<PAGE>   1
                                  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     1-1-01     to     3-31-01
                                         --------------    ------------------

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

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

                   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]


<PAGE>   2
                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION                                              PAGE
                                                                            ----

ITEM 1.  FINANCIAL STATEMENTS .............................................    3

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


                                      -2-


<PAGE>   3
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


                                      -3-
<PAGE>   4
                             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                                               F-1



                                      -4-
<PAGE>   5
                        [WILLIAMS & WEBSTER LETTERHEAD]

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, 2001, and the related statements of operations, stockholders' equity,
and cash flows for the three months then ended. 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, 2000 were audited by us
and we expressed an unqualified opinion on them in our report dated March 5,
2001, but we have not performed any auditing procedures since that date.

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

April 30, 2001

                                      -5-
<PAGE>   6
                             METALINE CONTACT MINES
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                         March 31,
                                                           2001     December 31,
                                                       (Unaudited)      2000
                                                       -----------  ------------
<S>                                                     <C>          <C>
ASSETS

     CURRENT ASSETS
         Cash and cash equivalents ..................   $ 301,882    $ 321,761
                                                        ---------    ---------
             Total Current Assets ...................     301,882      321,761
                                                        ---------    ---------

     OTHER ASSETS
         Receivables from related parties ...........     109,413      109,413
         Investment in LLC ..........................      37,742       37,847
                                                        ---------    ---------
             Total Other Assets .....................     147,155      147,260
                                                        ---------    ---------

     TOTAL ASSETS ...................................   $ 449,037    $ 469,021
                                                        =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY

     CURRENT LIABILITIES
         Accounts payable ...........................   $  15,196    $   1,355
         Deferred royalty income ....................       3,000        3,000
                                                        ---------    ---------
             Total Current Liabilities ..............      18,196        4,355
                                                        ---------    ---------

     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 ..............................      13,632       13,632
         Accumulated deficit ........................    (588,178)    (554,353)
                                                        ---------    ---------
             Total Stockholders' Equity .............     430,841      464,666
                                                        ---------    ---------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .....   $ 449,037    $ 469,021
                                                        =========    =========
</TABLE>

             See accountant's review report and accompanying notes.

                                      -6-
<PAGE>   7
                             METALINE CONTACT MINES
                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                          Three Months Ended
                                                      ---------------------------
                                                        March 31,      March 31,
                                                          2001           2000
                                                       (Unaudited)    (Unaudited)
                                                      ------------    -----------
<S>                                                   <C>             <C>
REVENUES
     Royalty income ................................  $      3,000    $     3,000
                                                      ------------    -----------
GENERAL AND ADMINISTRATIVE EXPENSES
     Consulting and management fees ................        30,000         30,000
     Professional fees .............................         8,396            283
     Transfer agent fees ...........................           237            227
     Office supplies and expenses ..................         1,674          1,159
                                                      ------------    -----------
         TOTAL GENERAL AND ADMINISTRATIVE EXPENSES..        40,307         31,669
                                                      ------------    -----------

OPERATING LOSS .....................................       (37,307)       (28,669)
                                                      ------------    -----------

OTHER INCOME
     Dividend income ...............................         3,287          3,304
     Miscellaneous income ..........................           300            293
     Loss from investment in LLC ...................          (105)          --
                                                      ------------    -----------
         TOTAL OTHER INCOME ........................         3,482          3,597
                                                      ------------    -----------

LOSS BEFORE TAXES ..................................       (33,825)       (25,072)

INCOME TAX EXPENSE .................................          --             --
                                                      ------------    -----------

NET LOSS ...........................................  $    (33,825)   $   (25,072)
                                                      ============    ===========
NET LOSS PER COMMON SHARE,
     BASIC AND DILUTED .............................  $        nil    $       nil
                                                      ============    ===========
WEIGHTED AVERAGE NUMBER
     OF COMMON SHARES OUTSTANDING,
     BASIC AND DILUTED .............................    14,064,300     13,378,684
                                                      ============    ===========
</TABLE>

             See accountant's review report and accompanying notes.

                                      -7-
<PAGE>   8
                             METALINE CONTACT MINES
                        STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                              Common Stock         Additional                                 Total
                                         -----------------------    Paid-in      Accumulated     Stock     Stockholders'
                                           Shares       Amount      Capital        Deficit      Options       Equity
                                         ----------   ----------   ----------    -----------   ---------   -------------
<S>                                      <C>          <C>          <C>           <C>           <C>          <C>
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

Net loss, March 31, 2001 (Unaudited)..           --           --           --       (33,825)          --       (33,825)
                                         ----------   ----------   ----------    ----------    ---------    ----------

Balance, March 31, 2001 (Unaudited)...   14,064,300   $  703,222   $  302,165    $ (588,178)   $  13,632    $  430,841
                                         ==========   ==========   ==========    ==========    =========    ==========
</TABLE>

             See accountant's review report and accompanying notes.

                                      -8-
<PAGE>   9
                             METALINE CONTACT MINES
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                      Three Months Ended
                                                                    ------------------------
                                                                     March 31,    March 31,
                                                                       2001         2000
                                                                    (Unaudited)  (Unaudited)
                                                                    -----------  -----------
<S>                                                                 <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
      Net loss ..................................................   $ (33,825)    $ (25,072)
      Adjustments to reconcile net loss to net cash
          provided (used) by operating activities:
      Changes in assets and liabilities:
           Increase in prepaid expenses .........................          --        (1,000)
           Decrease in federal tax deposit ......................          --         1,500
           Decrease in investment in LLC ........................         105            --
           Increase (decrease) in accounts payable ..............      13,841        (1,538)
           Increase in unrealized royalty income ................        --           3,000
      Payment of expenses from issuance of stock ................        --          25,000
                                                                    ---------     ---------
                 Net cash provided (used) by operating activities     (19,879)        1,890
                                                                    ---------     ---------
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES .....................          --            --
                                                                    ---------     ---------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES .....................          --            --
                                                                    ---------     ---------

      Net increase (decrease) in cash and cash equivalents ......     (19,879)        1,890

Cash and cash equivalents, beginning of period ..................     321,761       321,228
                                                                    ---------     ---------
Cash and cash equivalents, end of period ........................   $ 301,882     $ 323,118
                                                                    =========     =========

SUPPLEMENTAL CASH FLOW DISCLOSURES:
      Income taxes paid .........................................   $      --     $      --
      Interest paid .............................................   $      --     $      --

NON-CASH TRANSACTIONS:
      Stock issued in payment of consulting and other expenses ..   $      --     $  25,000
</TABLE>

             See accountant's review report and accompanying notes.

                                      -9-
<PAGE>   10
                             METALINE CONTACT MINES
                        NOTES TO THE FINANCIAL STATEMENTS

                                 MARCH 31, 2001

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.

Interim Financial Statements

The interim financial statements as of and for the period ended March 31, 2001
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.


                                      -10-
<PAGE>   11
NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair Value of Financial Instruments

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

Derivative Instruments

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This standard establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. It requires
that an entity recognize all derivatives as either assets or liabilities in the
balance sheet and measure those instruments at fair value.

At March 31, 2001, the Company has 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 4.

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.

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 -- CASH EQUIVALENTS

The Company holds funds which are primarily deposited in one money market
account, which funds are not insured by the Federal Deposit Insurance Company.
The balance in that account was $298,048 and $310,460 at March 31, 2001 and
December 31, 2000, respectively.


                                      -11-
<PAGE>   12
NOTE  4 -- 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.

In 1999, a net loss of $7,187 in The LLC resulted in a decreased value of the
Company's interest to $38,383.

At December 31, 2000, the Company recorded a loss in The LLC of $405, resulting
in a decreased value of the Company's interest to $37,847. A first quarter loss
of $105 was recorded at March 31, 2001.

NOTE 5 -- 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 Note 4.

NOTE 6 -- 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) although Metaline retained only a 6.9861 percent interest in The LLC
from the end of 1996 to December 31, 1998. For calendar 1998 and future years,
Metaline will report 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.


                                      -12-
<PAGE>   13
NOTE 6 -- COMMITMENTS AND CONTINGENCIES (CONTINUED)

The LLC has agreed, in writing, to indemnify Metaline for any prior year income
distributions requested by other LLC members. As of March 31, 2001, 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 5 regarding a change in LLC ownership.

See Note 11 regarding management contract with related party.

NOTE 7 -- COMMON STOCK

The Company has authorized the issuance of 20,000,000 shares of common stock at
a par value of $0.05 per share.

During the year ended December 31, 1999, the Company issued 750,000 shares of
common stock to Nor-Pac, a related party, for consulting fees valued at $37,500.

The Company issued 500,000 shares of its common stock to Nor-Pac during the year
ended December 31, 2000. These shares, valued at $25,000, were also issued for
consulting fees.

The Company did not issue any common stock or stock equivalents during the
period ended March 31, 2001.

NOTE 8 -- 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 Company's board of directors at an
initial exercise price of $0.125. The options may be exercised until November
16, 2009, at which time they expire.

The fair value of each option granted was estimated on the grant date using the
Black-Scholes Option Price Calculation. The following assumptions were made to
estimate fair value: the risk-free interest rate is 6.11%, volatility is 0.3,
and the expected life of the options is ten years. Accordingly, $13,632 of the
option's expense was initially recorded in the Company's financial statements as
consulting and management fees during the year ended December 31, 1999. 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.


                                      -13-
<PAGE>   14
NOTE 8 -- STOCK OPTIONS (CONTINUED)

Following is a summary of the status of fixed options outstanding at December
31, 2000 and March 31, 2001:

<TABLE>
<CAPTION>
                                                 Weighted
                                                  Average
                                   Number of     Exercise
                                    Shares        Price
                                   ---------     --------
<S>                                <C>           <C>
Outstanding, January 1, 2000 ...   1,000,000      $0.125
   Granted .....................          --          --
   Exercised ...................          --          --
   Forfeited ...................          --          --
   Expired .....................          --          --
                                   ---------      ------
Outstanding, December 31, 2000..   1,000,000      $0.125
                                   =========      ======

Exercisable, December 31, 2000..   1,000,000      $0.125
                                   =========      ======

Outstanding, January 1, 2001 ...   1,000,000      $0.125
   Granted .....................          --          --
   Exercised ...................          --          --
   Forfeited ...................          --          --
   Expired .....................          --          --
                                   ---------      ------
Outstanding, March 31, 2001 ....   1,000,000      $0.125
                                   =========      ======

Exercisable, March 31, 2001 ....   1,000,000      $0.125
                                   =========      ======
</TABLE>

NOTE 9 -- 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 the Company'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 obligates 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.


                                      -14-
<PAGE>   15
NOTE 9 -- MINING LEASE WITH PURCHASE OPTION (CONTINUED)

The lease agreement, while providing that Cominco must expend $125,000 in
exploration work within the first five years of the lease, also gives Cominco
the option to purchase 200 surface acres of the leased property for fair market
value during the lease term.

From the inception of the lease through March 31, 2001, the Company has received
$42,016 in payments from Cominco.

NOTE 10 -- INCOME TAXES

The Company has available unused operating loss carryforwards that may be
applied against future taxable income that expire on various dates through
December 31, 2020.

No deferred tax benefit has been reported in the financial statements, as the
Company believes there is a significant chance that the net operating loss
carryforwards will expire unused. Accordingly, the potential tax benefits of the
net operating loss carryforwards are offset by a valuation allowance of the same
amount. The cumulative operating losses attributed to the year ended December
31, 2000 were approximately $550,000. For the quarter ended March 31, 2001, the
Company's estimated additional net operating loss was $30,000 for federal income
tax purposes.

NOTE  11 --  RELATED PARTIES

Related Party Receivables

At March 31, 2001, the Company had approximately $109,000 of related party
receivables on its balance sheet. The majority of these receivables originated
with the Company's share of undistributed proceeds from a property sale by The
LLC in 1998.

Management and Consulting Services

In June 1998, Metaline executed an agreement with Nor-Pac wherein, for providing
management and consulting services to Metaline, Nor-Pac was entitled to receive
500,000 shares of the Company's common stock in the second half of 1998, 250,000
shares of the Company's common stock quarterly in 1999 and $10,000 per month
thereafter commencing on January 1, 2000. The Company issued 250,000 shares and
500,000 shares during the years ended December 31, 1999 and 2000, respectively,
as required by the management and consulting agreement, in addition to paying
$120,000 in cash in 2000 for services and $20,000 in cash in the first quarter
of 2001 for services.


                                      -15-
<PAGE>   16
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 quarter of
        2001, the same as its operating revenues of $3,000 in the first quarter
        of 2000. However, the Company experienced an increased operating loss of
        $37,307 in the first quarter of 2001 versus $28,669 in the first quarter
        of 2000. The increased loss, $8,638 in the first quarter of 2001, was
        predominantly due to increased professional fees related to the Company
        filing its Form 10-SB Registration Statement, as amended, with the
        Securities and Exchange Commission ("SEC").

        Consulting and management fees remained the same at $30,000. However,
        professional fees, consisting of legal and accounting, increased $8,113
        in the first quarter of 2001 to $8,396 versus $283 in the first quarter
        of 2000, due to audited and audit reviewed financial statements
        necessitated in SEC filing requirements. Transfer agent fees increased
        $10 in the first quarter of 2001 to $237 from $227 in the first quarter
        of 2000 due to a slight increase in trading volume on the Company's
        common stock. Office supplies and expenses increased to $1,674 in the
        first quarter of 2001 from $1,159 in the first quarter of 2000 due to
        cost increases of $515 to prepare and file the Company's amendments to
        its Form 10-SB Registration Statement.

        The Company's other income increased by $115 in the first quarter of
        2001 to $3,482 from $3,597 in the first quarter of 2000. The decrease
        was caused by lower dividend rates earned on the Company's money market
        account, and a $105 loss from its investment in Metaline Contact Mines
        LLC.

        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 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 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.

                                      -16-
<PAGE>   17
        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, 2001 was $301,882 as
        compared to $321,761 as of March 31, 2000.

         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
        $10,000 per month payable under the terms of its Management Agreement
        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 as of March 31, 2001. 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 since January 8, 2000. All of the
        Company's issuance of securities was disclosed in its annual Form 10-KSB
        (Filed on April 27, 2001).

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        None.


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

        None.


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<PAGE>   18
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, 2001.

                                   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 17th day of May, 2001               METALINE CONTACT MINES



                                                   By:   /s/ John W. Beasley
                                                       -------------------------
                                                         John W. Beasley
                                                         Secretary

                                      -18-