U. S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                   For the fiscal year ended December 31, 2006

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934

           For the transition period from ___________ to _____________


                        Commission File Number 000-32131


                          QUEST MINERALS & MINING CORP.
           (Name of small business issuer as specified in its charter)


              Utah                                             87-0429950
 (State or other jurisdiction of                            (I.R.S. Employer
  incorporation or organization)                           Identification No.)


                               18B East 5th Street
                               Paterson, NJ 07524
          (Address of principal executive offices, including zip code)


     Registrant's telephone number, including area code: (973) 684-0075

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

     Securities registered pursuant to Section 12(g) of the Act: Common Stock,
     $.001 par value

                              ___________________


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

         Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act. [ ]

         Check if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

         The issuer's revenues for the most recent fiscal year will be disclosed
by amendment.

         The aggregate market value of the voting and non-voting common equity
held by non-affiliates of the registrant was approximately $2,351,918 as of
April 16, 2007. Shares of common stock held by each officer and director and by
each person or group who owns 10% or more of the outstanding common stock
amounting to 6,845,000 shares have been excluded in that such persons or groups
may be deemed to be affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes.

         As of April 16, 2007, 450,603,167 shares of Quest's common stock were
issued and outstanding.

         Documents Incorporated by Reference: None.

         Transitional Small Business Disclosure Format: No.
<PAGE>

                                     PART I

         Quest Minerals & Mining Corp., including all its subsidiaries, are
collectively referred to herein as "Quest Minerals," "Quest," "the Company,"
"us," or "we."

Item 1.   DESCRIPTION OF BUSINESS

General

         Quest Minerals & Mining Corp. acquires and operates energy and mineral
related properties in the southeastern part of the United States. Quest focuses
its efforts on properties that produce quality compliance blend coal.

         Quest is a holding company for Quest Minerals & Mining, Ltd., a Nevada
corporation, or Quest (Nevada), which in turn is a holding company for Quest
Energy, Ltd., a Kentucky corporation, or Quest Energy, and of Gwenco, Inc., a
Kentucky corporation, or Gwenco. Quest Energy is the parent corporation of E-Z
Mining Co., Inc, a Kentucky corporation, or E-Z Mining, and of Quest Marine
Terminal, Ltd., a Kentucky corporation, or Quest Marine.

         Gwenco leases over 700 acres of coal mines, with approximately
12,999,000 tons of coal in place in six seams. In 2004, Gwenco had reopened
Gwenco's two former drift mines at Pond Creek and Lower Cedar Grove, and had
begun production at the Pond Creek seam. This seam of high quality compliance
coal is located at Slater's Branch, South Williamson, Kentucky.

Fiscal 2006 and First Quarter 2007 Developments

         Gwenco, Inc. Chapter 11 Reorganization. On March 2, 2007, our wholly
owned subsidiary, Gwenco, Inc., filed a voluntary petition for reorganization
under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy
Court for the Eastern District of Kentucky. Management felt this was a necessary
step to further our financial restructuring initiative and to protect Gwenco's
assets from claims, debts, judgments, foreclosures, and forfeitures of those
creditors and stakeholders with whom both Quest and Gwenco were unable to
negotiate restructured agreements. We are currently overseeing Gwenco's
operations as a debtor in possession, subject to court approval of matters
outside the ordinary course of business. We are currently seeking court approval
for debtor in possession financing from holders of Gwenco's existing debt
obligations in order to fund operating expenses. We intend to continue our
mining operations at Pond Creek Mine at Slater's Branch while this matter is
completed. Under Chapter 11, claims against Gwenco in existence prior to the
filing of the petitions for reorganization relief under the federal bankruptcy
laws are stayed while Gwenco is in bankruptcy.

         Rehabilitation of Pond Creek Mine. In January 2007, we received a
permit from the Kentucky Department of Natural Resources to conduct coal mining
at our Pond Creed Mine at Slater's Branch, Kentucky. The mining permit is held
by our wholly-owned subsidiary, Gwneco, Inc., and allows Gwenco to recommence
mining operations at the Pond Creek Mine. In February 2007, our engineering
firm, Alchemy Engineering of Prestonburg, Kentucky, completed a one and five
year mine plan and maps required by the Kentucky Department of Mines and
Minerals in connection with our permit to conduct coal mining at Pond Creek. We
retained General Mining, LLC of Wallins, Kentucky to rehabilitate the Pond Creek
Mine in February 2007 and further retained General Mining to conduct mining
operations at Pond Creek in March 2007. Quest intends to complete rehabilitation
of Pond Creek Mine by the end of April 2007. After rehabilitation, General
Mining will be able to put its equipment in place and commence mining
operations.

         Sale and Forbearance of National City Bank Judgment. In March, 2006,
National City Bank commenced an action commenced an action in Pike County Court,
Kentucky against Quest, Gwenco, and Quest Energy, seeking to be adjudged a lien
on certain real and personal property of Gwenco pursuant to the aforementioned
judgment and that said real and personal property be sold to satisfy the
aforesaid lien, and that the liens of National City Bank attach to the proceeds
of the sale. On July 19, 2006, National City Bank of Kentucky sold its right,
title, and interest in and to the various judgments, judgment liens, and
security interests to a third party investor. The third party investor has
agreed to forbear on further collection, enforcement, and foreclosure with
respect to this indebtedness until further notice, in exchange for which Gwenco
agreed to grant the investor a royalty on gross profits of Gwenco.

                                       2
<PAGE>

         Letter of Intent with Parsons Branch. On July 21, 2006, Quest signed a
non-binding letter of intent with Parsons Branch Development to acquire a permit
to mine the Elkhorn #2 seam on Parsons Branch located in Mud Creek, Kentucky.
Parsons Branch Development has approximately 450,000 tons of clean coal under
lease at this location. Upon completion of the transfer of the permit to Quest,
it will retain all revenues from coal sales after payment of a royalty to
Parsons Branch of $1.50 per clean ton mined and expenses of mine operations,
which are expected to be carried out by a contract miner. The transaction is
subject to due diligence, negotiation of definitive agreements, regulatory
approval of the transaction, and satisfaction of other customary conditions to
closing.

         Embezzlement/Check-Kiting. In December, 2004, Quest terminated its
former Chief Financial Officer, Fred Runyon. Quest Energy, Ltd., an indirect,
wholly-owned subsidiary of Quest, also terminated Mr. Runyon as President of
Quest Energy. On April 7, 2005, Quest announced that, upon completion of the
initial phase of an audit by counsel retained by Quest for that purpose, among
others, Quest began an investigation into an apparent embezzlement from Quest
and a conspiracy to commit embezzlement by some former employees of Quest,
Quest's indirect wholly-owned subsidiary, Quest Energy, Ltd., and its former
indirect wholly-owned subsidiary, D&D Contracting, Inc, including Mr. Runyon.
Most of the embezzled funds result from Runyon apparently engaging in a
"check-kiting" scheme with the complicity of his sister, Judy Holbrook, the
manager of Community Trust Bank, where Quest Energy maintained bank accounts.

         At of the date of this report, Quest has not quantified the scope of
the apparent embezzlement or the impact that the apparent embezzlement will have
on its financial statements. Quest has retained a forensic accountant to
quantify the scope of the alleged fraud; however, the forensic accountant has
not completed its analysis at this time.

         In May, 2006, a federal grand jury indicted Mr. Runyon, Ms. Holbrook,
James Daniel Stollings, and Quest's former President and Chief Executive
Officer, William R. Wheeler on charges of bank fraud. In connection with the
indictments, Mr. Runyon and Ms. Holbrook each pled guilty. In December 2006, a
federal jury convicted Mr. Stollings and Mr. Wheeler of bank fraud. Mr. Wheeler
has appealed the conviction. Quest denies any wrongdoing in connection with
these matters.

         The Federal Insurance Company, the insurer for Community Trust Bank,
has notified Quest Energy that is seeking to obtain subrogation of monies it has
paid to Community Trust Bank and repayment of deductibles by the bank as a part
of an alleged criminal scheme and conspiracy by former employees of the bank and
other individuals. The Federal Insurance Company has alleged that former
employees or associates of Quest Energy, including Mr. Runyon, were primarily
involved in the alleged scheme, that Quest Energy is accordingly responsible for
the actions of these former employees and associates, and that Quest Energy
obtained a substantial material benefit as a result of this alleged scheme.
Quest Energy denies that it had any involvement with or responsibility for any
of the actions alleged by the Federal Insurance Company, and it further denies
that it has benefited from any such alleged scheme. Further, Quest Energy
contends that the negligent actions and inactions by Community Trust Bank caused
severe damage and loss to Quest Energy. The Federal Insurance Company has
commenced an action against Quest Energy and others in Pike County Court,
Kentucky with respect to these allegations. Quest Energy believes that it has
several meritorious defenses and counterclaims to this action and intends to
defend it vigorously.

         In light of these occurrences, Quest has determined that the design and
operation of its disclosure controls and procedures, as defined in Exchange Act
Rule 13a-14(c) have not been effective to ensure that information required to be
disclosed in its Exchange Act reports is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms, and that such information is accumulated and
communicated to them to allow timely decisions regarding required disclosure.
Quest is currently reviewing and revising its controls and procedures to
increase the effectiveness of its disclosure controls and procedures.

Business Development of Quest

         Quest Minerals (Nevada), was organized on November 19, 2003 to acquire
and operate privately held coal mining companies in the southeast United States.
On January 1, 2004, Quest Minerals (Nevada) acquired E-Z Mining Co., Inc. On
February 9, 2004, Quest Minerals (Nevada) completed a "reverse merger" with
Tillman International, Inc., or Tillman, a publicly-traded shell corporation and
a fully reporting company registered under the Securities Exchange Act of 1934.
On April 8, 2004, Tillman changed its name to "Quest Minerals & Mining Corp."

                                       3
<PAGE>

         E-Z Mining Acquisition. On January 1, 2004, Quest Minerals (Nevada)
acquired E-Z Mining pursuant to a stock purchase agreement whereby Quest Energy
acquired 100% of the outstanding shares of capital stock of E-Z Mining. Under
the stock purchase agreement, Quest Minerals (Nevada) issued 2,000,000 shares of
its Series A convertible preferred stock and 23,000 shares of its common stock
to the stockholders of E-Z Mining in exchange for all of the outstanding shares
of capital stock of E-Z Mining.

         Each share of Quest Minerals (Nevada) Series A preferred stock is now
convertible into a maximum of five (5) shares of Quest common stock, or such
lesser shares as determined by dividing $3.00 by the average closing bid price
of one share of Quest common stock during the ten trading days preceding actual
receipt of a notice of conversion, subject to proportional adjustment for
stock-splits, stock dividends, recapitalizations, and subsequent dilutive
issuances of common stock. The Series A preferred stock is convertible at the
option of the holder. The holders of the Series A preferred stock shall be
entitled to receive cumulative dividends at the rate of $0.0001 per share per
annum in preference to the holders of common stock. The holders of the Series A
preferred stock shall also be entitled to receive, upon liquidation, an amount
equal to $3.00 per share for the Series A preferred stock plus all declared and
unpaid dividends, in preference to the holders of the common stock. After March
31, 2004, Quest has the option of redeeming the Series A preferred stock at a
price equal to $3.00 per share for the Series A preferred stock plus all
declared and unpaid dividends. The Series A Preferred Stock has no voting
rights. As of June 9, 2005, 1,546,667 shares of the Series A preferred stock had
been converted into an aggregate of 2,004,689 shares of Quest common stock.

         Reverse Merger. Quest was incorporated on November 21, 1985 in the
State of Utah under the name "Sabre, Inc." It subsequently changed its name to
Tillman International, Inc., or Tillman. On February 9, 2004, Tillman acquired
100% of the outstanding common stock of Quest Minerals (Nevada) pursuant to a
securities purchase agreement and plan of reorganization. Under the plan of
reorganization, Tillman issued 20,700,000 shares of its common stock to the
stockholders of Quest Minerals (Nevada) in exchange for all of the outstanding
shares of common stock of Quest Minerals (Nevada). In addition, Tillman agreed
to issue to the stockholders of Quest Minerals (Nevada) an additional 1,800,000
shares of its common stock upon completion of an amendment to its articles of
incorporation to increase the authorized common stock of Tillman to 250,000,000
shares. Pursuant to the plan of reorganization, 22,464,358 shares of Tillman
common stock held by Silvestre Hutchinson, the former President of Tillman and
one of its former directors, were cancelled. Upon the completion of the
reorganization, William R. Wheeler and Eugene Chiaramonte, Jr., the former
directors of Quest Minerals (Nevada), were appointed as directors of Tillman. On
April 8, 2004, Tillman amended its articles of incorporation to change its name
to "Quest Minerals & Mining Corp." The additional 1,800,000 shares of Quest
common stock were issued in May 2004.

         Gwenco Acquisition. Effective April 28, 2004, Quest Minerals (Nevada)
acquired 100% of the outstanding capital stock of Gwenco in exchange for
1,600,000 shares of Series B preferred stock of Quest Minerals (Nevada) and the
assumption of up to $1,700,000 in debt. Each share of Series B preferred stock
carries a liquidation preference of $2.50 per share. In addition, each share of
Series B Preferred Stock is convertible into one share of Quest common stock.
After the acquisition, the parties agreed to a post-closing adjustment to the
purchase price to adjust for the liabilities of Gwenco exceeding $1,700,000. As
a result of this adjustment, the number of shares of Series B preferred stock
issued to the former stockholders of Gwenco was reduced to 1,386,275. On
November 1, 2004, 1,000,000 shares of the Series B preferred stock were
converted into 1,000,000 shares of Quest common stock. In connection with this
acquisition, Quest appointed Albert Anderson, the former principal stockholder
of Gwenco, to Quest's board of directors.

         On March 24, 2005, the board of directors asked Albert Anderson to
resign as a director of Quest, and on April 4, 2005, Mr. Anderson submitted his
resignation. In connection with his resignation, Mr. Anderson alleged that Quest
has defaulted under the stock purchase agreement by and between Quest, Gwenco,
Inc., and the former stockholders of Gwenco, which includes Mr. Anderson. Quest
has denied Mr. Anderson's allegations, believes that the allegations are
baseless and without merit, and further believes that it has several claims
against Mr. Anderson which it could assert.

         In or about May, 2004, National City Bank of Kentucky commenced an
action in Boyd County Court, Kentucky against Gwenco, Inc. and Albert Anderson
for breach of various promissory notes issued by Gwenco. Duke Energy Merchants
and First Sentry Bank were joined in the action. National City Bank and Duke
Energy are collectively seeking approximately $1,100,000 in principal as well as
interests, fees, and costs. National City Bank and Duke Energy have been granted
summary judgment in this action. National City Bank has obtained judgment in
that action in the amount of approximately $340,000.

                                       4
<PAGE>

         In that action, Anderson has filed a third-party complaint against
Quest (Nevada) and Taylor Mining, two of Quest's subsidiaries, for breach of
contract, fraud in the inducement, breach of the covenant of good faith and fair
dealing, unjust enrichment, conversion, and breach of fiduciary duties. On July
27, 2006, Quest settled the third party complaint with Anderson. As part of the
settlement, Gwenco received mining permit renewal and transfer documentation
which Gwenco is required to obtain in order to recommence mining operations at
its Pond Creek mine at Slater's Branch, Kentucky. Further, Anderson agreed to
provide all reasonable cooperation in recommencing mining operations at the
Slater's Branch mine. The parties also agreed to terminate all remaining rights,
duties, and obligations under the original stock purchase agreement entered into
in connection with the acquisition of Gwenco by Quest. Quest made a one-time
cash payment of $75,000 and issued 3,500,000 shares of common stock, subject to
a lock-up/leak out agreement, to Anderson, upon conversion of his Series B
Preferred Stock, the terms of which were amended under the settlement agreement.
Quest also granted Anderson a sliding scale royalty on coal sales. The parties
mutually dismissed their respective counter-claims against each other in the
civil action pending in Boyd County Court, Kentucky.

Industry Overview

         As a major contributor to the world energy supply, coal represents
approximately 23% of the world's primary energy consumption, according to the
World Coal Institute. The primary use for coal is to fuel electric power
generation. In calendar year 2002, it is estimated that coal generated 51% of
the electricity produced in the United States, according to the Energy
Information Administration, a statistical agency of the U. S. Department of
Energy.

         The United States is the second largest coal producer in the world,
exceeded only by China. Other leading coal producers include India, South
Africa, and Australia. The United States is the largest holder of coal reserves
in the world, with over 250 years supply at current production rates. U.S. coal
reserves are more plentiful than oil or natural gas, with coal representing
approximately 70% of the nation's fossil fuel reserves, according to Energy
Ventures Analysis. Total coal reserves are estimated by comparing the total
probable heat value (British thermal units, or BTUs, per pound) of the
demonstrated coal reserve tonnage reported by the Department of Energy to the
heat value of other fossil fuel energy resources reported by the Department of
Energy.

         U.S. coal production has more than doubled during the last 30 years. In
2002, total coal production as estimated by the United States Department of
Energy, or DOE, was 1.1 billion tons. The primary producing regions were the
Powder River Basin (38%), Central Appalachia (23%), Midwest (14%), Northern
Appalachia (12%), West (other than the Powder River Basin) (12%), and other
(1%). All of Quest's coal production comes from the Central Appalachian region.
Approximately 66% of U.S. coal is produced by surface mining methods. The
remaining 34% is produced by underground mining methods.

         Coal is used in the United States by utilities to generate electricity,
by steel companies to make products with blast furnaces, and by a variety of
industrial users to heat and power foundries, cement plants, paper mills,
chemical plants and other manufacturing and processing facilities. Significant
quantities of coal are also exported from both east and west coast terminals.
The breakdown of 2002 U.S. coal demand, as estimated by Resource Data
International, Inc., or RDI, is as follows:

End Use                       Tons (millions)   Percentage of Total
--------------------------    ---------------   -------------------

Electricity generation        982               86%
Industrial users              66                6%
Exports                       64                6%
Steel making                  27                2%
Residential & commercial      5                 -%
                              ---------------   -------------------

Total                         1,144             100%
                              ---------------   -------------------


                                       5
<PAGE>

         Coal has long been favored as an electricity generating fuel by
regulated utilities because of its basic economic advantage. The largest cost
component in electricity generation is fuel. This fuel cost is typically lower
for coal than competing fuels such as oil and natural gas on a BTU-comparable
basis. RDI estimated the average total production costs of electricity, using
coal and competing generation alternatives in 2002 as follows:


        Electricity Generation Type     Cost per million Kilowatt Hours
        ----------------------------    -------------------------------

        Oil                             $4.754
        Natural Gas                     $4.422
        Coal                            $1.819
        Nuclear                         $1.785
        Other (solar, wind, etc.)       $0.979
        Hydroelectric                   $0.527

         According to RDI, 15 of the 25 lowest operating cost power plants in
the United States during 2001 were fueled by coal. Coal used as fuel to generate
electricity is commonly referred to as "steam coal."

         There are factors other than fuels cost that influence each utility's
choice of electricity generation mode, including facility construction cost,
access to fuel transportation infrastructure, environmental restrictions, and
other factors. The breakdown of U.S. electricity generation by fuel source in
2002, as estimated by the Energy Information Administration, is as follows:

        Electricity Generation Source   Percent of Total Electricity Generation
        -----------------------------   ---------------------------------------

        Coal                            51%
        Nuclear                         21%
        Natural Gas                     17%
        Hydro                           6%
        Oil                             3%
        Other                           2%
                                        ---------------------------------------

        Total                           100%
                                        ---------------------------------------

         RDI projects that generators of electricity will increase their demand
for coal as demand for electricity increases. Since coal-fired generation is
used in most cases to meet base load requirements, coal consumption has
generally grown at the pace of electricity demand growth. Demand for electricity
has historically grown in proportion to U.S. economic growth.

         Coal shipped for North American consumption is typically sold at the
mine loading facility with transportation costs being borne by the purchaser.
According to the National Mining Association, approximately two-thirds of U.S.
coal production is shipped via railroads. Final delivery to consumers often
involves more than one transportation mode. A significant portion of U.S.
production is delivered to customers via barges on the inland waterway system
and ships loaded at Great Lakes ports.

Market Opportunity

         In the recent past, coal price declines lead to widespread mine
shutdowns. Beginning in the fourth quarter of 2003, coal prices began a steady
increase. Traditionally, coal price increases have been caused by harsh North
American weather or labor stoppages. Current upward pricing trends have no
specific driver outside of general price increases in all energy sources, which
appear to be driven by geo-political concerns and the current non-renewable
characteristics of fossil fuels. Equivalent current natural gas prices imply
that coal should currently be trading at U.S. $70 to U.S. $80 per ton. Nymex
July 2004 coal deliveries were trading just above $51 per ton as of the
beginning of March 2004. As coal prices strengthen, Quest believes that it could
become highly lucrative to re-open the best of these recently closed mines.

                                       6
<PAGE>

Gwenco Mines

         Gwenco holds approximately 30 coal leases, covering an estimated 700
acres, with a projected 12,999,000 tons of coal in place in six seams with
possible additional reserves on adjacent leases. From 1997 to 2001, Gwenco
operated two deep mines in the Lower Cedar Grove and Pond Creek seams -- until a
downturn in coal prices made continued operations unfeasible, and the mines were
shut down. As discussed above, Gwenco has recently re-opened the Pond Creek mine
is starting to mine this seam.

         The primary reserves are in the Pond Creek, Lower Cedar Grove, and
Taylor seams. Both the Pond Creek and Lowers Cedars Grove seams are permitted
and bonded and have been mined to a limited extent. The coal in the Pond Creek
seam is low-sulfur, compliance coal, running at an average of 12,000 to 12,500
BTUs when mined clean. The coal in the Lower Cedar Grove seam has a shale
parting and must be washed to be commercial. When cleaned it is a high BTU coal
with certain metallurgical coal qualities.

Mining Techniques

         There are several basis techniques for mining drift or adit mines.
Quest has used, and intends to use, a continuous miner on the Pond Creek seam at
its Gwenco facility. Quest has used, and intends to use, a Joy 14-10AA
continuous miner at the Gwenco mines. In this technique, the miner has a cutting
head that tears the coal from it natural deposit and transfers the coal to a
gather head and then to shuttle cars that can carry from 3 to 10 tons depending
on the size. This method can create higher volume mining than the conventional
method, but may mine the coal with a higher content of ash.

Expansion Strategy

         Quest seeks to acquire new mines and contracting to produce and market
additional coal in its geographic focus area. Quest intends to acquire and
operate high quality coal properties with established field personnel, primarily
in the eastern Kentucky coalfields, with additional properties in southwestern
West Virginia and western Virginia. This region has an excellent infrastructure
of workers, truckers, rail sidings on the CSX and N&W rail lines and low cost
access to the Big Sandy barge docks near Ashland, KY, for effective coal
distribution. Quest intends to use its local knowledge to pursue high returns on
investment from re-opening profitable properties in this region. It intends to
grow by additional accretive acquisitions, contract mining, and internal
development of owned properties.

         Quest is also seeking to diversify its operations into other sectors of
the energy industry, including the oil and gas sector. Quest's management has
over 30 years of energy related projects and has managed over $60,000,000 of oil
and gas exploration and production in Appalachia, Oklahoma, Colorado, North
Dakota and Louisiana. Quest may also engage key industry experts to assist in
the analysis and funding of these properties. Quest management believes that a
successful diversification into the oil and gas field would provide Quest with
an opportunity to improve its results of operations while hedging on coal
production and prices.

Customers

         Quest intends to sell all of its coal on the spot market to coal
brokers. Quest seeks to enter into long-term contracts (exceeding one year in
duration) with many of its customers. These arrangements would allow customers
to secure a supply for their future needs and provide Quest with greater
predictability of sales volume and sales prices.

Competition

         The coal industry in the United States is highly competitive. Quest
competes with many large producers and other small coal producers. Quest also
competes with other producers primarily on the basis of price, coal quality,
transportation cost and reliability of supply. Continued demand for coal is also
dependent on factors outside of Quest's control, including demand for
electricity, environmental and governmental regulations, weather, technological
developments, and the availability and cost of alternative fuel sources.

         The price at which Quest's production can be sold is dependent upon a
variety of factors, many of which are beyond Quest's control. Quest sells coal
on the spot-market and seeks to sell coal under long-term contracts. Generally,
the relative competitiveness of coal vis-a-vis other fuels or other coals is
evaluated on a delivered cost per heating value unit basis. In addition to

                                       7
<PAGE>

competition from other fuels, coal quality, the marginal cost of producing coal
in various regions of the country and transportation costs are major
determinants of the price for which Quest's production can be sold. Factors that
directly influence production cost include geological characteristics (including
seam thickness), overburden ratios, depth of underground reserves,
transportation costs and labor availability and cost. Underground mining has
higher labor (including reserves for future costs associated with labor benefits
and health care) and capital (including modern mining equipment and construction
of extensive ventilation systems) costs than those of surface mining. In recent
years, increased development of large surface mining operations, particularly in
the western United States, and more efficient mining equipment and techniques,
have contributed to excess coal production capacity in the United States.
Competition resulting from excess capacity has encouraged producers to reduce
prices and to pass productivity gains through to customers. Demand for Quest's
low sulfur coal and the prices that Quest will be able to obtain for it will
also be affected by the price and availability of high sulfur coal, which can be
marketed in tandem with emissions allowances.

         Transportation costs are another fundamental factor affecting coal
industry competition. Coordination of the many eastern loadouts, the large
number of small shipments, terrain and labor issues all combine to make
shipments originating in the eastern United States inherently more expensive on
a per-mile basis than shipments originating in the western United States.
Historically, coal transportation rates from the western coal producing areas
into Central Appalachian markets limited the use of western coal in those
markets. More recently, however, lower rail rates from the western coal
producing areas to markets served by eastern producers have created major
competitive challenges for eastern producers. Barge transportation is the lowest
cost method of transporting coal long distances in the eastern United States,
and the large numbers of eastern producers with river access keep coal prices
competitive. Quest believes that many utilities with plants located on the Ohio
River system are well positioned for deregulation as competition for river
shipments should remain high for Central Appalachian coal. Quest also believes
that with close proximity to competitively-priced Central Appalachian coal,
utilities with plants located on the Ohio River system will become price setters
in a deregulated environment.

         Although undergoing significant consolidation, the coal industry in the
United States remains highly fragmented. It is possible that Quest's costs will
not permit it to compete effectively with other producers seeking to provide
coal to a customer; however, it is Quest's goal to maintain low production
costs, offer a variety of products and have develop access to multiple
transportation systems that will enable it to compete effectively with other
producers.

Environmental, Safety, and Health Matters

         Quest is subject to federal, state, and local laws and regulations
relating to environmental protection and plant and mine safety and health,
including, but not limited to, the federal Surface Mining Control and
Reclamation Act of 1977, the Occupational Safety and Health Act, the Mine Safety
and Health Act of 1977, the Water Pollution Control Act, as amended by the Clean
Water Act, the Clean Air Act, the Black Lung Benefits Revenue Act of 1977, and
the Black Lung Benefits Reform Act of 1977. Quest is rarely subject to
permitting or enforcement under the Resource Conservation and Recovery Act, or
RCRA, or the Comprehensive Environmental Response, Compensation, and Liability
Act, or CERCLA, and does not consider the effects of those statutes on its
operations to be material for purposes of disclosure.

         SMCRA. The Surface Mining Control and Reclamation Act, or SMCRA, which
is administered by the Office of Surface Mining Reclamation and Enforcement,
establishes mining, environmental protection and reclamation standards for all
aspects of surface mining as well as many aspects of deep mining. SMCRA and
similar state statutes require, among other things, the restoration of mined
property in accordance with specified standards and an approved reclamation
plan. In addition, the Abandoned Mine Land Fund, which is part of the Surface
Mining Control and Reclamation Act, imposes a fee on all current mining
operations, the proceeds of which are used to restore mines closed before 1977.
The maximum tax is $0.35 per ton on surface-mined coal and $0.15 per ton on
deep-mined coal. A mine operator must submit a bond or otherwise secure the
performance of these reclamation obligations. Mine operators must receive
permits and permit renewals for surface mining operations from the Office of
Surface Mining Reclamation and Enforcement or, where state regulatory agencies
have adopted federally approved state programs under the act, the appropriate
state regulatory authority. Quest does not engage in surface mining, but intends
to do so in the future.

         On March 29, 2002, the U.S. District Court for the District of Columbia
issued a ruling that could restrict underground mining activities conducted in
the vicinity of public roads, within a variety of federally protected lands,

                                       8
<PAGE>

within national forests, and within certain proximity to occupied dwellings. The
lawsuit, Citizens Coal Council v. Norton, was filed in February 2000 to
challenge regulations issued by the Department of Interior providing, among
other things, that subsidence and underground activities that may led to
subsidence are not surface mining activities within the meaning of SMCRA. SMCRA
generally contains restrictions and certain prohibitions on the locations where
surface mining activities can be conducted. The District Court entered summary
judgment upon the plaintiff's claims that the Secretary of the Interior's
determination violated SMCRA. By order dated April 9, 2002, the court remanded
the regulations to the Secretary of the Interior for reconsideration. The
significance of this decision for the coal mining industry remains unclear
because this ruling is subject to appellate review. The Department of Interior
and the National Mining Association, a trade group that intervened in this
action, sought a stay of the order pending appeal to the U.S. Court of Appeals
for the District of Columbia Circuit and the stay was granted. If the District
Court's decision is not overturned, or if some legislative solution is not
enacted, this ruling could have a material adverse effect on all coal mine
operations that utilize underground mining techniques, including those that
Quest may use in the future. While it still may be possible to obtain permits
for underground mining operations in these areas, the time and expense of that
permitting process are likely to increase significantly.

         Black Lung. The U.S. Department of Labor has issued a final rule
amending the regulations implementing the federal black lung laws which, among
other things, establish a presumption in favor of a claimant's treating
physician and limit a coal operator's ability to introduce medical evidence
regarding the claimant's medical condition. The amendments could have an adverse
impact on Quest, the extent of which cannot be accurately predicted.

         Clean Air Act. The Clean Air Act and corresponding state laws
extensively regulate emissions into the air of particulate matter and other
substances, including sulfur dioxide, nitrogen oxides and mercury. Although
these regulations apply directly to impose certain requirements for the
permitting and operation of Quest's mining facilities, by far their greatest
impact on Quest and the coal industry generally is the effect of emission
limitations on utilities and other prospective customers. Owners of coal-fired
power plants and industrial boilers have been required to expend considerable
resources in an effort to comply with these ambient air standards. Significant
additional emissions control expenditures will be needed in order to meet the
current national ambient air standard for ozone. In particular, coal-fired power
plants will be affected by state regulations designed to achieve attainment of
the ambient air quality standard for ozone. Ozone is produced by the combination
of two precursor pollutants: volatile organic compounds and nitrogen oxides.
Nitrogen oxides are a by-product of coal combustion. Accordingly, emissions
control requirements for new and expanded coal-fired power plants and industrial
boilers will continue to become more demanding in the years ahead. The EPA has
imposed or attempted to impose tighter emission restrictions in a number of
areas, some of which are currently subject to litigation. The general effect of
such tighter restrictions could be to reduce demand for coal. In July 1997, the
EPA adopted new, more stringent National Ambient Air Quality Standards for very
fine particulate matter and ozone. The Court of Appeals for the District of
Columbia issued an opinion in May 1999 limiting the manner in which the EPA can
enforce these standards. After a request by the federal government for a
rehearing by the Court of Appeals was denied, the Supreme Court agreed in
January 2000 to review the case. On February 27, 2001, the Supreme Court found
in favor of the EPA in material part and remanded the case to the Court of
Appeals. On remand, the Court of Appeals for the D.C. Circuit affirmed the EPA's
adoption of these more stringent ambient air quality standards. As a result of
the finalization of these standards, states that are not in attainment for these
standards will have to revise their State Implementation Plans to include
provisions for the control of ozone precursors and/or particulate matter.
Revised State Implementation Plans could require electric power generators to
further reduce nitrogen oxide and particulate matter emissions. The potential
need to achieve such emissions reductions could result in reduced coal
consumption by electric power generators. Thus, future regulations regarding
ozone, particulate matter and other pollutants could restrict the market for
coal and Quest's development of new mines. This in turn may result in Quest's
decreased production and a corresponding decrease in its revenue. Although the
future scope of these ozone and particulate matter regulations cannot be
predicted, future regulations regarding these and other ambient air standards
could restrict the market for coal and the development of new mines.

         Furthermore, in October 1998, the EPA finalized a rule that will
require 19 states in the Eastern United States that have ambient air quality
problems to make substantial reductions in nitrogen oxide emissions by the year
2004. The final rule was largely upheld by the United States Court of Appeals
for the District of Columbia Circuit. To achieve reductions in nitrogen oxide
emissions by 2004, many power plants would be required to install additional
control measures such as capital-intensive selective catalytic reduction (SCR)
devices. The installation of these measures would make it more costly to operate
coal-fired power plants and, depending on the requirements of individual state
implementation plans, could make coal a less attractive fuel. In addition,

                                       9
<PAGE>

reductions in nitrogen oxide emissions can be achieved at a low capital cost
through a combination of low nitrogen oxide burners and coal produced in western
U.S. coal mines. As a result, changes in current emissions standards could also
impact the economic incentives for eastern U.S. coal-fired power plants to
consider using more coal produced in western U.S. coal mines.

         Along with these regulations addressing ambient air quality, the EPA
has initiated a regional haze program designed to protect and to improve
visibility at and around National Parks, National Wilderness Areas and
International Parks. This program restricts the construction of new coal-fired
power plants whose operation may impair visibility at and around federally
protected areas. Moreover, this program may require certain existing coal-fired
power plants to install additional control measures designed to limit
haze-causing emissions, such as sulfur dioxide, nitrogen oxides and particulate
matter. EPA's final rule concerning best available retrofit technology (BART) is
currently on remand to the Agency from the United States Court of Appeals for
the District of Columbia Circuit. By imposing limitations upon the placement and
construction of new coal-fired power plants, the EPA's regional haze program
could affect the future market for coal.

         Additionally, the U.S. Department of Justice, on behalf of the EPA, has
filed lawsuits against several investor-owned electric utilities and brought an
administrative action against one government-owned electric utility for alleged
violations of the Clean Air Act. The EPA claims that these utilities have failed
to obtain permits required under the Clean Air Act for alleged major
modifications to their power plants. Quest may indirectly supply coal to some of
the currently affected utilities, and it is possible that other end users of
Quest's coal will be sued. These lawsuits could require the utilities to pay
penalties and install pollution control equipment or undertake other emission
reduction measures, which could adversely impact their demand for coal.

         Other Clean Air Act programs are also applicable to power plants that
may use Quest's coal. For example, the acid rain control provisions of Title IV
of the Clean Air Act require a reduction of sulfur dioxide emissions from power
plants. Because sulfur is a natural component of coal, required sulfur dioxide
reductions can affect coal mining operations. Title IV imposes a two-phase
approach to the implementation of required sulfur dioxide emissions reductions.
Phase I, which became effective in 1995, regulated the sulfur dioxide emissions
levels from 261 generating units at 110 power plants and targeted the highest
sulfur dioxide emitters. Phase II, implemented January 1, 2000, made the
regulations more stringent and extended them to additional power plants,
including all power plants of greater than 25 megawatt capacity. Affected
electric utilities can comply with these requirements by doing one or more of
the following:

         1        burning lower sulfur coal, either exclusively or mixed with
                  higher sulfur coal;

         2        installing pollution control devices such as scrubbers, which
                  reduce the emissions from high sulfur coal;

         3        reducing electricity generating levels; or

         4        purchasing or trading emission credits.

         Specific emissions sources receive these credits that electric
utilities and industrial concerns can trade or sell to allow other units to emit
higher levels of sulfur dioxide. Each credit allows its holder to emit one ton
of sulfur dioxide.

         In addition to emissions control requirements designed to control acid
rain and to attain the national ambient air quality standards, the Clean Air Act
also imposes standards on sources of hazardous air pollutants. Although these
standards have not yet been extended to coal mining operations, the EPA recently
announced that it will regulate hazardous air pollutants from coal-fired power
plants. Under the Clean Air Act, coal-fired power plants will be required to
control hazardous air pollution emissions by no later than 2009. These controls
are likely to require significant new improvements in controls by power plant
owners. The most prominently targeted pollutant is mercury, although other
by-products of coal combustion may be covered by future hazardous air pollutant
standards for coal combustion sources. However, the introduction of mercury
emissions limits could place coal produced in western U.S. mines at a
competitive disadvantage to coal produced in eastern U.S. mines, as current
mercury-removal technology is more effective on eastern U.S. coal. The EPA has
announced that it intends to issue a proposed rule concerning maximum achievable
control technology (MACT) for utilities by December 2003.

                                       10
<PAGE>

         Other proposed initiatives may have an effect upon coal operations.
Several so-called multi-pollutant bills, which could regulate a variety of air
emissions, including carbon dioxide and mercury, have been proposed. One such
proposal is the Bush Administration's recently announced Clear Skies initiative.
As proposed, this initiative is designed to reduce emissions of sulfur dioxide,
nitrogen oxides and mercury from power plants. Senator James Jeffords has also
introduced a bill that would place tight caps on coal-fired emissions, including
mandatory limits on carbon dioxide emissions, and require shorter implementation
time frames. While the details of these proposed initiatives vary, there is
clearly a movement towards increased regulation of air emissions, including
carbon dioxide and mercury, which could cause power plants to shift away from
coal as a fuel source.

         The Bush administration recently pledged $2 billion to the Clean Coal
Technology (CCT) Program. The CCT Program is a government and industry co-funded
effort to demonstrate a new generation of innovative coal-utilization processes
in a series of "showcase" facilities built across the country. These projects
are carried out in sufficiently large scale to prove commercial worthiness and
generate data for design, construction, operation, and technical/economic
evaluation of full -scale commercial applications. The goal of the CCT Program
is to furnish the U.S. energy marketplace with advanced, more efficient
coal-based technologies, technologies that are capable of mitigating some of the
economic and environmental impediments that inhibit the use of coal as an energy
source.

         1992 Framework Convention on Global Climate Change. The United States
has not implemented the 1992 Framework Convention on Global Climate Change, or
Kyoto Protocol, which is intended to limit or reduce emissions of greenhouse
gases, such as carbon dioxide. Under the terms of the Kyoto Protocol, which
specific emission targets vary from country to country, the United States would
be required to reduce emissions to 93% of 1990 levels over a five-year period
from 2008 through 2012. Although the United States has not ratified the emission
targets and no comprehensive regulations focusing on greenhouse gas emissions
are in place, these restrictions, whether through ratification of the emission
targets or other efforts to stabilize or reduce greenhouse gas emissions, could
adversely affect the price and demand for coal. In March 2001, President Bush
reiterated his opposition to the Kyoto Protocol and further stated that he did
not believe that the government should impose mandatory carbon dioxide emission
reductions on power plants. In February 2002, President Bush announced a new
approach to climate change, confirming the Administration's opposition to the
Kyoto Protocol and proposing voluntary actions to reduce the greenhouse gas
intensity of the United States. Greenhouse gas intensity measures the ratio of
greenhouse gas emissions, such as carbon dioxide, to economic output. The
President's climate change initiative calls for a reduction in greenhouse gas
intensity over the next 10 years which is approximately equivalent to the
reduction that has occurred over each of the past two decades.

         Operations - Permitting; Compliance. Quest is in the process of
obtaining all the permits required for its current operations under the SMCRA,
the Clean Water Act, the Clean Air Act, and corresponding state laws. Once all
required permits are obtained, Quest intends to be in compliance in all material
respects with such permits, and intends to routinely correct in a timely fashion
violations of which it receives notice in the normal course of operations. The
expiration dates of the permits are largely immaterial as the law provides for a
right of successive renewal. The cost of obtaining surface mining, clean water,
and air permits can vary widely depending on the scientific and technical
demonstrations that must be made to obtain the permits. However, the cost of
obtaining a permit is rarely more than $500,000 and of obtaining a renewal is
rarely more than $5,000. It is impossible to predict the full impact of future
judicial, legislative or regulatory developments on Quest's operations because
the standards to be met, as well as the technology and length of time available
to meet those standards, continue to develop and change.

         The imposition of more stringent requirements under environmental laws
or regulations, new developments or changes regarding site cleanup costs or the
allocation of such costs among potentially responsible parties, or a
determination that Quest is potentially responsible for the release of hazardous
substances at sites other than those currently identified, could result in
additional expenditures or the provision of additional accruals in expectation
of such expenditures.

Coal Reserves

         Quest estimates that, as of December 31, 2006, it has total recoverable
reserves of approximately two to three million tons consisting of both proven
and probable reserves. "Reserves" are defined by Securities and Exchange
Commission Industry Guide 7 as that part of a mineral deposit, which could be
economically and legally extracted or produced at the time of the reserve
determination. "Recoverable" reserves mean coal that is economically recoverable
using existing equipment and methods under federal and state laws currently in
effect. Approximately three million tons of Quest's reserves are classified as

                                       11
<PAGE>

proven reserves. "Proven (Measured) Reserves" are defined by Securities and
Exchange Commission Industry Guide 7 as reserves for which (a) quantity is
computed from dimensions revealed in outcrops, trenches, workings or drill
holes; grade and/or quality are computed from the results of detailed sampling
and (b) the sites for inspection, sampling and measurement are spaced so closely
and the geologic character is so well defined that size, shape, depth and
mineral content of reserves are well-established. None of Quest's reserves are
classified as probable reserves. "Probable reserves" are defined by Securities
and Exchange Commission Industry Guide 7 as reserves for which quantity and
grade and/or quality are computed from information similar to that used for
proven (measured) reserves, but the sites for inspection, sampling, and
measurement are farther apart or are otherwise less adequately spaced. The
degree of assurance, although lower than that for proven (measured) reserves, is
high enough to assume continuity between points of observation.

         Information about Quest's reserves consists of estimates based on
engineering, economic, and geological data assembled and analyzed by its
contracted engineers, geologists, and finance associates. Reserve estimates are
updated as deemed necessary by management using geologic data taken from drill
holes, adjacent mine workings, outcrop prospect openings and other sources. Coal
tonnages are categorized according to coal quality, seam thickness, mineability
and location relative to existing mines and infrastructure. In accordance with
applicable industry standards, proven reserves are those for which reliable data
points are spaced no more than 2,700 feet apart. Probable reserves are those for
which reliable data points are spaced 2,700 feet to 7,900 feet apart. Further
scrutiny is applied using geological criteria and other factors related to
profitable extraction of the coal. These criteria include seam height, roof and
floor conditions, yield and marketability.

         As with most coal-producing companies in Central Appalachia, all of
Quest's coal reserves are controlled pursuant to leases from third party
landowners. These leases convey mining rights to the coal producer in exchange
for a per ton or percentage of gross sales price royalty payment to the lessor.
The royalties for coal reserves from Quest's producing properties was
approximately $55,000 for the year ended December 31, 2006 and $55,000 for the
year ended December 31, 2005.

Employees

         Quest currently employs one person, our President, Eugene Chiaramonte,
Jr. All other personnel who provide services for Quest, whether in
administration or in mining operations, either work on an independent contractor
basis or work for General Mining under a contract mining arrangement. None of
Quest's employees are represented by a labor union, and Quest has not entered
into a collective bargaining agreement with any union. Quest has not experienced
any work stoppages and believes that it has good relations with its employees.



                                       12
<PAGE>

Item 1A. RISK FACTORS AND CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
         INFORMATION

         An investment in Quest common stock involves a high degree of risk. You
should carefully consider the following risk factors and the other information
in this report before investing in Quest common stock. Quest's business and
results of operations could be seriously harmed by any of the following risks.
The trading price of Quest's common stock could decline due to any of these
risks, and you may lose part or all of your investment.

         Our wholly owned subsidiary, Gwenco, Inc., has filed for bankruptcy
protection. On March 2, 2007, our wholly owned subsidiary, Gwenco, Inc., filed a
voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy
Code with the United States Bankruptcy Court for the Eastern District of
Kentucky. We are currently overseeing Gwenco's operations as a debtor in
possession, subject to court approval of matters outside the ordinary course of
business. We are currently seeking court approval for debtor in possession
financing from holders of Gwenco's existing debt obligations in order to fund
operating expenses. We intend to continue our mining operations at Pond Creek
Mine at Slater's Branch while this matter is completed. Under Chapter 11, claims
against us in existence prior to the filing of the petitions for reorganization
relief under the federal bankruptcy laws are stayed while we are in bankruptcy.
If we are unable to raise debtor in possession financing and/or if we are unable
to negotiate an acceptable plan of reorganization with Gwenco's creditors, we
may be forced to file for protection under Chapter 7 of the U.S Bankruptcy Code
and liquidate all or Gwenco's assets, in which case, Quest would cease to have
an operating business.

         We currently are not mining coal, and we may not be able to recommence
mining operations. Due to lack of working capital, Quest was forced to cease
mining operations at the Pond Creek mine at Slater's Branch, Kentucky in June
2005. In January 2007, we received a permit from the Kentucky Department of
Natural Resources to conduct coal mining at its Pond Creed Mine at Slater's
Branch Kentucky. The mining permit is held by our wholly-owned subsidiary,
Gwneco, Inc., and allows Gwenco to recommence mining operations at the Pond
Creek Mine. In February 2007, our engineering firm, Alchemy Engineering of
Preestonburg, Kentucky, completed a one and five year mine plan and maps
required by the Kentucky Department of Mines and Minerals in connection with our
permit to conduct coal mining at Pond Creek. We retained General Mining LLC of
Wallins, Kentucky to rehabilitate the Pond Creek Mine in February 2007 and
further retained General Mining to conduct mining operations at Pond Creek in
March 2007. Quest intends to complete rehabilitation of Pond Creek Mine by the
end of April 2007. After rehabilitation, General Mining will be able to put its
equipment in place and commence mining operations. However, it is possible that
Quest does not obtain sufficient working capital to recommence mining
operations. It is possible that Quest may never recommence coal mining
operations.

         Pending and threatened litigation could result in Quest losing its
primary operating assets. Currently, Quest is a party to various pending
lawsuits and judgments, including judgments in favor of National City Bank and
Duke Energy Merchants and third-party complaint by the former owner of Gwenco,
Inc., Albert Anderson. National City Bank has commenced an action commenced an
action against Quest, Gwenco, and Quest Energy, seeking to foreclose on our
assets, including our leasehold interests in the mines. On July 19, 2006,
National City Bank sold its right, title and interest in and to the various
judgments, judgment liens, and security interests to a third party investor.
While the third party investor has agreed to forbear on further collections,
enforcement, and foreclosure with respect to this indebtedness, such investor
may withdraw such forbearance if we do not comply with our covenants with the
investor. It is possible that, in connection with the foreclosure action, the
leasehold interests or other assets of Quest could be sold to such third party
creditor, Duke Energy Merchants, another creditor, or a third party. In the
event that the leasehold interests or the other assets are put up for sale,
Quest intends to bid on them, but it is possible that it may not be able to
purchase the leasehold interests or the other assets, either because it does not
have the assets with which to make a competitive bid or because it is simply
outbid by one of its creditors or a third party. In the event that either the
bank or a third party purchases the leasehold interests or the other assets,
Quest would no longer have any operating business.

         Quest's former President and Chief Executive Officer has been convicted
by a federal jury, which may negatively effect the public's perception of Quest
and its operations.

         In May, 2006, a federal grand jury indicted Mr. Runyon, Ms. Holbrook,
James Daniel Stollings, and Quest's former President and Chief Executive
Officer, William R. Wheeler on charges of bank fraud. Mr. Wheeler resigned as an
officer or director of Quest on May 31, 2006. In connection with the
indictments, Mr. Runyon and Ms. Holbrook each pled guilty. In December 2006, a
federal jury convicted Mr. Stollings and Mr. Wheeler of bank fraud. Mr. Wheeler
has appealed the conviction. Quest denies any wrongdoing in connection with

                                       13
<PAGE>

these matters. Although Quest does not believe that this conviction will affect
the business plans of Quest, it is possible that Mr. Wheeler, Quest, or one or
more of Quest's subsidiaries may be the subject of civil or administrative
actions based on the allegations set forth in the indictment. As a result, Quest
may incur civil or administrative liability based on these allegations. Further,
it is possible that the public perception of Quest may be negatively affected by
these allegations, which in turn may cause a drop in the market price of Quest's
common stock.

         Quest will need to continue to finance its operations through
additional bank borrowings or other capital financings, and if it is unable to
obtain additional capital, it may not be able to continue as a going concern.
Quest had a working capital deficit as of December 31, 2006. As of the date of
this annual report, Quest does not believe that it will be able to fund its
operations, working capital requirements, and debt service requirements over the
fiscal year 2007 through cash flows generated from operations, as Quest is not
currently generating any cash flows. Quest will need to continue to finance its
operations through additional borrowings or other capital financings. Quest's
collateral may not be sufficient to borrow additional amounts at such time.
Quest may also seek equity financing in the form of a private placement or a
public offering. Such additional financing may not be available to Quest, when
and if needed, on acceptable terms or at all. If Quest is unable to obtain
additional financing in sufficient amounts or on acceptable terms, its operating
results and prospects could be further adversely affected.

         Quest has substantial indebtedness outstanding, and its operations are
significantly leveraged. In order to finance its operations, Quest has incurred
substantial indebtedness. Quest is not in compliance with its debt covenants
under its loan agreements, and it has defaulted on substantially all of its loan
obligations, which has resulted in lawsuits, judgments, and foreclosure
proceedings against Quest and its assets. Quest has no cash flows from
operations, and without additional financing or cash flows from operations, it
cannot service its debt obligations. Quest's subsidiary, Gwenco, Inc., has
already filed for protection under Chapter 11 of the U.S. Bankruptcy Code. Quest
is currently negotiating with its creditors to reorganize and restructure its
debt obligations, both within the Chapter 11 reorganization at the Gwenco level
and outside the Chapter reorganization at other corporate levels, but if it is
unable to do so, there is a significant chance that Quest or its other
subsidiaries may be forced to seek protection under the U.S. Bankruptcy code, or
that its creditors could foreclose on its remaining assets, in which case it
would cease to continue as a going concern.

         Quest may be unable to continue as a going concern, in which case its
securities will have little or no value. Quest's independent auditor has noted
in its report concerning Quest's financial statements as of December 31, 2006
that it has incurred recurring losses from operations and has a working capital
deficiency, which raises substantial doubt about its ability to continue as a
going concern. As shown in the consolidated financial statements included in
this report, Quest has incurred recurring losses from operations in 2006 and
2005, and has an accumulated deficit and a working capital deficit as of
December 31, 2006. These conditions raise substantial doubt as to Quest's
ability to continue as a going concern. It is possible that Quest will not
achieve operating profits in the future.

         The level of Quest's indebtedness could adversely affect its ability to
grow and compete and prevent it from fulfilling its obligations under its
contracts and agreements. Quest has significant debt, lease, and royalty
obligations. Its ability to satisfy debt service, lease, and royalty obligations
and to effect any refinancing of its indebtedness will depend upon future
operating performance, which will be affected by prevailing economic conditions
in the markets that it serves as well as financial, business and other factors,
many of which are beyond its control. Quest may be unable to generate sufficient
cash flow from operations and future borrowings, or other financings may be
unavailable in an amount sufficient to enable it to fund its debt service,
lease, and royalty payment obligations or its other liquidity needs.

         Quest's relative amount of debt could have material consequences to its
business, including, but not limited to, the following: (i) making it more
difficult to satisfy debt covenants and debt service, lease payment, and other
obligations; (ii) increasing its vulnerability to general adverse economic and
industry conditions; (iii) limiting its ability to obtain additional financing
to fund future acquisitions, working capital, capital expenditures, or other
general corporate requirements; (iv) reducing the availability of cash flows
from operations to fund acquisitions, working capital, capital expenditures, or
other general corporate purposes; (v) limiting its flexibility in planning for,
or reacting to, changes in its business and the industry in which it competes;
or (vi) placing it at a competitive disadvantage when compared to competitors
with less relative amounts of debt.

                                       14
<PAGE>

         If transportation for Quest's coal becomes unavailable or uneconomic
for its customers, Quest's ability to sell coal could suffer. Transportation
costs represent a significant portion of the total cost of coal and, as a
result, the cost of transportation is a critical factor in a customer's
purchasing decision. Increases in transportation costs could make coal a less
competitive source of energy or could make some of Quest's operations less
competitive than other sources of coal. Coal producers depend upon rail, barge,
trucking, overland conveyor, and other systems to deliver coal to markets. While
U.S. coal customers typically arrange and pay for transportation of coal from
the mine to the point of use, disruption of these transportation services
because of weather-related problems, strikes, lock-outs or other events could
temporarily impair Quest's ability to supply coal to its customers and thus
could adversely affect Quest's results of operations. For example, the high
volume of coal shipped from one region of mines could create temporary
congestion on the rail systems servicing that region.

         Risks inherent to mining could increase the cost of operating Quest's
business. Quest's mining operations are subject to conditions beyond its control
that can delay coal deliveries or increase the cost of mining at particular
mines for varying lengths of time. These conditions include weather and natural
disasters, unexpected maintenance problems, key equipment failures, variations
in coal seam thickness, variations in the amount of rock and soil overlying the
coal deposit, variations in rock, and other natural materials and variations in
geologic conditions. In addition, the United States and over 160 other nations
are signatories to the 1992 Framework Convention on Climate Change, which is
intended to limit emissions of greenhouse gases, such as carbon dioxide. In
December 1997, in Kyoto, Japan, the signatories to the convention established a
binding set of emission targets for developed nations. Although the specific
emission targets vary from country to country, the United States would be
required to reduce emissions to 93% of 1990 levels over a five-year budget
period from 2008 through 2012. Although the United States has not ratified the
emission targets and no comprehensive regulations focusing on U.S. greenhouse
gas emissions are in place, these restrictions, whether through ratification of
the emission targets or other efforts to stabilize or reduce greenhouse gas
emissions, could adversely impact the price of and demand for coal. According to
the Energy Information Administration's Emissions of Greenhouse Gases in the
United States 2002, coal accounts for 30% of greenhouse gas emissions in the
United States, and efforts to control greenhouse gas emissions could result in
reduced use of coal if electricity generators switch to sources of fuel with
lower carbon dioxide emissions. Further developments in connection with
regulations or other limits on carbon dioxide emissions could have a material
adverse effect on Quest's financial condition or results of operations.

         Quest's future success depends upon its ability to continue acquiring
and developing coal reserves that are economically recoverable. Quest's
recoverable reserves decline as it produces coal. Quest has not yet applied for
the permits required or developed the mines necessary to use all of its
reserves. Furthermore, Quest may not be able to mine all of its reserves as
profitably as it does at its current operations. Quest's future success depends
upon its conducting successful exploration and development activities or
acquiring properties containing economically recoverable reserves. Quest's
planned mine development projects and acquisition activities may not result in
significant additional reserves, and it may not have continuing success
developing additional mines. Most of Quest's mining operations are conducted on
properties owned or leased by Quest. Because title to most of its leased
properties and mineral rights are not thoroughly verified until a permit to mine
the property is obtained, Quest's right to mine some of its reserves may be
materially adversely affected if defects in title or boundaries exist. In
addition, in order to develop its reserves, Quest must receive various
governmental permits. Quest cannot predict whether it will continue to receive
the permits necessary for it to operate profitably in the future. Quest may not
be able to negotiate new leases from the government or from private parties or
obtain mining contracts for properties containing additional reserves or
maintain its leasehold interest in properties on which mining operations are not
commenced during the term of the lease. From time to time, Quest has experienced
litigation with lessors of our coal properties and with royalty holders.

         If the coal industry experiences overcapacity in the future, our
profitability could be impaired. During the mid-1970s and early 1980s, a growing
coal market and increased demand for coal attracted new investors to the coal
industry, spurred the development of new mines, and resulted in added production
capacity throughout the industry, all of which led to increased competition and
lower coal prices. Similarly, an increase in future coal prices could encourage
the development of expanded capacity by new or existing coal producers. Any
overcapacity could reduce coal prices in the future.

         Quest's ability to operate effectively could be impaired if it loses
key personnel. Quest manages its business with a number of key personnel, the
loss of a number of whom could have a material adverse effect on Quest. In
addition, as its business develops and expands, Quest believes that its future
success will depend greatly on its continued ability to attract and retain
highly skilled and qualified personnel. It is possible that key personnel will

                                       15
<PAGE>

not continue to be employed by Quest and that we will be not able to attract and
retain qualified personnel in the future. Quest does not have "key person" life
insurance to cover its executive officers. Failure to retain or attract key
personnel could have a material adverse effect on Quest.

         Coal markets are highly competitive and affected by factors beyond
Quest's control. Quest competes with coal producers in various regions of the
U.S. for domestic sales and with both domestic and overseas producers for sales
to international markets. Continued domestic demand for Quest's coal and the
prices that it will be able to obtain primarily will depend upon coal
consumption patterns of the domestic electric utility industry and the domestic
steel industry. Consumption by the domestic utility industry is affected by the
demand for electricity, environmental and other governmental regulations,
technological developments and the price of competing coal and alternative fuel
supplies including nuclear, natural gas, oil and renewable energy sources,
including hydroelectric power. Consumption by the domestic steel industry is
primarily affected by the demand for U.S. steel. Quest's sales of metallurgical
coal are dependent on the continued financial viability of domestic steel
companies and their ability to compete with steel producers abroad. The cost of
ocean transportation and the valuation of the U.S. dollar in relation to foreign
currencies significantly impact the relative attractiveness of Quest's coal as
it competes on price with other foreign coal producing sources.

         Coal prices are affected by a number of factors and may vary
dramatically by region. The two principal components of the price of coal are
the price of coal at the mine, which is influenced by mine operating costs and
coal quality, and the cost of transporting coal from the mine to the point of
use. The cost of mining the coal is influenced by geologic characteristics such
as seam thickness, overburden ratios and depth of underground reserves.
Underground mining is generally more expensive than surface mining as a result
of high capital costs, including costs for modern mining equipment and
construction of extensive ventilation systems and higher labor costs due to
lower productivity. Quest currently engages in three principal coal mining
techniques: underground room and pillar mining, underground longwall mining and
highwall mining. Because underground longwall mining, surface mining, and
highwall mining are high-productivity, low-cost mining methods, Quest seeks to
increase production from its use of these methods to the extent permissible and
cost effective.

         Quest depends on continued demand from its customers. Reduced demand
from Quest's largest customers could have an adverse impact on its ability to
achieve its projected revenue. When Quest's contracts with its current customers
reach expiration, it is possible that that the customers will not extend or
enter into new long-term contracts or, in the absence of long-term contracts,
that they will not continue to purchase the same amount of coal as they have in
the past or on terms, including pricing terms, as favorable as under existing
agreements.

         Quest faces numerous uncertainties in estimating its economically
recoverable coal reserves, and inaccuracies in its estimates could result in
lower than expected revenues, higher than expected costs and decreased
profitability. There are numerous uncertainties inherent in estimating
quantities and values of economically recoverable coal reserves, including many
factors beyond Quest's control. As a result, estimates of economically
recoverable coal reserves are by their nature uncertain. Information about
Quest's reserves consists of estimates based on engineering, economic, and
geological data assembled and analyzed by Quest's staff. Some of the factors and
assumptions that impact economically recoverable reserve estimates include the
following:

         o        geological conditions;

         o        historical production from the area compared with production
                  from other producing areas;

         o        the assumed effects on regulations and taxes by governmental
                  agencies;

         o        assumptions governing future prices; and

         o        future operating costs.

         Each of these factors may in fact vary considerably from the
assumptions used in estimating reserves. For these reasons, estimates of the
economically recoverable quantities of coal attributable to a particular group
of properties may vary substantially. As a result, Quest's estimates may not
accurately reflect its actual reserves. Actual production, revenues, and
expenditures with respect to its reserves will likely vary from estimates, and
these variances may be material.

                                       16
<PAGE>

         Union represented labor creates an increased risk of work stoppages and
higher labor costs. As of December 31, 2006, none of Quest's workforce was
represented by a union. However, in the event that Quest is required to hire
union labor, there may be an increased risk of strikes and other related work
actions, in addition to higher labor costs associated with union labor. Quest
has experienced some union organizing campaigns at some of its open shop
facilities within the past five years. If some or all of Quest's current open
shop operations were to become union represented, Quest could be subject to
additional risk of work stoppages and higher labor costs. Increased labor costs
or work stoppages could adversely affect the stability of production and reduce
its net income.

         Severe weather may affect Quest's ability to mine and deliver coal.
Severe weather, including flooding and excessive ice or snowfall, when it
occurs, can adversely affect Quest's ability to produce, load, and transport
coal.

         Shortages of skilled labor in the Central Appalachian coal industry may
pose a risk to achieving high labor productivity and competitive costs. Coal
mining continues to be a labor intensive industry. In 2001, the coal industry
experienced a shortage of trained coal miners in the Central Appalachian region
causing many companies to hire mine workers with less experience. While Quest
did not experience a comparable labor shortage in 2003, if another such shortage
of skilled labor were to arise, Quest's productivity could decrease and our
costs could increase. Such a lack of skilled miners could have an adverse impact
on Quest's labor productivity and costs and its ability to expand production in
the event there is an increase in the demand for coal.

         If the coal industry experiences overcapacity in the future, Quest's
profitability could be impaired. Historically, a growing coal market and
increased demand for coal attract new investors to the coal industry, spur the
development of new mines and result in added production capacity throughout the
industry, all of which can lead to increased competition and lower coal prices.
Similarly, an increase in future coal prices could encourage the development of
expanded capacity by new or existing coal producers. Any overcapacity could
reduce coal prices and therefore reduce Quest's revenues.

         Terrorist attacks and threats, escalation of military activity in
response to such attacks, or acts of war may negatively affect Quest's cash
flows, results of operations, or financial condition. Terrorist attacks and
threats, escalation of military activity in response to such attacks or acts of
war may negatively affect Quest's cash flows, results of operations, or
financial condition. Quest's business is affected by general economic
conditions, fluctuations in consumer confidence and spending, and market
liquidity, which can decline as a result of numerous factors outside of its
control, such as terrorist attacks and acts of war. Future terrorist attacks
against U.S. targets, rumors or threats of war, actual conflicts involving the
U.S. or its allies, or military or trade disruptions affecting Quest's customers
may materially adversely affect its operations. As a result, there could be
delays or losses in transportation and deliveries of coal to Quest's customers,
decreased sales of its coal, and extension of time for payment of accounts
receivable from its customers. Strategic targets such as energy-related assets
may be at greater risk of future terrorist attacks than other targets in the
U.S. In addition, disruption or significant increases in energy prices could
result in government-imposed price controls. It is possible that any, or a
combination, of these occurrences could have a material impact on Quest's cash
flows, results of operations, or financial condition.

         Quest may not be able to identify quality strategic acquisition
candidates, and if it does make strategic acquisitions, it may not be able to
successfully integrate their operations. Quest intends to acquire companies in
the coal mining industry that offer complementary products and services to its
current business operations. For each acquisition, Quest will be required to
assimilate the operations, products, and personnel of the acquired business and
train, retain, and motivate its key personnel. Quest may be unable to maintain
uniform standards, controls, procedures, and policies if it fails in these
efforts. Similarly, acquisitions may subject Quest to liabilities and risks that
are not known or identifiable at the time of the acquisition or may cause
disruptions in its operations and divert management's attention from day-to-day
operations, which could impair Quest's relationships with its current employees,
customers, and strategic partners. Quest may have to incur debt or issue equity
securities to pay for any future acquisitions. The issuance of equity securities
could be substantially dilutive to Quest's stockholders. In addition, Quest's
profitability may suffer because of acquisition related costs. Quest currently
has no agreements or commitments concerning any such additional acquisitions,
and it may not be able to identify any companies that satisfy its acquisition
criteria.

                                       17
<PAGE>

         The government extensively regulates Quest's mining operations, which
imposes significant costs on Quest, and future regulations could increase those
costs or limit Quest's ability to produce coal. Federal, state, and local
authorities regulate the coal mining industry with respect to matters such as
employee health and safety, permitting and licensing requirements, air quality
standards, water pollution, plant and wildlife protection, reclamation and
restoration of mining properties after mining is completed, the discharge of
materials into the environment, surface subsidence from underground mining, and
the effects that mining has on groundwater quality and availability. In
addition, significant legislation mandating specified benefits for retired coal
miners affects Quest's industry. Numerous governmental permits and approvals are
required for mining operations. Quest is required to prepare and present to
federal, state, or local authorities data pertaining to the effect or impact
that any proposed exploration for or production of coal may have upon the
environment. The costs, liabilities, and requirements associated with these
regulations may be costly and time-consuming and may delay commencement or
continuation of exploration or production. The possibility exists that new
legislation and/or regulations and orders may be adopted that may materially
adversely affect Quest's mining operations, its cost structure, and/or its
customers' ability to use coal. New legislation or administrative regulations
(or judicial interpretations of existing laws and regulations), including
proposals related to the protection of the environment that would further
regulate and tax the coal industry, may also require Quest or its customers to
change operations significantly or incur increased costs. The majority of
Quest's coal supply agreements contain provisions that allow a purchaser to
terminate its contract if legislation is passed that either restricts the use or
type of coal permissible at the purchaser's plant or results in specified
increases in the cost of coal or its use. These factors and legislation, if
enacted, could have a material adverse effect on Quest's financial condition and
results of operations.

         There is a limited active trading market for Quest shares. Quest common
stock is traded on the OTC Bulletin Board under the symbol "QMMG.OB." Trading
activity in Quest common stock has fluctuated widely and at times has been
limited. Quest considers its common stock to be "thinly traded" and any last
reported sale prices may not be a true market-based valuation of the common
stock. A consistently active trading market for Quest's stock may not develop at
any time in the future. Stockholders may experience difficulty selling their
shares if they choose to do so because of the illiquid market and limited public
float for Quest stock.

         Quest's common stock is considered to be a "penny stock" and, as such,
the market for Quest common stock may be further limited by certain SEC rules
applicable to penny stocks. As long as the price of Quest's common stock remains
below $5.00 per share or Quest has net tangible assets of $2,000,000 or less,
Quest's common shares are likely to be subject to certain "penny stock" rules
promulgated by the SEC. Those rules impose certain sales practice requirements
on brokers who sell penny stock to persons other than established customers and
accredited investors (generally institutions with assets in excess of $5,000,000
or individuals with net worth in excess of $1,000,000). For transactions covered
by the penny stock rules, the broker must make a special suitability
determination for the purchaser and receive the purchaser's written consent to
the transaction prior to the sale. Furthermore, the penny stock rules generally
require, among other things, that brokers engaged in secondary trading of penny
stocks provide customers with written disclosure documents, monthly statements
of the market value of penny stocks, disclosure of the bid and asked prices and
disclosure of the compensation to the brokerage firm and disclosure of the sales
person working for the brokerage firm. These rules and regulations make it more
difficult for brokers to sell Quest common shares and limit the liquidity of
Quest's securities.

         Quest has no immediate plans to pay dividends. Quest has not paid any
cash dividends to date and does not expect to pay dividends for the foreseeable
future.

         Our sole officer and director owns a majority of Quest's outstanding
voting rights, and as long as he does, he will control the outcome of
stockholder voting. Quest's sole officer and director is the owner of all of the
outstanding shares of Quest's Series C Preferred Stock, pursuant to which he
holds approximately 66.7% of the outstanding voting rights for Quest's capital
stock. As long as Quest's sole officer and director owns the Series C Preferred
Stock, Quest's other stockholders will be unable to affect or change the
management or the direction of Quest without the support of its sole officer and
director. As a result, some investors may be unwilling to purchase Quest's
common stock. If the demand for Quest's common stock is reduced because Quest's
officer and director has significant influence over Quest, the price of Quest's
common stock could be materially depressed. The officer and director will be
able to exert significant influence over the outcome of all corporate actions
requiring stockholder approval, including the election of directors, amendments
to Quest's articles of incorporation, and approval of significant corporate
transactions.

         Quest's articles of incorporation authorizes Quest's board of directors
to designate and issue preferred stock with rights, preferences and privileges
that may be adverse to the rights of the holders of Quest's common stock.

                                       18
<PAGE>

Quest's board of directors has the authority to issue up to an additional
21,140,000 shares of preferred stock and to determine the price, rights,
preferences, and privileges of those shares without any further vote or action
by Quest's stockholders. To date, Quest has issued 2,000,000 shares of Series A
preferred stock, 1,600,000 shares of Series B preferred stock and 260,000 shares
of series C preferred stock. Any preferred stock issued by Quest's board of
directors may, and in certain cases, do contain rights and preferences adverse
to the voting power and other rights of the holders of common stock.

                         Cautionary Statement Concerning
                           Forward-Looking Information

         This annual report and the documents to which Quest refers you and
incorporate into this annual report by reference contain forward-looking
statements. In addition, from time to time, Quest, or its representatives, may
make forward-looking statements orally or in writing. These are statements that
relate to future periods and include statements regarding Quest's future
strategic, operational and financial plans, potential acquisitions, anticipated
or projected revenues, expenses and operational growth, markets and potential
customers for Quest's products and services, plans related to sales strategies
and efforts, the anticipated benefits of Quest's relationships with strategic
partners, growth of its competition, its ability to compete, the adequacy of its
current facilities and its ability to obtain additional space, use of future
earnings, and the feature, benefits and performance of its current and future
products and services.

         You can identify forward-looking statements by those that are not
historical in nature, particularly those that use terminology such as "may,"
"will," "should," "expects," "anticipates," "contemplates," "estimates,"
"believes," "plans," "projected," "predicts," "potential," "seek" or "continue"
or the negative of these or similar terms. In evaluating these forward-looking
statements, you should consider various factors. These factors may cause Quest's
actual results to differ materially from any forward-looking statement. Quest
cautions you not to place undue reliance on these forward-looking statements.

         Quest bases these forward-looking statements on its expectations and
projections about future events, which it derives from the information currently
available to it. Such forward-looking statements relate to future events or
future performance. Forward-looking statements are only predictions. The
forward-looking events discussed in this annual report, the documents to which
Quest refers you and other statements made from time to time by Quest or its
representatives, may not occur, and actual events and results may differ
materially and are subject to risks, uncertainties and assumptions about Quest.
For these statements, Quest claims the protection of the "bespeaks caution"
doctrine. The forward-looking statements speak only as of the date hereof, and
Quest expressly disclaims any obligation to publicly release the results of any
revisions to these forward-looking statements to reflect events or circumstances
after the date of this filing.


                                       19
<PAGE>

Item 2.  PROPERTIES

PROPERTIES

         Quest's executive offices are located in Paterson, New Jersey and
consist of approximately 1,000 square feet of leased space. Quest leases this
space at the rate of $500 per month from a related party corporation.

         Gwenco leases over 700 acres of coal mines in Pike County, Kentucky,
with approximately 12,999,000 tons of coal in place in six seams. Gwenco is
required to make annual minimum lease payments of approximately $55,000 per
year.

         All of Quest's current facilities are adequate for its current
operations. Quest anticipates that additional facilities will be leased or
purchased as needed and that sufficient facilities for its needs are readily
available.

Item 3.  LEGAL PROCEEDINGS

Litigation

         Gwenco, Inc. Chapter 11 Reorganization. On March 2, 2007, our wholly
owned subsidiary, Gwenco, Inc., filed a voluntary petition for reorganization
under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy
Court for the Eastern District of Kentucky. Management felt this was a necessary
step to further our financial restructuring initiative and to protect Gwenco's
assets from claims, debts, judgments, foreclosures, and forfeitures of those
creditors and stakeholders with whom both Quest and Gwenco were unable to
negotiate restructured agreements. We are currently overseeing Gwenco's
operations as a debtor in possession, subject to court approval of matters
outside the ordinary course of business. We are currently seeking court approval
for debtor in possession financing from holders of Gwenco's existing debt
obligations in order to fund operating expenses. We intend to continue our
mining operations at Pond Creek Mine at Slater's Branch while this matter is
completed. Under Chapter 11, claims against Gwenco in existence prior to the
filing of the petitions for reorganization relief under the federal bankruptcy
laws are stayed while Gwenco is in bankruptcy.

         In or about May, 2004, National City Bank of Kentucky commenced an
action in Boyd County Court, Kentucky against Quest's indirect wholly-owned
subsidiary, Gwenco, Inc., and Albert Anderson for breach of various promissory
notes issued by Gwenco. Duke Energy Merchants and First Sentry Bank were joined
in the action. National City Bank and Duke Energy are collectively seeking
approximately $1,100,000 in principal as well as interests, fees, and costs.
National City Bank and Duke Energy have been granted summary judgment in this
action. National City Bank has obtained judgment in that action in the amount of
approximately $353,000.

         In that action, Anderson had filed a third-party complaint against
Quest (Nevada) and Taylor Mining, two of Quest's subsidiaries, for breach of
contract, fraud in the inducement, breach of the covenant of good faith and fair
dealing, unjust enrichment, conversion, and breach of fiduciary duties. On July
27, 2006, Quest settled the third party complaint with Anderson. As part of the
settlement, Gwenco received mining permit renewal and transfer documentation
which Gwenco is required to obtain in order to recommence mining operations at
its Pond Creek mine at Slater's Branch, Kentucky. Further, Anderson agreed to
provide all reasonable cooperation in recommencing mining operations at the
Slater's Branch mine. The parties also agreed to terminate all remaining rights,
duties, and obligations under the original stock purchase agreement entered into
in connection with the acquisition of Gwenco by Quest. Quest made a one-time
cash payment of $75,000 and issued 3,500,000 shares of common stock, subject to
a lock-up/leak out agreement, to Anderson, upon conversion of his Series B
Preferred Stock, the terms of which were amended under the settlement agreement.
Quest also granted Anderson a sliding scale royalty on coal sales. The parties
mutually dismissed their respective counter-claims against each other in the
civil action pending in Boyd County Court, Kentucky.

         In March, 2006, National City Bank commenced an action commenced an
action in Pike County Court, Kentucky against Quest, Gwenco, and Quest Energy,
seeking to be adjudged a lien on certain real and personal property of Gwenco
pursuant to the aforementioned judgment and that said real and personal property
be sold to satisfy the aforesaid lien, and that the liens of National City Bank
attach to the proceeds of the sale. In July, 2006, National City Bank of
Kentucky sold its right, title, and interest in and to the various judgments,
judgment liens, security interests, and lines of credit to a third party
investor. The third party investor has agreed to forbear on further collection,
enforcement, and foreclosure with respect to this indebtedness, in exchange for
which Gwenco agreed to grant the investor a royalty on gross profits of Gwenco.

                                       20
<PAGE>

This foreclosure action was stayed against Gwenco as a result of Gwenco's
Chapter 11 filing.

         On or about August 25, 2004, Valley Personnel Services, Inc. commenced
an action in the Circuit Court of Mingo County, West Virginia against Quest's
indirect wholly-owned subsidiaries, D&D Contracting, Inc. and Quest Energy, Ltd.
for damages in the amount of approximately $150,000, plus pre and post judgment
interest as provided by law, costs, and fees. This action was stayed against
Gwenco as a result of Gwenco's Chapter 11 filing.

         The Federal Insurance Company has notified Quest Energy that is seeking
to obtain subrogation of monies it has paid to Community Trust Bank and
repayment of deductibles by the bank as a part of an alleged criminal scheme and
conspiracy by former employees of the bank and other individuals. The Federal
Insurance Company has alleged that former employees or associates of Quest
Energy were primarily involved in the alleged scheme, that Quest Energy is
accordingly responsible for the actions of these former employees and
associates, and that Quest Energy obtained a substantial material benefit as a
result of this alleged scheme. Quest Energy denies that it had any involvement
with or responsibility for any of the actions alleged by the Federal Insurance
Company, and it further denies that it has benefited from any such alleged
scheme. Further, Quest Energy contends that the negligent actions and inactions
by Community Trust Bank caused severe damage and loss to Quest Energy. The
Federal Insurance Company has commenced an action against Quest Energy and
others in Pike County Court, Kentucky with respect to these allegations. Quest
Energy believes that it has several meritorious defenses and counterclaims to
this action and intends to defend it vigorously.

         Mountain Edge Personnel has commenced an action in the Circuit Court of
Mingo County, West Virginia against Quest's now-dissolved indirect wholly-owned
subsidiary, J. Taylor Mining, for damages in the amount of approximately
$115,000, plus pre and post judgment interest as provided by law, costs, and
fees. Quest is in the process of negotiating a settlement of this action.

         An action has been commenced in the Circuit Court of Pike County,
Kentucky against Quest and its indirect, wholly-owned subsidiaries, Gwenco,
Inc., Quest Energy, Ltd., and J. Taylor Mining, for unspecified damages
resulting from personal injuries suffered while working for Mountain Edge
Personnel, an employee leasing agency who leased employees to Quest's
subsidiaries. Quest Energy is actively defending the action. This action was
stayed against Gwenco as a result of Gwenco's Chapter 11 filing.

         BHP, Inc. commenced an action in the Circuit Court of Pike County,
Kentucky against Quest's indirect, wholly-owned subsidiary, Quest Energy, Ltd.,
for damages resulting an alleged failure to pay for certain equipment leases in
the amount of approximately $225,000, plus pre and post judgment interest as
provided by law, costs, and fees. Quest Energy believes that it has several
meritorious defenses and counterclaims to this action and is defending it
vigorously.

         Christopher Younger and Sharon Preece commenced an action in the
Circuit Court of Pike County against Quest's indirect, wholly-owned subsidiary,
Gwenco, Inc., for damages resulting from an alleged failure to pay past
royalties and other amounts allegedly due. The plaintiffs have obtained a
default judgment in this action in the amount of approximately $600,000, from
which Gwenco has taken appeal. The plaintiffs then amended their complaint,
seeking to be adjudged a lien on certain real and personal property of Gwenco
pursuant to the aforementioned judgment and that said real and personal property
be sold to satisfy the aforesaid lien, and that the liens of the plaintiffs
attach to the proceeds of the sale. This foreclosure action was stayed against
Gwenco as a result of Gwenco's Chapter 11 filing.

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

         None.

                                       21
<PAGE>

                                     PART II

Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Quest's common stock has traded on the OTC Bulletin Board under the
symbol "QMMG" since April 13, 2004. Before that date, its common stock is traded
on the OTC Bulletin Board under the symbol "TLLM," and before that, it traded on
the OTC Bulletin Board under the symbol "TILL." The following table shows the
high and low bid prices for Quest's common stock for each quarter since January
1, 2005 as reported by the OTC Bulletin Board. All share prices have been
adjusted to provide for the one for 100 reverse split which was effected in
January, 2004 (i.e. they have been increased 100 times to compare them to
current prices). Quest considers its stock to be "thinly traded" and any
reported sale prices may not be a true market-based valuation of its stock. Some
of the bid quotations from the OTC Bulletin Board set forth below may reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions.

2006 (OTC Bulletin Board)                    High Bid         Low Bid
First quarter                                   0.181           0.079
Second quarter                                  0.152           0.030
Third quarter                                   0.040           0.016
Fourth quarter                                  0.019           0.004

2005 (OTC Bulletin Board)                    High Bid         Low Bid
First quarter                                    2.00            0.70
Second quarter                                   0.99            0.13
Third quarter                                    0.28            0.03
Fourth quarter                                   0.38            0.07

         As of April 16, 2007, there were approximately 517 record holders of
Quest's common stock.

         Quest has not paid any cash dividends since its inception and does not
contemplate paying dividends in the foreseeable future. It is anticipated that
earnings, if any, will be retained for the operation of its business.

         Shares eligible for future sale could depress the price of Quest's
common stock, thus lowering the value of your investment. Sales of substantial
amounts of Quest's common stock, or the perception that such sales could occur,
could adversely affect prevailing market prices for shares of Quest's common
stock.

         Quest's revenues and operating results may fluctuate significantly from
quarter to quarter, which can lead to significant volatility in the price and
volume of its stock. In addition, stock markets have experienced extreme price
and volume volatility in recent years. This volatility has had a substantial
effect on the market prices of securities of many smaller public companies for
reasons unrelated or disproportionate to the operating performance of the
specific companies. These broad market fluctuations may adversely affect the
market price of Quest's common stock.

Recent Sales of Unregistered Securities

         We will file an amendment to this annual report to provide recent sales
of unregistered securities as required by Item 701 of Regulation S-B.


                                       22
<PAGE>

Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

         We will file an amendment to this annual report to provide management's
discussion and analysis or plan of operation as required by Item 303 of
Regulation S-B.



                                       23
<PAGE>

Item 7.  FINANCIAL STATEMENTS

         We will file an amendment to this annual report to provide the
financial statements as required by Item 310 of Regulation S-B.

Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

         None.

Item 8A. CONTROLS AND PROCEDURES.

         We will file an amendment to this annual report to provide the
disclosures relating to controls and procedures as required by Items 307 and 308
of Regulation S-B.



                                       24
<PAGE>

                                    PART III

Item 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         The information under the captions "Election of Directors" and
"Management--Executive Officers and Directors" in the proxy statement for our
2007 annual meeting is incorporated herein by reference.

         The information under the caption "Section 16(a) Beneficial Ownership
Reporting Compliance" in the proxy statement for our 2007 annual meeting is
incorporated herein by reference.

Item 10. EXECUTIVE COMPENSATION

         The information under the caption "Executive Compensation" in the proxy
statement for our 2007 annual meeting is incorporated herein by reference.

Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information under the caption "Security Ownership of Certain
Beneficial Owners and Management" in the proxy statement for our 2007 annual
meeting is incorporated herein by reference.

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information under the caption "Certain Relationships and Related
Transactions" in the proxy statement for our 2007 annual meeting is incorporated
herein by reference.

Item 13. EXHIBITS

Exhibit No.       Description
-----------       -----------
10.1              Securities Purchase Agreement and Plan of Reorganization dated
                  February 9, 2004 (1)

10.2              Securities Purchase Agreement and Plan of Reorganization by
                  and among Tillman International, Inc., Quest Minerals &
                  Mining, Ltd., Gwenco, Inc., and the stockholders of Gwenco,
                  Inc., dated as of April 28, 2004.(2)

10.3              Lease Agreement between Monday Coal, LLC and Quest Marine
                  Terminal, Ltd. (3)

10.4              William R. Wheeler Employment Agreement (4)

10.5              Eugene Chiaramonte, Jr. Employment Agreement (4)

21.1              Subsidiaries of Quest Minerals and Mining Corp. (5)

31.1              Certification of Eugene Chiaramonte, Jr. pursuant to Rule
                  13a-14(a) (5)

32.1              Certification of Eugene Chiaramonte, Jr. pursuant to 18 U.S.C
                  Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002 (5)

__________________

(1)  Filed as an exhibit to a Current Report on Form 8-K filed on February 24,
     2004, incorporated herein by reference.

                                       25
<PAGE>

(2)  Filed as an exhibit to a Current Report on Form 8-K filed on May 6, 2004,
     incorporated herein by reference.

(3)  Filed as an exhibit to a Current Report on Form 8-K filed on November 22,
     2004, incorporated herein by reference.

(4)  Filed as an exhibit to the Quarterly Report on Form 10-QSB for the quarter
     ending September 30, 2005, incorporated herein by reference.

(5)  To be filed by amendment.

___________________


Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

         The information under the caption "Accountants Fees and Services" in
the proxy statement for our 2007 annual meeting is incorporated herein by
reference.






                                       26
<PAGE>

                                   SIGNATURES

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


                                       QUEST MINERAL AND MINING CORP.


                                       By: /s/ EUGENE CHIARAMONTE, JR.
                                           ------------------------------------
                                           Eugene Chiaramonte, Jr.
                                           President
                                           (Principal Executive Officer and
                                           Principal Accounting Officer)



         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the registrant and in the capacities indicated.


Signatures                                Title                        Date
-------------------------------   ---------------------------     --------------

/s/ EUGENE CHIARAMONTE, JR.       President and sole Director     April 17, 2007
------------------------------
Eugene Chiaramonte, Jr.



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