MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES 13 At June 30, 2001, the Company had current assets of $6,004,176 compared to current liabilities of $1,573,309 for a current ratio of 4 to 1.This compares to current assets of $7,564,689 and current liabilities of $1,872,246, at June 30, 2000, resulting in a current ratio of 4 to 1. During fiscal 2001, liquidity needs were met from: (i) $5,963,153 in revenues from production at the Pipeline Mining Complex and at Bald Mountain, (ii) the Company’s available cash resources, and interest and other income of $258,010, and (iii) cash receipts from the issuance of common stock and the exercise of options of $25,950. During the fiscal year, the Company spent $2,135,107 on the purchase of a NVR1 royalty at the Pipeline Mining Complex, and $60,347 on other capital expendi- tures. or acquiring additional properties, among other factors. The Company will evaluate acquisition opportunities and may use cash or stock for these acquisitions. Acquisitions have become a more important part of the Company’s growth strategy and could be substantial, while explo- ration is becoming less important. The Company has obtained a $10 million line of credit from HSBC that may be used to acquire produc- ing royalties. At this time no funds have been drawn under the line. The Company will continue to explore its remain- ing properties, with a view to enhance the value of any such properties prior to possible farm out to major mining company partners. The Company’s current financial resources and sources of income should be adequate to cover the Company’s anticipated expenditures for general and administrative costs, exploration and leasehold expenses, and capital expenditures for the foreseeable future. During the fiscal year, the Company made an addi- tional investment in Yamana and acquired two million units of Yamana Resources, Inc. for $250,000. Each unit consists of one share and one-half warrant to purchase an additional share for U.S. $0.15 per share, until February 9, 2004. The only material commitments that cannot be terminated at the sole discretion of the Company are  (i) employment agreements with three officers, calling for minimum payments of approximately $540,000; and (ii) office lease payments of $373,332 through the lease period ending October 2005. For the year ended June 30, 2001, the Company recorded net earnings of $1,138,297,or $0.06 per dilut- ed share, as compared to net earnings of $3,952,979, or $0.22 per diluted share, for the year ended June 30, 2000. Net earnings for the current year reflect $6.0 mil- lion in royalty revenues. The Company received royalty revenues of  $5.7 million from its royalties at the Pipeline Mining Complex.The Company also received $0.3 million from its royalty at Bald Mountain. In the prior fiscal year, the Company received royalty revenues of $9.0 million from the Pipeline Mining Complex and $0.4 million from Bald Mountain.This decrease in royalty revenue was directly related to the lower gold price in the current year, which also reduced the royalty rate on GSR1. For fiscal 2002, the Company anticipates production of one million ounces of gold at the Pipeline Mining Complex, which includes the processing of carbona- ceous ore, based on estimates from Cortez. Depletion and depreciation from this production is estimated to be $1.6 million.The Company has also budgeted general and administrative expenses of approximately $1.7 mil- lion, costs of operations of approximately $0.6 million and exploration and business development of approxi- mately $0.5 million.The Company estimates interest income of $0.2 million and income taxes of $0.1 million. These amounts could increase or decrease significantly, at any time during the fiscal year, based on the gold price, exploration results and decisions about releasing Cost of operations decreased compared to the prior year, primarily related to Nevada Net Proceeds  Tax expenditures associated with the increased royalties at the Pipeline Mining Complex, somewhat offset by settlement and accrual of estimated costs at Casmalia. See footnote 12. Fiscal Year Ended June 30, 2001, Compared with Fiscal Year Ended June 30, 2000 RESULTS OF OPERATIONS