UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549





FORM 10-K/A

Amendment No. 2







| ̈ | Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2007

or



| ̈ | Transition report pursuant to section 13 or 15(d) of the Securities Exchange act of 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission
File No. 0-51669





STERLING MINING COMPANY







|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Idaho                                                          |  | 82-0300575                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)

609 Bank Street, Wallace, ID 83873

(Address of principal executive offices and Zip Code)

(208) 556-0227

(Registrants telephone number, including area code)

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

Securities
registered under Section 12(g) of the Act: Common Stock, Par Value $0.05





Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes   ̈     No   x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes   ̈    No  x

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to the this Form 10-K.   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                                              |  |                             
|--------------------------------------------- |  | ----------------------------
|Large accelerated filer   ̈                    |  | Accelerated filer  x        
|Non-accelerated filer   ̈                      |  | Smaller reporting company   ̈
|(Do not check if a smaller reporting company) |  |                             

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).     Yes   ̈    No  x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrants most recently completed second fiscal quarter: $108.3 million.

The number of shares outstanding of the
registrants class of $0.05 par value common stock as of March 25, 2008 was 38,698,828.

DOCUMENTS INCORPORATED BY REFERENCE:
None









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Explanatory Note  This Amendment No. 2 to the Annual Report On From 10-K of Sterling Mining Company for the year ended December 31, 2007, is
filed to complete and correct information presented in the first amendment to the report filed April 2, 2008, (Amendment No. 1) under Part III Item 11. Executive Compensation and Item 12. Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder Matters.

All of Item 11. Executive Compensation, beginning on page 48 of Amendment
No. 1 is superseded and replaced by new Item 11 included in this Amendment No. 2.

All of Item 12. Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder Matters, beginning on page 56 of Amendment No. 1 is superseded and replaced by new Item 12 included in this Amendment No. 2.



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|ITEM 11. | EXECUTIVE COMPENSATION
|-------- | ----------------------

Compensation Discussion and Analysis

General Philosophy

At the end of September 2006,
Sterling Minings Board of Directors adopted a Compensation Committee Charter and established the Compensation Committee through the appointment of independent, non-employee directors. The Committee is responsible for establishing and
administering Sterling Minings executive and director compensation programs and arrangements.

Executive Compensation

The Committees compensation objective is designed to attract and retain the best available talent while efficiently utilizing available resources. In circumstances
where Sterling Mining has nominal revenues and is focused on bringing the Sunshine Mine back into production and applying its capital to that purpose, the challenge for the Committee is stretching limited capital resources to effectively seek out
and retain executives with the education, skills, and experience necessary for restarting and running a major underground mining operation in the United States. The Committee is learning to meet that challenge by developing packages consisting of
different forms of compensation that strike a balance between limiting the amounts of cash paid out for compensation and fostering commitment to Sterling Mining through the upside potential of deferred compensation paid in the form of equity
ownership or participation. The Committee seeks to compensate employees with a complete package competitive with comparable employers in the mining industry while maintaining internal and external equality and aligning senior managements
compensation with the long-term interests of shareholders. The process the Committee is developing for establishing compensation consists of targeting overall compensation for each executive officer and allocating that compensation among base salary
and incentive compensation. The Committee believes that a significant portion of total compensation should be earned through incentive compensation.

Allocation among Components: Under the Committees compensation structure, the mix of base salary, cash bonus, and equity compensation varies depending upon the employment level. In allocating compensation among these elements,
the Committee believes that the compensation of its senior-most levels of management, such as the Chief Executive Officer (CEO), the levels of management having the greatest ability to influence Sterling Minings performance, should
be significantly performance-based. However, the Committee recognizes that certain critical control positions, such as the Chief Financial Officer (CFO), should receive a greater portion of their total compensation in the form of base
salary versus incentive to assure sound judgment in decisions that will not be influenced by incentive payouts. At lower levels of management and staff, the Committee designs incentive compensation, as needed, which includes both cash and equity
awards, to reward the achievement of specific performance goals within areas under control of the relevant employees, although company-wide performance is also a factor.

In making compensation allocations, the Committee will rely in part upon an evaluation of aggressive exploration companies. The allocation made by the Committee is consistent with the results in their evaluation,
which showed the peer group providing their executive management with targeted cash incentive opportunities.

Base Salaries: The Committee provides
its executive management with a level of assured cash compensation in the form of base salary that is competitive in the market, is based upon the experience level of the individual executive, is consistent with other companies with similar
performance characteristics, and promotes sound judgment in daily decision making. The Committee concluded that for 2007, the appropriate base salary for the CEO is $156,000 and the appropriate base salary for the CFO is $180,000. These
salaries were determined based upon the evaluation and analysis performed by the Committee relative to targeted overall compensation.



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Incentive Bonuses: The Committee will award incentive cash bonuses based upon performance objectives.For
2007, the performance goals achieved by Sterling Minings CEO and CFO were viewed as being instrumental in obtaining financing for advancing rehabilitation of the Sunshine Mine.

Equity Compensation:The primary form of equity compensation consists of stock options. Beginning in 2006, the accounting treatment for stock options changed as a result of Statement of Financial Accounting
Standards No. 123(R), making the accounting treatment of stock options somewhat less attractive. Nevertheless, it should be expected the Committee will continue to use options as a compensation tool and will evaluate opportunities to use other
forms of stock and equity awards in the future.

Executive Agreements: The Committee believes that employment agreements, severance and change of
control agreements are appropriate for its senior management and top executives.

Retirement Plans:Sterling Mining has no defined pension plan.
Sterling Mining does maintain a 401(k) Safe Harbor Plan in which Sterling Mining matches employee contributions up to 100% of the employees contribution, with a maximum equal to three percent of eligible compensation, and 50% of
the next two percent of eligible compensation.

Perquisites and Other Benefits: The Committee annually reviews the perquisites that executive
management receives. The current available perquisite for executive management is the lease payment for vehicles. The Committee recognizes this automobile allowance pursuant to the employment agreements of the CEO and CFO.

Board Process:The Compensation Committee of the Board of Directors approves all compensation awards to executive officers. The Compensation Committee will review
the performance and compensation of the executive officers, and following discussions with those individuals and the members of the Board of Directors and, where it deems appropriate, other advisors, will establish their compensation levels. The
Chair of the Committee reports to the full board the actions of the Committee. With respect to employee equity compensation awards, the Committee will recommend awards to the full Board of Directors for discussion and approval.

Director Compensation

Director compensation is evaluated and
recommended by the Committee and approved by the full Board of Directors. Sterling Mining does pay directors who are also employees for their service as directors, so all directors are compensated similarly for their service as directors. Currently
Sterling Mining does not provide for incentive cash bonuses, defined pension benefits, deferred compensation, medical or dental benefits, or perquisites for its non-employee directors.

Summary Compensation Table

The following table sets forth all annual and long term compensation for services in all
capacities to the Company and its subsidiaries for the three most recently completed financial years in respect of each Named Executive Officer and former Named Executive Officer as at December 31, 2007.

Named Executive Officer for the purposes of this proxy statement includes (i) each of the Chief Executive Officer and the Chief Financial Officer of the
Company, despite the amount of compensation of that individual, (ii) each of the Companys three most highly compensated executive officers, other than the Chief Executive Officer and the Chief Financial Officer, who were serving as
executive officers at the end of the most recently completed financial year and whose total salary and bonus exceeds $100,000, and (iii) any additional individual for whom disclosure would have been provided under (ii) but for the fact
that the individual was not serving as an executive officer of the Company at the end of the most recently completed financial year end of the Company. (NEOs)



|                              |  |      |  |        |         |       |   |                |  |                 |        |       |   |         |  |   |        
|----------------------------- |  | ---- |  | ------ | ------- | ----- | - | -------------- |  | --------------- | ------ | ----- | - | ------- |  | - | -------
|Name and Principal Position   |  | Year |  | Salary |         | Bonus |   | StockAwards(1) |  | OptionAwards(2) |        | Total
|Raymond DeMotte, CEO          |  | 2007 |  | $      | 138,667 |       | $ | 62,500         |  | $               | 39,401 |       | $ | 126,131 |  | $ | 366,699
|James Meek, CFO               |  | 2007 |  | $      | 187,500 |       | $ | 55,000         |  | $               | 35,819 |       | $ | 94,598  |  | $ | 372,957
|Kevin Shiell, Executive VP    |  | 2007 |  | $      | 20,000  |       | $ | 25,451         |  | $               | 42,047 |       | $ | 47,298  |  | $ | 134,886
|Michael Mooney, Secretary (3) |  | 2007 |  | $      | 95,000  |       |   | 25,000         |  |                 | 36,232 |       | $ | 47,298  |  | $ | 203,530
|Raymond DeMotte, CEO          |  | 2006 |  | $      | 98,333  |       | $ | 103,727        |  | $               |       |       | $ |        |  | $ | 202,060
|James Meek, CFO               |  | 2006 |  | $      | 120,000 |       | $ | 25,556         |  | $               |       |       | $ |        |  | $ | 145,556
|Raymond DeMotte, CEO          |  | 2005 |  | $      | 58,000  |       | $ | 2,090          |  | $               |       |       | $ | 140,789 |  | $ | 200,879
|James Meek, CFO               |  | 2005 |  | $      | 35,000  |       | $ | 25,607         |  | $               |       |       | $ | 52,550  |  | $ | 113,157



|(1) | Stock awards valued according to FAS 123R using a Black-Scholes valuation method. Shares granted to officers in 2007 are as follows; Ray DeMotte, 11,000; Kevin Shiell, 11,000; James
Meek, 10,000; Michael Mooney, 10,000.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Options to officers for service years 2006 and 2007 were awarded in 2007 as follows: Ray DeMotte, 250,000; Kevin Shiell, 100,000; James Meek, 200,000; and Michael Mooney, 100,000.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Mr. Mooney left his employment and all positions with Sterling Mining in December 2007.
|--- | ---------------------------------------------------------------------------------------



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Discussion of Summary Compensation Table

Raymond K. De Motte Employment Agreement

Sterling Mining entered into an employment agreement with Raymond K. De
Motte, Sterling Minings President and Chairman of the Board, on January 1, 2004. The agreement has a ten-year term. The annual salary under the agreement is presently $156,000, and may be adjusted at the discretion of the Board of
Directors. The agreement also provides for standard health insurance and vacation benefits. The agreement provides for payment of a vehicle allowance that Mr. De Motte has waived to date, but which may be paid in the future upon Mr. De
Mottes request and approval of the Board. Mr. De Motte is entitled to receive each year stock options on 100,000 shares of Sterling Mining common stock under his employment agreement, which was amended to 50,000 Shares for 2006 and 2007.
The agreement also provides for a single lump-sum payment of $600,000, net of taxes, in the event Mr. De Mottes employment is terminated by Sterling Mining for reasons other than cause, or if Mr. De Motte terminates his employment
for good reason (as defined in the agreement). In addition, pursuant to his employment agreement Mr. De Motte is entitled to put all of his Sterling Mining stock to Sterling Mining for an aggregate amount of $200,000 or the aggregate market
price of such stock, whichever is greater. In the event Mr. De Mottes employment is terminated for cause, or if he resigns for reasons other than a good reason, then Mr. De Motte is entitled to a single lump-sum payment, net of
taxes, of $100,000.

James N. Meek Employment Agreement

During 2005, Sterling Mining entered into an Employment Agreement with James N. Meek, who was elected and appointed Vice-President and Chief Financial Officer for Sterling Mining. The agreement is for a term of three years, expiring on
September 1, 2008, and the current annual salary is $180,000, and may be adjusted at the discretion of the Board of Directors. The agreement also provides for standard health insurance and vacation benefits. The agreement provides for payment
of a vehicle allowance that Mr. Meek has waived to date, but which may be paid in the future upon Mr. Meeks request and approval of the Board. As provided in his employment agreement, Mr. Meek earned a bonus of $25,000 in 2005
when Sterling Mining filed its registration statement on Form 10 with the Securities and Exchange Commission and earned an additional bonus of $25,000 in 2006 when quotations for the common stock of Sterling Mining were approved for publication on
the OTC Bulletin Board, but payment of these bonuses was not made until 2007 when the Board determined there was sufficient capital to



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make the expenditures. Mr. Meeks agreement further provides that a bonus of $20,000 will be paid when Sterling Mining files an application for
listing on the American Stock Exchange and a bonus of $50,000 will be paid when Sterling Mining is approved for trading on the American Stock Exchange. Mr. Meek is entitled to receive each year stock options of 100,000 shares of Sterling Mining
common stock under his employment agreement, which was amended to 50,000 for 2006 and 2007. Discretionary performance bonuses may be awarded as determined by the Board.

Grants of Plan Based Awards

The following table sets forth certain information with respect to
grants of plan-based awards for the year ended December 31, 2007 with respect to the named executive officers. There were no future payouts under non-equity incentive plans and no future payouts under equity incentive plans during 2007.



|                                        |  |           |  |                                                           |  |                                                                     |  |                                      |      |                                                  |     |               
|--------------------------------------- |  | --------- |  | --------------------------------------------------------- |  | ------------------------------------------------------------------- |  | ------------------------------------ | ---- | ------------------------------------------------ | --- | --------------
|Name                                    |  | GrantDate |  | All OtherStock Awards:Number ofShares ofStock or Units(#) |  | All OtherOption Awards:Number ofSecuritiesUnderlyingOptions (#) (1) |  | Exercise Priceof OptionAwards ($/Sh) |      | Grant DateFair Valueof Stockand OptionAwards (2)
|Raymond K. De Motte - CEO & President   |  | 12/31/07  |  | 11,000                                                    |  | 250,000                                                             |  | $                                    | 4.00 |                                                  | $ $ | 39,401 126,131
|James N. Meek - Chief Financial Officer |  | 12/31/07  |  | 10,000                                                    |  | 200,000                                                             |  | $                                    | 4.00 |                                                  | $ $ | 35,819 94,598 
|Kevin Shiell - Executive Vice President |  | 12/31/07  |  | 11,000                                                    |  | 100,000                                                             |  | $                                    | 4.00 |                                                  | $ $ | 42,047 47,298 
|Michael Mooney - Secretary (3)          |  | 12/31/07  |  | 10,000                                                    |  | 100,000                                                             |  | $                                    | 4.00 |                                                  | $ $ | 36,232 47,298 



|(1) | With respect to the stock options of Ray De Motte: 150,000 vest evenly in 50% increments over a period of two years; and, 100,000 options vest evenly in 25 percent increments over a
four-year period. With respect to the stock options for James N. Meek: 100,000 vest evenly in 50% increments over a period of two years and 100,000 options vest evenly in 25 percent increments over a four-year period. With respect to the stock
options for Kevin Shiell: 50,000 vest evenly in 50% increments over a period of two years and 50,000 options vest evenly in 25 percent increments over a four-year period. With respect to the stock options for Michael Mooney: 50,000 vest evenly in
50% increments over a period of two years and 50,000 options vest evenly in 25 percent increments over a four-year period. The options issued to the persons listed expire three years after vest date.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Stock and option awards were valued according to FAS 123R using a Black-Scholes valuation method.
|--- | -------------------------------------------------------------------------------------------------



|(3) | Mr. Mooney left his employment and all positions with Sterling Mining in December 2007.
|--- | ---------------------------------------------------------------------------------------



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Outstanding Equity Awards

The following table sets forth certain information with respect to outstanding equity awards at December 31, 2007 with respect to the named executive officers.



|                                        |                                                    |               |                                                    |         |                        |   |                      |  |         
|--------------------------------------- | -------------------------------------------------- | ------------- | -------------------------------------------------- | ------- | ---------------------- | - | -------------------- |  | --------
|Name                                    |                                                    | Option Awards
|                                        | Number ofSecuritiesUnderlyingUnexercisedOptions(#) |               | Number ofSecuritiesUnderlyingUnexercisedOptions(#) |         | OptionExercisePrice($) |   | OptionExpirationDate
|                                        | Exercisable                                        |               | Unexercisable                                      |         |                       
|Raymond K. De Motte - CEO & President   |                                                    | 125,000       |                                                    | 125,000 |                        | $ | 4.00                 |  | 12/31/13
|James N. Meek - Chief Financial Officer |                                                    | 75,000        |                                                    | 125,000 |                        | $ | 4.00                 |  | 12/31/13
|Kevin Shiell - Executive vice President |                                                    | 37,500        |                                                    | 62,500  |                        | $ | 4.00                 |  | 12/31/13
|Michael Mooney - Secretary (1)          |                                                    | 37,500        |                                                    | 62,500  |                        | $ | 4.00                 |  | 12/31/13



|(1) | Mr. Mooney left his employment and all positions with Sterling Mining in December 2007.
|--- | ---------------------------------------------------------------------------------------

Option Exercises and Stock Vested

There were no stock option exercises or restricted stock vesting
occurrences in 2007 with respect to any of the Named Executive Officers.

Pension Plans and Non-Qualified Deferred Compensation

Our Named Executive Officers fo not participate in any pension plan, retirement benefit plan or non-qualified deferred compensation plan instituted by the
Company.

Potential Payments Upon Termination or Change In Control

Raymond K. De Motte Employment Agreement

Under his employment agreement, Mr. De Motte is entitled to
receive a single lump-sum payment of $600,000, net of taxes, in the event his employment is terminated by Sterling Mining for reasons other than cause, or if Mr. De Motte terminates his employment for good reason as defined in the agreement,
which includes a change in control of Sterling Mining. In addition, pursuant to his employment agreement Mr. De Motte is entitled to put all of his Sterling Mining stock to Sterling Mining for an aggregate amount of $200,000 or the aggregate
market price of such stock, whichever is greater. Based on a market price of $3.47 at December 31, 2007, the amount that would have been paid for 172,686 shares of common stock owned by Mr. De Motte would be $599,220. In the event
Mr. De Mottes employment is terminated for cause, or if he resigns for reasons other than a good reason, then Mr. De Motte is entitled to a single lump-sum payment, net of taxes, of $100,000. In the event termination is a result of
disability, Mr. De Motte would receive full salary for three months, one-half salary for an additional three months, and payment of health insurance premiums for 12 months. Based on his current level of compensation, the aggregate payments on
termination for disability would be $47,808.

James N. Meek Employment Agreement

Under his employment agreement, if Mr. Meek is terminated without cause or if there is a change in control of Sterling Mining, he is entitled to
receive 36 months of salary, any stock options granted will vest immediately, he will receive a payment equal to 100% or the greater of any target bonus or bonus actually earned during the preceding 24-month period, and he will receive payment of
health insurance premiums for a period of two years. On a change in control Mr. Meek will also receive an additional bonus equal to 40% of his salary and receive additional equity equivalent to the type an amount of equity held prior to the
change in control. Based on his current compensation arrangement, he would receive $841,953 if terminated without cause, and $913,953 plus 30,000 shares of common stock if there is a change in control. For the purpose of calculating such payments,
all Federal and State taxes and Federal excise taxes shall be grossed-up such that Mr. Meek receives the amount specified after all taxes have been paid.



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Compensation of Directors

Director compensation is evaluated and recommended by the Committee and approved by the full Board of Directors. Sterling Mining does pay directors who are also employees for their service as directors, so all
directors are compensated similarly for their service as directors. Currently Sterling Mining does not provide for incentive cash bonuses, defined pension benefits, deferred compensation, medical or dental benefits, or perquisites for its
non-employee directors.

In September 2006, the Board of Directors adopted a compensation plan for directors. Under the plan, each director
receives as an annual fee $16,000 paid monthly in cash. In addition, Directors are compensated at a rate of $75 per hour for additional director work outside of the preparation for and attendance of Board meetings.

The following table shows compensation paid or accrued for the last fiscal year to Sterling Minings directors.



|                            |  |      |  |                          |        |                |   |                 |  |                       |        |       |   |   |  |   |        
|--------------------------- |  | ---- |  | ------------------------ | ------ | -------------- | - | --------------- |  | --------------------- | ------ | ----- | - | - |  | - | -------
|Name and Principal Position |  | Year |  | FeesEarnedor Paidin Cash |        | StockAwards(1) |   | OptionAwards(2) |  | All OtherCompensation |        | Total
|Raymond DeMotte             |  | 2007 |  | $                        | 35,765 |                | $ | 34,080          |  | $                     | 10,533 |       | $ |  |  | $ | 80,378 
|Carol Stephan               |  | 2007 |  | $                        | 60,783 |                | $ | 44,670          |  | $                     | 22,075 |       | $ |  |  | $ | 127,528
|Kevin Shiell                |  | 2007 |  | $                        | 22,008 |                | $ | 34,080          |  | $                     | 10,533 |       | $ |  |  | $ | 66,621 
|David Waisman               |  | 2007 |  | $                        | 28,808 |                | $ | 44,670          |  | $                     | 22,075 |       | $ |  |  | $ | 95,553 
|Roger VanVoorhees           |  | 2007 |  | $                        | 36,392 |                | $ | 36,150          |  | $                     | 22,075 |       | $ |  |  | $ | 94,617 
|J. Kenney Berscht           |  | 2007 |  | $                        | 22,008 |                | $ | 19,110          |  | $                     | 35,866 |       | $ |  |  | $ | 76,984 



|(1) | Raymond DeMotte was awarded 8,000 shares of restricted stock valued at $4.26 per share, Carol Stephan was awarded 8,000 shares and 3,000 shares of restricted stock valued at $4.26
and $3.53 per share respectively, Kevin Shiell was awarded 8,000 shares of restricted stock valued at $4.26 per share, David Waisman was awarded 8,000 and 3,000 shares of restricted stock valued at $4.26 and $3.53 per share respectively, Roger
VanVoorhees was awarded 6,000 and 3,000 shares of restricted stock valued at $4.26 and $3.53 per share respectively, J. Kenney Berscht was awarded 2,000 and 3,000 shares of restricted stock valued at $4.26 and $3.53 per share respectively.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Raymond DeMotte was awarded 10,000 options, Carol Stephan was awarded 20,000 options, Kevin Shiell was awarded 10,000 options, David Waisman was awarded 20,000 options, Roger
VanVoorhees was awarded 20,000 options, and J. Kenney Berscht was awarded 20,000 options. All options were awarded on 6/15/2007 and expire on 12/31/09. The Black-Scholes method was used to value these options.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Compensation Committee Interlocks and Insider Participation

The
current members of the Compensation Committee formed in September 2006 are Carol Stephan, Roger A. Van Voorhees, and J. Kenney Berscht, and no other directors served on the Compensation Committee during 2006. No interlocking relationship exists
between our Compensation Committee and the board of directors or compensation committee of any other company.

Prior to September 2006, executive
compensation decisions were made by the entire Board. Raymond K. De Motte, a director and our President and Chief Executive Officer, and Kevin G. Shiell, a director and our Executive Vice President, participated in deliberations on executive
compensation prior to the formation of the Compensation Committee. Mr. De Motte is a director and Mr. Shiell is a director of Kimberly Gold Mines, Inc.



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|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|-------- | ----------------------------------------------------------------------------------------------

The following table sets forth, as of March 25, 2008, the number and percentage of the outstanding shares of common stock and warrants and options that, according to the information supplied to Sterling, were
beneficially owned by (i) each person who is currently a director, (ii) each executive officer, (iii) all current directors and executive officers as a group and (iv) each person who, to the knowledge of Sterling, is the
beneficial owner of more than five percent of the outstanding common stock. Except as otherwise indicated, the persons named in the table have sole voting and dispositive power with respect to all shares beneficially owned, subject to community
property laws where applicable.



|                                                    |  |                                                      |  |                                      |  |                 |   |     |  
|--------------------------------------------------- |  | ---------------------------------------------------- |  | ------------------------------------ |  | --------------- | - | --- | -
|Name and Address of Beneficial Owner                |  |                                                      |  | No. ofCommon SharesBeneficially Held |  | Percentof Class |  
|Raymond K. DeMotte                                  |  | 2201 N. Government Way; Coeur dAlene, ID 83814      |  |                                      |  | 432,686         |   | 1.1 | %
|Kevin G. Shiell                                     |  | 2201 N. Government Way; Coeur dAlene, ID 83814      |  |                                      |  | 119,617         |   | 0.3 | %
|Carol Stephan                                       |  | 2201 N. Government Way; Coeur dAlene, ID 83814      |  |                                      |  | 204,967         |   | 0.5 | %
|David J. Waisman                                    |  | 2201 N. Government Way; Coeur dAlene, ID 83814      |  |                                      |  | 39,000          |   | 0.1 | %
|Roger A. VanVoorhees                                |  | 2201 N. Government Way; Coeur dAlene, ID 83814      |  |                                      |  | 1,462,185       |   | 3.7 | %
|J. Kenney Berscht                                   |  | 2201 N. Government Way; Coeur dAlene, ID 83814      |  |                                      |  | 25,000          |   | 0.1 | %
|James N. Meek                                       |  | 2201 N. Government Way; Coeur dAlene, ID 83814      |  |                                      |  | 230,000         |   | 0.6 | %
|All executive officers and directors as a group (7) |  |                                                      |  | 2,513,455                            |  | 6.3             | %
|Goldman Sachs Group, Inc.                           |  | 150 King Street, Suite 1201 Toronto, Ontario, Canada |  |                                      |  | 3,152,105       |   | 8.0 | %
|Amalgamated Daries Charitable & Education Trust     |  | 40 Anzac Avenue Auckland, New Zealand                |  |                                      |  | 3,025,000       |   | 7.8 | %



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment No. 2 to its Annual report on Form 10-K for the period ended
December 31, 2007, to be signed on its behalf by the undersigned, thereunto duly authorized.



|             |  |  |  |                         |  |                   |  |                                                         
|------------ |  |  |  | ----------------------- |  | ----------------- |  | --------------------------------------------------------
|             |  |  |  | STERLING MINING COMPANY
|             |  |  | 
|June 3, 2008 |  |  |  | By:                     |  | /s/ James N. Meek
|             |  |  |  |                         |  |                   |  | James N. Meek Vice President and Chief Financial
Officer



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