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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 FORM 10-QSB

(Mark One)

[X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the quarterly period from 1-1-02 to 3-31-02

[   ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT.

For the transition period from ______________ to ______________

Commission file number 000-31025

METALINE CONTACT MINES

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(Exact name of small business issuer as specified in its charter)


|                                                         |  |                                  
|-------------------------------------------------------- |  | ---------------------------------
|Washington                                               |  | 91-0779945                       
|                                                         |  |                                  
|(State or jurisdiction of incorporation or
organization) |  | (IRS Employer Identification No.)

6599 Prichard Creek Road, Murray, ID 83874

---

(Address of principal executive offices)


208-682-2217

---

(Issuers telephone number


State the number of shares outstanding of each of the issuers classes of
common equity, as of the latest practical date: 14,064,300

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



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|                            |                                                                    |  |  |  |  |  |  | 
|--------------------------- | ------------------------------------------------------------------ |  |  |  |  |  |  | 
|                            | Item 2. Managements Discussion and Analysis or Plan of Operations
|PART II  OTHER INFORMATION
|                            | Item 1. Legal Proceedings                                         
|                            | Item 2. Changes in Securities                                     
|                            | Item 3. Defaults Upon Senior Securities                           
|                            | Item 4. Submission of Matters to a Vote of Security Holders       
|                            | Item 5. Other Information                                         
|                            | Item 6. Exhibits and Reports on Form 8-K                          
|SIGNATURES                 



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METALINE CONTACT MINES
 FINANCIAL STATEMENTS
March 31, 2002
 
 
 
 
 
 
 
 
 
 
 Williams & Webster, P.S.Certified Public AccountantsBank of America Financial Center
601 W. Riverside, Suite 1940
Spokane, WA 99201



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TABLE OF CONTENTS

|                                                            |  |     
|----------------------------------------------------------- |  | ----
|PART I - FINANCIAL INFORMATION                              |  | PAGE
|                                                            |  |     
|Item 1. Financial Statements                                |  | F-1 
|                                                           
|Item 2. Managements Analysis and Discussion                |  | 16  
|                                                           
|PART II  OTHER INFORMATION                                 |  |     
|                                                           
|Item 1. Legal Proceedings                                   |  | 17  
|                                                           
|Item 2. Changes in Securities                               |  | 17  
|                                                           
|Item 3. Defaults Upon Senior Securities                     |  | 17  
|                                                           
|Item 4. Submission of Matters to a Vote of Security Holders |  | 17  
|                                                           
|Item 5. Other Information                                   |  | 18  
|                                                           
|Item 6. Exhibits and Reports on Form 8-K                    |  | 18  
|                                                           
|SIGNATURES                                                  |  | 18  



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METALINE CONTACT MINES
 
TABLE OF CONTENTS

|                              |                                   |  |   |   | 
|----------------------------- | --------------------------------- |  | - | - | 
|                             
|ACCOUNTANTS REVIEW REPORT    |                                   |  | 1 |  
|                             
|FINANCIAL STATEMENTS          |                                   |  |   |  
|                             
|                              | Balance Sheets                    |  |   | 2 | 
|                              | Statements of Operations          |  |   | 3 | 
|                              | Statement of Stockholders Equity |  |   | 4 | 
|                              | Statements of Cash Flows          |  |   | 5 | 
|                             
|NOTES TO FINANCIAL STATEMENTS |                                   |  | 6 |  



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The Board of Directors
Metaline Contact Mines
Murray, Idaho

ACCOUNTANTS REVIEW REPORT

We have reviewed the accompanying balance sheet of Metaline Contact Mines as of
March 31, 2002, and the related statements of operations, stockholders equity,
and cash flows for the three months ended March 31, 2002 and 2001. All
information included in these financial statements is the representation of the
management of Metaline Contact Mines.

We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit in
accordance with auditing standards generally accepted in the United States of
America, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.

Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with accounting principles generally accepted in the United States
of America.

The financial statements for the year ended December 31, 2001 were audited by
us and we expressed an unqualified opinion on them in our report
dated February
14, 2002, but we have not performed any auditing procedures since that date.

Williams & Webster, P.S.Certified Public Accountants
Spokane, Washington

April 26, 2002



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METALINE CONTACT MINES
BALANCE SHEETS

|                                     |                                            |                                                                                                       |                            |         |             |         |              |         |          |         | 
|------------------------------------ | ------------------------------------------ | ----------------------------------------------------------------------------------------------------- | -------------------------- | ------- | ----------- | ------- | ------------ | ------- | -------- | ------- | 
|                                     |                                            |                                                                                                       |                            |         | March 31,   |         | December 31,
|                                     |                                            |                                                                                                       |                            |         | 2002        |         | 2001        
|                                     |                                            |                                                                                                       |                            |         | (Unaudited) |         |             
|                                     |                                            |                                                                                                       |                            |        
|ASSETS                               |                                            |                                                                                                       |                            |         |             |         |              |        
|                                    
|                                     | CURRENT ASSETS                             |                                                                                                       |                            |         |             |         |              |         |         
|                                     |                                            | Cash and cash equivalents                                                                             |                            | $       | 155,802     |         |              | $       | 183,354  |        
|                                     |                                            | Receivable from MLC                                                                                   |                            |         | 18,000      |         |              |         |         |        
|                                     |                                            |                                                                                                       |                            |         |             |         |              |        
|                                     |                                            |                                                                                                       | Total Current Assets       |         |             | 173,802 |              |         |          | 183,354 | 
|                                     |                                            |                                                                                                       |                            |         |             |         |              |        
|                                     | OTHER ASSETS                               |                                                                                                       |                            |         |             |         |              |         |         
|                                     |                                            | Receivables from related parties                                                                      |                            |         | 109,413     |         |              |         | 109,413  |        
|                                     |                                            | Accrued interest receivable                                                                           |                            |         | 9,575       |         |              |         | 7,660    |        
|                                     |                                            | Investment in LLC                                                                                     |                            |         | 36,079      |         |              |         | 36,188   |        
|                                     |                                            |                                                                                                       |                            |         |             |         |              |        
|                                     |                                            |                                                                                                       | Total Other Assets         |         |             | 155,067 |              |         |          | 153,261 | 
|                                     |                                            |                                                                                                       |                            |         |             |         |              |        
|                                     | TOTAL ASSETS                               |                                                                                                       | $                          | 328,869 |             |         | $            | 336,615 |         
|                                     |                                            |                                                                                                       |                            |         |             |         |              |        
|                                    
|LIABILITIES AND STOCKHOLDERS EQUITY |                                            |                                                                                                       |                            |         |             |         |              |        
|                                    
|                                     | CURRENT LIABILITIES                        |                                                                                                       |                            |         |             |         |              |         |         
|                                     |                                            | Accounts payable                                                                                      |                            | $       | 3,000       |         |              | $       |         |        
|                                     |                                            | Deferred royalty income                                                                               |                            |         | 3,000       |         |              |         | 3,000    |        
|                                     |                                            |                                                                                                       |                            |         |             |         |              |        
|                                     |                                            |                                                                                                       | Total Current Liabilities  |         |             | 6,000   |              |         |          | 3,000   | 
|                                     |                                            |                                                                                                       |                            |         |             |         |              |        
|                                     | COMMITMENTS AND CONTINGENCIES              |                                                                                                       |                            |        |             |         |              |        |         
|                                     |                                            |                                                                                                       |                            |         |             |         |              |        
|                                     | STOCKHOLDERS EQUITY                       |                                                                                                       |                            |         |             |         |              |         |         
|                                     |                                            | Common stock, $0.05 par value;
20,000,000 shares authorized,
14,064,300 shares issued and outstanding |                            |         | 703,222     |         |              |         | 703,222  |        
|                                     |                                            | Additional paid-in capital                                                                            |                            |         | 302,165     |         |              |         | 302,165  |        
|                                     |                                            | Stock options                                                                                         |                            |         | 17,907      |         |              |         | 17,907   |        
|                                     |                                            | Accumulated deficit                                                                                   |                            |         | (700,425    | )       |              |         | (689,679 | )      
|                                     |                                            |                                                                                                       |                            |         |             |         |              |        
|                                     |                                            |                                                                                                       | Total Stockholders Equity |         |             | 322,869 |              |         |          | 333,615 | 
|                                     |                                            |                                                                                                       |                            |         |             |         |              |        
|                                     | TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                       | $                          | 328,869 |             |         | $            | 336,615 |         
|                                     |                                            |                                                                                                       |                            |         |             |         |              |        

See accountants review report and accompanying notes.



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METALINE CONTACT MINES
STATEMENTS OF OPERATIONS

|                                                                        |                                |                                           |            |                    |        |             |            |        |        | 
|----------------------------------------------------------------------- | ------------------------------ | ----------------------------------------- | ---------- | ------------------ | ------ | ----------- | ---------- | ------ | ------ | 
|                                                                        |                                |                                           |            | Three Months Ended
|                                                                        |                                |                                           |            |                   
|                                                                        |                                |                                           |            | March 31,          |        | March 31,  
|                                                                        |                                |                                           |            | 2002               |        | 2001       
|                                                                        |                                |                                           |            | (Unaudited)        |        | (Unaudited)
|                                                                        |                                |                                           |            |                    |        |            
|REVENUES                                                                |                                |                                           |            |                    |        |             |            |       
|                                                                        | Royalty income                 |                                           | $          | 3,000              |        |             | $          | 3,000  |       
|                                                                        |                                |                                           |            |                    |        |             |            |       
|GENERAL AND ADMINISTRATIVE EXPENSES                                     |                                |                                           |            |                    |        |             |            |       
|                                                                        | Consulting and management fees |                                           |            | 9,000              |        |             |            | 30,000 |       
|                                                                        | Professional fees              |                                           |            | 5,229              |        |             |            | 8,396  |       
|                                                                        | Transfer agent fees            |                                           |            | 367                |        |             |            | 237    |       
|                                                                        | Taxes, licenses, and fees      |                                           |            | 389                |        |             |            |       |       
|                                                                        | Office supplies and expenses   |                                           |            | 1,035              |        |             |            | 1,674  |       
|                                                                        |                                |                                           |            |                    |        |             |            |       
|                                                                        |                                | TOTAL GENERAL AND ADMINISTRATIVE EXPENSES |            |                    | 16,020 |             |            |        | 40,307 | 
|                                                                        |                                |                                           |            |                    |        |             |            |       
|OPERATING LOSS                                                          |                                |                                           | (13,020    | )                  |        |             | (37,307    | )     
|                                                                        |                                |                                           |            |                    |        |             |            |       
|OTHER INCOME                                                            |                                |                                           |            |                    |        |             |            |       
|                                                                        | Dividend income                |                                           |            | 468                |        |             |            | 3,287  |       
|                                                                        | Interest income                |                                           |            | 1,915              |        |             |            |       |       
|                                                                        | Miscellaneous income           |                                           |            |                   |        |             |            | 300    |       
|                                                                        | Loss from investment in LLC    |                                           |            | (109               | )      |             |            | (105   | )     
|                                                                        |                                |                                           |            |                    |        |             |            |       
|                                                                        |                                | TOTAL OTHER INCOME                        |            |                    | 2,274  |             |            |        | 3,482  | 
|                                                                        |                                |                                           |            |                    |        |             |            |       
|LOSS BEFORE TAXES                                                       |                                |                                           | (10,746    | )                  |        |             | (33,825    | )     
|INCOME TAX EXPENSE                                                      |                                |                                           |           |                    |        |             |           |       
|                                                                        |                                |                                           |            |                    |        |             |            |       
|NET LOSS                                                                |                                | $                                         | (10,746    | )                  |        | $           | (33,825    | )     
|                                                                        |                                |                                           |            |                    |        |             |            |       
|NET LOSS PER COMMON SHARE,
BASIC AND DILUTED                            |                                | $                                         | nil        |                    |        | $           | nil        |       
|                                                                        |                                |                                           |            |                    |        |             |            |       
|WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING,
BASIC AND DILUTED |                                |                                           | 14,064,300 |                    |        |             | 14,064,300 |       
|                                                                        |                                |                                           |            |                    |        |             |            |       

See accountants review report and accompanying notes.



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METALINE CONTACT MINES
STATEMENT OF STOCKHOLDERS EQUITY

|                                                          |  |              |            |            |  |             |         |         |  |               |         |        |  |       |          |   |  |   |        |  |  |   |          |  
|--------------------------------------------------------- |  | ------------ | ---------- | ---------- |  | ----------- | ------- | ------- |  | ------------- | ------- | ------ |  | ----- | -------- | - |  | - | ------ |  |  | - | -------- | -
|                                                          |  | Common Stock |            | Additional |  |             |         |         |  |               |         |        |  | Total
|                                                          |  |              |            | Paid-in    |  | Accumulated |         | Stock   |  | Stockholders'
|                                                          |  | Shares       |            | Amount     |  | Capital     |         | Deficit |  | Options       |         | Equity
|                                                          |  |              |            |            |  |             |         |         |  |               |         |       
|Balance, January 1, 2000                                  |  |              | 13,564,300 |            |  | $           | 678,222 |         |  | $             | 302,165 |        |  | $     | (432,146 | ) |  | $ | 13,632 |  |  | $ | 561,873  |  
|Issuances of stock for consulting fees at
$0.05 per share |  |              | 500,000    |            |  |             | 25,000  |         |  |               |        |        |  |       |         |   |  |   |       |  |  |   | 25,000   |  
|Net loss, December 31, 2000                               |  |              |           |            |  |             |        |         |  |               |        |        |  |       | (122,207 | ) |  |   |       |  |  |   | (122,207 | )
|                                                          |  |              |            |            |  |             |         |         |  |               |         |        |  |       |          |   |  |   |        |  |  |   |          |  
|Balance, December 31, 2000                                |  |              | 14,064,300 |            |  |             | 703,222 |         |  |               | 302,165 |        |  |       | (554,353 | ) |  |   | 13,632 |  |  |   | 464,666  |  
|Stock options granted November 12, 2001                   |  |              |           |            |  |             |        |         |  |               |        |        |  |       |         |   |  |   | 4,275  |  |  |   | 4,275    |  
|Net loss, December 31, 2001                               |  |              |           |            |  |             |        |         |  |               |        |        |  |       | (135,326 | ) |  |   |       |  |  |   | (135,326 | )
|                                                          |  |              |            |            |  |             |         |         |  |               |         |        |  |       |          |   |  |   |        |  |  |   |          |  
|Balance, December 31, 2001                                |  |              | 14,064,300 |            |  |             | 703,222 |         |  |               | 302,165 |        |  |       | (689,679 | ) |  |   | 17,907 |  |  |   | 333,615  |  
|Net loss, March 31, 2002                                  |  |              |           |            |  |             |        |         |  |               |        |        |  |       | (10,746  | ) |  |   |       |  |  |   | (10,746  | )
|                                                          |  |              |            |            |  |             |         |         |  |               |         |        |  |       |          |   |  |   |        |  |  |   |          |  
|Balance, March 31, 2002 (unaudited)                       |  |              | 14,064,300 |            |  | $           | 703,222 |         |  | $             | 302,165 |        |  | $     | (700,425 | ) |  | $ | 17,907 |  |  | $ | 322,869  |  
|                                                          |  |              |            |            |  |             |         |         |  |               |         |        |  |       |          |   |  |   |        |  |  |   |          |  

See accountants review report and accompanying notes.



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METALINE CONTACT MINES
STATEMENTS OF CASH FLOWS

|                                               |                                                                                        |                                            |                                                  |         |                    |         |             |         |        |         |  
|---------------------------------------------- | -------------------------------------------------------------------------------------- | ------------------------------------------ | ------------------------------------------------ | ------- | ------------------ | ------- | ----------- | ------- | ------ | ------- | -
|                                               |                                                                                        |                                            |                                                  |         | Three Months Ended
|                                               |                                                                                        |                                            |                                                  |         |                   
|                                               |                                                                                        |                                            |                                                  |         | March 31,          |         | March 31,  
|                                               |                                                                                        |                                            |                                                  |         | 2002               |         | 2001       
|                                               |                                                                                        |                                            |                                                  |         | (Unaudited)        |         | (Unaudited)
|                                               |                                                                                        |                                            |                                                  |         |                    |         |            
|CASH FLOWS FROM OPERATING ACTIVITIES           |                                                                                        |                                            |                                                  |         |                    |         |             |        
|                                               | Net loss                                                                               |                                            | $                                                | (10,746 | )                  |         | $           | (33,825 | )     
|                                               | Adjustments to reconcile net loss to net cash
provided (used) by operating activities: |                                            |                                                  |         |                    |         |             |         |       
|                                               |                                                                                        | Accrued interest on amount due from MCMLLC |                                                  |         | (1,915             | )       |             |         |       |        
|                                               | Changes in assets and liabilities:                                                     |                                            |                                                  |         |                    |         |             |         |       
|                                               |                                                                                        | Decrease in investment in LLC              |                                                  |         | 109                |         |             |         | 105    |        
|                                               |                                                                                        | Increase (decrease) in accounts payable    |                                                  |         | 3,000              |         |             |         | 13,841 |        
|                                               |                                                                                        |                                            |                                                  |         |                    |         |             |        
|                                               |                                                                                        |                                            | Net cash provided (used) by operating activities |         |                    | (9,552  | )           |         |        | (19,879 | )
|                                               |                                                                                        |                                            |                                                  |         |                    |         |             |        
|CASH FLOWS PROVIDED BY INVESTING ACTIVITIES    |                                                                                        |                                            |                                                 |         |                    |         |            |        
|                                               |                                                                                        |                                            |                                                  |         |                    |         |             |        
|CASH FLOWS PROVIDED BY FINANCING ACTIVITIES    |                                                                                        |                                            |                                                  |         |                    |         |             |        
|                                               |                                                                                        | Cash advance to MLC                        |                                                  |         | (18,000            | )       |             |         |       |        
|                                               |                                                                                        |                                            |                                                  |         |                    |         |             |        
|                                               |                                                                                        |                                            | Net cash provided (used) by financing activities |         |                    | (18,000 | )           |         |        |        |  
|                                               |                                                                                        |                                            |                                                  |         |                    |         |             |        
|                                               | Net increase (decrease) in cash and cash equivalents                                   |                                            |                                                  | (27,552 | )                  |         |             | (19,879 | )     
|Cash and cash equivalents, beginning of period |                                                                                        |                                            | 183,354                                          |         |                    |         | 321,761     |        
|                                               |                                                                                        |                                            |                                                  |         |                    |         |             |        
|Cash and cash equivalents, end of period       |                                                                                        | $                                          | 155,802                                          |         |                    | $       | 301,882     |        
|                                               |                                                                                        |                                            |                                                  |         |                    |         |             |        
|SUPPLEMENTAL CASH FLOW DISCLOSURES:            |                                                                                        |                                            |                                                  |         |                    |         |             |        
|                                               | Income taxes paid                                                                      |                                            | $                                                |        |                    |         | $           |        |       
|                                               | Interest paid                                                                          |                                            | $                                                |        |                    |         | $           |        |       
|NON-CASH TRANSACTIONS:                         |                                                                                        | $                                          |                                                 |         |                    | $       |            |        

See accountants review report and accompanying notes.



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METALINE CONTACT MINES
NOTES TO THE FINANCIAL STATEMENTS
March 31, 2002

NOTE 1  ORGANIZATION AND DESCRIPTION OF BUSINESS

Metaline Contact Mines (hereinafter Metaline) was incorporated in November of
1928 under the laws of the State of Washington for the purpose of engaging in
mining and the buying and selling of ores, metals, and minerals.

The Company was reorganized and recapitalized in 1960 and its articles of
incorporation were amended to expand its business purposes to include various
additional business activities. Metaline has continued its operations since
its formation and has historically acquired land, mineral rights, patented lode
mining claims, and timber in the Pacific Northwest.

In the last quarter of 1996, Metaline transferred substantially all of its
assets to a limited liability company. See Note 4.

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies is presented to assist in
understanding the financial statements. The financial statements and notes are
representations of the Companys management, which is responsible for their
integrity and objectivity. These accounting policies conform to accounting
principles generally accepted in the United States of America and have been
consistently applied in the preparation of the financial statements.

Accounting Method

The Companys financial statements are prepared using the accrual method of
accounting.

Accounting Pronouncements

In September 2000, the FASB issued SFAS No. 140 Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities. This
statement provides accounting and reporting standards for transfers and
servicing of financial assets and extinguishment of liabilities and also
provides consistent standards for distinguishing transfers of financial assets
that are sales from transfers that are secured borrowings. SFAS No. 140 is
effective for recognition and reclassification of collateral and for
disclosures relating to securitization transactions and collateral for fiscal
years ending after December 15, 2000, and is effective for transfers and
servicing of financial assets and extinguishments of liabilities occurring
after June 30, 2001. The Company believes that the adoption of this standard
will not have a material effect on the Companys results of operations or
financial position.

In June 2001, the FASB issued SFAS No. 141, Business Combinations and SFAS
No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 provides for the
elimination of the pooling-of-interests method of accounting for business
combinations with an acquisition date of July 1, 2001 or later. SFAS No. 142
prohibits the amortization of goodwill and other intangible assets with
indefinite lives and requires periodic reassessment of the underlying value of
such assets for impairment. SFAS No. 142 is effective for fiscal years
beginning after December 15,



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METALINE CONTACT MINES
NOTES TO THE FINANCIAL STATEMENTS
March 31, 2002

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2001. An early adoption provision exists for companies with fiscal years
beginning after March 15, 2001. On September 1, 2001, the Company adopted SFAS
No. 142. Application of the nonamortization provision of SFAS No. 142 is
expected to result in no increase in net income in fiscal 2002. The Company is
currently evaluating the impact of the transitional provisions of the
statement.

In October 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets (SFAS No. 144). SFAS 144 replaces SFAS 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed of. This new standard establishes a single accounting model
for long-lived assets to be disposed of by sale, including discontinued
operations. Statement 144 requires that these long-lived assets be measured at
the lower of carrying amount or fair value less cost to sell, whether reported
in continuing operations or discontinued operations. This statement is
effective beginning for fiscal years after December 15, 2001, with earlier
application encouraged. The Company adopted SFAS 144 and does not believe
that the adoption will have a material impact on the financial statements of
the Company at December 31, 2001.

Interim Financial Statements

The interim financial statements as of and for the period ended March 31, 2002
included herein have been prepared for the Company without audit. They reflect
all adjustments, which are, in the opinion of management, necessary to present
fairly the results of operations for these periods. All such adjustments are
normal recurring adjustments. The results of operations for the periods
presented are not necessarily indicative of the results to be expected for the
full fiscal year.

Use of Estimates

The process of preparing financial statements in conformity with accounting
principles generally accepted in the United States of America requires the use
of estimates and assumptions regarding certain types of assets, liabilities,
revenues, and expenses. Such estimates primarily relate to unsettled
transactions and events as of the date of the financial statements.
Accordingly, upon settlement, actual results may differ from estimated amounts.

Cash and Cash Equivalents

For purposes of the Statement of Cash Flows, the Company considers all
short-term debt securities purchased with a maturity of three months or less to
be cash equivalents.

Fair Value of Financial Instruments

The carrying amounts for cash, receivables, investments, and payables
approximate their fair value.



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METALINE CONTACT MINES
NOTES TO THE FINANCIAL STATEMENTS
March 31, 2002

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Concentration of Risk

The Company held funds in primarily one money market account, the funds of
which are not insured by the Federal Deposit Insurance Company. The balance in
that account was $155,503 and $180,035 for the period ended March 31, 2002 and
year ended December 31, 2001, respectively. Further, the Companys sole source
of income currently is royalty income it receives under a mineral property
lease with Cominco American, Inc. See Note 6.

Derivative Instruments

The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments
and Hedging Activities, as amended by SFAS No. 137, Accounting for Derivative
Instruments and Hedging Activities  Deferral of the Effective Date of FASB No.
133, and SFAS No. 138, Accounting for Certain Derivative Instruments and
Certain Hedging Activities, which is effective for the Company upon
incorporation. These statements establish accounting and reporting standards
for derivative instruments, including certain derivative instruments embedded
in other contracts, and for hedging activities. They require that an entity
recognize all derivatives as either assets or liabilities in the balance sheet
and measure those instruments at fair value.

If certain conditions are met, a derivative may be specifically designated as a
hedge, the objective of which is to match the timing of gain or loss
recognition on the hedging derivative with the recognition of (i) the changes
in the fair value of the hedged asset or liability that are attributable to the
hedged risk or (ii) the earnings effect of the hedged forecasted transaction.
For a derivative not designated as a hedging instrument, the gain or loss is
recognized in income in the period of change.

Historically, the Company has not entered into derivatives contracts to hedge
existing risks or for speculative purposes.

At March 31, 2002, the Company had not engaged in any transactions that would
be considered derivative instruments or hedging activities.

Investments

The Company accounts for its investment in Metaline Contact Mines LLC using the
equity method. See Note 3.

Compensated Absences

Currently, the Company has no employees; therefore it is impracticable to
estimate the amount of compensation for future absences and no liability has
been recorded in the accompanying financial statements. The Companys policy
will be to recognize the costs of compensated absences when actually paid to
employees.



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METALINE CONTACT MINES
NOTES TO THE FINANCIAL STATEMENTS
March 31, 2002

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Basic and Diluted Loss Per Share

Loss per share was computed by dividing the net loss by the weighted average
number of shares outstanding during the period. The weighted average number of
shares was calculated by taking the number of shares outstanding and weighting
them by the amount of time that they were outstanding. Outstanding options
have been excluded from the calculation of diluted loss per share as they would
be antidilutive, therefore basic and diluted loss per share are the same.

NOTE 3  INVESTMENT IN LLC

On October 30, 1996, the Company organized a Delaware limited liability
company, Metaline Contact Mines, LLC (hereinafter The LLC). Upon
organization of The LLC, the Company transferred substantially all of its
assets (primarily real property surface rights and timber) to The LLC. At the
time of The LLCs formation, the Company was the sole managing member in The
LLC, representing 100% ownership.

In 1998, the majority of the Companys interest in The LLC was expensed in
connection with the sale of the majority of The LLCs assets.

At the beginning of 1998, the Companys former shareholders acquired 93 percent
of The LLC by transferring their stock in the Company to The LLC in exchange
for non-managing membership interests. (See Note 6.) At the conclusion of
this share exchange, the Companys percentage of ownership in The LLC was
reduced to seven percent (7%). The Company wrote down its initial investment
by 93% to reflect its diluted investment in The LLC. After the write down of
its investment, and net change in member capital during the year 1998, the
value of the Companys investment in The LLC was $45,440 at December 31, 1998.

After the dilution of its investment in The LLC, the Company continued as the
managing member of The LLC. See Note 5.

At March 31, 2002, the Company recorded a first quarter loss in The LLC of
$109, reducing the Companys recorded interest in the LLC to $36,079.

NOTE 4  MINERAL PROPERTIES

In 1996, Metaline transferred timber and real property surface rights to The
LLC (see Note 3) but retained underground mineral rights to the transferred
real property and its mining claims, located in Pend Oreille County in
Washington State. The timber and real property surface rights were deemed by
management to have a value equal to their recorded cost and this cost was
transferred to The LLC. The related mineral rights are carried at no cost on
Metalines books.



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METALINE CONTACT MINES
NOTES TO THE FINANCIAL STATEMENTS
March 31, 2002

NOTE 4  MINERAL PROPERTIES (continued)

In 1997, Metaline and The LLC jointly leased certain Pend Oreille County real
estate and all of its mineral rights to a major mining company. See Note 6.

NOTE 5  RELATED PARTIES

In March 2002, the Company advanced $18,000 on a short-term basis to
Murrayville Land Company to facilitate a real estate purchase. Collection on
the receivable is expected within one year.

During 1998, The LLC sold property for a net gain of $5,958,762. Metalines
share of this gain before adjustment of the Companys investment from The LLCs
operating results and write down from its substantial decrease in ownership of
The LLC (See Note 3) was $507,858. The Company recorded a non-current, related
party receivable of $109,413 for the balance of the distribution. Due to
uncertainty as to the date this receivable will be collected, interest at the
rate of 7 percent per annum was accrued as a non-current asset at March 31,
2002 and December 31, 2001.

In June 1998, Metaline executed an agreement with Nor-Pac Limited Company
wherein, for providing management and consulting services to Metaline, Nor-Pac
was entitled to receive 500,000 shares of Metaline common stock in the second
half of 1998, 250,000 shares of Metaline common stock quarterly in 1999 and
$10,000 per month thereafter commencing on January 1, 2000. This agreement
was subsequently modified with an effective date of January 1, 2002, providing
that Nor-Pac will receive $3,000 per month, rather than $10,000 per month.

For additional information on related parties, see Notes 3, 6 and 10.

NOTE 6  MINING LEASE WITH PURCHASE OPTION

On September 1, 1997, Metaline and The LLC acting jointly as lessors, executed
an agreement with Cominco American Incorporated (hereinafter Cominco) wherein
Cominco received the right to explore, develop, and mine Metalines underground
mineral rights in Pend Oreille County, Washington for a period of twenty years
with an option renewal period of the same length. Under this lease agreement,
Cominco obligated itself to pay the lessors $3,000 per quarter for the first
five years of the lease with ascending quarterly increments at each successive
five year interval.

The aforementioned quarterly disbursements are characterized by the lease as
advance royalty payments which may be fully offset against a three-percent
production royalty retained by the lessors. The lease agreement, while
providing that Cominco must expend $125,000 in exploration work within the
first five years of the lease, also gave Cominco the option to purchase 200
surface acres of the leased property for fair market value during the lease
term.



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METALINE CONTACT MINES
NOTES TO THE FINANCIAL STATEMENTS
March 31, 2002

NOTE 6  MINING LEASE WITH PURCHASE OPTION (continued)

From the inception of the lease through March 31, 2002, Metaline has received
$54,016 in payments from Cominco.

During 2001, Teck Cominco Limited was formed
following the acquisition of
Cominco Corporation by another mining company, Teck Corporation. The former
subsidiary of Cominco Corporation, Cominco American Incorporated was renamed,
Teck Cominco American, Inc., and continues as lessee under the original
agreement discussed in the preceding paragraph.

NOTE 7  CHANGE IN LLC OWNERSHIP

On June 1, 1998, Nor-Pac Limited Company (hereinafter Nor-Pac) purchased
control of The LLC from its three principal owners at the time (Bunker Limited
Partnership, Hecla Mining Company, and Metaline Mining & Leasing Company) by
acquiring these entities non-managing membership interests in Metaline Contact
Mines LLC. See Notes 1 and 5.

NOTE 8  INCOME TAXES

Income taxes are provided based upon the liability method of accounting
pursuant to SFAS No. 109 Accounting for Income Taxes. Under this approach,
deferred income taxes are recorded to reflect the tax consequences on future
years of differences between the tax basis of assets and liabilities and their
financial reporting amounts at each year-end. A valuation allowance is
recorded against deferred tax assets if management does not believe the Company
has met the more likely than not standard imposed by SFAS No. 109 to allow
recognition of such an asset.

At December 31, 2001, the Company had net deferred tax assets of approximately
$138,000, principally arising from net operating loss carryforwards for income
tax purposes. As management of the Company cannot determine that it is more
likely than not that the Company will realize the benefit of the net deferred
tax asset, a valuation allowance equal to the net deferred tax asset has been
established at December 31, 2001.

At December 31, 2001, the Company has a net operating loss carryforward of
approximately $690,000 which will expire in the year 2021. At March 31, 2002,
the Companys estimated net operating loss was $701,000 for federal income tax
purposes.

NOTE 9  STOCK OPTIONS

On November 16, 1999, the board of directors approved the Metaline Contact
Mines 1999 Stock Option Plan. This plan allows the Company to distribute up to
2,000,000 shares of common stock shares to officers, directors, employees and
consultants through the authorization of the



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METALINE CONTACT MINES
NOTES TO THE FINANCIAL STATEMENTS
March 31, 2002

NOTE 9  STOCK OPTIONS (continued)

Companys board of directors at an initial exercise price of $0.125, or $0.15,
depending on the terms of the option certificate. The options may be exercised
until November 16, 2009, at which time they expire.

The fair value of the options granted on November 12, 2001 was estimated using
the Black-Scholes Option Price Calculation. The following assumptions were
made to estimate fair value: the risk-free interest rate is 6.0%, volatility
is 0.24, and the expected life of the options is eight years. Accordingly,
$4,275 of option expense was recorded in the Companys financial statements as
consulting and management fees. In accordance with Financial Accounting
Standard No. 123 paragraph 115, this expense was deemed to be an estimate,
subject to adjustment by decreasing the expense in the period of forfeiture.

Following is a summary of the status of fixed options outstanding at December
31, 2001 and March 31, 2002:

|                               |                            |  |           |         |          |   |          |   | 
|------------------------------ | -------------------------- |  | --------- | ------- | -------- | - | -------- | - | 
|                               |                            |  |           |         |          |   | Weighted
|                               |                            |  |           |         |          |   | Average 
|                               |                            |  | Number of |         | Exercise
|                               |                            |  | Shares    |         | Price   
|                               |                            |  |           |         |         
|Outstanding, January 1, 2001   |                            |  | 1,000,000 |         |          | $ | 0.125    |  
|                               | Granted, November 12, 2001 |  |           | 250,000 |          |   |          |  | 
|                               | Exercised                  |  |           |        |          |   |          |  | 
|                               | Forfeited                  |  |           |        |          |   |          |  | 
|                               | Expired                    |  |           |        |          |   |          |  | 
|                               |                            |  |           |         |          |   |          |  
|Outstanding, December 31, 2001 |                            |  | 1,250,000 |         |          | $ | 0.150    |  
|                               |                            |  |           |         |          |   |          |  
|Exercisable, December 31, 2001 |                            |  | 1,250,000 |         |          | $ | 0.150    |  
|                               |                            |  |           |         |          |   |          |  
|Outstanding January 1, 2002    |                            |  | 1,250,000 |         |          | $ | 0.130    |  
|                               | Granted                    |  |           |        |          |   |          |  | 
|                               | Exercised                  |  |           |        |          |   |          |  | 
|                               | Forfeited                  |  |           |        |          |   |          |  | 
|                               | Expired                    |  |           |        |          |   |          |  | 
|                               |                            |  |           |         |          |   |          |  
|Outstanding, March 31, 2002    |                            |  | 1,250,000 |         |          | $ | 0.130    |  
|                               |                            |  |           |         |          |   |          |  
|Exercisable, March 31, 2002    |                            |  | 1,250,000 |         |          | $ | 0.130    |  
|                               |                            |  |           |         |          |   |          |  



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METALINE CONTACT MINES
NOTES TO THE FINANCIAL STATEMENTS
March 31, 2002

NOTE 10  COMMITMENTS AND CONTINGENCIES

All earnings from The LLC in 1997 and 1996 were attributed by The LLCs
principal owners to Metaline. Accordingly, Metaline reported these earnings as
its own taxable income (on both Metalines and The LLCs federal income tax
returns) with Metaline retaining only a 6.9861 percent interest in The LLC.
For calendar years 1998 through 2001, Metaline reported only its pro rata share
(6.9861%) of taxable income from The LLC, with other LLC members reporting
their respective share of LLC taxable income.

The LLC has agreed, in writing, to indemnify Metaline for any prior year income
distributions requested by other LLC members. As of March 31, 2002, no cash or
property distributions were made by the LLC to its members for indemnification
purposes. In view of the ownership changes in The LLC, future distributions
are expected to be made by The LLC to its members as determined from time to
time by Metaline, its managing member. See Note 7 regarding a change in LLC
ownership and see Note 5 regarding related party commitment.

NOTE 11  SUBSEQUENT EVENTS

Effective March 15, 2002, the Mining Lease with Purchase Option (Note 6)
between Metaline Contact Mines and Teck Cominco American Incorporated was
amended, reducing the amount of acreage leased from the Company, and providing
for an approximately three percent decrease in royalty payments.



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|Item 2. | Managements Discussion and Analysis or Plan of Operations
|------- | ----------------------------------------------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | The Company had revenues from operations of $3,000 in the first quarter
of 2002, the same as its operating revenues of $3,000 in the first
quarter of 2001. However, the Company experienced a decreased operating
loss of $16,020 in the first quarter of 2001 versus $40,307 in the first
quarter of 2001. The decreased loss, $24,287 in the first quarter of
2002, was predominantly due to a decrease in management and professional
fees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | Management fees decreased by $21,000, from $30,000 in the first quarter
of 2001 to $9,000 in the first quarter of 2002. Professional fees,
consisting of legal and accounting decreased by $3,167, from $8,396 in
the first quarter of 2001 to $5,229 in the first quarter of 2002, due to
a decrease in the cost its audited financial statements necessitated in
SEC filing requirements. Transfer agent fees increased by $130 in the
first quarter of 2002, to $367 in the first quarter of 2002 from $237 in
the first quarter of 2001 due to a slight increase in trading volume on
the Companys common stock. Office supplies and expenses decreased to
$1,035 in the first quarter of 2002 from $1,674 in the first quarter of
2001 due to cost decreases of $639 in the Companys share of office
expenses. Taxes, licenses and fees increased by $389 in the first
quarter of 2002, from nil in 2001 to $389 in 2002. The increase was due
to the Company becoming listed in the Spokane Quotation Bureau and
Washington State filing fees.
|
| | The Companys other income decreased by $1,208 in the first quarter of
2002 to $2,274 from $3,482 in the first quarter of 2000. The decrease
was caused by lower dividend rates earned on the Companys money market
account, and a $109 loss from its investment in Metaline Contact Mines
LLC. The Company did, however, experience a gain in interest income of
$1,915 during the first quarter of 2002 versus nil in the first quarter
of 2001. The gain in interest income was due to the Companys demand
note on receivables from a related party, Metaline Contact Mines LLC
(MCMLLC).                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | Financial Condition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | The Companys financial condition is such that it can continue at its
current level of operations for an additional 2 years without the
necessity of additional capital. Current level of operations includes
maintaining compliance with the New Cominco Lease, and the reporting
requirements of the SEC. Thereafter, the Company may require additional
capital for future operating costs and working capital. Such additional
capital could be obtained from either increased revenues from operations
(in the event the Companys mineral rights and properties are placed into
commercial production by Teck Cominco), or from the sale of shares of the
Companys authorized, but unissued, common stock.                                                                                                                                                                                                                                                                                                                                     
|
| | Under the New Cominco Lease, any production decision on the Companys
mineral rights and properties is under the sole discretion and control of
Teck Cominco. Further, there are no assurances that the Company would be
able to sell shares of its authorized, but unissued, common stock on
terms acceptable to the Company. Any such sales of shares could be
dilutive to the Companys then-existing shareholders, and any debt
financings could involve restrictive covenants with respect to future
capital raising activities, and other financial and operational matters.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | Presently there are no trends, events or uncertainties that have, or are
reasonably likely to have, a material impact on the Companys short-term
or long-term liquidity; there are no material commitments for capital
expenditures, except for the management of its own business affairs; and
there are no known trends, events or uncertainties that have or that are
reasonably expected to have a material impact on the revenues from
operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              



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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As a mineral resource exploration oriented enterprise, the Company will
investigate future business opportunities that are consistent with its
corporate charter and field of expertise, and in the opinion of
management worthy of investigation. It should be noted, however, that
the Company competes with other mining companies in connection with the
acquisition of mineral properties, some of which have substantially
greater financial resources than the Company. Management has not
recognized any such opportunities as of the date of this filing, nor does
it expect to do so during the next 12-month period. In the event such an
opportunity would materialize, the Companys initial due diligence
process in investigating such opportunity would not involve any
significant investment by the Company.                                                                                                                                                                                                                                                                            
|
| | Liquidity and Capital Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | To date, the Company has funded its capital requirements from revenues
from operations, and dividends and interest earned on its cash accounts.
The Companys cash position as of March 31, 2002 was $173,802 as compared
to $301,882 as of March 31, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| | The Company has no debt. The Company does not expect to incur any
debt in the immediate future to expand its current level of operation,
nor does it expect to expand its business operation in the immediate
future. The Companys most significant cash requirement is its
management fee of $3,000 per month payable under the terms of its
Management Agreement, as amended, with Nor-Pac. However, as a related
party, Nor-Pac has contractually agreed in the Management Agreement to
(i) review and adjust on a quarterly basis the amount of the management
fees based on time spent on the Companys affairs, and (ii) convert
management fees that are payable in cash into common stock in the Company
in the event of a shortfall of cash (the exchange rate would be
determined at the time of the shortfall). The Company also has a related
party receivable from MCMLLC in the amount of $109,413, with accrued
interest of $9,575, as of March 31, 2002. As the Managing Member of
MCMLLC, the Company has the ability to collect on this receivable in the
event of a shortfall of cash.
|
| | Based on the foregoing, it is managements opinion that at its current
level of operations the Company can satisfy its working capital
requirements internally in the immediate future without the need to seek
outside sources of equity or debt funding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                




PART II  OTHER INFORMATION




Item 1. Legal Proceedings

| |                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------
| | The Company is not a party to any legal proceedings, and management is
not aware of any threatened litigation, claims or assessments.




Item 2. Changes in Securities

| |                                                                              
| | -----------------------------------------------------------------------------
| | There has been no change in securities for the quarter ending March 31,
2002.




Item 3. Defaults Upon Senior Securities

None.




Item 4. Submission of Matters to a Vote of Security Holders

None.



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Item 5. Other Information

None.




Item 6. Exhibits and Reports on Form 8-K

| |                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------
| | No exhibits required. There were no reports filed on Form 8-K during the
three month period ended March 31, 2002.




SIGNATURES

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

|                                    |                           |                    
|----------------------------------- | ------------------------- | -------------------
|DATED this the 6th day of May, 2002 | METALINE CONTACT MINES   
|                                   
|                                    | By:                       | /s/ John W. Beasley
|                                    |                          
|                                    | John W. Beasley
Secretary



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