FORM 10-K



UNITED STATES SECURITIES AND EXCHANGE COMMISSION



Washington, D.C 20549





[ X ]

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the fiscal year ended June 30, 2003



Commission file number: 0-20430



AZCO MINING INC.

______________________________________________________

(Exact name of registrant as specified in its charter)



|Delaware                                                       | 84-1094315                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)





7239 N El Mirage Road, Glendale, AZ  85307

______________________________________________________

(Address of principal executive offices including zip code)





Registrants telephone number, including area code: (623) 935-0774



Securities registered pursuant to Section 12(b) of the Act



|Title of each class           | Name of exchange on which Registered
|----------------------------- | ------------------------------------
|Common Stock, $.002 par value | The Toronto Stock Exchange          
|Common Stock, $.002 par value | OTCBB                               



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



Indicate by check mark whether the registrant (1) has filed all reports required to 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 [     ]          No [ X ]



Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this Chapter) is not contained herein, and will not be contained, to the best of the registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ]



Aggregate Market Value of Stock held by Non-Affiliates as of July 23, 2004: $4,832,928



The number of shares of the Companys Common Stock outstanding as of July 23, 2004 is 40,342,122.



Documents incorporated by reference: See Item 15.

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PART I

FORWARD-LOOKING STATEMENTS

Information included or incorporated by reference in this annual report may contain forward-looking statements.  This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by any forward-looking statements.  Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words may, will, should, expect, anticipate, estimate, believe, plan, intend or project or the negative of these words or other variations on these words or comparable terminology.

This annual report contains forward-looking statements, many assuming that the Company secures adequate financing and is able to continue as a going concern, including statements regarding, among other things, (a) our projected sales and profitability, (b) our growth strategies, (c) anticipated trends in our industry, (d) our future financing plans, (e) our anticipated needs for working capital, (f) unfavorable weather conditions, in particular, high water levels in the Agua Fria river which could temporarily limit access to the Black Canyon mica mine site, if and when production is resumed (g) the lack of commercial acceptance of our mica product or by-products, (h) changes in environmental laws, (i) problems regarding availability of materials and equipment, if and when production is resumed (j) failure of the mica project equipment to process or operate in accordance with specifications, including expected throughput, which could prevent the project from producing commercially viable output, if and when production is resumed  (k) our lack of necessary financial resources to complete development of the mica product and by-products, successfully market our mica product and fund our other capital commitments and (l) our ability to seek out and acquire high quality gold, silver and/or copper properties.  These statements may be found under Managements Discussion and Analysis or Plan of Operations and Business, as well as in this annual report generally.  Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under Risk Factors and matters described in this annual report generally.  In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this annual report will in fact occur.  In addition to the information expressly required to be included in this annual report, we will provide such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading.





ITEM 1.  BUSINESS

Azco Mining Inc. (Azco or the Company) is a U.S. mining company, incorporated in August 1991 in the state of Delaware, with a general business strategy to acquire and develop mining properties amenable to low cost production.  Azco is currently focused on financing efforts to: (1) fund the re-opening and enhancement of its Black Canyon mica project located in Arizona and (2) acquire high quality gold, silver and/or copper properties.  Information about Azco, including a posting of the most recent financial reports, can be viewed on the Companys web site, www.azco.com.

In November 2002, the Company suspended crushing and concentrating activities at its Black Canyon mine due to economic constraints.  Limited production, marketing and sales have continued at its Glendale mica processing facility using inventoried mica, while the Company seeks sources of financing for the project.

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In April 2003, the Company sold its 30% share of Cobre del Mayo S.A. de D.V. (Cobre del Mayo), the Mexican corporation that holds the Piedras Verdes copper project, to Frontera Cobre del Mayo S.A. de D.V. (Frontera), for consideration of $250,000.  In addition, the Company was to receive an initial deferred payment of $250,000, upon the date of construction commencement of the Piedras Verdes copper project, if the COMEX price of copper is less than $1.00 per pound or $500,000 if the COMEX price is greater than $1.00 per pound.  Upon the date of commercial production, the Company was to receive an additional payment of $500,000, if the COMEX price is less than $1.00 per pound or $1,000,000 if the COMEX price is greater than $1.00 per pound.  Frontera also agreed to pay Azco a royalty of $0.02 per pound of copper produced and sold from Piedras Verdes during any calendar quarter the average COMEX price is equal to or greater than $1.20 per pound, until such time as the initial deferred payment, the subsequent deferred payment and the royalty aggregate in total $4,750,000.  In June 2003, the Company subsequently assigned all payment and royalties, defined under the terms of the sale of its interest in Cobre del Mayo, to Mr. Alan Lindsay (Mr. Lindsay) and Mr. Anthony Harvey (Mr. Harvey), former officers and directors of the Company, under the terms of a settlement agreement.



Prior to the sale of its copper assets, Azco was dedicated to the exploration and development of copper projects utilizing the solvent extraction-electrowinning (SX-EW) process.  Azcos principal mineral property was the Sanchez copper project located northeast of Safford, Arizona.  Azco also owned interests in two other copper properties, the Piedras Verdes and Suaqui Verde properties located in Sonora State, Mexico.  In 1995, with the approval of shareholders, Azco sold the Sanchez copper property and 70% of the Piedras Verdes property to Phelps Dodge Corporation for gross consideration of $40 million.

In March 1999, Azco completed the acquisition of Arizona Mica Properties, Inc. (Arizona Mica), an Arizona corporation, which owned the rights to develop 43 unpatented lode-mining claims located in Yavapai County, Arizona.  Azco obtains its mica from these mining claims.  The Arizona Mica acquisition was accomplished through the merger of Arizona Mica with and into Azcos wholly owned subsidiary, Sanchez Mining Inc., a Delaware corporation, with Sanchez being the surviving corporation.  Sanchez subsequently changed its name to Azco Mica, Inc.  In connection with the merger, Azco issued an aggregate of 4,500,000 shares of its common stock in equal amounts to each of the three shareholders of Arizona Mica: Lawrence G. Olson, John O. Rud and Floyd R. Bleak.

A predecessor of Azco was incorporated in July 1988 under the laws of Colorado to acquire the mining rights to the Sanchez Project, as well as certain other mineral properties.  In August 1991 the predecessor was merged into Azco, a newly incorporated Delaware corporation.  In October 1991, Azco acquired all of the shares of Filton Enterprises Limited, a Gibraltar corporation, in return for the issuance of 3,650,000 Azco common shares.  At that time, Filton owned rights in two copper properties both located in Sonora State, Mexico, the Piedras Verdes and Suaque Verde properties.  Filton was dissolved in 1994 and its assets were distributed to Azco.

In July 1992, Azco merged with Azco Mining Inc., a Wyoming corporation (Azco Wyoming), with Azco being the survivor of the merger.  At the time of the completion of the merger, Azco Wyoming had 3,946,550 shares issued and outstanding and Azco had 12,633,822 common shares issued and outstanding.  In connection with the merger, one common share of Azco was issued in exchange for each Azco Wyoming share.  Azco Wyoming was formerly a British Columbia corporation incorporated in August 1981 under the laws of the Province of British Columbia under the name 241145 B.C. Ltd.  241145 B.C. Ltd. changed its name to Canarex Resources Inc. in June 1983, then to International Baron Resources Ltd. in January 1988, and finally to Azco Mining Inc. in February 1992.  Azco Wyoming was continued under the laws of Wyoming in May 1992 prior to merging with Azco.

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Recent Developments

Since June 30, 2003 and through the date of this filing, Azco has remained minimally active while it continues to seek sources of new financing.  The Black Canyon mica mine has not operated since operations were suspended in November 2002.  The Glendale processing facility has continued to operate on an intermittent basis in fiscals 2003 and 2004, as required to fill purchase orders, using mica from inventory.  The Company has continued, on a limited basis, to sell mica to key customers in the plastics and cosmetic industries, and during the first half of fiscal 2004 sold approximately $160,000 of cosmetic grade mica and mica-filled plastic pellets. In addition, the Company has financed its activities by selling $348,000 of common stock through the first ten months of fiscal 2004.

In fiscal 2003, Azco raised approximately $1,000,000 through the sale of securities to Cornell Capital Partners (Cornell) under an equity line of credit agreement and a securities purchase agreement.  The Company entered into these two agreements with Cornell, respectively, in June 2002 and September 2002.  The Company issued the maximum of 6,000,000 shares allowed under the terms of the agreements.

In April 2003, the Company sold its 30% share of Cobre del Mayo S.A. de D.V. (Cobre del Mayo), the Mexican corporation that holds the Piedras Verdes copper project, to Frontera Cobre del Mayo S.A. de D.V. (Frontera), for consideration of $250,000.  In addition, the Company was to receive an initial deferred payment of $250,000, upon the date of construction commencement of the Piedras Verdes copper project, if the COMEX price of copper is less than $1.00 per pound or $500,000 if the COMEX price is greater than $1.00 per pound.  Upon the date of commercial production, the Company was to receive an additional payment of $500,000, if the COMEX price is less than $1.00 per pound or $1,000,000 if the COMEX price is greater than $1.00 per pound.  Frontera also agreed to pay Azco a royalty of $0.02 per pound of copper produced and sold from Piedras Verdes during any calendar quarter the average COMEX price is equal to or greater than $1.20 per pound, until such time as the initial deferred payment, the subsequent deferred payment and the royalty aggregate in total $4,750,000.



In June 2003, the Company subsequently assigned all payment and royalties, defined under the terms of the sale of its interest in Cobre del Mayo, to Mr. Lindsay and Mr. Harvey, former officers and directors of the Company, under the terms of a settlement agreement.



In July 2002, in conjunction with the October 2000 departure of two former executives, Mr. Lindsay and Mr. Harvey, Azco entered into a settlement agreement with these two former directors whereby Azco was required to make monthly payments of $10,000 to each director through June 2004, with a remaining balance of $90,000 due in July 2004.  The Company paid $184,906 through March 31, 2003.  Under the terms of the settlement agreement, Azco agreed also to provide Lindsay and Harvey with 150,000 shares each of unrestricted common stock in Azco Mining Inc.  The shares were issued in July 2002.

In April 2003, due to the Companys default status under the settlement agreement, Lindsay and Harvey filed for and were granted a writ of garnishment against the Company, whereby the court seized $85,908 of the Companys funds.  In June 2003, the Company entered into a second settlement agreement with the former directors, which released the Company from the first settlement agreement in return for cash payments totaling $102,257, the issuance of 600,000 shares of the Companys common stock to each of the former executives and the assignment of all of the Companys future rights under the terms of the sale of its interest in Cobre del Mayo.

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Exploration And Development

In April 2003, the Company sold its 30% share of Cobre del Mayo S.A. de D.V. (Cobre del Mayo), the Mexican corporation that holds the Piedras Verdes copper project, to Frontera Cobre del Mayo S.A. de D.V. (Frontera), for consideration of $250,000.  In addition, the Company was to receive an initial deferred payment of $250,000, upon the date of construction commencement of the Piedras Verdes copper project, if the COMEX price of copper is less than $1.00 per pound or $500,000 if the COMEX price is greater than $1.00 per pound.  Upon the date of commercial production, the Company was to receive an additional payment of $500,000, if the COMEX price is less than $1.00 per pound or $1,000,000 if the COMEX price is greater than $1.00 per pound.  Frontera also agreed to pay Azco a royalty of $0.02 per pound of copper produced and sold from Piedras Verdes during any calendar quarter the average COMEX price is equal to or greater than $1.20 per pound, until such time as the initial deferred payment, the subsequent deferred payment and the royalty aggregate in total $4,750,000.  In June 2003, the Company subsequently assigned all payment and royalties, defined under the terms of the sale of its interest in Cobre del Mayo, to Mr. Lindsay and Mr. Harvey, former officers and directors of the Company, under the terms of a settlement agreement.



Azco incurred no exploration expenses during fiscal 2003 in connection with Cobre del Mayo. Prior to the sale of its interest in Cobre del Mayo, the Company elected to dilute its interest in the project, as was permitted by the terms of the Cobre del Mayo shareholders agreement.

In September 2001, Randgold Resources terminated the exploration agreement with Azco relating to the West Africa Gold Joint Venture  Mali.  Under the agreement, Randgold had the right to earn 75% of Azcos interest in the mineral concessions by spending a minimum of $2 million to establish a deposit containing at least one million ounces of gold.  After Randgold withdrew from the joint venture, Azco did not renew the mineral concessions with the Malian government. During fiscal 2002 and 2003, Azco incurred no exploration expense on the Mali project.

In 2003 Azco relinquished the Silverado and the Alamos claims in Sonora, Mexico.  Exploration expenses of $5,862 were incurred in fiscal 2003 with respect to the Silverado and Alamos claims.

The Company incurred exploration expense of  $22,817 during fiscal 2003 in connection with its lease of the mineral property owned by New Planet Copper Mining Company in La Paz County, Arizona.  In August 2003, the Company sold its interest in this property subject to an option to reacquire a 25% interest at the time of any future commercial development.

Products

Azco produced and sold mica-f i
lled plastic pellets to the manufacturers of reinforced plastics in fiscal 2003.  Currently the Company is unable to produce plastic pellets due to a lack of working capital but has continued to sell, to a key customer, the mica needed to produce the pellets.  Azco also has continued to sell cosmetic grade mica on a limited basis.  The Company believes it has sufficient inventoried mica to meet the needs of its key mica customers for several months, while it seeks financing to resume production.

In the first half of fiscal 2003, Azco sold feldspathic sand, a by-product of mica production, as golf course bunker sand and as stucco sand.  Sand sales ceased due to the suspension of crushing and concentrating operations at the Black Canyon mine in November 2002.

Marketing

Marketing efforts have been placed on hold pending the resumption of production.  The Company maintains contact with current and past customers.

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Customers

Azco sells its cosmetic grade mica to Presperse, Inc. and to KOBO, who distribute the product to cosmetic manufacturers.  In fiscal 2003 sales of cosmetic grade mica totaled $7,658.  The Company sells its mica-filled plastic pellets and mica powder to a major plastic consumer in Canada.  Sales of plastic pellets totaled $16,750 in fiscal 2003.  In fiscal 2003 Azco sold its feldspathic sand products to Pioneer Sand (golf course bunker sand) and Western Stucco Products (stucco sand).  Sand sales totaled $31,060 in fiscal 2003.

Competition

Many companies are engaged in the exploration and development of mineral properties.  Azco is at a disadvantage with respect to those competitors whose technical and financial resources exceed Azcos.

Azcos main competitors include Olglebay Norton Specialty Minerals, Engelhard Corp. and Georgia Industrial Minerals, who are important producers of wet ground mica; and Oglebay Norton and J. R. Simplot, who are the main suppliers of manufactured sand to the Phoenix, Arizona area.

Research And Development

Azco has retained Transmit Technology Group, LLC, of Arlington, Texas, in the past, to provide research and development support for its mica-filled plastic products.  Azcos mica has been evaluated and tested by several potential customers in the cosmetics and plastics industries.  The Company intends, if and when financing for the mica project can be arranged, to continue its research and development efforts.  Currently the Company is conducting no research and development.

Employees And Consultants

As of June 30, 2003, we had three full-time employees, one part-time employee and one full-time consultant.  None of our employees are covered by labor union contracts or collective bargaining agreements.



ITEM 2.  PROPERTIES

Black Canyon Mica Project

Background

In 1999 Azco acquired the Black Canyon mica project from Arizona Mica Properties, Inc., a private Arizona corporation.  The project included 43 Federal unpatented mining claims at Black Canyon, 30 miles north of Phoenix, Arizona, and a pilot plant situated in Glendale, Arizona.  As part of its due diligence process, the Company carried out a marketing study, performed metallurgical testing and confirmatory diamond drilling, and conducted an environmental audit and title work.

Azco also conducted a geologic mapping program that recorded the many pegmatite dikes that host the ore bodies.  This work identified mica deposits lying outside the area of the original 43 mining claims, and additional claims were acquired.  The Company currently controls 67 Federal unpatented mining claims and 9 Federal millsite claims covering approximately 1,385 acres.

During 1999-2001, Azco began construction of the Glendale processing plant, obtained operating permits from the Bureau of Land Management and the State of Arizona and carried out an initial mining campaign.

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In 2002, Azco commissioned the processing facilities at the mine site and in Glendale, operated for several months on a test basis and achieved limited production and sales.  Operations at the mine site were suspended in November 2002.

The ultimate design capacity of the operation was set by reference to market share goals.  Capacity was set as 10,000 tons (20 million pounds) per year of finished mica product, which is calculated also to yield 180,000 tons per year of by-product feldspathic sand.  The installed capacities at the mine site and at the Glendale processing plant are capable of operating but at a throughput rate less than full planned capacity.  In order to achieve full design capacity, the installation of additional processing equipment is required, and will depend on the Companys receipt of adequate financing.

Azco is seeking new funding in the amount of $4.0 million to upgrade and expand the mining and processing facilities in order to reach planned capacity and to provide working capital.  These expansions are required in order to achieve the higher throughputs necessary for sustained economic operation.

The Companys total expenditures on the Black Canyon project have exceeded $10 million.

Location and Access

The Black Canyon mine is located about 30 miles north of Phoenix, Arizona, 3.5 miles west-southwest of Black Canyon City.  It can be reached via U.S. Highway 17, which connects Phoenix with Flagstaff, and, by a connecting dirt road for the last eight miles.



The Glendale processing plant is located in an industrial area on the west side of Phoenix, Arizona, 47 miles to the south of the mine site.

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Mineral Title



Azcos property holdings at and around the Black Canyon mine consist of 67 Federal unpatented mining claims in Yavapai County, Arizona and 9 Federal millsite claims in Maricopa County, Arizona, which in total cover approximately 1,385 acres.  The claims are located on public land and held pursuant to the General Mining Law of 1872.  The mining rights are fully owned by the Company.  The claims are in good standing in accordance with the mining laws of the United States.



Additional details of Azcos claims are as follows:  In Yavapai County, the claims are Spencer Nos. 1-43, 77, 79, 122-127, 146-153, 155, 157, 184, and 186-190, located in Sections 12, 13, 14, 23 and 24, Township 8N Range 1E and Sections 6, 7 and 8, T8N R2E, and recorded by the Bureau of Land Management on 2/25/1999 and by Yavapai County on 2/26/1999.  In Maricopa County, the claims are Mica Millsite Nos. 12, 14, 16, and 19-24, located in Sections 27 and 28, T8N R2E, and recorded by the Bureau of Land Management on 9/17/1999 and by Maricopa County on 9/20/1999.



In order to maintain its claims in good standing, Azco must pay annual assessment fees to the Bureau of Land Management and record the payment of rental fees with Yavapai and Maricopa Counties.  Annual assessment and recording costs total approximately $10,000.  The Company has paid the required fees for the 2005 assessment year (September 1, 2004 through August 31, 2005).



.

Mining and Processing Facilities

The Black Canyon project consists of two integrated operating facilities.  The mine site west-southwest of Black Canyon City contains the ore reserves where the Company proposes to conduct open pit mining operations.  The crusher, the concentrator and the feldspathic sand plant are located at the mine site.  These facilities depend on diesel generators for power.  Plans call for mining to be carried out by conventional open pit methods.  The ore is trucked from the pit and delivered to a nearby stockpile located adjacent to the crusher and concentrator.  Mica flakes are separated from the pegmatite host rock in a process that involves multi-stage crushing and screening to -3/16 size.  Mica is concentrated from the crushed material utilizing air classifiers.  The resulting concentrate, containing 95% mica, is trucked to the Glendale processing plant for further processing.



In the mica concentrating process at the mine site, the majority of the crushed host rock, which otherwise would be discarded as waste, is converted into feldspathic sand for sale into the local market.  Processing of the feldspathic sand involves screening and magnetic separation to yield sand fractions of various sizes.  The sand products are either bagged for shipment or trucked in bulk to customers.



The mica concentrate is further processed at the 5-acre Glendale plant and office site on the west side of Phoenix.  The processing is designed to achieve the desired product sizes and meet the quality requirements of the market place.  The plant is housed in an 18,000 square foot steel framed building, where equipment is installed for wet grinding, dewatering, drying, and air classification and bagging.  The final products are placed into 50-pound bags or into 1000-pound supersacks ready for shipment to customers.



Operations at the mine site were suspended in November 2002.

Azco is seeking new funding in the amount of $4.0 million to upgrade and expand the mining and processing facilities in order to reach planned capacity and to provide working capital.  These expansions are required in order to achieve the higher throughputs necessary for sustained economic operation.



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Permits

In 1999, Azco obtained approval for the Black Canyon Plan of Operations from the Bureau of Land Management and the State of Arizona.  An Environmental Assessment, Clean Water Act Permit and Air Quality Procedures were all approved.  An Aquifer Protection Permit was not required because processing operations at the mine site did not propose the use of water.

Geology and Mineralization

The mica deposits occur as pegmatite dikes cutting Precambrian schist and granite.  These dikes are steeply dipping tabular bodies, continuous along strike and with depth.  The main pegmatite dikes are hosted by the schist and have a northeasterly trend parallel to the structural grain of the schist.  Because the light colored pegmatite dikes are more resistant to weathering than is the enclosing schist, the dikes stand out at the surface as elongated light colored ridges relatively easy to discern and to map geologically.

In the area of the drilled ore reserves, a concentration of pegmatite occurs as a dike swarm and as massive irregular bodies of pegmatite.  An associated major structure, the Central Pit fault, appears to have created a zone of dilation that provided open space for intrusion of the pegmatite.  Drilling has identified seven individual dikes that range from approximately 4 feet to over 20 feet in thickness.  At the surface, massive pegmatite crops out over a width exceeding 50 feet.

The minerals of potential economic value are all found associated with the pegmatite dikes, and consist of muscovite mica, feldspar and silica.  Muscovite mica, the principal commodity, constitutes a major accessory mineral of the pegmatite dikes and is ubiquitous in the pegmatite.  Based on visual estimates of drill core, the content of muscovite in the pegmatite ranges from 5% to 35%.  The muscovite is light to whitish green in color and occurs as discrete, coarse-grained inclusions as well as fine-grained disseminations in the pegmatite.  Feldspar and silica, by-products of the proposed mining operation, make up most of the remaining component minerals of the pegmatite on about a 1:1 ratio.

Ore Reserves

In 1998 and 1999, based on geologic mapping, Azco drilled 41 inclined core holes and collected 59 samples of pegmatite exposed on the surface, at two central locations.  The drill holes and surface samples were spaced approximately 50 feet apart.  The holes ranged from 200 to 600 feet in length, and drilling totaled 13,070 feet.  The drilling covered only a small portion of the zones of outcropping mica-bearing rocks mapped on the Companys mining claims.

Mintec Inc., an independent geological engineering firm, analyzed Azcos drilling and sampling results, designed the mining plan and calculated the ore reserves.  In-place mining reserves for the pit design were calculated as 2,399,500 tons of proven ore grading 7.54% mica and 1,527,200 tons of probable ore grading 7.37% mica, for total reserves of 3,926,680 tons of ore grading 7.48% mica, at a cutoff grade of 2.47% mica.  Approximately 60% of the mica contained in these reserves is expected to be recoverable after losses due to mining and beneficiation.

Mica

Azcos mineral reserves
 contain
 high quality muscovite or white mica.  Mica is a mineral characterized by crystals that can be easily split into thin elastic sheets and is valued for its unique combination of chemical, physical, electrical, thermal and mechanical properties.  Muscovite exhibits perfect cleavage, flexibility and elasticity, infusibility, low thermal and electrical conductivity, high dielectric strength, light weight, good insulating characteristics, and is stable when exposed to moisture, light and high temperatures.  Because of these properties, muscovite has found widespread application in plastics, automotive coatings, cosmetics, paints, catalysis and composite formulations.

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Azco plans, once adequate financing is obtained, to produce 10,000 tons (20 million pounds) annually of premium wet-ground mica and intends to penetrate existing markets and to establish its own markets in plastics, cosmetics and ultra-micronized applications.

In fiscal 2003 Azco sold a portion of the mica it produced and retained a portion in inventory.  The Company sold mica products to customers in the plastics and cosmetics industries and for other specialized applications.   S
ales to key customers are continuing on a limited basis.  In addition, other potential consumers have conducted trial tests of the Companys mica products.

Feldspathic Sand

Azcos feldspathic sand is produced as a by-product of mica concentration and is screened and sized for sale into the Phoenix construction and recreational markets.  Products include golf course bunker sand and sand used in stucco, mortar and other specialized construction applications.  The Company plans, once suitable financing is obtained, to produce 180,000 tons of feldspathic sand products annually.

Currently sand producers in California and Nevada are significant suppliers to the Phoenix manufactured sand market.  Because the material has to be trucked long distances in order to reach Phoenix, trucking costs are significant and constitute a substantial proportion of the final selling price.  The location of Azcos Black Canyon mine 30 miles from Phoenix provides the Company with a transportation cost advantage over out-of-state suppliers.

In fiscal 2003 Azco sold all of the high quality feldspathic sand it produced to customers in the Phoenix area.

Impairment Charge and Carrying Value of Assets

In conjunction with discussions surrounding a potential sale of all or some portion of the Companys mining assets, management determined that an impairment charge was necessary to more accurately reflect the carrying value of its long-lived assets.  The amount of the impairment charge was based on a formal indication of willingness to acquire the Companys mining assets received during the third quarter and, accordingly, represents managements best estimate of the fair value of these assets.  An impairment charge of $3,291,773 has reduced the carrying cost of mineral properties, plant and equipment.

On June 30, 2003, Azco carried its long-lived assets related to the Black Canyon project at the following values:

|Acquisition of mineral properties         | $    1,528,724
|----------------------------------------- | --------------
|Mining and processing plant and equipment | 4,818,438     
|Development costs                         | 647,444       
|Accumulated amortization                  | (110,204)     
|Total                                     | $    6,884,402





Risk Factors



Mica Reserve Estimations

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Although independent consultants have reviewed and concurred with the estimations of reserves presented in this annual financial report, such estimations are necessarily imprecise because they depend upon the judgment of the individuals who review the geological and engineering information and upon statistical inferences drawn from only limited drilling and sampling.  If the Black Canyon mining operation encounters mineralization or geologic conditions different from those predicted, reserve estimations might have to be adjusted and mining plans altered.  Changes to the planned operations could adversely affect forecast costs and profitability.



Development and Completion

The development of mineral deposits involves significant risks that even the best evaluation, experience and knowledge cannot eliminate.  The economic feasibility of the Companys mining claims is based upon a number of factors, including reserve estimations, extraction and process recoveries, engineering, capital and operating costs, future production from the Black Canyon mine and Glendale processing plant, and future prices of mica and feldspathic sand.



The Black Canyon mica project has no significant operating history upon which to base estimates of operating costs and capital requirements.  As a result, estimations of resources, mining and process recoveries and operating costs have been based to a large extent upon the interpretation of geologic data obtained from drill holes, and upon feasibility estimates that derive forecasts of operating costs from anticipated tonnages and grades of ore to be mined and processed, the configuration of the ore body, expected recovery rates of minerals from the ore, comparable facility and equipment costs, and climatic conditions and other factors.  Commonly in new projects, actual construction costs, operating costs and economic returns differ materially from those initially estimated.  Accordingly, there can be no assurance that the Black Canyon mine can be upgraded or the Glendale processing plant expanded within the time frame or at the cost anticipated by the Company, or that the forecasted operating results can be achieved.  These risks have been mitigated in that although Azco proposes to upgrade or expand both of these facilities, in fact both already have been partially completed and have achieved limited production of marketable products.



Operating

Mining operations generally involve a high degree of risk.  The Companys operations are subject to all the hazards and risks normally encountered in the development of open pit mining operations, and in particular, production of mica and feldspathic sand.  These risks include unexpected geologic formations and conditions, rock bursts, cave-ins, flooding and other conditions involved in the open pit mining of material, any of which could result in damage to, or destruction of, producing facilities, damage to life or property, environmental damage and possible legal liability.



The Companys management has taken certain precautions to mitigate these risks.  However, in spite of these precautions, circumstances could arise that result in a significant increase in operating costs or cause the Company to incur potential liabilities, which could have a material adverse effect on its financial position.



Price

According to USGS information, mica prices recuperated in the past two after declining over the prior four years during a period of relatively flat US production.  Irrespective of the apparent recovery in prices, the outlook for future mica prices is unclear.  Feldspathic sand prices and demand have been on the rise over the same period.  The robust housing, construction, and recreational markets in the Southwest have driven demand for sand products, and there are indications that this trend will continue.  However, there are numerous factors beyond the Companys control that could affect markets for both mica and feldspathic sand.  No assurance can be given as to future prices or demand for the Azcos products.  Any decline in prices could have a material adverse effect on the Companys financial position.

11



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Market

Azcos dual products are mica that it plans to sell nationally into the cosmetics and plastics markets, and feldspathic sand that it plans to sell locally into the Phoenix, Arizona construction and recreational markets.  Although the Company anticipates being able to produce and sell premium products into these markets, it has not yet sold significant quantities of its products and has not entered into sales contracts.  The profitability of Azcos operations could be adversely affected if it does not achieve the selling prices or sales volumes currently targeted for its products.  The markets are affected by numerous factors beyond the Companys control.  For example, it is possible that new sources of supply from other domestic plants or imports could create an imbalance in the markets, depressing prices and causing a decrease in demand for the Companys products.  Another possibility is that the major mica and feldspathic sand producers could engage in a defensive price war against Azco as a means of protecting their respective market shares.  Any such factors could adversely impact the Companys ability to sell its products, the prices it receives for its products and its profitability.



Title

Azcos property holdings at and around the Black Canyon mine consist of unpatented mining claims located on public land and held pursuant to the General Mining Law of 1872.  The validity of such unpatented mining claims may be subject to title defects and may be contested.  Although there can be no assurance that titles are not defective, the Company has obtained various reports and opinions with respect to its mining claims and believes its claims are in good standing and held according to industry practice.



In recent years the United States Congress has considered amendments to the General Mining Law of 1872, some of which would lower the value of unpatented mining claims by restricting activities and imposing additional user fees or production royalties.  If enacted, these legislative changes could have an adverse impact on the operation of the Black Canyon mine.



Environmental

Mining is subject to potential risks and liabilities associated with pollution of the environment that may result from mineral exploration and production.  Although Azcos initial mining and processing operation has been approved and permitted by regulatory authorities, the Company could incur unexpected environmental liability resulting from its mining activity at Black Canyon, or even stemming from previous activity conducted by others prior to Azcos ownership.  Insurance against environmental mining risks (including liability for the disposal of waste products) generally is not available at a reasonable price and currently the Company does not have and does not intend to purchase such insurance.  Should Azco be unable to fund a required environmental remedy, the Company might be forced to suspend operations or enter into interim compliance measures pending completion of the remedy.

Laws and regulations involving the protection and remediation of the environment are constantly changing and generally are becoming more restrictive.  The Company has made, and expects to make in the future, significant expenditures to comply with such laws and regulations.  Although Azco has obtained the permits required to commence operations at Black Canyon and has conducted mining and processing activities under those permits, there can be no assurance that in the future the Companys operations will not be subject to more stringent regulations or to unfavorable interpretations of present regulations.  It is possible that costs and delays in complying with such regulations could adversely affect the Companys mining plan or any potential expansion of that plan.  This risk is mitigated at Black Canyon in that no water or chemicals are released into the environment during the mining and recovery process.



Mining Legislation and Regulation



12



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AZCO is subject to extensive United States federal, state and local laws and regulations related to mine prospecting, development, transportation, production, exports, taxes, labor standards, occupational health and safety, waste disposal, protection and remediation of the environment, mine safety, hazardous materials, toxic substances and other matters.  The Company believes that it has complied with all laws and regulations required for its initial mining operations.  However, new laws and regulations or more stringent enforcement could have a material adverse impact on the Company, causing a delay or reduction in production, increasing costs and preventing an expansion of mining activities.



Financing Risk

The Company has no significant operating history nor generated any cash flow.  To satisfy capital requirements it has relied on the issuance of equity securities, loans from shareholders and sales of assets.  Azco believes that the $4.0 million of new financing it seeks would provide capital in an amount sufficient for it to upgrade, expand and operate the Black Canyon mica project and to achieve positive cash flow.  However, there can be no assurance that the Company will succeed in arranging the required financing.

Piedras Verdes Copper Project



Azco owned 30% of the Piedras Verdes copper project after selling 70% of the project to the Phelps Dodge Corporation in December 1995.  In March 2002, Frontera, a Delaware corporation, purchased Phelps Dodges 70% interest in the project.



In April 2003, the Company sold its remaining 30% interest in Piedres Verdes to Frontera for consideration of $250,000.  In addition, Azco was to receive two future contingent payments, to be paid at the times the Piedras Verdes project commences construction and attains commercial production, the amounts of the payments depending on the price of copper at those times.



Frontera also agreed to pay Azco a royalty of  $0.02 per pound of copper produced and sold from the project in any calendar quarter during which the average COMEX price of copper is equal to or greater than $1.20 per pound, until such time as the aggregate of the contingent payments and the royalty totals $4,750,000.



In June 2003, the Company assigned all deferred payments and royalties, defined under the terms of the sale agreement, to Lindsay and Harvey, former officers and directors of the Company, under the terms of a settlement agreement.

New Planet Property

In September 2000, Azco entered into a lease and purchase option agreement with the New Planet Copper Mining Company on 31 patented mining claims located in La Paz County, Arizona, to assess the property for its iron oxide potential.  In August 2003, for the sum of $5,000 the Company assigned its interest in the New Planet project to Metallica Ventures LLC (Metallica), a corporation controlled by Mr. W. Pierce Carson, Azcos current President and Chief Executive Officer.

The Company retained an option to purchase 25% of the project.  The option is exercisable for a period of 90 days after Metallica has made the decision to proceed to commercial production.  To exercise the option, Azco is required to pay Metallica an amount equal to 25% of the expenditure on the property from the date of the assignment through the date of the exercise of the option.

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Mali Gold Concession

In September 2001 Randgold Resources terminated the exploration agreement with Azco relating to the WAG Joint Venture  Mali.  Azco did not renew the mineral concessions with the Malian government.

Silverado And Alamos Claims

In 2003 Azco relinquished the Silverado and the Alamos claims in Sonora, Mexico. Exploration expenses of $5,862 were incurred with respect to these claims in fiscal 2003.

ITEM 3.  LEGAL PROCEEDINGS

In July 2002, Azco entered into a settlement agreement regarding fees payable under terminated management agreements with two of its former officers and directors, Lindsay and Harvey.  Azco agreed to pay each former director the sum of $350,000.  The sum was to be paid in an initial amount of $20,000 each, due upon the signing of the agreement, and in monthly amounts of $10,000 thereafter, with the entire balance due within 24 months of the date of the agreement.  In addition, Azco agreed to pay $24,898 representing one half of the legal fees incurred by the former directors.  The Company paid $184,906 through March 31, 2003.  Azco also issued Lindsay and Harvey each 150,000 shares of unrestricted common stock under the terms of the settlement agreement
..

In April 2003, due to the Companys default status under the settlement agreement, Lindsay and Harvey filed for and were granted a writ of garnishment against the Company, whereby the court seized $85,908 of the Companys funds.  In June 2003, the Company entered into a second settlement agreement with the former directors whereby the Company was fully released under the terms of the first settlement agreement in return for cash payments totaling $102,257, the issuance of 600,000 shares of the Companys common stock to each of the former executives and the assignment of all of the Companys future rights under the sale of its interest in Cobre del Mayo.  The cash payments consisted of $95,000 to the former executives plus $7,257 for the reimbursement of legal and court costs.  In August 2003, the stock was issued under the terms of the second settlement agreement.  A restrictive legend was attached to the stock and its sale is reliant upon an exemption from Rule 144 of the Securities Act of 1934 (Securities Act).

The Companys rights under the agreement with Frontera that were assigned to the former executives include contingent future payments and production royalties totaling in aggregate $4,750,000.



In June 2002 Azco received a demand for arbitration filed by iCapital Corporation (iCapital) seeking $144,000 in relief due to failure to pay under a June 2001 financial consulting agreement.  On September 18, 2003 the American Arbitration Association awarded iCapital $144,000 plus $5,000 in attorneys fees as full settlement of the claim.  Under the terms of the award the Company had 30 days to remit the amount of the award, after which interest accrues at 5% per annum.  Azco failed to pay the amount awarded and has recorded a liability of $149,000 in fiscal 2003.  The Company has been in communication with iCapital and plans to settle once it has obtained adequate financing.



In January 1999 the trustee in bankruptcy proceedings against Eagle River International Limited, Azcos former partner in the WAG - Mali joint venture,served a petition upon Azco in the Quebec Superior Court, District of Hull, in order to recuperate from the Company certain subsidiary stock and other assets alleged to have a value of up to $4,300,000.  Azco considers the trustees claims to be without merit and has engaged counsel who is vigorously disputing the matter.





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



None.





PART II





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

During fiscal 2003 the Companys common stock was traded on the American Stock Exchange (AMEX) in the United States and on the Toronto Stock Exchange (TSX) in Canada.  In June 2003 the Company voluntarily requested its common stock be delisted from the AMEX.  In July 2003 the Companys shares began trading on the Over the Counter Bulletin Board (OTCBB).

The Company was delinquent in the filing of its financial statements for the year ended June 30, 2003 with the Security and Exchange Commission in the United States and with the Securities Commissions of Ontario and British Columbia.  Consequently cease trade orders were issued in November 2003 for trading of the Companys common stock on the TSX and in January 2004 for trading on the OTCBB.  Subsequently the Company has traded over-the-counter on the Pink Sheets.  The Company plans to become compliant in the filing of its annual and quarterly financial statements and immediately thereupon to apply for resumption of trading on the OTCBB.

On May 5, 2004 the Company received notice that the TSX is reviewing the eligibility for continued listing on TSX of the common shares of the Company.  Currently the Company falls below several requirements for continued listing, primarily related to its financial condition and operating results.  The Company has been granted 120 days, until September 2, 2004, to comply with all requirements for continued listing or face suspension of trading.  The Company does not expect to be able to meet all requirements for continued listing within the time frame specified and therefore expects its common shares to be suspended from trading on the TSX.  Following suspension of trading, delisting from the TSX can be expected to occur automatically after twelve months unless the Company is reinstated during that period. The Company is exploring the option of trading of its common shares on the TSX Venture Exchange.

As of July 23, 2004, there were 40,342,122 common shares outstanding.

The following table summarizes the high and low closing sales prices per share of Azcos common stock on the American Stock Exchange and on the Toronto Stock Exchange for the periods indicated:

15



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|Quarter ended | American Stock Exchange 
(U.S. $) | Toronto Stock Exchange
(Canadian $)
|------------- | --------------------------------- | -----------------------------------
|2001          | HIGH                              | LOW                                
|09/30/01      | $0.76                             | $0.43                              
|12/31/01      | 0.69                              | 0.49                               
|              |                                   |                                    
|2002          | HIGH                              | LOW                                
|03/31/02      | $1.20                             | $0.53                              
|06/30/02      | 1.13                              | 0.82                               
|09/30/02      | 1.00                              | 0.66                               
|12/31/02      | 0.70                              | 0.13                               
|              |                                   |                                    
|2003          | HIGH                              | LOW                                
|03/31/03      | $0.27                             | $0.10                              
|06/30/03      | 0.17                              | 0.10                               



Holders Of Common Equity

As of July 23, 2004, Azco had 921 recordholders of common stock.

Dividends

Azcos Board of Directors has not declared a dividend on its common stock since Azcos inception and has no plans to pay a cash dividend in the foreseeable future.

Recent Sales Of Securities

Through the first nine months of fiscal 2004, the Company sold $348,000 of common stock to accredited investors at prices ranging from $.10 to $.15 per share.

In June 2003, Azco was forced to enter into a second settlement agreement with Lindsay and Harvey (see below), due to the Companys default under certain of its obligations under the initial settlement agreement. Under the second settlement agreement, among other terms, the Company agreed to issue 600,000 shares of the Companys common stock to each of the former executives.  The stock was issued in August 2003.  A restrictive legend was attached to the stock and its sale is reliant upon an exemption from Rule 144 of the Securities Act.

In July 2002, Azco entered into a settlement agreement regarding fees payable under terminated management contracts with two of its former officers and directors, Lindsay and Harvey.  Under the terms of the settlement agreement, among other conditions, Azco agreed to issue Lindsay and Harvey each 150,000 shares of unrestricted common stock in Azco Mining Inc.  The shares were issued in July 2002.

In December 2002, the Company issued 10,000 shares of common stock for legal services rendered in connection with the Form S-8 registration statement discussed in the previous paragraph.

In July 2002, Azco issued 430,000 shares of common stock to Pacifica Financial Group as compensation for consulting services provided to Azco.

In June 2002 and September 2002, Azco entered into an equity line of credit agreement and a securities purchase agreement, respectively, with Cornell Capital Partners (Cornell).  In fiscal 2003 the Company raised a total of $1,000,000 by the sale of securities to Cornell through these agreements.  The Company issued the maximum of 6,000,000 shares allowed under the terms of the agreements.

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In December 2001, Azco received a one-year $100,000 loan, bearing interest at 12% per annum, from a sophisticated investor and shareholder, Luis Barrenchea.  In connection with this loan, Azco issued a warrant to purchase 125,000 shares of Azcos common stock at $.40 per share.  In December 2002 the loan was restructured and was payable in December 2003. It currently is in default.  The warrant vested in February 2002 and was exercisable through December 3, 2003.  Azco plans to negotiate a restructuring of this loan in conjunction with the procurement of the mica project financing if and when it becomes available.

In October 2001, Azco received a one-year $100,000 loan, bearing interest at 12% per annum, from Mr. Barrenchea.  In connection with this loan, Azco issued a warrant to purchase 125,000 shares of Azcos common stock at $.40 per share.  In October 2002 the loan was restructured and was payable in October 2003. It currently is in default.  The warrant vested in December 2001 and was exercisable through October 19, 2003.  Azco plans to negotiate a restructuring of this loan in conjunction with the procurement of the mica project financing if and when it becomes available.

In September 2001, Azco received a one-year $200,000 loan, currently bearing interest at 12% per annum, from Mr. Barrenchea.  In connection with this loan, Azco issued a warrant to purchase 250,000 shares of Azcos common stock at $.40 per share.  In September 2002 the loan was restructured and was payable in September 2003. It currently is in default.  The warrant vested in November 2001 and was exercisable through September 4, 2003.  Azco plans to negotiate a restructuring of this loan in conjunction with the procurement of the mica project financing if and when it becomes available.

In March 2001, Lawrence G. Olson, Azcos Chairman and former President and CEO, jointly with his wife, made an unsecured loan to Azco in the amount of $800,000 at an interest rate equal to the prime rate of interest as reported by Imperial Bank plus one percentage point.  In conjunction with the loan, Mr. Olson received a warrant to purchase 300,000 shares of common stock for $0.70 per share.  In October 2001, Azco restructured the $800,000 loan agreement with Mr. Olson.  Mr. Olson agreed to extend the note payable an additional year to March 15, 2003 in consideration for 700,000 warrants to purchase common stock at an exercise price of $0.40 per share.  The warrants vested in December 2001 and expired in October 2003.  In addition, effective October 1, 2001, the interest rate payable on the $800,000 Olson loan was adjusted from prime plus 1% to 12% annually.  In June 2002, the loan was extended an additional year and Azco entered into a security agreement with Mr. Olson, whereby Azcos assets secured the loan.  The loan became payable in March 2004 and currently is in default.  Azco plans to negotiate a restructuring of this loan in conjunction with the procurement of the mica project financing if and when it becomes available.

With respect to the sale of unregistered securities referenced above, all transactions were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933 (the 1933 Act), and Regulation D promulgated under the 1933 Act.  In each instance, the purchaser had access to sufficient information regarding Azco so as to make an informed investment decision.  More specifically, Azco had a reasonable basis to believe that each purchaser was an accredited investor as defined in Regulation D of the 1933 Act and otherwise had the requisite sophistication to make an investment in Azcos securities.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data for each of the five years during the period ended June 30 are derived from our audited consolidated financial statements.  The data presented below should be read in conjunction with our consolidated financial statements and related notes, and with Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations.

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|                                                  | Years Ended June 30,
|------------------------------------------------- | --------------------
|                                                  | 2003                
|Statement of Operations Data:                     |                     
|Sales                                             | $         55,469    
|Net loss from operations                          | (5,897,959)         
|Net loss                                          | (6,546,504)         
|Loss per share                                    | $          (0.19)   
|Weighted avg. number of common shares outstanding | 35,146,469          
|Balance Sheet Data:                               | June 30, 2003       
|Capital assets                                    | $   7,093,073       
|Total assets                                      | 8,551,839           
|Total debt                                        | 3,359,727           
|Total liabilities                                 | 4,982,809           
|Total stockholders equity                        | $   3,569,030       



ITEM 7.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The results of operations for the years ended June 30, 2003 and 2002 reflect under-capitalization of the Companys Black Canyon mica project, which project requires additional funding to be able to resume production and to achieve sustained profitable operation.  Results of operations similar to those in 2003 and 2002 can be expected to continue in the foreseeable future, and are not expected to change significantly until such time as additional capital and/or debt resources are secured and the Company is able to restructure its debt and lease commitments.  The Company anticipates a need for at least $5.2 million in order to satisfy past commitments, commence mining operations and initiate an exploration program as discussed in detail under the Liquidity and Capital Resources section of this report.  If it fails to procure this funding, the Company may be required to eliminate substantially all business activities and to seek protection under the U.S. bankruptcy laws.

Results Of Operations

Year Ended June 30, 2003 Compared To Year Ended June 30, 2002

Sales

Sales decreased in fiscal 2003 to $55,469 from $64,880 in fiscal 2002 due to the curtailment of operations at the Companys crushing and concentrating facilities at the Black Canyon mine in November 2002.  Prior to the closure of the Black Canyon facilities, the Company generated $31,060 in revenues from the sale of feldspathic sand, a by-product of the mica concentrator.  In addition, revenues of $24,409 were generated from the sale of cosmetic grade mica and mica-filled plastic pellets.  The Company continues to process and sell inventoried mica into the cosmetic and reinforced plastic industries, while it seeks financing to resume production.

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If and when financing is procured and production resumes, the Company expects that it will require 12 months or more time in order for it to introduce its mica and feldspathic sand products into the markets and to build a customer base necessary for sustained sales and profitable operation.  Although the Company anticipates being able to sell dual products of mica and feldspathic sand, it has not yet sold significant quantities of these products and has not entered into sales contracts.  There are numerous factors beyond the Companys control that could affect markets for both mica and feldspathic sand.  The profitability of the Companys operations could be adversely affected if it does not achieve the selling prices or sales volumes currently targeted for its products.  See also Risk Factors under the description of the Black Canyon mica project in this annual financial report.

Expenses

Production costs decreased by $338,792 in fiscal 2003 due to the curtailment of production at the Black Canyon facilities in November 2002.

Exploration costs decreased by $148,769 in fiscal 2003
as the result of the Companys election to not fund its current portion of expenses associated with the Piedras Verdes project.

General and administrative expense decreased to $914,015 in fiscal 2003 from $1,149,508 in fiscal 2002.  This decrease was due to legal fees of $12,121 in fiscal 2003 compared to legal fees of $139,638 associated with the lease transaction and other financings in fiscal 2002, and stock exchange fees of $52,309 in fiscal 2003 compared to $108,023 related to maintenance of AMEX and TSX listings in fiscal 2002.

Financing expenses in the fiscal year ended June 30, 2003 were $463,476 compared to $315,591 in the previous year.  The increase was due to fees under the Pacifica financial agreement, whereby the Company agreed to pay fees to Pacifica in the form of its common stock in the amount of $430,000, $363,000 of which was recorded in fiscal 2003 and $67,000 in fiscal 2002.

The Company recorded a recovery of expenses of $257,743 in fiscal 2003 due to the relinquishment of debt when it entered into a second settlement agreement with two former executives and restructured the terms of the initial settlement agreement.  Expenses of $1,030,900 related to the initial settlement agreement were recorded in fiscal 2002.

An impairment charge of $3,291,773 was recorded in fiscal 2003, which reduced the carrying value of mineral properties, plant and equipment. The amount of impairment was based upon a third partys formal indication of willingness to acquire the Companys mining assets.  It represented managements best estimate of the fair value of those assets.

Other Income and Expenses

Other income and expenses in fiscal 2003 were $(634,643) as compared to $(768,778) in 2002.  Interest expense increased to $952,854 in fiscal 2003 from $781,723 in fiscal 2002 due to an increase of $315,000 in accretion expense under the land and building leaseback arrangement with Muzz Investments, offset by a $119,391 reduction of deferred interest expense due to the amortization of the premium placed on warrants attached to debt financing packages.

Gain on the sale of mineral properties and equipment in fiscal 2003 consisted of $250,000 received in connection with the sale of the Companys interest in the Piedras Verde project and $65,000 for the disposal of mobile equipment.

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Income Tax Benefit

The Companys income tax benefit of $998,053 in fiscal 2002 was associated with the carry back of net operating losses resulting from the March 2002 enactment of the Job Creation and Workers Assistance Act of 2002.

Year Ended June 30, 2002 Compared To Year Ended June 30, 2001

Sales

Sales increased in fiscal 2002 to $64,880 from $17,600 in fiscal 2001 due to the acceptance in the market of our cosmetic grade mica.  Our sales volume in 2002 was 31,600 lbs. as compared to 8,800 lbs. in fiscal 2001.  The sales were derived from cosmetic grade mica produced from the Black Canyon project.  Beginning June 30, 2002, Azco also sold feldspathic sand into the Phoenix golf course sand and stucco markets.  Azcos customers included Presperse, Inc. and KOBO for mica, and Pioneer Sand Co. and Western Stucco Products for feldspathic sand.

Expenses

Production costs decreased by $104,705 in fiscal 2002 as compared to fiscal 2001 due to lower than expected demand for the Companys mica product.

Exploration costs decreased by $250,921 in fiscal 2002 as the result of the Companys election to not fund its current portion of expenses associated with the Piedras Verdes project.

Salaries expense decreased in fiscal 2002 to $341,608 from $430,111 in fiscal 2001. This decrease was due to the non-renewal in October 2002 of management contracts with two former executives.

General and administrative expense increased in fiscal 2002 to $1,149,508 from $588,632 in fiscal 2001.  This increase was due to $180,000 in financing new lease payments in fiscal 2002, as well as investor relations expense relating to contract services of $495,903 in fiscal 2002 compared to $71,644 in fiscal 2001, accounting fees of $118,180 in fiscal 2002 compared to $38,583 in fiscal 2001 and stock exchange fees of $108,023 in fiscal 2002 compared to $51,673 in fiscal 2001.  Investor relations expense includes $336,043 of non-cash expense related to the issuance of 820,000 shares of stock and 50,000 warrants in exchange for services rendered.  The increase in accounting fees in fiscal 2002 is due to services rendered in connection with the various financings throughout the year.

Expenses of $1,030,900 were recorded in fiscal 2002 related to the settlement reached with two of the Companys former executives.

Financing expense in fiscal year 2002 was $315,591 compared to $72,139 in fiscal 2001.  The increase was due to recording of the transaction fees due under the Cornell Capital equity line of credit agreement, whereby the Company agreed to issue $250,000 of its common stock as fees.

Other Income and Expenses

Other income and (expenses) was $(768,778) in fiscal 2002 as compared to $70,826 in fiscal 2001.  The principal factors in the decrease in fiscal 2002 were interest of $139,639 on new notes payable and $457,745 of non-cash amortization expenses on debt discounts relating to the financing arrangements.

Income Tax Benefit

The Companys income tax benefit of $998,053 in fiscal 2002 was associated with the carryback of net operating losses resulting from the March 2002 enactment of the Job Creation and Workers Assistance Act of 2002.

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Liquidity And Capital Resources

As of June 30, 2003, Azco had cash-on-hand of $707, a decrease from $884,647 at June 30, 2002.  The decrease was a result of increased expenses relating to financing activities.

In fiscal 2004, Azco has continued to seek funding for its mica project. The Company financed these efforts during the first six months of fiscal 2004 with the proceeds of the sale of approximately $160,000 of cosmetic grade mica and mica-filled plastic pellets.  In addition, the Company sold $348,000 of common stock during the first nine months of fiscal 2004 through the offering of stock subscriptions to shareholders and sophisticated investors.

In an effort to bring the mica project to commercial production, fund the Companys corporate commitments and initiate an exploration program, Azco anticipates the need for at least $5.2 million of additional financing during the next 12 months, in order to fund the following expected uses:



|Mica project operating losses           | $    500,000
|--------------------------------------- | ------------
|Mica project capital expenditures       | 3,000,000   
|Corporate overhead and related expenses | 1,200,000   
|Exploration program                     | 500,000     
|Total funds needed                      | $ 5,200,000 



This projection assumes that the Company will be able to restructure its current debt and lease commitments whereby interest, principal and lease payments will be paid from future mica project revenues or with equity components.

Management has developed a plan to place the Company on an improved financial footing.  Important elements of the plan include becoming compliant in the filing of our annual and quarterly financial statements, raising of interim funding to provide for corporate survival, restructuring of debt with secured creditors and arrangement of funding of $4.0-$6.0 million.  An important priority has been to bring the financial reports current.  Our auditor has completed the audit of the annual financial statement for the period ending June 30, 2004 and we expect to be able to file that annual report, followed by the quarterly financial reports for fiscal 2004 and 2005 and to be able to timely file our fiscal 2005 annual financial statement.  We have provided for interim financing of the Companys activities by selling mica, on a limited basis, to key customers in the plastics and cosmetic industries, and during the first half of fiscal 2004 received revenue of $160,000 from such sales.  In addition, the Company has obtained interim funding through the first ten months of fiscal 2004 by selling $348,000 of its common stock to accredited investors.  We have received verbal, nonbinding expressions of interest for a larger project financing once the Company becomes compliant in the filing of its annual and quarterly financial statements and its stock resumes trading on the Over the Counter Bulletin Board.  We have begun discussions with secured creditors concerning restructuring of debt and believe such restructuring may be possible in conjunction with a major project financing if such financing can be arranged.  If we are able to continue to secure interim financing, restructure debt and in 2005 obtain the additional required project financing, we believe  that in 2006 the Company could be in a position to begin profitable mining operations.

Azco will need additional interim funding to meet its operating expenses.  We plan to secure such interim funding through sales of the Companys common stock to accredited investors and by continuing to sell mica from inventory.  If we are unable to procure such additional funding, the Company may be required to eliminate substantially all business activities to conserve cash or may need to seek protection under the U.S. bankruptcy laws.

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In fiscal 2003, Azco raised approximately $1,000,000 through the sale of securities to Cornell Capital Partners (Cornell) under an equity line of credit agreement and a securities purchase agreement, which the Company and Cornell entered into in June 2002 and September 2002 respectively.  The Company issued the maximum of 6,000,000 shares allowed under the terms of the agreements.

In January 2002, Azco completed a financing lease transaction that yielded Azco net proceeds of $2,842,500.  Under the terms of the transaction, Azco sold a 40% ownership in its mica processing facility located in Glendale, Arizona.  Subsequently, Azco leased the property back for an initial period of 10 years, with an option to repurchase the stake for 120% of the original sales price, of $3,000,000, after the second year.  The repurchase price of the property increases by 10% of the original sales price each year the option remains unexercised up to a maximum of 150% of the original sales price.  The lessor maintains a mirror image option to put the property back to the Company.  Payments for the first 6 months under the lease agreement were $30,000, for the second 6 months they increase to $37,500 after which time they are $45,000 per month.  In connection with this transaction, the Company issued a warrant to purchase 2,550,000 shares of the Companys common stock at $0.50 per share.  The warrant vested in
January 2002 and is exercisable through January 16, 2007.  The Company paid the first 12 lease payments but currently is in default under terms of the lease agreement and, as of May
 17, 2004, owes $765,000
 representing 17
lease payments , plus
late payment penalties.  The Company plans to restructure the terms of the lease agreement if and when funding can be arranged for the mica project.

In December 2001, Azco received a one-year $100,000 loan, bearing interest at 12% per annum, from a sophisticated investor and shareholder, Luis Barrenchea.  In connection with this loan, Azco issued a warrant to purchase 125,000 shares of Azcos common stock at $.40 per share. In December 2002 the loan was restructured and was payable in December 2003. It currently is in default.  The warrant vested in February 2002 and expired in December 2003.  Azco plans to negotiate a restructuring of this loan in conjunction with the procurement of the mica project financing if and when it becomes available.

In October 2001, Azco received a one-year $100,000 loan, bearing interest at 12% per annum, from Mr. Barrenchea.  In connection with this loan, Azco issued a warrant to purchase 125,000 shares of Azcos common stock at $.40 per share.  In October 2002 the loan was restructured and was payable in October 2003.  It currently is in default.  The warrant vested in December 2001 and expired in October 2003.  Azco plans to negotiate a restructuring of this loan in conjunction with the procurement of the mica project financing if and when it becomes available.

In September 2001, Azco received a one-year $200,000 loan, currently bearing interest at 12% per annum, from Mr. Barrenchea.  In connection with this loan, Azco issued a warrant to purchase 250,000 shares of Azcos common stock at $.40 per share.  In  September 2002 the loan was restructured and was payable in September 2003.  It currently is in default.  The warrant vested in November 2001 and expired in September 2003.  Azco plans to negotiate a restructuring of this loan in conjunction with the procurement of the mica project financing if and when it becomes available.

In March 2001, Lawrence G. Olson, Azcos Chairman and former President and CEO, jointly with his wife, made an unsecured loan to Azco in the amount of $800,000 at an interest rate equal to the prime rate of interest as reported by Imperial Bank plus one percentage point.  In conjunction with the loan, Mr. Olson received a warrant to purchase 300,000 shares of common stock for $0.70 per share.  In October 2001, Azco restructured the $800,000 loan agreement with Mr. Olson.  Mr. Olson agreed to extend the note payable an additional year to March 2003 in consideration for 700,000 warrants to purchase common stock at an exercise price of $0.40 per share.  The warrants vested in December 2001 and expired in October 2003.  In addition, effective October 1, 2001, the interest rate payable on the $800,000 Olson loan was adjusted from prime plus 1% to 12% annually.  In June 2002, the loan was extended an additional year and Azco entered into a security agreement with Mr. Olson, whereby Azcos assets secured the loan.  The loan became payable in March 2004 and currently is in default.  Azco plans to negotiate a restructuring of this loan in conjunction with the procurement of the mica project financing if and when it becomes available.

22



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The agreements with Mr. Barrenchea and Mr. Olson described above are with parties related to Azco and may not be at arms-length.

A summary of the maturity dates of the notes payable currently due and the amounts payable (excluding debt discounts, accrued interest and default penalties) are set forth below:

|                             | Due Dates*                      | Amount         
|---------------------------- | ------------------------------- | ---------------
|                             | September 4, 2003               | $   200,000    
|                             | October 19, 2003                | 100,000        
|                             | December 3, 2003
March 14, 2004 | 100,000
800,000
|                             | Total                           | $1,200,000     
|                             |                                 |                
|(*) all notes are in default |                                 |                



Azco leases heavy equipment.  Certain equipment leases are classified as capital leases and, accordingly, the equipment and related obligation are recorded on its balance sheet.

Effective March 2003, Azco was released from lease obligations on its former executive office in Vancouver, British Columbia.  In exchange, the Company agreed to pay amounts totaling CDN$51,750 to the landlord and sub-lessor on September 1, 2003.  Azco failed to make the September payments and is in default under the agreements with the landlord and sub-lessor.  Azco plans to pay the amounts owing if and when financing can be procured, of which there can be no assurance.

The following table provides details of our contractual obligations and lease commitments:





|                               | Payments due through 
June 30, 2004 | Payments due in 
2-3 years 
2005-2006 | Payments due in 
4-5 years 
2007-2008 | Payments due 
after 
2008
|------------------------------ | ----------------------------------- | ------------------------------------- | ------------------------------------- | -------------------------
|                               |                                     |                                       |                                       |                          
|Equipment leases               | $              57,492               | 45,980                                | -                                     | $                       -
|Office lease                   | 38,165                              | -                                     | -                                     | -                        
|Settlement obligations         | 330,000                             | -                                     | -                                     | -                        
|Notes payable & line of credit | 1,187,998                           | -                                     | -                                     | -                        
|Financing lease                | 810,000                             | 1,080,000                             | 1,080,000                             | 6,390,000                
|                               |                                     |                                       |                                       |                          
|Total contractual obligations  | $         2,423,655                 | 1,125,980                             |                                       | $         6,390,000      
|                               |                                     |                                       |                                       |                          



If we are unable to procure additional financing, Azco (i) may be forced to further delay or terminate the development and marketing of Azcos mica and sand by-products, thereby hindering or eliminating Azcos expected primary source of future revenue, (ii) may be required to eliminate substantially all business activities to conserve cash, or (iii) may need to seek protection under the U.S. bankruptcy laws.

Critical accounting policies and estimates

23



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Our discussion and analysis of Azcos financial condition and results of operations is based on the Companys financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses for each period.  Critical accounting policies are defined as policies that management believes are the most important to the portrayal of the Companys financial condition and results of operations.  These policies may require us to make difficult, subjective or complex judgments, commonly about the effects of matters that are inherently uncertain.



Our significant accounting policies are described in the audited consolidated financial statements and notes thereto included in Item 8.  We believe our most critical accounting policies relate to revenue recognition, accounting for asset retirement obligations, capitalization of mineral properties and ore reserves, depreciation of plan t
 and equipment, and the carrying value of inventory.



An independent geological engineering firm estimated ore reserves at the Black Canyon mine based on Azcos exploration program completed in 1999.  Ore reserve estimates are based upon engineering evaluations of assay values from 41 drill holes and 59 samples of outcropping surface exposures.  These data were analyzed geostatistically and a geologic block model produced.  The model formed the basis on which the open pits were designed and on which the probable and proven reserves were calculated.  The methodology used was rigorous and conforms to accepted industry standards.  However, the distribution and spacing of data were such that the open pit analysis in the study produced a geometry that approached the limits of the model.  Additional drilling would need to be carried out in order to improve confidence in the mica grade and to increase the amount of proven and probable material.



On July 1, 2002, the Company adopted the provisions of Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations (SFAS No. 143).  SFAS No. 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs estimated to aggregate approximately $250,000.  Specifically, the Statement requires that retirement obligations be recognized when they are incurred and displayed as liabilities with the initial measurement being at the present value of estimated third party costs.  In addition, the asset retirement cost is capitalized as part of the assets carrying value and subsequently allocated to expense over the assets useful life.



The asset retirement costs associated with the Black Canyon mine consist of reclamation of disturbed property as well as the disposal and dismantling of related property and equipment.  The Company developed estimations of and accounting for asset retirement costs in conjunction with third parties and with the Companys auditors.  The Company previously accounted for these costs through periodic charges to earnings using the units-of-production method.  The change in accounting resulted in a decrease to long-lived assets of $161,746, a decrease to long-term liabilities of $147,844 and a cumulative effect charge to earnings of $13,902 during the fiscal year ended June 30, 2003.



As of June 30, 2003, the Company, pursuant to regulatory requirements, maintained the following restricted assets associated with reclamation costs for the Black Canyon property:  $50,000 held on deposit on behalf of the Arizona State Treasurer in a one-year automatically renewable short-term investment; and $131,092 held on deposit on behalf of the U.S. Bureau of Land Management, maturing October 25, 2004.



A roll forward of the Companys asset retirement obligation through June 30, 2003 is as follows:





|Initial liability recognition, July 1, 2002 | $      45,309
|------------------------------------------- | -------------
|Accretion                                   | 5,000        
|Balance, June 30, 2003                      | $      50,309



24



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In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets".  SFAS No. 144 replaced certain previously issued accounting guidance, developed a single accounting model for long-lived assets other than goodwill and indefinite-lived intangibles, and broadened the framework previously established for assets to be disposed of by sale (whether previously held or newly acquired).  This Statement was effective as of the beginning of fiscal 2003.  The Company considered the guidance in SFAS No. 144 in writing down approximately $3.3 million of long-lived capital assets for the fiscal year ended June 30, 2003.  This write-down was based on a formal indication of willingness by a third party to acquire the Companys mining assets received during the third quarter and accordingly represents managements best estimate of the fair value of these assets.  Due to the limited market for this equipment, its current dormancy and its remote location it is highly likely management will need to make additional adjustments to the estimate if additional impairment of this equipment occurs.



The Company recognizes the sale of product when an agreement of sale exists, product delivery has occurred, title has transferred to the customer and collection is reasonably assured.  The price received is based upon terms of the contract.



Inventory is stated at the lower of cost or net realizable value.  Inventory consists of the following as of June 30, 2003:



Inventoried mining costs

$634,351

In-Process inventory

$353,196

Finished goods inventory

$ 90,000



Finished goods inventory is valued at cost, which currently is less than the estimated retail value the product would be able to realize in sales.  Subsequent to year-end, in-process inventory was converted into finished goods inventory and the carrying value is also based at cost, which is less than the current market value.



Prior to 2001, the Company had a policy of capitalizing inventory costs.  Because of liquidity concerns, unfunded capital needs and the relative inaccessibility of the inventory located at the mine site, for the last two years management has ceased capitalizing inventory costs and has expensed all mining costs.  Because of the aforementioned factors management believes the inventory is currently being carried on the balance sheet at its residual usefulness.  The residual usefulness is measured in terms of equivalent expenditures that would have to be made in the ordinary course of business in order to procure a corresponding utility.  Utility would be indicated primarily by the current cost of replacement as would be reflected in the cost of production.  For the years ended June 30, 2003 and 2002 the Company has charged to results of operations $996,223 and $1,340,207 respectively, which it believes are the estimated costs over the net realizable values.  These charges are recorded on the consolidated statement of operations under production costs.  Based on estimated operating costs, management believes if it receives the capitalization it seeks as discussed under Capital and Liquidity Resources, the Company will be able to realize at least the carrying value of the inventoried mining costs at reasonably expected production rates and sales volumes of finished mica product.  At the point in time management believes new financing most likely will not occur or that such financing will be significantly delayed, it will reevaluate additional impairment charges for the inventoried mining costs, including the possibility of writing off these costs completely.



Cost is determined on a weighted average basis and includes all costs in bringing the inventory to its present location and condition.  Net realizable value is the estimated price at which inventory can be sold in the normal course of business after allowing for the cost of completion and sale.



25



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Land, buildings, plant, equipment and vehicles are carried at cost.  Replacements, maintenance and repairs that do not improve or extend the life of the respective assets are expensed as incurred.  Major renewals and improvements are capitalized.  Upon retirement, sale or other disposition, the cost and accumulated depreciation are eliminated and the gain or loss is included in other income or expense on the statement of operations.



The Company expenses prospecting and exploration costs as incurred, but capitalizes costs directly attributable to the acquisition of mineral properties, pending determination as to their commercial feasibility.  Mine development costs that are expected to benefit future production are capitalized and amortized on the units-of-production method over proven reserves.



Mineral properties (including capitalized development costs), plant and equipment are amortized on the units-of-production basis based on proven and probable reserves.  Although estimations of proven and probable reserves were developed with the aid and concurrence of independent experts, such estimations are imprecise because they depend upon the judgment of individuals who review the geological and engineering information and upon statistical inferences drawn from only limited drilling and sampling.  Should Azcos operation encounter mineralization or geologic conditions different from those predicted, reserves might have to be adjusted and the amortization schedule modified.



Office buildings, furniture, equipment, and vehicles are depreciated over their estimated useful lives (3 15 years) using the straight-line method



The Company evaluates its long-term assets for impairment when events or changes in economic circumstances indicate the carrying amount of the
 assets may not be recoverable. The Company uses an estimate of the future undiscounted net cash flows of the related asset or asset grouping over the remaining life to determine
 whether the assets are recoverable and measure s
 any impairment by reference to fair value.  Fair value is estimated using the Companys expectation of discounted net cash flows.



Going Concern

The accompanying consolidated financial statements have been prepared assuming that Azco will, as noted above, continue to operate as a going concern.  Azco has suffered recurring losses from operations , is currently in default of all of its financial obligations,
 and will require substantial additional funds to continue and develop operations.

These matters raise substantial doubt about Azcos ability to continue as a going concern. The accompanying consolidated financial statements in this Form 10-K do not include the adjustments that would be necessary, and could be significant, including a provision of impairment for plant and equipment should Azco be unable to continue as a going concern.



ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCUSSION ABOUT MARKET RISK



Azcos financial instruments include cash and cash equivalents and long-term debt.  Azco considers all financial instruments that are highly liquid and have original maturities of three months or less to be cash and cash equivalents that are readily convertible into cash.  Azcos cash and cash equivalents are not subject to significant interest rate risk due to the short maturities of these instruments.  Azcos total outstanding long-term debt as of June 30, 2003 was $3,359,727.  Azcos long-term debt is not subject to interest rate risk because all the long-term debt has fixed rates of interest.  Azco does not enter into contracts for speculative or investment purposes.



26



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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



The response to this item is submitted as a separate section at the end of this report beginning on page F-1 of this Form 10-K.





ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS



On September 5, 2003, PricewaterhouseCoopers LLP (PwC) resigned as the
independent registered public
accounting firm for the Company.  In connection with its audits for the fiscal years ending June 30, 2002 and June 30, 2001, and through September 5, 2003, there were no disagreements with PwC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure s
, which disagreements if not resolved to the satisfaction of PwC, would have caused them to make reference thereto in their reports on the financial statements for such years.



On October 24, 2003 the Company engaged James E. Raftery, Certified Public Accountant PC (Mr. Raftery), located at 606 North Stapley Drive, Mesa, AZ 85203, as the independent registered
public

account ing firm
 to audit the Companys financial statements.  However, Mr. Raftery was unable to issue an audit report for the Company, for the period ended June 30, 2003, and consequently, on February 13, 2004 he resigned as the independent registered public accounting firm
 for the Company.  Mr. Raftery was unable to issue an audit report due to the fact that, as of the date of his resignation, he had not received the final approval expected from the Public Accounting Oversight Board (PCAOB) to audit publicly traded companies.  Regulations issued pursuant to the Sarbanes-Oxley Act provide that on or after October 22, 2003 only accounting firms approved by the PCAOB may issue audit reports with respect to publicly traded companies.



Pursuant to Item 304 (a) (2) of Regulation S-K, the Company, effective February 14, 2004, engaged Semple & Cooper, LLP, located at 2700 North Central Avenue, Ninth Floor, Phoenix, AZ 85004, as the independent registered public accounting firm
to audit the Companys financial statements.





ITEM 9a. CONTROLS AND PROCEDURES



The Company maintains a system of disclosure controls and procedures that is designed to ensure required disclosure information is accumulated and communicated to management in a timely manner.  Management reviewed this system of disclosure controls and procedures at June 30, 2003 and concluded that the current system of controls and procedures is effective at accomplishing all the items defined as disclosure controls and procedures in Exchange Act Rule 13a-15(e).



The Company maintains a system of internal controls and procedures for financial reporting.  Since the date of managements most recent evaluation, there have been no changes in internal controls or in other factors that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.







PART III





ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS



Azcos present directors and officers as well as those who served during fiscal 2003 are as follows:

27



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|Name                    | Age | Position                                                                | Date Elected                                                                               
|----------------------- | --- | ----------------------------------------------------------------------- | -------------------------------------------------------------------------------------------
|Lawrence G. Olson       | 66  | Chairman of the Board      Former President and Chief Executive Officer | 1999 / served as President and Chief Executive Officer from October 2000 to October 7, 2003
|W. Pierce Carson        | 60  | President, Chief Executive Officer and Director                         | October 7, 2003                                                                            
|Paul A Hodges           | 76  | Director                                                                | 1993/resigned September 10, 2003                                                           
|Stanley A. Ratzlaff     | 68  | Director                                                                | 2001/resigned September 10, 2003                                                           
|M. William Lightner Jr. | 69  | Director                                                                | 2001/resigned September 10, 2003                                                           
|Ryan A. Modesto         | 48  | Vice President Finance,
Corporate Secretary                             | 1996/resigned February 2, 2004                                                             
|Gary L. Simmerman       | 53  | Vice President Operations                                               | 1998/resigned January 31, 2004                                                             



The directors and officers of Azco have held their principal occupations as set out above during at least the last five years, except as described below:

Lawrence G. Olson, age 66, Chairman, became a director of Azco in March 1999 in connection with the acquisition of Arizona Mica.  He has held the position of Chairman since October 2000, and also formerly held the positions of President and Chief Executive Officer from October 2000 until October 7, 2003.  Mr. Olson has owned and operated his own business, Olson Precast of Arizona Inc., since 1973.  In 1998, Olson Precast of New Mexico, Inc., a company controlled by Mr. Olson, was liquidated under bankruptcy laws in proceedings in the U.S. Bankruptcy Court for the District of New Mexico.  Mr. Olson received a B.S. Degree in Civil Engineering from the University of Southern California.

W. Pierce Carson, age 60,was named President and Chief Executive Officer and a director of Azco on October 7, 2003, following a consulting assignment with the Company.  Dr. Carson has 35 years of international mining experience and has managed the successful discovery, financing, development and operation of precious metals, base metals and industrial mineral properties in the United States, Australia and other countries.  From 1981 to 2000, he worked for Nord Pacific Limited and Nord Resources Corporation in senior management capacities, including president and chief executive officer.  Prior to 1981, he managed exploration programs for Exxon Minerals Company and Kennecott Copper Company.  Dr. Carson holds a Bachelors Degree in Geology from Princeton University and MS and PhD Degrees in Economic Geology from Stanford University.

Paul A. Hodges, age 76, became a director in August 1993 and resigned his position in September 2003.  He has over 40 years experience in the mining industry covering exploration, operations, project startup, and management and financing.  He has worked for and held senior positions with Anaconda, Asarco, RTZ and St. Joe.  Mr. Hodges holds the degree of Engineer of Mines from the Colorado School of Mines and is a Registered Professional Engineer in Arizona.

28



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Stanley A. Ratzlaff, age 68, became a director of Azco in February 2001 and resigned his position in September 2003.  A financial Consultant and CPA, Mr. Ratzlaff earned a B.A. Degree, cum laude, from San Jose State University and completed the Advanced Management Program at Harvard Business School.  Following employment from 1961 to 1969 with the public accounting firm of Ernst & Young, Mr. Ratzlaff held the positions of Assistant Controller of Atlantic Richfield Company, Corporate Controller of Standard Oil Company (Ohio), Vice President and Controller of Occidental Petroleum Corporation, and Vice President and Controller of Pacific Enterprises.

M. William Lightner Jr., age 69, became a director of Azco in March 2001 and resigned his position in September 2003.  A financial Consultant and CPA, Mr. Lightner holds a B.S. Degree in Commerce from Grove City College and a MBA from the University of Pennsylvania, Wharton School of Business.  Mr. Lightner was employed 31 years by the public accounting firm Arthur Andersen & Co., retiring in 1989 as a Partner.  Thereafter he became involved in leveraged buy-outs and held the positions of Chairman of Mica Resources and Financial Vice President of Merit Energy.  Most recently, Mr. Lightner held the positions of CFO and Executive Vice President at Consumer Packaging, Inc. (1994 to 1999) and Anchor Glass Container Corp. (1997 to 2000).

Ryan Modesto, age 48, Vice President Finance and Corporate Secretary, joined Azco in June 1994 and resigned his position in February 2004.  Mr. Modesto has 26 years of accounting and administrative experience in the mining industry.  For the six years prior to joining Azco, he was the controller for Corona Gold Inc.s Santa Fe Mine, Nevada.  Mr. Modesto earned a B.S. Degree in Accounting from the University of Utah.

Gary L. Simmerman, age 53, Vice President Operations, joined Azco in September 1992 and resigned his position in January 2004.  Mr. Simmerman has 30 years of experience in the mining industry and has been involved in exploration, development and production operations in gold, silver, copper, cobalt, coal and uranium.  For the five years prior to joining Azco, Mr. Simmerman was chief engineer for Santa Fe Pacific Golds Rabbit Creek Mine, Nevada.  Mr. Simmerman holds a B.S. Degree in Mining Engineering from the University of Arizona.



ITEM 11. EXECUTIVE COMPENSATION



The following table summarizes the total compensation of Azcos Chief Executive Officer and the other most highly compensated executive officers earning in excess of $100,000 for the fiscal years ended June 30, 2003, 2002 and 2001:

Summary Compensation Table

|                   |      |          | Annual Compensation | Long-Term Compensation    |                         
|------------------ | ---- | -------- | ------------------- | ------------------------- | ------------------------
|Name and Title     | Year | Salary   | Bonus               | Other Annual Compensation | Restricted Stock Awarded
|                   |      |          |                     |                           |                         
|Lawrence G. Olson  | 2003 | $0       | $0                  | $0                        | 0                       
|President, CEO,    | 2002 | $0       | $0                  | $0                        | 0                       
|Chairman           | 2001 | $0       | $0                  | $4,500(1)                 | 0                       
|                   |      |          |                     |                           |                         
|Ryan A. Modesto    | 2003 | $66,000  | $0                  | $0                        | 0                       
|V.P. of Finance,   | 2002 | $136,000 | $0                  | $0                        | 0                       
|Secretary          | 2001 | $110,000 | $0                  | $31,044(2)                | 0                       
|                   |      |          |                     |                           |                         
|Gary L. Simmerman  | 2003 | $87,500  | $0                  | $0                        | 0                       
|V.P. of Operations | 2002 | $189,592 | $0                  | $0                        | 0                       
|                   | 2001 | $160,416 | $0                  | $0                        | 0                       



(1)

These amounts represent directors fees paid to Mr. Olson prior to October 2000.  Mr. Olson has received no salary or fees since October 2000 as Chairman of the Board or as the former President and CEO of the Company.

(2)

Mr. Modesto was reimbursed $31,044 in relocation costs in conjunction with the move of Azcos corporate office from Ferndale, Washington to Glendale, Arizona.

29



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The following table contains information regarding options exercised in the year ended June 30, 2003, and the number of shares underlying common shares held as of June 30, 2003, by Azcos named executive officers.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR

AND FY-END OPTION VALUES



|                  |                             |                | Number of Securities Underlying Unexercised Options at FY-End | Value of Unexercised In-The-Money Options at FY-End ($)(*)
|----------------- | --------------------------- | -------------- | ------------------------------------------------------------- | ----------------------------------------------------------
|Name              | Shares Acquired on Exercise | Value Realized | Exercisable                                                   | Unexercisable                                             
|Lawrence G. Olson | --                          | --             | 200,000                                                       | 0                                                         
|Gary L. Simmerman | --                          | --             | 290,000                                                       | 0                                                         
|Ryan A. Modesto   | --                          | --             | 200,000                                                       | 0                                                         



(*)

Based on the closing price of $0.11 (CDN) of Azcos common stock as quoted on The Toronto Stock Exchange on June 30, 2003.

Compensation Of Directors

Azco pays to each of its outside, non-officer directors a fee of $1,500 per month.  Due to financial constraints, no such fees have been paid since August 2002.  Azco also reimburses its directors for reasonable expenses incurred in attending meetings of the Board of Directors.  During fiscal year 2002, non-officer directors received no consulting fees separate and distinct from directors fees as a result of actual services rendered above and beyond those typical of a non-officer director.  It is Azcos policy to grant to directors upon their initial election, options to purchase 100,000 shares of Azcos common stock at an exercise price equal to the fair market value of the stock.

Employment Agreements

The Company has entered into employment and change of control agreements with its President and Chief Executive Officer.  The employment agreement describes among other things the officers duties, compensation levels and benefits.  The term of the agreement is from October 16, 2003 through and including October 15, 2006, and then automatically extends through October 15, 2008 and thereafter year to year unless terminated on 90 days prior notice.  The change of control agreement provides that if there is a change of control of the Company and the officer leaves the employment of the Company, for whatever reason (other than discharge for cause, death, or disability) within six months after such change of control, the officer shall receive a lump sum cash payment pursuant to certain limitations of the Internal Revenue Code.  In addition, the officer will continue to be covered by the Companys medical, health, life and dental plans for 24 months after such cessation of employment.

The Company has entered into a change of control agreement with its Chairman.  The agreement provides for a lump sum cash payment in the amount not to exceed $100,000 in the event of change in control and resignation from the Board.

Stock Option Plan

Azco has a Stock Option Plan (the Plan) dated July 24, 1989, as amended, for the granting of options to purchase common stock.  The board of directors may grant options to key personnel and others as it deems appropriate provided the number of options does not exceed 5,950,424.  On June 30, 2003 there were 1,150,000 options outstanding under the Plan. There are no vesting requirements under the Plan.  The options are exercisable over a maximum term of five years.

The following table contains information regarding the Companys stock option plan as of June 30, 2003:

30



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|Plan Category                                         | Number of securities to be issued upon exercise of outstanding options | Weighted average exercise price of outstanding options US$ | Number of securities remaining available for future Issuance under equity compensation plan
|----------------------------------------------------- | ---------------------------------------------------------------------- | ---------------------------------------------------------- | -------------------------------------------------------------------------------------------
|Equity compensation plan approved by security holders | 1,150,000                                                              | $0.71                                                      | 2,982,924                                                                                  



Compensation Committee Interlocks And Insider Participation

In May 2001, Mr. Hodges, Mr. Ratzlaff and Mr. Lightner were appointed as Azcos Compensation Committee.  The Company has not had a compensation committee since September 2003, when these directors resigned.



ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of May 1, 2004, certain information regarding beneficial ownership of Azcos common stock by: (i) each person known by Azco to be the beneficial owner of more than 5% of Azcos outstanding common stock; (ii) each director and director-nominee; (iii) each named executive officer; and (iv) all executive officers and directors as a group.

|                                                        |                | Common Stock Beneficially Owned
|------------------------------------------------------- | -------------- | -------------------------------
|Name and Address Of Beneficial Owner                    | Title of Class | Number of Shares               
|Lawrence G. Olson
3045 S. 35th Avenue
Phoenix, AZ 85009 | Common Stock   | 3,978,700(1)                   
|W. Pierce Carson
33 Camino de Avila
Tijeras, NM         | Common Stock   | 4,000,000(2)                   
|Officers and Directors As a Group (2 Persons)           | Common Stock   | 7,978,700(3)                   





(1)

Includes options issued under the Companys stock option plan to acquire (i) 500,000 shares at an exercise price of US $0.11 per share, and (ii) 1,000,000 shares at an exercise price of US $0.10 per share. Includes non-plan options to acquire 500,000 shares at an exercise price of US $0.11 per share. Includes warrants to acquire 300,000 shares at an exercise price of US $0.70 per share.

(2)

Includes options issued under the Companys stock option plan to acquire 2,000,000 shares at an exercise price of US $0.10 per share.  Includes non-plan options to acquire 2,000,000 shares at an exercise price of US $0.11 per share.

(3)

Includes options and warrants to acquire an aggregate of 6,300,000 shares.

(4)

Applicable percentage of ownership is based on 40,342,122 shares of common stock outstanding as of May 1, 2004, together with securities exercisable or convertible into shares of common stock within 60 days of May 1, 2004 for each stockholder.  Beneficial ownership is determined in accordance with the rules of the Commission and generally includes voting or investment power with respect to securities.  Shares of common stock subject to securities exercisable or convertible into shares of common stock that are currently exercisable or exercisable within 60 days of May 1, 2004 are deemed to be beneficially owned by the person holding such options for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.



31



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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In July 2002, Azco entered into a settlement agreement regarding fees payable under terminated management agreements with two of its former officers and directors, Lindsay and Harvey.  Azco agreed to pay each former director the sum of $350,000.  The amount was to be paid in an initial payment of $20,000 each, due upon the signing of the agreement, and in monthly payments of $10,000 thereafter, with the entire balance due within 24 months from the date of the agreement.  In addition, Azco agreed to pay $24,898 representing one half of the legal fees incurred by the former directors.  The Company paid $184,906 through March 31, 2003.  In July 2002, under the terms of the settlement agreement, Azco issued Lindsay and Harvey each 150,000 shares of unrestricted common stock in Azco Mining Inc..

In April 2003, due to the Companys default status under the settlement agreement, Lindsay and Harvey filed for and were granted a writ of garnishment against the Company, whereby the court seized $85,908 of the Companys funds.  In June 2003, the Company entered into a second settlement agreement with the former directors whereby the Company was fully released under the terms of the first settlement agreement for cash payments totaling $102,257, the issuance of 500,000 shares of the Companys common stock to each of the former executives and the assignment of all of the Companys future rights under the sale of its interest in Cobre del Mayo.  The cash payments consisted of $95,000 to the former executives plus $7,257 for the reimbursement of legal and court costs.  In August 2003, the stock was issued under the terms of the second settlement agreement.  A restrictive legend was attached to the stock and its sale is reliant upon an exemption from Rule 144 of the Securities Act.

During the quarter ended December 31, 2001 and through January 2002, Lawrence G. Olson, Azcos Chairman and former President and CEO, provided unsecured short-term financing amounting to a total of $243,500.  These funds were offered on a 6.5% short-term basis, until alternate financing could be secured.  Subsequent to the closing of the financing lease agreement in January 2002 whereby Azco secured alternate financing, these notes along with all interest and associated fees were repaid in full.

In March 2001, Mr. Olson, jointly with his wife, made an unsecured loan to Azco in the amount of $800,000 at an interest rate equal to the prime rate of interest as reported by Imperial Bank plus one percentage point.  In conjunction with the loan Mr. Olson received a warrant to purchase 300,000 shares of common stock at an exercise price of $0.70 per share.  The warrant vested in December 2001 and expires in October 2006.

In October 2001, Azco restructured its $800,000 loan agreement with Mr. Olson.  Mr. Olson agreed to extend the note payable an additional year to March 2003 in consideration for a warrant to purchase 700,000 shares of common stock at an exercise price of $0.40 per share.  The warrant vested in December 2001 and expired in October 2003.  In addition, effective October 1, 2001, the interest rate payable on the loan was adjusted from prime plus 1% to 12% annually.

In June 2002, the $800,000 Olson loan was extended an additional year, in consideration for Azco entering into a security agreement with Mr. Olson, whereby certain of Azcos assets secured the loan.  The loan became payable in March 2004.

Compliance With Section 16(a) of The Securities Exchange Act of 1934

Based solely on its review of the copies of such forms received by it, or written representations from certain reporting persons, Azco believes that, during the fiscal year ended June 30, 2003, its officers, directors and greater than ten percent beneficial owners complied with all applicable filing requirements.

32



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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table discloses the fees for professional services provided by PricewaterhouseCoppers LLP in each of the last two fiscal years:

|              |  |      |         |      |  |   |        | 
|------------- |  | ---- | ------- | ---- |  | - | ------ | 
|              |  | 2003 |         | 2002
|              |  |      |         |     
|Audit Fees(1) |  | $    | 120,073 |      |  | $ | 65,500 | 
|Tax Fees(2)   |  | $    | 19,200  |      |  | $ | 17,975 | 



|(1) | Includes services rendered for audit of the Companys consolidated financial statements (2002), review of quarterly financial information and assistance and issuance of consents associated with SEC filings.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Relates to services rendered for tax advice and compliance services.                                                                                                                                          







33



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PART IV



ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8K



(a)



1.

Financial Statements - Reference is made to the Financial Statements appearing on Pages F-1 through F-23.



2.

Exhibits



|Exhibit No. | Description                                                                                                                                                                     | Location                                                                                                                                                                     
|----------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1         | Agreement and Plan of Merger of Arizona Mica Properties, Inc. into Sanchez Mining, Inc., a wholly-owned subsidiary of Registrant, dated as of March 9, 1999                     | Incorporated by reference to Exhibit 1 to Registrants 8-K dated March 9, 1999, as filed with the SEC on March 24, 1999                                                      
|            |                                                                                                                                                                                 |                                                                                                                                                                              
|3.1         | Registrants Certificate of Incorporation dated August 8, 1991                                                                                                                  | Incorporated by reference to Exhibit 3.1 to the Registrants Registration Statement on Form S-4 (File No. 33-45162)                                                          
|            |                                                                                                                                                                                 |                                                                                                                                                                              
|3.2         | Articles of Amendment to the Certificate of Incorporation dated December 5, 1991                                                                                                | Incorporated by reference to Exhibit 3.2 to the Registrants Registration Statement on Form S-4 (File No. 33-45162)                                                          
|            |                                                                                                                                                                                 |                                                                                                                                                                              
|3.3         | Registrants Amended By-laws                                                                                                                                                    | Incorporated by reference to Exhibit 3.3 to the Registrants Registration Statement on Form S-4 (File No. 33-45162)                                                          
|            |                                                                                                                                                                                 |                                                                                                                                                                              
|4.1         | Specimen stock certificate                                                                                                                                                      | Incorporated by reference to Exhibit 1 to the Registrants Registration Statement on Form 8-A as filed with the SEC on July 21, 1992                                         
|            |                                                                                                                                                                                 |                                                                                                                                                                              
|4.2         | Rights Agreement dated July 19, 1995 between the Registrant and Montreal Trust Company of Canada                                                                                | Incorporated by reference to Exhibit 3.4 to the Registrants Annual Report on Form 10-K/A for the fiscal year ended June 30, 1995                                            
|            |                                                                                                                                                                                 |                                                                                                                                                                              
|10.1        | Agreements for Piedras Verdes property                                                                                                                                          | Incorporated by reference to Exhibit 10.10 to the Registrants Registration Statement on Form S-4 (File No. 33-45162)                                                        
|            |                                                                                                                                                                                 |                                                                                                                                                                              
|10.2        | Purchase Agreement dated July 27, 1995 between the Registrant, Sanchez and Phelps Dodge                                                                                         | Incorporated by reference to Exhibit 10.20 to the Registrants Annual Report on Form 10-K/A for the fiscal year ended June 30, 1995                                          
|            |                                                                                                                                                                                 |                                                                                                                                                                              
|10.3        | Memorandum of Agreement dated June 7, 1996, by and among West Africa Gold & Exploration Ltd., Eagle River International Limited, Lion Mining Finance Limited and the Registrant | Incorporated by reference to Exhibit 10.10 to the Registrants Annual Report on Form 10-K for the fiscal year ended June 30, 1996 as filed with the SEC on September 30, 1996
|            |                                                                                                                                                                                 |                                                                                                                                                                              
|10.4        | Stock Option Plan                                                                                                                                                               | Incorporated by reference to Exhibit A to Registrants DEF 14A as filed with the SEC on March 5, 1997                                                                        

34



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|Exhibit No. | Description                                                                                                                                                                                                                | Location                                                                                                                                                                     
|----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.5        | Memorandum of Agreement/Eagle River International Ltd.                                                                                                                                                                     | Incorporated by reference to Exhibit 10.13 to Registrants Annual Report on Form 10-K for the year ended June 30, 1997, as filed with the SEC on September 30, 1997          
|            |                                                                                                                                                                                                                            |                                                                                                                                                                              
|10.6        | Management Agreements dated February 1, 1998 between the Registrant, Alan Lindsay and Associates, Ltd. and ARH Management Ltd.                                                                                             | Incorporated by reference to Exhibit 10.8 to the Registrants Annual Report on Form 10-K for the fiscal year ended June 30, 1998 as filed with the SEC on September 30, 1998 
|            |                                                                                                                                                                                                                            |                                                                                                                                                                              
|10.7        | Management Agreements dated August 15, 1994, by and between the Registrant and both of Alan P. Lindsay, Anthony R. Harvey; Management Agreement dated November 19, 1996, by and between the Registrant and Ryan A. Modesto | Incorporated by reference to Exhibit 10.15 to the Registrants Annual Report on Form 10-K for the fiscal year ended June 30, 1998 as filed with the SEC on September 30, 1998
|            |                                                                                                                                                                                                                            |                                                                                                                                                                              
|10.8        | Directors Agreement dated August 15, 1994, by and between the Registrant and Paul A.  Hodges                                                                                                                              | Incorporated by reference to Exhibit 10.16 to the Registrants Annual Report on Form 10-K for the fiscal year ended June 30, 1998 as filed with the SEC on September 30, 1998
|            |                                                                                                                                                                                                                            |                                                                                                                                                                              
|10.9        | Shareholders & Operators Agreement dated December 19, 1995, by and among PD Cobre Del Mayo, Inc., the Registrant and Cobre Del Mayo, SA de CV                                                                             | Incorporated by reference to Exhibit 10.17 to the Registrants Annual Report on Form 10-K for the fiscal year ended June 30, 1998 as filed with the SEC on September 30, 1998
|            |                                                                                                                                                                                                                            |                                                                                                                                                                              
|10.10       | Right of First Refusal Agreement dated June 18, 1998 by and among the Registrant, Seville Mineral Developments SA de CV and Minera Cortez Resources Ltd.                                                                   | Incorporated by reference to Exhibit 10.12 to the Registrants Annual Report on Form 10-K for the fiscal year ended June 30, 1998 as filed with the SEC on September 30, 1998
|            |                                                                                                                                                                                                                            |                                                                                                                                                                              
|10.11       | Mineral Property Option Agreement dated July, 1998, by and between the Registrant and Minera Cortez Resources Ltd.                                                                                                         | Incorporated by reference to Exhibit 10.13 to the Registrants Annual Report on Form 10-K for the fiscal year ended June 30, 1998 as filed with the SEC on September 30, 1998
|            |                                                                                                                                                                                                                            |                                                                                                                                                                              
|10.12       | Shareholders Agreement by and among Registrant, Sanou Mining Corporation, West African Gold & Exploration, S.A. and Randgold Resources Ltd.                                                                               | Incorporated by reference to Exhibit 10.5 to the Registrants Annual Report on Form 10-K for the fiscal year ended June 30, 1999 as filed with the SEC on September 29, 1999 
|            |                                                                                                                                                                                                                            |                                                                                                                                                                              
|10.13       | Mineral Property Option Agreement dated May 20, 1999, by and between the Registrant and Minera Cortez Resources Ltd.                                                                                                       | Incorporated by reference to Exhibit 10.16 to the Registrants Annual Report on Form 10-K for the fiscal year ended June 30, 1999 as filed with the SEC on September 29, 1999
|            |                                                                                                                                                                                                                            |                                                                                                                                                                              
|10.14       | Agreement in Principal dated August 9, 1999 between the Registrant, Thomas Ford and Calgem, Inc.                                                                                                                           | Incorporated by reference to Exhibit 10.17 to the Registrants Annual Report on Form 10-K for the fiscal year ended June 30, 1999 as filed with the SEC on September 29, 1999



35



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|Exhibit No. | Description                                                                                                                                            | Location                                                                                                   
|----------- | ------------------------------------------------------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------
|            |                                                                                                                                                        |                                                                                                            
|10.15       | Non-Revolving Credit Line Agreement dated March 14, 2001, by and between the Registrant and Lawrence G. Olson                                          | Incorporated by reference to Exhibit 10.16 to Registrants 10-K as filed with the SEC on October 15, 2001  
|            |                                                                                                                                                        |                                                                                                            
|10.16       | Settlement Agreement and Release by and among the Registrant, Anthony Harvey, ARH Management, Ltd., Alan Lindsay and Alan Lindsay and Associates, Ltd. | Incorporated by reference to Exhibit 99 to the Registrants 8-K as filed with the SEC on July 25, 2002     
|            |                                                                                                                                                        |                                                                                                            
|10.17       | $5,000,000 Equity Line of Credit Agreement, by and between the Registrant and Cornell Capital Partners, LP dated June 19, 2002                         | Incorporated by reference to Exhibit 10.17 to Registrants 10-K as filed with the SEC on September 27, 2002
|            |                                                                                                                                                        |                                                                                                            
|10.18       | Registration Rights Agreement by and between the Registrant and Cornell Capital Partners, LP dated June 19, 2000                                       | Incorporated by reference to Exhibit 10.18 to Registrants 10-K as filed with the SEC on September 27, 2002
|            |                                                                                                                                                        |                                                                                                            
|10.19       | Escrow Agreement by and among the Registrant, Cornell Capital Partners, LP, Wachovia, NA and Butler Gonzales LLP, dated June 19, 2002.                 | Incorporated by reference to Exhibit 10.19 to Registrants 10-K as filed with the SEC on September 27, 2002
|            |                                                                                                                                                        |                                                                                                            
|10.20       | Placement Agent Agreement by and between the Registrant and Westrock Advisors, Inc. dated June 19, 2002.                                               | Incorporated by reference to Exhibit 10.20 to Registrants 10-K as filed with the SEC on September 27, 2002
|            |                                                                                                                                                        |                                                                                                            
|10.21       | $150,000 Subscription Agreement between the Registrant and Floyd R. Bleak dated August 13, 2001                                                        | Incorporated by reference to Exhibit 10.21 to Registrants 10-K as filed with the SEC on September 27, 2002
|            |                                                                                                                                                        |                                                                                                            
|10.22       | 300,000 share Stock Loan Agreement between the Registrant and Floyd R. Bleak dated October 11, 2001                                                    | Incorporated by reference to Exhibit 10.22 to Registrants 10-K as filed with the SEC on September 27, 2002
|            |                                                                                                                                                        |                                                                                                            
|10.23       | $200,000 Loan Agreement between the Registrant and Patty J. Ryan dated August 27, 2001                                                                 | Incorporated by reference to Exhibit 10.23 to Registrants 10-K as filed with the SEC on September 27, 2002
|            |                                                                                                                                                        |                                                                                                            
|10.24       | $200,000 Loan agreement between the Registrant and Luis Barrenchea dated September 4, 2001                                                             | Incorporated by reference to Exhibit 10.24 to Registrants 10-K as filed with the SEC on September 27, 2002
|            |                                                                                                                                                        |                                                                                                            
|10.25       | Amendment to March 15, 2001 $800,000 Loan Agreement between the Registrant and Lawrence G. Olson dated October 12. 2001                                | Incorporated by reference to Exhibit 10.25 to Registrants 10-K as filed with the SEC on September 27, 2002
|            |                                                                                                                                                        |                                                                                                            
|10.26       | $100,000 Loan agreement between the Registrant and Luis Barrenchea dated October 19, 2001                                                              | Incorporated by reference to Exhibit 10.26 to Registrants 10-K as filed with the SEC on September 27, 2002
|            |                                                                                                                                                        |                                                                                                            
|10.27       | $100,000 Loan agreement between the Registrant and Luis Barrenchea dated December 4, 2001                                                              | Incorporated by reference to Exhibit 10.27 to Registrants 10-K as filed with the SEC on September 27, 2002

36



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|Exhibit No. | Description                                                                                                                          | Location                                                                                                                                                                  
|----------- | ------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |                                                                                                                                      |                                                                                                                                                                           
|10.28       | $3,000,000 Purchase Agreement between the Registrant and Muzz Investments, LLC dated January 17, 2002                                | Incorporated by reference to Exhibit 10.28 to Registrants 10-K as filed with the SEC on September 27, 2002                                                               
|            |                                                                                                                                      |                                                                                                                                                                           
|10.29       | Lease Agreement between the Registrant and Muzz Investments, LLC dated January 17, 2002                                              | Incorporated by reference to Exhibit 10.29 to Registrants 10-K as filed with the SEC on September 27, 2002                                                               
|            |                                                                                                                                      |                                                                                                                                                                           
|10.30       | Amendment No. 2 to Loan Agreement dated March 15, 2001 for $800,000 between the Registrant and Lawrence G. Olson dated June 28, 2002 | Incorporated by reference to Exhibit 10.30 to Registrants 10-K as filed with the SEC on September 27, 2002                                                               
|            |                                                                                                                                      |                                                                                                                                                                           
|10.31       | Directors Agreements dated April 26, 2002, by and between the Registrant and Stanley A. Ratzlaff and M. William Lightner            | Incorporated by reference to Exhibit 10.31 to Registrants 10-K as filed with the SEC on September 27, 2002                                                               
|            |                                                                                                                                      |                                                                                                                                                                           
|10.32       | Settlement Agreement dated July 9, 2002 by and between the Registrant and Anthony Harvey and Alan Lindsay                            | Incorporated by reference to Exhibit 1 to Registrants 8-K dated July 11, 2002, as filed with the SEC on July 25, 2002                                                    
|            |                                                                                                                                      |                                                                                                                                                                           
|10.34       | Stock Purchase Agreement dated April 10, 2003 by and between the Registrant and Frontera Cobre del Mayo, Inc.                        | Incorporated by reference to Exhibit 1 to Registrants 8-K dated April 10, 2003, as filed with the SEC on April 25, 2003                                                  
|            |                                                                                                                                      |                                                                                                                                                                           
|10.35       | Settlement Agreement dated June 22, 2003 by and between the Registrant and Anthony Harvey and Alan Lindsay                           | Provided herewith                                                                                                                                                         
|            |                                                                                                                                      |                                                                                                                                                                           
|10.36       | Amendment to $200,000 Loan agreement between the Registrant and Luis Barrenchea dated September 4, 2002                              | Provided herewith                                                                                                                                                         
|            |                                                                                                                                      |                                                                                                                                                                           
|10.37       | Amendment to $100,000 Loan agreement between the Registrant and Luis Barrenchea dated October 19, 2002                               | Provided herewith                                                                                                                                                         
|            |                                                                                                                                      |                                                                                                                                                                           
|10.38       | Amendment to $100,000 Loan agreement between the Registrant and Luis Barrenchea dated December 3, 2003                               | Provided herewith                                                                                                                                                         
|            |                                                                                                                                      |                                                                                                                                                                           
|21.1        | Subsidiaries of the Registrant                                                                                                       | Incorporated by reference to Exhibit 21.1 to the Registrants Annual Report on Form 10-K for the fiscal year ended June 30, 2001 as filed with the SEC on October 15, 2001
|            |                                                                                                                                      |                                                                                                                                                                           
|31.1        | Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)                                                    | Provided herewith                                                                                                                                                         
|            |                                                                                                                                      |                                                                                                                                                                           
|31.2        | Certification of Principal Financial Officer pursuant to
Rule 13a-14(a)/15d-14(a)                                                    | Provided herewith                                                                                                                                                         
|            |                                                                                                                                      |                                                                                                                                                                           
|32.1        | Certification of Principal Executive Officer pursuant to
18 U.S.C. Section 1350                                                      | Provided herewith                                                                                                                                                         
|            |                                                                                                                                      |                                                                                                                                                                           
|32.2        | Certification of Principal Financial Officer pursuant to
18 U.S.C. Section 1350                                                      | Provided herewith                                                                                                                                                         

37



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(b) Reports on Form 8K:

On April 25, 2003 the Company filed a Form 8-K in conjunction with the sale of its interest in Cobre del Mayo S.A. de C.V.

On September 17, 2003 the Company filed a Form 8-K relating to resignation of directors.

On September 12, 2003, October 1, 2003, November 12, 2003, February 26, 2004 and March 25, 2004, the Company filed forms 8-K or 8-K/A disclosing changes in its certifying accountant.





SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on May 18, 2005.



| | AZCO MINING INC.                            
| | --------------------------------------------
| |                                             
| | By:
/s/ W. Pierce Carson                    
| | Name:
W. Pierce Carson                      
| | Title:
President and Chief Executive Officer



Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant in the capacities indicated on May 18, 2005.





|SIGNATURE                                  | TITLE                                                              
|------------------------------------------ | -------------------------------------------------------------------
|                                           |                                                                    
|/s/ Lawrence G. Olson

Lawrence G. Olson   | Chairman of the Board                                              
|                                           |                                                                    
|/s/ W. Pierce Carson
W. Pierce Carson      | President and Chief Executive Officer
(Principal Executive Officer)
|                                           |                                                                    
|/s/ W. Pierce Carson_____
W. Pierce Carson | Chief Financial Officer
(Principal Financial Officer)              















38



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39