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UNITED STATES SECURITIES AND EXCHANGE COMMISSION  
Washington, DC 20549



FORM 10QSB

|[X] | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities  Exchange Act of 1934
|--- | ----------------------------------------------------------------------------------------
|    | FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001                                       
|    | OR                                                                                      
|[ ] | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|    | For the transition period from to                                                       

COMMISSION FILE NUMBER 000-33193



PALAL MINING CORPORATION(Exact name of registrant as specified in its charter)



|NEVADA                                                         | 88-0435904                          
|-------------------------------------------------------------- | ------------------------------------
|(State of other jurisdiction of incorporation or organization) | (IRS Employer Identification Number)

1040 West Georgia 
Suite 1160 
Vancouver, British Columbia 
Canada V6E 4H1 (Address of principal executive offices)



(604) 605-0885 (Registrant's telephone number, including area code)

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 the number of shares outstanding of each of the issuer's classes of common stock, as of September 30, 2001: 30,299,250

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Palal Mining Corporation
(An Exploration Stage Company)
Balance Sheets

|                                             |                                | September 30, 
2001 
(Unaudited)                                                                          |                              | June 30, 
2001        
|-------------------------------------------- | ------------------------------ | --------------------------------------------------------------------------------------------------------- | ---------------------------- | ----------------------
|ASSETS                                       |                                |                                                                                                           |                              |                       
|                                             |                                |                                                                                                           |                              |                       
|                                             | CURRENT ASSETS                 |                                                                                                           |                              |                       
|                                             |                                | Cash                                                                                                      | $                            | 8,563 ------------    
|                                             |                                |                                                                                                           | Total Current Assets         |                       
|                                             |                                |                                                                                                           |                              |                       
|                                             | PROPERTY AND EQUIPMENT         |                                                                                                           |                              |                       
|                                             |                                | Office equipment                                                                                          |                              | 1,595                 
|                                             |                                | Less:  accumulated depreciation                                                                           |                              | (278) ------------    
|                                             |                                |                                                                                                           | Total Property and Equipment |                       
|                                             |                                |                                                                                                           |                              |                       
|                                             | OTHER ASSETS                   |                                                                                                           |                              |                       
|                                             |                                | Deposits                                                                                                  |                              | 411 ------------      
|                                             |                                |                                                                                                           | Total Other Assets           |                       
|                                             |                                |                                                                                                           |                              |                       
|                                             |                                | TOTAL ASSETS                                                                                              | $                            | 10,291 ========       
|                                             |                                |                                                                                                           |                              |                       
|                                             |                                |                                                                                                           |                              |                       
|LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) |                                |                                                                                                           |                              |                       
|                                             |                                |                                                                                                           |                              |                       
|                                             | CURRENT LIABILITIES            |                                                                                                           |                              |                       
|                                             |                                | Accounts payable                                                                                          | $                            | 4,412                 
|                                             |                                | Related party payable                                                                                     |                              | 770 ------------      
|                                             |                                |                                                                                                           | Total Current Liabilities    |                       
|                                             |                                |                                                                                                           |                              |                       
|                                             | COMMITMENTS AND CONTINGENCIES  |                                                                                                           | - ------------               |                       
|                                             |                                |                                                                                                           |                              |                       
|                                             | STOCKHOLDERS' EQUITY (DEFICIT) |                                                                                                           |                              |                       
|                                             |                                | Common stock, 100,000,000 shares authorized,
$0.00001 par value; 30,299,250 shares
issued and outstanding |                              | 303                   
|                                             |                                | Additional paid-in-capital                                                                                |                              | 380,924               
|                                             |                                | Deficit accumulated during exploration stage                                                              |                              | (376,118) ------------
|                                             |                                | TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                                                      |                              | 5,109 ------------    
|                                             |                                |                                                                                                           |                              |                       
|                                             |                                | TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)                                                      | $                            | 10,291 ========       

See Notes to Interim Financial Statements





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Palal Mining Corporation
(An Exploration Stage Company)
Statements of Operations

|                                                                              |                                           |                     | For the Period From September 2, 1999 (Inception) to September 30 2001 (Unaudited)
|----------------------------------------------------------------------------- | ----------------------------------------- | ------------------- | ----------------------------------------------------------------------------------
|                                                                              | For the Three Months Ended 
September 30  |                    
|2001 
(Unaudited)                                                             |                                           | 2000 
(Unaudited)   |                                                                                   
|                                                                              |                                           |                     |                                                                                   
|REVENUES                                                                      | $                                         | - ------------      |                                                                                   
|                                                                              |                                           |                     |                                                                                   
|E X P E N S E S                                                               |                                           |                     |                                                                                   
|                                                                              | Consulting services provided by directors |                     | -                                                                                 
|                                                                              | Rent                                      |                     | -                                                                                 
|                                                                              | General and administrative expense        |                     | 25                                                                                
|                                                                              | Legal and accounting                      |                     | 6,012                                                                             
|                                                                              | Travel                                    |                     | -                                                                                 
|                                                                              | Stock transfer expense                    |                     | 43                                                                                
|                                                                              | Consulting                                |                     | -                                                                                 
|                                                                              | Depreciation                              |                     | 82                                                                                
|                                                                              | Miscellaneous                             |                     | -                                                                                 
|                                                                              | Mining exploration                        |                     | - ------------                                                                    
|                                                                              |                                           | OPERATING  LOSS     |                                                                                   
|                                                                              |                                           |                     |                                                                                   
|OTHER EXPENSES                                                                |                                           |                     |                                                                                   
|                                                                              | Loss on impairment of assets              |                     | -                                                                                 
|                                                                              |                                           |                     |                                                                                   
|LOSS BEFORE INCOME TAXES                                                      |                                           | (6,162)             |                                                                                   
|                                                                              |                                           |                     |                                                                                   
|INCOME TAXES                                                                  |                                           | - ------------      |                                                                                   
|                                                                              |                                           |                     |                                                                                   
|NET LOSS                                                                      | $                                         | (6,162) ========    |                                                                                   
|                                                                              |                                           |                     |                                                                                   
|NET LOSS PER COMMON SHARE,
BASIC AND DILUTED                                  | $                                         | nil ========        |                                                                                   
|                                                                              |                                           |                     |                                                                                   
|WEIGHTED AVERAGE NUMBER OF
COMMON STOCK SHARES
OUTSTANDING, BASIC AND DILUTED |                                           | 30,299,250 ======== |                                                                                   

See Notes to Interim Financial Statements



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Palal Mining Corporation
(An Exploration Stage Company)
Statement of Stockholders' Equity



|                                                                                          | Common Stock        |  | Additional
Paid-In
Capital |             | Deficit
Accumulated
During the
Exploration 
Stage |   | Total Stockholders'
Equity (Deficit)
|----------------------------------------------------------------------------------------- | ------------------- |  | -------------------------- | ----------- | ------------------------------------------------- | - | ------------------------------------
|                                                                                          | Number of Shares    |  | Amount                     |            
|Issuance of common stock for mining claims and executive compensation at
$0.055 per share | 5,000,000           |  | $                          | 50          |                                                   | $ | 274,950                             
|Net loss for the period ending June 30, 2000                                              | - ------------      |  |                            | - --------- |                                                   |   | - ----------                        
|Balance, June 30, 2000                                                                    | 5,000,000           |  |                            | 50          |                                                   |   | 274,950                             
|Sale of common stock at $0.10 per share                                                   | 1,059,850           |  |                            | 11          |                                                   |   | 105,974                             
|                                                                                          |                     |  |                            |             |                                                   |   |                                     
|Issuance of common stock for four-for-one stock dividend at par value                     | 24,239,400          |  |                            | 242         |                                                   |   | -                                   
|                                                                                          |                     |  |                            |             |                                                   |   |                                     
|Net loss for the year ending June 30, 2001                                                | - ------------      |  |                            | - --------- |                                                   |   | - ----------                        
|                                                                                          |                     |  |                            |             |                                                   |   |                                     
|Balance, June 30, 2001                                                                    | 30,299,250          |  |                            | 303         |                                                   |   | 380,924                             
|                                                                                          |                     |  |                            |             |                                                   |   |                                     
|Net loss for the period ending September 30, 2001 (Unaudited)                             | - ------------      |  |                            | - --------- |                                                   |   | - ----------                        
|                                                                                          |                     |  |                            |             |                                                   |   |                                     
|Balance, September 30, 2001 (Unaudited)                                                   | 30,299,250 ======== |  | $                          | 303 ======= |                                                   | $ | 380,924 =======                     

See Notes to Interim Financial Statements





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Palal Mining Corporation
(An Exploration Stage Company)
Statements of Cash Flows

|                                          |                                          | For the Period From September 2, 1999 (Inception) to September 30 2001 (Unaudited)
|----------------------------------------- | ---------------------------------------- | ----------------------------------------------------------------------------------
|For the Three Months Ended
September 30  
|                                          | 2001
(Unaudited)                         |                                                                                   
|                                          |                                          |                                                                                   
|CASH FLOWS FROM OPERATING ACTIVITIES      |                                          |                                                                                   
|                                          | Net loss                                 | $                                                                                 
|                                          | Adjustments to reconcile net loss to net |                                                                                   
|                                          |                                          | cash used by operating activities:                                                
|                                          |                                          | Depreciation                                                                      
|                                          |                                          | Loss on impairment of assets                                                      
|                                          |                                          | Payment of expenses from issuance of stock                                        
|                                          |                                          | Increase in:                                                                      
|                                          |                                          |                                                                                   
|                                          |                                          |                                                                                   
|                                          |                                          |                                                                                   
|Net cash provided by operating activities |                                          | (1,668) ------------                                                              
|                                          |                                          |                                                                                   
|CASH FLOWS FROM INVESTING ACTIVITIES      |                                          | - ------------                                                                    
|                                          |                                          |                                                                                   
|CASH FLOWS FROM FINANCING ACTIVITIES      |                                          |                                                                                   
|                                          | Proceeds from sales of stock             |                                                                                   
|                                          | Proceeds from advances                   |                                                                                   
|Net cash provided by financing activities |                                          | - ------------                                                                    
|                                          |                                          |                                                                                   
|Increase in cash                          |                                          | (1,668)                                                                           
|                                          |                                          |                                                                                   
|Cash, beginning of period                 |                                          | 10,231 ------------                                                               
|                                          |                                          |                                                                                   
|Cash, end of period                       | $                                        | 8,563 ========                                                                    
|                                          |                                          |                                                                                   
|SUPPLEMENTAL DISCLOSURES:                 |                                          |                                                                                   
|                                          | Interest paid                            | $                                                                                 
|                                          | Income taxes paid                        | $                                                                                 
|                                          |                                          |                                                                                   
|NON-CASH TRANSACTIONS:                    |                                          |                                                                                   
|                                          | Stock issued in payment of expenses      | $                                                                                 
|                                          | Stock issued in payment of advances      | $                                                                                 
|                                          | Stock issued in payment of mining claims | $                                                                                 
|                                          | Stock issued for stock dividend          | $                                                                                 

See Notes to Interim Financial Statements





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PALAL MINING CORPORATION
(An Exploration Stage Company)
September 30, 2001
NOTES TO INTERIM FINANCIAL STATEMENTS

=====================================

1.   BASIS OF PRESENTATION



The  foregoing  unaudited  interim  financial  statements  have been prepared in accordance with generally accepted  accounting  principles for interim financial information  and with the  instructions  to Form  10-QSB and  Regulation  S-B as promulgated  by the  Securities  and  Exchange  Commission.  Accordingly, these financial statements do not include all of the disclosures required by generally accepted  accounting  principles  for  complete  financial   statements.   These unaudited  interim  financial  statements should be read in conjunction with the audited  financial  statements  for the period ended  June 30,  2001.  In the opinion of management,  the unaudited  interim  financial  statements  furnished herein include all adjustments,  all of which are of a normal recurring  nature, necessary for a fair statement of the results for the interim period presented.



The preparation of financial  statements in accordance  with generally  accepted accounting  principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities,  disclosure of contingent assets and  liabilities  known to exist as of the  date the  financial  statements  are published,  and the  reported  amounts  of  revenues  and  expenses  during  the reporting period.  Uncertainties  with respect to such estimates and assumptions are  inherent  in  the  preparation  of  the  Company's  financial   statements; accordingly,  it is possible  that the actual  results  could  differ from these estimates  and  assumptions  that could have a material  effect on the  reported amounts of the Company's financial position and results of operations.



Operating  results for the three-month period ended September 30, 2001 are not necessarily  indicative of the results that may be expected for the year ending June 30, 2002.





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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS



Financial Condition, Liquidity and Capital Resources



Since inception on September 2, 1999, our Company has been engaged in exploration and acquisition of mineral properties. Our Company's principal capital resources have been acquired through issuance of common stock and from shareholder loans.



At September 30, 2001, there was positive working capital of $3,381 compared to positive working capital of $10,598 at September 30, 2000.  This change is primarily the result of payment of accounts payable and professional fees.



At September 30, 2001, our Company's total assets of $10,291 consists of mainly cash and office equipment. This compares with our Company's assets at September 30, 2000 of $43,169, which consisted of mainly cash.



At September 30, 2001, our Company's total liabilities decreased to $5,182 from $32,096 at September 30, 2000, primarily reflecting a net payment to related party loans of $25,272 and a decline in accounts payable in the amount of $1,642.



Our Company has not had revenues from inception.



The British Columbia Ministry of Energy and Mines has advised us that the land use area which includes most of the Mak Sikker property near Osoyoos, B.C. was in the process of being upgraded to a Class A Park.  When or if the area is designated as a Class A part, then a procedure will be commenced to arrange for compensating us for our properties.  The extent of the compensation cannot be estimated at this time.  As of November 6, 2001, we have received no further communication from the Government of British Columbia, nor from the Ministry of Energy and Mines.



We believe it is most likely that the compensation process will eventually be executed, but the change of government in British Columbia in this summer of 2001 increases the small likelihood that the property may not be included in a park and may again be eligible for exploration.  Until the foregoing issue is resolved, we do not intend to initiate exploration on our property.



Over 87% of the Province of British Columbia is not designated park land and is prospective for economic minerals and so we are actively seeking other mineral exploration properties of merit in British Columbia to acquire either by purchase or staking.



Our Company has no long-term debt and does not regard long-term borrowing as a good, prospective source of financing.



Results of Operations



Our Company posted loss of $6,162 for the three months ending September 30, 2001.  The principal component of the loss was professional expenses.





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Operating expenses for the three months ending September 30, 2001 were $6,162, down $4,687 from the three months ending September 30, 2000, due mainly to a decline in general and administrative expenses.



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on this 6th  day of November, 2001.

PALAL MINING CORPORATION
(Registrant)

By:/s/ Hugh Grenfal
Hugh Grenfal, President, Treasurer,Principal
Accounting Officer and a member of the Board
Of Directors