10-K

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                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549


                                   FORM  10-K


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

                     For the fiscal year ended September 30, 1996

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) 
     OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

               For the transition period from ____________ to __________

                           Commission file number 0-25170

                              ROYAL SILVER MINES, INC. 
               (Exact name of Registrant as specified in its charter)

               Utah                                  87-0306609             
(State of Incorporation)                    (I.R.S. Employer Ident. No.)
               
Address of principal offices :  10220 N. Nevada, Suite 230
                                Spokane, Washington 99218    

Registrant's Telephone No.:     (509)466-3144

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, $0.01

Indicate by check mark whether the Registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
Registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days: 

                              YES  _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 statements
incorporated by reference in Part III of this Form 10-K or any amendment to 
this Form 10-K:  _X_

As of December 17, 1996 the aggregate value of the voting stock held by non-
affiliates of the Registrant, computed by reference to the average of the bid
and ask price ($0.83) on such date was $5,010,525.

As of December 17, 1996, the Registrant had outstanding 10,649,854 shares of 
common stock ($.01 par value). An index of the documents incorporated herein 
by reference and/or annexed as exhibits to the signed originals of this report
appears beginning on page 50.

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                              TABLE OF CONTENTS
                                                                 
                                                                       PAGE
ITEM NUMBER AND CAPTION                                                 NO.

                                  PART   I

ITEM 1.   Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ITEM 2.   Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 21

ITEM 3.   Legal Proceedings  . . . . . . . . . . . . . . . . . . . . . . 28

ITEM 4.   Submission of Matters to a Vote of 
           Security Holders. . . . . . . . . . . . . . . . . . . . . . . 28

                                 PART   II

ITEM 5.   Market for Registrant's Common Equity and 
           Related Stockholder Matters . . . . . . . . . . . . . . . . . 29

ITEM 6.   Selected Financial Data. . . . . . . . . . . . . . . . . . . . 29

ITEM 7.   Management's Discussion and Analysis of
           Financial Condition and Results of
           Operation . . . . . . . . . . . . . . . . . . . . . . . . . . 30

ITEM 8.   Financial Statements and Supplementary Data  . . . . . . . . . 33

ITEM 9.   Changes in and Disagreements with Accountants 
           on Accounting and Financial Disclosure  . . . . . . . . . . . 33

                                PART   III

ITEM 10.  Directors and Executive Officers of the 
           Company   . . . . . . . . . . . . . . . . . . . . . . . . . . 35

ITEM 11.  Executive Compensation   . . . . . . . . . . . . . . . . . . . 39

ITEM 12.  Security Ownership of Certain Beneficial Owners 
           and Management  . . . . . . . . . . . . . . . . . . . . . . . 43

ITEM 13.  Certain Relationships and Related Transaction  . . . . . . . . 44

                                PART   IV

ITEM 14.  Exhibits, Financial Statement Schedules, 
           and Reports of Form 8-K   . . . . . . . . . . . . . . . . . . 46

Signatures   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51








                                      1

                                  PART I
ITEM 1.  BUSINESS

GENERAL  (Please refer to the glossary at the end of Item 1 for definitions of 
certain mining terms used in this annual report.)

Royal Silver Mines, Inc. (generally  referred to as 'Royal' or 'the Company'), 
formerly known as Consolidated Royal Mines, Inc., and also, Royal Minerals, 
Inc., is a U.S. mineral resource company incorporated under the laws of the 
State of Utah.  The Company is engaged in the business of acquiring and 
exploring mineral properties containing silver, gold, copper, and other 
mineralization, with a primary emphasis on silver.  Prior to September 30, 
1995, Royal acquired all of the outstanding securities of Celebration Mining 
Company ('Celebration'), a development stage company, pursuant to a share 
exchange agreement and plan of reorganization ('Reorganization').  Unless 
indicated differently by the context, all references to 'the Company' and 
'Royal' in this report shall be read to refer to Royal Silver Mines, Inc., the 
corporate entity that resulted from the business combination of Consolidated 
Royal Mines, Inc. and Celebration Mining Company.  

Prior to the Reorganization, Celebration was a non-public, closely held 
Washington corporation.  It was formed in February 1994 to identify and 
acquire mineral properties for subsequent exploration and development, if 
warranted, through equity financing and joint venture arrangements. The 
Reorganization has been accounted for as a purchase by Celebration of Royal.  
Celebration was treated as the acquiring company for financial reporting 
purposes because its shareholders constituted greater than 50 percent of the 
combined shareholder group at the time of reorganization.  In conformity with 
generally accepted accounting principles and the Company's accounting policy, 
Celebration is recognized as the predecessor entity.  Consequently, 
Celebration's assets and liabilities were not adjusted in the accompanying 
financial statements.  On the other hand, for purposes of reporting statutory 
and corporate authority, Royal is deemed to be the acquiring corporation, and 
Celebration is now  a wholly-owned subsidiary of Royal.  Prior to the 
Reorganization, Royal had been a majority-owned subsidiary of Centurion Mines 
Corporation ('Centurion').  Currently, however, Centurion holds an approximate 
14 percent shareholder interest in Royal and is an affiliate and related party 
of the Company.  

The Company operates its business as an exploration stage company, meaning 
that it intends to receive income from property sales, joint ventures, or 
other business arrangements with larger companies, rather than developing and 
placing its properties into production on its own.  There currently are 
several business arrangements, joint venture prospects, and potential property 
sales from which the Company expects to receive income.  The Company has owned 
royalty interests in properties situated in Utah's Gold Belt.  There has been 
and is no assurance that the Company will receive royalties from these 
properties; it received no royalty income during the fiscal year ended 
September 30, 1996 ("Fiscal 1996").

The Company currently has no revenues.  At September 30, 1996, the Company's 
accumulated deficit was $3,057,817.  Although it has recurring losses from 
operations, the Company has increased its operating capital and improved its 
financial condition and ability.   Regarding its losses from operations, the 
Company cannot assure that it will be able to fully carry out its plans as 
budgeted without additional operating capital.  At September 30, 1996, the 
Company had a cash balance of $688,716 and working capital of $686,573, as 
compared to a cash balance of 
                                      2

$151,698 and a working capital deficit of $665,274 at September 30, 1995.  
Royal will need capital resources of approximately $40,000 per month to meet 
its estimated expenditures for the ensuing twelve months.  The Board of 
Directors has instructed management to consult with experienced financial and
investment advisory firms to formulate arrangements for such capital fund 
raising.  Currently, the Company is pursuing various alternatives, including, 
if necessary, the private placement of stock.

During the twelve months ended September 30, 1996, the Company placed 
1,949,332 shares of its common stock for $2,958,314 in cash.  The Company also 
issued 406,050 shares of its common stock in lieu of outstanding debt. The 
stock was issued at $1.50 per share for a total value of $609,075.  At the end 
of September, 1996, the Company reached an agreement with Centurion Mines 
Corporation, a related affiliate, for an option to purchase or assign up to 
800,000 shares of Royal common stock, presently owned by Centurion Mines and 
representing approximately seven and one-half percent of currently outstanding 
shares, at an exercise price of $1.75 per share. The re-purchase option, which 
is assignable to third parties, expires October 1, 1998.

As discussed in greater detail below in the section entitled 'The Company's 
Strategy and Business Plan,' a substantial portion of Royal's assets consist 
of investments in mineral properties for which additional exploration is 
required to determine if they contain mineralization that is economically 
recoverable.  The realization of these investments is contingent to a large 
extent  upon the success of Royal's property transactions as a whole, the 
existence of economically recoverable metals and other mineralized material, 
the ability of the Company to obtain financing or make other arrangements for 
development, and upon future profitable production.  The likelihood and extent 
to which these contingencies may be material is uncertain, and Royal cannot 
assure that the outcome of these uncertain events will not have a material 
impact and result in adverse consequences to the Company.  If Royal does not 
receive suitable financing or funds from its present or future business 
arrangements to develop these properties, and continues to suffer losses from 
operations, the Company will revise its business activities accordingly.

HISTORY
The Company was incorporated in Utah on April 6, 1969 as Royal Resources, Inc. 
for the purpose of acquiring and developing mineral properties.  The Company 
changed its name to Royal Minerals, Inc., on January 6, 1983, and became a 
public company in July 1984.  Royal complied with the Securities and Exchange 
Commission reporting requirements until August 1986, at which time Royal filed 
Form 15 with the Commission and suspended further reporting requirements.  On 
January 31, 1992, Centurion owned 82.3 percent of the Company's common stock 
(see the section entitled 'Centurion's Acquisition and Control of the 
Company,' below.)  Also on January 31, 1992, the Company shareholders 
authorized a 5-for-1 reverse stock split, and on March 4, 1994, authorized a 
4-for-1 reverse stock split of the common stock of the Company.  On March 17, 
1994, the Company changed its name to Consolidated Royal Mines, Inc.  On 
November 22, 1994, the Company filed a registration statement on Form 10 and 
renewed its reporting requirements, effective January 23, 1995.  During the 
fourth quarter of Fiscal 1995, the Company revised its business plan to 
concentrate on the acquisition of silver properties.  That change in focus 
prompted Consolidated Royal Mines, Inc. and Celebration Mining Company to 
implement the Reorganization, which closed on August 8, 1995, and to change 
the Company's name to Royal Silver Mines, Inc., effective September 18, 1995.



                                      3

THE COMPANY'S STRATEGY AND BUSINESS PLAN 
Royal's management believes that control of land and mineral rights is the key 
ingredient for financial success in the exploration and development phases of 
the mining business.  Previously, Royal had concentrated its main exploration 
efforts in the northern Utah Gold Belt because of that area's history of 
profitable metal production and because of Royal's exploration experience in 
the western United States.  After the Reorganization, the Company acquired a 
number of significant mineral properties focusing on silver resources.  The 
Company expects to concentrate its main exploration efforts during Fiscal 1997 
in Idaho's Coeur d' Alene Mining District and to a much lesser extent in the 
Lakeview Mining District, and Utah's Ashbrook Mining District where the 
Company owns a 25% interest in the Vipont Mine property.  The Company was 
involved in a joint venture in Australia through an agreement between 
Celebration and an Australian company.   A deep test exploration hole was 
drilled in search of a buried massive sulfide target; however the hole 
encountered only weak mineralization.

Royal's corporate strategy is directed toward the acquisition of land 
positions for the exploration of mineralization in established mining 
districts that have had large and profitable production histories.  This 
approach is referred to in the mining industry as 'headframe geology,' which 
is defined as concentrating efforts near previously known, profitable ore 
deposits.  Royal does not currently have sufficient capital of its own to 
carry out its strategy and business plan.  

The Company's plan of operation for Fiscal 1997 is to proceed with its 
exploration efforts and to seek business arrangements that, in conjunction 
with the funds of other companies or business entities, will provide 
sufficient funding to meet the initial expenditures required for the 
exploration of mineralization on such properties and to acquire land positions 
or other interests in mineral properties.  It expects in this way to achieve 
an increase in the value of its assets and to obtain production income with 
less risk of its own funds for development expenditures and capital investment
in production facilities.  As a consequence of the Company's plans, management 
expects a reversal of the current trend of diminishing cash flow.  However, 
because it currently does not have sufficient capital, if the Company is not 
successful in obtaining suitable joint venture commitments and funds, there is 
no assurance that the Company otherwise will obtain the capital it would need 
to achieve its business plan.  During September 1996, the Company completed 
its initial due diligence review and signed a revised option agreement with 
the Placer Mining Corporation of Kellogg, Idaho, to purchase a 100 percent 
ownership interest in the Bunker Hill Mine, a silver-lead-zinc mine in
Shoshone County, Idaho. The Bunker Hill Mine is the largest mine in northern 
Idaho's historic Coeur d'Alene Mining District, which currently has four major 
silver mines in production. The Bunker Hill Mine has produced over 35 million 
tons of ore over a one hundred year period.

Under the terms of the option, the Company can acquire the mine by making 
payment through one of two alternative purchase arrangements: the Company may 
either (1) pay $7 million and issue 500,000 shares of its restricted common 
stock to Placer Mining on or before May 10, 1997; or (2) pay $4 million and 
issue 500,000 shares to Placer Mining on or before May 10, 1997, and then pay 
an additional $3.5 million on or before May 10, 1998. Under either 
alternative, Placer Mining will retain a 2-3/4 percent net smelter return 
royalty on the property. The Company intends to raise the necessary funds via 
equity and/or debt financing, or through a possible joint venture with a major 
partner.  

                                      4

The Bunker Hill Mine, which was originally discovered in 1881, was last 
operated on a large scale in 1990.  Placer Mining has reestablished small 
production of high grade lead-silver ore from stopes on 10 level and 11 level, 
but has lacked the requisite capital to properly redevelop the mine.  In order 
to achieve the necessary economies of scale, and to benefit from low cost, 
bulk underground mining methods, the Company's engineers believe that a 
capital investment in excess of $50 million will be required over and above 
the purchase price.  However, the Company believes that if the technical due 
diligence is favorable and the ongoing environmental issues can be 
satisfactorily resolved, an investment of that magnitude may be possible to 
obtain.

The Board of Directors reasonably believes that the Company is able to engage 
in nearly any size operation or scope of mining activity depending on the 
circumstances and merits of each proposed operation or mining activity.  
Accordingly, the Board has not limited the size of operation or scope of 
project which it believes is reasonable for management to consider in 
achieving the Company's business plan.  Following that direction, management 
of the Company pursued a vigorous and fruitful program during the last quarter 
of Fiscal 1995, acquiring interests in seven distinct parcels of mineral 
property.  Further, management has been authorized to consider and review all 
reasonable proposals and, upon satisfactory assessment, to then make a 
specific determination as to an estimated range of funding amounts that each 
such proposal reasonably might require.  

By further direction of the Board of Directors, management may enter into new 
mining arrangements with joint venturers, partners, or other third parties.  
Such arrangements may be multi-party ventures to which the Company will 
contribute stock, cash, and/or mineral interests.  In such arrangements, the 
Company's participation in revenues and profits, if any, will be reduced.  At 
this time, the Company has no agreement or understanding with any third 
parties for the formation of a joint venture mining operation other than those 
described herein.  The Company will encounter significant competition from 
firms currently engaged in the mining industry.  In general, all of these 
companies are substantially larger than the Company, and have substantially 
greater resources and operating histories.  (See 'Risk Factors,' below.)

Management, together with such professional advisors which the Company deems 
appropriate, will investigate prospective properties through on-site 
examination, reviewing available geologic reports or publications relating to 
the property, and a general field reconnaissance to secure preliminary 
information regarding characteristics of the property.  If, from such 
preliminary reviews, management deems it advisable to further investigate the 
property, the Company may determine the condition of title and ownership by 
using abstractors or title companies, and may obtain a preliminary feasibility 
study by one or more geologists, mining engineers, or accountants.  If, after 
the foregoing preliminary investigation, management determines that the 
property does not meet the Company's acquisition criteria, efforts to acquire 
the property will be abandoned, in which case costs incurred in conducting the 
investigation would not be recoverable.  It should be noted, however, that the 
Company has only a limited amount of funds available for working capital which 
could be used for future exploration expenditures.  Thus, if future 
exploration is desired, additional funds would be needed.  Only a limited 
amount of such funds have currently been identified and there can be no 
assurance that such funds would be available at an acceptable cost, if at all. 




                                      5

Inasmuch as the eventual project, operation or mining activity could be of any 
size or scope, management is not able at this time to provide more exact 
amounts or a detailed listing of operation costs, including increases in 
general and administrative expense, if any.  However, the Company plans to 
fund any increases in general and administrative expense principally from 
joint venture revenues, fees it may receive, or additional funds it may 
receive from debt or equity financing.  Funds required to finance the 
Company's exploration and development of mineral properties are expected to 
come primarily from joint venture participant contributions with the remainder 
provided by funds generated from such joint venture and other lease or royalty 
arrangements.

Management has budgeted approximately $480,000 for Fiscal 1997 for general and 
administrative expenses and other operating costs.  To date, the Company has 
made full and timely payment of its expenses, in particular to the various 
governmental payees it interacts with, and has met its obligations to the 
entities and contractors that provide its personnel, office space, and 
equipment needs.  The Company currently is seeking additional sources of 
working capital sufficient to continue its present level of funding its 
general and administrative expenses and meet ongoing payment obligations for 
its leases to governmental bodies.  Operating costs are largely dependent upon 
the level of exploration and development activity engaged in, which, in turn, 
is dependent upon availability of funds.  The Company has determined not to 
incur any operating costs related to exploration and development until 
sufficient funds are available for payment.  

PRIVATE PLACEMENTS.  In July, 1995, the Company completed a private placement 
of 8,700 shares through two Regulation S offerings, both at a price of $2.00 
per share, for a total of $17,400.  During September 1995, the Company 
completed a private placement of 179,000 shares of common stock through a 
domestic offering at a price of $1.50 per share for a total of $241,650 after 
expenses.  During the twelve months ended September 30, 1996, the Company 
placed 1,949,332 shares of its common stock for $2,958,314 in cash. The 
Company also issued 406,050 shares of its common stock in lieu of outstanding 
debt of $570,919, plus accrued interest. The stock was issued at $1.50 per 
share for a total value of $609,075.

COMPETITION
The mining industry is very competitive.  There is a high degree of 
competition to obtain favorable mining properties and suitable mining 
prospects for drilling, exploration, development and mining operations.  The 
Company encounters competition from a handful of other similarly-situated 
mining companies in the silver mining industry in connection with the 
acquisition of properties capable of profitably producing silver and other 
mineralization.  The Company is unable to ascertain the exact number of such 
competitor companies, however, the Company believes that with the acquisition 
of significant properties in the Coeur d'Alene Mining District of Northern 
Idaho, USA, its competitive position for exploring and developing such 
properties for silver mineralization should improve. Nevertheless, the Company 
may be unable to acquire attractive mining properties on terms it considers 
acceptable. Accordingly, there can be no assurance that the Company's programs 
will yield commercially minable reserves.  

RISK FACTORS  

The following risk factors with respect to the Company and its operations may 
affect its strategy and business plan:

                                      6

1.  Recent Status as a Public Reporting Company.  The Company became a fully 
reporting public company on January 23, 1995.  The Company has no current 
operating history and is subject to all risks inherent in a developing 
business enterprise.  The likelihood of success of the Company must be 
considered in light of the problems, expenses, difficulties, complications, 
and delays frequently encountered in connection with a new business in general 
and those specific to the natural resource industry and the competitive and 
regulatory environment in which the Company will operate.  

2.  Exploration Stage Company.   Mineral exploration, particularly for gold 
and silver, is highly speculative in nature, frequently is nonproductive, and 
involves many risks, often greater than those involved in the discovery of 
mineralization.  Such risks can be considerable and may add unexpected 
expenditures or delays to the Company's plans.  There can be no assurance that 
the Company's mineral exploration activities will be successful or profitable. 

Once mineralization is discovered, it may take a number of years from the 
initial phase of drilling until production is possible, during which time the 
economic feasibility of production may change.  

A related factor is that exploration stage companies use the evaluation work 
of professional geologists, geophysicists, and engineers for estimates in 
determining whether to acquire an interest in property or to commence 
exploration or development work.  These estimates generally rely on scientific 
estimates and economic assumptions, and in some instances may not be correct, 
and could result in the expenditure of substantial amounts of money on a 
property before it can be determined whether or not the property contains 
economically recoverable mineralization.

The economic viability of a property cannot be determined until extensive 
exploration and development has been conducted and a comprehensive feasibility 
study performed.  The Company currently does not have any such feasibility 
studies, and has not yet prepared feasibility studies on any of its 
properties.  Moreover, the market prices of any minerals produced are subject 
to fluctuation, which may negatively affect the economic viability of 
properties on which expenditures have been made.  The Company is not able to 
determine at present whether or not, or the extent to which, such risks may 
adversely affect the Company's strategy and business plans.

3.  Lack of Revenue.  The Company needs additional capital but currently has 
no revenues.  Substantial expenditures are required to establish ore reserves 
through drilling, to determine metallurgical processes to extract the 
mineralization from the ore and, in the case of new properties, to construct 
mining and processing facilities.  The Company lacks a constant and continual 
flow of revenue.  The Company currently holds certain royalty interests in 
several mining properties previously sold, but there is no assurance that the 
Company will receive royalty payments, or that the Company will otherwise 
receive adequate funding to be able to finance its exploration activities.  
The Company is looking for revenue sources on an on-going basis, but there can 
be no assurance that such sources can be found or that, if available, the 
terms of such financing will be commercially acceptable to the Company.  
Because of the Company's need for additional capital to fund its present 
operations, to complete the acquisition of certain mineral rights, and to 
provide for further exploration and development, the lack of consistent 
revenue could be a detrimental factor in the progress of the Company.  




                                      7

4. Realization of Investments in Mineral Properties and Additional Capital 
Needs.  The ultimate realization of the Company's investments in mineral 
properties is dependent upon the success of future property sales, the 
existence of economically recoverable reserves, the ability of the Company to 
obtain financing or make other arrangements for development and upon future 
profitable production.  The Company expects to finance its operations for 
Fiscal 1997 through the sale of equity securities, joint venture arrangements 
(including project financing), and the sale of interests in mineral 
properties.  The Company does not have sufficient capital of its own to 
explore and develop its mineral properties and there can be no assurance that 
the Company will be successful in obtaining the required funds to finance its 
long-term capital needs.

5.   Retention and Attraction of Key Personnel.  The Company's success will 
depend, in large part, on its ability to retain and attract highly qualified 
personnel.  The Company's success in retaining its present staff and in 
attracting additional qualified personnel will depend on many factors, 
including its ability to provide them with competitive compensation 
arrangements, equity participation and other benefits.  There is no assurance 
that the Company will be successful in retaining or attracting highly 
qualified individuals in key management positions.

6.  Regulatory Concerns.  Environmental and other government regulations at 
the federal, state and local level pertaining to the Company's business and 
properties may include: 1) Surface Impact, 2) Water Acquisition, 3) Site 
Access, 4) Reclamation, 5) Wildlife Preservation, 6) Licenses and Permits, and 
7) Maintaining the Fees for unpatented mining claims.   See the section below 
entitled 'Government Regulation and Environmental Concerns,' for a 
comprehensive discussion of the risks related to this factor.  

TRANSACTIONS WITH CENTURION
The Company has disclosed pertinent information and financial data with 
respect to its transactions with Centurion in its presentation found at Item 
13 of this Report, entitled 'Certain Relationships and Related Transactions.'  

PATENTS, TRADEMARKS, LICENSES, FRANCHISES
The Company does not own any patents, trademarks, licenses, franchises, or 
concessions, except for patented mining claims  granted by 
governmental authorities and private land owners.  

SEASONABILITY
The Company's business is generally not seasonal in nature except to the 
extent that weather conditions at certain times of the year may affect the 
Company's access to its properties.

GOVERNMENT REGULATION AND ENVIRONMENTAL CONCERNS
The Company is committed to complying and, to its knowledge, is in compliance 
with all governmental and environmental regulations.  The Company's activities 
are subject to extensive federal, state, and local laws and regulations 
controlling not only the mining of and exploration for mineral properties, but 
also the possible effects of such activities upon the environment.  Permits 
from a variety of regulatory authorities are required for many aspects of mine 
operation and reclamation.  The Company cannot predict the extent to which 
future legislation and regulation could cause additional expense, capital 
expenditures, restrictions and delays in the development of the Company's 
properties, including those with respect to unpatented mining claims.

                                      8

As used in this Annual Report, the term 'unpatented mining claim' refers to a 
mining claim on federal lands which has not been converted into full fee 
ownership in the name of a private person or entity.  The process of 
converting ownership was established under the (U.S.) General Mining Law of 
1872, as amended (the 'General Mining Law'), and requires that certain 
conditions be met.  Once met, and all other requirements are satisfied, the 
U.S. government transfers ownership of the underlying property (held to that 
point in the public trust) to the private person or entity by granting fee 
simple and conveying full private ownership of the subject mineral property, 
including mineral rights, surface, subsurface and appurtenant rights, subject 
to any vested and accrued water rights.  The act of granting full fee 
ownership is accomplished by a duly endorsed instrument referred to as a 
'patent.'  Until such time as a mining claim on federal land may be 
'patented,' the claim is deemed an 'unpatented mining claim' and ownership is 
held in the public trust by the U.S. government subject to existing federal 
mining laws and other applicable statutory or regulatory provisions as may be 
implemented by the federal bureaucracy.

In 1992, the U.S. Congress passed a number of amendments to the General Mining 
Law which governs mining claims and related activities on federal lands.  A 
holding fee of $100 and a filing assessment of $35 per claim was imposed upon 
unpatented mining claims located on federal lands.  Since 1992, a variety of 
legislation has been proposed to further amend the General Mining Law.  The 
proposed legislation would, among other things, impose royalties and add 
requirements affecting reclamation, environmental controls, and restoration.  
Although such legislative proposals are not currently in effect, the 
likelihood or extent of subsequent enactments is not presently known and the 
potential impact on the Company as a result of future congressional action 
cannot be predicted.  

The Company's activities are not only subject to extensive federal, state, and 
local regulations controlling the mining of and exploration for mineral 
properties, but also the possible effects of such activities upon the 
environment.  Future legislation and regulations could cause additional 
expense, capital expenditures, restrictions and delays in the development of 
the Company's properties, the extent of which cannot be predicted.  Also, as 
discussed above, permits from a variety of regulatory authorities are required 
for many aspects of mine operation and reclamation.  In the context of 
environmental permitting, including the approval of reclamation plans, the 
Company must comply with known standards, existing laws and regulations that 
may entail greater or lesser costs and delays depending on the nature of the 
activity to be permitted and how stringently the regulations are implemented 
by the permitting authority.  While it is possible that the costs and delays 
associated with the compliance of such laws, regulations, and permits could 
become such that the Company would not proceed with the development or 
operation of a mine, the Company is not presently aware of any material 
environmental constraint affecting its properties that would preclude the 
economic development or operation of any specific property, other than those 
relating to the Bunker Hill Mine (described in Item 2.)

At present, the Company does not have any environmental control facilities. 
Thus, the Company has not made any material capital expenditures for 
environmental controls, other than the nominal costs of preparing the plans 
and contingencies for such environmental controls, measures and facilities as 
may be required in its future activities.  




                                      9

As the Company becomes more active on its properties, it is reasonable to 
expect that compliance with environmental regulations will substantially 
increase costs to the Company.  Such compliance may include feasibility 
studies on the surface impact of the Company's proposed operations; costs 
associated with minimizing surface impact; water treatment and protection; 
reclamation activities, including rehabilitation of various sites; on-going 
efforts at alleviating the mining impact on wildlife; and permits or bonds as 
may be required to ensure the Company's compliance with applicable 
regulations.  It is possible that the costs and delays associated with such 
compliance could become so prohibitive that the Company may decide to not 
proceed with the exploration, development, or mining operations on any of its 
mineral properties.  

Specifically as it relates to the Company's option to purchase the Bunker Hill 
Mine, Royal Silver Mines has endeavored to assess the environmental issues, 
including preexisting conditions such as acid water mine drainage and related 
treatment efforts, and the impact of these and other issues that may arise 
pertaining to environmental protection requirements and areas of concern, some 
of which are tailings pond construction, mine waste rock disposal, etc.  
Discussions with the State of Idaho and the EPA have been ongoing and 
continue.  The company expects to complete a full review and determination of 
the environmental impact and requirements to bring the mine to an economically 
productive level.

Future costs of compliance may depend upon the extent and type of exploration 
and testing required.  Moreover, there is no assurance that the Company will 
be able to comply with requirements imposed on future development, or that the 
Company will be able to economically develop operating mines under such 
regulations.  Therefore, management is not able to estimate those amounts at 
this time. 

NUMBER OF EMPLOYEES
The Company has five employees.  The Company arranges for much of its work 
through contracts with various consultants.  The Company may contract with 
additional consultants from time to time, as required by its operations.  
Consultants are treated as independent contractors.  

CENTURION'S ACQUISITION AND CONTROL OF THE COMPANY
In October 1991, Centurion entered into negotiations with the officers and 
directors of Royal for the acquisition and control of the Company.  In 
November 1991, Centurion's Board of Directors approved this acquisition.  
Subsequently, Centurion entered into subscription and investment agreements 
with several of Royal's principal shareholders, whereby Centurion exchanged 
174,743 restricted shares of Centurion stock and $1,600 cash for shares of 
Royal common stock constituting 37.2 percent ownership of Royal's outstanding 
shares.  On January 10, 1992, Royal's Board of Directors authorized the 
exchange of 100,000 post-split shares of Royal's common stock for 
approximately 4,196 acres of unpatented mining claims and state and private 
mineral leases from Centurion.  On January 31, 1992, at the Royal annual 
shareholders meeting, the shareholders authorized the purchase of 
approximately 17,000 acres of mining properties from Centurion for 1,250,000 
post-split shares of Royal common stock.  This acquisition of shares gave 
Centurion an 82.3 percent controlling interest in Royal.  Because of the 
changes in the control of shareholdings brought about by the Reorganization 
with Celebration, Centurion currently holds approximately 14 percent of 
Royal's outstanding common stock.  Of this, Royal has been granted an 
assignable option to repurchase up to half of Centurion's position at a price 
of $1.75 at any time prior to October 1, 1998.
                                      10

SUBSIDIARIES
The Company currently has one subsidiary, Celebration Mining Company, of which 
Royal currently is the sole shareholder.  Celebration was incorporated in the 
State of Washington in February 1994.  

ROYAL'S REORGANIZATION WITH CELEBRATION.  In May and June 1995, Royal's 
management began negotiations with management of Celebration regarding a 
merger or other reorganization plan of the two companies.  On June 28, 1995, 
the boards of directors of both companies approved a reorganization and the 
companies signed an agreement based on a share exchange.  Royal would acquire 
100 percent of Celebration's interest in the Vipont Mine Joint Venture, the 
Crescent Mine Lease, the Australia Joint Venture, and the option rights to 
acquire up to 50 percent of the mineral rights on the Prospect Mine Property 
in Madison County, Montana.  

The Celebration shareholders approved the Reorganization and share exchange 
agreement at an August 8, 1995 shareholder meeting.  In exchange for 100 
percent of the issued and outstanding Celebration shares, Royal agreed to 
issue to the Celebration shareholders 4,143,750 shares of Royal common stock 
that together would represent ownership of 63 percent of Royal shareholdings 
outstanding immediately following the Reorganization.  Also, Royal agreed to 
honor all of the stock rights held by various Celebration shareholders and 
which were subject to certain conditions and events.

Some of those stock rights had been granted contingent upon the repayment of 
notes, and others had been granted as options under consultant agreements.  In 
total, those stock rights permitted the purchase or receipt of approximately 
1,755,000 additional shares of Royal common stock.  If all of the shares 
underlying various stock rights were added to the initial group of 4,143,750 
shares exchanged in the Reorganization, that would result in a total issuance 
from the share exchange of approximately 5,898,750 shares, or 71 percent 
ownership by the Celebration shareholders.  However, to date, none of the 
overhanging stock rights have been or are expected to be exercised.

In December 1995, stock rights to receive approximately 190,795 shares were 
extinguished when the Company converted debt of $570,919 in principal, plus 
interest, by issuing common stock.  The noteholders of that debt amount 
received approximately 406,050 shares in full satisfaction of the debt.

TERMINATION OF INTENT TO ACQUIRE FAUSETT INTERNATIONAL.  On October 18, 1995, 
the Company entered into an agreement with Fausett International, an Idaho 
corporation, which the Company proposed acquiring as an 81 percent-owned 
consolidated subsidiary.  However, as of the date of this filing, management 
has determined not to pursue this acquisition because of changes in Fausett 
International's financial circumstances, and a projected reduction in its 
operations. 

ACQUISITION AND DISPOSITION OF MINERAL PROPERTIES.  
ROYALTY PROPERTIES.  On January 10 and January 31, 1992, Royal obtained from 
Centurion a total of 23,300 acres of unpatented mining claims and State and 
private mineral leases in exchange for the equivalent of 1,350,000 post-split 
shares of Royal common stock.  






                                      11

During the nine months ended September 30,1992, the Company sold unpatented 
mining claims and state and private mineral lease properties to Kennecott 
Copper Corporation, a Unit of RTZ, London ('Kennecott').  The Company sold 
four unpatented mining claims (80 acres) to Kennecott in January 1992, for 
$100,000 retaining a five percent production royalty.  In July of 1992,  Royal 
sold approximately 16,880 acres of mining claims and state and private mineral 
leases to Kennecott for $250,000 retaining a 2 1/2 percent production royalty. 

On September 30, 1992, Kennecott purchased 6,320 acres of mining claims for 
$250,000, on which Royal retained a 2 1/2 percent production royalty.

GLOSSARY OF CERTAIN MINING TERMS

ACID MINE DRAINAGE -- Acidic run-off water from mine waste dumps and mill 
tailings ponds containing sulfide minerals.  Also refers to ground water 
pumped to surface from mines.

ADIT -- An opening driven horizontally into the side of a mountain or hill for 
providing access to a mineral deposit.

ALTERATION -- Any physical or chemical change in a rock or mineral subsequent 
to its formation.  Milder and more localized than metamorphism.

ANTICLINE -- An arch or fold in layers of rock shaped like the crest of a 
wave.

ASSAY -- A chemical test performed on a sample of ores or minerals to 
determine the amount of valuable metals contained.

BACKFILL -- Waste material used to fill the void created by mining an orebody.

BALL MILL -- A steel cylinder filled with steel balls into which crushed ore 
is fed.  The ball mill is rotated, causing the balls to cascade and grind the 
ore.

BASEMENT ROCKS -- The underlying or older rock mass.  Often refers to rocks of 
Precambrian age which may be covered by younger rocks.  

BASE METAL -- Any non-precious metal (e.g. copper, lead, zinc, nickel, etc.).

BEDDING -- The arrangement of sedimentary rocks in layers. 

BLOCK CAVING -- An inexpensive method of mining in which large blocks of ore 
are undercut, causing the ore to break or cave under its own weight.

BRECCIA -- A rock in which angular fragments are surrounded by a mass of fine-
grained minerals.  

BULK MINING -- Any large-scale, mechanized method of mining involving many 
thousands of tons of ore being brought to surface per day.

CATHODE -- A rectangular plate of metal, produced by electrolytic refining,
which is melted into commercial shapes such as wirebars, billets, ingots, etc.

CHALCOCITE -- A sulfide mineral of copper common in the zone of secondary 
enrichment. 



                                      12

CHANNEL SAMPLE -- A sample composed of pieces of vein or mineral deposit that 
have been cut out a small trench or channel, usually about ten cm wide and two 
cm deep.

CHUTE -- An opening, usually constructed of timber and equipped with a gate, 
through which ore is drawn from a stope into mine cars.

COMPLEX ORE -- An ore containing a number of minerals of economic value.  The 
term often implies that there are metallurgical difficulties in liberating and 
separating the valuable metals.

CONE CRUSHER -- A machine which crushes ore between a gyrating cone or 
crushing head and an inverted, truncated cone known as a bowl.

CONCENTRATE -- A fine, powdery product of the milling process containing a 
high percentage of valuable metal.

CONGLOMERATE -- A sedimentary rock consisting of rounded, water-worn pebble or 
boulders cemented into a solid mass.

CONTACT -- A geological term used to describe the line or plane along which 
two different rock formations meet.

CORE -- The long cylindrical piece of rock, about an inch in diameter, brought 
to surface by diamond drilling.

CROSSCUT -- A horizontal opening driven from a shaft and (or near) right 
angles to the strike of a vein or other orebody.

CUT-AND-FILL -- A method of stoping in which ore is removed in slices, or 
lifts, and then the excavation is filled with rock or other waste material 
(backfill), before the subsequent slice is extracted.

CYANIDATION -- A method of extracting exposed gold or silver grains from 
crushed or ground ore by dissolving it in a weak cyanide solution.  May be 
carried out in tanks inside a mill or in heaps of ore out of doors.

DECLINE -- An underground passageway connecting one or more levels in a mine, 
providing adequate traction for heavy, self-propelled equipment. Such 
underground openings are often driven in an upward or downward spiral, much 
the same as a spiral staircase.

DEVELOPMENT -- Work carried out for the purpose of opening up a mineral 
deposit and making the actual ore extraction possible.  

DEVELOPMENT DRILLING -- drilling to establish accurate estimates of mineral 
reserves.

DIAMOND DRILL -- A rotary type of rock drill that cuts a core of rock that is 
recovered in long cylindrical sections, two centimeters or more in diameter.

DILUTION (mining) -- Rock that is, by necessity, removed along with the ore in 
the mining process, subsequently lowering the grade of the ore.

DIP -- The angle at which a vein, structure or rock bed is inclined from the 
horizontal as measured at right angles to the strike.


                                      13

DISSEMINATED ORE -- Ore carrying small particles of valuable minerals spread 
more or less uniformly through the hose rock.  

DORE -- Unparted gold and silver poured into molds when molten to form buttons 
or bars.  Further refining is necessary to separate the gold and silver.

DRIFT -- A horizontal underground opening that follows along the length of a 
vein or rock formation as opposed to a cross-cut which crosses the rock 
formation.

DRILL-INDICATED RESERVES -- The size and quality of a potential orebody as 
suggested by widely spaced drill holes; more work is required before reserves 
can be classified as probable or proven.

DUE DILIGENCE -- The degree of care and caution required before making a 
decision; loosely, a financial and technical investigation to determine 
whether an investment is sound.

ELECTROLYTIC REFINING -- The process of purifying metal ingots that are 
suspended as anodes in an electrolytic bath, alternated with refined sheets of 
the same metal which act as starters or cathodes.

ENVIRONMENTAL IMPACT STUDY -- A written report, compiled prior to a production 
decision, that examines the effects proposed mining activities will have on 
the natural surroundings.

EPITHERMAL DEPOSIT -- A mineral deposit consisting of veins and replacement 
bodies, usually in volcanic or sedimentary rocks, containing precious metals, 
or, more rarely, base metals.

EXPLORATION -- Work involved in searching for ore, usually by drilling or 
driving a drift.

FACE -- The end of a drift, crosscut or stope in which work is taking place.

FISSURE -- An extensive crack, break or fracture in rocks.

FLOAT -- Pieces of rock that have been broken off and moved from their 
original location by natural forces such as frost or glacial action.
     
FLOTATION -- A milling process in which valuable mineral particles are induced 
to become attached to bubbles and float, and others sink.

FOOTWALL -- The rock on the underside of a vein or ore structure.

FRACTURE -- A break in the rock, the opening of which allows mineral bearing 
solutions to enter.  A "cross-fracture" is a minor break extending at more-or-
less right angles to the direction of the principal fractures.

FREE MILLING - Ores of gold or silver from which the precious metals can be 
recovered by concentrating methods without resort to pressure leaching or 
other chemical treatment.

GALENA -- Lead sulfide, the most common ore mineral of lead.

GOSSAN -- The rust-colored capping or staining of a mineral deposit, generally 
formed by the oxidation or alteration of iron sulfides.

                                      14

GRAB SAMPLE -- A sample from a rock outcrop that is assayed to determine if 
valuable elements are contained in the rock.  A grab sample is not intended to 
be representative of the deposit, and usually the best-looking material is 
selected.

GRADE -- The average assay of a ton of ore, reflecting metal content.

HANGINGWALL -- The rock on the upper side of a vein or ore deposit.

HEAD GRADE -- The average grade of ore fed into a mill. 

HEAP LEACHING -- A process involving the percolation of a cyanide solution 
through crushed ore heaped on an impervious pad or base to dissolve minerals 
or metals out of the ore.

HIGH GRADE -- Rich ore.  As a verb, it refers to selective mining of the best 
ore in a deposit.

HOST ROCK -- The rock surrounding an ore deposit.

HYDROMETALLURGY -- The treatment of ore by wet processes (e.g., leaching) 
resulting in the solution of a metal and its subsequent recovery.

INTRUSIVE -- A body of igneous rock formed by the consolidation of magma 
intruded into other rocks, in contrast to lavas, which are extruded upon the 
surface.

LAGGING -- Planks or small timbers placed between steel ribs along the roof of 
a stope or drift to prevent rocks from falling, rather than to support the 
main weight of the overlying rocks.

LENS -- Generally used to describe a body of ore that is thick in the middle 
and tapers towards the ends.

LEVEL -- The horizontal openings on a working horizon in a mine; it is 
customary to work mines from a shaft, establishing levels at regular 
intervals, generally about 50 meters or more apart.

LIMESTONE -- A bedded, sedimentary deposit consisting chiefly of calcium 
carbonate.

LODE -- A mineral deposit in solid rock. 

METAMORPHIC ROCKS -- Rocks which have undergone a change in texture or 
composition as the result of heat and/or pressure.

MILL -- A processing plant that produces a concentrate of the valuable 
minerals or metals contained in an ore.  The concentrate must then be treated 
in some other type of plant, such as a smelter, to affect recovery of the pure 
metal.

MILLING ORE -- Ore that contains sufficient valuable mineral to be treated by 
the milling process.  

MINEABLE RESERVES -- Ore reserves that are known to be extractable using a 
given mining plan.  


                                      15

MINERAL -- A naturally occurring homogeneous substance having definite 
physical properties and chemical composition and, if formed under favorable 
conditions, a definite crystal form.  

MINERALIZED MATERIAL OR DEPOSIT -- A mineralized body which has been 
delineated by appropriate drilling and/or underground sampling to support a 
sufficient tonnage and average grade of metal(s). Under SEC standards, such a 
deposit does not qualify as a reserve until a comprehensive evaluation, based 
upon unit cost, grade, recoveries, and other factors, conclude economic 
feasibility.

MUCK -- Ore or rock that has been broken by blasting. 

NATIVE METAL -- A metal occurring in nature in pure form, uncombined with 
other elements. 

NET PROFIT INTEREST -- A portion of the profit remaining after all charges, 
including taxes and bookkeeping charges (such as depreciation) have been 
deducted.

NET SMELTER RETURN -- A share of the net revenues generated from the sale of 
metal produced by a mine.

OPEN PIT -- A mine that is entirely on surface.  Also referred to as open-cut 
or open-cast mine.

ORE -- Material that can be mined and processed at a positive cash flow.

ORE PASS -- Vertical or inclined passage for the downward transfer of ore 
connecting a level with the hoisting shaft or a lower level.  

OREBODY -- A natural concentration of valuable material that can be extracted 
and sold at a profit. 

ORE RESERVES -- The calculated tonnage and grade of mineralization which can 
be extracted profitably; classified as possible, probable and proven according 
to the level of confidence that can be placed in the data.

ORESHOOT -- The portion, or length, of a vein or other structure, that carries 
sufficient valuable mineral to be extracted profitably.

OXIDATION -- A chemical reaction caused by exposure to oxygen that results in 
a change in the chemical composition of a mineral.

PARTICIPATING INTEREST -- A company's interest in a mine, which entitles it to 
a certain percentage of profits in return for putting up an equal percentage 
of the capital cost of the project.  

PATENT -- The ultimate stage of holding a mineral claim in the United States, 
after which no more assessment work is necessary because all mineral rights 
have been earned.

PATENTED MINING CLAIM -- A parcel of land originally located on federal lands 
as an unpatented mining claim under the General Mining Law, the title of which 
has been conveyed from the federal government to a private party pursuant to 
the patenting requirements of the General Mining Law.  


                                      16

PILLAR -- A block of solid ore or other rock left in place to structurally 
support the shaft, walls or roof of a mine.  

PORPHYRY -- Any igneous rock in which relatively large crystals, called 
phenocrysts, are set in a fine-grained groundness.

PRECAMBRIAN SHIELD -- The oldest, most stable regions of the Earth's crust, 
the largest of which is the Canadian Shield.  

PROSPECT -- A mining property, the value of which has not been determined by 
exploration.  

PROVEN AND PROBABLE MINERAL RESERVES -- Reserves that reflect estimates of the 
quantities and grades of mineralized material at a mine which the Company 
believes could be recovered and sold at prices in excess of the cash cost of 
production.  The estimates are based largely on current costs and on projected 
prices and demand for such mineralized material.  Mineral reserves are stated 
separately for each such mine, based upon factors relevant to each mine. 
Proven and probable mineral reserves are based on calculations of reserves 
provided by the operator of a property that have been reviewed but not 
independently confirmed by the Company. Changes in reserves represent general 
indicators of the results of efforts to develop additional reserves as 
existing reserves are depleted through production.  Grades of ore fed to 
process may be different from stated reserve grades because of variation in 
grades in areas mined from time to time, mining dilution and other factors.  
Reserves should not be interpreted as assurances of mine life or of the 
profitability of current or future operations.

PROBABLE RESERVES -- Resources for which tonnage and grade and/or quality are 
computed primarily from information similar to that used for proven reserves, 
but the sites for inspection, sampling and measurement are farther apart or 
are otherwise less adequately spaced.  The degree of assurance, although lower 
than that for proven reserves, is high enough to assume continuity between 
points of observation.

PROVEN RESERVES -- Resources for which tonnage is computed from dimensions 
revealed in outcrops, trenches, workings or drill holes and for which the 
grade and/or quality is computed from the results of detailed sampling.  The 
sites for inspection, sampling and measurement are spaced so closely and the 
geologic character is so well defined that size, shape, depth and mineral 
content of reserves are well established.  The computed tonnage and grade are 
judged to be accurate, within limits which are stated, and no such limit is 
judged to be different from the computed tonnage or grade by more than 20 
percent.

RAISE -- A vertical or inclined underground working that has been excavated 
from the bottom upward.

RAKE -- The trend of an orebody along the direction of its strike.  

RECLAMATION -- The restoration of a site after mining or exploration activity 
is completed.

RECOVERY -- The percentage of valuable metal in the ore that is recovered by 
metallurgical treatment.



                                      17

REPLACEMENT ORE -- Ore formed by a process during which certain minerals have 
passed into solution and have been carried away, while valuable minerals from 
the solution have been deposited in the place of those removed.

RESERVES -- That part of a mineral deposit which could be economically and 
legally extracted or produced at the time of the reserve determination.  
Reserves are customarily stated in terms of "Ore" when dealing with 
metalliferous minerals.

RESOURCE -- The calculated amount of material in a mineral deposit, based on 
limited drill information.  

RIB SAMPLES -- Ore taken from rib pillars in a mine to determine metal 
content.

ROCKBOLTING -- The act of supporting openings in rock with steel bolts 
anchored in holes drilled especially for this purpose.  

ROCKBURST -- A violent release of energy resulting in the sudden failure of 
walls or pillars in a mine, caused by the weight or pressure of the 
surrounding rocks.

ROCK MECHANICS -- The study of the mechanical properties of rocks, which 
includes stress conditions around mine openings and the ability of rocks and 
underground structures to withstand these stresses.

ROOM-AND-PILLAR MINING -- A method of mining flat-lying ore deposits in which 
the mined-out area, or rooms, are separated by pillars of approximately the 
same size.

ROTARY DRILL -- A machine that drills holes by rotating a rigid, tubular 
string of drill rods to which is attached a bit.  Commonly used for drilling 
large-diameter blastholes in open pit mines.

ROYALTY -- An amount of money paid at regular intervals by the lessee or 
operator of an exploration or mining property to the owner of the ground.  
Generally based on a certain amount per ton or a percentage of the total 
production or profits.  Also, the fee paid for the right to use a patented 
process.

RUN-OF-MINE -- A loose term used to describe ore of average grade. 

SAMPLE -- A small portion of rock or a mineral deposit, taken so that the 
metal content can be determined by assaying. 

SECONDARY ENRICHMENT -- Enrichment of a vein or mineral deposit by minerals 
that have been taken into solution from one part of the vein or adjacent rocks 
and redeposited in another.

SHAFT -- A vertical or steeply inclined excavation for the purpose of opening 
and servicing a mine.  It is usually equipped with a hoist at the top which 
lowers and raises a conveyance for handling personnel and materials.

SHEAR OR SHEARING -- The deformation of rocks by lateral movement along 
unnumberable parallel planes, generally resulting from pressure and producing 
such metamorphic structures as cleavage and schistosity.


                                     18

SHRINKAGE STOPING -- A stoping method which uses part of the broken ore as a 
working platform and as support for the walls of the stope.  

SIDERITE -- Iron carbonate, which when pure, contains 48.2% iron; must be 
roasted to drive off carbon dioxide before it can be used in a blast furnace.  
(Roasted product is called sinter.)

SKARN -- Name for the metamorphic rocks surrounding an igneous intrusive where 
it comes in contact with a limestone or dolomite formation.

SOLVENT EXTRACTION-ELECTROWINNING (SX/EW) -- A metallurgical technique, so far 
applied only to copper ores, in which metal is dissolved from the rock by 
organic solvents and recovered from solution by electrolysis.

SPHALERITE -- A zinc sulfide mineral; the most common ore mineral of zinc. 

STEP-OUT DRILLING -- Holes drilled to intersect a mineralization horizon or 
structure along strike or down dip.

STOCKPILE -- Broken ore heaped on surface, pending treatment or shipment.

STOPE -- An underground excavation from which ore has been extracted either 
above or below mine level.

STRATIGRAPHY -- Strictly, the description of bedded rock sequences; used 
loosely, the sequence of bedded rocks in a particular area.

STRIKE -- The direction, or bearing from true north, of a vein or rock 
formation measured on a horizontal surface.  

STRINGER -- A narrow vein or irregular filament of a mineral or minerals 
traversing a rock mass.

STRIPPING RATIO -- The ratio of tons removed as waste relative to the number 
of tons or ore removed from an open pit mine.

SUBLEVEL -- A level or working horizon in a mine between main working levels.

SULFIDE -- A compound of sulfur and some other element.  

TAILINGS -- Material rejected from a mill after more of the recoverable 
valuable minerals have been extracted.

TAILINGS POND -- A low-lying depression used to confine tailings, the prime 
function of which is to allow enough time for heavy metals to settle out or 
for cyanide to be destroyed before water is discharged into the local 
watershed.

TREND -- The direction, in the horizontal plane, or a linear geological 
feature (for example, an ore zone), measured from true north.

TROY OUNCE -- Unit of weight measurement used for all precious metals.  The 
familiar 16-ounce avoirdupois pound equals 14.583 Troy Ounces.  





                                      19

UNPATENTED MINING CLAIM -- A parcel of property located on federal lands 
pursuant to the General Mining Law and the requirements of the state in which 
the unpatented claim is located, the paramount title of which remains with the 
federal government.  The holder of a valid, unpatented lode mining claim is 
granted certain rights including the right to explore and mine such claim 
under the General Mining Law.  

VEIN -- A mineralized zone having a more or less regular development in 
length, width and depth which clearly separates it from neighboring rock.  

VOLCANOGENIC -- A term used to describe the volcanic origin of mineralization.

VUG -- A small cavity in a rock, frequently lined with well-formed crystals.  
Amethyst commonly forms in these cavities.

WALL ROCKS -- Rock units on either side of an orebody.  The hanging-wall and 
footwall rocks of an orebody.

WASTE -- Barren rock in a mine, or mineralized material that is too low in 
grade to be mined and milled at a profit. 

WINZE -- An internal shaft.

ZONE OF OXIDATION -- The upper portion of an orebody that has been oxidized.


































                                      20

ITEM 2.  PROPERTIES

OVERVIEW

The properties in which the Company has an interest are divided into the 
following areas:

      A.  CRESCENT MINE
      B.  OPTION TO PURCHASE BUNKER HILL MINE
      C.  CONJECTURE MINE
      D.  VIPONT MINE
      E.  OTHER IDAHO PROPERTIES
      F.  OTHER PROPERTIES
      G.  UTAH GOLD BELT AND ROYALTY INTERESTS
      H.  OFFICES

A.  CRESCENT MINE

In February 1995, Celebration entered into an agreement to acquire a mineral 
lease on the Crescent Mine.  The Crescent Mine is an underground mine, located 
in the Coeur d'Alene Mining District of Shoshone County, Idaho, about five 
miles east of Kellogg, Idaho.

Operations of the Crescent Mine began prior to 1917 and, according to records 
available to the Company, approximately 25 million ounces of silver have been 
produced from the Crescent Mine.  The mine is not currently in operation and 
is flooded to approximately the 1200 foot level.  The most current ore reserve 
report that the Company has been able to obtain was prepared in 1985 by Norman 
A. Radford, a registered professional geologist.  That report, based on an 
assumption that silver prices would remain below ten dollars ($10) per ounce, 
indicated that the Crescent Mine contained 141,000 tons of probable reserves 
averaging 31 ounces of silver per ton of mineralized material. At current 
prices of under five dollars ($5.00), the Company cannot assure that any of 
the mineralization could be mined at a profit.

Host rocks in the Crescent Mine, in common with the rest of the District, are 
members of the Precambrian Belt Super Group.  Within the Crescent Mine area, 
three formations are present, in descending order:  Wallace, St. Regis, and 
Revett.  The most favorable rocks in the Crescent Mine are the Lower St. Regis 
and Upper Revett quartzites.  These rocks occur in the Crescent Mine from the 
1,200-foot level downward.  The Coeur d'Alene 'Silver Belt' ore structures are 
frequently narrow, fragmented, and sinuous, and have exhibited great vertical 
continuity.  For this reason, they have been discovered and mined at levels 
deeper than is generally the case in other mining districts.  The ore at the 
Crescent Mine occurs in thin veins steeply dipping to the south.  These veins 
may vary in thickness from several inches to several feet.  The Alhambra and 
the Syndicate Faults are major reverse faults and both are present in the 
Crescent Mine.

The Crescent Mine property consists of 12 patented mining claims and two Idaho 
state leases located immediately adjacent to and west of the world-famous 
Sunshine Mine (Sunshine Mining Company, SSC-NYSE).  The Sunshine Mine has 
produced nearly 400 million ounces of silver since its inception, making it 
the largest primary silver mine in the world.  The major structural and 
stratigraphic features which have produced the major ore deposits in the 
Sunshine Mine are also present in the Crescent Mine.


                                      21

The Crescent is developed to a vertical depth of 5,100 feet by two vertical 
shafts.  The majority of past production from the Crescent Mine occurred in 
the Revett formation over 1,200 feet of dip between the 3,100 level and the 
4,300 level.  In the mid-1980's, the No. 2 shaft was deepened to the 5,100 
level, which opened an additional 800 feet of favorable Revett quartzites for 
development of the downward extensions of the East Footwall and Hook veins, 
which have been the most productive veins in the Crescent Mine.

The Company's plans to reestablish significant silver production from the 
Crescent Mine will be dependent upon silver prices.  Management estimates that 
a price of at least $6.00 per ounce would need to be sustained for a period of 
six months to justify the capital investment necessary to de-water the lower 
workings of the mine and rehabilitate the stopes.  At December 17, 1996, the 
Comex Spot price for silver was $4.89.  Absent a $6.00 silver price, the 
Company intends to pursue development and exploration efforts in the upper 
Crescent.  The workings of the upper Crescent Mine are above the water table, 
and therefore can be developed without major capital investment.  The Company 
believes that a processing agreement for Crescent ore can be negotiated with 
the neighboring Sunshine Mine on a favorable basis.

During the 1996 fiscal year, the Company's field activities at the Crescent 
Mine were limited to are unsuccessful attempt to re-open the #3 level portal.  
The portal was filled with unconsolidated glacial till and it was determined 
that a much more expensive program will be required given the bad ground.  Due 
to the low silver price, no attempt to dewater the lower mine was contemplated 
during the 1996 fiscal year.  Further developments on the Crescent Mine for 
fiscal 1997 will depend upon the price of silver, as well as the Company's 
available capital.

B.  OPTION TO PURCHASE THE BUNKER HILL MINE

In September 1996, the Company completed its due diligence review and 
successfully renegotiated its option with Placer Mining Corporation of 
Kellogg, Idaho, to purchase a 100 percent ownership interest in the Bunker 
Hill Mine, a silver-lead-zinc mine in Shoshone County, Idaho and the largest 
mine in northern Idaho's historic Coeur d'Alene Mining District.  In pursuing 
the due diligence effort during fiscal 1996 with respect to the Bunker Hill 
option, the Company engaged outside legal counsel and Fulcrum Environmental, 
an independent environmental consulting firm, to assist with the review.  The 
major environmental issues which must be considered include possible successor 
liabilities to the Bunker Hill Superfund Site, the operation and maintenance 
of the Central Water Treatment Plant (which handles acid mine drainage from 
the portal), and other revegetation and restoration efforts in Milo gulch and 
elsewhere on the property.  As of the date of this filing, discussions are 
ongoing with the U.S. Environmental Protection Agency and the State of Idaho 
with respect to these issues.  The Company believes that it may be possible to 
negotiate a satisfactory solution to these issues; however, there can be no 
assurance of this.

The Bunker Hill Mine has produced over 35 million tons of ore over a one 
hundred year period. Option terms and financing alternatives regarding the 
purchase are explained above in more detail in the section within Item 1 
entitled "The Company's Strategy and Business Plan." 





                                      22

The Bunker Hill complements Royal's silver focus.  The Bunker Hill has 
historically produced in excess of 165 million ounces of silver, making it the 
second most productive silver mine in United States history. Preliminarily, 
the Company has identified seven near-term exploration-development projects of 
potentially high-grade silver zones.  These targets were also identified by 
past operators.  Detailed exploration plans for these projects are available 
to the Company in the records at the mine.

The Bunker Hill Mine property consists of over 6,500 acres of patented mining 
claims, much of which is completely unexplored.  The largest deposit of zinc 
mineralization in the mine, the Quill, is open on strike to the west and down 
dip. The largest and highest grade deposits of lead-silver mineralization, the 
Francis, the "J", and the Emery are all open to depth. Given the extensive 
vertical continuity of mineralized material in the Coeur d' Alene Mining 
District, the Company believes that the existence of additional mineralized 
material at depth that may be economically profitable is a rational basis for 
conducting further exploration and development.  Management of the Company 
notes that the other four largest mines in the district have been mined and 
developed at least one thousand feet deeper, in reference to sea level, than 
the Bunker Hill Mine.

The Bunker Hill Mine was discovered in 1885 and produced continuously until 
its first closure in 1981.  Historical production from the mine exceeded 
39,600,000 tons at a grade of 4.5 ounces per ton of silver, 8.6 percent lead 
and 3.7 percent zinc.  At present metal prices, this prior production would 
have exceeded approximately five billion dollars.

Placer Mining acquired the Bunker Hill Mine in 1991 and is currently producing 
approximately 50 tons per day of high-grade lead-silver ore.  Upon exercising 
its option, the Company intends to expand production to approximately 500 tons 
per day of lead-zinc-silver ores, as well as to undertake its underground 
diamond drilling program to better define, evaluate, and expand reserves and 
other mineralized material.  

The mineralized material is contained within 18 known ore zones.  
Historically, the Bunker Hill Mine has been mined from over 60 individual ore 
zones extending within a broad area approximately 1500 feet wide, 11,000 feet 
long, and 7000 feet deep.  Substantial inferred resources and potential 
extensions are believed to be present within the mine complex.  The Company 
believes also that projected mining activities at the Bunker Hill Mine will 
benefit from the presence of three workable shafts and over 150 miles of 
drifts, crosscuts and raises, which in today's dollars represents an 
infrastructure that could cost in excess of $300 million dollars to duplicate.

During Royal's extensive due diligence review, of more than six months, 
technical staff of the Company completed an extensive review of mine maps, 
drill logs, and other technical data which presents a preliminary overview 
that approximately eight million tons of silver and other mineralized material 
may be present and economically recoverable from within the mine.  Thus, the 
Company is preparing plans to implement exploration activities should the 
Company elect to exercise its option to purchase the mine.

Exploration targets are believed to consist of large tonnage, bulk-minable 
deposits as well as high-grade vein deposits.  According to consulting Royal 
geologist Daniel Gorski, extensive, minable bulk tonnages may be indicated by 
prior drilling results. Management believes that implementation of the option 
purchase agreement will allow the Company to extend its exploration strategy 
for silver and other mineralized material in a known mining district.
                                      23

C.  CONJECTURE MINE

In late August of 1995, the Company completed two acquisitions which included 
six patented and six unpatented mining claims comprising the Conjecture Mine 
property.   

The Conjecture property is located in the Lakeview Mining District of Idaho, 
some 30 miles to the northwest of the Coeur d'Alene mining district.  The rock 
groups of the Lakeview District are the same Precambrian belt series 
associated with the world-class silver deposits of the Coeur d' Alene mining 
district to the south.

The history of the Lakeview District in general, and the Conjecture Mine in 
particular, has shown sporadic high grade silver production from shallow 
workings since the late 1800's.  Most recent production on a neighboring 
property occurred as recently as 1987.  However, within the District, only the 
Conjecture Mine itself has been developed to any significant depth.

In the late 1950's and early 1960's, Federal Resources of Salt Lake City, Utah 
invested approximately $3 million in shaft sinking and underground development 
at the Conjecture Mine.  In all, Federal Resources completed a 2,000 foot 
deep, concrete lined, three compartment vertical shaft and nearly 12,000 feet 
of drifts, cross-cuts and raises to establish a block of mineralized material 
of 336,000 tons at a grade of 11 ounces per ton of silver, and .03 ounces of 
gold, with some lead and zinc. 

An additional block of 370,000 tons of similar grade was listed as a possible 
block of mineralization between the levels. Since obtaining the property, the 
Company has not been able to re-confirm these reserve estimates of mineralized 
material, although an independent reserve report done in 1981 essentially 
verified the earlier numbers. 

That independent reserve report was prepared by Richard W. Morris, a 
registered professional geologist, for a company known as Minerals Management, 
Inc.  Nevertheless, no assurance can be made that this mineralized material 
constitutes a proven or probable 'ore reserve', if at all, until it can be 
reverified.

The Company's geologists have noted the striking similarities between the 
Lakeview District and the nearby Coeur d'Alene District.  High grade silver 
mineralization has been shown to extend laterally for over two miles, and 
vertically for over 3,000 feet in the Conjecture Mine.  The same rock unit 
sequence (i.e., Wallace, St. Regis, Revett) is found in both districts, with 
the same important ore minerals (tetrahedrite, galena, sphalerite) defining 
productive ore shoots.  However, within the Lakeview District, only the 
conjecture shaft has penetrated the less favorable Wallace formation into the 
better quartzite units. 

Because of heavy snows in the winter of 1995 and spring of 1996, the Company's 
planned exploration activities at the Conjecture were delayed.  With the 
Company's resources currently being devoted to its due diligence and financing 
activities for the Bunker Hill Mine, no further work is planned at the 
Conjecture Mine in fiscal year 1997.





                                      24

D.  VIPONT MINE

The Vipont Mine is located in the Ashbrook Mining District, a remote area in 
the extreme northwestern corner of Box Elder County, Utah, approximately ten 
miles east of the Nevada state line and one mile south of the Idaho state line 
near the headwaters of the Little Birch Creek.  It is accessible by asphalt, 
gravel, and dirt roads.  The mine property consists of 53 patented (deeded) 
mining claims covering nearly 1,000 acres with a 25% undivided interest owned 
by Celebration Mining Company (a wholly-owned subsidiary of the Company.)

The Vipont Mine was at one time one of the foremost silver-producing mines in 
the State of Utah.  Its greatest period of activity was from 1919 through mid-
1923 after the passage of the Pittman Silver Purchase Act ('Pittman Act') 
which authorized the purchase of 200,000,000 ounces of silver.  The Mine 
closed in August 1923 with the expiration of the Pittman Act after producing 
nearly 1,000,000 ounces of silver per year.  Some leasing was done in the 
1930's and the Mine was closed in 1942 when Congress passed War Order L-208 
closing all gold and silver mines.  From 1977 through 1987, United Silver 
Mines began further development and leached the old mill tailings.

The mineralization in the Mine occurs predominantly as the mineral argentite 
in the Vipont limestone.  Two other units, the Phelan limestone, and the 
Sentinel limestone have produced high-grade ore.  Neither the Phelan nor the 
Sentinel have been seriously explored for additional ore.

The mineralization in the Vipont limestone occurs as a continuous tabular 
'manto' mineralization body in the crests of folds (crenulations) superimposed 
upon a shallowly dipping (22 degrees) syncline.  The continuity of the 
mineralization down-dip has been shown by past mining operations and by a line 
of drill holes below the old workings.  It is thought by geologists that the 
mineralization will continue to down-dip toward an igneous intrusive 4,600 
feet southwest of the old mine.

There are two distinct mineralization deposits on the Vipont Property: the 
oxide deposit and the sulfide deposit.  The characteristics of each are unique 
and require different approaches to development and exploration.  According to 
a 1994 report by Dr. Armond H. Beers, the oxide deposit contains 1,100,000 
tons of mineralized material grading 6.9 ounces per ton in silver and with a 
small gold credit.  The Company has not independently re-verified those 
findings and cannot and does not make any assurance as to their accuracy or 
compliance with regulatory standards.

The report of Marston and Marston, completed in 1981, provides different 
grades and tonnage.  Marston and Marston did not have access to additional 
drilling results completed subsequent to their report; however, based on the 
information then available, Marston and Marston reported 1.5 million tons of 
mineralized material at a silver grade of 4.47 ounces per ton.  Because the 
mineralization is oxidized, it is believed that recovery of the precious 
metals can be achieved with cyanide heap leaching.  It is also believed that 
mining can be accomplished with open pit methods.  The Company will evaluate 
its plans for development of the Vipont Property after further review of all 
technical data.  Any development is anticipated to require amendments to the 
United Silver Mines permits to allow construction of leaching pads, completion 
of engineering design of the leach pads and recovery plant, selection of a 
mining contractor, building and installing crushing circuits, agglomerating 
unit, leach pads, and recovery plant.


                                      25

The sulfide deposit is currently defined in the Beers Report as 478,000 tons 
of mineralized material at an estimated average grade of 13.52 ounces per ton 
in silver. Geologic interpretation of the manto-type replacement deposit, 
however, may establish upon further exploration that this mineralized resource 
may be larger.  The Company's management and professional staff believe that 
the sulfide deposits will represent the long-term future of the Vipont Mine.

During the 1996 fiscal year, the Company elected not to proceed further with 
the Vipont joint venture, but as a result of the Company's successful effort 
at removing all liens on the property at a Box Elder County Sheriff's sale, 
the Company's wholly-owned subsidiary now owns a 25% undivided interest in the 
property.  The company has no plans to proceed further with the Vipont joint 
venture until such time as silver prices improve.

E.  OTHER IDAHO PROPERTIES

BISMARK MINE PROPERTY.  In September of 1995, the Company obtained a 10-year 
lease on three patented mining claims in Shoshone County, known as the Bismark 
claims.   The claims lie about one mile south of the main shaft of the 
Sunshine Mine and are surrounded by Sunshine holdings.  The property is 
developed by a 1,500 foot adit which was driven to the northwest to intersect 
the Bismark vein.  Royal has re-opened and re-timbered the portal of the 
Bismark adit to permit accessing and sampling of the Bismark vein.  This work 
was planned for the 1996 field season, however, due to other priorities it was 
deferred.

The geology of the Bismark claims, given the proximity to the Sunshine Mine, 
is highly favorable to ore deposition.  The Bismark vein lies entirely with 
the Revett formation, which is the most favorable rock unit for ore 
emplacement in the Coeur d'Alene mining district.  Limited exploration by 
Sunshine Mining Company on the 2,600 level established the downward projection 
of mineralization in the Bismark vein structure.

Bismark Mining Company, the property owner and lessor, will receive a 2.5 
percent net smelter return on commercial production from the claims, under the 
terms of the Company's lease.

COEUR D' ALENE SYNDICATE PROPERTY.  No significant mineral production has to 
date occurred on the Coeur d'Alene Syndicate property and there are no known 
proven or probable reserves.  In September of 1995, the Company acquired fee 
simple ownership of the 24 patented mining claims that comprise the Coeur 
d'Alene Syndicate property, located in Burke Canyon some six miles northeast 
of Wallace, Idaho.  The property is near the eastern end of the Coeur d'Alene 
mining district, and is an undeveloped portion of a major mineralized trend 
running through the Star-Morning Mines and on to the Frisco and Black Bear 
Mines.

Geologists have long considered the Syndicate property to be an outstanding 
exploration target where the highly productive Star fault turns to the 
southwest and intersects the Commander fault.  This structural anomaly, 
occurring in favorable Revett  and Burke formation quartzite rocks is exactly 
what develops major ore shoots within the Coeur d'Alene district.

The property is currently developed by an adit from the Black Bear property, 
but could ultimately be accessed by deep shafts on either end of the strike.



                                      26

Subsequent to September 30, 1995, the Company entered into an agreement with 
an independent timber company to sell the mature timber for cash.  The 
transaction was expected to close in Fiscal 1996, but was not concluded as a 
timber consultant recommended allowing the timber crop to achieve greater 
maturity prior to harvesting.

THE LIBERAL KING MINE. In the fourth quarter of Fiscal 1995, the Company 
acquired fee simple ownership of the Liberal King Mine, consisting of five 
patented claims located southwest of the famous Bunker Hill Mine in the Pine 
Creek area of the Coeur d'Alene Mining District.  At the time the mine was 
last operated by Spokane National in the 1960's, that company reported a 
defined block of mineralized material totaling 81,000 tons at 12 percent zinc 
and 2.5 ounces of silver.  In the early 1980's, Cominco-American conducted an 
exploration program on the Liberal King property in search of a large, 
stratabound zinc-silver deposit.  Such potential has not been fully explored 
at this time.  Royal has not been able to evaluate this property as of the 
date of this filing, and no current reserve estimates can be given.

F.  OTHER PROPERTIES

FRISCO STANDARD SILVER MINE.  As of the first quarter of fiscal 1997, the 
Company has fully divested itself of any ownership in the Frisco Standard 
Mine.  In September 1995, the Company had acquired fee simple ownership of the 
seven patented claims that comprised this property.  

NEW DEPARTURE MINE.  There are no known proven or probable reserves identified 
at the New Departure Mine.  In August 1995, the Company acquired a long term 
mineral lease for the New Departure Mine in Beaverhead County, Montana.  This 
property is located in southeastern Montana near the town of Bannock.  The 
property consists of eight patented claims and has a history of very high 
grade silver production.  Royal management has not as yet developed an 
exploration plan for the property, which was acquired by lease in September 
1995, subject to a three percent net smelter return.

AUSTRALIA JOINT VENTURE PROPERTY.  There are no known proven or probable 
reserves identified at the Australia Joint Venture Property.  On March 21, 
1995, Celebration entered into a joint venture with Metallurgical Refining & 
Development PTY, LTD. ('Metallurgical'), of Brisbane, Queensland, Australia, 
for the exploration of EL 3854, a prospecting license in western New South 
Wales.  For the three prior years, Metallurgical was engaged in an active 
program of geophysics, geochemistry, satellite reconnaissance, and other 
proprietary exploration methods seeking to identify large, buried, 
polymetallic deposits.  In July of 1995, the joint venture completed an 
exploratory diamond drill hole to a depth of 700 meters (2100 feet).  While 
the hole did not encounter significant mineralization, there was geologic 
indication that a large porphyry system may be nearby.  Results of additional 
scientific testing of the core are being evaluated before conducting further 
magnetics and geophysics to determine plans for further drilling.

G.  UTAH GOLD BELT AND ROYALTY INTERESTS

The Company is not currently involved in active exploration with respect to 
any of the property holdings or royalty interests within the Utah Gold Belt. 
Subject to the progress of Royal's plan for Fiscal 1997 regarding its mineral 
properties, the Company does not anticipate pursuing significant exploration 
activities within the Utah Gold Belt properties during Fiscal 1997.  


                                      27

The Utah Gold Belt is a major mineralized north-south zone, including the 
Oquirrh Mountain range, situated on the west side of the Salt Lake valley.  
The Utah Gold Belt is close to Salt Lake City, and major highways and 
railroads make up a well-developed infrastructure.  The Utah Gold Belt 
includes the well-known Bingham and Mercur mining districts, plus smaller 
Ophir, Stockton, and Greeley districts.

The Utah Gold Belt has been a major producer of copper, gold, silver, and 
other metals since the late 1800's.  Discovery and profitable production of 
new ore bodies has continued up to the present time.  Indeed, important new 
gold mines have been developed within the last decade.  Centurion initiated a 
land acquisition program in 1987 and Royal subsequently purchased Utah Gold 
Belt properties because management recognized that these properties had not 
been fully explored and it offered excellent potential for the discovery of 
new gold ore bodies.

The Company sold various Utah Gold Belt mining properties to Kennecott during 
1992,  and has retained production royalty interests on these properties.  
These sold properties are contiguous to or near properties held previously by 
Kennecott in the Utah Gold Belt.  

Management of the Company believed it was to the Company's advantage to allow 
the ownership of these properties to pass to Kennecott, with the Company 
retaining a production royalty interest.  There is no assurance that the 
Company will receive or continue to receive royalties from these properties, 
or of the amount, if any, of such royalties. 

The Company's land holdings in the Utah Gold Belt consist of Utah State 
mineral leases, fee leases and unpatented lode mining claims totaling over 
12,000 acres.  The Company did not undertake any exploration efforts on these 
holdings during fiscal 1996 and does not plan any activities during fiscal 
1997.

H.  OFFICES

The Company's executive office is located at 10220 North Nevada, Suite 230, 
Spokane, Washington 99218.  In addition, the Company maintains its registered 
corporate office at 331 South Rio Grande Street, Suite 208, Salt Lake City, 
Utah 84101.  The Company leases its principal office in Spokane, Washington, 
on a renewable one-year term with rental costs of $988 per month, including 
basic maintenance and janitorial services.  The Company does not currently 
have any other branch offices. 

ITEM 3.  LEGAL PROCEEDINGS 

The Company is not aware of any material pending legal proceedings incidental 
to the Company or any of its properties.

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

No matter was submitted to a vote of security holders through the solicitation 
of proxies or otherwise during the Fiscal 1996.






                                      28





                                  PART II

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

The Company's common shares are traded on the NASDAQ Bulletin Board under the 
symbol RSMI.  The prices listed below were obtained from the National 
Quotation Bureau, Inc., and are the highest and lowest bids reported during 
each fiscal quarter for the period December 31, 1994, through September 30, 
1996.  These bid prices are over-the-counter market quotations based on 
interdealer bid prices, without markup, markdown, or commission and may not 
necessarily represent actual transactions: 




Fiscal Quarter Ended          High Bid ($)   Low Bid ($) 
- - --------------------          ------------   -----------  
                                       
December 31, 1994             4.125          3.000
March 31, 1995                2.500          1.125
June 30, 1995                 3.750          0.875
September 29, 1995            3.124          2.750
December 31, 1995             2.87           2.43
March 31, 1996                2.75           2.25
June 30, 1996                 2.94           1.62
September 30, 1996            2.12           1.00



On December 17, 1996, the average of the high bid and low ask quotation for 
the Company's common shares as quoted on the NASDAQ Bulletin Board was $0.83.

The approximate number of holders of common stock of record on December 17, 
1996, was approximately 390. 

Since its inception, the Company has not paid any dividends on its common 
shares.  The Company does not anticipate that dividends will be paid in the 
foreseeable future. 

ITEM 6.  SELECTED FINANCIAL DATA

The selected financial data included in the following table have been derived 
from and should be read in conjunction with and are qualified by the Company's 
financial statements and notes set forth elsewhere in this report.  Historical 
financial data for certain periods may be derived from financial statements 
not included herein. 








                                      29




                                For the Ten    From Inception  From Inception:
                 For the Year   Months Ended   on 2/17/94      on 2/17/94
                 Ended 9/30/96  9/30/95        to 11/30/94     to 9/30/96  
                 -------------  -------------  ------------  ---------------
Results of 
   Operations:
                                                   

Revenues         $        -0-   $      -0-   $      -0-      $        -0-   
Net Income (loss)$  (2,045,082) $  (750,939)   $(211,796)      $(3,007,817) 
Net income (loss)
   per common 
   share         $        (.22) $      (.17)   $    (.09)      $      (.53) 
Balance Sheet 
   Data:
Total Assets     $   5,605,357  $ 4,056,698    $ 366,619       $ 5,605,357
 
Working Capital
   (deficit)     $     686,573  $  (665,274)   $  25,754       $   686,573

Long-Term debt   $         -0-  $       -0-    $  59,000       $         0

Stockholders' 
  equity         $   5,485,490  $ 3,235,376    $ 276,321       $ 5,485,490 
                                                                               
          


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

GENERAL
Pursuant to the Reorganization discussed above in Item 1 of this Report, the 
accompanying consolidated financial statements include those of Celebration 
Mining Company and Royal Silver Mines, Inc., which was known as Consolidated 
Royal Mines, Inc. before the Reorganization.  All significant intercompany 
accounts and transactions have been eliminated.  The accounting of financial 
statements following the Reorganization also required a change in fiscal year-
end date, namely, from November 30 (Celebration's) to September 30 (Royal's).  

The financial statements account for the Reorganization using the purchase 
method of accounting. (See Note 1 to the financial statements.)  Celebration 
is treated as the acquiring company for financial reporting purposes because 
its shareholders constitute greater than 50 percent of the combined 
shareholder group.  In conformity with generally accepted accounting 
principles and the Company's accounting policy, Celebration is recognized as 
the predecessor entity.   Consequently, Celebration's assets and liabilities 
were not adjusted in the accompanying financial statements.  The financial 
statements for the period from the inception of Celebration on February 17, 
1994 to November 30, 1994 ('Fiscal 1994') do not include the balance sheet 
data or results of operations of Consolidated Royal Mines, Inc.  






                                      30

There is considerable risk in any mining venture, and there can be no 
assurance that the Company's operations will be successful or profitable.  
From inception of the Company to September 30, 1996, the Company has an 
accumulated deficit of $3,057,817.  Exploration for commercially minable ore 
deposits is highly speculative and involves risks greater than those involved 
in the discovery of mineralization.  Mining companies use the evaluation work 
of professional geologists, geophysicists, and engineers in determining 
whether to acquire an interest in a specific property, or whether or not to 
commence exploration or development work.  These estimates are often based on 
scientific estimates and economic assumptions, and in some instances result in 
the expenditure of substantial amount of money on a property before it is 
possible to make a final determination as to whether or not the property 
contains economically minable ore bodies.  The economic viability of a 
property cannot be finally determined until extensive exploration and 
development work, plus a detailed economic feasibility study, has been 
performed.  Also, the market prices for mineralization produced are subject to 
fluctuation and uncertainty, which may negatively affect the economic 
viability of properties on which expenditures have been made.

As of September 30, 1996, $4,785,665 of the Company's total assets of 
$5,605,357 are investments in mineral properties for which additional 
exploration is required to substantiate or determine whether they contain ore 
reserves that are economically recoverable.  The realization of these 
investments is dependent upon the success of future property sales, the 
existence of economically  recoverable reserves, the ability of the Company to 
obtain financing, the Company's success in carrying out its present plans or 
making other arrangements for development, and upon future profitable 
production.  The ultimate outcome of this matter cannot be determined at this 
time; accordingly, no provision for any asset impairment that may result, in 
the event the Company is not successful in developing or selling these 
properties, has been made in the Company's financial statements.

LIQUIDITY AND CAPITAL RESOURCES
The Company currently has no revenues.  At September 30, 1996, the Company's 
accumulated deficit was $3,057,817.  Although it has recurring losses from 
operations, the Company has increased its operating capital and improved its 
financial condition and ability.   Regarding its losses from operations, the 
Company cannot assure that it will be able to fully carry out its plans as 
budgeted without additional operating capital.  At September 30, 1995, the 
Company had negative working capital of $665,274.  However, at September 30, 
1996, the company had positive working capital of $686,573.  The following 
factors explain the principal increase in working capital during Fiscal 1996.

The change in working capital from a negative $665,274 at September 30, 1995 
to a positive $686,573 at September 30, 1996 was due to the successful 
conversion of $570,920 of debt into 406,050 shares of common stock as well as 
the successful placement of 1,949,332 shares of common stock for $2,958,314 in 
cash.  The Company's cash balance increased significantly from $151,698 at 
September 30, 1995 to $688,716 at September 30, 1996.  However, during fiscal 
1996 the Company continued to incur more in expenses as a result of increased 
activity in evaluating and acquiring mineral properties.  

The Company has estimated that it will need capital resources of approximately 
$40,000 per month to meet its estimated expenditures for the ensuing twelve 
months.  The Board of Directors has instructed management to consult with 
experienced financial and investment advisory firms to formulate arrangements 
for such capital fund raising.  Currently, the Company is pursuing various 
alternatives, including the possible private placement of equity. 
                                      31

The Board of Directors reasonably believes that the Company is able to engage 
in nearly any size operation or scope of mining activity depending on the 
circumstances and merits of each proposed operation or mining activity.  
Accordingly, the Board has not limited the size of operation or scope of 
project which it believes is reasonable for management to consider in 
achieving the Company's business plan.  Therefore, management has been 
authorized  to consider and review all reasonable proposals and, upon 
satisfactory assessment, to then make a specific determination as to an 
estimated range of funding amounts that each such proposal reasonably might 
require.  

Inasmuch as the eventual project, operation or mining activity could be of any 
size and scope, management is not able at this time to provide a detailed 
listing or exact range of operation costs, including increases in general and 
administrative expense, if any.  However, the Company plans to fund any 
increases in general and administrative expense principally from joint venture 
revenues or funds it may receive from debt or equity financing.  Funds 
required to finance the Company's exploration and development of mineral 
properties are expected to come primarily from joint venture participant 
contributions with the remainder provided by funds generated from such joint 
venture and other lease or royalty arrangements.

The Company consistently has made full and timely payment of its expenses, in 
particular to the various governmental payees it interacts with, and has met 
its obligations to the entities which provide its personnel, office space, and 
equipment needs.  The Company currently is seeking alternate sources of 
working capital sufficient to increase the funding of additional general and 
administrative expenses that may become necessary as  the Company's business 
plan develops, and to continue meeting its ongoing payment obligations for its 
leases to governmental bodies.

RESULTS OF OPERATIONS
FISCAL 1996 AS COMPARED TO FISCAL 1995.  General and administrative expenses 
increased from $543,644 during fiscal 1995 to $1,835,548 during fiscal 1996.  
The increase is principally due to additional staff and outside technical and 
environmental consultants and legal fees associated with the Company's due 
diligence related to the Bunker Hill Mine option.  As a result, from Fiscal 
1995, to Fiscal 1996, the net loss increased from $(750,939) to $(2,045,082) 
and the net loss per share increased from $(0.17) to $(0.22).

The Company is unable to fully determine the impact of its current lack of 
adequate operating capital.  Other than as described herein, in particular 
with respect to the option to purchase the Bunker Hill Mine, the Company has 
determined not to incur and does not have any commitments or plans for 
material capital expenditures during Fiscal 1997 for which it does not have a 
reasonably available source or basis for making payment. For additional 
information regarding the Company's present commitments and plans for which it 
does have reasonably definable and available payment sources, for example the 
option to purchase the Bunker Hill Mine, please refer to the "Properties" 
discussion under Item 2 above, at Section B, entitled "Option to Purchase The 
Bunker Hill Mine".

It is uncertain what the scope or impact will be of the Company's decision to 
restrict capital expenditures.  On the one hand, if the Company were to 
continue such restriction, the likely effect might be adverse to the 
preservation of its assets and capital base, thereby narrowing the scope of 
plans for future operations and constricting liquidity.  On the other hand, if 

                                      32

the Company were to discontinue such restriction without an increase in 
sustained cash flow, the likely effect of that might be an increase in 
accumulated deficits which could be adverse to the Company's financial 
condition with respect to liabilities and stockholders' equity.  Therefore, 
the Company's plan for the next twelve months is to closely monitor its 
capital expenditures while it pursues a joint venture participant or other 
sources of capital for financing operations.

FISCAL 1995 AS COMPARED TO FISCAL 1994.  General and administrative expenses 
increased from $211,796 during Fiscal 1994 to $543,644 during Fiscal 1995.  
The increase was principally due to an increase in the amount of stock issued 
to officers, directors, and a consultant as compensation for services and 
bonus.  As a result, from Fiscal 1994 to Fiscal 1995, the net loss increased 
from $(211,796) to $(750,939) and the net loss per share increased from $(.09) 
to $(.17), respectively.

ITEM  8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Consolidated Financial Statements and the Report of Independent Public 
Accountants are filed as part of this report on pages F-1 through F-19.

                           C O N T E N T S
                                                     
Independent Auditors' Reports . . . . . . . . . . . . . F-1

Consolidated Balance Sheets . . . . . . . . . . . . . . F-2

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

Consolidated Statements of Stockholders' Equity . . . . F-4

Consolidated Statements of Cash Flows . . . . . . . . . F-10

Notes to the Consolidated Statements . . . . . . . . . .F-13



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

A.  CHANGES OR DISAGREEMENTS WITH PRINCIPAL ACCOUNTANT.  There have been no 
disagreements with the Company's independent public accountants.

B.  CHANGE IN PRINCIPAL ACCOUNTANT.  As a result of increased activity at its 
executive office in Spokane, the Company changed the engagement of its 
principal independent accountant to audit its financial statements.  The 
former principal accountant, Jones, Jensen & Company, was replaced by Williams 
& Webster, P.S. as principal independent accountant.  This decision was not 
based on any disagreement between Royal or Jones, Jensen and Company nor was 
it based on any information that would have led Jones, Jensen and Company to 
resign or decline to stand for reelection.

Jones, Jensen and Company's report on the financial statements of Royal at 
September 30, 1995 did not contain an adverse opinion or a disclaimer of 
opinion, nor was its report qualified as to uncertainty, audit scope, or 
accounting principles.  During the period described above and up through 
September 30, 1995, for the period preceding such dismissal:

                                      33

(1)  The Company had no disagreements with Jones, Jensen and Company on any 
matter of accounting principles or practices, financial statement disclosure, 
or auditing scope or procedure;

(2)  Jones, Jensen and Company did not advise the Company that the internal 
controls necessary for the Company to develop financial statements do not 
exist;

(3)  Jones, Jensen and Company did not advise the Company of any information 
leading Jones, Jensen and Company to be unable to rely on management's 
representations, or unwilling to be associated with the financial statements 
prepared by management;

(4)  Jones, Jensen and Company did not advise the Company of any need to 
significantly expand the scope of its audit, or of any information that may or 
would (i) materially affect the fairness or reliability of, or prevent it from 
rendering an unqualified opinion regarding, its audit report or any of the 
underlying financial statements, or (ii) cause Jones, Jensen and Company to be 
unwilling to rely on management's representations or be associated with the 
Company's financial statements; and 

(5)  Jones, Jensen and Company did not, as a result of its dismissal, expand 
its audit or conduct any investigation of information that came to its 
attention of the type referred to above in subparagraph (4), or have any 
issues that were unresolved to its satisfaction prior to dismissal.

The Company has provided Jones, Jensen and Company with a copy of the above 
disclosures in a timely manner and requested and received from Jones, Jensen 
and Company a letter addressed to the Commission stating Jones, Jensen and 
Company's agreement with these disclosures.  A copy of such letter is attached 
to this registration statement and filed as Exhibit 16.2.

C.  DESIGNATION OF NEW ACCOUNTANT.  The Company has designated the continuing 
services of the accounting firm of Williams and Webster, P.S. to serve as 
principal independent accountant for the Company effective November 8, 1996.  
During the period of Jones, Jensen and Company engagement as principal 
independent accountant and up to November 8, 1996, prior to designating 
Williams and Webster, P.S. as principal accountant:

(1)  Neither the Company nor any person or entity acting on its behalf has 
consulted Williams and Webster, P.S. regarding the application of accounting 
principles to any specified transaction, or the type of audit opinion that 
might be rendered on the Company's financial statements, or any matter 
characterized as a 'disagreement' or 'reportable event' (as defined by 
Regulation S-K, Item 304(a)(1)(iv) and (v)); and

(2)  Williams and Webster, P.S. did not provide the Company with either a 
written report or oral advice containing any conclusions by Williams and 
Webster, P.S. of any important factors considered by the Company in reaching a 
decision as to any accounting, auditing, or financial reporting issues.








                                      34




                                 PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

On March 31, 1995, the Company restructured its Board of Directors and 
management.  The Board formally named Howard Crosby as President, Hal Cameron 
as Vice President, LaRoy Orr as Treasurer and Carlos M. Chavez as Secretary.   
On August 8, 1995, in accordance with the terms of the Reorganization with 
Celebration, the Board appointed Robert E. Jorgensen as Director and Executive 
Vice President; Ronald Kitching and James W. Prier as Directors; and Jerry 
Stacey as Vice President of Operations.  On August 31, 1995, upon receiving 
the resignation of Mr. Orr, the Board appointed Mr. Jorgensen to the position 
of Treasurer.  In September 1996, the Board appointed John Ryan to the 
position of Vice President, Corporate Development.

INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS.  The following table 
sets forth the name, age, position, and length of service for each of Royal's 
present directors and executive officers:


                                                                     
                                                                          
Name                Age       Position(s) Held                   Director  
                                                                 Since
- - -----------------   ----      -------------------------------   -------------
                                                       
Howard M. Crosby    44         President and Director           February 1994
E. Hal Cameron      78         Vice President and Director      April 1969
Spenst Hansen       63         Director                         November 1991
Carlos M. Chavez    44         Corporate Secretary and Director March 1995
Robert E. Jorgensen 43         Executive Vice President,
                               Treasurer and Director           August 1995
Jerry Stacey        52         Vice President, Operations       August 1995
John Ryan           35         Vice President, Corp. Dev.       September 1996
Ronald Kitching     66         Director                         August 1995
James W. Prier      49         Director                         August 1995



The authorized number of directors of the Company is presently fixed at ten. 
Each director serves for a term of one year that expires at the following 
annual shareholders' meeting.  Each officer serves at the pleasure of the 
Board of Directors and until a successor has been qualified and appointed.  
There are no family relationships, or other arrangements or understandings 
between or among any of the directors, executive officers or other person 
pursuant to which such person was selected to serve as a director or officer.

Set forth below is certain biographical information regarding each director 
and executive officer of the Company:





                                      35

HOWARD M. CROSBY received a B.A. degree from the University of Idaho in 1974.  
Since 1989, Mr. Crosby has been president of Crosby Enterprises, Inc., a 
family-owned business advisory and public relations firm.  From September 1992 
to May 1993, Mr. Crosby was employed by Digitran Systems, Inc., of Logan, 
Utah, in the marketing department.  In May of 1993, Mr. Crosby entered into a 
business consulting relationship with Centurion Mines Corporation, and has 
served as president and director of Mammoth Mining Company and Gold Chain 
Mining Company, both Centurion subsidiaries.  In July, 1992, Mr. Crosby filed 
a Chapter 13 petition for bankruptcy.  The reorganization plan was approved in 
October, 1992.

HAL CAMERON founded the Company in 1969, has held the position of President 
and Director, and was engaged, virtually full-time, in the business affairs of 
the Company from May 1983 up through November 1991.  Mr. Cameron is a graduate 
of West High School in Salt Lake City, Utah, and has been involved in the 
natural resource field since 1953, including the active management of 
publicly-held natural resource exploration and development companies.  In 
1953, Mr. Cameron was one of the founders of Federal Uranium Corp., now a 
publicly-held Nevada corporation known as Federal Resources Corporation, and 
served as an independent consultant to Federal Resources from 1955 to 1960. He 
was also one of the founders and a director of Cherokee Utah Uranium, a 
publicly-held Utah corporation, in 1954, and served as a consultant until 1960 
to its successor, Beaver Mesa Uranium.  From 1964 until 1974, Mr. Cameron was 
the vice-president and a licensed commercial real estate salesman for Meeks-
Wirthlin Real Estate Company in Salt Lake City, Utah.  From 1974 to the 
present, Mr. Cameron has been engaged in commercial real estate acquisitions, 
sales, and development for himself.  Mr. Cameron was president of Cameo 
Minerals, Inc., a publicly-held Utah corporation, from its inception in 1969 
until its merger in 1981 with Hendon Exploration, Inc., a Texas oil and gas 
company.

SPENST HANSEN was awarded a Ph.D. degree in geology from the University of 
Missouri, Columbia, Missouri; a Masters degree in mining engineering from the 
Missouri School of Mines, Rolla, Missouri; and a Bachelor of Science degree in 
geological engineering from the University of Utah, Salt Lake City, Utah.  Dr. 
Hansen is a registered professional geologist in California (#2067) and Idaho 
(#38).  Dr. Hansen has been principally employed by Centurion Mines 
Corporation since November, 1984, where he is currently President, Chief 
Executive Officer, a Director, and Chairman of the Board of Directors.  Dr. 
Hansen has worked on mining projects in the western United States for more 
than 20 years.  From 1982 to 1989, he also conducted an independent 
geophysical and geologic contracting business as a sole proprietorship under 
the name Axis Geophysics Company.  Dr. Hansen still retains ownership of this 
company. 

CARLOS M. CHAVEZ has been principally employed as Centurion's in-house legal 
counsel since March 1994.  Mr. Chavez received his J.D. in 1980 from Stanford 
Law School, Palo Alto, California, and has been admitted to the Utah State Bar 
and the Bar of the District of Columbia.  From 1991 to his employment with 
Centurion, Mr. Chavez was employed with Suitter, Axland & Hanson and Jay 
Gurmankin, Esq., P.C., law firms in Salt Lake City, Utah.  During 1989 and 
1990, Mr. Chavez taught full-time as a Visiting Assistant Professor of Law on 
the faculty of the Whittier College School of Law, Los Angeles, California.  
Prior to that position, Mr. Chavez taught and supervised the academic support 
program as Adjunct Professor of Law on the faculty of the University of Utah 
College of Law, and also served in the dual capacity as assistant attorney 
general for Higher Education and as associate legal counsel for the University 
of Utah.  Mr. Chavez also serves as a director of Dotson Exploration Company. 

                                      36

ROBERT E. JORGENSEN received a degree in Business Administration from the 
University of Idaho.  He has served as vice-president, secretary and director 
of Celebration Mining Company since its inception.  In May 1992, Mr. Jorgensen 
retired from the brokerage business and has since been a private investor.  
From 1987 to 1991, Mr. Jorgensen was an investment broker and owner of RCL 
Northwest, Inc., a regional investment firm.  He was a broker with Cohig & 
Associates, Inc., from January 1992 to May 1992.  Mr. Jorgensen filed for 
protection under Chapter 7 of the Bankruptcy Code in August 1992.

JERRY STACEY is a professional mining engineer with over 20 years experience 
in open pit and underground mining.  He earned a B.S. Degree in Mining 
Engineering from Montana Tech in 1974 while working in Butte, Montana mines.  
Between 1974 and 1981, Mr. Stacey worked in senior supervisory positions as a 
Shift Foreman for the Anaconda Company; as mine superintendent for Day Mines 
at the Sherman Mine, mining 1,000 tons per day of silver ore; as mine manager 
for Choctaw Mining supervising the construction and operation of a tungsten 
mine and mill complex; as mine manager for Mountain Mineral's barite mines in 
British Columbia; and as a mine manager at the Goodnews Bay platinum placer 
operation.  In 1981, Mr. Stacey formed General Mine Services Corp., a mine 
consulting and contracting firm for junior mining and exploration companies, 
where he continued as CEO until 1994, when he joined with Celebration and has 
continued full time as Vice President of Operations with Royal.  His current 
responsibilities focus on the engineering, design, installation, and operation 
of complete mine and metallurgical plants involving base and precious metals 
and industrial minerals.

JOHN RYAN, a professional mining engineer, was recently appointed to the 
position of Vice President of Corporate Development for the Company.  Up 
through his appointment, Mr. Ryan has served most recently as a consultant in 
mine engineering services, and will continue in these activities during his 
tenure as Vice President of Corporate Development, as well as engage in other 
matters in accordance with the direction and assignment of the Board of 
Directors.  In addition to his professional degree in 

Mining Engineering, which he received from the University of Idaho, Mr. Ryan 
also holds a juris doctorate (J.D.) law degree from the Boston College School 
of Law.

RONALD KITCHING resides in Australia.  Prior to his retirement five years ago, 
Mr. Kitching was involved in he mining industry from over 35 years holding 
various positions, including serving as president of Overland Drilling 
Company, an Australian exploration drilling company, and as co-founder of 
Glindeman-Kitching Enterprises, an exploration drilling company.  He has 
served as a director for Celebration Mining Company since May 1994.

JAMES W. PRIER has been active in the Canadian resource industry for the past 
14 years as a principal and through his consulting firm, James Prier & 
Associates, Ltd.  From 1986 to 1990, Mr. Prier was associated with Energex 
Minerals, Ltd., a natural resource company listed on the Toronto Stock 
Exchange, serving as vice-president of corporate development from 1987 to 
1990.  While with Energex, Mr. Prior participated in the development, 
evaluation and sale of an open-pit gold deposit in northern British Columbia 
and the subsequent acquisition of a Houston-based oil and gas company.  





                                      37

Mr. Prier was a founding director of Minerex Resources Ltd., a gold producer 
listed on the Toronto Stock Exchange.  He served as vice-president of 
corporate development for Black Swan Gold Mines Ltd., a Toronto Stock Exchange 
listed resource company, from 1991 to 1993.  He is a principal and director of 
Argosy Mining Corp., a Vancouver-based resource company engaged in a US $8.5 
million diamond exploration joint venture in Zimbabwe and Tanzania.  Mr. Prier 
is a director and corporate secretary of Urandel Minerals Corporation, listed 
on the Vancouver Stock Exchange.  Prior to 1979, Mr. Prier was a financial 
analyst for a private Ontario investment group.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934.  Section 
16(a) of the Securities and Exchange Act of 1934 requires certain defined 
persons to file reports of and changes in beneficial ownership of a registered 
security with the Securities and Exchange Commission and the National 
Association of Securities Dealers in accordance with the rules and regulations 
promulgated by the Commission to implement the provisions of Section 16.  
Under the regulatory procedure, officers, directors, and persons who own more 
than ten percent of a registered class of a company's equity securities are 
also required to furnish the Company with copies of all Section 16(a) forms 
they file.  

Based solely on review of the copies of Forms 3, 4, and 5 furnished to the 
Company for transactions occurring between October 1, 1995, and September 30, 
1996, or with respect to transactions which occurred between October 1, 1994, 
and September 30, 1995, and should have been reported in Fiscal 1995 but were 
not, or were untimely reported and that untimeliness was not disclosed in the 
Form 10-K for Fiscal 1995, and on representations that no other transactions 
were required to be reported and no other Forms were required to be filed, the 
Company has determined that the pertinent officers, directors, and principal 
shareholders have complied with all applicable Section 16(a) requirements, 
except as follows: 

Howard Crosby, President, CEO and a Director of the Company, filed Form 5 for 
Fiscal 1995 on December 22, 1995.  That form should have been filed by 
November 14, 1995.  The Form 5 reported two September 1995 transactions.

Robert E. Jorgensen, Executive Vice President, Treasurer and a Director of the 
Company, filed Form 3 on December 22, 1995.  That Form 3 should have been 
filed by August 18, 1995.  A Form 5 for Fiscal 1995 was filed on December 22, 
1995.  That Form 5 should have been filed by November 14, 1995.  The Form 5 
reported two September 1995 transactions.

Jerry Stacey, a Vice President and a Director of the Company, filed Form 3 on 
December 22, 1995.  The Form 3 should have been filed by August 18, 1995.  

Carlos M. Chavez, Secretary and a Director of the Company, filed Form 5 for 
Fiscal 1995 on December 22, 1995.  That form and the two exempt transactions 
it reported should have been filed and disclosed by November 14, 1995.  

Spenst Hansen, a Director of the Company, should have filed a Form 5 for 
Fiscal 1995 by November 14, 1995. Registrant believes that the Form 5 has not 
been filed, but is unaware of any other Form 4 or Form 5 transactions that 
should be reported on that Form 5 or that otherwise have not been filed.





                                       38

Ronald Kitching, a Director of the Company, should have filed a Form 3 for 
Fiscal 1995 by November 14, 1995. Registrant believes the that Form 3 has not 
been filed, but is unaware of any Form 4 or Form 5 transactions that have not 
been filed.

James W. Prier, a Director of the Company, filed Form 3 on December 22, 1995.  
That form should have been filed by August 18, 1995.  

ITEM 11.  EXECUTIVE COMPENSATION

Summary Compensation.  The following table sets forth the compensation paid by 
Royal during each of the last three fiscal years to its Chief Executive 
Officer, and to the other four most highly compensated officers and executive 
officers, but only if the total annual salary and bonus of any such executive 
officer exceeded $100,000 for Fiscal 1995 (the 'Named Executive Officers').  
This information includes the dollar value of base salaries, bonus awards and 
number of stock options granted, and certain other compensation, if any. 


                       SUMMARY COMPENSATION TABLE

                                                 Long  Term  Compensation
                Annual  Compensation             Awards          Payouts
(a)     (b)    (c)     (d)      (e)     (f)      (g)      (h)    (i)
Name                                             Secur-
and                                    Restric   ities
Prin-                           Other  ted       Under    LTIP   All
cipal                           Annual Stock     lying    Pay    Other
Posi-                           Compen Award (1) Options/ Outs   Compen
tion   Year  Salary     Bonus   sation  ($)      SAR's(#) ($)    sation
- - -----  ----  ------     -----  ------- --------- -------- ------ -------
                                         
CEO    1996  $78,000    $0     $0      $0         0       $0     $0
Howard 1995  $48,000    $0     $0      $0         0       $0     $0
Crosby 1994  $16,000(2) $0     $0      $40,000    0       $0     $0
       1993  $0         $0     $0      $0         0       $0     $0

Named 
Execu-
tive 
Officers
- - ------
None   n/a   n/a        n/a     n/a     n/a        n/a     n/a    n/a

(1)  The above shares were issued for Directors fees, for service to Royal.  
     No awards were made for service to Celebration.

(2)  This represents salary received as an officer of Celebration, $4,000 per 
     month, beginning with June 1994.

Other than the Company's Stock Option and Award Plan, there are no retirement, 
pension, or profit sharing plans for the benefit of the Company's officers and 
directors.

Option/SAR Grants Table.     Information concerning individual grants of stock 
options, whether or not in tandem with stock appreciation rights ('SARs'), and 
freestanding SARs made during Fiscal 1996 to the CEO and each of the Named 
Executive Officers, if any, is reflected in the table below.
                                      39



                     OPTION/SAR GRANTS IN FISCAL 1996

                                             Potential Realizable    Alterna-
                                                 Value at Assumed      tive to
                                             Annual Rates of Stock     (f) and
                                               Price Appreciation   (g) Grant
           Individual Grants                      for Option Term  Date Value
- - -------------------------------------------------    ----------------   ---------
(a)      (b)        (c)            (d)      (e)      (f)      (g)      (h)
      Number of     Percent of   
      Securities    Total Options/                                     Grant
      Underlying    SARs Granted   Exercise  Expira-                   Date
      Options/SARs  to Employees   or Base   tion                      Present
Name  Granted (#)   in Fiscal Year Price     Date    5%($)     10%($)   Value $
- - ----  ------------  -------------  --------  ------  ------    ------   -------
                                                   
CEO
- - ----
Howard
Crosby  0            0              N/A       N/A    N/A        N/A      N/A

Named
Execu-
tive
Officers
- - ------
None     n/a         n/a            n/a       n/a    n/a        n/a      n/a  
                                            


Aggregated Option/SAR Exercises and Fiscal 1996 Year-End Option/SAR Value 
Table.  The following table sets forth certain information with respect to 
each exercise, if any,  of stock options and SARs during Fiscal 1996 by the 
CEO and each of the Named  Executive Officers, if any, and the Fiscal 1996 
year-end value of unexercised options and SARs.  The dollar values in columns 
(c) and (e) are calculated by determining the difference between the fair 
market value of the underlying stock and the exercise price or base price of 
the options at exercise or Fiscal 1996 year-end, respectively.  The stock's 
fair market value on September 30, 1996 was $1.1875  per share.  There are no 
outstanding option awards to management.  Even if there were, it is possible 
they might never be exercised.  Actual gains realized, if any, on stock option 
exercises and Common Stock holdings are dependent on the future performance 
and value of the Common Stock and overall stock market conditions.  There can 
be no assurance that projected gains and values would be realized.









                                      40



                AGGREGATED OPTION/SAR EXERCISES IN FISCAL 1996
                 AND OPTION/SAR VALUES AT SEPTEMBER 30, 1996

(a)            (b)             (c)               (d)               (e)
                                             Number of          Value of
                                             Securities         Unexercised
                                             Underlying         In-the-Money
                                             Unexercised        Options/SARs
                                             Options/SARs       at FY-End($)
                                             at FY-End (#)
                              Dollar
           Shares Acquired    Value          Exercisable/       Exercisable/
Name       on Exercise (#)    Realized($)    Unexercisable      Unexercisable
- - ----       ---------------    -----------    -------------      -------------
                                                    
CEO
- - ----
Howard
Crosby      0                  $0            0/0                 0/0

Execu-
tive 
Officers
- - ---------
None         n/a                n/a           n/a                 n/a        



LONG-TERM INCENTIVE PLAN AWARDS.  The Company does not have any formalized 
long-term incentive plan (excluding restricted stock, stock option and SAR 
plans) that provides compensation intended to serve as incentive for 
performance to occur over a period longer than one fiscal year, whether such 
performance is measured by reference to financial performance of the Company 
or an affiliate, the Company's stock price, or any other measure.

COMPENSATION OF DIRECTORS.  Directors receive for their services a retainer 
fee payable in shares of the Company's Common Stock, currently at the rate of 
2,500 shares per quarter of completed service.  During Fiscal 1996, 150,000 
shares were awarded to directors as compensation. The Board has not 
implemented a plan to award options, authorized under the Company's Stock 
Option and Award Plan and none have been granted.  There are no contractual 
arrangements with any member of the Board of Directors, other than the 
employment and salary arrangements for compensating two of its members for 
their service as executive officers:  Howard Crosby as President and CEO, and 
Robert Jorgensen as Executive Vice President and Treasurer.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.  There are no 
compensation committee interlocks.   With respect to insider participation, 
Howard Crosby, Hal Cameron and Carlos Chavez, participated in deliberations of 
the Company's Board of Directors during Fiscal 1996, concerning executive 
officer compensation.

BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION.  The following is a 
summary of the Board of Directors Report:


                                      41

It is the Board's responsibility to review and set compensation levels of the 
executive officers of the Company, evaluate the performance of management and 
consider management appointments and related matters.  All decisions are 
decisions of the full Board.  The Board considers the performance of the 
Company and how compensation paid by the Company compares to compensation 
generally in the mining industry and among similar companies.  In establishing 
executive compensation, the Board bases its decisions, in part, on achievement 
and performance regarding broad-based objectives and targets relating to the 
continued acquisition of favorable silver properties and the progress of 
exploration and development of such properties, as well as the Company's 
financial performance.

For Fiscal 1996, the Company's executive compensation policy consisted of two 
elements: base salary and stock awards.  The policy factors which determine 
the setting of these compensation elements are largely aimed at attracting and 
retaining executives considered essential to the Company's long-term success.  
The granting of stock is designed as an incentive for executives to keep 
management's interests in close alignment with the interests of shareholders.  
The Company's executive compensation policy seeks to engender committed 
leadership to favorably posture the Company for continued growth, stability 
and strength of shareholder equity.

The Company paid salaries to its officers for the fiscal year-ended September 
30, 1996, as follows:  President and CEO, Howard Crosby, $78,000 yearly; 
Executive Vice President and Treasurer, Robert Jorgensen, $72,000 yearly; Vice 
President of Operations, Jerry Stacey, $70,000 yearly; and Vice President of 
Development, John Ryan, $48,000 yearly.  These amounts were approved by the 
Board in recognition of the work and efforts and in completing the acquisition 
of a large number of silver mining properties prior to the end of Fiscal 1996. 

Further, the Board recognized the significant role of these four individuals 
in managing the Company's principal office in Spokane, Washington and in 
raising funds for the Company's exploration and development activities.  
Finally, the Board of Directors took into account the reasonableness of these 
salaries in comparison with Executive salaries within the mining region.  On 
the basis of the above factors, the Board determined that these salaries were 
proper and fitting.  No other officers received a salary during Fiscal 1996.

With respect to stock awards during Fiscal 1996, the Board of Directors did 
not change the amount of shares, 2,500 per quarter, which each director is 
entitled to receive as partial compensation for service to the Company.

The Board believes that executive compensation during Fiscal 1996 
substantially reflects the Company's compensation policy.  

PERFORMANCE GRAPH.  The Company is not presently able to provide a line graph 
covering five consecutive years that compares (1) the yearly percentage change 
in the Company's cumulative total shareholder return on its Common Stock with 
(2) the cumulative total return of a broad equity market index and (3) the 
cumulative total return of an industry index, peer line-of-business index, or 
a group of similarly capitalized issuer companies.  The Company continues 
every reasonable effort to compile or locate commercially available and 
reliable data of its historical stock price for the period required by the 
SEC, or to compile such data for a lesser period of sufficient range in time 
from which the Company could be able to prepare a meaningful performance 
graph. However, the Company has been unable to obtain this information or 
prepare such a performance graph. Nevertheless, the Company continues its 
search for such data.

                                      42

ITEM  12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners and Management.  The following 
table sets forth as of October 4, 1996, the beneficial ownership of Common 
Stock with respect to:  (1) All persons known to the Company to be the 
beneficial owners of more than five percent of the outstanding shares of 
Common Stock (the 'Principal Shareholders'); (2) Each director and director 
nominee of the Company; (3) Each Named Executive Officer (as that term is 
defined in the section entitled 'Executive Compensation', below) who is listed 
in the  'Summary Compensation Table', below,  and (4) All directors and 
executive officers as a group.  At October 4, 1996, the number of shares of 
common stock of the Company issued and outstanding was 10,649,854.




Common Stock Beneficially Owned        No. of Shares         Percent of Class
1.  Name and Address of
    Principal Shareholders
                                                              
Centurion Mines Corporation              1,537,267                  14.4%
  331 South Rio Grande,   Suite 201
  Salt Lake City, UT 84101
Howard Crosby                              632,500(1)                5.9%
  105 N. First, Ste. 232
  Sandpoint, ID 83864
James Kontes                               635,000(2)                5.6%
  P.O. Box 112
  Firth, ID 83236
Thomas Miller                              600,000(3)                5.3%
  2508 Zinfadel Dr.
  Rancho Cordova, CA 95670
Robert E. Jorgensen                        595,000(4)                5.5%
  W. 2719 Strong Rd.
  Spokane, WA 99208

2.  Directors
Howard Crosby                              632,500                   5.9%
Robert E. Jorgensen                        595,000                   5.5%
Ronald Kitching                            157,500                   1.4%
Hal Cameron                                 48,028                    *
Spenst Hansen                              106,100                    *
Carlos M. Chavez                            20,000                    *

3.  Named Executive Officers (Excluding
        Any Director Named Above)

Jerry Stacy                                 20,500                    *
John Ryan                                   22,500                    *

4.  All Directors and Executive Officers
        as a Group (8 Persons)           1,602,128                  15.0%


All shares are owned beneficially and of record, unless otherwise noted.  
Percentage ownership of less than 1% is marked with an asterisk (*).


                                      43

(1) Mr. Crosby is a director, executive officer and 50% shareholder of Extol 
International Corp., a privately-held Washington corporation. As a 50% 
shareholder, Mr. Crosby holds indirect beneficial ownership of one-half of the 
restricted shares retained by Extol following the closing of the share 
exchange with Celebration.  Also, the Board approved the release of a 
previously authorized grant of 200,000 restricted shares to Crosby 
Enterprises, Inc. for its work in putting together for the Company no fewer 
than five major business proposals, culminating in the reorganization with 
Celebration.  Mr. Crosby holds indirect beneficial ownership of those 
restricted shares as a director, executive officer and majority shareholder of 
Crosby Enterprises, a private, closely-held Washington corporation.  Mr. 
Crosby holds all remaining shares in his name, 15,000 shares of which he 
received in Fiscal 1995 as partial compensation for his service as a director 
and executive officer.

(2) Mr. Kontes owns 35,000 issued and outstanding shares, but received options 
to purchase 600,000 restricted shares in exchange for the options he had held 
in Celebration.  None of these options have been exercised, but are 
exercisable within 60 days.  For purposes of reporting beneficial ownership in 
this Item 12 only, the securities underlying Mr. Kontes' options are deemed 
outstanding and have been added to the 10,649,854 actual shares outstanding to 
compute the percentage owned.

(3) Mr. Miller does not own any of the actual shares that are outstanding, but 
received options to purchase 600,000 restricted shares in exchange for the 
options he had held in Celebration.  None of these options have been 
exercised, but are exercisable within 60 days.  For purposes of reporting 
beneficial ownership in this Item 12 only, the securities underlying Mr. 
Miller's options are deemed outstanding and have been added to the 10,649,854 
actual shares outstanding to compute the percentage owned.

(4) The Company notes that in addition to the awards of shares for his service 
as a director and officer of the Company, Mr. Jorgensen initially received 
550,000 restricted shares as part of the share exchange with Celebration.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

RELATIONSHIPS AND TRANSACTIONS PERTAINING TO ROYAL AND CELEBRATION.  Certain 
of the directors and/or officers of the Company also serve as directors and/or 
officers of other companies involved in natural resource exploration and 
development and, consequently, there exists the possibility for such directors 
and officers to be in a position of conflict.  Any decision made by such 
directors and officers involving the Company, as the case may be, will be made 
in accordance with their duties and obligation to deal fairly and in good 
faith with the Company and such other companies.  In addition, such directors 
and officers are required to declare and refrain from voting on any matter in 
which such directors and officers may have a conflict of interest.  In this 
respect, Howard Crosby, who was the President of Celebration and of Royal at 
the time of the Reorganization,  refrained from voting on any matter related 
to the Reorganization or any other matter pertaining to both companies. 

The Company has engaged in transactions with its officers, directors and 
principal shareholders, including the issuance of the initial shares of the 
Company.  Such transactions may be considered as not having occurred at arm's 
length.  The Company may be engaged in transactions with management and others 
involving conflicts of interest, including conflicts on salaries and other 


                                      44

payments to such parties, as well as business opportunities which may arise.  
In this regard, the directors of the Company are involved in other companies 
and may have conflicts of interest in allocating time between the Company and 
other entities to which they are affiliated.

RELATIONSHIPS AND TRANSACTIONS PERTAINING TO ROYAL.  From time to time, at the 
Company's request, Centurion may, at its discretion, provide funds to the 
Company or pay certain expenses directly.  The Company is current in its 
payments to Centurion and management intends to continue the immediate 
repayment to Centurion as expenses are incurred.

During Fiscal 1994, Royal carried over the previous balance owed by Centurion 
of $5,055 and loaned Centurion $8,075, resulting in cumulative total advances 
made by Royal to Centurion of $13,130.  Also during Fiscal 1994, Centurion 
accrued $54,335 of Royal taxes, loaned $83,700 to Royal, and paid $140,932 of 
Royal expenses (including certain land costs of Royal), resulting in total 
advances made by Centurion to Royal of $278,967.  Centurion repaid these and 
previous amounts by paying certain of the Company's expenses and by 
transferring to the Company $467,236 of mineral properties.  Thus, for Fiscal 
1994 transactions between Royal and Centurion, including balance carryovers, 
the net cumulative result was a balance of $265,838 owed by Royal to 
Centurion.

During Fiscal 1995, Centurion made net total advances to the Company of 
$38,086.  The net result was a balance of approximately $300,000 owed by Royal 
to Centurion, which Royal repaid prior to the end of Fiscal 1995 by issuing 
200,000 shares of its common stock to Centurion at the then prevailing market 
price of $1.50 per share.  At September 30, 1995, and at September 30, 1996, 
the Company owed $289 to Centurion.  

RELATIONSHIPS AND TRANSACTIONS PERTAINING TO CELEBRATION.  In May 1994, 
Celebration issued, pursuant to Board resolution, an aggregate of 1,000,000 
shares of common stock to Extol International Corporation, an affiliate of 
Howard M. Crosby, an officer and director of the Company, and 500,000 shares 
of Common Stock to Robert Jorgensen, an officer and director of the Company, 
in exchange for a transfer of the rights under an option on the Montana 
Property.  Mr. Crosby and Mr. Jorgensen are considered founders of the 
Company. The Company has not received a fairness opinion or other valuation of 
the rights transferred in exchange for the shares issued to Mr. Jorgensen and 
Extol International Corporation.  The cost basis of the rights under the 
Montana Property was estimated to be $4,000.  The perceived value of the 
shares issued was determined as of the time of transfer by Mr. Crosby and Mr. 
Jorgensen as sole officers and directors of the Company.  The determination 
was not based on arms length negotiations.  In June 1994, the Company repaid 
to Crosby Enterprises, Inc., an affiliate of Howard M. Crosby, $20,000 for 
funds advanced on the Montana Property prior to the transfer of the rights 
under the option to the Company.

In August 1994, Celebration issued 100,000 shares of Common Stock to Ronald 
Kitching, a director, as compensation for his services as a director.  Mr. 
Crosby and Mr. Jorgensen also received compensation from the Company as 
executive officers.






                                      45

In August 1994, Thomas Miller, a director of Celebration up to August 8, 1995, 
received options to purchase up to 400,000 shares as compensation for his 
consulting services in field exploration management through August 1995.  Mr. 
Miller was also an officer, director and principal shareholder of United 
Silver Mines, Inc., the Company's Joint Venture Partner on the Vipont Property 
and its subsidiary, Bannock Silver Mining Company.

                                 PART IV

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

A.   INDEX TO SUPPLEMENTAL SCHEDULES AND EXHIBITS.
     1.   Supplemental Schedule Number I --
     Weighted Average Shares for the Year Ended September 30, 1996


                                                       Weighted  
                                   Days                Average
Date Issued          Shares        Outstanding         Shares
___________________  ___________    ___________        _____________
                                              
October 1, 1995        7,757,063        366               7,757,063
October 4, 1995          200,000        362                 197,814
October 11, 1995          15,000        355                  14,549
October 26, 1995          13,000        340                  12,077
November 10, 1995         17,700        325                  15,717
November 20, 1995          2,500        315                   2,152
December 4, 1995           3,000        301                   2,467
December 20, 1995        135,000        285                 105,123
December 20, 1995         14,200        285                  11,057
December 29, 1995        375,300        276                 317,987
December 29, 1995         30,750        276                  23,189
December 29, 1995         25,000        276                  18,852
January 4, 1996           60,000        270                  44,262
January 11, 1996         200,000        263                 143,716
January 16, 1996           3,000        258                   2,115
January 29, 1996           7,500        245                   5,020
February 12, 1996          3,000        231                   1,893
March 1, 1996              3,000        213                   1,746
March 5, 1996              1,700        209                     971
March 14, 1996            20,000        200                  10,929
March 20, 1996            31,875        194                  16,895
March 21, 1996             3,000        193                   1,582
April 1, 1996             68,000        182                  33,814
April 2, 1996             66,667        181                  32,969
April 3, 1996              1,700        180                     836
April 4, 1996             50,000        179                  24,454
April 5, 1996              5,000        177                   2,418
April 17, 1996            70,000        166                  31,749
April 18, 1996            47,500        165                  21,414
April 24, 1996           200,000        159                  86,885







                                      46

                                                       Weighted  
                                   Days                Average
Date Issued          Shares        Outstanding         Shares
___________________  ___________    ___________        _____________
                                              
April 25, 1996            66,666        158                  28,779
April 26, 1996             2,900        157                   1,244
April 26, 1996           120,000        157                  51,475
April 29, 1996            41,667        154                  17,532
April 29, 1996             3,000        154                   1,262
May 6, 1996               41,000        147                  16,467
May 6, 1996 (cancel)    -103,334        147                 -41,503
May 14, 1996             150,000        139                  56,967
May 24, 1996               8,000        129                   2,820
June 6, 1996               1,500        116                     475
June 30, 1996 (cancel)   -10,000         92                  -2,514
July 1, 1996              95,500         91                  23,745
July 1, 1996             250,000         91                  62,158
July 19, 1996            115,000         73                  22,937
July 23, 1996            272,500         69                  51,373
July 29, 1996             15,000         63                   2,582
July 30, 1996 (cancel)   -25,000         63                  -4,303
August 19, 1996          200,000         42                  22,951
September 30, 1996       -25,000          0                       0

       TOTAL SHARES:  10,649,854      WEIGHTED AVERAGE:   9,221,191
                      ==========                          =========

     2.   Supplemental Schedule No. II --
     Weighted Average Shares, For the Year Ended September 30, 1995


                                                       Weighted  
                                   Days                Average
Date Issued          Shares        Outstanding         Shares
___________________  ___________    ___________        _____________
                                                 
February 17, 1994      3,450,000        304               3,450,000
January 17, 1995         416,250        256                 350,526
March 21, 1995           262,500        193                 166,653
March 25, 1995            15,000        189                   9,326
August 8, 1995         2,434,563         53                 424,447
September 13, 1995       166,000         17                   9,283
September 29, 1995       800,000          1                   2,632
September 29, 1995        12,750          1                      42
September 29, 1995       200,000          1                     658

      TOTAL SHARES:    7,757,063         WEIGHTED AVERAGE: 4,413,566
                       =========                           =========


     3.  Supplemental Schedule No. III --
     Weighted Average Shares, For the Period From Inception on February 17,   
     1994, Through November 30, 1994




                                      47



                                                       Weighted  
                                   Days                Average
Date Issued          Shares        Outstanding         Shares
___________________  ___________    ___________        _____________
                                                 
February 17, 1994               0        286                       0
May 1, 1994             2,250,000        213               1,675,699
July 16, 1994           1,050,000        137                 502,972
August 20, 1994           150,000        102                  53,497

       TOTAL SHARES:  3,450,000        WEIGHTED AVERAGE:   2,232,168
                      =========                            =========
  

     4.  Supplemental Schedule No. IV --
     Weighted Average Shares, For the Period From Inception on February 17, 
     1994 
     Through September 30, 1996


                                                       Weighted  
                                   Days                Average
Date Issued          Shares        Outstanding         Shares
___________________  ___________    ___________        _____________
                                                 
February 17, 1994              0        956                       0
May 1, 1994            2,250,000        883               1,675,699
July 16, 1994          1,050,000        807                 502,972
August 20, 1994          150,000        742                  53,497
January 17, 1995         416,250        622                 350,526
March 21, 1995           262,500        559                 166,653
March 25, 1995            15,000        555                   9,326
August 8, 1995         2,434,563        419                 424,447
September 13, 1995       166,000        383                   9,283
September 29, 1995       800,000        367                   2,632
September 29, 1995        12,750        367                      42
September 29, 1995       200,000        367                     658
October 4, 1995          200,000        362                 197,814
October 11, 1995          15,000        355                  14,549
October 26, 1995          13,000        340                  12,077
November 10, 1995         17,700        325                  15,717
November 20, 1995          2,500        315                   2,152
December 4, 1995           3,000        301                   2,467
December 20, 1995        135,000        285                 105,123
December 20, 1995         14,200        285                  11,057
December 29, 1995        375,300        276                 317,987
December 29, 1995         30,750        276                  23,189
December 29, 1995         25,000        276                  18,852
January 4, 1996           60,000        270                  44,262
January 11, 1996         200,000        263                 143,716
January 16, 1996           3,000        258                   2,115
January 19, 1996          12,000        255                   8,361
January 29, 1996           7,500        245                   5,020
February 12, 1996          3,000        231                   1,893


                                      48

                                                       Weighted  
                                   Days                Average
Date Issued          Shares        Outstanding         Shares
___________________  ___________    ___________        _____________
                                              
March 1, 1996              3,000        213                   1,746
March 5, 1996              1,700        209                     971
March 14, 1996            20,000        200                  10,929
March 20, 1996            31,875        194                  16,895
March 21, 1996             3,000        193                   1,582
April 1, 1996             68,000        182                  33,814
April 2, 1996             66,667        181                  32,969
April 3, 1996              1,700        180                     836
April 4, 1996             50,000        179                  24,454
April 5, 1996              5,000        177                   2,418
April 17, 1996            70,000        166                  31,749
April 18, 1996            47,500        165                  21,414
April 24, 1996           200,000        159                  86,885
April 25, 1996            66,666        158                  28,779
April 26, 1996             2,900        157                   1,244
April 26, 1996           120,000        157                  51,475
April 29, 1996            41,667        154                  17,532
April 29, 1996             3,000        154                   1,262
May 6, 1996               41,000        147                  16,467
May 6, 1996 (cancel)    -103,334        147                 -41,503
May 14, 1996             150,000        139                  56,967
May 24, 1996               8,000        129                   2,820
June 6, 1996               1,500        116                     475
June 30, 1996 (cancel)   -10,000         92                  -2,514
July 1, 1996              95,500         91                  23,745
July 1, 1996             250,000         91                  62,158
July 19, 1996            115,000         73                  22,937
July 23, 1996            272,500         69                  51,373
July 29, 1996             15,000         63                   2,582
July 30, 1996 (cancel)   -25,000         63                  -4,303
August 19, 1996          200,000         42                  22,951
September 30, 1996       -25,000          0                       0

      TOTAL SHARES:   10,649,854      WEIGHTED AVERAGE:   5,596,841
                      ==========                         ==========


All other schedules have been omitted because they are not applicable or the 
required information is included in the financial statements, or notes 
thereto, or in the above schedules. 



B.  REPORTS ON FORM 8-K
   
Royal filed one report on Form 8-K, dated August 8, 1995, during the last 
quarter of the period covered by this report.  






                                      49

C.  INDEX TO EXHIBITS

The following documents are incorporated herein by reference to Royal's 
Registration Statement on Form 10, as filed with the Securities and Exchange 
Commission:




Exh. No.  Sec No.   Name Of Document
              
 3.1       3(i)      Articles of Incorporation
 3.2       3(i)      Articles of Amendment
 3.3       3(i)      Amendment to Articles of Incorporation Limiting Director 
                         Liability
 3.4       3(ii)     By-Laws
10.1      10         Sale of Mining Properties By Centurion Mines Corporation 
                         to Royal Minerals, Inc. - June 1992 through September 
                         1993
10.2      10        Deed with Reservation of Mineral Royalty - January 1992 to
                         Kennecott
10.3      10        July 1992 Purchase and Sale Agreement of 16,880 acres to
                         Kennecott
10.4      10        July 1992 Kennecott Option to Purchase 6,320 acres
10.5      10        Deed and Assignment with Reservation of  Mineral Royalty - 
                         August 1992 (16,880 acres) to Kennecott
10.6      10        Deed and Assignment with Reservation of Mineral Royalty - 
                         December 1992 (6,320 acres) to Kennecott

The following documents are incorporated herein by reference to Royal's Current
Report on Form 8-K, dated August 8, 1995, as filed with the Securities and
Exchange Commission:

 2.01      2        Agreement and Plan of Reorganization
 3.05      3        Articles of Share Exchange ( Utah) 
 3.06      3        Articles of Share Exchange (Washington)
 4.01      4        Subscription and Investment Agreement
 4.02      4        Stock Purchase Option Certificate
19.01     19        Material Furnished to Celebration Security Holders
20.01     20        Letter from Royal to Share Exchange Security Holders



                             POWER OF ATTORNEY

The Registrant and each person whose signature appears below has designated 
and appointed Howard M. Crosby and Robert E. Jorgensen and each of them as its 
or his true attorneys-in-fact ('Attorneys-in-Fact') with full power to act 
alone and authority to execute in the name of each such  person, and to file 
with the Securities and Exchange Commission, together with any exhibits 
thereto and other documents therewith, any and all amendments to this Form 10-
K that may be necessary or advisable to enable the Registrant to comply with 
the Securities Exchange Act of 1934, as amended, and all rules, regulations 
and requirements pertaining thereto, which amendments may make such other 
changes in the Form 10-K as the aforesaid Attorneys-in-Fact executing the same 
deem appropriate.  


                                      50

- - ------------------------------------------------------------------------------
                                 SIGNATURES
- - ------------------------------------------------------------------------------
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange 
Act of 1934, the registrant has duly caused this report to be signed on its 
behalf by the undersigned, thereunto duly authorized.

DATED:  October 4, 1996
                              ROYAL SILVER MINES, INC. 
   
                              By:     /s/ Howard Crosby                    
                                   --------------------------------
                                   Howard Crosby, President  
                                   Principal Executive Officer  

                              By:    /s/ Robert E. Jorgensen
                                   --------------------------------
                                   Robert E. Jorgensen, Principal
                                   Financial and Accounting Officer

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

DATED: October 4, 1996

ROYAL SILVER MINES, INC.
   
By:   /s/  Howard M. Crosby                                       
    --------------------------------------
    Howard M. Crosby, Director and Chairman

By:   /s/  Robert E. Jorgensen                                     
    --------------------------------------
    Robert E. Jorgensen, Director

By:   /s/  Robert E. Jorgensen                                     
    --------------------------------------
    E. Hal Cameron, Director

By:   /s/  Robert E. Jorgensen
    --------------------------------------
    Spenst Hansen, Director

By:   /s/  Robert E. Jorgensen                                     
    --------------------------------------
    Carlos M. Chavez, Director

By:   /s/  Robert E. Jorgensen                                     
    --------------------------------------
    Ronald Kitching, Director

By:   /s/  Robert E. Jorgensen                                     
    --------------------------------------
    James W. Prier, Director

                                     51

EX-16.2

                            ROYAL SILVER MINES, INC.
                         (A Development Stage Company)

                          Audited Financial Statements

                           September 30, 1996 and 1995














































                           C O N T E N T S

Independent Auditors' Reports  . . . . . . . . . . . . .  F-1

Balance Sheets . . . . . . . . . . . . . .  . . . . . .   F-2

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

Statements of Stockholders' Equity . . . . . . . . . . .  F-4

Statements of Cash Flows . . . . . . . . . . . . . . . .  F-10

Notes to the Financial Statements . . . . . . . . . . . . F-13








































                             (Company Logo)
                         Williams & Webster, P.S.
                       Certified Public Accountants
                         Seafirst Financial Center
                       601 W. Riverside, Suite 1970
                          Spokane, WA 99201-0611
                            Tel: (509) 838-5111
                            Fax: (509) 624-5001

The Board of Directors
Royal Silver Mines, Inc.
(A Development Stage Company)
Spokane, Washington

INDEPENDENT AUDITOR'S REPORT


We have audited the accompanying balance sheet of Royal Silver Mines, Inc. (a
development stage company) as of September 30, 1996, and the related statements
of operations, shareholders' equity, and cash flows for the year then ended, and
from inception on February 17, 1994 through September 30, 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 audit.  

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

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the financial position of Royal Silver Mines, Inc. as of
September 30, 1996, and the results of their operations and their cash flows 
for the year then ended and from inception on February 17, 1994 through 
September 30, 1996 in conformity with generally accepted accounting principles.


Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
December 13, 1996











                                     F-1

ROYAL SILVER MINES, INC.
(A Development Stage Company)
BALANCE SHEETS


                                                  September 30,  September 30,
                                                     1996           1995
                                                  _____________  _____________
                                                           
ASSETS
  CURRENT ASSETS
     Cash                                         $    688,716   $    151,698
     Note receivable                                   100,000            -  
     Interest receivable                                   333            -  
     Prepaid expenses                                   17,391          4,350
                                                  _____________  _____________
          TOTAL CURRENT ASSETS                         806,440        156,048
                                                  _____________  _____________
  MINERAL PROPERTIES                                 4,785,665      3,869,515
  PROPERTY AND EQUIPMENT
     Furniture and equipment                            15,802         11,629
     Less - accumulated depreciation                    (2,809)          (589)
                                                  _____________  _____________
          TOTAL PROPERTY AND EQUIPMENT                  12,993         11,040
                                                  _____________  _____________
  OTHER ASSETS
     Deferred debt issuance costs, net                     -           19,736 
     Organization costs, net                               259            359 
                                                  _____________  _____________
          TOTAL OTHER ASSETS                               259         20,095 
                                                  _____________  _____________
TOTAL ASSETS                                      $  5,605,357   $  4,056,698
                                                  =============  =============
LIABILITIES AND SHAREHOLDERS' EQUITY
  CURRENT LIABILITIES
     Accounts payable                             $    25,135    $    60,026 
     Payable to related parties                           289            289
     Accrued expenses                                  34,443         90,088
     Notes payable                                     60,000        670,919
                                                  _____________  _____________
  TOTAL CURRENT LIABILITIES                           119,867        821,322
                                                  _____________  _____________
  LONG-TERM DEBT                                          -              -
  COMMITMENTS AND CONTINGENCIES                           -              -
  SHAREHOLDERS' EQUITY 
     Common stock, $.01 par value; 40,000,000 shares
     authorized, 10,649,854 and 7,757,063 shares
     issued and outstanding, respectively              106,499         77,571
     Additional paid-in capital                      8,436,808      4,120,540 
     Deficit accumulated during development stage   (3,057,817)       962,735
                                                  _____________  _____________
  TOTAL SHAREHOLDERS' EQUITY                         5,485,490      3,235,376 
                                                  _____________  _____________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $  5,605,357   $  4,056,698
                                                  =============  =============


  The accompanying notes are an integral part of these financial statements.
                                     F-2

ROYAL SILVER MINES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS


                                                                Period From
                                                                February 17,
                                                                   1994   
                                                   Ten months   (inception)
                                    Year ended       ended         through
                                   September 30,  September 30,  September 30,
                                       1996           1995           1996
                                   _____________  _____________  _____________
                                                        
REVENUES                           $        -     $       -      $       -
                                   _____________  _____________  _____________
GENERAL AND ADMINISTRATIVE EXPENSES

   Mineral leases                         8,122           843          8,965
   Depreciation and amortization         35,736        59,822         98,069
   Officers and directors
       compensation                     492,715       209,733        831,948
   Other administrative expenses      1,298,975       273,246      1,652,006
                                   _____________  _____________  _____________

     Total expenses                   1,835,548       543,644      2,590,988
                                   _____________  _____________  _____________

OPERATING LOSS                       (1,835,548)     (543,644)    (2,590,988)
                                   _____________  _____________  _____________
OTHER EXPENSES
   Interest expense                      (9,534)      (62,557)       (72,091)
   Loss on disposition of assets       (200,000)     (144,738)      (344,738)
                                   _____________  _____________  _____________
     Total other expenses              (209,534)     (207,295)      (416,829)

                                   _____________  _____________  _____________

NET LOSS                           $ (2,045,082)  $  (750,939)  $ (3,007,817)
                                   =============  =============  =============

NET LOSS PER COMMON SHARE          $      (0.22)  $     (0.17)  $      (0.53)
                                   =============  =============  =============
WEIGHTED AVERAGE  NUMBER OF
COMMON SHARES OUTSTANDING              9,221,191     4,413,566      5,596,841 
                                   =============  =============  =============











  The accompanying notes are an integral part of these financial statements.
                                     F-3

ROYAL SILVER MINES, INC.
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)

          Common Stock                                        Total
             _________________________   Additional                    Stock-
                Number                     Paid-in     Accumulated     holders
             of  Shares       Amount       Capital       Deficit       Equity
             ___________ ___________  ____________  ____________  ____________
                                                     
Balance
February 17, 
1994                -    $      -     $       -     $       -     $       -   
             ___________ ___________  ____________  ____________  ____________
Issuance in 
  May 1994 
  of shares
  at $.002
  per share
  to officers
  and directors
  in exchange 
  for assignment
  of mining 
  property 
  option       2,250,000      22,500       (18,500)         -           4,000
Issuance in
  July 1994 of 
  shares for 
  cash at $.402
  in private
  placement,
  net of costs 1,050,000      10,500       411,116          -         421,616
Issuance in 
  August 1994
  of shares to
  a director
  in exchange
  for services,
  valued at
  $.417 per 
  share          150,000       1,500       61,000           -          62,500
Net loss for
  the year
  ended
  November 
  30, 1994          -           -            -         (211,796)     (211,796)
            ____________ ___________  ____________  ____________  ____________
Balance,
  November 
  30, 1994     3,450,000      34,500      453,616      (211,796)      276,320
            ____________ ___________  ____________  ____________  ____________




  
  The accompanying notes are an integral part of these financial statements.
                                     F-4

ROYAL SILVER MINES, INC.
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) (Continued)

          Common Stock                                        Total
             _________________________   Additional                    Stock-
                Number                     Paid-in     Accumulated     holders
             of  Shares       Amount       Capital       Deficit       Equity
             ___________ ___________  ____________  ____________  ____________
                                                     
Balance, forward
  November 
  30, 1994     3,450,000      34,500      453,616      (211,796)      276,320
            ____________ ___________  ____________  ____________  ____________
Issuance of
  shares in
  debt offering 
  at $.03
  per share      416,250       4,163        9,712           -          13,875
Issuance of
  shares for
  mineral 
  properties
  valued at
  $1.00 per
  share          262,500       2,625      259,875           -         262,500
Issuance of
  shares for
  cash at $1.00 
  per share       15,000         150       14,850           -          15,000
Stock issuance
  costs              -           -        (58,202)          -         (58,202)
Issuance of
  shares to
  acquire 
  Consolidated
  Royal Mines,
  Inc. at $.15
  per share    2,434,563      24,346       335,750           -         360,096
Issuance of
  shares to
  directors and
  employees for 
  services at
  prices ranging
  from $2.00
  to $2.50
  per share      12,750         127        29,473           -          29,600
            ____________ ___________  ____________  ____________  ____________
Balance
  forward     6,591,063      65,911     1,045,074      (211,796)      899,189
            ____________ ___________  ____________  ____________  ____________




  
  The accompanying notes are an integral part of these financial statements.
                                     F-5

ROYAL SILVER MINES, INC.
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) (Continued)

          Common Stock                                        Total
             _________________________   Additional                    Stock-
                Number                     Paid-in     Accumulated     holders
             of  Shares       Amount       Capital       Deficit       Equity
             ___________ ___________  ____________  ____________  ____________
                                                     
Balance, 
forward       6,591,063      65,911     1,045,074      (211,796)      899,189
             ____________ ___________  ____________  ____________  ___________
Issuance of
  shares in
  exchange for 
  mineral
  properties
  at prices
  ranging 
  from $3.13
  to $3.25
  per share     800,000       8,000     2,530,126           -       2,538,126
Issuance of
  shares for
  cash at 
  prices
  ranging from
  $1.50 to 
  $2.00 per
  share         166,000       1,660       247,340           -         249,000
Issuance of
  shares in
  exchange for 
  debt at $1.50 
  per share     200,000       2,000       298,000           -         300,000
Net loss for
  the ten
  months ended 
  September
  30, 1995          -           -             -         (750,939)    (750,939)
            ____________ ___________  ____________  ____________  ____________
Balance,
September 30,
1995          7,757,063  $   77,571   $  4,120,540  $   (962,735) $ 3,235,376
            ____________ ___________  ____________  ____________  ____________
Issuance of
  shares for
  cash at 
  $1.50 per
  share       1,176,832       11,769     1,754,010           -      1,765,779
            ____________ ___________  ____________  ____________  ____________
Balance
  forward     8,933,895       89,340     5,874,550      (962,735)   5,001,155
            ____________ ___________  ____________  ____________  ____________

  
  The accompanying notes are an integral part of these financial statements.
                                     F-6

ROYAL SILVER MINES, INC.
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) (Continued)

          Common Stock                                        Total
             _________________________   Additional                    Stock-
                Number                     Paid-in     Accumulated     holders
             of  Shares       Amount       Capital       Deficit       Equity
             ___________ ___________  ____________  ____________  ____________
                                                     
Balance,
  forward     8,933,895       89,340     5,874,550      (962,735)   5,001,155
             ___________ ___________  ____________  ____________  ____________
Issuance of
  shares to
  directors and
  employees for
  services at
  $1.50 
  per share     222,700        2,227       331,823           -        334,050
Issuance of
  shares in
  exchange for
  debt and accrued
  interest 
  at $1.50
  per share     406,050        4,060       605,015           -        609,075
Issuance of
  shares for
  cash at 
  $2.20
  per share     150,000        1,500       328,500           -        330,000
Issuance of
  warrants
  for cash
  at $.05 
  per warrant       -            -          41,068          -          41,068 
Issuance of
  shares for
  cash at
  $1.62
  per share      65,000          650       104,650          -         105,300
Issuance of
  shares for
  cash to
  directors and
  employees
  at prices
  ranging 
  from $1.62
  to $2.08
  per share     107,500        1,075       181,175         -          182,250
            ____________ ___________  ____________  ____________  ____________
Balance
  forward     9,885,145       98,852     7,466,781    (962,735)     6,602,830
            ____________ ___________  ____________  ____________  ____________
  
  The accompanying notes are an integral part of these financial statements.
                                       F-7

ROYAL SILVER MINES, INC.
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) (Continued)

          Common Stock                                        Total
             _________________________   Additional                    Stock-
                Number                     Paid-in     Accumulated     holders
             of  Shares       Amount       Capital       Deficit       Equity
             ___________ ___________  ____________  ____________  ____________
                                                     
Balance,
  forward     9,885,145       98,852     7,466,781    (962,735)     6,602,830
             ___________ ___________  ____________  ____________  ____________
Issuance of
  shares for
  cash at
  $0.75
  per share      200,000       2,000       147,985            -       149,985
Issuance of
  shares for
  cash at $1.70
  per share      250,000       2,500       422,500            -       425,000
Cancellation
  of 35,000
  shares 
  received in 
  exchange for 
  return of 
  mining
  property       (35,000)       (350)     (109,025)          -       (109,375)
Payment to 
  Centurion Mines
  for option to
  repurchase
  stock              -           -             -         (50,000)     (50,000)
Issuance of
  shares for
  joint venture
  in mining
  property
  at $1.50
  per share      100,000       1,000       149,000           -        150,000
Repurchase of
  25,000 shares
  issued for
  joint venture
  at $1.40
  per share      (25,000)       (250)      (34,750)          -        (35,000)
            ____________ ___________  ____________  ____________  ____________
Balance
  forward     10,375,145     103,752     8,042,491    (1,012,735)   7,133,508
            ____________ ___________  ____________  ____________  ____________

  



  The accompanying notes are an integral part of these financial statements.
                                     F-8

ROYAL SILVER MINES, INC.
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) (Continued)

          Common Stock                                        Total
             _________________________   Additional                    Stock-
                Number                     Paid-in     Accumulated     holders
             of  Shares       Amount       Capital       Deficit       Equity
             ___________ ___________  ____________  ____________  ____________
                                                     
Balance,
  forward     10,375,145     103,752     8,042,491    (1,012,735)   7,133,508
             ___________ ___________  ____________  ____________  ____________
Issuance of
  shares for
  mining
  property
  at $1.50
  per share       20,000          200       29,800           -         30,000
Issuance of
  shares to
  noteholders
  for extension
  of notes
  at $1.50
  per share       39,375          394       58,669            -        59,063
Issuance of
  shares for
  services at 
  $1.50
  per share      215,334         2,153     320,848            -       323,001
Stock
  issuance
  costs              -             -       (15,000)           -       (15,000)
Net loss for
  the year
  ended 
  September
  30, 1996           -             -           -       (2,045,082) (2,045,082)
            ____________ ___________  ____________  ____________  ____________
Balance,
September 30,
1996          10,649,854 $   106,499  $  8,436,808  $ (3,057,817) $ 5,485,490 
            ============ ===========  ============  ============  ============

  











  The accompanying notes are an integral part of these financial statements.
                                    F-9

ROYAL SILVER MINES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS

                                                           From
                                                                 February 17,
                               For the year     For the Ten   1994 (Inception)
                                   Ended        Months Ended       Through
                               September 30,    September 30,    September 30,
                                    1996            1995            1996
                               ______________  ______________  ______________
                                                      
Cash flows from operating
  activities:
  Net loss                     $  (2,045,082)  $    (750,939)  $  (3,007,817)
                               ______________  ______________  ______________
  Adjustments to reconcile
  net loss to net cash used
  by operating activities:
     Depreciation and 
       amortization                    35,736           59,822        100,616
     Issuance of common stock
       for services                   657,051           29,600        749,151
     Write-off of joint
       venture costs                  150,000              -          150,000
  Changes in assets and liabilities:
     Note receivable                 (100,000)             -         (100,000)
     Interest receivable                 (333)             -             (333)
     Prepaid expenses                 (13,041)          22,627        (17,391)
     Other assets                      19,836          (23,137)        (3,801)
     Accounts payable                 (34,891)          53,727         25,135
     Accrued expenses                 (55,645)          90,088         34,443
     Payable to related parties           -            300,289        300,289
                                ______________  ______________  ______________
  Net cash used in operating
    activities                     (1,386,369)        (217,923)    (1,769,708)
                                ______________  ______________  ______________
Cash flows from investing
    activities:
   Purchase and development of
     mineral properties              (979,043)        (455,418)    (1,604,836)
   Purchase of fixed assets            (4,173)         (11,629)       (15,802)
                                ______________  ______________  ______________
Net cash provided used in 
     investing activities            (983,216)        (467,047)    (1,620,638)
                                ______________  ______________  ______________











  The accompanying notes are an integral part of these financial statements.
                                    F-10

ROYAL SILVER MINES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS (Continued)



                                                           From
                                                                 February 17,
                               For the year     For the Ten   1994 (Inception)
                                   Ended        Months Ended       Through
                               September 30,    September 30,    September 30,
                                    1996            1995            1996
                               ______________  ______________  ______________
                                                      
Cash flows from financing 
     activities:
   Stock issuance and offering
     costs                            (15,000)         (58,202)      (144,835)
   Proceeds received on 
     long-term debt                       -            675,000        675,000
   Payments made on notes payable     (40,000)         (74,206)      (114,206)
   Issuance of common stock for
      cash                          2,958,314          264,000      3,659,814
   Payment for option to
     repurchase stock                 (50,000)             -          (50,000)
   Issuance of common stock 
      for accrued interest             38,158              -           38,158
   Issuance of common stock for
      extension of notes payable
      maturation                       59,063              -           59,063
   Payment for return of stock
      issued for mining property
      interest                        (35,000)             -          (35,000)
   Payment of joint venture costs     (50,000)             -          (50,000)
   Issuance of warrants for cash       41,068              -           41,068
                                ______________  ______________  ______________
Net cash provided by financing
   activities                       2,906,603          806,592      4,079,062
Net increase in cash            $     537,018   $      121,622 " $    688,716

Cash, beginning of period             151,698          30,076             -
                                ______________  ______________  ______________

Cash, end of period             $     688,716   $     151,698   $     688,716
                                ==============  ==============  ==============














  The accompanying notes are an integral part of these financial statements.
                                    F-11

ROYAL SILVER MINES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS (Continued)



                                                           From
                                                                 February 17,
                               For the year     For the Ten   1994 (Inception)
                                   Ended        Months Ended       Through
                               September 30,    September 30,    September 30,
                                    1996            1995            1996
                               ______________  ______________  ______________
                                                      
Supplemental cashflow disclosure:

   Income taxes                 $         -     $         250   $         350
   Interest                     $       5,715   $      17,683   $      23,398

Non-cash financing activities:
   Common stock issued for
     services rendered          $     657,051   $      29,600   $     749,151
   Common stock issued for
      mineral properties        $     180,000   $   2,800,626   $   2,980,626
   Common stock issued for
      exchange for debt         $     570,917   $     313,875   $     922,950
   Common stock issued in 
      acquisition of 
      Consolidated Royal
      Mines, Inc.               $         -     $     360,096   $     360,096
   Option rights acquired in
     exchange for a payable     $         -     $         -     $      79,000
   Common stock issued for 
   assignment of mining
    property options            $         -     $         -     $       4,000























  
  The accompanying notes are an integral part of these financial statements.
                                    F-12

                           ROYAL SILVER MINES, INC.
                         (A Development Stage Company)
                       Notes to the Financial Statements
                              September 30, 1996

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Royal Silver Mines, Inc. (Royal) was incorporated in April of 1969 under the 
laws of the State of Utah primarily for the purpose of acquiring and 
developing mineral properties.  Royal conducts its business as a "junior" 
natural resource company, meaning that it intends to receive income from 
property sales or joint ventures with larger companies.

Celebration Mining Company (Celebration), currently a wholly-owned subsidiary 
of Royal was incorporated for the purpose of identifying, acquiring, exploring 
and developing mining properties.  Celebration was organized on February 17, 
1994 as a Washington Corporation.  Celebration has not yet realized any 
revenues from its planned operations.

On August 8, 1995, Royal and Celebration completed an Agreement and Plan of 
Reorganization whereby the Company issued 4,143,750 shares of its common stock 
and 1,455,000 warrants in exchange for all of the outstanding common stock of 
Celebration.  Pursuant to the reorganization the name of the Company was 
changed to Royal Silver Mines, Inc.  Immediately prior to the Agreement and 
Plan of Reorganization, the Company had 2,375,463 common shares issued and 
outstanding.

The acquisition was accounted for as a purchase by Celebration of Royal, 
because  the shareholders of Celebration control the company after the 
acquisition.  Therefore, Celebration is treated as the acquiring entity.  
There was no adjustment to the carrying value of the assets or liabilities of 
Royal in the exchange as the market value approximated the net carrying value. 

Royal is the acquiring entity for legal purposes and Celebration is the 
surviving entity for accounting purposes.

The $4,785,665 cost of mineral properties included in the accompanying balance 
sheet as of September 30, 1996 is related to exploration properties.  The 
Company has not determined whether the exploration properties contain ore 
reserves that are economically recoverable.  The ultimate realization of the 
Company's investment in exploration properties is dependent upon the success 
of future property sales, the existence of economically recoverable reserves, 
the ability of the Company to obtain financing or make other arrangements for 
development and upon future profitable production.  The ultimate realization 
of the Company's investment in exploration properties cannot be determined at 
this time and, accordingly, no provision for any asset impairment that may 
result, in the event the Company is not successful in developing or selling 
these properties, has been made in the accompanying financial statements.

The Company is actively seeking additional capital and management believes the 
properties can ultimately be sold or developed to enable the Company to 
continue its operations.  However, there are inherent uncertainties in mining 
operations and management cannot provide assurances that it will be successful 
in this endeavor.  Furthermore, the Company is in the development stage as it 
has not realized any significant revenues from its planned operations.




                                     F-13

                           ROYAL SILVER MINES, INC.
                         (A Development Stage Company)
                       Notes to the Financial Statements
                              September 30, 1996

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Method

The Company's financial statements are prepared using the accrual method of 
accounting.

Loss Per Share

Loss per share was computed by dividing the net loss by the weighted average 
number of shares outstanding during the year  The weighted average number of 
shares was calculated by taking the number of shares outstanding and weighing 
them by the amount of time they were outstanding.

The outstanding warrants were not included in the computation of loss per 
share because the exercise price of the outstanding warrants is higher than 
the market price of the stock, thereby causing the warrants to be 
antidilutive.

Cash Equivalents

The Company considers all highly liquid investments with a maturity of three 
months or less when purchased to be cash equivalents.

Mineral Properties

Costs of acquiring, exploring and developing mineral properties are 
capitalized by project area.  Costs to maintain the mineral rights and leases 
are expensed as incurred.  When a property reaches the production stage, the 
related capitalized costs will be amortized, using the units of production 
method on the basis of periodic estimates of ore reserves.  Mineral properties 
are periodically assessed for impairment of value and any losses are charged 
to operations at the time of impairment.

Should a property be abandoned, its capitalized costs are charged to 
operations.  The Company charges to operations the allocable portion of 
capitalized costs attributable to properties sold.  Capitalized costs are 
allocated to properties sold based on the proportion of claims sold to the 
claims remaining within the project area.

Concentration of Risk

The Company maintains its cash accounts in primarily one commercial bank in 
Spokane, Washington.  Accounts are guaranteed by the Federal Deposit Insurance 
Corporation (FDIC) up to $100,000.  The Company's cash balance exceeds that 
amount by $588,716 at September 30, 1996.







                                     F-14

                           ROYAL SILVER MINES, INC.
                         (A Development Stage Company)
                       Notes to the Financial Statements
                              September 30, 1996

Provision For Taxes

At September 30, 1996, the Company had net operating loss carryforwards of 
approximately $3,130,000 that may be offset against future taxable income 
through 2011  No tax benefit has been reported in the financial statements as 
the Company believes there is a 50% or greater chance the net operating loss 
carryforwards will expire unused.  Accordingly, the potential tax benefits of 
the net operating loss carryforwards are offset by a valuation allowance of 
the same amount.

Recently Issued Accounting Standards

In March 1995, the Financial Accounting Standards Board issued a new statement 
titled "Accounting for Impairment of Long-Lived Assets."  This new standard is 
effective for years beginning after December 15, 1995 and would change the 
Company's method of determining impairment of long-lived assets.  Although the 
Company has not performed a detailed analysis of the impact of this new 
standard on the Company's financial statements, the Company does not believe 
that adoption of the new standard will have a material effect on the financial 
statements.

In October 1995, the Financial Accounting Standards Board issued a new 
statement titled "Accounting for Stock-Based Compensation " (FAS 123).  The 
new statement is effective for fiscal years beginning after December 15, 1995. 

FAS 123 encourages, but does not require, companies to recognize compensation 
expense for grants of stock, stock options, and other equity instruments to 
employees based on fair value.  Companies that do not adopt the fair value 
accounting rules must disclose the impact of adopting the new method in the 
notes to the financial statements.  Transactions in equity instruments with 
non-employees for goods or services must be accounted for on the fair value 
method.  The Company currently intends to adopt the fair value accounting 
prescribed by FAS 123.  However, the Company intends to continue its analysis 
of FAS 123 to determine its ultimate effect in the future.

Restatement

The restatement of the financial statements have resulted in certain changes 
in presentation which have no effect on the net losses or shareholder's equity 
for September 30, 1995 or the year then ended.

NOTE 3 - MINERAL PROPERTIES

Utah Mining Property Joint Venture

In October 1994, Celebration and United Silver Mine, Inc., (United ) entered 
into a joint venture agreement, whereby Celebration could acquire up to an 80% 
interest in a mining property located in the State of Utah.  Under the terms 
of the agreement, United contributed real properties for an initial 75% 
interest in the joint venture, and Celebration was to remove all liens 
associated with the real properties by paying $175,000 to a bank which was the 
primary lien holder for its initial 25% interest in the venture.  


                                     F-15

                           ROYAL SILVER MINES, INC.
                         (A Development Stage Company)
                       Notes to the Financial Statements
                              September 30, 1996

NOTE 3 - MINERAL PROPERTIES (Continued)

Celebration expended $175,000 to purchase the aforementioned promissory note.  
The property was auctioned in a public auction in May, 1995 and by virtue of 
Celebration's first position lien, Celebration was able to successfully bid 
the full amount of the underlying promissory note.  Although additional 
expenditures have been made on the property through September 30, 1996, no 
further funds toward the joint venture have been expended by Celebration, 
which owns an undivided 25% interest in the property.

Shoshone County Idaho Mineral Lease

In February 1995, Celebration entered into an agreement to acquire a fifty-
year renewable mineral lease on a property in Shoshone County, Idaho.  The 
mining property consists of twelve patented claims and associated Idaho state 
leases.  In connection with this lease, Celebration paid $50,000 and issued 
175,000 shares of common stock.  In addition, 10,000 shares were issued to a 
new director for his assistance in obtaining this lease.  Celebration 
subsequently paid $950,000 for the option of extending its lease for an 
additional forty-nine years.  When, and if, the property achieves gross sales 
of $40,000,000, Celebration will be obligated to pay an additional .5% royalty 
on future sales.  Furthermore, beginning after September 1, 1995, and at such 
time as the average price of silver has reached $6.00 per ounce for a 30-day 
period, Celebration is obligated to spend not less than $2,000,000 during the 
subsequent 36 months to de-water and repair the mine.  Thereafter, Celebration 
will be required to maintain the mine in a condition to allow it to be put 
into production within sixty days.  There are certain claims by the U.S. 
Environmental Protection Agency and the County on this property for which the 
lessor is obligated to pay.  In the event these claims are not satisfactorily 
resolved, they may effect Celebration's rights to the property.

Australian Mineral Property Joint Venture

In March 1995, Celebration entered into a joint venture agreement with an 
Australian company for exploration of a certain mineral property in Australia. 

Under the original terms of the joint venture agreement, Celebration acquired 
a 10% interest by paying $100,000 in April 1995.  No additional funds where 
paid or required to be paid subsequent to the initial payment.

Washington and Idaho Mineral Properties

During the year ended September 30, 1995, Celebration purchased through the 
issuance of 800,000 shares of its common stock, various mineral properties 
located in the States of Washington and Idaho.  The mineral properties were 
recorded at the fair market value of the shares paid on the date of issuance 
ranging from $3.13 to $3.25 per share for a total purchase price of 
$2,538,126.

In May 1996, the Company sold back the Frisco Standard Silver Mine to its 
original seller in exchange for the same price (35,000 shares of Royal stock) 
received by the seller when the mine was purchased.  The shares received were 
cancelled and no gain or loss was recorded on the transaction.

                                     F-16

                           ROYAL SILVER MINES, INC.
                         (A Development Stage Company)
                       Notes to the Financial Statements
                              September 30, 1996

NOTE 3 - MINERAL PROPERTIES (Continued)

The Company's proposed future mining activities will be subject to laws and 
regulations controlling not only the exploration and mining of mineral 
properties, but also the effect of such activities on the environment.  
Compliance with such laws and regulations may necessitate additional capital 
outlays, affect the economics of a project, and cause changes or delays in the 
Company's activities.

The total mineral properties at September 30, 1996 are classified as follows:

          Mineral properties under joint ventures            $    366,510
          Other mineral properties                              4,419,155
                                                             _____________
          Total Mineral Properties                           $  4,785,665
                                                             =============

The Company's mineral properties are valued at the lower of cost or net 
realizable value.

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost.  Major additions and improvements 
are capitalized.  Minor replacements, maintenance and repairs that do not 
increase the useful life of the assets are expensed as incurred.  Depreciation 
of property and equipment is determined using the straight-line method over 
the expected useful lives of the assets of five years.

NOTE 5 - INTANGIBLE ASSETS

Deferred debt issuance costs and organization costs are recorded at cost.  
Amortization of these intangible assets is determined using the straight-line 
method over the expected useful lives of the assets as follows:

                  Description                    Useful Lives
                  ___________________________    ____________
                  Deferred debt issuance costs       1 year
                  Organization costs                 5 years

NOTE 6 - COMMON STOCK

During the year ended November 30, 1994, Celebration issued 1,500,000 shares 
of common stock to directors for services rendered, valued at $.003 to $.625 
per share, which is the fair market value of the shares on the date of 
issuance.

During the year ended September 30, 1995, the Company issued 12,750 shares of 
common stock to directors and employees for services rendered, valued at 
prices ranging from $2.00 to $2.50 per share, which is the fair market value 
of the shares on the date of issuance.



                                     F-17

                           ROYAL SILVER MINES, INC.
                         (A Development Stage Company)
                       Notes to the Financial Statements
                              September 30, 1996

NOTE 6 - COMMON STOCK (Continued)

During the year ended September 30, 1995, Celebration issued 975,000 shares of 
common stock in exchange for mineral properties (See Note 3) and sold 176,000 
shares of common stock for $264,000 cash.

The Company issued 200,000 shares of its common stock during the year ended 
September 30, 1995 in lieu of outstanding debt that was owed to Centurion 
Mines Corporation  (Centurion), a related entity.  The stock was issued at 
$1.50 per share in payment of $300,000 of the then outstanding debt (See Note 
10).  The Company also issued 277,500 shares in connection with the issuance 
of notes payable (See Note 9).  (See also the disclosure in Note 1).

During the year ended September 30, 1996, the Company sold 1,949,332 shares of 
its common stock for $2,958,314 in cash.  The Company also issued 222,700 
shares to directors and employees for services rendered valued at $1.50 per 
share, which is the fair market value of the shares on the date of issuance.

Also during the year ended September 30, 1996, the Company issued 100,000 
shares of its common stock for a joint venture in a mining property and 20,000 
common shares for a mining property (See Note 12).  The stock issued was 
valued at $1.50 per share, which is the fair market value to the shares at the 
date of issuance.

In the same twelve-month period, the Company also issued 406,050 shares of its 
common stock in payment of outstanding debt of $570,917 and accrued interest 
of $38,158.  The stock was issued at $1.50 per share for a total value of 
$609,075.  In addition, the Company issued 39,375 shares of common stock to 
noteholders for extending the maturity date of their loans.  Again, the shares 
were valued at $1.50 each, which is the fair market value of the shares when 
issued.

NOTE 7 - COMMON STOCK OPTIONS AND WARRANTS

In January 1992, the shareholders of Royal approved a 1992 Stock Option and 
Stock Award Plan under which up to ten percent of the issued and outstanding 
shares of the Company's common stock could be awarded based on merit of work 
performed.  As of September 30, 1996, 12,750 shares of common stock have been 
awarded under the Plan.

Also during the year ended September 30, 1996, the Company issued 215,334 
shares of its common stock for services received.  The shares were valued at 
$1.50 per share, which is the fair market value of the shares at the date of 
issuance.  









                                    F-18

                           ROYAL SILVER MINES, INC.
                         (A Development Stage Company)
                       Notes to the Financial Statements
                              September 30, 1996

NOTE 7 - COMMON STOCK OPTIONS AND WARRANTS (Continued)

Celebration, prior to the exchange agreement with Royal, had granted 
securities to certain shareholders which represented rights to purchase or 
receive shares of Celebration's common stock.  These options were assumed by 
the Company after the merger at a rate of 1.5 shares for each option still 
outstanding.  Thus, the Company has granted options, with varying conditions 
and requirements, to purchase a total of 1,455,000 shares of its common stock. 

There are 255,000 of the stock options exercisable at $1.50 per share which 
expire March 21, 2000.  The remaining 1,200,000 stock options are exercisable 
at $0.93 per share and expire on August 31, 2001.  As of September 30, 1996, 
none of these options have been exercised.

On January 9, 1996, the Board of Directors approved the issuance of warrants 
to two of its officers to purchase a total of 300,000 shares for a purchase 
price of $2.50 per share, exercisable from the date of issuance until January 
9, 1999.

On March 22, 1996, the Board of Directors approved the issuance of warrants to 
an investor to purchase 625,000 shares of common stock of the Company in 
partial completion of a private placement of stock.  These warrants are 
exercisable until September 30, 1998, at a price of $1.50 per share, which is 
67% of the closing price on March 22, 1996.  

On April 10, 1996, following the close of the second quarter of fiscal 1996, 
the Board of Directors authorized the issuance of 420,666 warrants to 
unaffiliated investors as part of the private placement of stock.  These 
warrants are exercisable until April 12, 1997 at prices ranging from $2.50 to 
$2.625 per share.  As of September 30, 1996, 320,666 warrants have been issued 
(but not exercised) for a total amount of $41,068.

NOTE 8 - ADDITIONAL PAID-IN CAPITAL

The following is a summary of additional paid-in capital at September 30, 1996 
and September 30, 1995:

                                      September 30,           September 30,
                                          1996                    1995   
                                      _____________           _____________
Applicable to:
     Common stock                       $8,395,740              $4,120,540
     Stock warrants                         41,068                     -    
                                      _____________           _____________
                                        $8,436,808              $4,120,540
                                      =============           =============







                                    F-19


                           ROYAL SILVER MINES, INC.
                         (A Development Stage Company)
                       Notes to the Financial Statements
                              September 30, 1996

NOTE 9 - NOTES PAYABLE

In February 1995, Celebration raised $555,000 through the issuance of 
promissory notes.  During the second quarter ended March 31, 1996, $470,000 of 
the total amount plus accrued interest of $29,265 was converted into 332,800 
shares of the Company's common stock, leaving an amount owing of $85,000, 
which was further reduced by cash payments to $60,000 at September 30, 1996.  
The notes bear interest at 10% per annum and will be due on the earlier of 
January 1, 1997 or the closing of any public offering of equity securities by 
the Company.  The note holders also received 277,500 shares of Celebration's 
common stock.  A 10% commission was charged by an underwriter on the sale of 
almost all of the notes.

In April 1995, Celebration raised $120,000 in 10% convertible debentures.  In 
late 1995, $105,000 of the total amount plus accrued interest of $4,810 was 
converted into 73,250 shares of the Company's common stock, leaving an amount 
owing of $15,000.  During the third quarter ended September 30, 1996, this 
remaining $15,000 plus accrued interest was paid.  

NOTE 10 - RELATED PARTY TRANSACTIONS

After receiving advances from a related party for payment of operating 
expenses, the Company approved the issuance of 200,000 shares of common stock 
in payment of $300,000 of the then outstanding balance (See Note 6).  The 
balance outstanding at September 30, 1996 was $289.


NOTE 11 - FUTURE LEASE OBLIGATIONS

The Company is obligated under its lease arrangements to make additional lease 
payments subsequent to September 30, 1996 as follows:

              Year Ended  
             September 30,                                 Amount  
             _____________                                _________

                 1997                                      $  9,440
                 1998                                         4,500
                 1999                                         4,500
                 2000 and thereafter                         22,500
                                                          _________
                      Total                                $ 40,940
                                                          =========

NOTE 12 - OPTIONS WITH PLACER MINING CORPORATION

In April 1996, the Company entered into an option with Placer Mining 
Corporation ("Placer") of Kellogg, Idaho whereby the Company could acquire a 
joint venture interest in the Bunker Hill Mine, a silver-lead-zinc mine in 
Shoshone County, Idaho.  After issuing 100,000 shares valued at $1.50 per 
share and spending a non-refundable $50,000 on this option, the Company 
elected to renegotiate this option agreement and entered into a second option 
agreement with Placer on September 18, 1996.  
                                     F-20

                           ROYAL SILVER MINES, INC.
                         (A Development Stage Company)
                       Notes to the Financial Statements
                              September 30, 1996

NOTE 12 - OPTIONS WITH PLACER MINING CORPORATION (Continued)

In the second agreement, the Company paid $100,000 in September 1996 for the 
nonassignable option of acquiring a 100% interest in the Bunker Hill Mine.  In 
order to exercise this option, the Company must issue 500,000 shares of its 
common stock to Placer by May 10, 1997 and pay Placer either $7,000,000 by 
that date or $4,000,000 by that date and $3,500,000 by May 10, 1998.  Under 
the terms of this agreement, the Company will pay Placer a 2 3/4% net smelter 
return royalty in perpetuity with stipulated annual advance minimum royalty 
payments to Placer ranging from $100,000 (in 1999) to $250,000 (in years 2002 
through 2010).  All advance minimum royalties paid are to be credited against 
actual production royalties.

At September 30, 1996, the Company had expended $101,715 in option and related 
expenses toward the purchase of the Bunker Hill Mine.  These costs are 
included in the cost of mineral properties (Note 3) on the Company's balance 
sheet.

NOTE 13 - STOCK OPTION AGREEMENT WITH CENTURION MINES CORPORATION

In September 1996, the Company executed an agreement with Centurion Mines 
Corporation ("Centurion") whereby the Company acquired an option from 
Centurion to purchase up to 800,000 shares of its common stock held by 
Centurion for the exercise price of $1.75 per share during the two-year period 
ending September 30, 1998.  The cost of this two-year stock purchase option 
was $50,000, which was paid by the Company and charged to stockholders' equity 
(accumulated deficit).

At September 30, 1996, no shares were acquired from Centurion under this 
option agreement.




















                                     F-21

EX-27

 


<ARTICLE>5

<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN REGISTRANT'S
FORM 10-K FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1996, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO ITS FINANCIAL STATEMENTS.

                                              
<PERIOD-TYPE>                                     YEAR
<FISCAL-YEAR-END>                          SEP-30-1996
<PERIOD-END>                               SEP-30-1996
<CASH>                                         688,716    
<SECURITIES>                                         0
<RECEIVABLES>                                  100,133
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                               806,440
<PP&E>                                          15,802
<DEPRECIATION>                                   2,809
<TOTAL-ASSETS>                               5,605,357
<CURRENT-LIABILITIES>                          199,867
<BONDS>                                              0
<COMMON>                                       106,499
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<OTHER-SE>                                   5,378,991
<TOTAL-LIABILITY-AND-EQUITY>                 5,605,357
<SALES>                                              0
<TOTAL-REVENUES>                                     0
<CGS>                                                0
<TOTAL-COSTS>                                1,835,548
<OTHER-EXPENSES>                               200,000
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                               9,534
<INCOME-PRETAX>                             (2,045,082)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                         (2,045,082)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                (2,045,082)
<EPS-PRIMARY>                                    (0.22)
<EPS-DILUTED>                                    (0.22)