in accordance with a plan developed by a licensed hydrologist.
Assays have revealed that the cyanide in the solid materials is below the
allowable limits for previously leached materials. In 1993, a closure report
requesting reclassification of the heap leach pad to a nontoxic category was
filed and such reclassification was received in 1994.

In 1992 and 1993, the Company also devoted time and effort to improving the
mine site. Equipment abandoned by the former contractors was removed from the
site. Hazardous waste, primarily diesel fuel, motor oil, and filters, was
removed in accordance with current regulations. Spills that had occurred over
the long history of mining at Morning Star were remediated.
<PAGE>

During 1992 and again in 1993, the Company commissioned a metallurgical test
program directed toward improved gold recovery levels with less environmental
impact. The process entails fine crushing the ore, agglomerating it with
cyanide, lime and cement and leaching it in totally enclosed vats. The leached
ore is then detoxified before being removed from the enclosed area. This
approach has the advantage of dramatically reducing the time needed for
precious metal recovery and for final reclamation of the spent ores. In
laboratory tests the gold recovery shows as increased from 74% to 85% or
higher. This procedure comprises the basis for the revised Plan of Operations
submitted to the BLM and to the Lahontan Region of the California Regional
Water Quality Control Board.

In August, 1994, the Company's San Bernardino County, State of California,
permit to operate a mine expired. Vanderbilt is now required to expend
considerable man-hours and expense on preparing the reapplication for a new
permit. Considering the 1992 misdemeanor court case and the general attitude in
San Bernardino County against mining operations of any kind, management is not
able to forecast their success in obtaining the new permit or gauge the scope
of any limitations which the new permit may place upon the operations at the
mine.

The California Desert Protection Act of 1994 ("Act") was passed by Congress and
signed into law by the President. The Morning Star Mine ("Morning Star") is
located in the newly designated "Mojave National Preserve". In general, the
Morning Star's mining and processing operations, under the new Act, may be
conducted as provided in the existing Plan of Operations (Plan"). One change
will be that public land, including that occupied by the Morning Star, will be
administered by the National Park Service ("NPS") instead of the BLM. The
exact timetable for the transfer has not been announced. The NPS, however, has
notified the Company that existing operating mines, with approved BLM Plans,
that are now on lands to be administered by the NPS will be temporarily allowed
to continue until the approved BLM Plan can be converted to an approved NPS
Plan and a validity determination of its claims can be made.

Since the Morning Star has an approved Plan (Approved by BLM) and state water
permits, it appears that the mining and processing operations can proceed in
accordance with the Company's plans. However, it is not possible at this time
to assess the ultimate impact, if any, that the Act will have upon the
Company's operations at the Morning Star and the timing of such impact.
<PAGE>

Conclusion

1994 continued the positive progress started in 1993, and 1995 shows full
promise to exceed both years for accomplishments. In January, 1995, the
Company signed an Agreement with Compania Minera Rosarence S. A. de C. V.
("Rosarence"), a Mexican Corporation headquartered in Culiacan, Sinaloa, Mexico
wherein the Company will fund certain development and exploration activities to
be performed by Rosarence at a 67,000 acre concession in the State of Durango,
Mexico. Preliminary sampling has identified gold, silver and copper
potentials. The Company also acquired a one year option to acquire a specified
portion of the concession, including all equipment purchased pursuant to the
agreement, and further, the option to acquire all of the outstanding shares of
Rosarence at no further cost. This option expires one year from January 13,
1995.

Vanderbilt is required to pay $200,000 for the grant of the option, as
follows: 1) the delivery of a Caterpillar D8K bulldozer to Rosarence, valued
in the agreement at $55,000, 2) $25,000 upon execution of the agreement, and 3)
four quarterly payments of $30,000 each beginning April 1, 1995.

The Company is obligated to provide $400,000 for the exploration and
development of the concession during the one year term following the execution
of the agreement.

Vanderbilt may exercise its option to purchase the specified portion of the
concession and all of the shares of Rosarence by notifying Rosarence of its
intention and transferring 1,800,000 restricted common shares to the non US
person owner(s) of Rosarence pursuant to Regulation S of the United States
Securities and Exchange Commission. If, however, the shares have a value less
than $1.00 each (average of bid and ask price on the NASDAQ Electronic Bulletin
Board System), the seller(s) may elect to receive the remainder of the option
exercise price in cash or in additional Vanderbilt common shares. In effect,
the sellers are to receive $1,800,000 in value (Vanderbilt common shares and
cash).

During the term of the agreement, Rosarence shall be the operator of the
concession pursuant to a mutually agreed upon work plan.

Any revenues earned during the term of the agreement are restricted to be used
for expanded exploration and development and may be used by Vanderbilt as an
offset against its $400,000 funding obligation.

During the first quarter of 1995, the Company recovered and processed about 40
ounces of gold from the heap leach solutions underlying heap leach pad #2 at
the Morning Star Mine, demonstrating that the current process and the equipment
in place are both functional.
<PAGE>

</TABLE>
<TABLE>

Item 8. Financial Statements

<CAPTION>
INDEX TO FINANCIAL STATEMENTS

<S> <C>
Independent Auditor's Report. . . . . . . . . . . . . . . . . . . . . .F-1

Consolidated Balance Sheets at December 31, 1994 and 1993. . . . . . . F-2

Consolidated Statements of Operations. . . . . . . . . . . . . . . . . F-3

Consolidated Statements of Changes in Shareholders' Equity (Deficit). .F-4

Consolidated Statement of Cash Flows. . . . . . . . . . . . . . . . . .F-6

Notes to Consolidated Financial Statements. . . . . . . . . . . . . . .F-8

<PAGE>
INDEPENDENT AUDITOR'S REPORT

The Board of Directors
Vanderbilt Gold Corporation

I have audited the accompanying consolidated balance sheets of Vanderbilt Gold
Corporation and subsidiaries as of December 31, 1994 and 1993, and the related
consolidated statements of operations, changes in shareholders' equity
(deficit) and cash flows for each of the three years in the period ended
December 31, 1994. These consolidated financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these consolidated financial statements based on my audit.

I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis
for my opinion.

In my opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Vanderbilt Gold
Corporation and subsidiaries at December 31, 1994 and 1993, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1994 in conformity with generally accepted accounting
principles.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in note 10 to the
financial statements, the Company's recurring losses from operations and
accumulated deficit raise substantial doubt about the entity's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in note 10. The consolidated financial statements do not
include any adjustments relating to the recoverability and classification of
reported asset amounts or the amounts and classification of liabilities that
might result from the outcome of this uncertainty.

/S Keith J. Rosen
Keith J. Rosen
Certified Public Accountant
Sherman Oaks, California
March 15, 1995
<PAGE>

</TABLE>
<TABLE>
VANDERBILT GOLD CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets at December 31, 1994 and 1993
(In Thousands, except for number of shares)
<CAPTION>
<S> <C> <C>
1994 1993
Current Assets:
Cash and Cash Equivalents (Note 6) $ 153 $ 36
Accounts Receivable - Trade 68 -
Employee Advances Receivable 23 5
Due from Related Party 17 -
Inventories (Notes 2 & 5) 867 851
Prepaid Expenses 3 4
Other 2 3
______ ______
Total Current Assets 1,133 899

Property, Plant, Equipment and
Mining Properties - Net (Notes 2 & 4) 2,159 2,129
______ ______
Total Assets $ 3,292 $ 3,028
====== ======
Current Liabilities:
Accounts Payable $ 1,062 $ 959
Accrued Expenses 156 169
Accrued Salaries and Wages 480 370
Notes Payable - Other (Note 12) - 14
Due to Related Parties (Note 3) - 5
Deferred Revenue - Gold Sales (Note 11) 95 70
Gold Loan Payable (Note 3) 38 38
______ ______
Total Current Liabilities 1,831 1,625

Long Term Liabilities:
Accrued Reclamation Expense 45 47

Shareholders' Equity (Deficit):
Preferred Stock, Par Value $.01 Per Share;
Authorized 5,000,000 Shares;
Series A, 100,000 Shares Designated,
Issued and Outstanding 9,670 Shares (Note 13) - 148
Common Stock, Par Value $.01 Per Share;
Authorized 45,000,000 Shares at 1994
and 25,000,000 Shares at 1993;
Issued and Outstanding 28,976,210
and 23,558,412 Shares at Respective Dates 290 235
Common Stock Subscribed but Unissued (825,546 Shares) 133 -
Additional Paid in Capital 24,411 23,682
Accumulated Deficit (23,418) (22,709)
______ ______
Net Shareholders' Equity (Deficit) 1,416 1,356
______ ______
Total Liabilities and Shareholders' Equity (Deficit) $ 3,292 $ 3,028
====== ======
<FN>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>

</TABLE>
<TABLE>
VANDERBILT GOLD CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share amounts)
<CAPTION>
Years Ended
December 31,
1994 1993 1992
<S> <C> <C> <C>
Revenues:
Bullion Sales $ 14 $ 4 $ 101
Option Fee (Note 15) - 50 -
Rent Income - 7 -
______ ______ ______
Total Revenues 14 61 101

Direct Cost of Sales:
Mining, Leaching and Refining Costs 130 39 351
Debt Restructuring Expense 13 31 -
______ ______ ______
Total Direct Cost of Sales 143 70 351

Depreciation and Amortization (Notes 2 and 4) 60 104 486
Reclamation & Environmental Expenses 112 84 -
Exploration Costs (Note 2) 10 - 7
General and Administrative Expenses 397 223 288
______ ______ ______ _ _ _ _ _ _
Total Expenses 722 481 1,132

Loss from Operations 708 420 1,031

Interest Income - - 3
Dividend Income 1 - -
Interest Expense (37) (72) (183)
Debt Cancellation Income 11 131 5
Gain on Joint Venture Termination 25 - -
Loss on Sale and Other Disposal of Assets 1 166 -

Net Loss Before Taxes 709 527 1,206

Income Taxes (Benefit) (Note 7) - - -

Net Loss $ 709 $ 527 $ 1,206
====== ====== =====

Net Loss Per Share (Note 2) $ 0.03 $ 0.03 $ 0.09
====== ====== =====

Weighted Average Number of Shares
Outstanding Used in Calculation of
Loss Per Share 25,128 15,141 12,873
====== ====== ======
<FN>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>

</TABLE>
<TABLE>
VANDERBILT GOLD CORPORATION AND SUBSIDIARIES
Consolidated Statements of Changes in Shareholders' Equity (Deficit)
(in thousands)
<CAPTION>
Total
Series A Common Additional Shareholders'
Common Stock Preferred Stock Paid-In Accumulated Equity
# of Shares Amount Stock Subscribed Capital Deficit (Deficit)

<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1992 12,481 $ 125 $ - $ 94 $ 21,946 $ (20,976) $ 1,189

Common Shares Issued for:
Payment of Amount Due to
Related Parties with
Common Stock at $0.15
per share 6 6
Net (Loss) for Year (1,206) (1,206)
______ ___ ______ ___ ______ _______ _____
Balance, December 31, 1992 12,481 $ 125 $ - $ 100 $ 21,946 $ (22,182) $ (11)

Common Shares Issued for:
Sale of Shares 740 7 126 133
Exercise of Employee Stock
Options (Note 9) at
$0.25 per share:
For Accounts Payable 5 1 1
For Amounts Due Related
Parties 50 1 12 13
For Current Expenses 5 1 1
Exercise of Employee Stock
Options (Note 9) at
$0.18 per share:
For Accounts Payable 5 1 1
For Current Expenses 5 1 1
Adjust Common Stock Subscribed 2 2
For Common Stock Subscribed 423 4 (102) 98 -
Payment of Accounts Payable 5,505 55 845 900
Payment of Accrued Expense 55 1 8 9
Payment of Current Expense 440 4 66 70
Payment of Amount Due
Related Parties 38 6 6

<FN>
See Accompanying Notes to Consolidated Financial Statements

<PAGE>

1993 Transactions, Continued

Settlement of Gold Loans 933 9 140 149
Settlement of Note Payable:
CTI (Note 12) 1,625 16 244 260
Others 873 9 131 140
Payment of Accrued Interest 375 4 56 60
Preferred Stock (Series A)
Issued For (Note 13):
Accounts Payable 100 100
Payment of Amount Due
Related Parties 48 48
Net (Loss) for Year (527) (527)
______ ___ ______ ___ ______ _______ _____
Balance, December 31, 1993 23,558 235 148 - 23,682 (22,709) 1,356

Common Shares Issued for:
Sale of Shares 3,072 31 384 415
Conversion of Preferred
Shares 967 10 (148) 138 -
Payment of Current Expenses 456 4 69 73
Payment of Accounts Payable 703 7 106 113
Settlement of Notes Payable 63 1 9 10
Settlement of Deferred
Common Shares Subscribed and
Fully Paid 133 133
Revenue - Gold Sales 157 2 23 25
Net (Loss) for Year (709) (709)
______ ___ ______ ___ ______ _______ _____
Balance, December 31, 1994 28,976 $ 290 $ - $ 133 $ 24,411 $ (23,418) $ 1,416
====== === ====== ====== ====== ====== =====

<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
VANDERBILT GOLD CORPORATION AND SUBSIDIARIES
Consolidated Statement of Cash Flows (Notes 1 & 6)
(in thousands)
<CAPTION>
Years Ended
December 31,
1994 1993 1992
<S> <C> <C> <C>
Cash Flows from Operating Activities:

Net Loss $ (709) $ (527) $(1,206)
Adjustments for Noncash Items Included
in Net Loss):
Depreciation and Amortization Charged:
to Costs and Expenses from Current Period 60 104 474
to Costs and Expenses from Inventory - - 13
Included in Ending Inventory 3 5 -
Income from the Cancellation of Debt (11) (131) (5)
Provision for (Payment of) Reclamation
Costs (Note 2) (2) (44) -
Gain on Joint Venture Termination (25) - -
Passthrough of Joint Venture Expenses 25 - -
Loss on Disposal of Fixed Assets 1 166 -
Settlement of Deferred Revenue - Gold
Sales 13 31 -
Payment of Current Expenses with Common Shares 60 72 -
Changes in Current Assets and Liabilities:
Accounts Receivable (68) - 2
Tax Refunds Receivable - Assigned (Note 7) - 5 17
Employee Advances Receivable (18) (5) -
Due from Related Parties (17) - -
Inventories - Net of Depreciation and
Amortization Charged to Costs and Expenses (16) 2 65
Other Current Assets 2 5 34
Accounts Payable and Accrued Expenses 213 117 498
Accrued Salaries & Wages 110 113 99
Deferred Revenues 50 - -
______ ______ ______
Net Cash (Used in) Operating Activities (329) (87) (9)

Cash Flows from Investing Activities:

Purchases of Fixed Assets (93) - -
Proceeds from Fixed Asset Disposals - 6 4
______ ______ ______
Net Cash Provided by (Used in)
Investing Activities (93) 6 4

Years Ended
December 31,
1994 1993 1992
<S> <C> <C> <C>

Cash Flows from Financing Activities:

Proceeds from Sale of Stock 415 133 -
Proceeds from Common Stock Subscribed and
Fully Paid 133 - -
Increase in Amounts Due to Related Parties - 6 14
Payment of Amounts Due Related Parties (Note 3) (5) (26) (18)
Increase in Notes Payable - Other 10 12 19
Payment of Notes Payable - Other (14) (8) (10)
______ ______ ______
Net Cash Provided by Financing
Activities 539 117 5
______ ______ ______
Increase in Cash and Cash Equivalents 117 36 0
Cash and Cash Equivalents at Beginning of Year 36 0 0
______ ______ ______
Cash and Cash Equivalents at End of Year $ 153 $ 36 $ 0
====== ====== =====

Supplemental Information:
Interest Paid 1 - 4
Payment of Accrued Interest with Common Stock 25 60 -
Payment of Accounts Payable with Common Stock 113 902 -
Exercise of Employee Stock Options with Amount Due
Related Parties - 13 -
Settlement of Forward Gold Sale with Common Stock 25 118 -
Exercise of Employee Stock Options with
Accounts Payable - 2 2
Fixed Assets Exchanged in Settlement for Accounts
Payable & Accrued Expense - - 9
Fixed Assets Exchanged in Settlement of Notes Payable - - 7
Payment of Amount Due Related Parties with Common Stock - 6 6
Payment of Notes Payable - Other with Common Stock 10 400 -
Payment of Accounts Payable with Preferred Stock - 100 -
Payment of Amounts Due Related Parties with
Preferred Stock - 48 -
Non-Cash Investment in Joint Venture 50 - -
Non-Cash Distribution from Joint Venture 50 - -

<FN>
See Accompanying Notes to Consolidated Financial Statements

</TABLE>
<PAGE>

VANDERBILT GOLD CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

1. ORGANIZATION AND NATURE OF ACTIVITIES:

Vanderbilt Gold Corporation ("Company") operates the Morning Star Mine
("Mine"), its principal operating property, which is located in eastern San
Bernardino County, California. The Mine produces gold and silver which is
sold by the Company in the form of dore bullion. In January 1995, the
Company signed an agreement with Compania Minera Rosarence S. A. de C. V.
("Rosarence"), a Mexican Corporation headquartered in Culiacan, Sinaloa,
Mexico wherein the Company will fund certain development and exploration
activities to be performed by Rosarence at a concession in the State of
Durango, Mexico. See Note 16 for additional details.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation

The Company's consolidated financial statements have been prepared on the
going concern basis which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The
Company's continued existence is dependent upon its ability to achieve
profitable operations, reduce its accounts payable and accrued expenses,
realize its investment in inventories and to obtain additional financing.
Accordingly, the consolidated financial statements do not include any
adjustments relating to the overall recoverability and classification of
recorded asset amounts or the amount and classification of liabilities or
any other adjustments that might be necessary should the Company be unable
to continue as a going concern in its present form.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company,
its wholly owned and majority owned subsidiaries and its proportionate
share of the accounts of the joint ventures in which it participates. All
intercompany and interventure accounts and transactions have been
eliminated.

Inventories

Inventories of ores (on the heap leach pad) and precious metals in process
are valued at the lower of average cost or market. Ore inventories include
direct production costs, allocable operating overhead and allocable
depreciation and amortization. Materials and supplies are stated at the
lower of cost, using the first-in, first-out method, or market.
<PAGE>
VANDERBILT GOLD CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued

Property, Plant, Equipment and Mining Properties

Property, plant, equipment and producing mining properties are capitalized
at cost. Overburden and waste rock removal costs are capitalized and
amortized as the underlying ore reserves are mined. For producing mining
properties, the acquisition costs, deferred overburden and waste rock
removal costs are amortized by the units of production method based upon
estimated ore reserves. Plant and equipment are depreciated over their
estimated useful lives, principally on a straight line basis (Note 4).

Exploration Costs

Exploration costs and costs of carrying and retaining undeveloped
properties are charged against income as incurred.

Reclamation and Environmental Costs

Various governmental agencies have set minimum levels for required
reclamation procedures to be performed at the time the mining and
production activities at the Mine cease. Provision has been made in the
Company's financial statements for the estimated future costs for the
dismantling and reclamation work to be done to comply with existing and
known reclamation standards. This provision is computed on a units of
production basis. Ongoing expenses for compliance with environmental
regulations are expensed as incurred.

Recognition of Revenue

The Company recognizes the revenue from the sale of gold and silver dore
bullion as of the date of delivery. The settlement price for the bullion
is determined as of the settlement date, which is usually five working days
after the receipt of the bullion by the refiner or, in the case of a
forward sale contract, by the terms and conditions of the forward sale
contract. Payment is generally received within two weeks following the
shipment date.

Interest Expense

Interest costs incurred during the construction of certain assets are
capitalized as a part of the asset cost.

Income Taxes

The effects of timing differences between financial income (loss) and
taxable income (loss) are deferred. Investment tax credits are recognized
when earned (the flow through method). The Company has significant net
operating loss carryforwards available to offset future taxable income.
<PAGE> VANDERBILT GOLD CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued

Loss Per Common Share

Loss per common share is computed on the basis of the weighted average
number of shares, which includes the number of shares subscribed to and for
which the Company has been fully paid. The effect on loss per common share
resulting from the exercise of outstanding options would be antidilutive.

Reclassifications

Certain reclassifications were made to the prior years' financial
statements for comparability to 1994. Such reclassifications had no effect
on the amount of net loss(es).

3. RELATED PARTY TRANSACTIONS:

The Company entered into a Gold Loan in November, 1990 with Brenda, Inc.
It borrowed 653 ounces of gold which were simultaneously sold at $383.10
per ounce and the Company received the proceeds of $250,164.30. Under the
terms of the Loan Agreement and the related Security Agreement, the loan
bears interest, payable monthly, of 3.53% per annum on the outstanding
dollar value of the unpaid gold ounces computed daily using the London
afternoon fixing price. The Loan Agreement provides for repayment by the
Company delivering 100 ounces of gold to Brenda Inc. each month from
January to April, 1991, 125 ounces in May, 1991, and 128 ounces in June,
1991. Virtually all of the Company's assets are pledged as collateral for
this loan under the Security Agreement until the loan is paid in full. At
December 31, 1994, 1993 and 1992, 100 ounces remained undelivered.

The President engaged in financial transactions with the Company during
1994, 1993 and 1992. Following is a summary of the financial transactions
between the Company and this related party:

1994 1993 1992

Another Board member loaned $12,000 at 12% percent interest per annum
during 1990; $6,000 of the loan was repaid by conversion to common stock in
1993 and $6,000 had been paid in cash during the year ended 1990.

4. PROPERTY, PLANT, EQUIPMENT AND MINING PROPERTIES - NET:

Property, plant, equipment and mining properties, accumulated depreciation
and amortization and range of estimated lives as of December 31, 1994 and
1993 are as follows (in thousands):

Range
Of Lives
In Years 1994 1993
Capitalized Overburden and
Waste Removal Costs Approx 5 $ 8,019 $ 8,019
Mining and Other Equipment 5-10 1,050 970
______ ______
9,069 8,989
Less: Accumulated Depreciation and Amortization (6,910) (6,860)
______ ______
Net Property, Plant, Equipment and Mining
Properties $ 2,159 $ 2,129
====== =====

5. INVENTORIES:

Inventories at December 31, consist of the following (in thousands):

1994 1993
Ore (on Heap Leach Pad and in process) $ 856 $ 851
Materials and Supplies 11 -
______ ______
Total $ 867 $ 851
===== =====

Management believes that 2,449 ounces of gold remains in the heap leach pad
at December 31, 1994 and 1993 and that they are recoverable over a several
year period, depending upon the level of mine and refinery operations.

6. CASH FLOW INFORMATION:

Cash and cash equivalents consist of cash on hand and investments in
short-term, highly liquid securities which generally have maturities of
three months or less when purchased.
<PAGE>
VANDERBILT GOLD CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued

7. INCOME TAXES:

The Company adopted the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 109 effective January 1, 1993. Adoption of SFAS No.
109 had no material impact upon the financial statements of the Company.
The Company has no computable material timing differences for any items of
income or deductions for 1994, 1993 or 1992 which could give rise to any
material deferred income taxes. The Company has available at December 31,
1993, estimated federal net operating loss carryforwards of approximately
$12,000,000, which expire in varying amounts between 1997 and 2009. It
also has net investment tax credits of $23,000, which expire in varying
amounts between the years 1994 and 2004.

A write off of the Mine Lease Intangible in the amount of $6,154,000 which
the Company recorded in 1990 is not a deduction for income tax purposes
until the Company has ceased operations at, disposed of the Morning Star
Mine or recorded amortization for tax purposes which fully expenses the
remaining balance.

8. RENTAL EXPENSE AND LEASE COMMITMENTS:

MORNING STAR MINE
SAN BERNARDINO COUNTY, CALIFORNIA

The Company leases two unpatented lode mining claims from unrelated
parties. The lease commenced on October 24, 1973, and was scheduled to
expire in October of 1993; however, the lease provides that it will
continue so long as the lessee is conducting exploration, development or
mining operations on the property. The Company is obligated to pay a
monthly royalty equal to the greater of $1,000 or 5% of the net smelter
receipts. The Company paid royalties of $12,000 for each of 1994, 1993 and
1992. Vanderbilt may cancel this lease at its option.

9. STOCK OPTIONS:

Incentive Stock Option Plans:

In 1983, the shareholders approved the 1983 Incentive Stock Option Plan
(the "ISO Plan"). Under the ISO Plan, full-time officers and other key
employees may be granted options to purchase shares of common stock of the
Company at a price at least equal to fair market value on the date of
grant. There were no Stock Option plan transactions, under this plan,
during 1992 or 1993. 29,500 options were available for grant at December
31, 1992. The 1983 ISO Plan expired on September 15, 1993.
<PAGE>
VANDERBILT GOLD CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued

At the Annual Meeting of Stockholders held June 6, 1989 the Stockholders
approved the Company's 1989 Stock Option Plan. This plan provides for the
discretionary grant of up to 500,000 shares of the Company's common stock
as incentive stock options to officers and other key employees and for the
automatic grant of certain non-qualified stock options to nonemployee
directors. At the Annual Meeting of Shareholders held June 16, 1994, the
Stockholders approved amending the 1989 Stock Option Plan to authorize the
eligibility of certain consultants to be granted options and to increase
the number of shares available for grant under the Plan from 500,000 to
1,000,000 shares of Common Stock.

The 1989 Stock Option Plan transactions during 1994, 1993 and 1992 are
shown below:

Number of Shares 1994 1993 1992

Balance at January 1, 102,000 174,500 197,500
Authorized Increase in Shares 500,000 - -
Options Granted 645,000 5,000 5,000
Options Exercised - (70,000) -
Average Price - $0.24 -
Options Lapsed or Terminated (22,000) (7,500) (28,000)
At December 31:
Options Outstanding 725,000* 102,000 174,500
Average Price $0.25 $0.64 $0.48
Options Available for Grant 177,500 300,500 298,000

*80,000 expire June 29, 1995, 620,000 expire June 24, 1999 and 25,000
expire June 30, 1999.

Non-Qualified Stock Options:

On March 27, 1987, the shareholders approved the 1986 Non-Qualified Stock
Option Plan (the "1986 Non-Qualified Plan") under which directors and
full-time key employees of the Company were eligible to receive options to
purchase shares of common stock at an exercise price not less than 100% of
the fair market value of the stock on the date of the option grant. 500,000
shares of the common stock had been reserved for issuance under this plan.
As of December 31, 1990, 39,000 shares had been cumulatively granted under
this plan at an average exercise price of $4.88. 461,000 shares remained
available for grant under this plan as of December 31, 1993 and 1992. The
Board of Directors terminated this plan April 20, 1994.
<PAGE>
VANDERBILT GOLD CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued

In February and July, 1991, the Board of Directors granted options at $0.25
per share for the Company's common stock to persons who had made loans to
the Company and agreed to accept the options in lieu of interest on their
loans. Two unrelated individuals received these options for 320,000 shares
(expiration date August 14, 1993), one Board member received an option for
48,000 shares (expiration date August 14, 1993), an individual received an
option on 28,000 shares (expiration date July 4, 1994), the President and
Chairman of the Board received an option on 380,000 shares (expiration date
July 4, 1994) and one unrelated party received an option on 500,000 shares
(expiration date August 14, 1994).

10. GOING CONCERN:

The Company's financial statements have been presented on the basis that it
is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company
has reported recurring net losses for the years ended December 31, 1994,
1993 and 1992. Further, the current liabilities exceed current assets by
$698,000 at December 31, 1994 and $726,000 at December 31, 1993. Those
factors as well as the uncertain capability of the Company to produce gold
in sufficient quantities to fulfill the requirements of the gold loan, to
meet the delivery schedules for the deferred revenue contracts (which are
technically in default) and to generate sufficient revenues to fund day to
day operations and meet its funding obligations under the Rosarence
Agreement create substantial uncertainty about the Company's ability to
continue as a going concern. The Company is exploring alternative
financing arrangements via direct loans, private placements, restructuring
debt or by joint venture arrangement(s) to provide the capital with which
to commence full operations and meet contractual obligations.

During 1994, the Company raised $414,000 through private placements, paid
about $73,000 in current expenses with common shares, settled prior and
current debts amounting to $148,000 by conversion to common shares. In
1993, the Company converted a substantial portion of debt (approximately
$1,690,000) into common and preferred stock, raised $133,000 through
private placements, and negotiated a settlement of one liability for
$96,000 less than owed.

11. DEFERRED REVENUE - GOLD SALES:

The Company entered into forward gold sale arrangements with four parties
between June and August, 1990. Under the arrangements, the Company agreed
to deliver a total of 900 ounces of gold on varying delivery dates
commencing in December, 1990 through March, 1991. The Company received a
total of $266,500 (average price per ounce $296.11) in cash proceeds at the
time the contracts were entered into.
<PAGE>
VANDERBILT GOLD CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued

Between October, 1991 and April, 1994, three of the parties agreed to
accept common shares as payment in lieu of gold delivery. As a result of
the Company's inability to meet the required scheduled delivery dates, the
remaining gold contract for 150 ounces is in default at December 31, 1994.
As part of the debt restructuring in 1994, $25,000 (85 ounces) of these
contracts was settled with 156,875 common shares (at $0.16 per share). As
a part of the debt restructuring in 1993, the Company was able to settle
$118,000 of these contracts (400 ounces) for 933,000 shares of common stock
at $0.16 per share.

During 1994, the Company entered into a gold contract with an unrelated
party wherein the Company sold 166.66 ounces of gold at $300.00 per ounce
under a delivery schedule projected to commence in November 1994 and
conclude by November 1995. The Company guaranteed the buyer a minimum 10%
return should the price of gold at the dates of delivery be below $330.00
per ounce. The Company received $50,000 in proceeds at the effective date
of the contract.

12. NOTES PAYABLE - OTHER:

During 1993, the Company negotiated with the successors in interest to CTI
to accept common stock in exchange for the amount owed by the Company. The
successors in interest agreed to accept 2,000,000 common shares at $0.16
per share ($320,000) as settlement in full for all amounts owed including
interest. The Company also negotiated with three individual creditors, who
had loaned cash to Vanderbilt, to accept approximately 873,000 shares of
its common stock at $0.16 per share in settlement of $140,000 in loans.

13. PREFERRED STOCK:

On December 30, 1993, the Board of Directors by written consent authorized
the Company to issue 9,670 shares of Series A Preferred Stock. 100,000
shares of the authorized 5,000,000 shares of preferred stock was designated
that date by the Board of Directors as Series A Preferred Stock. This
Series A Preferred Stock is not entitled to receive dividends, has a $1.00
per share preference upon liquidation, has the right to share ratably with
others entitled to liquidation preferences, and has voting rights equal to
the number of common shares into which the preferred could be converted.
Each share of the Series A Preferred Stock is convertible into 100 shares
of common stock; except that in the event of a change of control each
Series A preferred share shall be convertible into 1,000 shares of common
stock. For this purpose, a change of control of the Company not approved
by at least 75% of the directors prior to such change of control, includes
the acquisition by a single holder or a group acting in concert, of such
number of shares of common stock or other securities of the Company so as
to permit the holder or affiliated holders to cause the election of at
least one-third of the directors of the Company.
<PAGE>
VANDERBILT GOLD CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued

The Company had the option to convert the Series A Preferred Stock into
common shares at any time up to and including December 31, 1994; thereafter
the holder(s) of such preferred shares have the right to require
conversion.

6,670 shares at $14.99 per share of the Series A Preferred Stock were
issued December 30, 1993 in payment of $100,000 of accounts payable to an
unrelated party and 3,000 shares at $16.00 per share were issued to the
Chairman of the Board and President in payment of $48,000 which he had
loaned to the Company.

On October 10, 1994, the Board of Directors exercised the conversion right
and all of the Series A Preferred Stock was converted into common stock.

14. CONTINGENCIES:

In September and October, 1992, a misdemeanor jury trial was held in San
Bernardino County (California) Municipal Court, which resulted in ten
guilty verdicts against Vanderbilt and ten guilty verdicts against its
President, Mr. John F. Jordan, Jr., for environmental violations. These
verdicts resulted in fines totaling $90,000 for each (grand total
$180,000). The Company and Mr. Jordan have filed an appeal to an Appellate
Panel in the Superior Court of San Bernardino County against each of the
ten misdemeanor convictions. It would be premature to attempt to predict
the eventual outcome of the Company's appeal. A provision for the
Company's fine was recorded in the 1992 financial statements.

In April, 1993, the Bureau of Land Management (BLM) served Vanderbilt with
a request that the Morning Star Mine "Plan of Operation" be amended. A
"Plan of Operation" filed with the BLM is, in effect, a permit to operate
the mine which is located on public land. Vanderbilt has filed a "Revised
Plan of Operation" with the BLM pursuant to their request.

Like other companies, Vanderbilt is subject to the existing and evolving
standards relating to the protection of the environment. It has
established a reserve for reclamation for those costs it can estimate that
it will probably incur when the operations at the Mine finally cease.
However, Vanderbilt is subject to contingencies as a result of changing
environmental laws and regulations. The related future cost is
indeterminable due to such factors as the unknown timing and extent of
corrective actions which may be required and due to the application of
joint and several liability. Vanderbilt believes that those costs will not
have a material adverse effect on its operations or financial position.
<PAGE>
VANDERBILT GOLD CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued

15. OPTION FEE:

During 1993, Vanderbilt and Boulder Gold, Inc.("Boulder"), a Delaware
Corporation, a wholly owned subsidiary of American Boulder NL, an
Australian Corporation, entered into a letter of intent which provided
generally that Vanderbilt and Boulder would enter into a production joint
venture for the Morning Star Mine, if after a 60 day due diligence period
granted to Boulder, Boulder elected to proceed with the production joint
venture with Vanderbilt. Boulder paid $50,000 with the letter of intent
which further provided that if Boulder elected to proceed with the
production joint venture, the $50,000 payment would be considered as
payment in full for Vanderbilt common stock valued at a date exactly two
weeks prior to Boulder's election. Boulder was to notify Vanderbilt of its
intention to exercise or not sixty days from August 16, 1993. On January
3, 1994, Vanderbilt received a letter from Boulder notifying it that
Boulder had decided not to proceed with the production joint venture.
Accordingly, Vanderbilt recorded the option fee received as income for its
"standing still" during the Boulder sixty day due diligence period during
which Vanderbilt could not negotiate with any other potential joint
venturer or investor with respect to the Morning Star Mine.

16. SUBSEQUENT EVENT:

On January 13, 1995, Vanderbilt entered into a contract with Compania
Minera Rosarence S. A. de C. V., also known as Rosarence, under which the
Company is to fund certain exploration and development activities in a
concession of 67,000 acres in the western part of the State of Durango,
Mexico. Preliminary sampling has identified gold, silver and copper
potentials. The Company also acquired a one year option to acquire a
specified portion of the concession, including all equipment purchased
pursuant to the agreement, and further, the option to acquire all of the
outstanding shares of Rosarence at no further cost. This option expires
one year from January 13, 1995.

Vanderbilt is required to pay $200,000 for the grant of the option, as
follows: 1) the delivery of a Caterpillar D8K bulldozer to Rosarence,
valued in the agreement at $55,000, 2) $25,000 upon execution of the
agreement, and 3) four quarterly payments of $30,000 each beginning April
1, 1995.

The Company is obligated to provide $400,000 for the exploration and
development of the concession during the one year term following the
execution of the agreement.

<PAGE>
VANDERBILT GOLD CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued

Vanderbilt may exercise its option to purchase the specified portion of the
concession and all of the shares of Rosarence by notifying Rosarence of its
intention and transferring 1,800,000 restricted common shares to the non
US person owner(s) of Rosarence pursuant to Regulation S of the United
States Securities and Exchange Commission. If, however, the shares have
a value less than $1.00 each (average of bid and ask price on the NASDAQ
Electronic Bulletin Board System), the seller(s) may elect to receive the
remainder of the option exercise price in cash or in additional
Vanderbilt common shares. In effect, the sellers are to receive
$1,800,000 in value (Vanderbilt common shares and cash).

During the term of the agreement, Rosarence shall be the operator of the
concession pursuant to a mutually agreed upon work plan.

Any revenues earned during the term of the agreement are restricted to be
used for additional exploration and development and cannot be used by
Vanderbilt as an offset against its $400,000 funding obligation.

<PAGE>

Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.

On November 12, 1993, the Company dismissed KPMG Peat Marwick, its former
accountant. The report of such firm on the financial statements of the Company
as of December 31, 1990 and 1989 was qualified with respect to the ability of
the Company to continue as a going concern. The decision to dismiss the
accountant was made by the board of directors of the Company based upon the
recommendation of the audit committee.

During the Company's two most recent fiscal years ended December 31, 1989 and
1990, and the subsequent fiscal years and all interim periods between then and
the date of dismissal, there were no disagreement with KPMG Peat Marwick on any
matter of accounting principles or practices, financial statement disclosure,
or auditing scope or procedure. There were no "reportable events" as defined
in this item requiring disclosure herein.

As of November 12, 1993, the Company engaged Keith J. Rosen, C.P.A.. as its new
independent accountant to audit the financial statements of the Company for the
fiscal years ended December 31, 1991, 1992 and 1993. He was subsequently
engaged to perform the audit for the year ended December 31, 1994. At no time
prior to engaging Mr. Rosen has the Company or anyone on its behalf consulted
with him regarding any matter required to be disclosed in this Item.

PART III

Item 10. Directors and Executive Officers of the Registrant.

The following table sets forth certain information about the executive officers
and directors of Vanderbilt as of December 31, 1994:
Name Age Position with Vanderbilt
____________ ___ ________________________

Tom D. Scott 66 Chairman of the Board of
Directors since June 1994;
President and Chairman of
the Board of Directors from
1980-1987; Director 1971 -
1987, 1994 - Present.

John F. Jordan, Jr. 63 President,Chief Financial
Officer, and Director since
1987; Vice President from 1982
to 1987; Chairman of the Board
of Directors 1988 - 1994;
Director since 1967.
<PAGE>
Howard T. Urband 63 Vice President, Secretary,
and Director; Vice President
since 1989; Secretary since
1990; Director since 1989.

Ted E. Slanker 76 Director since 1974.

Bernard O. Brynelsen 83 Director since 1984.

Barry L. Adams 33 Director since 1994.

Keith W. Fegert 34 Director since 1994.

Tom D. Scott is a Regional Director of Document, Inc., a manufacturer of
electronic financial document delivery systems.

John F. Jordan, Jr.'s expertise includes mining and processing management,
specializing in cost control, process innovation and construction engineering.

Howard T. Urband was President and director of Heavy Metals Development
Corporation, a former wholly-owned subsidiary of Vanderbilt Gold Corporation;
Vice President of Vanderbilt Gold Corporation since 1989; Vice President then
President of Exploration & Development Associates, Inc. (mining consultants)
from 1980 - 1988; Exploration Manager and Mine Geologist since 1957.

Ted E. Slanker was a director of Heavy Metals Development Corporation, a former
wholly-owned subsidiary of Vanderbilt Gold Corporation until it became inactive
in 1991; manages his own investments.

Bernard O. Brynelsen is a director of several mining companies including
Brenda Mines, Ltd., Viceroy Resource Company and Forester Resources, Inc. He
has been a director of Vanderbilt since December 1984 and has been a mining
engineer for 48 years.

Barry L. Adams is an attorney at law in private practice in California
specializing in environmental and solid waste issues, general business and
real estate law. He was formerly associated with the Environmental Department
of the Pacific Legal Foundation.

Keith W. Fegert is general manager of Target Construction Company and SanRoc,
Inc. (mining and construction contractors). Over eleven years experience in
the mining industry as Operations Manager, Purchasing Agent, and Controller;
other experience in project finance, financial controls, and contract
negotiations.
<PAGE>

Item 11. Executive Compensation

The following table sets forth the cash compensation paid to the Company's
Executive Officers for the fiscal year ended December 31, 1994:
Summary Compensation Table
__________________________
Name of Individual Capacities Served Cash
Compensated Year Compensation
__________________ ____ ___________________ ____________
John F. Jordan, Jr. 1994 President and Chief $5,287 (1)
Financial Officer
1993 0 (2)

1992 0 (3)

Howard T. Urband 1994 Vice President and 2,563 (4)
Secretary
1993 0 (5)

1992 0 (6)

______________________________________________________________________

(1) Mr. Jordan accrued $44,100 in salary for 1994.

(2) Mr. Jordan accrued $58,800 in salary for 1993.

(3) Mr. Jordan accrued $96,738 in salary for 1992.

(4) Mr. Urband accrued $51,437 in salary for 1994.

(5) Mr. Urband accrued $54,000 in salary for 1993.

(6) Mr. Urband accrued no salary for 1992.

<PAGE>

The following table sets forth Company stock options that were granted during
1994 for each named executive.

Option/SAR Grants in Last Fiscal Year
_____________________________________

Potential
Realizable Value at
Assumed Annual
Rates Of Stock Price
Appreciation
Individual Grants for Option Term *
(a) (b) (c) (d) (e) (f) (g)
Number of % of
Securities Total
Under- Options/
lying SARs
Options/ Granted to Exercise
SARs Employees or Base
Granted in Fiscal Price Expiration
Name (#) Year ($/sh) Date 5% 10%
_________ _______ _________ _________ __________ _______ ______

J. F. Jordan, Jr.
President 250,000 62.5% $0.25 6/24/99 $17,275 $38,150

Howard T. Urband
Vice-President
150,000 37.5% 0.25 6/24/99 $10,365 $22,890

* The dollar amounts under these columns are the result of calculations at 5%
and 10% compounded annual rates as set by the Securities and Exchange
Commission, and therefore are not intended to forecast future appreciation, if
any, in the price of the Company's common stock. The potential realizable
values illustrated at 5% and 10% compound annual appreciation assume that the
price of the Company's common stock increases $0.0691 and $0.1526 per share,
respectively, over the 5 year term of the options.

<PAGE>

The following table sets forth Company Stock Option data including options
exercised during 1994 for each named executive:

Aggregated Option/SAR Exercises in Last Fiscal Year
and Year-End Option SAR/Values
___________________________________________________

(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)

Shares Acquired Value Exercisable/ Exercisable/
Name On Exercise (#) Realized ($) Unexercisable Unexercisable
_____________ ______________ ________ ____________ ______________

John F. Jordan, Jr.
none none 250,000 N/A
Howard T. Urband none none 225,000 N/A

[FN]
All securities listed in column (d) are assumed to be exercisable at December
31, 1994.

Notes to table:

1) Exercise price $.25; market price at December 31, 1994 $.15

2) Does not include any options not covered by the 1989 Stock Option Plan.

3) None of the Company's options were in-the-money as of December 31, 1994.

Item 12. Security Ownership of Certain Beneficial Owners
and Management.

The following table sets forth as of December 31, 1994 certain information
concerning the ownership of shares of common stock of the Company by (i) each
person who is known by the Company to own of record or beneficially 5% or more
of the common stock of the Company, (ii) each director of the Company and (iii)
all officers and directors of the Company as a group. As of such date,
28,976,210 shares were issued and outstanding.

All shareholders listed below have sole voting and investment power with
respect to their shares except as otherwise noted.
<PAGE>

Name and Address of Amount and Nature Percent of
Beneficial Owner of Beneficial Ownership Class
_______________________ _______________________ ___________

Target Construction, Inc. 4,000,000 13.8%
333 Holcomb Avenue, #100
Reno NV 89502

Mother Lode Mining Co., LLC. 1,600,000 5.5%
11714 Gamble Oak Circle
Sandy UT 84092

Keith W. Fegert 4,708,382 (1) 16.3%

Barry L. Adams 807,851 (2) 2.8%

John F. Jordan, Jr. 700,200 (3) 2.4%

Howard T. Urband 233,000 (4) *

Tom D. Scott 229,863 (5) *

Ted E. Slanker 99,966 (6) *

Bernard O. Brynelsen 52,036 (6) *

All officers and
Directors (7 persons) 6,831,298 (1) (2) (3) 23.6%
(4) (5) (6)
(1) Mr. Fegert disclaims beneficial ownership of 3,784,191 shares. The
total shown above includes 5,000 shares issuable upon the exercise of
stock options.

(2) Mr. Adams disclaims beneficial ownership of 584,191 shares. The total
shown above includes 5,000 shares issuable upon the exercise of stock
options.

(3) Mr. Jordan disclaims beneficial ownership of 450,200 shares. The
total shown above includes 250,000 shares issuable upon the exercise
of stock options.

(4) Includes 225,000 shares issuable upon the exercise of stock options.

(5) Mr. Scott disclaims beneficial ownership of 70,569 shares. The total
shown above includes 5,000 shares issuable upon the exercise of stock
options.

(6) Includes 7,500 shares issuable upon the exercise of stock options.

* Less than 1%.
<PAGE>

The certificate of incorporation of the Company provides for a classified board
of directors. The board is divided into three classes, designated Class I,
Class II, and Class III. The directors in Classes I, II and III were elected
to hold office until the annual meetings of shareholders in 1995, 1996 and
1997, respectively.

The Company's last annual meeting was held on June 16, 1994. It is anticipated
that the next annual meeting will be held in June, 1995. At that meeting
shareholders will elect directors for Class I, who will serve for a three year
term ending June, 1998.

1986 Nonqualified Stock Option Plan

On March 27, 1987, the shareholders approved the 1986 Nonqualified Stock Option
Plan (the "Non-Qualified Plan") under which directors and full-time key
employees of the Company and its subsidiaries were eligible to receive
non-qualified options to purchase shares of Common Stock at an exercise price
not less than 100% of the fair market value of the Common Stock on the date of
the option grant and with a term not exceeding ten years. In 1989, the Board
of Directors resolved that notwithstanding the terms of the Nonqualified Plan,
no non-employee directors of the Company or its subsidiaries will be eligible
to participate under the Nonqualified Plan. The administrators of the
Nonqualified Plan determined in their sole discretion which officers and other
key employees of the Company and its subsidiaries should be granted options
under the Nonqualified Plan. A registration statement on Form S-8 was filed
with the Securities and Exchange Commission covering the 500,000 shares of
Common Stock reserved for issuance under the Nonqualified Plan, and the
registration statement became effective September 11, 1987. As of December 31,
1993, there were no outstanding unexercised options under the Nonqualified
Plan. The Nonqualified Plan was terminated by the Board of Directors on April
20, 1994.

1989 Stock Option Plan

On June 6, 1989, the stockholders of the Company approved the 1989 Stock Option
Plan (the "1989 Plan") under which full-time officers and key employees of the
Company and its subsidiaries are eligible to receive either incentive stock
options or nonqualified stock options to purchase shares of Common Stock with
terms not exceeding ten years. In addition, the 1989 Plan provides for the
automatic grant of five-year nonqualified options to non-employee directors
("Director Option"). All options are granted at exercise prices of not less
that 100% of the fair market value of the Common Stock on the date of the
grant. A Director Option to purchase 5,000 shares (subject to adjustment as
provided in the 1989 Plan) shall be granted to each non-employee director
automatically as of the last trading day in June immediately following the date
of his or her election or reelection through 1998, as the case may be, to the
Board of Directors.
<PAGE>

A Director Option to purchase 2,500 shares (subject to adjustment as provided
in the 1989 Plan) shall be granted automatically to each non-employee director
on the last trading day in each June through 1998, except that a non-employee
director will not be entitled to receive such annual grant to purchase 2,500
shares in any year during which he or she was elected or reelected, as the case
may be, to the Board of Directors and received a Director Option to purchase
5,000 shares as described above. In addition, the 1989 Plan provided that a
Director Option to purchase the number of shares indicated was granted to each
of the following non-employee directors on June 30, 1989: Ted E. Slanker:
15,000 shares; Bernard O. Brynelsen: 2,000 shares; and John M. Gordon: 500
shares. The administrators of the 1989 Plan determine in their sole discretion
which officers and other key employees of the Company and its subsidiaries
should be granted options under the 1989 Plan.

A registration statement on Form S-8 was filed with the Securities and Exchange
Commission covering the 500,000 shares of Common Stock reserved for issuance
under the 1989 Plan, and the registration statement became effective on June
29, 1989.

At the annual stockholders' meeting held June 16, 1994, the stockholders
approved amendments to the 1989 Stock Option Plan which 1) authorized the
eligibility of certain consultants to be granted options under the Plan as may
be approved by the Board of Directors and 2) authorized an increase in the
number of shares available for grant under the Plan from 500,000 to 1,000,000
shares of Common Stock.

As of December 31, 1994, options to purchase 725,000 shares of Common Stock
were outstanding. During 1993, options to purchase 645,000 shares were
granted, options to purchase 22,000 shares lapsed and options to purchase
177,500 shares were available for grant.

Preferred Stock

On December 30, 1993, the Board of Directors designated 100,000 shares of the
Company's 5,000,000 authorized shares of Preferred Stock as Series A Preferred
Stock (the "Preferred Stock"). This Preferred Stock is not entitled to receive
dividends, has a liquidation preference of $1.00 per share, has the right to
share ratably with other shares entitled to liquidation preferences, and has
voting rights equal to the number of shares of common stock into which it is
convertible. Each share of preferred stock is convertible into 100 shares of
common stock, provided that in the event of a change of control each share of
Preferred Stock shall be convertible into 1,000 shares of common stock. Change
of control means a change of control of the Company not approved by at least
75% of the directors prior to such change of control and includes the
acquisition by a single holder or a group acting in concert of such number of
shares of common stock or other securities of the Company as to permit the
holder or affiliated holders to cause the election of at least 1/3 of the
directors of the Company.
<PAGE>

The Preferred Stock is convertible at the option of the Company until December
31, 1994 and thereafter is convertible at the option of the holders thereof.
On December 31, 1993, the directors authorized the issuance of 9,670 shares of
Preferred Stock including 3,000 shares of Preferred Stock issued to John F.
Jordan, Jr., as trustee of the Jordan Family Trust, in consideration for the
cancellation of debt in the amount of $48,000 which Mr. Jordan had loaned to
the Company. During 1994, the Board of Directors exercised its option to
convert all 9,670 shares of the Preferred Stock into 967,000 shares of the
Company's Common Stock.

Director Compensation

The Company has agreed to pay its outside directors $500, plus expenses, for
each Board meeting attended. In addition, the outside (non-employee) directors
have been granted stock options as discussed above.

Item 13. Certain Relationships and Related Transactions

The Company entered into a Gold Loan in November, 1990 with Brenda, Inc. It
borrowed 653 ounces of gold which were simultaneously sold at $383.10 per ounce
and the Company received the proceeds of $250,164.30. Under the terms of the
Loan Agreement and the related Security Agreement, the loan bears interest,
payable monthly, of 3.53% per annum on the outstanding dollar value of the
unpaid gold ounces computed daily using the London afternoon fixing price. The
Loan Agreement provides for repayment by the Company delivering 100 ounces of
gold to Brenda Inc. each month from January to April, 1991, 125 ounces in May,
1991, and 128 ounces in June, 1991. Virtually all of the Company's assets are
pledged as collateral for this loan under the Security Agreement until the loan
is paid in full. At December 31, 1994, 1993 and 1992, 100 ounces remained
undelivered. Bernard O. Brynelsen, a director of the Company, is the Chairman
of the Board of Directors of Brenda Mines Ltd., which is controlled by Brenda,
Inc.

John F. Jordan, Jr., the President and Chief Financial Officer of the Company
engaged in financial transactions with the Company during 1994, 1993 and 1992.
Following is a summary of the financial transactions between the Company and
this related party:

1994 1993 1992

Loan Balance, Beginning of Year $ 5,000 $ 74,000 $ 84,000
Additional Loans during the Year 21,000 6,000 10,000
Transfer of Accounts Payable Balance - 2,000 -
Expense Reports Submitted 3,000 9,000 -
Cash Repayments (46,000) (26,000) (14,000)
Exercise of Employee Stock Options - (12,000) -
Repayment of Loan with Series A
Preferred Stock - (48,000) -
Repayment of Loan with Common Stock - - (6,000)
______ ______ ______
Loan (Receivable) Balance
End of Year $(17,000) $ 5,000 $ 74,000
====== ===== ======
<PAGE>
Mr. Jordan loaned an aggregate of $134,000 (plus $11,000 of expenses and
transfer of payables) to the Company and its subsidiaries from January 1, 1990
through December 31, 1991; $19,000 was repaid through December 31, 1991, and
$24,875 was applied to the exercise of an employee stock option for 99,500
shares on December 9, 1991. This loan was at 12% interest per annum. Another
director loaned $12,000 at 12% interest per annum; $6,000 was repaid by
December 31, 1992 and the director received an option to acquire 48,000 shares
of common stock (which expired unexercised on August 14, 1993) for waiving
interest on the loan. In exchange for waiving interest on his loans to the
Company, Mr. Jordan was granted a three year option in July, 1991, to purchase
380,000 shares of common stock at $.25 each; this option expired unexercised in
July, 1994. On December 31, 1993, Mr. Jordan, as trustee of the Jordan Family
Trust, was issued 3,000 shares of Series A Preferred Stock in consideration of
his cancellation of $48,000 of debt owed by the Company to him. Refer also to
Note 3 of the Notes to the Consolidated Financial Statements.

Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K

(a) 1. Financial Statements: Registrant's Consolidated Financial
Statements, Report of Independent Certified Public Accountant
and Notes to Consolidated Financial Statements which are
required to be filed hereunder are found at Item 8, Page
20 and Pages F-1 through F-18, in this report on Form 10-K.

2. Financial Statement Schedules: The Registrant is not
required to file any Financial Statement Schedules as per
Financial Reporting Release 44.

3. Exhibits:

10.1 Agreement between Vanderbilt and Compania Minera
Rosarence S. A. de C. V., dated as of
January 13, 1995, concerning a mining concession
in the State of Durango, Mexico. Exhibit A is
included. Exhibits B & C have not been prepared as
of the date of this Form 10-K filing and
accordingly are not included.

11.1 Statement re: Computation of Per Share Earnings

21.1 Subsidiary of Registrant

23.1 Consent of Keith J. Rosen, CPA

(b) 1. Reports on Form 8-K

No Reports on Form 8-K were filed during the last quarter of
1994.
<PAGE>
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 on March 24, 1995.

VANDERBILT GOLD CORPORATION
(Registrant)

By: /S John F. Jordan, Jr.
John F. Jordan, Jr., President

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

DATED: 3/27/95 By:/S John F. Jordan, Jr.
John F. Jordan, Jr., Director,
President and Chief Financial
Officer

DATED: March 24, 1995 By: /S Howard T. Urband
Howard T. Urband, Vice President,
and Director

DATED: March 27, 1995 By: /S B. Brynelsen
Bernard O. Brynelsen, Director

DATED: 30 March 95 By: /S Ted E. Slanker
By: Ted E. Slanker, Director

DATED: 3/27/95 By:/Barry L. Adams
Barry L. Adams, Director

DATED: 3-25-95 By:/S Keith Fegert
Keith W. Fegert, Director

DATED: 3-27-95 By:/S Tom D. Scott
Tom D. Scott, Director

<PAGE>

AGREEMENT

between

VANDERBILT GOLD CORPORATION

COMPANIA MINERA ROSARENCE S. A. de C. V.

Exhibit 10.1

<PAGE>

Note: The following agreement makes reference to Exhibits "B" and "C". These
exhibits or the documents to which they relate have not been created as of the
date of the filing of this Form 10-KA. Exhibit "A" which was in Spanish has
been translated into English and is attached as required.
<PAGE>

AGREEMENT

THIS AGREEMENT is made as of January 13, 1995 (the "Effective Date") by and
between VANDERBILT GOLD CORPORATION, a Delaware Corporation, ("VANDERBILT")
whose address is 4625 Wynn Road, Ste 100, Las Vegas, Nevada 89103, facsimile
telephone number 702-362-8313, and Compania Minera S.A. de C.V. ("ROSARENCE"),
a Mexican Corporation of Culiacan Sinaloa, Mexico, whose address is Carratera
Culiacan-Eldorado KM 0.600 Interior 3, Culiacan, Sinaloa, Mexico, facsimile
telephone number 011-52-696-50306.

RECITALS

ROSARENCE is the owner of a certain mineral exploration concession located in
Durango, Mexico, which is more particularly described in the attached Exhibit
"A" (the "CONCESSION"). ROSARENCE and VANDERBILT each desire to enter into an
agreement whereby VANDERBILT agrees to fund certain development and exploration
activities to be performed by ROSARENCE and by which VANDERBILT acquires an
option to purchase a portion of the CONCESSION from ROSARENCE. In turn,
ROSARENCE, during the term of this Agreement, will act as the operator of the
CONCESSION under the direction of a management committee comprised of
representatives of VANDERBILT and ROSARENCE. This agreement is intended to be
legally binding but the parties recognize that they may be required under
Mexican law to enter into a more formal agreement to give full effect to the
rights and obligations of both parties.

1. Grant of Option. ROSARENCE hereby grants to VANDERBILT an exclusive
and irrevocable option to purchase that portion of the CONCESSION,
described in Exhibit B, attached hereto (the "Target"), including all
equipment purchased pursuant to this agreement and as part of said
option grants to VANDERBILT the option to purchase all of the shares
of ROSARENCE as part of the same purchase and for no additional
consideration. The purchase of ROSARENCE shall be solely the shell
corporation and the TARGET and all equipment purchased Pursuant to
this Agreement.

2. Term. The term of the option granted hereby shall be for one year
from January 13, 1995.

3. Consideration. The consideration for the grant of the option is as
follows:

a. VANDERBILT shall pay or contribute to ROSARENCE the sum of
$200,000 as follows:

(1) VANDERBILT has delivered to ROSARENCE, F.O.B. Nogales,
Arizona, one Caterpillar D8K bulldozer, Serial No. 77VI5809
(the "Bulldozer" herein), and the parties have agreed that
the reasonable value of the Bulldozer is $55,000.00 which
shall be credited towards VANDERBILT'S obligation hereunder,
<PAGE>

(2) Upon execution of this Agreement, VANDERBILT will pay the
sum of $25,000.00 to ROSARENCE;

(3) VANDERBILT will thereafter make four quarterly payments of
$30,000.00 each to ROSARENCE with the first payment due on
or before April 1, 1995, and the remaining payments due on
or before July 1, 1995, October 1, 1995 and the final
payment on or before January 1, 1996.

b. VANDERBILT shall provide $400,000.00 for the exploration and
development of the CONCESSION during a term of one year from and
after the execution of this Agreement to be expended in the
manner provided by Section 5 of this Agreement.

4. Exercise of Option. VANDERBILT may exercise its option to purchase
the Target and all of the shares of ROSARENCE at any time during the
term of this Agreement by notifying ROSARENCE in writing of its
intent to exercise its option and by transferring to ROSARENCE
(within a reasonable time thereafter) the amount of 1,800,000 (one
millon eight hundred thousand) shares of VANDERBILT restricted common
shares which shall be deemed a private placement, however, said
shares shall be freely transferable within 45 days from the date of
issuance.

At the time of such issuance of the shares, the shares shall have a
value of not less than $1.00 (U.S.) as determined by the average of
the bid/ask price on the electronic bulletin board trading system for
VANDERBILT unrestricted common shares in the United States for the
preceding week. If the value of each share is less than $1.00,
ROSARENCE may elect to receive the remainder of the purchase price in
cash or by additional shares of VANDERBILT stock. If ROSARENCE
elects to receive the remainder of the purchase price in cash, such
funds shall be paid to ROSARENCE in equal monthly installments
beginning (90) days from and after closing and paid over the
following twelve (12) month period. Until the purchase price is paid
in full, title to the Target shall be held in trust and released to
VANDERBILT upon its completion of the payment of the purchase price.
If VANDERBILT exercises its option prior to completion of its
payments to ROSARENCE as specified in Section 3 hereof, VANDERBILT
shall pay any remaining amounts due under Paragraph a of Section 3 to
ROSARENCE at closing and any unexpended funds for exploration and
development required under paragraph b of Section 3 or otherwise
accumulated in such account as a result of the activities of
ROSARENCE as operator, shall, at the election of VANDERBILT, be paid
to ROSARENCE at closing or paid to ROSARENCE, as the operator, to
complete the performance of the work plan for the Concession
established under Section 5 during the period remaining under the
term of this Agreement.
<PAGE>

5. Operation of CONCESSION. The CONCESSION shall be operated in the
following manner:

a. ROSARENCE shall be the operator of the CONCESSION pursuant to a
work plan attached hereto as Exhibit "C". A management
committee, including an equal number of representatives from
VANDERBILT and ROSARENCE, shall meet monthly to review
administrative and operations issues.

b. A bank account will be set up for the amounts contributed by
VANDERBILT for the purpose of exploration, development and
production and the revenues from production shall be maintained
in a bank account mutually acceptable to both parties.
Disbursements shall only be made upon checks requiring the
signatures of both parties, provided however, that an operating
account shall be established for ROSARENCE requiring only the
signature of ROSARENCE, into which account execution of the
Agreement, VANDERBILT shall deposit $40,000.00 and shall
thereafter replenish such funds an a monthly basis sufficient to
meet the ongoing expenses required during the upcoming month as
determined by the management committee as its regular monthly
meeting but in any case the balance shall not be less than
$40,000.00 at the beginning of each month during the one-year
exploration and development term until the aggregate amount so
deposited by VANDERBILT equals $400,000.00. Any revenues from
operations on the CONCESSION during the term of this Agreement
shall be deposited by ROSARENCE into such account and reinvested
in further exploration and development of the CONCESSION, and
shall be over and above the funding required of VANDERBILT under
paragraph b of Section 3.

c. If any disagreement arises between the parties in the conduct of
ROSARENCE'S activities as manager hereunder that the parties
cannot resolve by mutual agreement after thirty (30) days, the
matter shall be submitted to a single Arbitrator, mutually
agreeable to both parties, under the following procedure:

Each party shall submit its arguments in writing to the
Arbitrator within 10 days after submission of the matter to
arbitration with a copy to the other party. The parties shall
then have five (5) days to file a response to each other's
arguments. The Arbitrator may then conduct such interviews or
make other inquiries as the Arbitrator in its sole judgment
deems appropriate and shall provide a written decision within
ten (10) working days after the time for delivery of the
responses to the arguments. The decision of the Arbitrator
shall be final.
<PAGE>

6. Representations of ROSARENCE. ROSARENCE represents that to the best
of its knowledge and belief:

a. There is no condition or impediment that legally prevents it
from entering into this agreement.

b. There are no liens or encumbrances against the CONCESSION.

c. There are no environmental problems, no reclamation problems, no
existing labor disputes nor any labor contracts nor any other
legal or governmental matters that would significantly impair
the ability of ROSARENCE or VANDERBILT to explore, develop,
process minerals and produce minerals from the CONCESSION.

d. ROSARENCE has clear title to the CONCESSION and that it may
legally transfer the Target to VANDERBILT upon the exercise by
VANDERBILT of its option hereunder.

7. VANDERBILT'S Due Diligence. VANDERBILT has been previously provided
with information concerning title to the CONCESSION. VANDERBILT may
continue, at its own expense, to conduct whatever investigations and
inquiries it deems necessary related to their examination of title
and other legal matters during a period not to exceed thirty (30)
days from and after the execution of this Agreement. If VANDERBILT
identifies any legal defects that would impair the security of its
investment or the ability to mine and process ore from the Target it
shall notify ROSARENCE of same. If ROSARENCE cannot cure such defect
or defects within fifteen days of notification of same, then
VANDERBILT shall have the option to cancel this Agreement without
further obligation and shall be entitled to the return of the
Bulldozer delivered to ROSARENCE (in the same or better condition
than when delivered to ROSARENCE) under paragraph a of Section 3 of
this Agreement, or at the election of ROSARENCE, the reasonable value
of the Bulldozer) together with the payment in U.S. Dollars of any
and all amounts paid to ROSARENCE under this Agreement.

8. Geological Information. ROSARENCE has previously delivered or
communicated to VANDERBILT certain geological and engineering
information including reserve ore calculations regarding the
CONCESSION. ROSARENCE makes no representations as to the validity of
accuracy of such information, calculation or any conclusions that
might be inferred therefrom and shall not be responsible for any loss
or damage suffered by VANDERBILT in reliance upon such information.
VANDERBILT acknowledges that such information was supplied as a
courtesy by ROSARENCE and at the request of VANDERBILT and that the
decision of VANDERBILT to enter into this Agreement was not solely
based upon the information supplied by ROSARENCE or any statements
make by employees, consultants, or other representatives for or on
behalf of ROSARENCE, but solely upon the investigations and testing
conducted by VANDERBILT.

<PAGE>

9. Default by VANDERBILT. If VANDERBILT shall fail to make any of the
quarterly payments under paragraph a of Section 3 or fails to meet
any cash calls under the terms of paragraph b of Section 3, ROSARENCE
shall send written notice of said default to VANDERBILT. If
VANDERBILT does not cure said default within 10 days of receipt of
said notice, this Agreement shall terminate without any further
notice from ROSARENCE, If this Agreement is so terminated, all
consideration therefore paid to ROSARENCE by VANDERBILT shall be
retained by ROSARENCE as liquidated damages for VANDERBILT'S default
hereunder, provided, however, if VANDERBILT'S failure hereunder
results from failure to meet cash calls under paragraph b of Section
3, and VANDERBILT has paid not less that Three Hundred Thousand
Dollars ($300,000.00) in such cash calls prior to the default,
VANDERBILT may nevertheless exercise its option and defer payment of
such delinquent cash calls for a period of not to exceed two (2)
years from and after the exercise of its option. During the period
when such delinquency is being made up, title to the Target shall be
held in trust for either transfer to either (1) VANDERBILT upon its
completion of funding during the two-year period, or (2) ROSARENCE
upon VANDERBILT'S failure to complete such funding within the
two-year period.

10. Effect of Agreement. Upon execution of this Agreement, it shall be
binding upon the parties unless and until the parties agree to a more
formal agreement if the same is deemed advisable by Mexican legal
counsel to accomplish the intention of the parties under the laws of
Mexico. This Agreement supersedes all prior agreement or
understandings between the parties.

11. General Provisions.

a. The rights of VANDERBILT in this Agreement shall not be assigned
without having first obtained the written consent of ROSARENCE
which consent shall not be unreasonably withheld. The rights of
ROSARENCE in this Agreement shall not be assigned without having
first obtained the written consent of VANDERBILT which consent
shall not be unreasonably withheld.

b. Any notice or communication required or permitted hereunder
shall be effective when personally delivered or deposited,
postage prepaid, with Federal Express or DHL (or any other
courier as the parties may agree on in advance) to the addressed
specified above. Any such notice shall be effective three(3)
days after deposit with such a courier. Any party may, by
notice given to the other as given aforesaid, change its mailing
address for future notices.

c. All references to payment of money in this Agreement shall be in
UNITED STATES DOLLARS.
<PAGE>

12. Further Assurances. The parties intend that this Agreement be a
binding and enforceable contract, but they further understand that it
may be necessary to enter into other further agreements to
memorialize or otherwise give legal effect to the terms and
conditions of this Agreement and agreed to do so. If any provision
of this Agreement is in violation of the laws of Mexico, such
invalidity shall not effect the remainder of this Agreement and such
remaining portions of this Agreement shall be interpreted to give the
maximum possible effect to the intention of the parties to sell the
Target while maintaining for the parties the economic benefit
expressed herein.

13. Final Agreement. This Agreement is the only Agreement between the
parties and supersedes any and all prior Agreements and supersedes
any and all oral and written communications between the parties.
This Agreement may be modified solely by a writing signed by both
parties.

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the dates indicated below.

VANDERBILT GOLD CORPORATION

Dated 1-13, 1995 /S Howard T. Urband
Vice President

ROSARENCE

Dated 1-13, 1995 /S Alejandro Canelos
President

<PAGE>

EXHIBIT A

AGREEMENT

between

VANDERBILT GOLD CORPORATION

COMPANIA MINERA ROSARENCE S. A. de C. V.
<PAGE>

EXHIBIT A

_________

United States of Mexico

Department of Energy, Mines and Semi-State Industry

General Division of Mines

TITLE

MINING CONCESSION

FOR EXPLORATION

Number Agency File Number
195880 Culiacan, Sin 8140

Concessionaire
Cia. Minara La Rosarence, S.A.

Year
1992

<PAGE>

Issued in Mexico, D.F., on September 23, 1992
The Assistant Secretary of Mines and Basic Industry
Engineer Alfredo Elias Ayub

After registering folio 763 of the respective book.

Mexico, D.F., on September 23, 1992.

The General Director of Mines (signed) Jose I. Villanueva Lagar.

Registered under No. 440, on folio 111 of volume 270 of the
general Book of Mining Concessions of the Public Registry of
Mines.

Mexico, D.F., on November 23, 1992.

The Registrar, (signed) Ines Acevedo Solis.

(There is a round seal of the Department of the Ministry of Mines
and Semi-State Industry, General Division of Mines, Public
Registry of Mines, Mexico, D.F.)

<PAGE>

OBLIGATIONS AND RIGHTS

The beneficiary of this concession will have the rights that the current Law of
Mines and its Regulations establish and it will be subject to obligations
included in the same ordinance and those that shall be established in this
title.

CAUSES OF EXPIRATION AND CANCELLATION

Causes of expiration of the mining concessions for exploration include the
following:

I. Failure to pay fiscal taxes on the mining concession;

II. Failure to execute the works and the investments to which article 50,
section II, refers in the periods and under the conditions set in the
respective title;

III. Not confirming the execution of the works and the investments to which
article 50, section III refers, in the periods and under the
conditions set in the respective title;

IV. Altering the capital structure of the beneficiary company in such a
way that the part subscribed by Mexicans is less than the average
prescribed by articles 12 and 13 of the law.

V. That the concessionaire, after having obtained the concession, has
changed its nationality, and

VI. Transmitting the concession without the prior and express
authorization of the Secretary, under the terms of the Mining Law and
its Regulations.

Causes of annulment of the mining concessions for exploration include the
following:

I. That the title of the mining concession totally covers land that is
not free under the terms of Article 19 of the Law, and

II. That upon obtaining the concession, a foreign physical person has
identified himself as Mexican.

SUBSTANCES WHOSE EXPLORATION IS AUTHORIZED

This title covers the land that is bounded by the perimeter of the lot given in
concession after respecting the land that is not free at the time of
presentation of the application, which lies within this perimeter and only
authorizes the exploration to the substances expressly assigned in it, and its
beneficiary may dispense of them, provided that he shall obtain them in this
exploration.
<PAGE>

It is expressly stipulated that in no case may substances be exploited under
the coverage of this title are governed by their respective regulations; such
as rocks, gravel and sand used for construction; limestone, marble, onyx, etc.,
or substances that are incorporated in National Mining Reserves.

This concession terminates on September 22, 1995.

Title Number 195880

The Secretary of Energy, Mines and Semi-State Industry in representation of the
Constitutional President of the United States of Mexico, pursuant to the
Constitutional Regulatory Law of Article 27 in mining matters, without
prejudice to third parties who may have greater rights, subject to the rights,
and obligations that the mentioned law and its regulations indicate, issues
this title of Mining Concession for Exploration according to the information
that is contained below.

CONCESSIONAIRE, CIA, MINERA LA ROSARENCE, S.A. DE C.V.

TYPE OF CONCESSION: Exploration.

NAME OF THE LOT: "La Sierra".

SUBSTANCES TO BE EXPLORED: Gold, Silver, Lead, Copper, Zinc, Tungsten,
Antimony.

THE AREA COVERED BY THIS TITLE WILL BE THAT WHICH RESULTS AFTER RESPECTING THE
LAND THAT IS NOT FREE AT THE TIME OF PRESENTATION OF THE RESPECTIVE APPLICATION
AND NEVER GREATER THAN: 49,800 Hectares.

STATE, MUNICIPALITY AND LOCATION: Tamazula, Durango, in the hills of Empacho,
Santa Cruz, Pito Real, El Ugualamo and Los Volcanes, Communal Land of Colomo,
El Palmar and Agua Caliente.
Geographical Coordinates: Latitude: N 24 degrees 41' 40" Longitude W.S. 106
degrees 32' 45".
<PAGE>

LOCATION

Starting Point: Landmark of 0.6m X 0.6m, of section and 1.00 m altitude,
located in the North foothill of Loma del Empacho; to the west is Rancho Boca
de Arroyo, to the South Loma de la Cruz and to the North, Cerro de las Ahujas.

Landmarks Especially Constructed
Relationship of the landmark. West and 10,500 m.
of the location to the starting
point.

Relationship of the starting East and 500m.
point to point 1 of the
perimeter

Sides Directions Lengths Adjacent property
_____ __________ _______ _________
1 - 2 North 20,000m. Free Land
2 - 3 East 20,000m. Free Land
3 - 4 South 20,000m. Free Land
4 - 5 East 4,900m. Free Land
5 - 6 South 20,000m. Free Land
6 - 7 West 14,900m. Free Land
7 - 1 North 20,000m. Free Land

Line of sight taken from starting point to:
Mezcalera Hill SW 69 degrees 38'
Santa Cruz Hill SE 18 degrees 30'
Pito Real Hill SE 75 degrees 06'

<PAGE>

Certification of Translation

From the Spanish

I, John F. Jordan, Jr., President of Vanderbilt Gold Corporation, do
hereby certify that the foregoing translation in English of Exhibit A to
the Agreement between Vanderbilt Gold Corporation and Compania Minera
Rosarence S. A. de C. V. is a fair and accurate translation into English.

/S John F. Jordan, Jr./

John F. Jordan, Jr.
President
Vanderbilt Gold Corporation
March 30, 1995

<PAGE>
<TABLE>
<CAPTION>
VANDERBILT GOLD CORPORATION AND SUBSIDIARIES
Statement RE: Computation of Per Share Earnings
(In thousands, except per share amounts)

Years Ended
December 31,

1994 1993 1992

<S> <C> <C> <C>
Net Loss Available to Common Shareholders $ 709 $ 527 $ 1,206
====== ====== ======

Weighted Average Number of Common Shares
Outstanding During the Period 25,128 15,141 12,873
Incremental Shares Related to Options
for Primary Earning Per Share (1) - - -
Total Weighted Average Number of Shares
for Primary Earnings Per Share Computation 25,128 15,141 12,873
====== ====== ======

Incremental Shares Related to Options
for Fully Diluted Earnings Per Share (2) - - -
______ ______ ______
Total Weighted Average Number of Shares
for Fully Diluted Earnings Per Share 25,128 15,141 12,873
====== ====== ======

Net Loss Per Common Share $ .03 $ .03 $ .09
====== ====== ======

<FN>
(1) Average market price per share less than the exercise price of all options outstanding for the
years ended December 31, 1994, 1993 and 1992.

(2) End of year market price per share less than exercise price of all options outstanding for the
years ended December 31, 1994, 1993 and 1992.

</TABLE>

<PAGE>

EXHIBIT 21.1

SUBSIDIARY OF REGISTRANT

Star Mining Corporation, A Nevada Corporation

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT

As an independent certified public accountant, I hereby consent to the
inclusion in Vanderbilt Gold Corporation's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994, of my report dated March 15, 1995
on the consolidated balance sheets as of December 31, 1994 and December
31, 1993 and the statements of operations, changes in shareholder's
equity, and cash flows for the three years ended December 31, 1994 of
Vanderbilt Gold Corporation and Subsidiaries.

/S KEITH J. ROSEN

Keith J. Rosen
Certified Public Accountant
Sherman Oaks, California
March 30, 1995

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