---

**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**Washington, DC 20549

**FORM 10-QSB**

[ x ] Quarterly Report Pursuant to Section 13 or 15(d) of the
  Securities Exchange Act of 1934

FOR THE QUARTERLY PERIOD ENDED**JUNE 30,
2006**

OR

[]
  Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
  Act of 1934

For the transition period from ____________________ to
____________________

COMMISSION FILE NUMBER **333-125436**

ZONE MINING LIMITED(Exact
name of registrant as specified in its charter)

|NEVADA                                                               | 98-0446135                          
|-------------------------------------------------------------------- | ------------------------------------
|(State of other jurisdiction of incorporation or
      organization) | (IRS Employer Identification Number)

C202 9801 King George Highway Surrey, British ColumbiaCanada V3T 5H6(Address of principal executive
offices)

(604) 588-1183(Registrant's telephone number,
including area code)

Indicate by check mark whether the registrant (1) has filed all
  reports required to be filed by Section 13 
  or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
  (or for such shorter 
  period that the Registrant was required to file such reports), and (2) has been
  subject to such filing 
  requirements for the past 90 days. Yes [ x ] No []

The Registrant is a Shell company. Yes []
  No [ x ]

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date: As at July
31, 2006 the issuer had 3,250,000 common shares issued and
outstanding.

Transitional Small Business Disclosure Format (Check one): Yes
  []
  No []

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PART I

Item
1.           Financial
Statement

---



ZONE MINING LIMITED

(An Exploration Stage Company)

INTERIM FINANCIAL STATEMENTS

JUNE 30, 2006

Expressed in US Funds

Unaudited





---

|Zone Mining Limited            | Statement 1
|------------------------------ | -----------
|(An Exploration Stage Company) |            
|Interim Balance Sheets         |            
|Expressed in US Funds          |            

|                                                                     |   | As at       |   |   | As at     |  
|-------------------------------------------------------------------- | - | ----------- | - | - | --------- | -
|                                                                     |   | June 30,    |   |   | March 31, |  
|                                                                     |   | 2006        |   |   | 2006      |  
|ASSETS                                                               |   | (Unaudited) |   |   | (Audited) |  
|Current                                                              |   |             |   |   |           |  
|Cash and cash equivalents                                            | $ | 3,767       |   | $ | 33,245    |  
|Prepaid expense                                                      |   | -           |   |   | 10,000    |  
|                                                                     | $ | 3,767       |   | $ | 43,245    |  
|                                                                     |   |             |   |   |           |  
|                                                                     |   |             |   |   |           |  
|                                                                     |   |             |   |   |           |  
|                                                                     |   |             |   |   |           |  
|LIABILITIES                                                          |   |             |   |   |           |  
|                                                                     |   |             |   |   |           |  
|Current                                                              |   |             |   |   |           |  
|Accounts payable                                                     | $ | 12,332      |   | $ | 5,419     |  
|Accrued liabilities                                                  |   | 2,000       |   |   | 5,000     |  
|Due to related party (Note 5)                                        |   | 29,998      |   |   | 29,830    |  
|                                                                     |   | 44,330      |   |   | 40,249    |  
|                                                                     |   |             |   |   |           |  
|Going Concern(Note 1)                                                |   |             |   |   |           |  
|                                                                     |   |             |   |   |           |  
|                                                                     |   |             |   |   |           |  
|                                                                     |   |             |   |   |           |  
|                                                                     |   |             |   |   |           |  
|STOCKHOLDERS
      EQUITY (DEFICIENCY)                              |   |             |   |   |           |  
|                                                                     |   |             |   |   |           |  
|Capital Stock(Note 4)                                                |   |             |   |   |           |  
|Authorized:                                                          |   |             |   |   |           |  
|100,000,000
      common shares, $0.00001 par value                  |   |             |   |   |           |  
|100,000,000 preferred shares, $0.00001 par value                     |   |             |   |   |           |  
|Issued and outstanding shares:                                       |   |             |   |   |           |  
|3,250,000 common shares 
      Statement 3                          |   | 33          |   |   | 33        |  
|Capital in excess of par value  Statement
      3                   |   | 64,967      |   |   | 64,967    |  
|Deficit accumulated during
      the exploration stage - Statement 3 |   | (105,563    | ) |   | (62,004   | )
|                                                                     |   | (40,563     | ) |   | 2,996     |  
|                                                                     | $ | 3,767       |   | $ | 43,245    |  

- See Accompanying Notes -

---

|Zone Mining Limited              | Statement 2
|-------------------------------- | -----------
|(An Exploration Stage Company)   |            
|Interim Statements of Operations |            
|Expressed in US Funds            |            
|Unaudited                        |            

|                                              |   | Cumulative from    |   |   |              |   |   |              |  
|--------------------------------------------- | - | ------------------ | - | - | ------------ | - | - | ------------ | -
|                                              |   | Inception (January |   |   | Three-Months |   |   | Three-Months |  
|                                              |   | 31, 2005) to       |   |   | Ended        |   |   | Ended        |  
|                                              |   | June 30,           |   |   | June 30,     |   |   | June 30,     |  
|                                              |   | 2006               |   |   | 2005         |   |   | 2006         |  
|                                              |   |                    |   |   |              |   |   |              |  
|General and administrative expenses           | $ | 68,688             |   | $ | 17,387       |   | $ | 18,559       |  
|Mineral property costs                        |   | 36,875             |   |   | -            |   |   | 25,000       |  
|Loss for the Period                           | $ | (105,563           | ) | $ | (17,387      | ) | $ | (43,559      | )
|                                              |   |                    |   |   |              |   |   |              |  
|                                              |   |                    |   |   |              |   |   |              |  
|Basic and Diluted Loss per Common Share       |   |                    |   | $ | (0.02        | ) | $ | (0.01        | )
|                                              |   |                    |   |   |              |   |   |              |  
|                                              |   |                    |   |   |              |   |   |              |  
|Weighted Average Number of Shares Outstanding |   |                    |   |   | 750,000      |   |   | 3,250,000    |  

- See Accompanying Notes -

---

|Zone Mining Limited                            | Statement 3
|---------------------------------------------- | -----------
|(An Exploration Stage Company)                 |            
|Interim Statements of Stockholders Deficiency |            
|Expressed in US Funds                          |            
|Unaudited                                      |            

DeficitAccumulatedCapital in
      
      
      During theCommon Shares
      
      
      Excess of
      
      
      ExplorationShares
      
      
      Amount
      
      
      Par
        Value
      
      
      Stage
      
      
      TotalInception  January 31, 2005
      
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -Common shares issued for cash at$0.02 per share
      
      750,000
      
      
      8
      
      
      14,992
      
      
      -
      
      
      15,000Loss for the period
      
      -
      
      
      -
      
      
      -
      
      
      (13,438
      )
      
      (13,438
      )Balance  March 31, 2005 (audited)
      
      750,000
      
      $
      8
      
      $
      14,992
      
      $
      (13,438
      )
      $
      1,562Common shares issued for cash
        at$0.02 per share
      
      2,500,000
      
      
      25
      
      
      49,975
      
      
      -
      
      
      50,000Loss for the year
      
      -
      
      
      -
      
      
      -
      
      
      (48,566
      )
      
      (48,566
      )Balance  March 31, 2006 (audited)
      
      3,250,000
      
      $
      33
      
      $
      64,967
      
      $
      (62,004
      )
      $
      2,996Loss for the period
      
      -
      
      
      -
      
      
      -
      
      
      (43,559
      )
      
      (43,559
      )Balance  June 30, 2006 (unaudited)
      
      3,250,000
      
      $
      33
      
      $
      64,967
      
      $
      (105,563
      )
      $
      (40,563
      )


- See Accompanying Notes -

---

|Zone Mining Limited              | Statement 4
|-------------------------------- | -----------
|(An Exploration Stage Company)   |            
|Interim Statements of Cash Flows |            
|Expressed in US Funds            |            
|Unaudited                        |            

|                                                              |   | Cumulative     |   |   |              |   |   | Three-   |  
|------------------------------------------------------------- | - | -------------- | - | - | ------------ | - | - | -------- | -
|                                                              |   | from Inception |   |   | Three-Months |   |   | Months   |  
|                                                              |   | (January 31,   |   |   | Ended        |   |   | Ended    |  
|                                                              |   | 2005) to June  |   |   | June 30,     |   |   | June 30, |  
|Cash Resources Provided By (Used In)                          |   | 30, 2006       |   |   | 2005         |   |   | 2006     |  
|Operating Activities                                          |   |                |   |   |              |   |   |          |  
|Loss for the period                                           | $ | (105,563       | ) | $ | (17,387      | ) | $ | (43,559  | )
|Changes in operating assets
      and liabilities             |   |                |   |   |              |   |   |          |  
|Prepaid expense                                               |   | -              |   |   | 15,000       |   |   | 10,000   |  
|Accounts
      payable and accrued liabilities                |   | 14,332         |   |   | (8,417       | ) |   | 3,913    |  
|                                                              |   | (91,231        | ) |   | (10,804      | ) |   | (29,646  | )
|                                                              |   |                |   |   |              |   |   |          |  
|Financing Activities                                          |   |                |   |   |              |   |   |          |  
|Advances from related
      party                             |   | 29,998         |   |   | 15,000       |   |   | 168      |  
|Issuance of capital stock                                     |   | 65,000         |   |   | -            |   |   | -        |  
|                                                              |   | 95,998         |   |   | 15,000       |   |   | 168      |  
|                                                              |   |                |   |   |              |   |   |          |  
|Net Increase (Decrease) in Cash and Cash
      Equivalents    |   | 3,767          |   |   | 4,196        |   |   | (29,478  | )
|Cash and cash equivalent position 
      Beginning of period |   | -              |   |   | 14,920       |   |   | 33,245   |  
|Cash and Cash Equivalents Position  End of Period            | $ | 3,767          |   | $ | 19,116       |   | $ | 3,767    |  
|                                                              |   |                |   |   |              |   |   |          |  
|                                                              |   |                |   |   |              |   |   |          |  
|                                                              |   |                |   |   |              |   |   |          |  
|                                                              |   |                |   |   |              |   |   |          |  
|Supplemental Cash Flow Disclosure:                            |   |                |   |   |              |   |   |          |  
|Cash paid for interest                                        |   |                |   | $ | -            |   | $ | -        |  
|Cash paid for income taxes                                    |   |                |   | $ | -            |   | $ | -        |  

- See Accompanying Notes -

---

|Zone Mining Limited                  
|-------------------------------------
|(An Exploration Stage Company)       
|Notes to Interim Financial Statements
|June 30, 2006                        
|Expressed in US Funds                
|Unaudited                            
|                                     
|                                     

|1. | Organization and Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Zone Mining Limited (the Company) was incorporated
        on January 31, 2005 in the State of Nevada, U.S.A. It is based in Vancouver,
        British Columbia, Canada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Company is an exploration stage company that engages
        principally in the acquisition, exploration and development of resource
        properties. By Exploration Lease Agreement dated April 18, 2005, the Company
        has the right to conduct exploration work on 15 mineral mining claims
        in the Maricopa County, Arizona, U.S.A. and has not yet determined whether
        this property contains reserves that are economically recoverable. To
        date, the Companys activities have been limited to its formation
        and the raising of equity capital.                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Going Concern and Liquidity Considerations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The accompanying financial statements have been prepared
        assuming that the Company will continue as a going concern, which contemplates,
        among other things, the realization of assets and satisfaction of liabilities
        in the normal course of business. As at June 30, 2006, the Company has
        working capital deficit of $40,563 and an accumulated deficit of $105,563.
        The Company intends to fund operations through equity financing arrangements,
        which may be insufficient to fund its capital expenditures, working capital
        and other cash requirements for the next twelve months.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The ability of the Company to emerge from the exploration
        stage is dependent upon, among other things, obtaining additional financing
        to continue operations, explore and develop the mineral properties and
        the discovery, development and sale of ore reserves.                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | In response to these problems, management intends to
        raise additional funds through public or private placement offerings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | These factors, among others, raise substantial doubt
        about the Companys ability to continue as a going concern. The accompanying
        financial statements do not include any adjustments that might result
        from the outcome of this uncertainty.                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2. | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| | a) | Basis of Presentation                                                                                                                                                              
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                    
| |    | The accounting and reporting policies of the Company
        conform to United States generally accepted accounting principles applicable
        to exploration stage enterprises.
| |    |                                                                                                                                                                                    
| | b) | Fiscal Periods                                                                                                                                                                     
| |    |                                                                                                                                                                                    
| |    | The Companys fiscal year end is March 31.                                                                                                                                         

---

|Zone Mining Limited                  
|-------------------------------------
|(An Exploration Stage Company)       
|Notes to Interim Financial Statements
|June 30, 2006                        
|Expressed in US Funds                
|Unaudited                            
|                                     
|                                     

|2. | Significant Accounting Policies- Continued
|-- | ------------------------------------------

| | c) | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The preparation of financial statements in conformity
        with United States generally accepted accounting principles requires management
        to make estimates and assumptions that affect the reported amounts 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 during the reporting period. Actual results could differ
        from those estimates. The Companys periodic filings with the Securities
        and Exchange Commission include, where applicable, disclosures of estimates,
        assumptions, uncertainties and markets that could affect the financial
        statements and future operations of the Company.         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | d) | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Cash and cash equivalents include cash in banks, money
        market funds, and certificates of term deposits with maturities of less
        than three months from inception, which are readily convertible to known
        amounts of cash and which, in the opinion of management, are subject to
        an insignificant risk of loss in value.                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | e) | Mineral Property Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company has been in the exploration stage since
        its formation in January 31, 2005 and has not yet realized any revenue
        from its planned operations. It is primarily engaged in the acquisition,
        exploration and development of mining properties. Mineral property acquisition
        and exploration costs are expensed as incurred. When it has been determined
        that a mineral property can be economically developed as a result of establishing
        proven and probable reserves, the costs incurred to develop such property,
        are capitalized. Such costs will be amortized using the units-of-production
        method over the estimated life of the probable reserve.                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | f) | Long Lived Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Long-lived assets are reviewed for impairment whenever
        events or changes in circumstances indicate that the carrying amount of
        the assets might not be recoverable or at least at the end of each reporting
        period. Conditions that would necessitate an impairment assessment include
        a significant decline in the observable market value of an asset, a significant
        change in the extent or manner in which an asset is used, or a significant
        adverse change that would indicate that the carrying amount of an asset
        or group of assets is not recoverable. For long-lived assets to be held
        and used, management measures fair value based on quoted market prices
        or based on discounted estimates of future cash flows.

---

|Zone Mining Limited                  
|-------------------------------------
|(An Exploration Stage Company)       
|Notes to Interim Financial Statements
|June 30, 2006                        
|Expressed in US Funds                
|Unaudited                            
|                                     
|                                     

|2. | Significant Accounting Policies Continued
|-- | ------------------------------------------

| | g) | Fair Value of Financial Instruments and Derivative
        Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The Company has adopted Statement of Financial Accounting
        Standards (SFAS) Number 119, Disclosure About Derivative
        Financial Instruments and Fair Value of Financial Instruments. The
        carrying amounts of cash and cash equivalents, accounts payable, accrued
        liabilities and amount due to related party approximate their fair values
        because of the short maturity of these items. Certain fair value estimates
        may be subject to and involve, uncertainties and matters of significant
        judgment, and, therefore, cannot be determined with precision. Changes
        in assumptions could significantly affect these estimates. The Company
        does not hold or issue financial instruments for trading purposes, nor
        does it utilize derivative instruments in the management of its foreign
        exchange, commodity price or interest rate market risks.                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | h) | Segmented Reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | SFAS Number 131, Disclosure About Segments of
        an Enterprise and Related Information, changed the way public companies
        report information about segments of their business in their quarterly
        reports issued to shareholders. It also requires entity-wide disclosures
        about the products and services an entity provides, the material countries
        in which it holds assets and reports revenues and its major customers.
        Except for mineral property costs, which relate to operations in U.S.A.,
        all other expenses, assets and liabilities relate to operations in Canada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | i) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Deferred income taxes are reported for timing differences
        between items of income or expense reported in the financial statements
        and those reported for income tax purposes in accordance with SFAS Number
        109, Accounting for Income Taxes, which requires the use of
        the asset/liability method of accounting for income taxes. Deferred income
        taxes and tax benefits are recognized for the future tax consequences
        attributable to differences between the financial statement carrying amounts
        of existing assets and liabilities and their respective tax bases, and
        for tax loss and credit carryforwards. Deferred tax assets and liabilities
        are measured using enacted tax rates expected to apply to taxable income
        in the years in which those temporary differences are expected to be recovered
        or settled. The Company provides for deferred taxes for the estimated
        future tax effects attributable to temporary differences and carryforwards
        when realization is more likely than not.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | j) | Basic and Diluted Net Loss Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The Company computes net loss per share in accordance
        with SFAS No. 128, "Earnings per Share". SFAS No. 128 requires presentation
        of both basic and diluted earnings per share (EPS) on the face of the
        income statement. Basic EPS is computed by dividing net loss available
        to common shareholders (numerator) by the weighted average number of shares
        outstanding (denominator) during the period. Diluted EPS gives effect
        to all potentially dilutive common shares outstanding during the period
        using the treasury stock method and convertible preferred stock using
        the if-converted method. In computing Diluted EPS, the average stock price
        for the period is used in determining the number of shares assumed to
        be purchased from the exercise of stock options or warrants. Diluted EPS
        excludes all potentially dilutive shares if their effect is anti dilutive.                                                                                                                                         

---

|Zone Mining Limited                  
|-------------------------------------
|(An Exploration Stage Company)       
|Notes to Interim Financial Statements
|June 30, 2006                        
|Expressed in US Funds                
|Unaudited                            
|                                     
|                                     

|2. | Significant Accounting Policies Continued
|-- | ------------------------------------------

| | k) | Risks and Uncertainties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | The Company operates in the resource exploration industry
        that is subject to significant risks and uncertainties, including financial
        operational, technological and other risks associated with operating a
        resource exploration business, including the potential risk of business
        failure.                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | l) | Foreign Currency Translations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | The Companys functional and reporting currency
        is the US dollar. All transactions initiated in other currencies are translated
        into the US dollars using the exchange rate prevailing on the date of
        transaction. Monetary assets and liabilities denominated in foreign currencies
        are translated into the US dollar at the rate of exchange in effect at
        the balance sheet date. Unrealized exchange gains and losses arising from
        such transactions are deferred until realization and are included as a
        separate component of shareholders equity (deficit) as a component
        of comprehensive income or loss. Upon realization, the amount deferred
        is recognized in income in the period when it is realized.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | No significant realized exchange gain or losses were
        recorded in the period ended June 30, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | m) | Concentrations of Credit Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | The Companys financial instruments that are exposed
        to concentrations of credit risk primarily consist of its cash and cash
        equivalents and related party payables. The Company places its cash and
        cash equivalents with financial institutions of high credit worthiness.
        At times, its cash and cash equivalents with a particular financial institution
        may exceed any applicable government insurance limits. The Companys
        management also routinely assesses the financial strength and credit worthiness
        of any parties to which it extends funds, and as such, it believes that
        any associated credit risk exposures are limited.                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | n) | Derivative Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | The Company was not a party to any derivative financial
        instruments during the reported fiscal period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

---

|Zone Mining Limited                  
|-------------------------------------
|(An Exploration Stage Company)       
|Notes to Interim Financial Statements
|June 30, 2006                        
|Expressed in US Funds                
|Unaudited                            
|                                     
|                                     

|2. | Significant Accounting Policies- Continued
|-- | ------------------------------------------

| | o) | Stock-Based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company follows Financial Accounting Standards Board
        (FASB) Statement of Financial Accounting Standard (SFAS) No. 123R, Share
        Based Payment. SFAS 123R is a revision of SFAS No. 123 Accounting
        for Stock-Based Compensation, and supersedes APB Opinion No. 25,
        Accounting for Stock Issued to Employees and its related implementation
        guidance. SFAS 123R establishes standards for the accounting for transactions
        in which an entity exchanges its equity instruments for goods or services.
        It also addresses transactions in which an entity incurs liabilities in
        exchange for goods or services that are based on the fair value of the
        entitys equity instruments or that may be settled by the issuance
        of those equity instruments. SFAS 123R focuses primarily on accounting
        for transactions in which an entity obtains employee services in share-based
        payment transactions. SFAS 123R does not change the accounting guidance
        for share-based payment transactions with parties other than employees
        provided in SFAS 123 as originally issued and Emerging Issues Task Force
        Issue No. 96-18, Accounting for Equity Instruments That Are Issued
        to Other Than Employees for Acquiring, or in Conjunction with Selling,
        Goods or Services. SFAS 123R does not address the accounting for
        employee share ownership plans, which are subject to AICPA Statement of
        Position 93-6, Employers Accounting for Employee Stock Ownership
        Plans. SFAS 123R requires a public entity to measure the cost of
        employee services received in exchange for an award of equity instruments
        based on the grant-date fair value of the award (with limited exceptions).
        That cost is recognized over the period during which an employee is required
        to provide service in exchange for the award  the requisite service
        period (usually the vesting period). SFAS 123R requires that the compensation
        cost relating to share-based payment transactions be recognized in financial
        statements. That cost is measured based on the fair value of the equity
        or liability instruments issued. The adoption of this accounting policy
        did not have any effect on prior periods.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | As at June 30, 2006, the Company had no stock-based
        compensation plans nor had it granted options to employees. No stock-based
        employee compensation cost is reflected in net loss, as no options had
        been granted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | p) | Comprehensive Income (Loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | SFAS No. 130, Reporting Comprehensive Income,
        establishes standards for reporting and display of comprehensive income
        and its components in a full set of general-purpose financial statements.
        For the period ended June 30, 2006, the Company had no items of other
        comprehensive income. Therefore, net loss equals comprehensive loss for
        the period ended June 30, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | q) | Asset Retirement Obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company accounts for asset retirement obligations
        in accordance with the provisions of SFAS 143 Accounting for
        Asset Retirement Obligations. SFAS 143 requires the Company
        to record the fair value of an asset retirement obligation as a liability
        in the period in which it incurs a legal obligation associated with the
        retirement of tangible long-lived assets that result from the acquisition,
        construction, development and/or normal use of the assets. The Company
        had no asset retirement obligation as of June 30, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

---

|Zone Mining Limited                  
|-------------------------------------
|(An Exploration Stage Company)       
|Notes to Interim Financial Statements
|June 30, 2006                        
|Expressed in US Funds                
|Unaudited                            
|                                     
|                                     

|3. | Mineral Property Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | By Exploration Lease Agreement dated April 18, 2005
        with Gold Explorations LLC (Gold), the Company has the right
        to conduct exploration work on certain properties consisting of 15 unpatented
        mineral claims, known as the Black Rock Basin property (the Property)
        located in the Maricopa County of Arizona, United States. The lease has
        a 25-year term and expires on April 18, 2030. The Company can terminate
        the lease at any time by giving a 30 days notice prior to an anniversary
        date.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | As consideration, the Company is required to make annual
        lease payments of $10,000 (paid to date). All cash payments shall be made
        within 30 days of the anniversary date, otherwise the mineral property
        rights will revert back to Gold.                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | In addition, the Company must incur exploration expenditures
        in the amount of $15,000 with the work to be performed by Gold. Failure
        to fulfill the exploration expenditure requirement will result in the
        properties reverting back to Gold. The Company completed the work program
        during the period ended June 30, 2006.                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company is also responsible for maintaining the
        mineral claims in good standing by paying all the necessary rents, taxes
        and filing fees associated with the Property.                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|4. | Capital Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| | a) | Authorized Stock                                                                                                                                                                                                                                                                                                                                                                                                                           
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    | The Company has authorized 100,000,000 common shares
        with a par value of $0.00001 per share. The Company has also authorized
        100,000,000 preferred shares with a par value of $0.00001 per share. Each
        common share entitles the holder to one vote, in person or proxy, on any
        matter on which action of the stockholder of the corporation is sought.                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | b) | Share Issuance                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    | Since the inception of the Company on January 31, 2005
        to June 30, 2006, the Company has issued 3,250,000 common shares at $0.02
        per share for total proceeds of $65,000 being $33 for par value shares
        and $64,967 for capital in excess of par. Included in the above are 750,000
        common shares at $0.02 per share for total proceeds of $15,000 issued
        to directors and officers of the Company.

|   |                     
|-- | --------------------
|   |                     
|5. | Due to Related Party

Except as noted elsewhere in these financial
  statements, related party transactions are as follows:

| | a) | As of June 30, 2006, the Company was obligated to a
        director and officer of the Company, for a non-interest bearing unsecured
        demand loan with a balance of $29,998 (June 30 2005 $30,000).
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The above transactions, occurring
        in the normal course of operations, are measured at the exchange amounts,
        which is the amount of consideration established and agreed by related
        parties.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                    

---

|Zone Mining Limited                  
|-------------------------------------
|(An Exploration Stage Company)       
|Notes to Interim Financial Statements
|June 30, 2006                        
|Expressed in US Funds                
|Unaudited                            
|                                     
|                                     

|6. | Income Taxes                                                                                                                                                                                                                       
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                    
|   | The Company has accumulated net operating losses for
        U.S. federal income tax purposes of approximately $105,500, which may
        be carried forward until 2026 and used to reduce taxable income of future
        years.
|   |                                                                                                                                                                                                                                    
|   | Details of future income tax assets:                                                                                                                                                                                               

| |                           |   | June 30, |  
| | ------------------------- | - | -------- | -
| | Future income tax assets: |   | 2006     |  
| | Income Tax Rate           |   | 34%      |  
| | Non-capital tax loss      | $ | 35,870   |  
| | Valuation allowance       |   | (35,870  | )
| |                           | $ | -        |  

|   | The potential future tax benefits of these losses have
        not been recognized in these financial statements due to uncertainty of
        their realization. When the future utilization of some portion of the
        carry forwards is determined not to be more likely than not,
        a valuation allowance is provided to reduce the recorded tax benefits
        from such assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|7. | New Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The following recent U.S. accounting pronouncements
        were or will be adopted, and either did not, or are not currently expected
        to have a material effect on the Companys financial statements:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | SFAS No. 144, Accounting for the Impairment
            or Disposal of Long-lived AssetsSFAS No. 145, Rescission of FASB Statements
            No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
            Technical CorrectionsSFAS No. 146, Accounting for Costs Associated
            with Exit or Disposal ActivitiesFASB Interpretation No. 45, Guarantors
            Accounting and Disclosure Requirements for Guarantees, Including
            Indirect Guarantees of Indebtedness of Others  and Interpretation
            of FASB Statements No. 5, 57, and 107 and rescission of FASB
            Interpretation No. 34SFAS No. 147, Acquisitions of Certain Financial
            Institutions  an amendment of FASB Statements No. 72
            and 144 and FASB Interpretation No. 9SFAS No. 148, Accounting for Stock-Based Compensation
             Transition and Disclosure  an amendment of FASB
            Statement No. 123FASB Interpretation No. 46, Consolidation of
            Variable Interest Entities  an Interpretation of ARB No.
            51SFAS No. 149, Amendment of Statement 133 on
            Derivative Instruments and Hedging ActivitiesSFAS No. 150, Accounting for Certain Financial
            Instruments with Characteristics of both Liabilities and EquitySecurities and Exchange Commissions Staff
            Accounting Bulletin (SAB) No. 104, Revenue RecognitionSFAS No. 151, Inventory Costs - an Amendment
            of ARB No. 43SFAS No. 153, Exchanges of Non-monetary Assets
            - An Amendment of APB Opinion No. 29SFAS No. 154, Accounting Changes and Error CorrectionsSFAS No. 155, Accounting for Certain Hybrid
            Financial Instruments, an amendment of FASB Statements No.
            133 and 140SFAS 156, Accounting for Servicing of Financial Assetsan
          amendment of FASB Statement No. 140
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

---

ITEM
2.           MANAGEMENT
DISCUSSION AND ANALYSIS

****Statements contained herein which are not historical facts are
forward-looking statements as that term is defined by the Private Securities
Litigation Reform Act of 1995. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable,
forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ from those projected. The Company cautions
investors that any forward-looking statements made by the Company are not
guarantees of future performance and that actual results may differ materially
from those in the forward-looking statements. Such risks and uncertainties
include, without limitation: established competitors who have substantially
greater financial resources and operating histories, regulatory delays or
denials, ability to compete as a start-up company in a highly competitive
market, and access to sources of capital.

****The following discussion and analysis should be read in conjunction
with our financial statements and notes thereto included elsewhere in this Form
10-QSB. Except for the historical information contained herein, the discussion
in this Form 10-QSB contains certain forward-looking statements that involve
risks and uncertainties, such as statements of our plans, objectives,
expectations and intentions. The cautionary statements made in this Form 10-QSB
should be read as being applicable to all related forward-looking statements
wherever they appear in this Form 10-QSB. The Company's actual results could
differ materially from those discussed here.

Plan of Operation

****We are a start-up, exploration stage corporation and have not yet
generated or realized any revenues from our business operations.

****Our auditors have issued a going concern opinion. This means that there
is substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay for our expenses. This
is because we have not generated any revenues and no revenues are anticipated
until we begin exploiting our mineral properties. There is no assurance we will
ever reach this point.

****Accordingly, we must raise sufficient capital from sources other than
the sale of minerals found on the property. Our only other source for cash at
this time is investments by others. We must raise cash to implement our project
and stay in business. We raised $50,000 from our public offering. Under this
offering we sold 2,500,000 shares at $0.02 per share to individuals and thus
have a total of 3,250,000 common shares outstanding. As of June 30, 2006, we had
cash on hand of $3,767. This will not enable us to fund operations for the next
twelve months, and we will have to rely on additional loans from our
directors.

****We have used the above-mentioned funds to start to explore our resource
property located in the northeast portion of the Belmont Mountain Range in
western Maricopa County, Arizona. We do not intend to acquire or dispose of any
plant or significant equipment during the next twelve months.

****Our exploration target is to find an ore body containing gold. Our
success depends upon finding mineralized material. This includes a determination
by our consultant if the property contains reserves.

****We have retained Gold Explorations LLC to supervise the exploration
work on the property.

-3-

---

****Mineralized material is a mineralized body, which has been delineated
by appropriate spaced drilling or underground sampling to support sufficient
tonnage and average grade of metals to justify removal. If we don't find
mineralized material or we cannot remove mineralized material, either because we
do not have the money to do it or because it is not economically feasible to do
it, we will cease operations and you will lose your investment.

The
initial offering produced sufficient funds to pay for the 2006 exploration
program and many of the administration costs for the next 12 months. However, if
the Company required additional funds, we will try to raise additional funds
from a second public offering, a private placement or loans.

We
must conduct exploration to determine what amount of minerals, if any, exist on
our property and if any minerals, which are found, can be economically extracted
and profitably processed.

The
property is undeveloped raw land. To our knowledge, the property has never been
mined. The only event that has occurred is the locating and the recording of the
lode mining claims under the direction of Steve Karolyi.

The
work program was started April 25, 2006 and was finished on May 9, 2006. The
soil and rock samples were sent to Chemex Labs..A map with GPS coordinates for
sample sites and assays of all samples has been received and is being evaluated.
The work program cost $15,000 USD.

Before
minerals retrieval can begin, we must explore for and find mineralized material.
After that has occurred we have to determine if it is economically feasible to
remove the mineralized material. Economically feasible means that the costs
associated with the removal of the mineralized material will not exceed the
price at which we can sell the mineralized material. We can't predict what that
will be until we find mineralized material.

We
do not claim to have any minerals or reserves whatsoever at this time on any of
the property.

The
exploration program from 2006 consisted of establishing a grid mapping and
sample collecting at regular intervals. The soil and rock chip samples were
collected and analyzed for gold, silver, copper, lead and zinc. The results are
being plotted on a map to determine where the elevated areas of mineralization
occur. We collected soil samples on 50 foot centers over the best looking areas
on either 300 or 500 foot line spacing. Rock chip samples were taken where we
had the best outcrop exposures. Based upon the results of the exploration Mr.
Berrow will determine, in consultation with Gold Explorations LLC, if the
property is to be dropped or further exploration work done. Mr. Berrow will not
receive fees for his services.

The
proceeds from our offering were designed only to fund the costs of an
exploration program recommended by Steve Karolyi, an Engineering Contractor.
Additional funding will be required to take the property to a more advanced
stage of exploration.

-4-

---

If
we are unable to complete any phase of exploration because we don't have enough
money, we will cease operations until we raise more money. If we can't or don't
raise more money, we will cease operations. If we cease operations, we don't
know what we will do and we don't have any plans to do anything.

We
do not intend to hire additional employees at this time. All of the work on the
property will be conducted by unaffiliated independent contractors that will be
hired by Gold Explorations LLC. The independent contractors will be responsible
for surveying, geology, engineering, and exploration.

Limited Operating History; Need for Additional
Capital

There
is no historical financial information about us upon which to base an evaluation
of our performance. We are an exploration stage corporation and have not
generated any revenues from operations. We cannot guarantee we will be
successful in our business operations. Our business is subject to risks inherent
in the establishment of a new business enterprise, including limited capital
resources, possible delays in the exploration of our properties, and possible
cost overruns due to price and cost increases in services.

To
become profitable and competitive, we will conduct into the research and
exploration of our properties before we start production of any minerals we may
find. We believe that the funds raised from our public offering will allow us to
operate for at least one year.

We
have no assurance that future financing will be available to us on acceptable
terms. If financing is not available on satisfactory terms, we may be unable to
continue, develop or expand our operations. Equity financing could result in
additional dilution to existing shareholders.

Liquidity and Capital Resources

To
meet our need for cash we raised $50,000 from our public offering. We cannot
guarantee that we have raised enough money through the public offering to stay
in business. The money we have raised has been applied to the items set forth in
the Use of Proceeds section of the SB-2 filed with the SEC. If we find
mineralized material and it is economically feasible to remove the mineralized
material, we will attempt to raise additional money through a subsequent private
placement, public offering or through debt financing.

We
have discussed this matter with our officers and directors and Mr. Berrow has
agreed to advance funds as needed and has agreed to pay the cost of reclamation
of the property should mineralized material not be found thereon. There is no
written agreement with Mr. Berrow to this affect. The agreement is entirely
oral. We estimate cost of reclamation to be not more than $5,000. Mr. Berrow has
advanced $29,998 to date. At the present time, we have not made any arrangements
to raise additional cash, other than through our public offering. If we need
additional cash and cannot raise it, we will either have to suspend operations
until we do raise the cash, or cease operations entirely. The funds raised in
our public offering, together with the loans advanced, will allow the company to
operate for a minimum of one year. Other than as described in this paragraph, we
have no other financing plans.

We
acquired a lease that grants us the right to enter on a property which contains
fifteen lode mining claims with our employees, representatives and agents, and
to prospect, explore, test, develop, work and mine the property. However, at
this time, we do not have the rights to any of the minerals. The property is
staked and we began the exploration work program on April 25,, 2006 and finished
May 9, 2006.

-5-

---

Since
inception, we have issued 3,250,000 shares of our common stock and received
$65,000.

We
received a $29,998 loan from Mr. Berrow, our President.

As
of the date of this filing, we have yet to begin operations and therefore have
not generated any revenues.

Since
inception of the Company on January 31, 2005 to June 30, 2006, the Company has
issued 3,250,000 common shares at $0.02 per share for total proceeds of $65,000.
This was accounted for as an acquisition of shares. Albert Berrow covered our
initial expenses of $15,000 for incorporation and legal fees and $14,998 for
working capital. The amount owed to Mr. Berrow is non-interest bearing,
unsecured and due on demand.

As
of June 30, 2006, our total assets were $3,767 and our total liabilities were
$44,330.

Application of Critical Accounting Policies

Our
financial statements have been prepared on a going concern basis. We have
accumulated a deficit of $105,563 from inception to June 30, 2006. Our ability
to continue as a going concern is dependent upon our ability to generate
profitable operations in the future and/or to obtain the necessary financing to
meet our obligations and repay our liabilities arising from normal business
operations when they come due. The outcome of these matters cannot be predicted
with any certainty at this time. We have historically satisfied our working
capital needs primarily by sales of securities and a loans payable from an
officer of the company and at June 30, 2006, we had working capital deficit of
$40,563. These financial statements do not include any adjustments to the amount
and classification of assets and liabilities that may be necessary should we be
unable to continue as a going concern.

Use of Estimates

The
preparation of financial statements in accordance with United States generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could materially differ from these estimates.

Impairment and Disposal of Long-Lived Assets

In
accordance with Statement of Financial Accounting Standards ("SFAS") No.144,
Accounting for the Impairment or Disposal of Long-Lived Assets, the Company
reviews the carrying value of its long-lived assets for impairment whenever
events and circumstances indicate that the carrying value of the assets might be
impaired and the carrying value may not be recoverable. Recoverability of these
assets is measured by comparison of the carrying value of the assets to the
undiscounted cash flows estimated to be generated by those assets over their
remaining economic lives and the eventual disposition of the assets. If the
undiscounted cash flows are not sufficient to recover the carrying value of such
assets the assets are considered impaired, the impairment loss is measured by
comparing the fair value of the assets to their carrying values. Fair value is
determined by either a quoted market price or a value determined by a discounted
cash flow technique, whichever is more appropriate under the circumstances
involved.

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Off Balance-sheet Arrangements

The Company has no off
balance-sheet arrangements.

Recent Accounting Pronouncements

The
following recent U.S. accounting pronouncements were or will be adopted, and
either did not, or are not currently expected to have a material effect on the
Companys financial statements:

- SFAS No. 144, Accounting for the Impairment or Disposal of Long-lived
  Assets
- SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64,
  Amendment of FASB Statement No. 13, and Technical Corrections
- SFAS No. 146, Accounting for Costs Associated with Exit or Disposal
  Activities
- FASB Interpretation No. 45, Guarantors Accounting and Disclosure
  Requirements for Guarantees, Including Indirect Guarantees of
  Indebtedness of Others  and Interpretation of FASB Statements No. 5,
  57, and 107 and rescission of FASB Interpretation No. 34
- SFAS No. 147, Acquisitions of Certain Financial Institutions  an
  amendment of FASB Statements No. 72 and 144 and FASB Interpretation No.
  9
- SFAS No. 148, Accounting for Stock-Based Compensation  Transition and
  Disclosure  an amendment of FASB Statement No. 123
- FASB Interpretation No. 46, Consolidation of Variable Interest Entities
   an Interpretation of ARB No. 51
- SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and
  Hedging Activities
- SFAS No. 150, Accounting for Certain Financial Instruments with
  Characteristics of both Liabilities and Equity
- Securities and Exchange Commissions Staff Accounting Bulletin (SAB) No.
  104, Revenue Recognition
- SFAS No. 151, Inventory Costs - an Amendment of ARB No. 43
- SFAS No. 153, Exchanges of Non-monetary Assets - An Amendment of APB
  Opinion No. 29
- SFAS No. 154, Accounting Changes and Error Corrections
- SFAS No. 155, Accounting for Certain Hybrid Financial Instruments, an
  amendment of FASB Statements No. 133 and 140
- SFAS 156, Accounting for Servicing of Financial Assetsan amendment of
  FASB Statement No. 140

**ITEM
3.**          **CONTROLS
AND PROCEDURES.**

**(a)**     **Evaluation
of Disclosure Controls and Procedures:** Disclosure controls and
procedures are designed to ensure that information required to be disclosed in
the reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported, within the time period specified in the SEC's rules and
forms. Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed in
the reports filed under the Exchange Act is accumulated and communicated to
management, including the Chief Executive Officer and Chief Financial Officer,
as appropriate, to allow timely decisions regarding required disclosure. As of
the end of the period covered by this report, we carried out an

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evaluation, under the supervision and with the participation of
our management, including our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures. Based upon and as of the date of that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures are effective to ensure that information
required to be disclosed in the reports our files and submits under the Exchange
Act is recorded, processed, summarized and reported as and when required.

**(b)**     **Changes
in Internal Control over Financial Reporting:** There were no changes
in our internal control over financial reporting identified in connection with
our evaluation of these controls as of the end of the period covered by this
report that could have significantly affected those controls subsequent to the
date of the evaluation referred to in the previous paragraph, including any
correction action with regard to significant deficiencies and material weakness.

There
were no changes in our internal controls or in other factors that could
significantly affect these controls subsequent to the date of their evaluation,
including any deficiencies or material weaknesses of internal controls that
would require corrective action.

PART II - OTHER INFORMATION

**ITEM
2.**          **CHANGES
IN SECURITIES AND USE OF PROCEEDS.**

On
October 4, 2005, our Form SB-2 registration statement (SEC file no. 333-125436)
was declared effective by the SEC. On December 23, 2005, we completed our public
offering of 2,500,000 shares of common stock to 44 persons in consideration of
$50,000.

Since
completing our public offering, we have used the proceeds as follows:

Offering Expenses
    $
    30,000$Sample Analysis, Assays
    $
    8,750Labor and Supplies
    $
    3,750Supervision & Grid Mapping
    $
    2,500Stationary, Mail
    $
    0Accounting
    $
    5,000Office Equipment
    $
    0Cash on Hand
    $
    0Totals
    $
    50,000


The Offering expenses have been completely paid. We will
require additional funds.

**ITEM
6.**          **EXHIBITS.**

The following Exhibits are attached hereto:

|Exhibit No. | Document Description                                                                                                                                                                                                  
|----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |                                                                                                                                                                                                                       
|31.1        | Certification
        of Principal Executive Officer and Principal Financial Officer pursuant
        to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities
        Exchange Act of 1934, as amended.
|            |                                                                                                                                                                                                                       
|32.1        | Certification
        of Chief Executive Officer and Chief Financial Officer Pursuant To 18
        U.S.C. Section 1350, as adopted pursuant to Section 302 Of The Sarbanes-Oxley
        Act of 2002.                

-8-

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SIGNATURES

In
  accordance with the requirements of the Exchange Act, the registrant caused
  this report to be signed on its behalf by the undersigned, thereunto duly authorized
  on this 9th day of August, 2006.

| | **ZONE MINING LIMITED**
| | -----------------------
| | **(Registrant)**       
| |                        
| | BY:                    
| |                        
| |                        
| |                        
| |                        

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