SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB

(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO
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Commission file number: 1-355

DRAGON MINING CORPORATION
(Exact name of small business issuer as specified in its charter)

UTAH 87-0128639
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

107 WEST WADE, SUITE 7, P.O. BOX 9, PAYSON, ARIZONA 85547-0009
(Address of principal executive offices) (Zip Code)

(520) 474-9151
(Issuer's telephone number)

N/A
(Former name, former address and former fiscal year,
if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes _X_ No ____

State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date.

4,423,983 SHARES OF COMMON STOCK, $.001 PAR VALUE, AS OF AUGUST 10, 1998

Traditional Small Business Disclosure Format (Check one): YES ___ NO _X_

Exhibit index on page 3 Page 1 of 5

PART I - FINANCIAL INFORMATION

Omitted pursuant to Rule 240.13a-13(c)(2).

PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS.
Not applicable.

Item 2. CHANGES IN SECURITIES.

Not applicable.

Item 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Subsequent to June 30, 1998, the Company held an Annual
Meeting of shareholders on July 31, 1998. During the Annual
Meeting, the Company's shareholders approved the following
actions:

1) Elected four directors: Thomas J. Ian Wright, Larry
N. Lorenz, Aubrey McGinnis and Thomas L. Crom:

2) Amended the articles of Incorporation to increase the
number of authorized shares from 25,000,000 to
50,000,000;

3) Ratified the issuance of 15,000,000 shares (prior to
the reverse-split) to Marbella Capital Corp.;

4) Approved the issuance of 21,000,000 shares (prior to
the reverse-split) to Marbella Capital Corp to retire
debt of $2,100,000;

5) Approved a 1-for-10 reverse stock split;

6) Approved an amendment to the Articles of
Incorporation to change the name of the Company from
"Dragon Mining Corporation" to "Dragon Diamond
Corporation";

7) Approved the Company's 1998 Stock Option Plan; and

8) Approved the Company's 1998 Restricted Stock Plan.

Item 5. OTHER INFORMATION.
Not applicable.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K.

REGULATION S-B CONSECUTIVE
NUMBER EXHIBIT PAGE NUMBER

27 Financial Data Schedule 4

B) REPORTS ON FORM 8-K: None

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

DRAGON MINING CORPORATION
(Registrant)

AUGUST 10, 1998 BY: /s/THOMAS L. CROM
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Thomas L. Crom,
Chief Financial Officer
(Principal Financial
and Accounting Officer)

EXHIBIT 27

FINANCIAL DATA SCHEDULE