NEVADA GOLD & CASINOS INC, 10-K, 1996-07-03

NEVADA GOLD & CASINOS INC
10-K, 1996-07-03
MINERAL ROYALTY TRADERS

Previous: UNC INC, SC 13D/A, 1996-07-03

Next: UNITED HIGH INCOME FUND INC, 497, 1996-07-03

<PAGE> 1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year Ended
March 31, 1996 0-8927

NEVADA GOLD & CASINOS, INC.
(Exact name of registrant as specified in its charter)

Nevada 88-0142032
(State or other jurisdiction (IRS Employer
of incorporation) Identification Number)

3040 Post Oak Blvd., Suite 675, Houston, Texas 77056
(Address of principal executive offices) (Zip Code)

Registrant's telephone number: (713) 621-2245

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, Par Value $.04 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. (1) Yes X No ___ (2) Yes X No ___

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 Form 10-K or
any amendment to this Form 10-K. _____

The aggregate market value of Common Stock held by non-affiliates of the
Registrant at March 31, 1996, based upon the last reported sales price of the
NASDAQ Bulletin Board, was $42,264,605.

Portions of the Registrant's definitive proxy statement for its annual meeting
of stockholders to be held in October 1996 (are incorporated in) Part III of
this Form 10-K.

At March 31,1996, 24,292,114 shares of common stock outstanding.

Documents incorporated by reference: NONE

<PAGE> 2
NEVADA GOLD & CASINOS, INC.
MARCH 31, 1996

PART I

ITEM 1. BUSINESS

GENERAL

Nevada Gold & Casinos, Inc. (the Company) was originally formed in
1977 under the name Pacific Gold & Uranium Corporation for the principal
purpose of operating and managing mining activities primarily in the western
United States. During 1993, in connection with the acquisition of a
controlling interest in the Company by affiliates of the Company's current
management, the Company's primary focus was redirected toward the development
of gaming and real estate properties in Colorado. The Company's current
business activities are described below:

Gaming and Real Estate Development

In 1990, the State of Colorado amended its constitution to permit
"limited stakes gaming" in the cities of Cripple Creek, Central City and Black
Hawk, each of which was considered an old mining town of historical
significance. As a result, property values in these communities have increased
substantially, particularly in the limited areas that have been zoned for
gaming. During the fall of 1993, the Company commenced negotiations to acquire
certain properties located in and around the City of Black Hawk (the "Colorado
Properties") by granting a 75 percent ownership interest in the Company to the
previous owners of these properties. The acquisition of the Colorado Properties
was accomplished in two stages. During 1994 and 1995, the Company acquired all
of Clay County Holding's 60 percent undivided interest in the Colorado
Properties. In exchange for its undivided interest, Clay County Holdings was
granted 9,500,000 and 804,303 shares of the authorized but unissued shares of
the Company on December 6, 1993 and August 1, 1994, respectively. This
transaction (the "Clay County Acquisition") gave Clay County Holdings a
controlling interest in the Company. The acquired undivided interest was
recorded by the Company based upon the fair market value of the interest as
determined by an independent third party appraisal. To complete the second
stage of this transaction, on August 1, 1994 the Company acquired the remaining
40 percent undivided interest in the Colorado Properties from an unrelated third
party. In exchange for its undivided interest, the seller was granted 5,809,000
shares of the Company's authorized but unissued common stock. This remaining
undivided interest was recorded by the Company based upon the fair market value
of the interest as determined by an independent third party appraisal. On
January 19, 1996, the Company issued an additional 150,000 shares of stock to
Clay County Holdings associated with the Clay County Acquisition. This
additional issuance was due to an understatement in the original number of
shares outstanding at the time of the acquisition. The Colorado Properties
include four lots which have been zoned by the State of Colorado for gaming
purposes. Options on adjacent gaming lots were purchased during 1995 for cash.
The options on these lots were assigned, and exercised as a part of the
operating agreement with Caesars World Inc. The Company's management believes
that the acquired gaming lots which are located at the entrance of the Black
Hawk/Central City gaming area, are uniquely situated to take advantage of the
traffic flow coming into the area.

<PAGE> 3
NEVADA GOLD & CASINOS, INC.
MARCH 31, 1996

Gaming and Real Estate Development

well as provide for the capital required as a participant in the project. As a
result of management's negotiations, an operating agreement was signed,
effective February 26, 1996, with a wholly owned subsidiary of Caesar World
Inc. ("Caesars") creating Caesars Black Hawk, LLC. ("Caesars Black Hawk"), (a
Colorado limited liability company). The Company will hold it's interest in
Caesars Black Hawk through a wholly owned subsidiary. The Company is required
to make an initial capital contribution of land, valued under the agreement at
$4.9 million. The land to be transferred includes lots 5,6,7 and 8 of Block
51, and adjoining land comprised of over three acres located in Black Hawk,
Colorado, as well as options to acquire the land referred to as the "Weaver
Parcel" and the "Woodall Parcel". The land will be transferred to Caesars
subject to any encumbrances and Caesars will satisfy such encumbrances up to
$250,000 above which amount the capital account of the Company will be
adjusted. Additionally, the Company is required to make an additional
contribution of cash into the project amounting to $3 million within 120 days
of the execution and delivery of the agreement, or by July 5, 1996. It is
uncertain at this time as to the outcome of this contribution, however
management is currently in negotiations to extend the date of the required
capital contribution, and feels confident it will meet its objectives. There
can be no assurance that either the extension will be obtained or that such
additional capital contribution will be made before the applicable dead line.
Upon completion of the initial capital contributions, the Company will own 22
percent of Caesars Black Hawk. Additionally, the Company has the right to
purchase up to $6.4 million of the remaining interest in Caesars Black Hawk by
no later than September 30, 1996. Upon exercise of this right, the Company's
interest in Caesars Black Hawk increases to 40 percent. The remaining interest
in Caesars Black Hawk is owned by Caesars. Under the terms of the agreement,
Caesars will prepare a Development Plan for the project and will receive a
development fee equal to two percent of the total capital budget for the
project. Such development fee is the liability of Caesars Black Hawk and will
be paid on a monthly basis over the term of the development period of the
project. The current budget for the project is $94 million and the
anticipated development fee to be paid to Caesars World Inc., is $1,880,000
over the 12 month development period. The management of the hotel/casino
project will be conducted pursuant to a Management Agreement with Caesars.
Under the terms of the Management Agreement, Caesars will manage the project
over a thirty year term, with the right to renew for two consecutive ten year
terms. Caesars will be paid a base management fee equal to 5 percent of gross
revenues generated by the project and an incentive management fee equal to 10
percent of the operating profit of the project before interest, income taxes,
depreciation and amortization but excluding one-half of the base management
fee, all as determined in accordance with generally accepted accounting
principles. Generally, the agreement calls for Caesars to contribute up to $28
million in equity and arrange for the debt financing of the project.

<PAGE> 4
NEVADA GOLD & CASINOS, INC.
MARCH 31, 1996

September 1, 1995, the Company acquired the remaining 60% interest in
Gold Mountain Development, LLC, making it a wholly owned subsidiary. The former
members received a portion of the land owned subject to the underlying mortgages
and a note in the amount of $150,000, which had a balance of $38,971 as of March
31, 1996. All intercompany balances, have been eliminated in preparing the
Company's financial statements as of March 31, 1996.

Mining Interests

The Company has had joint-venture agreements with such mining companies
as Hanna Mining, Noranda Exploration Inc., Southern Pacific Land Co., Santa Fe
Minerals, AMAX Exploration Inc., and Dexter Gold Mines Inc. among others. The
Company was party to an agreement with Cameco U.S., Inc. which, at its inception
on May 1, 1991, was with Noranda Exploration, Inc. The most recent agreement
with Cameco was terminated effective March 31, 1996. The agreement called for
monthly payments to the Company of $5,000.00 per month. The agreement also
provided for the Company to receive a production royalty, amounting to five
percent of all the net smelter returns for products shipped out of the mining
claims; however, there is no production from the claims, as of March 31, 1996.
Management is currently in negotiations with other prominent mining companies
to further extend the exploration of the mining property and believes that it
will be able to enter into a Lease Agreement which will be sufficient to recover
the Cost Basis of the mining interests.

As of March 31, 1995, the Company entered into an agreement to
purchase 100% of the outstanding common stock of Sunrise Land and Minerals,
Inc. The seller financed the entire purchase price of the acquisition through a
non-recourse note. The Company at the option of the holder, extended the note
through March 31, 1997, and accrued interest was paid in the form of the
company's stock.

Letter of Intent

As of March 2, 1996, the Company entered into a Letter of Intent with
Applied Voice Technologies to jointly develop voice activated gaming
technology.

BUSINESS RISK FACTORS

Need for Additional Capital

Revenues from the Company have not been sufficient to cover the
Company's operating expenses during the past several years. In addition, there
have been no revenues from the Company's gaming operations to date since these
are currently in the predevelopment stage. The Company received $50,000 as part
of a rental agreement, and $350,000 from the disposition of property in which
the company had a nominal cost basis. This cash settlement assisted in covering
the operating deficit experienced by the Company, but was not sufficient to
fully cover all expenses. Management does not expect significant increases in
revenues from any of its operations over the next year. The Company's
environmental commitments were funded partially by the completion of the debt
offering in process at the prior year end, amounting to $350,000. Additionally,
the Company borrowed $376,361 from a major shareholder for working capital. The
Company's mining interest generated $60,000 which was used in operations.

<PAGE> 5
NEVADA GOLD & CASINOS, INC.
MARCH 31, 1996

As a result of the operating losses of the Company, there was an
increase in the amount of trade accounts payable outstanding at year end. The
Company acquired furniture and computer equipment during the year amounting to
$108,000 which was financed through two capital leases.

The Company will continue to require substantial capital to fund the
continued acquisition and development of the real estate properties and to cover
the anticipated operating deficits and debt maturities during the next several
years. The most significant requirement for capital is associated with the
Company's interest in Caesars Black Hawk, LLC. The Company is required to make
a capital contribution of $3,000,000 into Caesars Black Hawk within 120 days
next after the execution and delivery of the agreement, or by July 5, 1996. It
is uncertain at this time as to the outcome of this contribution, however
management is currently in negotiations to extend the date of the required
capital contribution, and feels confident it will meet its objectives. There can
be no assurance that either the extension will be obtained or that such
additional capital contribution will be made before the applicable dead line. To
meet the capital requirements of the next year, the Company has offered
$8,500,000 in Convertible Secured Notes which are being sold through it's
investment bankers. Management expects that sufficient capital will be raised
through this offering to meet the capital contribution requirements of Caesars
Black Hawk and to fund the operating needs of the Company for the next 12
months. However, there is no assurance that this offering will be successful or
that the proceeds from this offering will be sufficient to meet the Company's
cash requirements. The short term viability of the Company is dependent upon
it's ability to raise sufficient capital to meet it's cash requirements. The
long term viability of the Company is dependent upon successful completion and
operation of a casino hotel complex. The factors described above raise
substantial doubt about the Company's ability to continue as a going concern.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. If the Company is unable to continue
as a going concern, the values realized from the Company's assets may be less
than the carrying amounts reported in its financial statements. The
accompanying financial statements do not include any adjustments relating to
the recoverability and classification of asset carrying amounts or the amount
and classification of liabilities that might result should the Company be
unable to continue as a going concern.

In addition to funding it's operating deficit, the Company also
advanced money to BSH, Inc., the firm performing the remediation of the
Colorado property. The proceeds of the $350,000 debt offering were used for
this purpose.

Environmental Considerations

The casino hotel complex to be constructed by Caesars Black Hawk will
be located in an area that has been designated by the United States
Environmental Protection agency ("EPA") as a superfund site on the National
Priorities List as a result of contamination from historic mining activity in
the area. The EPA is entitled to proceed against owners and operators of
properties located within the superfund site for remediation and response
costs associated with their properties and with the entire site. Caesars
Black Hawk's casino hotel complex will be located within the drainage basin of
the North Clear Creek and therefore subject to potentially contaminated surface
and ground water from upstream mining-related sources. Soil and ground water
samples on the site indicate that several contaminants existed in
concentrations exceeding drinking water standards. The Company, through an
affiliate, was required to work closely with the EPA and the Colorado
Department of Health in connection with developing the casino hotel complex,
and an affiliate had agreed to perform environmental analyses and test and
remove any and all hazardous substances located on the gaming lots. The
Company paid a total of $330,459 to an affiliate to complete the remediation.
No further remedial activity has been required or is expected of Caesars Black
Hawk with respect to the gaming lots.

5
<PAGE> 6
NEVADA GOLD & CASINOS, INC.
MARCH 31, 1996

Governmental Regulations

The ownership and operation of gaming facilities in Colorado are
subject to extensive state and local regulations. No gaming may be conducted
in Colorado unless licenses are obtained from the Colorado Limited Gaming
Control Commission (the "Colorado Commission"). In addition, the State of
Colorado created the Division of Gaming (the "Colorado Division") within its
Department of Revenue to license, implement, regulate, and supervise the
conduct of limited stakes gaming. The Director ("Colorado Director") of the
Colorado Division under the supervision of the Colorado Commission, has been
granted broad powers to ensure compliance with the law and regulations. The
Colorado Commission, Colorado Division, Colorado Director, and the city
authorities in Black Hawk that have responsibility for regulation of gaming are
collectively referred to as the "Colorado Gaming Authorities."

The laws, regulations and supervisory procedures of the Colorado
Gaming Authorities seek to maintain public confidence and trust that licensed
limited gaming is conducted honestly and competitively, that the rights of the
creditors of licensees are protected and that gaming is free from criminal and
corruptive elements. It is the stated policy of the Colorado Gaming
Authorities that public confidence and trust can be maintained only by strict
regulation of all persons, locations, practices, associations, activities
related to the operation of the licensed gaming establishments and the
manufacture and distribution of gaming devices and equipment.

The Colorado Commission is empowered to issue five types of gaming and
related licenses. The Caesars Black Hawk casino to be located in Black Hawk,
Colorado, requires a retail gaming license, which must be renewed each year,
and the Colorado Division has broad discretion to revoke, suspend, condition,
limit or restrict the licensee at any time. No person or entity can have an
ownership interest in more than three retail licenses, and the Company's
business opportunities will be limited accordingly. Caesars Black Hawk has not
yet obtained the required gaming license. There is no assurance that such
license will be obtained.

In addition to a retail gaming license for its casino, all of the
casino's employees must apply for and receive a support gaming license prior to
commencing employment. "Controlling Employees", which are defined as any
executive, employee or agent of a licensee having the power to exercise a
significant influence over decisions concerning any part of the operations of
any licensee, must obtain key licenses. At least 1 key license holder must be
on the premises of the casino at all times. The casino pays the cost of
obtaining and maintaining key licenses. All licenses are revocable,
non-transferable and valid only for the particular location initially
authorized.

Any person group or related persons that acquires beneficial ownership
of between 5 percent and 9 percent of the outstanding Common Stock of the
Company must be required to provide additional information to the Colorado
Commission and be found suitable. Any person or group of related person that
acquires beneficial ownership of 10 percent or more of the outstanding common
stock of the Company must apply to the Colorado Commission within 45 days after
acquiring such interests and submit to investigation for suitability by the
Colorado

6
<PAGE> 7
NEVADA GOLD & CASINOS, INC.
MARCH 31, 1996

Commission. Certain qualifying institutional investors, at the Colorado
Commission's discretion, may acquire up to 15 percent ownership before finding
if suitability is required if such investors provide certain information to the
Colorado Commission regarding investment intent and other matters. In order to
be found suitable, a stockholder must be a person of good moral character,
honesty, integrity, and in general terms, must be free from previous criminal
or unsavory conditions or similar acts. The Colorado Commission may require
substantial information in connection with a suitability investigation,
including personal background and financial information, source of funding
information and a sworn statement that such person or entity is not holding the
Common Stock for any either party and also may require fingerprints. Until a
finding of suitability occurs for a stockholder who is undergoing a suitability
investigation, the Company cannot pay dividends to such stockholder nor may the
stockholder exercise any voting rights with respect to the Common Stock. A
stockholder that is found to be unsuitable must transfer his common stock to a
suitable person within 60 days after the finding of unsuitability. Otherwise,
the Company may offer such person a lesser of the cash equivalent of such
person's investment in the common stock or the current market price of the
Common Stock as of the date of the finding of unsuitability, and the
stockholder will be required to sell his Common Stock to the Company.

The Colorado Commission has adopted comprehensive rules and
regulations that require the Company to maintain adequate books and records and
prescribe minimum operating, security and payoff procedures. Operating
procedures include limited hours and rules of play. Rules regarding gaming,
cheating and fraudulent practices have also been adopted, which the company is
obligated to police and enforce. Upon request, the Company must make copies of
all written gaming contracts and summaries of all oral gaming contracts to
which it is a party or intends to become a party. The Company must also
promptly inform the Colorado Commission of any change of its officers or
directors. Further, if any employee possessing support license changes
employment, is terminated or resigns, the Company must notify the Colorado
Director.

The sale of alcoholic beverages by the casino will be subject to
licensing, control, and regulation by the applicable state and local
authorities. All licenses are revocable and are not transferable. The
agencies involved have full power to limit, condition, suspend or revoke any
such license, and any such disciplinary action could (in revocation would) have
a material adverse effect on Caesars Black Hawk.

The State of Colorado has enacted an annual gross gaming revenue tax
(gross gaming revenue being defined generally as the total amount wagered minus
the total amount paid out in prize) of 2 percent of the $1 million of gross
gaming revenues, eight percent of the second $1 million, 15 percent of the
third $1 million and 18 percent of the amounts in excess of $3 million. The
Colorado Commission has also imposed an annual device fee of $100 per gaming
device. The Colorado Commission may revise the gaming tax rate and device fee
from time to time. The city of Black Hawk currently imposes an annual device
fee of $800. In addition, the City of Black Hawk imposes liquor licensing
fees, restaurant fees and parking impact fees. Caesars Black Hawk has, and in
the future, may be required to pay local parking and other municipal "impact"
fees based on square footage of its facilities. Significant increases in the
applicable taxes or fees, or the imposition of new taxes or fees, could have a
material adverse effect on

7
<PAGE> 8
NEVADA GOLD & CASINOS, INC.
MARCH 31, 1996

Caesars Black Hawk, and it is not unreasonable to expect that such taxes or
fees could be increased or new taxes or fees imposed.

The Company may not make a public offering of its securities without
notifying the Colorado Commission. The notification must occur within 10
business days after the initial filing of a registration statement with the
Securities and Exchange Commission ("SEC") or, if the offering will not be
registered with the SEC, 10 days prior to the public use or distribution of any
offering document. The notification must disclose, among other things, a
description of the securities to be offered, the proposed term of the offering,
its anticipated gross and net proceeds and the use of the proceeds. The
notification procedures apply to this Offering and to any subsequent offerings
by the Company, under certain circumstances.

There can be no assurance that the Company will be able to comply or
conduct business in accordance with applicable regulations. Furthermore, there
can be no assurance that additional state or federal statutes or regulations
will not be enacted at some future date which could have a material adverse
effect on the business operations of the Company.

New Industry

Limited stakes gaming did not commence in Colorado until October 1991,
accordingly, there is limited experience in Colorado from which to evaluate the
likelihood of success of the Company's or Caesars Black Hawk's gaming operation
in the state. Existing casino results to date may reflect the novelty of
limited gaming. There can be no assurance that Caesars Black Hawk will be able
to manage the casino on a profitable basis. However, the market continues to
grow and is currently over $380 million in annual adjusted gross proceeds.

Access to Black Hawk

The City of Black Hawk is located in a narrow valley in the foothills
of the Colorado Rocky Mountains and is served by winding mountain roads which
are generally 2 lanes and require extreme cautious driving, especially in bad
weather. Congestion on the roads leading into Black Hawk is not uncommon
during the peak summer season, holidays, and other times of the year and may
discourage potential customers from traveling to casinos located in the City of
Black Hawk.

Competition

The gaming and casino industry is subject to intense competition,
particularly in the state of Colorado. As the number of gaming establishments
in Colorado have increased over the past 2 years, average revenues for some of
the smaller casinos located in Colorado have declined significantly. Future
initiatives could expand limited gaming in Colorado to other locations. In
addition to competing with other casinos in Black Hawk, Caesars Black Hawk may
compete for customers with casinos in other gaming jurisdictions. While
Caesars Black Hawk believes its casino will be competitive advantages over the
other gaming establishments in the area as a primary result of its size and
location, the Company believes that national, regional, state, and

8
<PAGE> 9
NEVADA GOLD & CASINOS, INC.
MARCH 31, 1996

local competition for the gaming markets, in general, will be extremely intense
during the foreseeable future, as gaming activities expand in traditional
gambling legislation. Many of the Company's competitors have established
positions in more locations, have greater financial resources, have more
experience and expertise than the Company.

EMPLOYEES AND OTHER MATTERS

The Company maintains a staff of 5, and 2 of those individuals perform
services for the Corporation on a contractual basis with the Company.

As of April 29, 1994, the common stock of the Company was listed on
the "Bulletin Board" of NASDAQ under the symbol "NGCI."

ITEM 2. PROPERTIES

The Company's principal properties consist of undeveloped land located
in and around Black Hawk, Colorado. Certain properties are zoned for gaming,
while the other properties are intended for residential, commercial, and
recreational real estate development. The Company's mining properties are
located in the Goldfield Mining District, Nye and Esmeralda Counties, Nevada
and Nevada County, California.

The Company leases approximately 3,500 square feet of office space in
Houston, Texas. The monthly rental is currently $2,800. The Company believe
that its existing facilities are adequate to meet its current needs and to
accommodate anticipated growth.

ITEM 3. LEGAL PROCEEDINGS

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER'S MATTERS.

MARKET INFORMATION

The Company's Common Stock is traded on the NASDAQ "Bulletin Board",
under the symbol NGCI. There were approximately 3200 shareholders of record, as
of March 31, 1996. The following table sets forth the high and low sales
prices relating to the Company's common stock, with the last two fiscal years:

9
<PAGE> 10
NEVADA GOLD & CASINOS, INC.
MARCH 31, 1996

FISCAL YEARS ENDED

<TABLE>
<CAPTION>
MARCH 31, 1996 MARCH 31, 1995
HIGH BID LOW BID HIGH BID LOW BID
<S> <C> <C> <C> <C>
First Quarter 3 3/8 1 3/8 1 7/8 1
Second Quarter 3 1/4 2 1/2 2 1/8 1/2
Third Quarter 2 3/4 1 1/8 2 1/8 1 1/8
Fourth Quarter 2 3/8 1 1/4 1 13/16 1 1/2
</TABLE>
DIVIDENDS

There have never been any dividends declared by the Registrant. The
Registrant's losses do not currently indicate the ability to pay cash
dividends, and Registrant does not indicate the intention of paying cash
dividends in the foreseeable future.

ITEM 6. SELECTED FINANCIAL DATA

The Selected Financial Data set forth below should be read in
conjunction with the accompanying financial statements and notes, thereto, and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
------------- ------------ ------------ ------------- -----------
<S> <C> <C> <C> <C> <C>
Revenues $ 468,113 $ 77,900 $ 60,152 $ 48,000 $ 44,004

Net loss (598,752) (434,364) (113,203) (32,465) 13,103

Net loss per share (.02) (.02) (.02) (.01) 0

Total assets 5,057,691 4,213,808 2,265,932 490,175 497,445

Long term debt 395,798 579,480 369,446 26,537 0
</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.

The following discussions of the Company's results of operations and
financial position should be read in conjunction with the financial statements
and notes pertaining thereto, appearing elsewhere in this Form 10-K.
Management is of the opinion that inflation and changing prices will have
little, if any, effect on the Company's financial position or results of
operations.

RESULTS OF OPERATIONS

COMPARISON OF FISCAL YEARS ENDED MARCH 31, 1996 AND 1995

Royalty income remained constant as compared to the prior year. The
royalty income represents the minimum amount payable under the Cameco Agreement.
The Company received $50,000 as part of a rental agreement, and a $350,000 gain
on the disposition of property in which the company had a nominal cost basis.
Due to the termination

<PAGE> 11
NEVADA GOLD & CASINOS, INC.
MARCH 31, 1996

of the Cameco agreement and the nonrecurring nature of the other income these
revenues are not expected to continue during 1997.

General and administrative expenses increased substantially during the
year ended March 31, 1996. Travel expenses increased during the year due to
management's travel in connection with the signing of the agreement with
Caesars, the pre-development activities of the Company in Colorado and the
raising of capital. The increase in the various components of travel expense
accounted for 32 percent of the total increase in general and administrative
expenses for the year.

Due to the substantial business activity in Colorado, the Company
leased office space in the Denver area. The additional office lease expense
accounted for 18 percent of the increase in total general and administrative
expense.

The Company also incurred a substantial increase in legal and
professional fees. The increase in legal fees is mostly attributable to the
indirect and general costs associated with the acquisition of capital during the
year, including the $8,500,000 convertible secured note offering which was in
its initial stages as of March 31, 1996, and for which substantial legal fees
had been incurred. Accounting expense increased substantially during the year
due to a change in auditors as well as the continued development of the system
of internal controls and financial reporting. The Company also incurred costs
pertaining to assistance in the preparation of various regulatory filings. The
increase in accounting expenses accounted for 56 percent of the total increase
in legal and professional expenses for the year ended March 31, 1996 as compared
to 1995.

The Company incurred higher salary expenses during the year due to an
additional staff person and modest pay increases to employees. Contract labor
included in the financial statements as salaries, increased during the year due
to the need for temporary help during various times of the year. Additionally,
the Company engaged the services of a consultant with experience in the casino
industry. Amounts paid to this consultant are included in contract labor.

As a result of the $350,000 debt offering outstanding during the
course of the year ended March 31, 1996, the Company had a substantial
percentage increase in interest expense. Additionally, the Company entered into
capital lease agreements for furniture and computer equipment which has been
recorded as a lease obligation, thus resulting in interest expense being
incurred in connection with the lease payments.

11
<PAGE> 12
NEVADA GOLD & CASINOS, INC.
MARCH 31, 1996

COMPARISON OF FISCAL YEARS ENDED MARCH 31, 1995 TO 1994

Royalty income in connection with the Cameco Agreement remained
relatively constant as compared with the previous year. The amounts of royalty
income during both 1995 and 1994 represent minimum royalty amounts paid under
the terms of the Cameco Agreement.

General and administrative expenses of the Company increased as
compared to the previous year due to substantial increases in several expense
categories. The Company utilized outside sources for the performance of some
office administrative functions during 1995 that were not used during 1994.
Management fees payable to Aaminex Capital Corporation, an affiliate, were
incurred for the entire year during 1995 as compared to only a portion of the
previous year. Additionally, the Company incurred additional expenses
pertaining to maintaining a larger office and additional personnel.

Legal and professional fees increased during 1995 because the Company
obtained the services of an outside consultant to assist in the development of
accounting systems and internal controls. Additionally, legal fees increased
significantly due to indirect costs associated with the Company's acquisition
and predevelopment activities.

LIQUIDITY AND CAPITAL RESOURCES

For the year's ended March 31, 1996, 1995 and 1994, revenues of the
Company did not cover it's operating expenses. During 1996, the Company
received $50,000 as part of a rental agreement, and a $350,000 on the
disposition of property in which the company had a nominal cost basis. This
cash assisted in reducing the operating deficit experienced by the Company, but
was not sufficient to fully cover all expenses. Additionally, there have been
no revenues from the Company's gaming interests to date, since the activities
are currently in the pre-development stage. Management does not expect
significant increases in revenues from any of its operations over the next
year. The Company's need for working capital was funded partially by the
completion of the debt offering in process at the prior year end, amounting to
$350,000. Additionally, the Company borrowed $376,361 from a major
shareholder. The Company's mining interest generated $60,000 which was used in
operations. As a result of the operating losses of the Company, there was an
increase in the amount of trade accounts payable of $202,698, outstanding at
year end. The Company acquired furniture and computer equipment during the year
amounting to $108,000 which was financed through a capital lease.

12
<PAGE> 13
NEVADA GOLD & CASINOS, INC.
MARCH 31, 1996

such additional capital contribution will be made before the applicable dead
line.

To meet the capital requirements of the next year, the Company has
offered $8,500,000 in Convertible Secured Notes which are being sold through
it's investment bankers. The notes earn 10 percent interest on the first two
years, during which time the note holders have an option to convert their note
to the Company's common stock at a price of $2.25 or 85 percent of the average
closing price of the prior 20 consecutive trading days. A 12 percent interest
rate is earned for the remaining 3 years management expects that sufficient
capital will be raised through this offering to meet the capital contribution
requirements of Caesars Black Hawk and to fund the operating needs of the
Company for the next 12 months. However, there is no assurance that this
offering will be successful or that the proceeds from this offering will be
sufficient to meet the Company's cash requirements. The short term viability
of the Company is dependent upon it's ability to raise sufficient capital to
meet it's cash requirements.

In addition to funding it's operating deficit, the Company advanced
money to BSH, Inc., the firm performing the remediation of the Colorado
property. The proceeds of the $350,000 debt offering were used for this
purpose.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The information required there under is included in this report as set forth in
the "Index to Financial Statements"

INDEX TO FINANCIAL STATEMENTS

Report of independent public accountants 14
Report of independent public accountants from prior years 15
Balance sheet 16
Statements of operations 17
Statements of stockholders' equity 18
Statements of cash flows 19
Notes to financial statements 20-29

<PAGE> 14
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Nevada Gold & Casinos, Inc.:

We have audited the accompanying balance sheets of Nevada Gold & Casinos, Inc.
(a Nevada corporation in the development stage) as of March 31, 1996, and 1995
and the related statements of operations, stockholders' equity and cash flows
for the years then ended and the related statements of operations and cash flows
for the period from the inception of the development stage (Inception --
December 27, 1993) to March 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We did not audit the
financial statements of Nevada Gold & Casinos, Inc. for the period from
Inception through March 31, 1994. Such statements are included in the
cumulative inception to March 31, 1996 totals of the statements of operations
and cash flows and reflect total revenues and net loss of 10 percent and 10
percent, respectively, of the related cumulative totals. Those statements were
audited by other auditors whose reports have been furnished to us and our
opinion, insofar as it relates to amounts for the period from Inception to March
31, 1994, included in the cumulative totals, is based solely upon the report of
the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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. We believe that our audits and the report of other
auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the
financial statements referred to above present fairly, in all material
respects, the financial position of Nevada Gold & Casinos, Inc. as of March 31,
1996, and 1995 and the results of its operations and its cash flows for the
years then ended and for the period from Inception to March 31, 1996, in
conformity with generally accepted accounting principles.

As discussed in Note 1 to the financial statements , revenues have not been
sufficient to cover the Company's operating expenses during the past several
years. In addition, there have been no revenues from the Company's gaming
operations to date since these activities are currently in the predevelopment
stage. Management does not expect significant increases in revenues from any
of its operations over the next year. The Company will require substantial
additional capital to fund the continued acquisition and development of gaming
and real estate properties and to cover the Company's anticipated operating
deficits and debt maturities over the next several years. The Company intends to
fund such capital requirements through a combination of debt and equity
offerings. However, there is no assurance that these offerings will be
successful or that proceeds from these offerings, if successful, will be
sufficient to meet all of the Company's future cash requirements. The short
term viability of the Company is dependent upon the Company's ability to raise
sufficient capital to meet its cash requirements. In addition, the Company has
signed a Operating Agreement with Caesars World Inc. ("Caesars") concerning the
development of a casino hotel complex. However, there is no assurance that the
development of a successful casino will be completed. The ownership and
operation of gaming facilities are subject to extensive state and local
regulations. There is no assurance that the Company will be able to comply or
conduct business in accordance with applicable regulations. The long term
viability of the Company is dependent upon successful completion and operation
of a casino hotel complex. The factors described above raise substantial doubt
about the Company's ability to continue as a going concern. The accompanying
financial statements have been prepared assuming that the Company will continue
as a going concern. If the Company is unable to continue as a going concern,
the values realized from the Company's assets may be less than the carrying
amounts reported in its financial statements. The accompanying financial
statements do not include any adjustments relating to the recoverability and
classification of asset carrying amounts or the amount and classification of
liabilities that might result should the Company be unable to continue as a
going concern.

ARTHUR ANDERSEN LLP
Houston, Texas
May 24, 1996

14
<PAGE> 15

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Nevada Gold & Casinos, Inc.:

We have audited the accompanying statements of operations, and cash flows of
Nevada Gold & Casinos, Inc. (a Nevada corporation in the development stage) for
the year ended March 31, 1994, and for the period from inception of the
development stage to March 31, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, Nevada Gold & Casinos, Inc's. The results of operations
and its cash flows for the year ended March 31, 1994, and for the period from
inception to December 31, 1994, in conformity with generally accepted accounting
principles.

HENSON & COMPANY
July 13, 1994 except for Note 5,
which is dated August 1, 1994
Pasadena, California

<PAGE> 16
NEVADA GOLD & CASINOS, INC.
BALANCE SHEETS
AS OF MARCH 31, 1996 AND 1995

<TABLE>
<CAPTION>
1996 1995
------------------- -------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and equivalents $ 76,371 $ 89,180

Short term investments 109,789 100,000
Receivable from broker 125,000 240,433
------------------- -------------------
Total current assets 311,160 429,613

Property and assets held for development 3,602,084 2,757,369
Mining properties and claims 1,005,812 1,005,812
Furniture, fixtures and equipment, net 138,635 21,014
------------------- -------------------
TOTAL ASSETS $ 5,057,691 $ 4,213,808
=================== ===================

LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 538,002 $ 167,154
Short term notes payable 1,606,481 724,248
Current portion of long term debt 106,313 67,854
------------------- -------------------

Total current liabilities 2,250,796 959,256
------------------- -------------------

LONG TERM DEBT

Mortgages payable 202,661 333,288
Notes payable 193,137 246,192
-------------------- -------------------

Total long term debt 395,798 579,480
-------------------- -------------------

TOTAL LIABILITIES 2,646,594 1,538,736
------------------- -------------------
STOCKHOLDERS' EQUITY
Common stock, $.04 par value, 30,000,000 shares authorized,
24,292,114 and 24,027,432 shares issued and outstanding at March 31,
1996 and 1995, respectively. 971,685 961,098
Additional paid in capital 4,881,808 4,557,618
Accumulated deficit prior to development stage(12/27/93) (2,296,077) (2,296,077)
Accumulated deficit during development stage (1,146,319) (547,567)
------------------- -------------------
Total stockholders' equity 2,411,097 2,675,072
------------------- -------------------

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 5,057,691 $ 4,213,808
=================== ===================
</TABLE>

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

16
<PAGE> 17
NEVADA GOLD & CASINOS, INC.
STATEMENTS OF OPERATIONS
FOR YEARS ENDED MARCH 31, 1996, 1995 AND 1994
AND CUMULATIVE AMOUNTS DURING DEVELOPMENT STAGE (SINCE DECEMBER 27, 1993)

<TABLE>

CUMULATIVE AMOUNTS
DURING DEVELOPMENT
STAGE (SINCE
1996 1995 1994 12/27/93)
---------- ----------- --------- -----------
<S> <C> <C> <C> <C>
REVENUES
Royalty income $ 60,000 $ 55,000 $ 59,000 $ 174,000
Other income 408,113 22,900 1,152 432,165
----------- ----------- ---------- -----------
Total revenues 468,113 77,900 60,152 606,165

EXPENSES
General & administrative 394,557 220,954 49,418 664,929
Interest expense 129,593 6,826 12,384 148,803
Salaries 63,379 39,000 27,095 129,474
Legal & professional fees 397,131 159,094 58,850 615,075
Other expenses 82,205 86,390 25,608 194,203
----------- ----------- ---------- -----------
Total expenses 1,066,865 512,264 173,355 1,752,484
----------- ----------- ---------- -----------

NET LOSS $ (598,752) $ (434,364) $ (113,203) $(1,146,319)
========== =========== ========== ===========

PER SHARE INFORMATION

Weighted average number
of common shares and
equivalent outstanding 24,410,365 21,369,229 6,889,062 17,556,219
----------- ----------- ---------- -----------

Net loss per common share $ (.02) $ (.02) $ (.02) $ (.07)
========== =========== ========== ===========
</TABLE>

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

17
<PAGE> 18
NEVADA GOLD & CASINOS, INC.
STATEMENTS OF STOCKHOLDERS EQUITY
FOR THE YEARS ENDED MARCH 31, 1996, 1995 AND 1994

<TABLE>
<CAPTION>
STOCK COMMON STOCK ADDITIONAL ACCUMULATED TOTAL
SUBSCRIPTIONS SHARES AMOUNT PAID DEFICIT STOCKHOLDERS
IN CAPITAL EQUITY
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at 3/31/93 4,280,817 $171,233 $2,559,028 $(2,296,077) $ 434,184
---------------------------------------------------------------------------------------------
Stock issued for cash 400,000 16,000 84,000 100,000

Stock issued for property(Note 5) 9,500,000 380,000 703,000 1,083,000
December 27, 1993
Cash for stock subscriptions 295,500 295,500

Contribution of Salaries to
paid in capital by officers 1,000 1,000

Net Loss (113,203) (113,203)
---------------------------------------------------------------------------------------------
Balance at 3/31/94 295,500 14,180,817 567,233 3,347,028 (2,409,280) 1,800,481

Stock subscriptions outstanding (295,500) (295,500)

Stock issued for property(Note 5) 6,613,303 264,532 182,468 447,000
August 1, 1994
Stock issued for cash 1,170,000 46,800 46,800
March 31, 1994
Stock issued for cash 1,177,200 47,088 541,512 588,600
April 15, 1994
Stock issued for cash 886,112 35,445 486,610 522,055
August 15, 1994
Net Loss (434,364) (434,364)
----------------------------------------------------------------------------------------------
Balance at 3/31/95 24,027,432 961,098 4,557,618 (2,843,644) 2,675,072
Stock issued for cash 8,352 334 5,930 6,264
February 7, 1996
Stock issued associated
with debt offering 29,460 1,178 20,917 22,095
March 31, 1996
Stock issued for promotional
and employee benefits 12,454 498 13,189 13,687
February 8, 1996
Stock issued for accounting expense 22,416 897 24,834 25,731
February 8, 1996
Additional stock issued for 150,000 6,000 (6,000)
property(Note 5)
January 19, 1996
Investment banker's option expense 225,000 225,000

Interest Expense paid in stock
March 31, 1996 42,000 1,680 40,320 42,000
Net Loss (598,752) (598,752)
----------------------------------------------------------------------------------------------
Balance at March 31, 1996 24,292,114 $971,685 $4,881,808 $(3,442,396) $2,411,097
==============================================================================================
</TABLE>

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

18
<PAGE> 19
NEVADA GOLD & CASINOS, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 1996, 1995 AND 1994
AND CUMULATIVE AMOUNTS DURING DEVELOPMENT STAGE (SINCE DECEMBER 27, 1993)

<TABLE>
<CAPTION>
CUMULATIVE AMOUNTS
DURING DEVELOPMENT
1996 1995 1994 STAGE SINCE 12/27/93
------------ ------------ ------------ ---------------------
<S> <C> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:

Net loss $ (598,752) $ (434,364) $ (113,203) $ (1,146,319)

Adjustments to reconcile net loss to net
cash provided (used) by operating
activities:
Depreciation 14,370 5,488 0 19,858
Changes in operating assets and
liabilities:
Receivable 230,644 (15,433) (1,067) 214,144
Accounts payable and accrued
liabilities 377,474 125,442 33,216 536,132
----------- ----------- ----------- -------------
NET CASH PROVIDED BY (USED) IN OPERATING 23,736 (318,867) (81,054) (376,185)
ACTIVITIES:

CASH FLOW FROM INVESTING ACTIVITIES:
Property and assets held for development (410,919) (572,841) (235,491) (1,219,251)
Purchase of Furniture, fixtures and
equipment (23,736) (5,302) 0 (29,038)
----------- ----------- ----------- -------------
NET CASH USED IN INVESTING ACTIVITIES (434,655) (578,143) (235,491) (1,248,289)

CASH FLOW FROM FINANCING ACTIVITIES:
Salaries contributed by officers 0 0 1,000 1,000
Common stock issued for cash, net of
offering costs 28,359 861,954 100,000 990,313
Proceeds from Debt 501,407 52,926 554,333
Payments on debt (131,656) (54,293) (39,717) (225,666)
Changes in short term debt 0 79,078 0 79,078
Prepaid Stock subscriptions 0 0 295,500 295,500
----------- ----------- ----------- -------------

NET CASH PROVIDED BY FINANCING
ACTIVITIES: 398,110 939,665 356,783 1,694,558
----------- ----------- ----------- -------------

NET INCREASE (DECREASE) IN CASH (12,809) 42,655 40,238 70,084

BEGINNING CASH BALANCE 89,180 46,525 6,287 141,992
----------- ----------- ----------- -------------

ENDING CASH BALANCE $ 76,371 $ 89,180 $ 46,525 $ 212,076
=========== =========== =========== =============

SUPPLEMENTAL CASH FLOW INFORMATION:
CASH PAID FOR INTEREST $ 84,149 $ 6,826 $ 12,384 $ 103,359
=========== =========== =========== =============

CASH PAID FOR TAXES $ 0 $ 0 $ 0 $ 0
----------- ----------- ----------- -------------
</TABLE>

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

19
<PAGE> 20
NEVADA GOLD & CASINOS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996

1. BUSINESS

Nevada Gold & Casinos, Inc.'s (The Company) principal business
historically was mineral exploration and, development of properties indirectly,
principally through investments in partnerships and joint ventures. On
December 27, 1993, control of the Company changed, and the Company began to
explore the real estate development and gaming businesses in Colorado. The
Company is considered to be in the development stage since December 27, 1993. In
January, 1994, the Company changed its name from Pacific Gold Corporation to
Nevada Gold & Casinos, Inc. While the Company is maintaining its mining
business, it is anticipated that Company's growth will be in the real estate
and casino business.

The principal focus of management during 1996, was the negotiation of
and signing of the agreement concerning the hotel/casino project. Additionally,
management spent a substantial portion of their time raising capital necessary
to fund the ongoing operations of the Company as well as provide for the capital
required as a participant in the project. As a result of management's
negotiations, an operating agreement was signed, effective February 26, 1996,
with a wholly owned subsidiary of Caesar World Inc. ("Caesars") creating Caesars
Black Hawk, LLC. ("Caesars Black Hawk"), a (Colorado limited liability company).
The Company will hold it's interest in Caesars Black Hawk through a wholly owned
subsidiary. The Company is required to make an initial capital contribution of
land, valued under the agreement at $4.9 million. The land to be transferred
includes lots 5, 6, 7 and 8 of Block 51, and adjoining land comprised of over
three acres located in Black Hawk, Colorado, as well as options to acquire the
land referred to as the "Weaver Parcel" and the "Woodall Parcel". The land will
be transferred to Caesars subject to any encumbrances and Caesars will satisfy
such encumbrances up to $250,000 above which amount the capital account of the
Company will be adjusted. Additionally, the Company is required to make an
additional contribution of cash into the project amounting to $3 million within
120 days of the execution and delivery of the agreement, or by July 5, 1996. It
is uncertain at this time as to the outcome of this contribution, however
management is currently in negotiations to extend the date of the required
capital contribution, and feels confident it will meet its objectives. There can
be no assurance that either the extension will be obtained or that such
additional capital contribution will be made before the applicable dead line.
Upon completion of the initial capital contributions, the Company will own 22
percent of Caesars Black Hawk. Additionally, the Company has the right to
purchase up to $6.4 million of the remaining interest in Caesars Black Hawk by
no later than September 30, 1996. Upon exercise of this right, the Company's
interest in Caesars Black Hawk increases to 40 percent. The remaining interest
in Caesars Black Hawk is owned by Caesers. Under the terms of the agreement,
Caesars will prepare a Development Plan for the project and will receive a
development fee equal to two percent of the total capital budget for the
project. Such development fee is the liability of Caesars Black Hawk and will be
paid on a monthly basis over the term of the development period of the project.
The current budget for the project is $94 million and the anticipated
development fee to be paid to Caesars World Inc., is $1,880,000 over the 12
month development period. The management of the hotel/casino project will be
conducted pursuant to a Management Agreement with Caesars. Under the terms of
the Management Agreement, Caesars will manage the project over a thirty year
term, with the right to renew for two consecutive ten year terms. Caesars will
be paid a base management fee equal to 5 percent of gross revenues generated by
the project and an incentive management fee equal to 10 percent of the operating
profit of the project before interest, income taxes, depreciation and
amortization but excluding one-half of the base management fee, all as
determined in accordance with generally accepted accounting principles.
Generally, the agreement calls for Caesars to contribute up to $28 million in
equity and arrange for the debt financing of the project. As of March 2, 1996,
the Company entered into a Letter of Intent with Applied Voice Technologies to
jointly develop voice activated gaming technology.

There have been no revenues from the Company's gaming operations to
date since these are currently in the predevelopment stage. Revenues have not
been sufficient to cover the Company's operating expenses during the past
several years. In addition, there have been no revenues from the Company's
gaming operations to date since these activities are currently in the
predevelopment stage. Management does not expect significant increases in
revenues from any of its operations over the next year. The Company will require
substantial additional capital to fund the continued acquisition and development
of gaming and real estate properties and to cover the Company's anticipated
operating deficits and debt maturities over the next several years. The Company
intends to fund such capital requirements through a combination of debt and
equity offerings. However, there is no assurance that these offerings will be
successful or that proceeds from these offerings, if successful, will be
sufficient to meet all of the Company's future cash requirements. The short term
viability of the Company is dependent upon the Company's ability to raise
sufficient capital to meet its cash requirements. In addition, the Company has
signed an operating agreement with Caesars World Inc. ("Caesars") concerning the
development of a casino hotel complex. However, there is no assurance that the
development of a successful casino will be completed. The ownership and
operation of gaming facilities are subject to extensive state and local
regulations. There is no assurance that the Company will be able to comply or
conduct business in accordance with applicable regulations. The long term
viability of the Company is dependent upon successful completion and operation
of a casino hotel complex. The factors described above raise substantial doubt
about the Company's ability to continue as a going concern. The accompanying
financial statements have been prepared assuming that the Company will continue
as a going concern. If the Company is unable to continue as a going concern, the
values realized from the Company's assets may be less than the carrying amounts
reported in its financial statements. The accompanying financial statements do
not include any adjustments relating to the recoverability and classification of
asset carrying amounts or the amount and classification of liabilities that
might result should the Company be unable to continue as a going concern.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND EQUIVALENTS. Interest bearing deposits and other
investments, with original maturities of three months or less, are considered
cash and cash equivalents.

MINING PROPERTIES AND CLAIMS. The Company capitalizes costs of
acquiring and developing mineral claims, until such time as the properties are
placed into production, at that time, costs will be amortized on a
units-of-production basis. Such costs include the costs to acquire and improve
the claims, including land related improvements, such as roads. The Company
carries these costs on its books at the lower of its basis in the claims, or
the net realizable value of the mineral reserves contained in the claims. Other
mining properties are recorded at their acquisition price. At March 31, 1996
and 1995, management believes the net realizable value of the mineral reserves
is in excess of the Company's cost in the claims.

PROPERTY HELD FOR DEVELOPMENT. Property held for development consists
of undeveloped land located in and around Black Hawk, Colorado. Certain
properties are zoned for gaming, and were conveyed to the project, while the
other properties are intended for residential, commercial, and recreational
real estate development. The Company has capitalized certain direct costs of
pre-development activities together with capitalized interest. Property held
for development is carried at the lower of cost or net realizable value.

IMPACT OF NEW ACCOUNTING STANDARDS. The Company adopted Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
long-lived Assets and for

20
<PAGE> 21

NEVADA GOLD & CASINOS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996

Long-Lived Assets to be Disposed of" on April 1, 1996. The impact of this
adoption was not material to the Company's financial statements. The Company
will adopt SFAS No. 123, "Accounting for Stock-based Compensation," during
fiscal 1997 using the pro-forma disclosure method described in the
pronouncement. Accordingly, adoption of the statement will not affect the
Company's financial statements but will add to its footnote disclosures.

FURNITURE, FIXTURES AND EQUIPMENT. The Company depreciates furniture,
fixtures, and equipment over their estimated useful lives, ranging from 2 to 7
years, using the straight-line method. Expenditures for furniture, fixtures,
and equipment are capitalized at cost. When items are retired or otherwise
disposed of, income is charged or credited for the difference between net book
value and proceeds realized thereon. Ordinary maintenance and repairs are
charged to expense, and replacements and betterment's are capitalized.

LOSS PER SHARE DATA. Loss per share is based on the weighted average
number of common shares and common equivalent shares outstanding during each
year. Options are considered to be common stock equivalents and are a component
of weighted average shares outstanding, to the extent that such options are
dilutive as calculated using the treasury stock method.

RECLASSIFICATIONS. Certain prior-year balances have been reclassified
to conform to current year presentation.

CONSOLIDATION. These Financial Statements are consolidated for all
wholly owned subsidiaries as of March 31, 1996. All significant intercompany
transactions and balances have been eliminated in the financial statements.

USE OF ESTIMATES. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

3. SHORT TERM INVESTMENTS

On March 27, 1996, the Company purchased a certificate of deposit,
which bears interest at the rate of 4.60% per annum, and matures on September
28, 1996. The certificate of deposit is pledged as collateral on a loan of same
amount at the same financial institution. See Note 7.

4. RECEIVABLE FROM BROKER

At March 31, 1996, the Company, through its investment bankers, had
recorded a receivable from broker for a debt offering, in the amount of
$125,000. As of such date, the Company has recorded the amount subscribed,
together with the related indebtedness. See Note 7.

5. REAL ESTATE AND ASSETS HELD FOR DEVELOPMENT

21
<PAGE> 22
NEVADA GOLD & CASINOS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996

for gaming. During the fall of 1993, the Company commenced negotiations to
acquire certain properties located in and around the City of Black Hawk (the
"Colorado Properties") by granting a 75 percent ownership interest in the
Company to the previous owners of these properties. The acquisition of the
Colorado Properties was accomplished in two stages. During 1994 and 1995, the
Company acquired all of Clay County Holding's 60 percent undivided interest in
the Colorado Properties. In exchange for its undivided interest, Clay County
Holdings was granted 9,500,000 and 804,303 shares of the authorized but
unissued shares of the Company on December 6, 1993 and August 1, 1994,
respectively. This transaction (the "Clay County Acquisition") gave Clay County
Holdings a controlling interest in the Company. The acquired undivided interest
was recorded by the Company based upon the fair market value of the interest as
determined by an independent third party appraisal. To complete the second
stage of this transaction, on August 1, 1994 the Company acquired the remaining
40 percent undivided interest in the Colorado Properties from an unrelated third
party. In exchange for its undivided interest, the seller was granted 5,809,000
shares of the Company's authorized but unissued common stock. This remaining
undivided interest was recorded by the Company based upon the fair market value
of the interest as determined by an independent third party appraisal. On
January 19, 1996, the Company issued an additional 150,000 shares of stock to
Clay County Holdings associated with the Clay County Acquisition. This
additional issuance was due to an understatement in the original number of
shares outstanding at the time of the acquisition. The Colorado Properties
include four lots which have been zoned by the State of Colorado for gaming
purposes. Options on adjacent gaming lots were purchased during 1995 for cash.
The options on these lots were assigned , and exercised as a part of the
operating agreement with Caesars World, Inc. The Company's management believes
that the acquired gaming lots which are located at the entrance of the Black
Hawk/Central City gaming area, are uniquely situated to take advantage of the
traffic flow coming into the area.

PRE-DEVELOPMENT COSTS. The Company has capitalized certain costs associated
with the pre-development activities related to the Hotel/Casino property in
Black Hawk, Colorado. The amounts included in pre-development costs are costs
that are directly attributable to the pre-development of such project.

6. MINING PROPERTIES AND CLAIMS

The Company has had joint-venture agreements with such mining companies as
Hanna Mining, Noranda Exploration Inc., Southern Pacific Land Co., Santa Fe
Minerals, AMAX Exploration Inc., and Dexter Gold Mines Inc. among others. The
Company was party to an agreement with Cameco U.S., Inc. which, at its inception
on May 1, 1991, was with Noranda Exploration, Inc. The most recent agreement
with Cameco was terminated effective March 31, 1996. The agreement called for
monthly payments to the Company of $5,000.00 per month. The agreement also
provided for the Company to receive a production royalty, amounting to five
percent of all the net smelter returns for products shipped out of the mining
claims; however, there is no production from the claims, as of March 31, 1996.

Management is currently in negotiations with other prominent mining
companies to further expand the exploration of the mining property, and believes
that it will be able to enter a lease agreement, which will be sufficient to
recover the cost basis of the mining interest.

22
<PAGE> 23
NEVADA GOLD & CASINOS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996

PURCHASE OF SUNRISE LAND AND MINERALS, INC. As of March 31, 1995, the
Company entered into an agreement to purchase 100% of the outstanding common
stock of Sunrise Land and Minerals, Inc. The seller financed the entire
purchase price of the acquisition through a non-recourse note. The Company at
the option of the holder, extended the note through March 31, 1997, and accrued
interest was paid in the form of the company's stock. See Note 7 concerning
details of the note payable.

7. SHORT TERM NOTES PAYABLE

The following notes will become due and payable on or before March 31, 1997:

<TABLE>
<CAPTION>
MARCH 31,1996 MARCH 31, 1995
------------- --------------
<S> <C> <C>
Note payable to Trust, dated 3/31/95, calling for interest of 8%,
principal & interest due at maturity 3/31/97. Note is secured by
pledge of 100% of stock in Sunrise Land & Minerals, Inc. $525,000 $525,000

Eight notes payable to individuals, in the amount of $25,000 each and
three notes in the amount of $50,000. Each note bears interest at a rate
of 12% per annum, and mature July 5, 1996. All notes are secured by
gaming lots owned by the Company. 350,000 0

Note payable to a bank, dated 3/28/95, calling for interest of 6.60%,
interest paid through 5/28/96, entire principal due at maturity of
9/28/96. Note is secured by certificate of deposit for $100,000 (see
footnote 3.) 100,000 100,000

Note payable to others, unsecured, consisting of two notes, bearing
interest at rates to 12%, maturing on demand or prior to April 1, 1996 0 32,967

Note payable, dated 9/26/95 calling for 21% interest on any portion not
paid by 11/24/95, principal and interest due demand 38,971 0

Note payable to individual, dated 3/31/95, calling for interest of 10%,
principal & interest is due on demand. Note is secured by furniture &
fixtures. 16,165 16,165

Note payable to individual, dated 12/5/95, calling for interest of 12%,
principle & interest is due 8/10/97, secured by patented mining claims 25,000 0
</TABLE>

23
<PAGE> 24
NEVADA GOLD & CASINOS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996

7. SHORT TERM NOTES PAYABLE (CONTINUED)

<TABLE>
<S> <C> <C>
Note payable to corporation, dated 1/21/94, calling for interest of
8%, principal & interest due on demand, secured by patented mining
claim 24,821 0

Notes payable to affiliates consisting of Seven individual notes
bearing interest at 10%, all payable on demand.
526,524 50,117
---------- ---------
Total short-term notes payable $1,606,481 $ 724,249
========== =========
</TABLE>

8. LONG TERM DEBT

MORTGAGES PAYABLE. Mortgages payable are comprised of eleven mortgage notes,
all secured by real property, consisting of undeveloped land in the city of
Black Hawk, Colorado, or in an adjacent area in the county of Gilpin. The
mortgage terms are as follows:

<TABLE>
<CAPTION>
BALANCE AS OF

MARCH 31, 1996 MARCH 31, 1995
-------------- --------------
<S> <C> <C>
Note payable, interest at 8%, payable in monthly payments of $ 5,238 $ 22,593
$177, through December, 1998.

Note payable, interest at 8%, payable in monthly payments of 5,238 6,876
$177, through December, 1998.

Note payable, interest at 8%, payable in monthly payments of 22,968 24,821
$329, through December, 1998.

Note payable, interest at 8%, payable in monthly payments of 8,612 11,001
$284, through December, 1998.

Note payable, interest at 8%, payable in monthly payments of 52,907 66,682
$1,658, through February, 1999.

Note payable, interest at 8.5%, payable in monthly payments 0 52,926
of $694, through May 6, 1999.

Note payable, interest at 8%, payable in monthly payments of 87,232 95,036
$1,262, through December, 2003.

Note payable, interest at 8%, payable in monthly payments of 13,106 14,164
$188, through December, 2003

Note payable, interest at 8.5%, payable in monthly payments 39,395 42,499
of $575, through December, 2003.
</TABLE>

24
<PAGE> 25
NEVADA GOLD & CASINOS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996

8. LONG TERM DEBT (CONTINUED)

<TABLE>
<CAPTION>
Balance as of
--------------------------------------------------
March 31, 1996 March 31, 1995
----------------- --------------------
<S> <C> <C>
Note payable, interest at 8%, payable in semi-annual 9,742 10,553
payments of $822, through February, 2004.

Note payable, interest at 8%, payable in semi-annual
payments of $2,575, through March, 2004. 0 32,632
----------------- -----------------
Total mortgages payable 244,438 379,783

Current portion of mortgages payable (41,777) (46,495)
----------------- ------------------

Long term mortgages payable $ 202,661 $ 333,288
================== ==================
</TABLE>

OTHER LONG TERM NOTES PAYABLE & CAPITAL LEASES

<TABLE>
<S> <C> <C>
Capital Leases for acquisition of computers & furniture, principle &
interest payments in the amounts of $4,483 monthly, maturity 1998 & 2001
respectively. $ 102,370 $ 0

Note payable to individual dated 7/15/94, calling for interest of 8%,
principal & interest payments in amounts of $2,000, maturity 2/15/97. 30,303 42,551

Seven notes payable to individuals, in the amount of $25,000 each and
one note payable in the amount of $50,000. Each note bears interest at
a rate of 12 percent per annum, and mature July 5, 1996. All notes are
secured by gaming lots owned by the company. 225,000

Note payable associated with the Company's $8.5 million secured
convertible debt offering, calling for interest of 10%, for the first two
years, expiring 6/30/01, interest to be paid semi-annually. 125,000
----------------- ------------------

Total other long term notes payable 257,673 267,551

Current portion of other long term notes payable (64,536) (21,359)
----------------- ------------------

OTHER LONG TERM NOTE PAYABLE $ 193,137 $ 246,192
================= =================
</TABLE>

The aggregate principal maturities on long term debt for the years ending March
31, are as follows:

<TABLE>
<S> <C>
1997 $ 72,080
1998 45,608
1999 58,976
2000 22,344
Thereafter 200,733
----------------
Total $ 399,741
================
</TABLE>

9. LEASES

CAPITAL LEASES. - The company entered into two capital leases for 4
computers and office furniture. The leases expire from 1998 to 2001.

<PAGE> 26
NEVADA GOLD & CASINOS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996

Future minimum lease payments for capital leases are as follows:

<TABLE>
<S> <C>
1997 $ 55,142
1998 55,142
1999 16,138
2000 16,138
Thereafter 16,107
------
Interest paid (56,297)

Net Present Value $102,370
========
</TABLE>

10. TAXES BASED ON INCOME

The Company adopted SFAS No. 109, "Accounting for Income Taxes",
effective April 1, 1993. Under SFAS No. 109, deferred tax liabilities are
determined based on the difference between financial statement and tax bases
of all assets and liabilities, measured by using the enacted statutory tax
rates. The principal difference between book and tax bases which gives
rise to a deferred tax liability consists of depreciation.

SFAS No. 109 also provides for the recording of a deferred tax asset for
net operating loss carryforwards. For the years ended March 31, 1996 and 1995,
the Company had net operating loss carry forwards amounting to $3,048,958 and
$2,426,855 respectively. The loss carryforwards expire through the year 2010.
The Company has recorded a deferred tax asset in each year amounting to
$1,570,229 and $1,357,481 as of March 31, 1996 and 1995, as a result of the
future tax benefit of the net operating loss carryforward, determined by
applying the enacted statutory rate of 34 percent to such carryforwards. Since
the ability of the Company to realize the deferred tax asset is not certain, a
valuation allowance has been recorded for both years in an amount equal to the
deferred tax asset.

<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
1996 ACTIVITY 1995
--------------------------------------------------------
<S> <C> <C> <C>
Deferred tax assets:
Net operating loss carryforwards $1,570,229 $ 212,748 $1,357,481
Book verses tax depreciation (9,172) (9,172)
Valuation allowance for deferred tax assets (1,561,057) (203,576) (1,357,481)
--------------------------------------------------------

Net deferred tax asset -0- -0- -0-
=========================================================
</TABLE>

26
<PAGE> 27
NEVADA GOLD & CASINOS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996

Reconciliation's between the statutory federal income tax (benefit) rate and
the Company's effective income tax (benefit) rate as a percentage of loss from
continuing operations were as follows:

<TABLE>
<CAPTION>
Year ended March 31,
--------------------------------------------
1996 1995
Percent Dollars Percent Dollars
------- -------- ------- --------
<S> <C> <C> <C> <C>
Tax benefit at statutory federal rate (34)% $(203,576) (34)% $(147,684)
Permanent Differences:
Stock Options Exercised 0 0 (122)% (530,722)
Expired NOL 0 0 7 32,346
Increase in valuation allowance related
to current year net operating loss 34% 203,576 149% 646,060
----- --------- ----- ---------
Effective income tax benefit 0% $ 0 0% $ 0
===== ========= ===== =========

</TABLE>

11. STOCK OPTIONS

On March 31, 1992, the Board of Directors authorized the issuance of stock
options to various individuals, for the purchase of the Company's common stock
at $0.04 per share, expiring March 31, 1995, all exercisable from March 31,
1992, through March 31, 1995. At March 31, 1995, all options that were granted
in lieu of cash, for services rendered, had been exercised.

The options were granted, in lieu of cash, for services rendered, as follows:

<TABLE>
<S> <C> <C>
Individual Service # of shares
---------- ---------------------- -----------
<S> <C> <C>
Paul Burkett Management 600,000
Roy Hackworth Assessment Work 150,000
Alan Macquoid Financial Consulting 50,000
Woody Clemons Gold Field Operation Supervision 50,000
Lynette Milan Office Secretary 25,000
Fred Holabird Geological Consulting 15,000
Art Nielson Mining Superintendent 15,000
Gary Ojala Geological Consulting 15,000
</TABLE>

Additionally, on September 17, 1993, options to purchase 250,000 shares of
the common stock of the Company, expiring September 17, 1996, were granted to
the Company's legal counsel, Jim Hurley. All such options were exercised during
the year ended March 31, 1995.

27
<PAGE> 28
NEVADA GOLD & CASINOS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996

The options were granted during 1996, in lieu of cash, for services rendered,
as follows:

Options issued for Compensation

Individual Service # of shares
--------------------------------------------------------------
Directors Management 120,000
Advisory Directors Management 120,000
D.E. Frey & Company Investment Bankers 100,000
David K. Cantley Employee Compensation 10,002
Carolyn DeWitt Employee Compensation 3,500

In connection with the investment banking agreement signed in October
1993, the company issued stock options during the fiscal year ended March 31,
1995, the Company granted options to its investment bankers, providing for the
issuance of 200,000 shares of stock, at an option price of .50 per share. This
option was granted on April 1, 1994, and expires on April 1, 1999. The Company
also issued 100,000 stock options in association with the assistance of that
certain debt offering funded by the company's investment bankers to remediate
the gaming lots. The option price is $.75 per share, expiring on August 1,
1997.

Options were also granted in connection with the debt offering that
was in process at the year ended March 31, 1995 to the holders of notes
payable by the Company, as described in Note 7. Such options grant the holders
of the notes to a total of 35,000 shares, exercisable at $.75 per share based
upon the debt subscribed of $350,000 and an additional 14,000 options were
granted to the brokers. The unexercised options expired at March 31, 1996,
with 27,500 shares being exercised by note holders, and 1,960 shares being
exercised by brokers.

12. STOCK SUBSCRIPTIONS

At March 31, 1994, the Company collected $295,500 in cash, in the form
of subscriptions to buy restricted stock in the Company, at $.50 per share.
The offering was done through a private placement, offered to accredited
investors, and was completed during the year, ended March 31, 1995. The total
funds raised amounted to $588,600, as a result of this offering.

13. RELATED PARTY TRANSACTIONS

In the ordinary course of business, the Company has entered into
transactions with officers, directors and other related entities. The
majority of such transactions include loans made or received from the related
party. The following summarizes such transactions during the years ended
March 31, 1996 and 1995.

During the year ended March 31, 1996, Bingle Northwest, an affiliate
of the Company's President, lent the Company $7,034 for working capital. The
note payable to ADT Resources, a wholly owned subsidiary of Aaminex Capital
Corporation ("Aaminex"), remained unchanged as of March 31, 1996.

28
<PAGE> 29
NEVADA GOLD & CASINOS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996

The Company shares office space and other office expenses with Aaminex.
The Company's President is also the President of Aaminex. Under the terms
of a management agreement, the Company is obligated to pay $8,333.33 per month
to Aaminex for the full-time services of Mr. Winn and for the payment of
various office expenses. Accrued management fees under the agreement totaled
$100,000 and $90,000 during the years ended March 31, 1996 and 1995.

In addition to the above the Company increased it's note payable to
Aaminex by $99,266.

The Company, through BSH, Inc., an affiliate of the President and
Treasurer was required to work closely with the EPA and the Colorado Department
of Health in connection with developing the casino hotel complex, and BSH, Inc.
agreed to perform environmental analyses and test and remove any and all
hazardous substances located on the gaming lots. The Company paid a total of
$330,459 to BSH, Inc. No further remedial activity has been required or is
expected of the Company.

On May 19, 1995, the Company transferred real estate to Gold Mountain
Development, LLC, an entity in which the Company had a forty percent interest.
Real estate, having a cost basis of $867,283, mortgages payable and certain
other assets were transferred to Gold Mountain Development, LLC. The Company
received a note receivable from Gold Mountain in the amount of $919,248 which
bears interest at the rate of fourteen percent per annum and matures on March
31, 1997. The Company was required to assume debt totaling $115,384. On
September 1, 1995, the Company acquired the remaining 60% interest in Gold
Mountain Development, LLC, making it a wholly owned subsidiary. The former
members received a portion of the land owned subject to the underlying
mortgages and a note in the amount of $150,000, which had a balance of $38,971
as of March 31, 1996. All intercompany balances, have been eliminated in
preparing the Company's financial statements as of March 31, 1996.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

On June 7, 1995, the Company engaged the services of Arthur Andersen,
LLP, in Houston, Texas. This constituted a change in accountants. The
financial statements for the previous two years were reported on by Henson &
Company, an auditing firm in Pasadena, California. The predecessor auditors
were notified by the Company on June 7, 1995. Their report dated July 13,
1994, except for Note 12 which was dated August 1, 1994 expressed an
unqualified opinion on the financial condition on the two most recent years.
The decision to change accountants was recommended by the Board of Directors.
There were no disagreements with the former accountants.

29
<PAGE> 30
NEVADA GOLD & CASINOS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item is incorporated by reference from
the Company's definitive Proxy Statements to be filed with the Commission not
later than 120 days after the end of the fiscal end covered by this Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated by
reference from the Company's definitive Proxy Statements to be
filed with the Commission not later than 120 days after the end of
the fiscal end covered by this Form 10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The information required by this item is incorporated by
reference from the Company's definitive Proxy Statements to be
filed with the Commission not later than 120 days after the end of
the fiscal end covered by this Form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is incorporated by
reference from the Company's definitive Proxy Statements to be
filed with the Commission not later than 120 days after the end of
the fiscal end covered by this Form 10-K.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K

Not Applicable

(a) FINANCIAL STATEMENTS AND SCHEDULES

Reference

8 Report of independent public accountants

9 Balance sheets

10 Statements of operations

12 Statements of stockholders' equity

13 Statements of cash flows

14 Notes to financial statements

30
<PAGE> 31
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996

(b) REPORTS ON FORM 8-K

3.1 - Articles of Incorporation

3.1a - Amendment to Articles of Incorporation

3.2 - By-laws

21 - Subsidiaries of the Registrant

27 - Financial Data Schedule
(To be filed with Amendment)

* - Operating Agreement Caesars Black Hawk, LLC.
(To be filed with Amendment)

31
<PAGE> 32
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, hereunto duly authorized

NEVADA GOLD & CASINOS, INC.

By: /s/ H. Thomas Winn July 2, 1996
----------------------------
H. Thomas Winn, President

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following person on behalf of the Registrant
and in the capacity and on the date indicated.

<TABLE>
<CAPTION>
NAME & POSITION DATE
<S> <C>

/s/ H. Thomas Winn
-----------------------------
H.Thomas Winn, President July 2, 1996

/s/ Paul J. Burkett
-----------------------------
Paul J. Burkett, Director July 2, 1996
Vice President - Mining

/s/ Fred N. Holabird July 2, 1996
-----------------------------
Fred N. Holabird, Director

/s/ William G. Jayroe July 2, 1996
-----------------------------
William G. Jayroe, Director

/s/ David K. McCaleb July 2, 1996
----------------------------
David K. McCaleb, Treasurer
</TABLE>

32
<PAGE> 33

INDEX TO EXHIBITS

3.1 - Articles of Incorporation

3.1a - Amendment to Articles of Incorporation

3.2 - By-laws

21 - Subsidiaries of the Registrant

27 - Financial Data Schedule
(To be filed with Amendment)

* - Operating Agreement Caesars Black Hawk, LLC.
(To be filed with Amendment)

<PAGE> 1
EXHIBIT 3.1

F I L E D
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA

ARTICLES OF INCORPORATION APR 7 1977

OF WM. SWACKHAMER-SECRETARY OF STATE
/s/ {ILLEGIBLE}
No. 1530-77
-------
PACIFIC GOLD AND URANIUM. INC.
* * * *

We, the undersigned, have voluntarily associated ourselves together
for the purpose of forming a corporation under the laws of the State of Nevada
relating to private corporations, and to that end do hereby adopt articles of
incorporation as follows:

ARTICLE ONE. [NAME]. The name of the corporation is:

PACIFIC GOLD AND URANIUM, INC.

ARTICLE TWO. [LOCATION]. The address of the corporation's principal
office is Suite 1400 First National Bank Building, One East First Street, in
the City of Reno, County of Washoe, State of Nevada. The initial agent for
service of process at that address is Nevada Agency and Trust Company.

ARTICLE THREE. [PURPOSES]. The purposes for which the corporation is
organized are to engage in any activity or business not in conflict with the
laws of the State of Nevada or of the United States of America, and without
limiting the generality of the foregoing, specifically:

I. [OMNIBUS]. To have and to exercise all the powers now
or hereafter conferred by the laws of the State of Nevada upon
corporations organized pursuant to the laws under which the
corporation is organized and any and all acts amendatory thereof and
supplemental thereto.

II. [MINING]. To carry on the business of mining,
milling, concentrating, converting, smelting, treating, refining,
preparing for market, manufacturing, buying, selling, exchanging and
otherwise producing and dealing in uranium, zinc, lead, gold, silver,
copper, brass, iron, steel, coal, and in all kinds of ores, metals,
and minerals, oils, petroleum, natural gas, hydrocarbons, acids and
chemicals, and in the products and by-products of every kind and
description and by whatsoever process, the same can be or may
hereafter be produced; to purchase, lease, option, locate, or
otherwise acquire, own, exchange, sell, or otherwise dispose of,
pledge, mortgage, deed in trust, hypothecate, and deal in mines,
mining claims, mineral lands, coal lands, oil lands, timber lands,
water and water rights, and other property, both real and personal;
and to carry on as principals, agents, commission merchants or
consignees the business of mining, milling, concentrating, converting,
smelting, treating, refining, buying, selling, exchanging,
manufacturing, and dealing
<PAGE> 2
in the above specified products or any of them and of materials used
in the manufacture of each, and any and all of such articles and to
carry on as such principals, agents, commission merchants or
consignees any other business which in the judgment of the Board of
Directors of the corporation may be conveniently conducted in
conjunction with any of the matters aforesaid.

III. [SMELTING AND REFINING]. To engage in the erection
and operation of a smelting and refining works, and to carry on the
business of concentrating, converting, smelting, refining, treating,
preparing for market, and otherwise producing lead, zinc, and all
other kinds of metals and minerals, and generally to engage in the
business of refining, buying, selling, exchanging, and otherwise
dealing in and with, at wholesale or retail, all metals and mineral
products and by-products of every kind and description and by
whatsoever process the same can be or may hereafter be produced.

IV. [MINING CLAIMS]. To acquire by purchase or exchange,
or in any other manner, in the United States or in foreign countries,
mining claims, grounds, or lodes, mining and mineral rights,
concessions or grants, or any interest therein, and to sell, exchange,
lease, or in any other manner to dispose of the whole or any part
thereof or any interest therein when desirable.

V. [CARRYING ON BUSINESS OUTSIDE STATE]. To conduct and
carry on its business or any branch thereof in any state or territory
of the United States or in any foreign country in conformity with the
laws of such state, territory, or foreign country, and to have and
maintain in any state, territory, or foreign country a business
office, plant, store or other facility.

VI. [PURPOSES TO BE CONSTRUED AS POWERS]. The purposes
specified herein shall be construed both as purposes and powers and
shall be in no wise limited or restricted by reference to, or
inference from, the terms of any other clause in this or any other
article, but the purposes and powers specified in each of the clauses
herein shall be regarded as independent purposes and powers, and the
enumeration of specific purposes and powers shall not be construed to
limit or restrict in any manner the meaning of general terms or of the
general powers of the corporation; nor shall the expression of one
thing be deemed to exclude another, although it be of like nature not
expressed.

ARTICLE FOUR. [CAPITAL STOCK]. The corporation shall have authority to
issue an aggregate of TEN MILLION (10,000,000) shares of capital stock having a
par value of One Cent ($0.01) per share.

-2-
<PAGE> 3
No holder of shares of capital stock of the corporation shall be
entitled, as such, to any pre-emptive or preferential right to subscribe to any
unissued stock or any other securities which the corporation may now or
thereafter be authorized to issue.

The corporation's capital stock may be issued and sold from time to
time for such consideration as may be fixed by the Board of Directors, provided
that the consideration so fixed is not less than par value.

ARTICLE FIVE. [DIRECTORS]. The affairs of the corporation shall be
governed by a Board of Directors of not less than three (3) directors. The
names and addresses of the members of the first Board of Directors are:

NAME TITLE ADDRESS
- ---- ----- -------
Alexander H. Walker, Jr. President 840 Kennecott Bldg.
Salt Lake City, Utah

Cecil Ann Walker Vice President 840 Kennecott Bldg.
Salt Lake City, Utah

Marjorie L. Hall Secretary and 840 Kennecott Bldg.
Treasurer Salt Lake City, Utah

Directors of the corporation need not be residents of the State of
Nevada and need not own shares of the corporation's stock.

ARTICLE SIX. [ASSESSMENT OF STOCK]. The capital stock of the
corporation, after the amount of the subscription price or par value has been
paid in, shall not be subject to pay debts of the corporation, and no paid up
stock and no stock issued as fully paid up shall ever be assessable or
assessed.

ARTICLE SEVEN. [INCORPORATORS]. The name and address of each
incorporator of the corporation is as follows:

NAME ADDRESS
---- -------
Alexander H. Walker, Jr. 840 Kennecott Bldg.
Salt Lake City, Utah

Cecil Ann Walker 840 Kennecott Bldg.
Salt Lake City, Utah

Marjorie L. Hall 840 Kennecott Bldg.
Salt Lake City, Utah

ARTICLE EIGHT. [PERIOD OF EXISTENCE]. The period of existence of the
corporation shall be perpetual.

-3-
<PAGE> 4
ARTICLE NINE. [BY-LAWS]. The initial By-Laws of the corporation shall
be adopted by its Board of Directors. The power to alter, amend, or repeal the
By-Laws, or to adopt new By-Laws, shall be vested in the Board of Directors,
except as otherwise may be specifically provided in the By-Laws.

ARTICLE TEN. [STOCKHOLDERS' MEETINGS]. Meetings of stockholders shall
be held at such place within or without the State of Nevada as may be provided
by the By-Laws of the corporation. Special meetings of the stockholders may be
called by the President or any other executive officer of the corporation, the
Board of Directors, or any member thereof, or by the record holder or holders
of at least ten percent (10%) of all shares entitled to vote at the meeting.
Any action otherwise required to be taken at a meeting of the stockholders,
except election of directors, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by stockholders
having at least a majority of the voting power.

ARTICLE ELEVEN. [CONTRACTS OF CORPORATION]. No contract or other
transaction between the corporation and any other corporation, whether or not a
majority of the shares of the capital stock of such other corporation is owned
by this corporation, and no act of this corporation shall in any way be
affected or invalidated by the fact that any of the directors of this
corporation are pecuniarily or otherwise interested in, or are directors or
officers of such other corporation. Any director of this corporation,
Individually, or any firm of which such director may be a member, may be a
party to, or may be pecuniarily or otherwise interested in any contract or
transaction of the corporation; provided, however, that the fact that he or
such firm is so interested shall be disclosed or shall have been known to the
Board of Directors of this corporation, or a majority thereof; and any director
of this corporation who is also a director or officer of such other
corporation, or who is so interested, may be counted in determining the
existence of a quorum at any meeting of the Board of Directors of this
corporation that shall authorize such contract or transaction, and may vote
thereat to authorize such contract or transaction, with like force and effect
as if he were not such director or officer of such other corporation or not so
interested.

IN WITNESS WHEREOF, the undersigned incorporators have hereunto
affixed their signatures at Salt Lake City, Utah, this 30th day of March, 1977.

/s/ ALEXANDER H. WALKER, JR.
---------------------------
Alexander H. Walker, Jr.

/s/ CECIL ANN WALKER
---------------------------
Cecil Ann Walker

/s/ MARJORIE L. HALL
---------------------------
Majorie L. Hall

-4-
<PAGE> 5
STATE OF UTAH )
) ss.
COUNTY OF SALT LAKE )

On the 30th day of March, 1977, before me, the undersigned, a Notary
Public in and for the County of Salt Lake, State of Utah, personally appeared
ALEXANDER H. WALKER, JR., CECIL ANN WALKER, and MARJORIE L. HALL, known to be
to be the persons described in and who executed the foregoing instrument, and
who acknowledged to me that they executed the same freely and voluntarily and
for the uses and purposes therein mentioned.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

/s/ S. A. SMITH
---------------------------
Notary Public
Residing in Salt Lake City, Utah

My Commission Expires:

February 22, 1980

<PAGE> 1
EXHIBIT 3.1a

F I L E D
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA

JAN 24 1994

CHERYL A. LAU SECRETARY OF STATE

No. 1530-77 AMENDMENT

TO THE ARTICLES OF INCORPORATION OF

PACIFIC GOLD CORPORATION
* * * *

Pursuant to the provisions of the Nevada Revised Statutes,
PACIFIC GOLD CORPORATION, a Nevada corporation, adopts the following amendments
to its Articles of Incorporation:

1. The undersigned hereby certifies that on the 27th day
of December, 1993, a Special Meeting of the Board of Directors of Pacific Gold
Corporation was duly held and convened at which there was present a quorum of
the Board of Directors acting throughout all proceedings, and at which time the
following resolutions were unanimously adopted by the Board of Directors:

BE IT RESOLVED: That the Secretary of the corporation, Alan P.
MacQuoid, is hereby authorized and directed to call an Annual Meeting
of Stockholders to be held on Sunday, January 23, 1994, at 2:00 p.m.
at the Four Queens Hotel, Las Vegas, Nevada for the following purpose:

(1) To consider and vote upon a proposal to amend the
corporation's Articles of Incorporation as follows:

To change the name of the corporation from PACIFIC
GOLD CORPORATION to NEVADA GOLD & CASINOS, INC.

2. An Annual Meeting of the Shareholders of Pacific Gold
Corporation was held on Sunday January 23, 1994, at 2:00 p.m., local time, at
the Four Queens Hotel, Las Vegas,
<PAGE> 2
Nevada, and with regard thereto, the undersigned certify as follows:

a. Notice of a Special Meeting of Shareholders was
mailed to each shareholder of record as of the close of business on December
27, 1993.

b. There were present in person or represented by Proxy
10,689,392 shares of the 13,599,168 shares outstanding in the corporation.

c. The proposal to amend the Articles of Incorporation
which is set forth below, was adopted by 10,689,392 shares. There were -O-
shares voting against the proposal, and -0- shares abstained from voting.

ARTICLE ONE: [NAME] The name of the corporation is NEVADA
GOLD & CASINOS, INC.

IN WITNESS WHEREOF, the undersigned being the President and
Secretary of Pacific Gold Corporation, a Nevada corporation, hereunto affix
their signatures this 23rd day of January, 1994.

PACIFIC GOLD CORPORATION

By: /s/ PAUL J. BURKETT
--------------------
Paul J. Burkett
President

By: /s/ ALAN P. MACQUOID
--------------------
Alan P. MacQuoid
Secretary

2
<PAGE> 3

STATE OF NEVADA )
) ss
COUNTY OF WASHOE )

On the 23rd day of January, 1994, before me, the undersigned,
a Notary Public in and for the State of Nevada, personally appeared Paul J.
Burkett, President and Alan P. MacQuoid, Secretary, of PACIFIC GOLD
CORPORATION, a Nevada corporation, known to me to be the persons described in
and who executed the foregoing instrument, and who described in and who
executed the foregoing instrument, and who acknowledged to me that they
executed the same freely and voluntarily, in behalf of and in their capacities
as President and Secretary respectively of PACIFIC GOLD CORPORATION for the
uses and purposes therein mentioned.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year first above written.

/s/ AMANDA E. WALKER
-------------------------
Notary Public
Residing in Washoe County

My Commission Expires:
AMANDA E. WALKER
Notary Public - State of Nevada
9/18/94 Appointment Recorded in Washoe County
MY APPOINTMENT EXPIRES SEPT. 18, 1994

<PAGE> 1
BY-LAWS FOR THE REGULATION
EXCEPT AS OTHERWISE PROVIDED BY STATUTE
OF ITS ARTICLES OF INCORPORATION OF
PACIFIC GOLD AND URANIUM, INC.

ARTICLE I.

Offices

Section 1. PRINCIPAL OFFICE. The principal office for the
transaction of the business of the corporation is hereby fixed and located at
Suite 1400, First National Bank Building, Reno, Nevada, being the office of The
Nevada Agency and Trust Company. The Board of Directors is hereby granted full
power and authority to change said principal office from one location to
another in said county.

Section 2. OTHER OFFICES. Branch or subordinate offices may at any
time be established by the Board of Directors at any place or places where the
corporation is qualified to do business.

ARTICLE II.

Meetings of Shareholders

Section 1. MEETING PLACE. All annual meetings of shareholders and
all other meetings of shareholders shall be held either at the principal office
or at any other place within or without the State of Nevada which may be
designated either by the Board of Directors, pursuant to authority hereinafter
granted to said Board, or by the written consent of all shareholders entitled
to vote thereat, given either before or after the meeting and filed with the
secretary of the corporation.

Section 2. ANNUAL MEETINGS. The annual meetings of shareholders
shall be held on the fourth Wednesday of May each year, at the hour of 2:00
o'clock p.m. of said day commencing with the year 1978; provided, however, that
should said day fall upon a legal holiday then any such annual meeting of
shareholders shall be held at the same
<PAGE> 2
time and place on the next day thereafter ensuing which is not a legal holiday.

Written notice of each annual meeting signed by the president or a
vice president, or the secretary, or an assistant secretary, or by such other
person or persons as the directors shall designate, shall be given to each
shareholder entitled to vote thereat, either personally or by mail or other
means of written communication, charges prepaid, addressed to such shareholder
at his address appearing on the books of the corporation or given by him to the
corporation for the purpose of notice. If a shareholder gives no address,
notice shall be deemed to have been given to him, if sent by mail or other
means of written communication addressed to the place where the principal
office of the corporation is situated, or if published at least once in some
newspaper of general circulation in the county in which said office is located.
All such notices shall be sent to each shareholder entitled thereto not less
than ten (10) nor more than sixty (60) days before each annual meeting, and
shall specify the place, the day and the hour of such meeting, and shall also
state the purpose or purposes for which the meeting is called.

Section 3. SPECIAL MEETINGS. Special meetings of the shareholders,
for any purpose or purposes whatsoever, may be called at any time by the
president or by the Board of Directors, or by one or more shareholders holding
not less than one-fifth of the voting power of the corporation. Except in
special cases where other express provision is made by statute, notice of such
special meetings shall be given in the same manner as for annual meetings or
shareholders. Notices of any special meeting shall specify in addition to the
place, day and hour of such meeting, the purposes for which the meeting is
called.

Section 4. ADJOURNED MEETINGS AND NOTICE THEREOF. Any shareholders'
meeting, annual or special, whether or not a quorum
<PAGE> 3
of the shares, the holders of which are either present in person or represented
by proxy thereat, but in the absence of a quorum, no other business may be
transacted at any such meeting.

When any shareholders' meeting, either annual or special, is adjourned
for thirty (30) days or more, notice of the adjourned meeting shall be given as
in the case of an original meeting. Save as aforesaid, it shall not be
necessary to give any notice of an adjournment or of the business to be
transacted at an adjourned meeting, other than by announcement at the meeting
at which such adjournment is taken.

Section 5. ENTRY OF NOTICE. Whenever any shareholder entitled to
vote has been absent from any meeting of shareholders, whether annual or
special, an entry in the minutes to the effect that notice has been duly given
shall be conclusive and incontrovertible evidence that due notice of such
meeting was given to such shareholders, as required by law and the By-Laws of
the corporation.

Section 6. VOTING. At all annual and special meetings of
stockholders entitled to vote thereat, every holder of stock issued to a bona
fide purchaser of the same, represented by the holders thereof, either in
person or by proxy in writing, shall have one vote for each share of stock so
held and represented at such meetings, unless the Articles of Incorporation of
the company shall otherwise provide, in which event the voting rights, powers
and privileges prescribed in the said Articles of Incorporation shall prevail.
Voting for directors and, upon demand of any stockholder, upon any question at
any meeting shall be by ballot.

Section 7. QUORUM. The presence in person or by proxy of the holders
of a majority of the shares entitled to vote at any meeting shall constitute a
quorum for the transaction of business. The shareholders present a duly called
or held meeting at which a quorum is present may continue to do business until
adjournment, notwithstanding
<PAGE> 4
Section 8. CONSENT OF ABSENTEES. The transactions of any meeting of
shareholders, either annual or special, however called and noticed, shall be as
valid as though had at a meeting duly held after regular call and notice, if a
quorum be present either in person or by proxy, and if, either before or after
the meeting, each of the shareholders entitled to vote, not present in person
or by proxy, sign a written Waiver of Notice, or a consent to the holding of
such meeting, or an approval of the minutes thereof. All such waivers,
consents or approvals shall be filed with the corporate records or made a part
of the minutes of the meeting.

Section 9. PROXIES. Every person entitled to vote or execute
consents shall have the right to do so either in person or by an agent or
agents authorized by a written proxy executed by such person or his duly
authorized agent and filed with the secretary of the corporation; provided that
no such proxy shall be valid after the expiration of eleven (11) months from
the date of its execution, unless the shareholder executing it specifies
therein the length of time for which such proxy is to continue in force, which
in no case shall exceed seven (7) years from the date of its execution.

ARTICLE III.

Section 1. POWERS. Subject to limitations of the Articles of
Incorporation or the By-Laws, and the provisions of the Nevada Revised Statutes
as to action to be authorized or approved by the shareholders, and subject to
the duties of directors as prescribed by the By-Laws, all corporate powers
shall be exercised by or under the authority of, and the business and affairs
of the corporation shall be controlled by the Board of Directors. Without
prejudice to such general powers, but subject to the same limitations, it is
hereby expressly declared that the directors shall have the following powers,
to-wit:
<PAGE> 5
and employees of the corporation, prescribe such powers and duties for them as
may not be inconsistent with law, with the Articles of Incorporation or the
By-Laws, fix their compensation, and require from them security for faithful
service.

Second - To conduct, manage and control the affairs and business of
the corporation, and to make such rules and regulations therefor not
inconsistent with law, with the Articles of Incorporation or the By-Laws, as
they may deem best.

Third - To change the principal office for the transaction of the
business of the corporation from one location to another within the same county
as provided in Article I, Section 1, hereof; to fix and locate from time to
time one or more subsidiary offices of the corporation within or without the
State of Nevada, as provided in Article I, Section 2, hereof; to designate any
place within or without the State of Nevada for the holding of any
shareholders' meeting or meetings; and to adopt, make and use a corporate seal,
and to prescribe the forms of certificates of stock, and to alter the form of
such seal and of such certificates from time to time, as in their judgment they
may deem best, provided such seal and such certificates shall at all times
comply with the provisions of law.

Fourth - To authorize the issue of shares of stock of the corporation
from time to time, upon such terms as may be lawful, in consideration of money
paid, labor done or services actually rendered, debts or securities cancelled,
or tangible or intangible property actually received, or in the case of shares
issued as a dividend, against amounts transferred from surplus to stated
capital.

Fifth - To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences
<PAGE> 6
Sixth - To appoint an executive committee and other committees and to
delegate to the executive committee any of the powers and authority of the
Board in the management of the business and affairs of the corporation, except
the power to declare dividends and to adopt, amend or repeal By-Laws. The
executive committee shall be composed of one or more directors.

Section 2. NUMBER AND QUALIFICATION OF DIRECTORS. The authorized
number of directors of the corporation shall be three (3) and no more than
fifteen (15).

Section 3. ELECTION AND TERM OF OFFICE. The directors shall be
elected at each annual meeting of shareholders, but if any such annual meeting
is not held, or the directors are not elected thereat, the directors may be
elected at any special meeting of shareholders. All directors shall hold office
until their respective successors are elected.

Section 4. VACANCIES. Vacancies in the Board of Directors may be
filled by a majority of the remaining directors, though less than a quorum, or
by a sole remaining director, and each director so elected shall hold office
until his successor is elected at an annual or a special meeting of the
shareholders.

A vacancy or vacancies in the Board of Directors shall be deemed to
exist in case of the death, resignation or removal of any director, or if the
authorized number of directors be increased, or if the shareholders fail at any
annual or special meeting of shareholders at which any director or directors
are elected to elect the full authorized number of directors to be voted for at
that meeting.

The shareholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors. If the
<PAGE> 7
Board of Directors accept the resignation of a director tendered to take effect
at a future time, the Board or the shareholders shall have the power to elect a
successor to take office when the resignation is to become effective.

No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of his term of office.

Section 5. PLACE OF MEETING. Regular meetings of the Board of
Directors shall be held at any place within or without the State which has been
designated from time to time by resolution of the Board or by written consent
of all members of the Board. In the absence of such designation regular
meetings shall be held at the principal office of the corporation. Special
meetings of the Board may be held either at a place so designated, or at the
principal office.

Section 6. ORGANIZATION MEETING. Immediately following each annual
meeting of shareholders, the Board of Directors shall hold a regular meeting
for the purpose of organization, election of officers, and the transaction of
other business. Notice of such meeting is hereby dispensed with.

Section 7. OTHER REGULAR MEETINGS. Other regular meetings of the
Board of Directors shall be held without call on the fourth Wednesday of each
month at the hour of 3:00 o'clock p.m. of said day; provided, however, should
said day fall upon a legal holiday, then said meeting shall be held at the same
time on the next day thereafter ensuing which is not a legal holiday. Notice of
all such regular meetings of the Board of Directors is hereby dispensed with.

Section 8. SPECIAL MEETINGS. Special meetings of the Board of
Directors for any purpose or purposes shall be called at any time by the
president, or, if he is absent or unable or refuses to act, by any vice
president or by any two directors.
<PAGE> 8
shall be delivered personally to the directors or sent to each director by mail
or other form of written communication, charges prepaid, addressed to him at
his address as it is shown upon the records of the corporation, or if it is not
shown on such records or is not readily ascertainable, at the place in which
the meetings of the directors are regularly held. In case such notice is mailed
or telegraphed, it shall be deposited in the United States mail or delivered to
the telegraph company in the place in which the principal office of the
corporation is located at least forty-eight (48) hours prior to the time of the
holding of the meeting. In case such notice is delivered as above provided, it
shall be so delivered at least twenty-four (24) hours prior to the time of the
holding of the meeting. Such mailing, telegraphing or delivery as above
provided shall be due, legal and personal notice to such director.

Section 9. NOTICE OF ADJOURNMENT. Notice of the time and place of
holding an adjourned meeting need not be given to absent directors, if the time
and place be fixed at the meeting adjourned.

Section 10. ENTRY OF NOTICE. Whenever any director has been absent
from any special meeting of the Board of Directors, an entry in the minutes to
the effect that notice has been duly given shall be conclusive and
incontrovertible evidence that due notice of such special meeting was given to
such director, as required by law and the By-Laws of the corporation.

Section 11. WAIVER OF NOTICE. The transactions of any meeting of the
Board of Directors, however called and noticed or wherever held, shall be as
valid as though had a meeting duly held after regular call and notice, if a
quorum be present, and if, either before or after the meeting, each of the
directors not present sign a written waiver of notice or a consent to holding
such meeting or an approval of the minutes thereof. All such waivers, consents
or approvals shall be filed with the corporate records or made a part of the
minutes of the meeting
<PAGE> 9
of directors shall be necessary to constitute a quorum for the transaction of
business, except to adjourn as hereinafter provided. Every act or decision done
or made by a majority of the directors present at a meeting duly held at which
a quorum is present, shall be regarded as the act of the Board of Directors,
unless a greater number be required by law or by the Articles of Incorporation.

Section 13. ADJOURNMENT. A quorum of the directors may adjourn any
directors' meeting to meet again at a stated day and hour: provided, however,
that in the absence of a quorum, a majority of the directors present at any
directors' meeting, either regular or special, may adjourn from time to time
until the time fixed for the next regular meeting of the board.

Section 14. FEES AND COMPENSATION. Directors shall not receive any
stated salary for their services as directors, but by resolution of the board,
a fixed fee, with or without expenses of attendance may be allowed for
attendance at each meeting. Nothing herein contained shall be construed to
preclude any director from serving the corporation in any other capacity as an
officer, agent, employee, or otherwise, and receiving compensation therefor.

ARTICLE IV.

Officers

Section 1. OFFICERS. The officers of the corporation shall be a
president, a vice president, a secretary, and a treasurer. The corporation may
also have, at the discretion of the Board of Directors, a chairman of the
board, one or more additional vice presidents, one or more assistant
secretaries, one or more assistant treasurers, and such other officers as may
be appointed in accordance with the provisions of Section 3 of this Article.
Officers other than president and chairman of the board need not be directors.
One person may hold two or more offices, except that of president.

<PAGE> 10
except such officers as may be appointed in accordance with the provisions of
Section 3 or Section 5 of this Article, shall be chosen annually by the Board
of Directors, and each shall hold his office until he shall resign or shall be
removed or otherwise disqualified to serve, or his successor shall be elected
and qualified.

Section 3. SUBORDINATE OFFICERS, ETC. The Board of Directors may
appoint such other officers as the business of the corporation may require,
each of whom shall hold office for such period, have such authority and perform
such duties as are provided in the By-Laws or as the Board of Directors may
from time to time determine.

Section 4. REMOVAL AND RESIGNATION. Any officer may be removed,
either with or without cause, by a majority of the directors at the time in
office, at any regular or special meeting of the Board.

Any officer may resign at any time by giving written notice to the
Board of Directors or to the president, or to the secretary of the corporation.
Any such resignation shall take effect at the date of the receipt of such
notice or at any later time specified therein; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.

Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in
the manner prescribed in the By-Laws for regular appointments to such office.

Section 6. CHAIRMAN OF THE BOARD. The chairman of the board, if there
shall be such an officer, shall, if present, preside at all meetings of the
Board of Directors, and exercise and perform such other powers and duties as
may be from time to time assigned to him by the Board of Directors or
prescribed by the By-Laws.

-10-
<PAGE> 11
powers, if any, as may be given by the Board of Directors to the chairman of
the board, if there be such an officer, the president shall be the chief
executive officer of the corporation and shall, subject to the control of the
Board of Directors, have general supervision, direction and control of the
business and officers of the corporation. He shall preside at all meetings of
the shareholders and in the absence of the chairman of the board, or if there
be none, at all meetings of the board of directors. He shall be ex-officio a
member of all the standing committees, including the executive committee, if
any, and shall have the general powers and duties of management usually vested
in the office of president of a corporation, and shall have such other powers
and duties as may be prescribed by the Board of Directors or the By-Laws.

Section 8. VICE PRESIDENT. In the absence or disability of the
president, the vice presidents in order of their rank as fixed by the board of
directors, or if not ranked, the vice president designated by the board of
directors, shall perform all the duties of the president, and when so acting
shall have all the powers of, and be subject to all the restrictions upon, the
president. The vice presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them respectively by
the board of directors or the By-Laws.

Section 9. SECRETARY. The secretary shall keep, or cause to be kept,
a book of minutes at the principal office or such other place as the Board of
Directors may order, of all meetings of directors and shareholders, with the
time and place of holding, whether regular or special, and if special, how
authorized, the notice thereof given, the names of those present at directors'
meetings, the number of shares present or represented at shareholders' meetings
and the proceedings thereof.

-11-
<PAGE> 12
principal office, a share register, or a duplicate share register, showing the
names of the shareholders and their addresses; the number and classes of shares
held by each; the number and date of certificates issued for the same; and the
number and date of cancellation of every certificate surrendered for
cancellation.

The secretary shall give, or cause to be given, notice of all the
meetings of the shareholders and of the Board of Directors required by the
By-Laws or by law to be given, and he shall keep the seal of the corporation in
safe custody, and shall have such other powers and perform such other duties as
may be prescribed by the Board of Directors or the By-Laws.

Section 10. TREASURER. The treasurer shall keep and maintain, or cause
to be kept and maintained, adequate and correct accounts of the properties and
business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, surplus and
shares. Any surplus, including earned surplus, paid-in surplus and surplus
arising from a reduction of stated capital, shall be classified according to
source and shown in a separate account. The books of account shall at all times
be open to inspection by any director.

The treasurer shall deposit all moneys and other valuables in the name
and to the credit of the corporation with such depositaries as may be
designated by the Board of Directors. He shall disburse the funds of the
corporation as may be ordered by the Board of Directors, shall render to the
president and directors, whenever they request it, an account of all of his
transactions as treasurer and of the financial condition of the corporation,
and shall have such other powers and perform such other duties as may be
prescribed by the Board of Directors or the By-Laws.

-12-

<PAGE> 1
EXHIBIT 21

<TABLE>
<CAPTION>
LIST OF SUBSIDIARIES STATE OF INCORPORATION

<S> <C>
GOLD MOUNTAIN DEVELOPMENT COLORADO

COLORADO GOLD LTD. NEVADA

SUNRISE LAND & MINERAL NEVADA

</TABLE>