U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended OCTOBER 31, 1996

[ ] TRANSITION REPORT PURSUANT TO 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 0-17386

FISCHER-WATT GOLD COMPANY, INC.
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)

NEVADA 88-0227654
--------------------------- -----------------
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)

1621 North 3rd Street, Suite 1000, Coeur d'Alene, ID 83814
----------------------------------------------------------
(Address of principal executive offices)

(208) 664-6757
-------------------------
(Issuer's telephone number)

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 [ ] No [ X ]

The number of shares of Common Stock, $0.001 par value, outstanding as of
October 31, 1996 was 31,296,760. Transitional Small Business Disclosure Format
(check one): Yes [ ] No [X]

Part 1 - Financial Information

Item 1. Financial Statements

FISCHER-WATT GOLD COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

October 31,
ASSETS 1996
---------
(Unaudited)

CURRENT ASSETS:
Cash ...................................................... $ 1,039,000
Certificate of Deposit .................................... 500,000
Accounts receivable ....................................... 341,000
Due from related parties .................................. 496,000
Inventories ............................................... 839,000
Prepaid Expenses .......................................... 20,000
------------
Total current assets .................................... 3,235,000

MINERAL INTERESTS, net ...................................... 3,946,000

PLANT, PROPERTY, AND EQUIPMENT .............................. 1,892,000
LESS ACCUMULATED DEPRECIATION ............................... (65,000)
------------

FOREIGN TAX REFUNDS ......................................... 725,000
OTHER ASSETS ................................................ 57,000
------------
Total assets ............................................ $ 9,790,000
------------
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable
and accrued expenses .................................... $ 1,713,000
Notes payable to others ................................... 400,000
Notes payable to banks (Note 6) ........................... 228,000
------------
Total current liabilities ................................. 2,341,000

LONG-TERM LIABILITIES:
Notes Payable(Note 6) ..................................... 700,000
------------
Total liabilities ......................................... 3,041,000
------------

COMMITMENTS AND CONTINGENCIES,
Notes 1,3

SHAREHOLDERS' EQUITY:
Preferred Stock, non-voting,
convertible, $2.00 par value,
250,000 shares authorized;
0 shares outstanding
Common stock, $0.001 par value,
50,000,000 shares authorized;
31,296,760 shares outstanding
at October 1996 ........................................ 31,000
Additional paid-in capital ................................ 12,772,000
Foreign Currency translation
adjustments ............................................. 294,000
Deficit ................................................... (6,348,000)
------------
Total shareholders' (deficit) equity ........................ 6,749,000
------------
Total liabilities and
shareholders' equity ...................................... $ 9,790,000
------------

The accompanying notes are an integral part of these balance sheets.

FISCHER-WATT GOLD COMPANY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Three Months Ended Nine Months Ended
October 31, October 31,
1996 1995 1996 1995
------ ------ ------ ------

SALES OF PRECIOUS METALS ....................................... $1,243,000 $ 595,000 $ 3,212,000 $ 595,000
COSTS APPLICABLE TO SALES ...................................... (1,014,000) (344,000) (3,015,000) (344,000)
------------ ------------ ------------ ------------
INCOME FROM MINING ............................................. 229,000 251,000 197,000 164,000
GAIN ON SALE OF MINERAL INTEREST ............................... -0- 887,000 -0- 1,530,000

COSTS AND EXPENSES:
Abandoned and impaired
mineral interests .......................................... -0- 4,000 3,000 183,000
Selling, general and administrative .......................... 502,000 80,000 1,337,000 244,000
Exploration .................................................. 117,000 -0- 333,000 3,000
------------ ------------ ------------ ------------
619,000 84,000 1,673,000 430,000
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest income (expense) .................................... 12,000 (119,000) 72,000 (143,000)
Unrealized gain on trading securities ........................ -0- -0- -0- 206,000
Other (expense) income ....................................... (31,000) (135,000) (20,000) (98,000)
Currency exchange losses, net ................................ 56,000 -0- (244,000) -0-
------------ ------------ ------------ ------------
37,000 (254,000) (192,000) (35,000)
------------ ------------ ------------ ------------
Net (loss) income before income taxes .......................... (353,000) 713,000 (1,668,000) 1,229,000

TAX PROVISION .................................................. -0- (61,000) -0- (72,000)
------------ ------------ ------------ ------------
NET (LOSS) INCOME .............................................. $ (353,000) $ 652,000 $ (1,668,000) $1,157,000
------------ ------------ ------------ ------------
(LOSS) INCOME PER SHARE AND
COMMON EQUIVALENT .......................................... $ (.01) $ .04 $ (.06) $ .08
------------ ------------ ------------ ------------
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING .............................. 31,213,427 15,193,000 29,274,760 12,344,000
------------ ------------ ------------ ------------

The accompanying notes are an integral part of these statements

FISCHER-WATT GOLD COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Nine Months Ended
October 31,
1996 1995
-------- -------

Net cash used in
operating activities ................ $(3,238,000) $ (176,000)
---------- -----------

Net cash (used in) provided by
investing activities ................ (551,000) 94,000
---------- -----------

Net cash provided by
financing activities ................ 5,062,000 570,000
---------- -----------

NET INCREASE IN CASH ...................... 1,273,000 488,000

CASH, at beginning of period .............. 266,000 6,000

CASH, at end of period .................... $ 1,539,000 $ 494,000

SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid during the period
for interest ........................ $ 32,000 $ 7,000
Cash paid during the period for taxes.. 164,000 -0-

SUPPLEMENTAL DISCLOSURE OF SIGNIFICANT
NONCASH ACTIVITIES:
Liabilities assumed in connection
with purchase of Oronorte ........... $ -0- $ 887,000
Application of bonus on unproven
property to offset accrued
interest expense ..................... $ -0- $ 1,000,000
Short term debt incurred in
connection with purchase of
shares of Greenstone Resources
of Colombia Ltd. .................... $ -0- $ 25,000
Cost basis of trading securities
sold in connection with loss on
trading securities .................. $ -0- $ 564,000
Short-term debt eliminated in
connection with sale of
mineral interest .................... $ -0- $ 605,000
Accrued interest eliminated in
connection with sale of
mineral interest .................... $ -0- $ 52,000
Cost basis in mineral interest
sold in connection with
debt eliminated ..................... $ -0- $ 164,000
Common stock issued in exchange for
professional services rendered ...... $ 21,000 $ -0-
Common stock issued in exchange for
certain unpatented mining claims .... $ 50,000 $ -0-
Long-term debt incurred in connection
with purchase of mineral interest ... $ 700,000 $ -0-

The accompanying notes are an integral part of these statements.

FISCHER-WATT GOLD COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Financial Condition and Liquidity

The accompanying financial statements are unaudited; however, in the opinion of
management, all adjustments (consisting only of normal recurring accruals)
necessary for a fair presentation have been made. These financial statements and
notes thereto should be read in conjunction with financial statements and
related notes included in Fischer-Watt Gold Company, Inc.'s ("Fischer- Watt" or
the "Company") Annual Report on Form 10-KSB for the year ended January 31, 1996
("Form 10-KSB").

Future Financing and Realization

While Fischer-Watt reported net income in fiscal 1996 principally as a result of
realizing gains on the sale of exchange of non-producing mineral properties, it
has an accumulated deficit of $6,348,000 and continues to experience negative
cash flow from operations. Management believes that as the recently acquired
producing gold mine property is further developed and production levels
increase, sufficient cash flows will exist to fund the Company's continuing
mining operations and exploration and development efforts in other areas.
Management anticipates achieving levels of production sufficient to fund the
Company's operating needs by the end of fiscal 1998 and until then will fund
operations with the cash raised in its March 1996 offering (see Note 7), and the
anticipated receipt of funds from the exercise of in the money stock warrants
expiring August of 1997. The ability of the Company to achieve its operating
goals and thus positive cash flows from operations is dependent upon the future

market price of gold, and the ability to achieve future operating efficiencies
anticipated with increased production levels and cost cutting measures to be
implemented. Management's plans may require additional financing or disposition
of some of the Company's non-producing assets. While the Company has been
successful in raising cash from these sources in the past, there can be no
assurance that its future cash raising efforts and anticipated operating
improvements will be successful.

2. Unaudited Pro Forma Information

The following unaudited pro forma information has been prepared on the basis
that the acquisitions of Greenstone Resources of Columbia Ltd. ("GRC") and Great
Basin Management Co. Inc., ("GBM") had both occurred at the beginning of fiscal
1995. The unaudited pro forma information includes adjustments to depreciation
and depletion expense based on the allocation of the purchase price to the
property, plant, equipment and mineral interests acquired.

Quarter ended October 31, 1995:

Sales of precious metals $ 2,559,000
Net income $ 451,000
Net earnings per common share $ .03

3. Accounts Receivable

Accounts receivable at October 31, 1996 consist of:

Trade $ 163,000
Other 178,000
--------
Total accounts receivable $ 341,000

4. Inventories

Inventories at October 31, 1996 consist of:

Finished products and products in process $ 339,000
Supplies, materials and spare parts 500,000
--------
Total inventories $ 839,000

5. Mineral Interests

Capitalized costs for mineral interests at October 31, 1996 consist of:

Operating mining property:
El Limon Mine, Oronorte District $ 758,000
Less accumulated depletion (259,000)
-------
499,000

Non-operating properties,
net of reserves:
El Carmen, Colombia 772,000
La Aurora, Colombia 130,000
Juan Vara, Colombia 87,000
Afghan-Kobeh, Nevada 647,000
Castle, Nevada 700,000
Coal Canyon, Nevada 578,000
Red Canyon, Nevada 334,000
Tempo, Nevada 50,000
Sacramento Mountains, California 60,000
Water Canyon, Nevada 3,000
Amador, Nevada 3,000
Oatman, Arizona 10,000
Modoc, California 73,000
---------
Total mineral interests $3,946,000

6. Notes Payable

The Company has a $500,000 line of credit with a bank. Advances under the line,
which totaled $228,000 at October 31, 1996, accrue interest at rates from 26% to
39% and are collateralized by $500,000 placed into a certificate of deposit
which bears interest at 3.9%.

The Company delivered to Kennecott Exploration Company a promissory note in the
amount of $700,000, which bears interest at an annual interest rate equal to the
prime or base rate, or legal rate, if less. Principal and interest are due on
September 30, 1998 or at the option of the Company, by issuance of 1,000,000
(one million) shares of the Company's stock.

7. Equity and Common Stock

In November 1995, the Company completed a private placement of 6,067,500 common
shares and 3,033,750 warrants to purchase common shares. The net proceeds from
this private placement of $816,000 are to be used to finance the expansion and
operation of the Company's El Limon gold mine in Colombia. Each warrant can be
exercised to purchase a common share for $0.30 through August 1997. Costs of
issuing these common shares and stock warrants totaled $94,000 and were
subtracted from the gross proceeds in determining the amount of additional paid
in capital.

The Company issued 4,125,660 common shares on January 29, 1996 in exchange for
all of the issued and outstanding common shares of GBM. The shares had an
estimated fair market value of $1,234,000 and the costs of the issuance of
$21,000 were subtracted from the proceeds in determining the amount of
additional paid in capital.

On March 12, 1996, the Company sold 9,960,000 common shares and 4,980,000
warrants to purchase common shares to investors located outside of the United
States pursuant to a Regulation S offering.

The net proceeds from this offering of $4,930,000 are to finance the Company's
capital equipment and working capital needs related to the further development
and expansion of the Colombian gold mining operation and the Company's
exploration and development activities in Colombia and Nevada.

Each of these warrants issued entitles the holder to purchase one additional
share of Fischer-Watt common stock at an exercise price of $.75 through February
28, 1998. These securities were not registered under the Securities Act of 1933
and may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements. Costs of issuing these
common shares and warrants totaled $348,000 and will be subtracted from the
gross proceeds in determining the amount of additional paid in capital.

In March 1996, the Company issued 50,000 common shares in exchange for
professional services rendered. The shares had an estimated fair market value of
$17,762.

In June 1996, the Company issued 9,600 common shares in exchange for
professional services rendered. The shares had an estimated fair market value of
$3,000.

Item 2. Management's Discussion and Analysis or Plan of
Operation

The following is a discussion of Fischer-Watt Gold Company, Inc.'s (the
"Company") current financial condition as well as its operations for the three
months and nine months ended October 31, 1996 (fiscal 1997) and October 31, 1995
(fiscal 1996). This discussion should be read in conjunction with the Financial
Statements in Item 1 of this report as well as the Financial Statements in Form
10-KSB for the fiscal year ended January 31, 1996 on file with the Securities
and Exchange Commission, as the discussion set forth below is qualified in its
entirety by reference thereto.

Liquidity and Capital Resources

Short-Term Liquidity

As of November 30, 1996, the Company had $1,249,000 in cash and accounts payable
of $1,302,000. While Fischer-Watt reported net income in fiscal 1996 principally
as a result of realizing gains on the sale or exchange of non-producing mineral
properties, it has an accumulated deficit of $6,348,000 and has continued to
experience negative cash flow from operations. Management believes that as the
recently acquired producing gold mine property is further developed and
production levels increase, sufficient cash flows will exist to fund the
Company's continuing mining operations and exploration and development efforts
in other areas. Management anticipates achieving levels of production sufficient

to fund the Company's operating needs by the end of fiscal 1998 and until then
will fund operations with the cash raised in its March 1996 offering(see Note 7)
and the anticipated receipt of funds from the exercise of in the money stock
warrants expiring in August of 1997. The ability of the Company to achieve its
operating goals and thus positive cash flows from operations is dependent upon
the future market price of gold, and the ability to achieve future operating
efficiencies anticipated with increased production levels and cost cutting
measures to be implemented. Management's plans may require additional financing
or disposition of some of the Company's non-producing assets. While the Company
has been successful in raising cash from these sources in the past, there can be
no assurance that its future cash raising efforts and anticipated operating
improvements will be successful.

On October 31, 1996, the Company's current ratio was 1.4:1 based on current
assets of $3,235,000 and current liabilities of $2,341,000. On October 31, 1995,
Fischer-Watt's current ratio was 1:1 based on current assets of $1,568,000 and
current liabilities of $1,574,000. The improvement in the current ratio at
October 31, 1996 as compared to October 31, 1995 is primarily related to an
increase in cash which resulted from the November and March stock offerings, and
an increase in accounts receivable and inventory balances associated with the
increased operational activity at the mine; all of which are partially offset by
the increased accounts payable related to the increased operational activity at
the mine, and the addition of a note payable incurred with the acquisition of
GBEM (see discussion below).

Pursuant to agreements among Greenstone Resources Ltd. ("Greenstone"), Dual
Resources Ltd. ("Dual"), and the Company, Greenstone made a payment of $300,000
to Dual to acquire 2,800,000 shares of Oronorte common stock for the benefit of
the Company. The Company's obligation to repay Greenstone this $300,000 is
evidenced by a note payable which bears interest at the rate of 10% per annum.
This note became payable, in full, on June 20, 1996 at which time the Company
withheld payment while negotiating the settlement of amounts owed to the Company
by Greenstone. In October 1996, the Company filed suit against Greenstone
seeking payment of these excess Oronorte liabilities.

Prior to its acquisition by the Company, GBEM, borrowed funds from Serem Gatro
Canada Inc. This loan was evidenced by a note. The note payable is for monies
lent and advanced to GBEM by SGC during the period April 1, 1995, to May 31,
1995, as provided under the share purchase agreement among Serem Gatro, GBEM and
GBM made as of May 31, 1995. The note was to be repaid not later than September
30, 1995. and bears interest at 8%. Repayment of this note payable and related
interest is currently being negotiated with SGC.

Management believes that the Company has adequately reserved its reclamation
commitments.

Long-Term Liquidity

Cash flows from operations during fiscal 1998 are expected to be sufficient to
fund operating, administrative expenses and exploration expenses. The Company is
anticipating that additional funding from the exercise of stock warrants with a
thirty cent per share exercise price, will be received in August 1997. The
Company may need additional funding from equity or borrowings if a major
expansion at its Oronorte property is neccesary and cost justified, or to fund
the development of other properties, or if an acquisition opportunity arises. At
October 31, 1996 the Company had no long term debt.

As of September 30, 1996, the Company purchased certain unpatented mining claims
located in Esmeralda County, Nevada (the "Property"), from Kennecott Exploration
Company. At closing, the Company delivered to Kennecott Exploration Company a
promissory note in the amount of $700,000, due September 30, 1998, as the
purchase price for the Property, which is payable under certain conditions, at
the option of the Company, by the issuance of 1,000,000 (one million) shares of
the Company's stock.

Results of Operations

Three months ended October 31, 1996 compared with three months ended October 31,
1995.

The Company had net loss of $353,000 ($.01 per share) compared to net income of
$652,000 ($.04 per share) in the quarter ended October 31,1996 and 1995,
respectively. The primary reasons for the change relates to the recognition of a
gain on sale of mineral interest of $887,000 in the quarter ended October 31,
1995, for which no comparable gain was recognized in the quarter ended October
31, 1996. Additionally, selling, general and administrative expenses increased
$335,000 as a result of increased operational activity at the mine, and
increased legal, accounting, and travel costs associated with the administration
of an active, growing public company, coupled with the acquisition of GBM which
resulted in an increase in exploration expenses of $117,000 in the quarter ended
October 31, 1996, as compared to the quarter ended October 31, 1995. The above
items were partly offset by an increase in interest income (expense) of $131,000
which resulted from the elimination of high interest rates on outstanding debts
and unpaid taxes of the Colombian unit during the quarter ended October 31,
1995.

Revenues

The Company had sales of precious metals of $1,243,000 representing 3,786 ounces
of gold in the quarter ended October 31, 1996, and sales of precious metals of
$595,000 representing 1,367 ounces of gold in the quarter ended October 31,
1995. The increase in revenues from 1995 relates to production for a full
quarter in 1996 versus two months in 1995, coupled with increased average
monthly production in 1996 resulting from further development of the mine. The
Company does not presently employ forward sales contracts or engage in any
hedging activities.

Costs and Expenses

Production costs totaled $626,000 and $344,000 for the three month period ended
October 31, 1996 and 1995, respectively. Production costs as a percentage of
revenues were 50 percent and 58 percent during the quarter ended October 31,
1996 and 1995, respectively. The improvement relates to operational efficiencies
gained with increased production levels and the implementation of cost cutting
measures.

The cost of abandoned mineral interests decreased from $4,000 to $-0- in
quarters ended October 31, 1995 and 1996, respectively. In the quarter ended
October 31, 1995 the El Cerrito, a property in Mexico held by the Company's
Minera Montoro subsidiary was abandoned after Montoro's joint venture partner's
exploratory drilling program did not produce encouraging results, and
consequently, the property was returned to Minera Montoro.

Abandonments are a natural result of the Company's ongoing program of
acquisition, exploration and evaluation of mineral properties. When the Company
determines that a property lacks continuing economic value, it is abandoned. It
cannot be determined at this time when or if any of the Company's current
property interests will be abandoned.

Selling, general and administrative costs increased from $167,000 to $502,000 in
quarters ended October 31, 1995 and 1996, respectively. The increase of $335,000
primarily relates to an increase in general and administrative expenses
associated with mining operations of $203,000, coupled with an increase in
accounting and legal expenses associated with the acquisitions of GRC and GBM,
and the increasing activity level of the Company. Additionally, the positions of
a Vice President and Chief Financial Officer were added during the quarter ended
July 31, 1996.

Exploration expense increased $117,000 in the third quarter of fiscal 1997 from
$-0- in the third quarter of fiscal 1996. This increase is due to the
acquisition of GBM.

Net interest income (expense) increased from $(119,000) in the third quarter of
1995 to $12,000 in the third quarter of 1996.

This increase is due to the elimination of high interest rates on outstanding
debts and unpaid taxes of the Colombian unit during the prior year coupled with
interest earned in the proceeds from the November and March stock offerings.

Nine months ended October 31, 1996 compared with nine months ended October 31,
1995.

The Company had net loss of $1,668,000 ($.06 per share) compared to net income
of $1,157,000 ($.08 per share) in the nine months ended October 31, 1996 and
1995, respectively. The primary reasons for the change relates to the
recognition of a gain on sale of mineral interest of $1,530,000 and an
unrealized gain on trading securities of $206,000 in the nine months ended
October 31, 1995, for which no comparable gains were recorded in the nine months
ended October 31, 1996. Additionally, the acquisition of the Oronorte project,
which reported income from mining of $197,000, offset by general and
administrative expenses associated with mining operations of $791,000 and a loss
from currency exchange of $244,000 in the nine months ended October 31, 1996 as
compared to income from mining of $251,000, offset by general and administrative
expenses associated with mining operations of $87,000 in the nine months ended
October 31, 1995. Additionally, selling, general and administrative expenses
increased by $1,006,000, of which $791,000 relates to expenses associated with
mining operations, and the remainder is related to an increase in SEC
accounting, legal, and corporate relations expenses. Further, the acquisition of
GBM resulted in an increase in exploration expenses of $330,000 in the nine
months ended October 31, 1996, as compared to the nine months ended October 31,
1995.

Revenues

The Company had sales of precious metals of $3,212,000 representing 9,124 ounces
of gold in the nine months ended October 31, 1996, and $595,000 representing
1,367 ounces of gold in the nine months ended October 31, 1995. The increase in
revenues is primarily attributed to production during nine months of 1996 as
compared to two months in 1995. The Company does not presently employ forward
sales contracts or engage in hedging activities.

Cost and Expenses

Production costs totaled $3,015,000 and $344,000 for the nine months ended
October 31, 1996 and 1995 respectively. Production costs as a percentage of
revenues were 94 percent and 58 percent during the nine months ended October 31,
1996 and 1995 respectively. The increase in production costs as a percentage of
revenues in the nine months ended October 31, 1996 relates to the costs
associated with further development of the mine and mill for the improvement of
future operating efficiencies. The results of the development, coupled with cost

cutting implementations dropped the production costs as a percentage of revenue
to 50 percent in the third quarter of fiscal 1997.

The cost of abandoned mineral interests decreased from $183,000 to $3,000 in the
nine months ended October 31, 1995 and 1996, respectively. During the nine
months ended October 31, 1996, the La Victoria was abandoned in the amount of
$3,000. In the nine months ended October 31, 1995 the Oatman property in Arizona
was partially abandoned in the amount of $125,000, the Tuscara was partially
abandoned in the amount of $32,000, the Rio Tinto was abandoned in the amount of
$22,000 and the El Cerrito was abandoned in the amount of $4,000.

Selling, general and administrative costs increased from $331,000 to $1,337,000
in the nine months ended October 31, 1995 and 1996, respectively. The increase
of $671,000 primarily relates to an increase in general and administrative
expenses associated with mining operations of $704,000, coupled with an increase
in SEC accounting, legal and corporate relations expenses. Additionally, the
positions of a Vice President and Chief Financial Officer were added during the
six months ended July 31, 1996.

Exploration expense increased $330,000 in the first nine months of fiscal 1997
from $3,000 in the first nine months of fiscal 1996. This increase is primarily
due to the acquisition of GBM.

Net interest income (expense) increased from $(143,000) in the first nine months
of fiscal 1996 to $72,000 in the first nine months of fiscal 1997. This increase
is primarily due to the elimination of interest accrued on the $500,000 note to
Kennecott, coupled with the elimination of high interest rates on outstanding
debts and unpaid taxes of the Colombian unit during the prior year, partly
offset by the interest earned in the proceeds from the November and March stock
offerings.

The Company accounts for foreign currency translation in accordance with the
provisions of Statement of Financial Accounting Standards No. 52, "Foreign
Currency Translation" ("SFAS No.52"). The assets and liabilities of the
Colombian unit are translated at the rate of exchange in effect at the balance
sheet date. Income and expenses are translated using the weighted average rates
of exchange prevailing during the period. The related translation adjustments
are reflected in the accumulated translation adjustment section of shareholders'
equity. The Company recognized a currency exchange loss of $240,000 in the nine
months ended October 31, 1996. There was no comparable gain or loss in the nine
months ended October 31, 1995.

Commitments and Contingencies

Upon the purchase of GRC, the Company assumed GRC's liabilities related to
transactions governed by Colombian law concerning the movement of foreign
currency into and out of Colombia. The Colombian government has the right to
request an audit of foreign currency movement within a two year time frame. No
request of notice of an audit has been received from the Colombian government to
date. Therefore, the likelihood of a loss resulting from the actions of GRC
prior to the Company's purchase cannot presently be determined.

Oronorte is currently the defendant in several claims relating to labor
contracts and employee terminations which occurred during a labor strike. This
strike and the resulting terminations took place during the former ownership of
Oronorte. The estimated amount of the claims against Oronorte totals
approximately $200,000. In the event of an unfavorable outcome from Oronorte's
perspective, there is a likelihood that the Company would have the right to
claim indemnity from Greenstone Resources Canada Ltd. pursuant to the terms of
the agreements related to the acquisition of Oronorte.

In connection with the purchase of GRC, Greenstone agreed to reimburse the
Company for certain liabilities existing at the date of purchase in excess of
$1,000,000. At the present time, the Company has paid or identified as current
payables approximately $309,000 in excess of the $1,000,000. Management is
seeking to recover these excess liabilities in accordance with the terms of the
purchase agreement and accordingly has not recorded a receivable from Greenstone
as of October 31, 1996.

Statements which are not historical facts contained herein are forward looking
statements that involve risks and uncertainties that could cause actual results
to differ from projected results. Such forward-looking statements include
statements regarding expected commencement dates of mining or mineral production
operations, projected quantities of future mining or mineral production, and
anticipated production rates, costs and expenditures, as well as projected
demand or supply for the products that FWG and/or FWG Subsidiaries produce,
which will affect both sales levels and prices realized by such parties. Factors
that could cause actual results to differ materially include, among others,
risks and uncertainties relating to general domestic and international economic
and political risks associated with foreign operations, unanticipated ground and
water conditions, unanticipated grade and geological problems, metallurgical and
other processing problems, availability of materials and equipment, the timing
of receipt of necessary governmental permits, the occurrence of unusual weather
or operating conditions, force majeure events, lower than expected ore grades

and higher than expected stripping ratios, the failure of equipment or processes
to operate in accordance with specifications and expectations, labor relations,
accidents, delays in anticipated start-up dates, environmental costs and risks,
the results of financing efforts and financial market conditions, and other
factors described herein and in FWG's annual report on Form 10-KSB. Many of such
factors are beyond the Company's ability to control or predict. Actual results
may differ materially from those projected. Readers are cautioned not to put
undue reliance on forward-looking statements. The Company disclaims any intent
or obligation to update publicly these forward-looking statements, whether as a
result of new information, future events or otherwise, except as required by
applicable laws.

Part II - Other Information

Item 1. Legal Proceedings

On November 14, 1996, the Nevada Supreme Court upheld the December 7, 1994 jury
verdict in favor of the Company's Great Basin Exploration and Mining Company
relating to the lawsuit filed in 1993 by a reporter who sustained an injury
while covering a story on a property previously held by GBEM. (See Part II-Item
1. Legal Proceedings of Form 10-QSB for the quarter ended April 30, 1996.)

Item 2. Changes in Securities

On October 14, 1996 the Company obtained exploration rights with respect to
unpatented mining claims from a property owner by entering into a letter
agreement for a $10,000 cash payment and the issuance of 100,000 shares of
common stock to the property owner. The securities were issued pursuant to the
exemption from registration provided by Section 4(2) of the Securities Act in a
private transaction to a sophisticated purchaser and are restricted from
transfer unless such transfer is registered under the Securities Act or made
pursuant to an exemption therefrom.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits -

Exhibit Item 601
No. Category Exhibit
- ------- -------- -------

1 2 Mining Property Purchase Agreement dated September
30, 1996, between Fischer-Watt Gold Company, Inc. and
Kennecott Exploration Company ("KEC") whereby FWG
purchased mining claims owned by KEC in Esmeralda
County, Nevada, and upon closing, delivered to KEC a
promissory Note in the amount of $700,000. Filed as
exhibit 6.2 to Form 10-QSB filed October 18, 1996 and
incorporated herein by reference.

2 2 Letter agreement dated October 14, 1996, between
Steve Van Ert and Fischer-Watt Gold Company, Inc. known
as the Sacramento Mountains property. Filed as Exhibit
7.2 to Form 10-QSB filed November 15, 1996 and
incorporated herein by reference.

3 3 By-laws of the Corporation. Amended and restated.

4 10 Promissory note dated September 30, 1996, whereby
Fischer-Watt Gold Company, Inc. Promises to pay
$700,000 to Kennecott Exploration Company, Inc., filed
as exhibit 48-27 to form 10-QSB filed October 18, 1996
and incorporated herein by reference.

5 27 Financial Data Schedule for the nine month period ended
October 31, 1996.

(b) Reports on Form 8-K

During the quarter ended October 31, 1996, no reports on Form 8-K were filed by
the registrant.

SIGNATURES

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

FISCHER-WATT GOLD COMPANY, INC.

December 16, 1996 By /s/ George Beattie
----------------------------
(Signature)
George Beattie, President,
Chief Executive Officer
(Principal Executive Officer),
Chairman of the Board and
Director

December 16, 1996 By /s/ Michele D. Wood
-----------------------------
(Signature)
Michele D. Wood,
Chief Financial Officer
(Principal Financial and
Accounting Officer)