U. S. Securities and Exchange Commission
                     Washington D. C. 20549

                          FORM 10-KSB

          Annual Report Under Section 13 or 15(d) of the
                 Securities Exchange Act of 1934               

            For the fiscal year ended December 31, 1996

                  Commission File No. 33-28106

                   YAAK RIVER RESOURCES, INC.
                 (Name of small business issuer)

           Colorado                             84-1097796       
(State or other jurisdiction of              (I.R.S. Employer
incorporation or organization)              Identification No.)

 830 S. Kline Way, Lakewood, Colorado            80226-7506
(Address of principal executive office)          (Zip Code)

             Issuer's telephone number: (303) 985-3972

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

      Securities registered pursuant to Section 12(g) of the Act: 
                               None

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

     State issuer's revenues for its most current fiscal year: $0

     The aggregate market value of voting stock held by
non-affiliates based upon the closing sale price as quoted on the
OTC Bulletin Board on April 15, 1997, was $447,138.  

     At April 15, 1997, 56,666,000 shares of the registrant's
Series A Common Stock were outstanding.  The average bid/asked
price on that date was $.05.

     Documents incorporated by reference: None


             This Form 10-KSB consists of 26 pages.
           Exhibit Index is Located at Page Twenty-Six.



<PAGE>

                        TABLE OF CONTENTS

                    FORM 10-KSB ANNUAL REPORT 

                    YAAK RIVER RESOURCES, INC.

                                                             PAGE

Facing Page
Index

PART I

Item 1.    Description of Business.....................         3

Item 2.    Description of Property.....................         5 

Item 3.    Legal Proceedings...........................         5

Item 4.    Submission of Matters to a Vote of            
               Security Holders........................         5


PART II

Item 5.    Market for the Registrant's Common Equity
               and Related Stockholder Matters.........         6

Item 6.    Management's Discussion and Analysis of 
               Financial Condition and Results of
               Operations..............................         7

Item 7     Financial Statements........................         8

Item 8.    Changes in and Disagreements on Accounting
               and Financial Disclosure................        20


PART III

Item 9.    Directors, Executive Officers, Promoters 
               and Control Persons, Compliance with 
               Section 16(a) of the Exchange Act.......        20

Item 10.   Executive Compensation......................        21

Item 11.   Security Ownership of Certain Beneficial
               Owners and Management...................        22

Item 12.   Certain Relationships and Related 
               Transactions............................        23


PART IV

Item 13.   Exhibits and Reports of Form 8-K............        24

SIGNATURES.............................................        25

                                 -2-


<PAGE>


                             PART I


Item 1.  Description of Business

     The Company was organized under the laws of the State of
Colorado on June 10, 1988, under the name Andraplex Corporation,
for the primary purpose of creating a vehicle to obtain capital to
take advantage of business opportunities which may have the
potential for profit.  From inception until December 12, 1991 the
primary activity of the Company was directed to organizational
efforts, obtaining initial financing, completion of its public
offering on November 27, 1989 and identification of a business
opportunity.

     As of the date of this report, the Company is principally
engaged in the metals mining business. During the fiscal year ended
December 31, 1996, the Company did not engage in any material
business due primarily to a lack of available funds with which to
develop its properties.  The Company owns those certain mining
properties discussed hereinbelow, but has not commenced development
of these properties, except as described herein.  The Company's
mining properties include the following:  

     a.  Three patented mining claims and 22 lode and placer
claims, all located in the Yaak Mining District, Lincoln County,
Montana, adjoining the Company's properties discussed hereinbelow. 
These properties were acquired from Rio Bravo Resources, Ltd. and
Troy Gold Resources, Ltd. by quit claim deed in November 1993. 
However, the sellers were unable to deliver proper title to these
properties in 1993.  Effective August 30, 1995, all title problems
to these properties were resolved to the Company's satisfaction. 
Title to these properties was provided by the U.S. Bureau of Land
Management.

     Included on each of the aforesaid properties is the Morning
Glory gold vein, which has a long and prosperous mining production
history dating back to the late 1800's, producing both gold and
silver. It was mined intermittently from 1893 to 1937, with
production out of a known short section producing 53,000 tons with
indicated recovered grades of approximately 0.28 OPT Au and 1.0 OPT
Ag.  Noranda Mines, Ltd., Toronto Canada drilled the property
during the 1970's and reported drill indicated reserves of in
excess of 542,000 tons of .0.140 and 1.44 OPT Ag. within 2,000 feet
of the Morning Glory Mine.  The structure remained open in all
directions.  Wm. Ernest Simmons, President and a director of the
Company, was employed as U.S. Manager of mine development for
Mining Corp., Inc., a wholly owned subsidiary of Noranda, during
the period of time when this drilling activity took place.

     b.  Ninety three lode claims located in the Yaak River Valley
in northwestern Montana, approximately 15 miles northwest of Troy,
Montana.

                                 -3-


<PAGE>

     c.  A lease-option to purchase the mining and mineral rights
for 6 lode and millsite claims and 1 patent, located in the Yaak
River Valley, adjacent to the property referenced above.  These
properties together total approximately 2,000 acres.  The lease-
option  requires annual payments of $7,500 and are payable to an
unaffiliated party.  The Company has paid all balances due under
the lease-option agreement due as of the date of this report.

     The Company has not begun mining on its Montana properties and
is currently seeking interested parties to join with the Company,
either as limited partners and/or joint venture partners, for the
purpose of mining its properties.  There are no assurances that the
Company will locate and reach agreement with any other independent
party to provide the funding for commencement of mining operations. 
Further, the Company does not have sufficient funds available to
commence mining operations on these properties for its own account,
nor is such funding expected to become available to the Company in
the future.  Additionally, if such mining operations are commenced,
there can be no assurances that the Company will recover any gold
or silver under positive economic circumstances, or at all.

Other Business Activities

     In addition, the Company is General Partner of the Yaak River
Resources, Timber Division, L.P., a Colorado limited partnership
(the "Partnership"), which intends to harvest timber located on
properties presently owned by the United States government and to
be patented (and subsequently owned) by the Company.  The
Partnership intends to harvest timber and develop certain mineral
resources located on defined mining claims and patented claims
presently owned or controlled by the Company.  During the fiscal
year ended December 31, 1996, the Partnership only engaged in
administrative activities.

Competition

     The Company is a small mining company which has not commenced
mining activities as of the dates of this report.  The Company is
not competitive with other larger and better financed mining
companies.

Government Regulations

     The Company's operation is subject to numerous federal and
state governmental regulations, including environmental laws, as
they relate to mining activities, compliance to which will require
considerable capital expenditures, the aggregate amount of which
have not been calculated at the date of this report. Management of
the Company believes that the Company is in compliance with all
applicable governmental regulations as of the date of this report.


                                 -4-


<PAGE>

Employees

     The Company's employees consist of Wm. Ernest Simmons, its
President, who performs his services to the Company without
compensation.  See "Item 10, Executive Compensation" below.  The
Company does not have any other employees at the date of this
report.  The officers operate the Company under the direction of
the Board of Directors.  The Company does not contemplate retaining
any employees until mining activities are commenced.
     

I
tem 2.  Description of Property

     The Company's principal place of business is located at 830 S.
Kline Way, Lakewood, Colorado 80226, which is the home of Mr.
Simmons, President and a director of the Company.  This property is
provided to the Company on a rent free basis, except that the
Company is obligated to pay for clerical functions, including
copies, facsimile transmissions, telephone and other general and
administrative matters, estimated by management not to exceed $200
per month.  These premises include one office of approximately 280
square feet.  Management of the Company believes that this space
will be sufficient to meet the Company's needs during the next 12
months.
     
     The Company manages a group of 125 contiguous mining claims on
properties located in the State of Montana.  The Company's mining
properties are located in Lincoln County, approximately 25 miles
northwest of Troy, Montana, in Sections 8, 9, 16, 17, T28N, R33W,
MPM, northwest of the deserted town of Sylvanite on the east side
of Friday Hill, an offshoot of Keystone Mountain.  Elevations of
the properties are from approximately 2,500 to 4,800 feet above sea
level.  The properties are accessed by state and county roads and
are heavily forested with larch, white fir, douglas fir and
lodgepole pine.  See "Item 1, Description of Business" for a more
detailed description of the Company's mining properties.


Item 3. Legal Proceedings.

     There are no material pending legal proceedings to which the
Company (or any of its officers and directors in their capacities
as such) is a party or to which the property of the Company is
subject and no such material proceeding is known by management of
the Company to be contemplated as of the date of this report.


Item 4.  Submission of Matters to a Vote of Security Holders.

     There were no matters submitted to a vote of the security
holders during the fourth quarter of the fiscal year ended December
31, 1996.

                                 -5-


<PAGE>


                             PART II


Item 5. Market for Common Equity and Related Stockholder Matters.

     The Company's Units, (comprised of one share of Series A
Common Stock, one Class A Common Stock Purchase Warrant and one
Class B Common Stock Purchase Warrant), and the Company's Series A
Common Stock are traded on the over-the-counter market on the OTC
"Electronic Bulletin Board" operated by the National Association of
Securities Dealers, Inc. under the symbols YAAKU and YAAKA,
respectively.  The Company's securities began trading during the
first quarter of the Company's fiscal year 1992.  Prior, there was
no trading market for the Company's securities.  Below are the
reported high and low bid prices for the Company's Units and Common
Stock for each quarter since March 1995.  The bid prices shown
reflect quotations between dealers, without adjustment for markups,
markdowns or commissions, and may not represent actual transactions
in the Company's securities.

Units:
                                        Bid Price 
           Date                       High       Low

           March 31, 1995             $.06      $.03
           June 30, 1995              $.06      $.015
           September 30, 1995         $.06      $.03
           December 31, 1995          $.03      $.01

           March 31, 1996             $.01      $.01
           June 30, 1996              $.01      $.01
           September 30, 1996         $.01      $.01
           December 31, 1996          $.01      $.01

     The Company's market maker for its securities is Paragon
Capital.  As of the date of this report, the Company had 42
shareholders, not including those persons holding their securities
in "street name."

     The Company's securities are presently classified as
"designated securities", which classification places significant
restrictions upon broker-dealers desiring to make a market in such
securities.  As a result, it has been difficult for management to
interest additional market makers in the Company's securities and
it is anticipated that these difficulties will continue until such
time as the Company is able to meet the criteria to qualify as a
non-designated security to allow additional market makers to trade
without complying with these stringent requirements.

     The Class A Warrant included in the Company's Units is
exercisable at an exercise price of $.05 per share until July 6,
1997, unless otherwise extended by the Board of Directors.  The
Class B Warrant is exercisable at an exercise price of $.10 per

                                 -6-


<PAGE>

share until July 6, 1997, unless otherwise extended by the Board of
Directors.  The exercise price of the Warrants may be lowered but
not increased at the discretion of the Company's Board of
Directors.  The Board of Directors intend to extend the exercise
period for the Class A and Class B Warrants to July 6, 1999. 
However, as of the date of this report, no action has been taken in
this regard and there can be no assurance that the Board will so
extend the exercise period of these Warrants.

Dividends

     The Company has not declared or paid any dividends on its
Class A Common Stock to date.  Management anticipates that future
earnings, if any, will be retained as working capital and used for
business purposes.  Accordingly, it is unlikely that the Company
will declare or pay any dividends in the foreseeable future.


Item 6.  Management's Discussion and Analysis of Financial
Condition

Plan of Operation

     In the fiscal year ended December 31, 1996, the Company did
not generate any revenues from its operations and the Company is
considered a development stage company.  The plan of operation of
the Company during the fiscal year ending December 31, 1997
generally involves the acquisition of additional mineral claims and
the taking to patent of a number of the claims acquired and to be
acquired by the Company in the future.  This was the same plan
which the Company's Board of Directors had established for the
Company for the fiscal year ended December 31, 1996, but the
extended moratorium by the Federal Government on disallowing the
taking of claims to patent has impacted the Company's financial
capabilities to generate timber resources and has caused the
Company to change its short term operating plan.  The Company is
now seeking the acquisition of mineral claims in an attempt to
develop an attractive exploration portfolio to present to potential
joint venture partner candidates.

     The Company incurred an operating loss during fiscal year 1996
of $19,842.  The operations of the Company during the fiscal year
1996 were financed primarily by cash of $242, and a loan from the
President of the Company of $12,100, and by a lease payment from
the Partnership of $7,500.  Additional costs were incurred related
to legal and auditing fees.  See "Item 12 - Certain Relationships
and Related Transactions."  The Company is expected to continue to
operate at a loss until earnings, if any, are received from the
harvesting of the metal and non-metal resources known to exist
within the boundaries of the Company's properties.

     The Company expects to continue without any cash revenues for
at least the fiscal year 1997 and will continue to satisfy its cash

                                 -7-


<PAGE>

requirements for the next twelve months by loans and advances from
the Partnership and/or officers and directors of the Company,
providing that the Company does not commence mining activities.  At
present, the Company's financial resources are not sufficient to
commence mining activities.  In order to satisfy the Company's
capital requirements for additional drilling and to develop a
mining feasibility program, it will be necessary for the Company to
obtain additional financing in the minimum estimated amount of
$750,000.  Management of the Company is continuing to seek possible
interested partners to join with the Company in developing its
mining claims.  The Company is actively soliciting joint venture
partners to expand its mining activities, based upon the valuation
of the Company's claims and properties as reported in the
independent engineering valuation report.  The report also advised
the Company to consolidate adjoining claims to make such joint
ventures more attractive.  As of the date of this report management
is unaware of any third parties who are interested in joining with
the Company in this regard. Exploration and mining activities of
other mining companies in the surrounding area of Northern Montana
and Canada in similar geological settings provides a basis for
management to believe that it will be able to interest joint
venturers in its proposed mining ventures.  However, in the event
the Company is unable to either solicit joint venture partners or
otherwise obtain the capital deemed necessary in order to commence
mining operations, it is possible that management will reconsider
the Company's business plan and begin to seek out other viable
business opportunities in order to provide the Company's
shareholders with liquidity.

     The Company currently has no employees and relies upon the
unpaid services of its officers for the operation of the Company. 
The contracted services of individuals will continue until it is
justifiable to employ a full time employee.


I
tem 7.  Financial Statements.

                                      -8-


<PAGE>







                          YAAK RIVER RESOURCES, INC.
                        (A Development Stage Company)


                            FINANCIAL STATEMENTS

                              December 31, 1996




































                                      -9-


<PAGE>

                        Michael B. Johnson & Co., P.C.

                         (A Professional Corporation)

                         Certified Public Accountants
                       9175 East Kenyon Ave., Suite 100
                           Denver, Colorado 80237
Michael B. Johnson C.P.A.                              Telephone: (303) 796-0099
Member: A.I.C.P.A.                                           Fax: (303) 796-0137



Board of Directors
Yaak River Resources, Inc.


We have examined the accompanying balance sheet of Yaak River Resources, Inc.
(A Development Stage Company) as of December 31, 1996 and December 31, 1995, and
the related statements of operations, cash flows, and changes in stockholders'
equity for the period June 10, 1988 (inception), through December 31, 1996, and
the fiscal years ended December 31, 1996 and 1995.  These financial statements
are the responsibility of the Company's management.  Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  These 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 Yaak River Resources, Inc. at
December 31, 1996 and December 31, 1995, and the results of its operations and
its cash flows for the period June 10, 1988 (inception), through December 31,
1996, and the fiscal years ended December 31, 1996 and 1995, in conformity with
generally accepted accounting principles.


                                        s/Michael B. Johnson & Co., P.C.



Denver, Colorado
March 10, 1997




                                     -10-


<PAGE>


<TABLE>

                          YAAK RIVER RESOURCES, INC.
                        (A Development Stage Company)
                               Balance Sheet
<CAPTION>

                                             December 31      December 31
                                                 1996             1995
                                              _________       ___________
<S>                                           <C>             <C>
ASSETS:
Current Assets:
  Cash                                        $     911       $     2,293
  Accounts Receivable-O'Hara Resources            2,200             2,200
  Investment-Mining Properties                  305,410           305,410
                                              _________       ___________
Total Current Assets                            308,521           309,903

Other Assets:
  Organizational Costs-
    Net of Amortization                               0                 0
                                              _________       ___________
Total Other Assets                                    0                 0
                                              _________       ___________
TOTAL ASSETS                                  $ 308,521       $   309,903


LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
  Accounts Payable                               24,225            17,865
  Advance from (YRML) Purchase, 1.5 Units        20,000            20,000
  Shareholder Loans                              12,100                 0
  Current Portion-Long Term Debt                  7,500             7,500
                                              _________       ___________
Total Current Liabilities                        63,825            45,365

Long-Term Liabilities:
  Long Term Debt                                115,000           122,500
                                              _________       ___________
Total Long-Term Liabilities                     115,000           122,500
                                              _________       ___________
TOTAL LIABILITIES                             $ 178,825       $   167,865

Stockholders' Equity:
  Series A Common Stock, par value
   $.0001 per share; 250,000,000 Shares
   Authorized; Issued and outstanding
   56,666,000 Shares                              5,666             5,666
  Series B Common Stock, par value
   $.0001 per Share; Authorized 250,000,000
   Shares. Issued and outstanding,
   None                                               0                 0
  Preferred Stock, par value $.0001 per
   share; Authorized 50,000,000 Shares.
   Issued and outstanding, none                       0                 0

                                     -11-


<PAGE>

  Capital paid in excess of par value           304,663           297,163

  Deficit accumulated during
    the development stage                      (180,633)         (160,791)
                                              _________       ___________
TOTAL SHAREHOLDERS' EQUITY                    $ 129,696       $   142,038
                                              _________       ___________
TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                        $ 308,521       $   309,903

<FN>

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

</TABLE>


                                     -12-


<PAGE>


<TABLE>
                          YAAK RIVER RESOURCES, INC.
                        (A Development Stage Company)
                           Statement of Operations
<CAPTION>

                                                                10-Jun-88
                                 For the       For the         (Inception)
                               Year Ended     Year Ended           thru
                              December 31,   December 31,      December 31,
                                   1996         1995               1996
                              ____________   ____________   _________________
<S>                           <C>            <C>            <C>
Revenue                       $          0   $          0   $               0

Expenses:
  Amortization                           0              0               1,500
  Bank Charges                          51              0                 321
  Legal and Accounting               6,360          3,780              40,993
  Director Fees                          0              0                 800
  Office                                 0            116               6,898
  Stock Fees and Other Costs           950            930               9,982
  Administration/Consulting              0            352              34,111
  Mining Assessments and Fees       12,481         12,464              69,815
  Bad Debt                               0              0               4,000
  Rent/Telephone                         0            122              12,213
                              ____________   ____________   _________________

Total Expenses                      19,842         17,764             180,633

Net (Loss) Accumulated During
  the Development Stage       $    (19,842)  $    (17,764)  $        (180,633) 
         
Net Loss per Common Share is
  less than $.002             $          *   $          *   $               *

<FN>

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

</TABLE>


                                     -13-


<PAGE>


<TABLE>
                          YAAK RIVER RESOURCES, INC.
                        (A Development Stage Company)
                           Statement of Cash Flows
<CAPTION>

                                                                 10-Jun-88
                                    For the        For the      (Inception)
                                  Year Ended     Year Ended         thru
                                 December 31,   December 31,    December 31,
                                      1996          1995            1996
                                 ____________   ____________   ______________ 
<S>                              <C>            <C>            <C>
Cash Flows From
  Operating Activities:
    Net (Loss) Accumulated
      During Development Stage   $    (19,842)  $   (17,764)   $    (180,633)

    Amortization and Depreciation           0             0            1,500
    Organization Costs                      0             0           (1,500)
    Decrease (Increase) in
      Accounts Payable                  6,360          (640)          24,225
    Decrease (Increase) in
      Accounts Receivable                   0         2,200           (2,200)
    Decrease (Increase) in
      Loans to Shareholder             12,100             0           12,100
                                 ____________   ___________    _____________  
Net Cash Flows Used
  By Operating Activities              (1,382)      (16,204)        (146,508)

Cash Flows From
  Investing Activities:

    Investment Purchase                     0             0         (305,410)
                                 ____________   ___________    _____________
Net Cash Flows Used 
  By Investing Activities                   0             0         (305,410)

Cash Flows From
  Financing Activities:

    Issuance of Common Stock                0             0            1,800
    Loan from LP Investors                  0        20,000           20,000
    Proceeds From Long-Term Debt            0             0          167,500
    Payment of Long-Term Debt          (7,500)       (7,500)         (45,000)
    Proceeds From Sale of Stock         7,500             0          308,529
                                 ____________   ____________   ______________
Net Cash Flows Provided
  By Financing Activities                   0        12,500          452,829
                                 ____________   ____________   ______________

Net Increase (Decrease) in Cash        (1,382)       (3,704)             911
                                 ____________   ___________    _____________

                                     -14-


<PAGE>


Cash at Beginning of Period             2,293         5,997                0
                                 ____________   ____________   ______________

Cash at End of Period            $        911   $     2,293    $         911

<FN>

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

</TABLE>



                                     -15-


<PAGE>


<TABLE>
                          YAAK RIVER RESOURCES, INC.
                            (A Development Stage)
                      Statement of Stockholders' Equity
<CAPTION>

                                                           Deficit
                                                         Accumulated
                                            Capital Paid  During the
                                    Common  in Excess of Development
                       # of Shares   Stock   Par Value      Stage     Totals
                       ___________  ______  __________  ___________  ________
<S>                    <C>          <C>     <C>         <C>          <C>
ISSUANCE OF
  COMMON STOCK:

January 6, 1989
  (for services)        10,000,000   1,000         500            0     1,500

January 6, 1989
  (for cash)             5,000,000     500           0            0       500

November 27, 1989
  (Public offering)      2,666,000     266      12,353            0    12,619

Net Loss for the year
  ended 12/31/89                                             (3,765)   (3,765)

Net Loss for the year
  ended 12/31/90                                            (10,129)  (10,129) 

Net Loss for the year
  ended 12/31/91                                               (300)     (300)

January 10, 1992
  (for assets YRML)     30,000,000   3,000     134,910            0   137,910

Net Loss for the year
  ended 12/31/92                                            (47,589)  (47,589)

June 30, 1993
  (for cash)             6,000,000     600     149,400            0   150,000

June 30, 1993
  (for services)         3,000,000     300           0            0       300

Net Loss for the year
  ended 12/31/93                                            (54,951)  (54,951)

Net Loss for the year
  ended 12/31/94                                            (26,293)  (26,293)

Net Loss for the year
  ended 12/31/95                                            (17,764)  (17,764)

                                     -16-


<PAGE>

Net Loss for the year
  ended 12/31/96                                  7,500     (19,842)  (12,342)
                       ___________  ______  __________  ___________  ________
Balance -
  December 31, 1996     56,666,000  $5,666  $  304,663  $  (180,633) $129,696

<FN>

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

</TABLE>


                                     -17-


<PAGE>

                          YAAK RIVER RESOURCES, INC.
                         (A Development Stage Company)

                         Notes to Financial Statements
                               December 31, 1996


Note 1 - Organization and Summary of Significant Accounting Policies:

     Organization:

     On June 10, 1988, Yaak River Resources, Inc. (the Company) was incorporated
     under the laws of Colorado under the name of Andraplex Corporation.  The
     name was changed at the annual shareholder's meeting on January 10, 1992. 
     The Company's primary purpose is to engage in selected acquisitions and
     development of mineral and mining properties.

     Initial Public Offering:

     In the Company's initial public offering, which was closed on November 27,
     1989, the Company sold 2,580,000 units (the Units).  86,000 additional
     shares were issued to the underwriters.  Each Unit consisted of one (1)
     share of Series A Common Stock, one (1) A Warrant exercisable at $.05, one
     (1) B Warrant exercisable at $.10.

     Costs, consisting of $9,444 and 86,000 shares of Series A Common Stock,
     incurred to complete the registration were offset against the gross
     proceeds.

     The Company's fiscal year end is December 31.

Note 2 - Purchase of Mineral Properties:

     On January 10, 1992, at the Annual Meeting of Shareholders, the
     shareholders voted unanimously to purchase certain mineral and mining
     properties (the Properties) located in the State of Montana, including
     leases, drawings, engineering studies and other tangible and intangible
     assets associated with the Properties.  The seller of the Properties was
     Yaak River Mines, Ltd.  They received 30,000,000 shares of Series A Common
     Stock.  The issuance of the 30,000,000 shares of Series A Common Stock was
     exempt from registration under the exemption provided in Section 4(2) of
     the Securities Act of 1933, as amended.

     The Company is the beneficiary of 16,000,000 of the above shares which are
     being held in the Con Tolman Memorial Trust C.  8,000,000 additional shares
     of the Company were placed in the trust as part of the original purchase
     of the Company.  These 24,000,000 shares are expected to be used to acquire
     additional mining properties.




                                     -18-


<PAGE>


                          YAAK RIVER RESOURCES, INC.
                        (A Development Stage Company)
                        Notes to Financial Statements
                              December 31, 1996

Note 3 - Yaak River Resources Timber Division, Limited Partnership:

     On August 14, 1992, the Company formed a limited partnership, Yaak River
     Resources Timber Division L.P. (the Partnership), a Colorado limited
     partnership, with subscriptions for 40 Units at $5,000.00 per Unit for an
     aggregate price of $200,000.00.  Each Unit contains 1/40th interest in the
     Partnership and 150,000 shares of Series A Common Stock of the Company. 
     The Company is the general Partner of the Partnership.  As a part of the
     formation of the Partnership, the Company agreed to reserve 6,000,000
     shares of its Series A Common Stock for the Partnership.  Said 6,000,000
     shares of Series A Common Stock represents the shares offered in the Units
     issued by the Partnership.  The Partnership was formed for the purpose of
     developing certain available natural resources on properties under the
     management of the Company.

     On June 30, 1993, the Company sold Six Million (6,000,000) shares of its
     $.0001 par value Series Common Stock for the issuance to the purchasers of
     the Limited Partnership interests in the Yaak River Resources, Timber
     Division L.P., for $150,000.

Note 4 - Income Taxes:

     The Company has made no provision for income taxes because there have been
     no operations to date causing income for financial statement or tax
     purposes.

Note 5 - Net (Loss) Per Common Share

     The net (loss) per common share of the Series A Common Stock is computed
     based on the weighted average number of shares outstanding.

Note 6 - Long-Term Debt

     Note Payable to the Roy Grush Estate in annual installments of $7,500, 0%,
     due September 2014, secured by the Properties, (Note 2).  The Company has
     agreed to pay the minimum annual assessment costs of maintenance and
     improvements on claims in lieu of interest.

     Following is a summary of long-term debt at December 31, 1996:

          1997                             7,500
          1998                             7,500
          1999                             7,500
          2000                             7,500
          2001                             7,500
                                        ________
                                          37,500
          After 2001                      85,000
                                        ________
                                        $122,500

                                     -19-


<PAGE>


I
tem 8.  Changes and Disagreements With Accountants on Accounting
and Financial Disclosures.

     None.

                            PART III


Item 9.  Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act.

     The Directors and Executive Officers of the Company are as
follows:

Name                        Age              Title     

Wm. Ernest Simmons           58         President and Director

Adolph Lee Amundson          50         Secretary and Director

Harry G. Titcombe, Jr.       66         Director

     The above listed officers and directors will serve until the
next annual meeting of the shareholders or until their death,
resignation, retirement, removal, or disqualification, or until
their successors have been duly elected and qualified.  Vacancies
in the existing Board of Directors are filled by majority vote of
the remaining Directors.  Officers of the Company serve at the will
of the Board of Directors.

Resumes

     Wm. Ernest Simmons currently is, and has been since December
12, 1991, the President and a Director of the Company.  Also, since
January 1996, Mr. Simmons has been Director General of "Bumbat"
Co., Ltd., a Mongolian-Canadian joint venture mining operation
based in Zaamar Sum, Mongolia, where his responsibilities include
acquisition and mobilization of all equipment and supplies,
preparation and construction of mill site and mine site operations
and other managerial matters associated with the exploration and
development of hard rock gold.  Prior, from 1991 through December
1995, Mr. Simmons was a life and health insurance agent in Denver,
Colorado with New York Life Insurance Company. From 1978 to 1990,
Mr. Simmons served as Manager of U.S. Operations for Mining
Corporation, Inc., of Lakewood, Colorado.  From February 1987
through December 1989 Mr. Simmons was president and a director of
Bluestone Capital, Inc., a publicly held "blind pool" Colorado
corporation.  From March, 1986 through July, 1994, Mr. Simmons was
president and a director of Yaak River Mines, Ltd., a Colorado
corporation also defined as a public "shell" company.  Mr. Simmons
received a Bachelor's of Science Degree in Business Administration
from Regis University, Denver, Colorado in 1987 and received the
Degree of Mining Technologist from Haileybury School of Mines in
1973.  Mr. Simmons devotes approximately 20 hours per month to the

                                -20-


<PAGE>

business of the Company.  It is anticipated that the time devoted
to the business of the Company by Mr. Simmons will increase if and
when the Company commences mining operations.

     Adolph Lee Amundson, P.E., currently is, and has been since
December 1991, the Vice President and a Director of the Company. In
September 1995, he was also appointed as Secretary of the Company. 
He has been Vice President for Goodson & Associates, Denver,
Colorado, since 1984, managing drilling, mine backfilling, and
grouting operations.  From 1983 to 1984, he was Project
Superintendent for Mining Corporation, Great Falls, Montana.  From
1975 to 1983 he was Chief Engineer for Western Slope Carbon
administering exploration, reserve evaluation, feasibility studies,
economic evaluations, property acquisition, mine planning, coal
quality evaluation, site selection and surface layout for new
properties.  He holds a B.S. Degree in Mining Engineering from the
Colorado School of Mines, 1971.  His certifications include
Professional Engineer, Colorado; Underground Coal Mine Foreman
Certificate in Colorado, Utah and Montana; and Underground Coal
Mine Electrician in Colorado and Utah.  His publications include U.
S. Bureau of Mines IC 8857, 1981, and U.S. Bureau of Mining
Research Contract Report No. J0145032, 1985.  Mr. Amundson devotes
only such time as necessary to the business of the Company.

     Harry G. Titcombe, Jr. has been a director of the Company
since September 1995, when he was appointed by the remaining Board
to replace Bruce McMillen, who had past away.  Since 1984, Mr.
Titcombe has engaged in the practice of law as a sole practitioner
in Denver, Colorado.  Prior to that, Mr. Titcombe was a partner and
associate at the Denver law firm of Burnett, Horan & Hilgers and
was a Deputy District Attorney in the offices of the Denver County
District Attorney.  Mr. Titcombe is also an officer and director of
Genesis Companies Group, Inc., a public "shell" company which is a
reporting company under the Securities Exchange Act of 1934, as
amended.  Mr. Titcombe received a degree of L.L.B. in 1960 from the
University of Denver College of Law.  Mr. Titcombe devotes only
such time as necessary to the business of the Company.

     The Company does not have any of its securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934 and
as such, shareholders and management of the Company are not
required to file any reports pursuant to Section 16(a) of the
aforesaid Act.


Item 10.  Executive Compensation.

Remuneration

     The following table reflects all forms of compensation for
services to the Company for the year ended December 31, 1996 of the
chief executive officer of the Company.  

                                -21-


<PAGE>


<TABLE>
                          SUMMARY COMPENSATION TABLE

<CAPTION>

                                             Long Term Compensation
                                          ____________________________

                   Annual Compensation          Awards         Payouts
                  _____________________   ____________________ _______
                                                    Securities
                                 Other                 Under-            All
Name                             Annual   Restricted   lying            Other
and                              Compen-     Stock    Options/  LTIP   Compen-
Principal         Salary  Bonus  sation     Award(s)    SARs   Payouts sation
Position    Year   ($)     ($)    ($)        ($)        (#)      ($)     ($)
__________  ____  ______  _____  ______    ________   _______  _______ ______
<S>         <C>   <C>     <C>    <C>       <C>        <C>      <C>     <C>
Wm. Ernest
Simmons,          (1)(2)
President & 1995  $    0  $   0  $    0    $      0         0  $     0 $    0
Director    1996  $    0  $   0  $    0    $      0         0  $     0 $    0
_________________________

<F1>
(1)  Mr. Simmons did not receive any salary during the fiscal year
     ended December 31, 1996 from the Company.   

<F2>
(2)  It is not anticipated that any executive officer of the
     Company will receive compensation exceeding $100,000 during
     1996.

</TABLE>


     In addition to the cash compensation set forth above, the
Company reimburses each executive officer for expenses incurred on
behalf of the Company on an out-of-pocket basis.  The Company
cannot determine, without undue expense, the exact amount of such
expense reimbursement.  However, the Company believes that such
reimbursements did not exceed, in the aggregate, $1,000 during
fiscal year 1995.

     No executive officer or director of the Company holds any
option to purchase any of the Company's securities.

     The Company has not adopted any pension or stock options
plans.


Item 11.  Security Ownership of Certain Beneficial Owners and
Management.

     The following tables set forth information, as of December 31,
1996, with respect to the beneficial ownership of the Company's
Series A Common Stock by (a) each person known by the Company to be
the beneficial owner of five percent or more of the Company's

                                -22-


<PAGE>

Series A Common Stock, and (b) the stock ownership of each officer
and director individually and all directors and officers of the
Company as a group of the Company's Series A Common Stock.  Unless
otherwise indicated, the shareholders listed possess sole voting
and investment power with respect to the shares shown.

     (a) Security Ownership of Certain Beneficial Owners.

                                   

<TABLE>
<CAPTION>
                    Name and            Amount and         
                   Address of            Nature of
Title              Beneficial           Beneficial        Percent
of Class             Owner                Owner           of Class
                                                                  
<S>           <C>                        <C>                <C>
Series A      Wm. Ernest Simmons         6,966,120          12.3%
Common Stock  830 S. Kline Way
              Lakewood, CO 80226

Series A      Helen L. Tolman            4,031,040           7.1%
Common Stock  Trust               
              10251 W. 44th Ave
              #4-105
              Wheat Ridge, CO 80033

</TABLE>


     (b)  Security Ownership of Management.


<TABLE>
<CAPTION>
                                  
                    Name and            Amount and         
                   Address of            Nature of
Title              Beneficial           Beneficial        Percent
of Class             Owner                Owner           of Class
                                                                  
<S>           <C>                        <C>                <C>
Series A      Wm. Ernest Simmons         6,966,120          12.3%
Common Stock  830 S. Kline Way
              Lakewood, CO 80226

Series A      Adolph Lee Amundson          775,200           1.4%
Common Stock  11797 W. Aqueduct
              Littleton, CO 80127

Series A      Harry G. Titcombe, Jr.       180,000           0.3%
Common Stock  3003 E. 3rd Ave., Ste. 201
              Denver, CO  80206

Series A      All Officers               7,921,320          14.0%
Common Stock  and Directors
              as a Group 
              (3 persons)
</TABLE>


                                -23-


<PAGE>


Item 12.  Certain Relationships and Related Transactions.

     During the fiscal year ended December 31, 1995, the Company
received a loan in the aggregate of $20,000 from the Yaak River
Resources, Inc., Timber Division, L.P., a Colorado limited
partnership (the "Partnership"), to which the Company is General
Partner.  The limited partnership also loaned an additional $7,500
to the Company during the fiscal year ended December 31, 1996. 
These loans are due upon demand and do not accrue interest and were
issued pursuant to the terms of the applicable Limited Partnership
Agreement.  These loans were approved by a majority vote of the
limited partners of the Partnership.  See "Item 6, Management's
Discussion and Analysis of Financial Condition and Results of
Operations."

     In September 1995, Mr. Harry J. Titcombe, Jr. was appointed as
a director of the Company by the remaining members of the Company's
Board of Directors pursuant to the terms of the Company's Bylaws
upon the death of Bruce McMillen.


Item 13.  Exhibits and Reports on Form 8-K

(a)   Exhibits

     EX-27      Financial Data Schedule

     The following exhibits are incorporated by reference to the
Company's Registration Statement on Form S-18, SEC file no. 33-
28106, effective July 21, 1989:

     3.1  Articles of Incorporation and Certificate
     3.2  Bylaws

     The following exhibit is incorporated by reference to the
Company's Form 10-KSB annual report for the fiscal year ended
December 31, 1992:

     3.3  Amendment to Articles of Incorporation and Certificate

(b)  Reports on Form 8-K 

     The Company did not file any reports on Form 8-K during the
fiscal year ended December 31, 1996, or subsequent thereto through
the date of this report.

                                -24-


<PAGE>


                            SIGNATURES

     In accordance with Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on
April 15, 1997.

                                   YAAK RIVER RESOURCES, INC.
                                   (Registrant)



                                   By: s/Wm. Ernest Simmons
                                       Wm. Ernest Simmons,
                                       President


                                   By: s/Al Amundson
                                       Al Amundson, Secretary


     In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant
and in the capacities indicated on April 15, 1997.




s/William Ernest Simmons
William Ernest Simmons,
President and Director


s/Adolph Lee Amundson
Adolph Lee Amundson,
Secretary and Director


s/Harry G. Titcombe, Jr.
Harry G. Titcombe, Jr.,
Treasurer and Director





                                -25-


<PAGE>


                          EXHIBIT INDEX


Page   Exhibit                                      
 No.     No.          Description                                 

 -      3.1*     Articles of Incorporation

 -      3.2*     Bylaws

 -      3.3**    Amendment to Articles of Incorporation 
                 and Certificate

 27     27       Financial Data Schedule

*  Incorporated by reference to the Company's Registration
Statement on Form S-18, SEC File No. 33-28106, effective July 21,
1989.

** Incorporated by reference to the Company's Form 10-KSB for the
fiscal year ended December 31, 1992.





<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
AUDITED FINANCIAL STATEMENTS FILED WITH FORM 10-KSB FOR THE YEAR ENDED
DECEMBER 31, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-END>                               DEC-31-1996
<CASH>                                             911
<SECURITIES>                                         0
<RECEIVABLES>                                     2200
<ALLOWANCES>                                         0
<INVENTORY>                                    305,410
<CURRENT-ASSETS>                               308,521
<PP&E>                                               0
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                                 308,521
<CURRENT-LIABILITIES>                           63,825
<BONDS>                                        115,500
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                         5,666
<OTHER-SE>                                   (124,030)
<TOTAL-LIABILITY-AND-EQUITY>                   308,521
<SALES>                                              0
<TOTAL-REVENUES>                                     0
<CGS>                                                0
<TOTAL-COSTS>                                        0
<OTHER-EXPENSES>                                19,842
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                   0
<INCOME-PRETAX>                                      0
<INCOME-TAX>                                  (19,842)
<INCOME-CONTINUING>                                  0
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                         0
<EPS-PRIMARY>                                        0
<EPS-DILUTED>                                        0
        

</TABLE>