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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
  þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period from 7-01-05 to 9-30-05
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT.
 For the transition period fromto
 Commission file number 000-31025
 METALINE CONTACT MINES
  Washington
    
    91-0779945(State or jurisdiction of incorporation or
    
    (IRS Employer Identification No.)organization)
 W. 3848 Turtle Patch Road, Pine River WI 54965
 
   
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TABLE OF CONTENTS
 PAGEPART I  FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    F-1Item 2. Managements Discussion and Analysis
    
    
    3Item 3. Controls and Procedures
    
    
    5PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    5Item 2. Changes in Securities
    
    
    5Item 3. Defaults Upon Senior Securities
    
    
    6Item 4. Submission of Matters to a Vote of Security Holders
    
    
    6Item 5. Other Information
    
    
    6Item 6. Exhibits and Reports on Form 8-K
    
    
    6SIGNATURES
    
    
    6EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
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PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
  F-1




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METALINE CONTACT MINES  BALANCE SHEETS
 
 September 30,
    
    
    December 31,2005
    
    
    2004(unaudited)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    83,183
    
    
    $
    90,652Undeposited Funds
    
    
    2,282Total Current Assets
    
    
    85,465
    
    
    
    90,652OTHER ASSETSRelated party receivable
    
    
    109,413
    
    
    
    109,413Accrued interest  related party receivable
    
    
    36,381
    
    
    
    30,637Investments
    
    
    25,600
    
    
    
    5,100Website, net of amortization
    
    
    667
    
    
    
    917Other asset
    
    
    350
    
    
    
    350Golden Chest Mines Lease
    
    
    250,000
    
    
    
    Total Other Assets
    
    
    422,411
    
    
    
    146,417TOTAL ASSETS
    
    $
    507,876
    
    
    $
    237,069LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable
    
    $
    523
    
    
    $
    Unearned royalty income
    
    
    5,021
    
    
    
    3,880Total Current Liabilities
    
    
    5,544
    
    
    
    3,880COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    STOCKHOLDERS EQUITYCommon stock, $0.05 par value;
20,000,000 shares authorized, 14,783,189 issued
and 13,783,189 outstanding
    
    
    776,570
    
    
    
    726,570Additional paid-in capital
    
    
    483,040
    
    
    
    283,040Stock options
    
    
    47,907
    
    
    
    47,907Accumulated deficit
    
    
    (805,185
    )
    
    
    (824,328
    )Total Stockholders Equity
    
    
    502,332
    
    
    
    233,189TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    507,876
    
    
    $
    237,069
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METALINE CONTACT MINES  STATEMENTS OF OPERATIONS
 
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(unaudited)
    
    
    (unaudited)
    
    
    (unaudited)
    
    
    (unaudited)REVENUESRoyalty income
    
    $
    8,483
    
    
    $
    3,880
    
    
    $
    58,566
    
    
    $
    16,440GENERAL AND ADMINISTRATIVE EXPENSESProperty expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,765Administrative expenses
    
    
    10,076
    
    
    
    39,751
    
    
    
    46,418
    
    
    
    55,524TOTAL EXPENSES
    
    
    10,076
    
    
    
    39,751
    
    
    
    46,418
    
    
    
    93,289OPERATING INCOME (LOSS)
    
    
    (1,593
    )
    
    
    (35,871
    )
    
    
    12,148
    
    
    
    (76,849
    )OTHER INCOME (EXPENSE)Dividend income
    
    
    517
    
    
    
    137
    
    
    
    1,251
    
    
    
    250Interest income
    
    
    1,915
    
    
    
    1,915
    
    
    
    5,744
    
    
    
    5,744Loss from investment in LLC
    
    
    
    
    
    
    (144
    )
    
    
    
    
    
    
    (393
    )TOTAL OTHER INCOME
    
    
    2,432
    
    
    
    1,908
    
    
    
    6,995
    
    
    
    5,601INCOME (LOSS) BEFORE TAXES
    
    
    839
    
    
    
    (33,963
    )
    
    
    19,143
    
    
    
    (71,248
    )INCOME TAX EXPENSE
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NET INCOME (LOSS)
    
    $
    839
    
    
    $
    (33,963
    )
    
    $
    19,143
    
    
    $
    (71,248
    )NET INCOME (LOSS) PER COMMON SHARE, BASIC AND DILUTED
    
    $
    nil
    
    
    $
    nil
    
    
    $
    nil
    
    
    $
    nilWEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC
    
    
    13,783,189
    
    
    
    14,453,428
    
    
    
    14,116,522
    
    
    
    14,453,428WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, DILUTED
    
    
    13,783,189
    
    
    
    14,453,428
    
    
    
    14,116,522
    
    
    
    14,453,428
  F-3




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METALINE CONTACT MINES  STATEMENTS OF CASH FLOWS
 
 Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004(unaudited)
    
    
    (unaudited)CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    19,143
    
    
    $
    (71,248
    )Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:Amortization expense
    
    
    250
    
    
    
    Loss in LLC investment
    
    
    
    
    
    
    393Rent expense paid with NJMC stock
    
    
    
    
    
    
    Royalty income received in NJMC stock
    
    
    
    
    
    
    Common stock issued in payment of expenses
    
    
    
    
    
    
    37,765Stock options issued for directors fees
    
    
    
    
    
    
    30,000Changes in assets and liabilities:Increase in accrued interest receivable
    
    
    (5,744
    )
    
    
    (5,744
    )Increase in prepaid expenses
    
    
    
    
    
    
    (350
    )Increase in website
    
    
    
    
    
    
    (1,000
    )Increase in accounts payable
    
    
    523
    
    
    
    Net cash used by operating activities
    
    
    14,172
    
    
    
    (10,184
    )CASH FLOWS USED BY INVESTING ACTIVITIES:
    
    
    (20,500
    )
    
    
    (2,400
    )CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
    
    
    (1,141
    )
    
    
    Net decrease in cash and cash equivalents
    
    
    (7,469
    )
    
    
    (12,584
    )Cash at beginning of period
    
    
    90,652
    
    
    
    105,687Cash at end of period
    
    $
    83,183
    
    
    $
    93,103SUPPLEMENTAL CASH FLOW DISCLOSURES:Income taxes paid
    
    $
    
    
    
    $
    Interest paid
    
    $
    
    
    
    $
    NON-CASH TRANSACTIONS:Loss in LLC investment
    
    $
    
    
    
    $
    393Common stock issued in payment of expenses
    
    $
    
    
    
    $
    37,765Rent expense paid with NJMC stock
    
    $
    20,500
    
    
    $
    Royalty income received in NJMC stock
    
    $
    41,000
    
    
    $
    Stock options issued for directors fees
    
    $
    
    
    
    $
    30,000
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METALINE CONTACT MINES  CONDENSED NOTES TO THE FINANCIAL STATEMENTS  SEPTEMBER 30, 2005
 
 NOTE 1  ORGANIZATION AND DESCRIPTION OF BUSINESS
     NOTE 2  BASIS OF PRESENTATION
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METALINE CONTACT MINES  CONDENSED NOTES TO THE FINANCIAL STATEMENTS  SEPTEMBER 30, 2005
 
 NOTE 3  RECENT ACCOUNTING PRONOUNCEMENTS
    F-6




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METALINE CONTACT MINES  CONDENSED NOTES TO THE FINANCIAL STATEMENTS  SEPTEMBER 30, 2005
 
 NOTE 4  MINERAL PROPERTIES
 Pend Oreille/Metaline Zinc Mines
 Golden Chest Mine
  NOTE 5  RELATED PARTY TRANSACTIONS
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METALINE CONTACT MINES  CONDENSED NOTES TO THE FINANCIAL STATEMENTS  SEPTEMBER 30, 2005
 
  NOTE 6  INCOME TAXES
   NOTE 7  STOCK OPTIONS
  Options Outstanding
    
    
    Options ExercisableWeightedAverageRemaining
    
    
    Weighted
    
    
    
    
    
    
    WeightedContractual
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    Number
    
    
    Life
    
    
    Exercise
    
    
    Number
    
    
    ExercisePrice
    
    
    Outstanding
    
    
    (Years)
    
    
    Price
    
    
    Exercisable
    
    
    Price$
    0.06
    
    
    
    500,000
    
    
    
    4.12
    
    
    $
    0.06
    
    
    
    500,000
    
    
    $
    0.060.125
    
    
    
    1,000,000
    
    
    
    4.12
    
    
    
    0.125
    
    
    
    1,000,000
    
    
    
    0.1250.15
    
    
    
    250,000
    
    
    
    4.12
    
    
    
    0.15
    
    
    
    250,000
    
    
    
    0.15$
    0.06-0.15
    
    
    
    1,750,000
    
    
    
    4.12
    
    
    $
    0.11
    
    
    
    1,750,000
    
    
    $
    0.11
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
       Golden Chest Mine
  Pend Oreille/Metaline Zinc Mines
  Operating Loss
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Other Income
  Income Before Taxes
     (a)
    
    Collection of Receivables. We have a related party receivable from Nor-Pac Limited
Company (Nor-Pac) of $109,413, with accrued interest of $36,381, as of September 30, 2005.
Nor-Pac owns approximately 81% of our outstanding shares and has related directors. We
therefore believe we have the ability to collect this receivable in the event of a shortfall
of cash.(b)
    
    Increase Royalty Revenues. Increasing royalty revenues from operations on our current
mining projects is under the sole control of third parties, namely Teck Cominco and New
Jersey, and other factors, including: changes in precious and base metals prices;
unanticipated grade, geological, metallurgical, processing or other problems at our mining
projects; changes in project parameters as plans of the operators are refined; and economic
and market conditions.(c)
    
    Sale of Companys Common Stock. There are no assurances that we would be able to
sell shares of our authorized, but unissued, common stock on acceptable terms. Additionally,
any such sales of shares could be dilutive to our then-existing shareholders.(d)
    
    Sale of Certain Assets. We own 60,000 shares of New Jersey common stock with a
recorded value of $25,600, which shares could be sold pursuant to Rule 144 of the Securities
Act of 1933, as amended.
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ITEM 3. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls
   
 PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEDDINGS
  
 ITEM 2. CHANGES IN SECURITIES
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
 (a)
    
    Exhibit 31.1  Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Exhibit 31.2  Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Exhibit 32.1  Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.Exhibit 32.2  Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(b)
    
    Form 8-K was filed on August 5, 2005, as amended on August 9, 2005, announcing that the
Company had issued 1,000,000 shares of its authorized, but unissued, common stock to Paymaster
Resources Incorporated (Paymaster) pursuant to its agreement with Paymaster to acquire the
lease and other agreements on the Golden Chest Mine.
 
 SIGNATURES
  DATED this the 9th day of November, 2005
    METALINE CONTACT MINESBy:
    /s/ John W. BeasleyJohn W. Beasley

Secretary/Treasurer/CFO -6-