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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2010

or

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

For the transition period from ______ to ______

Commission file number: 000-28837

NEW JERSEY MINING COMPANY(Exact name of registrant as specified in its charter)

|Idaho                             | 82-0490295                          
|--------------------------------- | ------------------------------------
|(State or other jurisdiction      | (I.R.S. employer identification No.)
|of incorporation or organization) |                                     

89 Appleberg Road, Kellogg, Idaho 83837(Address of principal executive offices) (zip code)

(208) 783-3331Registrants telephone
number, including area code

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

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
Yes [   ]    No [   ]

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

Large Accelerated Filer  [   ]
    Accelerated
      Filer                   [  
      ]Non-Accelerated Filer    [  
]
    Smaller reporting company 
  [X]


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

On November 2, 2010, 42,937,862 shares of the registrants
common stock were outstanding.

1

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NEW JERSEY MINING COMPANYQUARTERLY REPORT ON FORM
10-QFOR THE QUARTERLY PERIODENDED SEPTEMBER 30, 2010

TABLE OF CONTENTS

|                                                                                                          | Page
|--------------------------------------------------------------------------------------------------------- | ----
|                                                                                                          |     
|PART
      I  FINANCIAL INFORMATION                                                                      |     
|                                                                                                          |     
|Item
      1: Financial Statements                                                                        | 3   
|                                                                                                          |     
|Item
      2: Managements Discussion and Analysis of Financial Condition and Results
      of Operations | 7   
|                                                                                                          |     
|Item
      3: Quantitative and Qualitative Disclosures about Market Risk                                  | 9   
|                                                                                                          |     
|Item
      4: Controls and Procedures                                                                     | 9   
|                                                                                                          |     
|PART
      II  OTHER INFORMATION                                                                         |     
|                                                                                                          |     
|Item
      1: Legal Proceedings                                                                           | 10  
|                                                                                                          |     
|Item
      2: Unregistered Sales of Equity Securities and Use of Proceeds                                 | 10  
|                                                                                                          |     
|Item
      3: Defaults Upon Senior Securities                                                             | 10  
|                                                                                                          |     
|Item
      4: Removed and Reserved                                                                        | 10  
|                                                                                                          |     
|Item
      5: Other Information                                                                           | 10  
|                                                                                                          |     
|Item
      6: Exhibits                                                                                    | 10  
|                                                                                                          |     
|SIGNATURES                                                                                                | 11  
|                                                                                                          |     
|CERTIFICATIONS                                                                                            |     

2

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PART I-FINANCIAL INFORMATION

Item 1: FINANCIAL STATEMENTS

New Jersey Mining Company(A Development Stage
Company)Balance SheetsSeptember 30, 2010and December 31, 2009

|                                                                                                                                                                                                                         |   | September 30, 2010 |   |   | December 31, 2009 |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | ------------------ | - | - | ----------------- | -
|                                                                                                                                                                                                                         |   | (Unaudited)        |   |   |                   |  
|                                                                                                                                                                                                                         |   |                    |   |   |                   |  
|**ASSETS**                                                                                                                                                                                                               |  
|                                                                                                                                                                                                                         |   |                    |   |   |                   |  
|Current assets:                                                                                                                                                                                                          |   |                    |   |   |                   |  
|Cash and cash equivalents                                                                                                                                                                                                | $ | 21,839             |   | $ | 34,087            |  
|Investment in marketable equity
      security at market               (cost-$3,868)                                                                                                                                     |   | 9,672              |   |   | 21,665            |  
|Interest receivable                                                                                                                                                                                                      |   | 183                |   |   | 309               |  
|Miscellaneous receivable                                                                                                                                                                                                 |   |                    |   |   | 919               |  
|Contract drilling receivable                                                                                                                                                                                             |   | 71,795             |   |   |                   |  
|Engineering services receivable                                                                                                                                                                                          |   | 1,665              |   |   |                   |  
|Prepaid claim fees                                                                                                                                                                                                       |   | 18,480             |   |   | 18,573            |  
|Inventory                                                                                                                                                                                                                |   | 14,451             |   |   | 1,833             |  
|Total current assets                                                                                                                                                                                                     |   | 138,085            |   |   | 77,386            |  
|                                                                                                                                                                                                                         |   |                    |   |   |                   |  
|Property, plant, and equipment, net of accumulated depreciation                                                                                                                                                          |   | 1,336,524          |   |   | 1,353,369         |  
|Mineral properties, net of accumulated amortization                                                                                                                                                                      |   | 1,403,579          |   |   | 1,407,959         |  
|Reclamation bonds                                                                                                                                                                                                        |   | 121,133            |   |   | 121,088           |  
|Total
      assets                                                                                                                                                                                                       | $ | 2,999,321          |   | $ | 2,959,802         |  
|                                                                                                                                                                                                                         |   |                    |   |   |                   |  
|LIABILITIES AND STOCKHOLDERS
      EQUITY                                                                                                                                                                               |  
|                                                                                                                                                                                                                         |   |                    |   |   |                   |  
|Current liabilities:                                                                                                                                                                                                     |   |                    |   |   |                   |  
|Accounts payable                                                                                                                                                                                                         | $ | 49,888             |   | $ | 62,858            |  
|Note and interest payable, related
      party                                                                                                                                                                           |   | 82,717             |   |   | 72,107            |  
|Accrued payroll and related payroll expenses                                                                                                                                                                             |   | 21,661             |   |   | 7,160             |  
|Deposit received on sale of mineral
      property                                                                                                                                                                       |   |                    |   |   | 50,000            |  
|Obligations under capital lease, current                                                                                                                                                                                 |   | 13,512             |   |   | 9,894             |  
|Notes payable, current                                                                                                                                                                                                   |   | 70,462             |   |   | 134,689           |  
|Total current liabilities                                                                                                                                                                                                |   | 238,240            |   |   | 336,708           |  
|                                                                                                                                                                                                                         |   |                    |   |   |                   |  
|Asset retirement obligation                                                                                                                                                                                              |   | 28,517             |   |   | 25,913            |  
|Obligations under capital lease, non-current                                                                                                                                                                             |   | 4,335              |   |   | 10,398            |  
|Notes payable, non-current                                                                                                                                                                                               |   | 67,604             |   |   | 56,650            |  
|Total non-current liabilities                                                                                                                                                                                            |   | 100,456            |   |   | 92,961            |  
|                                                                                                                                                                                                                         |   |                    |   |   |                   |  
|Total liabilities                                                                                                                                                                                                        |   | 338,696            |   |   | 429,669           |  
|                                                                                                                                                                                                                         |   |                    |   |   |                   |  
|Stockholders equity:                                                                                                                                                                                                    |   |                    |   |   |                   |  
|Preferred stock, no par value, 1,000,000 shares
      authorized;               no
      shares issued and outstanding                                                                                                   |   |                    |   |   |                   |  
|Common stock, no par value, 50,000,000
      shares authorized;               September
      30, 2010-42,936,612 and               December
      31, 2009-38,685,232               shares
      issued and outstanding |   | 9,948,367          |   |   | 9,285,383         |  
|Deficit accumulated during the development stage                                                                                                                                                                         |   | (7,293,545         | ) |   | (6,773,046        | )
|Accumulated other comprehensive
      income                                                                                                                                                                             |   |                    |   |   |                   |  
|Unrealized
      gain in marketable equity security                                                                                                                                                                      |   | 5,803              |   |   | 17,796            |  
|Total stockholders equity                                                                                                                                                                                               |   | 2,660,625          |   |   | 2,530,133         |  
|                                                                                                                                                                                                                         |   |                    |   |   |                   |  
|Total
      liabilities and stockholders equity                                                                                                                                                                         | $ | 2,999,321          |   | $ | 2,959,802         |  

3

The accompanying notes are an integral part of these
financial statements.

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New Jersey Mining Company(A Development Stage
Company)Statements of Operations and Comprehensive Loss (Unaudited)For the Three and Nine Month Periods Ended September 30, 2010 and
2009,And from Inception (July 18, 1996) through September 30, 2010

|                                                                                |   |                    |   |   |                    |   |   |                |   |   |             |   |   | From Inception  |  
|------------------------------------------------------------------------------- | - | ------------------ | - | - | ------------------ | - | - | -------------- | - | - | ----------- | - | - | --------------- | -
|                                                                                |   |                    |   |   |                    |   |   |                |   |   |             |   |   | (July 18, 1996) |  
|                                                                                |   |                    |   |   |                    |   |   |                |   |   |             |   |   | Through         |  
|                                                                                |   | September 30, 2010 |   |   | September 30, 2009 |   |   | Sept. 30, 2010 |  
|                                                                                |   | Three Months       |   |   | Nine Months        |   |   | Three Months   |   |   | Nine Months |   |   |                 |  
|Income earned during the development stage:                                     |   |                    |   |   |                    |   |   |                |   |   |             |   |   |                 |  
|Sales of gold                                                                   | $ | 5,343              |   | $ | 11,410             |   | $ | 98,512         |   | $ | 262,171     |   | $ | 437,122         |  
|Sales of concentrate                                                            |   |                    |   |   |                    |   |   |                |   |   |             |   |   | 601,168         |  
|Drilling and exploration
      contract income                                  |   | 120,255            |   |   | 132,340            |   |   | 94,659         |   |   | 161,131     |   |   | 330,951         |  
|Engineering services income                                                     |   | 10,415             |   |   | 10,415             |   |   |                |   |   |             |   |   | 10,415          |  
|                                                                                |   | 136,013            |   |   | 154,165            |   |   | 193,171        |   |   | 423,302     |   |   | 1,379,656       |  
|                                                                                |   |                    |   |   |                    |   |   |                |   |   |             |   |   |                 |  
|Costs and expenses:                                                             |   |                    |   |   |                    |   |   |                |   |   |             |   |   |                 |  
|Direct production costs                                                         |   | 8,571              |   |   | 49,491             |   |   | 108,174        |   |   | 280,445     |   |   | 1,316,693       |  
|Drilling and exploration
      contract expense                                 |   | 56,287             |   |   | 76,896             |   |   | 48,224         |   |   | 76,386      |   |   | 165,582         |  
|Engineering servicing expense                                                   |   | 375                |   |   | 375                |   |   |                |   |   |             |   |   | 375             |  
|Management                                                                      |   | 59,205             |   |   | 186,231            |   |   | 94,597         |   |   | 281,668     |   |   | 1,882,262       |  
|Exploration                                                                     |   | 37,575             |   |   | 151,203            |   |   | 17,956         |   |   | 67,500      |   |   | 2,401,211       |  
|Gain on sale of
      mineral property                                          |   |                    |   |   |                    |   |   |                |   |   |             |   |   | (90,000         | )
|Gain on default of mineral 
                    property
      sale             |   |                    |   |   | (50,000            | ) |   |                |   |   |             |   |   | (320,000        | )
|Net gain on sale
      of equipment                                             |   | (30,500            | ) |   | (30,098            | ) |   |                |   |   |             |   |   | (30,098         | )
|Depreciation and amortization                                                   |   | 13,050             |   |   | 46,493             |   |   | 22,932         |   |   | 108,536     |   |   | 716,585         |  
|General and administrative
      expenses                                       |   | 65,687             |   |   | 240,297            |   |   | 55,851         |   |   | 191,668     |   |   | 2,631,855       |  
|Total
      operating expenses                                                  |   | 210,250            |   |   | 670,888            |   |   | 347,734        |   |   | 1,006,203   |   |   | 8,674,465       |  
|                                                                                |   |                    |   |   |                    |   |   |                |   |   |             |   |   |                 |  
|Other (income) expense:                                                         |   |                    |   |   |                    |   |   |                |   |   |             |   |   |                 |  
|Timber sales                                                                    |   |                    |   |   |                    |   |   |                |   |   |             |   |   | (54,699         | )
|Timber expense                                                                  |   |                    |   |   |                    |   |   |                |   |   |             |   |   | 14,554          |  
|Royalties and other
      income                                                |   | (1,284             | ) |   | (3,095             | ) |   | (234           | ) |   | (237        | ) |   | (75,171         | )
|Royalties expense                                                               |   |                    |   |   |                    |   |   | 6,219          |   |   | 9,816       |   |   | 44,089          |  
|Gain on sale of
      marketable equity security                                |   |                    |   |   |                    |   |   |                |   |   | (1,912      | ) |   | (92,269         | )
|Interest income                                                                 |   | (112               | ) |   | (723               | ) |   | (111           | ) |   | (548        | ) |   | (47,816         | )
|Interest expense                                                                |   | 3,366              |   |   | 7,593              |   |   | 4,915          |   |   | 15,930      |   |   | 89,098          |  
|Write-off of goodwill                                                           |   |                    |   |   |                    |   |   |                |   |   |             |   |   | 30,950          |  
|Write-off of investment                                                         |   |                    |   |   |                    |   |   |                |   |   |             |   |   | 90,000          |  
|Total
      other (income) expense                                              |   | 1,970              |   |   | 3,775              |   |   | 10,789         |   |   | 23,049      |   |   | (1,264          | )
|                                                                                |   |                    |   |   |                    |   |   |                |   |   |             |   |   |                 |  
|Net loss                                                                        |   | 76,207             |   |   | 520,498            |   |   | 165,352        |   |   | 605,950     |   |   | 7,293,545       |  
|                                                                                |   |                    |   |   |                    |   |   |                |   |   |             |   |   |                 |  
|Other comprehensive (income) loss:                                              |   |                    |   |   |                    |   |   |                |   |   |             |   |   |                 |  
|Unrealized (gain) loss on 
                    marketable
      equity security |   |                    |   |   | 11,993             |   |   | (3,324         | ) |   | (7,614      | ) |   | (5,803          | )
|                                                                                |   |                    |   |   |                    |   |   |                |   |   |             |   |   |                 |  
|Comprehensive loss                                                              | $ | 76,207             |   | $ | 532,491            |   | $ | 162,028        |   | $ | 598,336     |   | $ | 7,287,742       |  
|                                                                                |   |                    |   |   |                    |   |   |                |   |   |             |   |   |                 |  
|Net loss per common share basic                                                 | $ | Nil                |   | $ | 0.01               |   | $ | Nil            |   | $ | 0.02        |   | $ | 0.34            |  
|                                                                                |   |                    |   |   |                    |   |   |                |   |   |             |   |   |                 |  
|Weighted average common         shares
      outstanding basic                  |   | 42,703,101         |   |   | 42,020,248         |   |   | 37,903,858     |   |   | 37,535,281  |   |   | 21,364,990      |  

4

The accompanying notes are an integral part of these
financial statements.

---

New Jersey Mining Company(A Development Stage
Company)Statements of Cash Flows (Unaudited)For the Nine
Month Periods Ended September 30, 2010 and 2009,And from Inception (July 18, 1996) through September 30, 2010

|                                                               |   |                     |   |   |                 |   |   | From Inception     |  
|-------------------------------------------------------------- | - | ------------------- | - | - | --------------- | - | - | ------------------ | -
|                                                               |   | September
      30, |   |   | (July 18, 1996) |  
|                                                               |   |                     |   |   |                 |   |   | through            |  
|                                                               |   | 2010                |   |   | 2009            |   |   | September 30, 2010 |  
|Cash flows from operating activities:                          |   |                     |   |   |                 |   |   |                    |  
|Net loss                                                       | $ | (520,498            | ) | $ | (605,950        | ) | $ | (7,293,545         | )
|Adjustments to reconcile net loss to net
      cash            |   |                     |   |   |                 |   |   |                    |  
|Used by operating activities:                                  |   |                     |   |   |                 |   |   |                    |  
|Depreciation
      and amortization                            |   | 46,493              |   |   | 108,536         |   |   | 716,586            |  
|Net gain on sale of equipment                                  |   | (30,098             | ) |   |                 |   |   | (18,826            | )
|Write-off
      of goodwill and investment                     |   |                     |   |   |                 |   |   | 120,950            |  
|Gain on sale of mineral properties                             |   | (50,000             | ) |   |                 |   |   | (410,000           | )
|Gain on sale
      of marketable equity securities             |   |                     |   |   | (1,912          | ) |   | (92,269            | )
|Accretion of asset retirement obligation                       |   | 2,604               |   |   |                 |   |   | 4,047              |  
|Common stock issued for:                                       |   |                     |   |   |                 |   |   |                    |  
|Management and directors fees                                 |   | 31,240              |   |   | 221,498         |   |   | 1,140,575          |  
|Services and
      other                                       |   | 17,113              |   |   | 16,323          |   |   | 239,521            |  
|Exploration                                                    |   |                     |   |   | 11,250          |   |   | 95,521             |  
|Mineral property
      agreement                               |   |                     |   |   |                 |   |   | 15,000             |  
|Change in:                                                     |   |                     |   |   |                 |   |   |                    |  
|Prepaid expense                                                |   |                     |   |   | 572             |   |   |                    |  
|Prepaid claim fees                                             |   | 93                  |   |   | (25,538         | ) |   | (18,480            | )
|Inventory                                                      |   | (12,618             | ) |   | 63,583          |   |   | (14,451            | )
|Miscellaneous receivable                                       |   | 919                 |   |   | 5,516           |   |   |                    |  
|Interest receivable                                            |   | 125                 |   |   | 118             |   |   | (184               | )
|Contract drilling receivable                                   |   | (71,795             | ) |   | (48,073         | ) |   | (71,795            | )
|Engineering
      services receivable                          |   | (1,665              | ) |   |                 |   |   | (1,665             | )
|Other assets                                                   |   |                     |   |   |                 |   |   | (778               | )
|Accounts payable                                               |   | (12,446             | ) |   | 10,274          |   |   | 59,650             |  
|Accrued payroll and related payroll expenses                   |   | 14,501              |   |   | (30,118         | ) |   | 21,661             |  
|Accrued reclamation
      costs                                |   |                     |   |   |                 |   |   | (1,443             | )
|Net cash used by operating activities                          |   | (586,032            | ) |   | (273,921        | ) |   | (5,509,925         | )
|Cash flows from investing activities:                          |   |                     |   |   |                 |   |   |                    |  
|Purchases of property,
      plant, and equipment              |   | (21,043             | ) |   | (4,392          | ) |   | (1,105,291         | )
|Purchase of mineral property                                   |   |                     |   |   |                 |   |   | (20,904            | )
|Proceeds from sale of
      mineral property                   |   |                     |   |   |                 |   |   | 120,000            |  
|Deposit received on sale of mineral property                   |   |                     |   |   |                 |   |   | 320,000            |  
|Proceeds on sale of equipment                                  |   | 31,498              |   |   |                 |   |   | 31,498             |  
|Purchases of or increase in reclamation
      bonds            |   | (45                 | ) |   | 2,432           |   |   | (121,133           | )
|Purchase of marketable
      equity security                   |   |                     |   |   |                 |   |   | (7,500             | )
|Proceeds from sales of marketable equity
      securities      |   |                     |   |   | 2,112           |   |   | 95,901             |  
|Cash of acquired companies                                     |   |                     |   |   |                 |   |   | 38,269             |  
|Deferral of development costs                                  |   |                     |   |   |                 |   |   | (759,209           | )
|Net cash provided (used) by investing
      activities         |   | 10,410              |   |   | 152             |   |   | (1,408,369         | )
|Cash flows from financing activities:                          |   |                     |   |   |                 |   |   |                    |  
|Exercise of stock purchase
      warrants                      |   | 33,936              |   |   |                 |   |   | 2,571,536          |  
|Sales of common stock, net of issuance
      costs             |   | 580,170             |   |   | 30,000          |   |   | 4,841,246          |  
|Principal payments on
      capital lease                      |   | (8,069              | ) |   | (24,212         | ) |   | (191,566           | )
|Principal payments on notes payable                            |   | (53,273             | ) |   | (86,345         | ) |   | (363,800           | )
|Note and interest payable,
      related party net             |   | 10,610              |   |   | 70,048          |   |   | 82,717             |  
|Net cash provided (used) by financing activities               |   | 563,374             |   |   | (10,509         | ) |   | 6,940,133          |  
|Net change in cash and cash equivalents                        |   | (12,248             | ) |   | (284,278        | ) |   | 21,839             |  
|Cash and cash equivalents, beginning of period                 |   | 34,087              |   |   | 321,254         |   |   | 0                  |  
|Cash and cash equivalents, end of period                       | $ | 21,839              |   | $ | 36,976          |   | $ | 21,839             |  
|Supplemental disclosure of cash flow information:              |   |                     |   |   |                 |   |   |                    |  
|Interest paid in cash, net of amount capitalized               | $ | 7,593               |   | $ | 14,482          |   | $ | 77,077             |  
|Non-cash investing and financing activities:                   |   |                     |   |   |                 |   |   |                    |  
|Common stock issued for:                                       |   |                     |   |   |                 |   |   |                    |  
|Property,
      plant, and equipment                           |   |                     |   |   |                 |   | $ | 50,365             |  
|Mineral properties                                             |   |                     |   |   |                 |   | $ | 333,300            |  
|Payment of
      accounts payable                              | $ | 525                 |   |   |                 |   | $ | 12,730             |  
|Acquisitions of companies, excluding cash                      |   |                     |   |   |                 |   | $ | 743,653            |  
|Capital lease obligation incurred for
      equipment acquired | $ | 5,625               |   |   |                 |   | $ | 184,213            |  
|Notes payable for property
      and equipment acquired        |   |                     |   |   |                 |   | $ | 482,634            |  

5

The accompanying notes are an integral part of these financial
statements.

---

New Jersey Mining CompanyNotes to Financial
Statements(Unaudited)

1.           
Basis of Presentation:

These unaudited interim financial statements have been prepared
by the management of New Jersey Mining Company (the Company) in accordance
with accounting principles generally accepted in the United States of America
for interim financial information, as well as the instructions to Form 10-Q.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of the Companys management, all adjustments (consisting of only
normal recurring accruals) considered necessary for a fair presentation of the
interim financial statements have been included.

The preparation of financial statements in accordance with
accounting principles generally accepted in the United States of America
requires the use of estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities known
to exist as of the date the financial statements are published, and the reported
amounts of revenues and expenses during the reporting period. Uncertainties with
respect to such estimates and assumptions are inherent in the preparation of the
Company's financial statements; accordingly, it is possible that the actual
results could differ from these estimates and assumptions, which could have a
material effect on the reported amounts of the Company's financial position and
results of operations. Operating results for the three and nine month periods
ended September 30, 2010, are not necessarily indicative of the results that may
be expected for the full year ending December 31, 2010.

For further information refer to the financial statements and
footnotes thereto in the Companys Annual Report on Form 10-K for the year ended
December 31, 2009.

The Company presents its financial statements in accordance
with accounting guidance for development stage entities, as management believes
that while the Companys planned principal operations have commenced, the
revenue generated from them is not sufficient to cover all corporate costs.
Additional development of the Companys properties is necessary before a
transition is made to reporting as a production stage company.

2.            Related
Party Transactions

Stock payments are made to President Fred Brackebusch and Vice
President Grant Brackebusch quarterly based on an hourly rate for management
services above a predetermined amount and also in some cases in lieu of base
salary. These payments have been deferred for the first and second quarters of
2010. As of September 30, 2010, these deferred payments were $48,549 for the
first quarter and $31,250 for the second quarter. An unsecured line of credit
with 0% interest was extended to the Company by Fred Brackebusch and Grant
Brackebusch for the amount of stock due for management services in those
quarters. In addition $2,918. in office rent for the second and third quarters
of 2010 is payable to Mine Systems Design, a related party.

3.            Equity

Warrants

In the second quarter of 2010, 206,500 warrants were exercised;
  each warrant was exchanged for one unregistered share of the Companys
  stock, at $0.16 per share resulting in proceeds of $33,936. No warrants were
  exercised in the first or third quarters of 2010.

Common Stock Issued for Cash, Goods, and Services

The Company issued 142,000 shares of unregistered common stock
  to President Fred Brackebusch for management services rendered in the three
  month period ending September 30, 2010. The shares were valued at $0.22 per
  share or $31,240.

During the three and nine month periods ended September 30,
2010, the Company issued 72,250 and 79,750 shares, respectively, of unregistered
common stock to individuals for goods and services at fair value prices ranging
from $0.17 to $0.25 per share for a total of $15,438 and $17,113 respectively.

During the three month period ending September 30, 2010, the
Company issued 2,600 shares of unregistered common stock to individuals in
exchange for accounts payable at a fair value price of $0.20 per share or $525.

During the three and nine month periods ended September 30,
2010, the Company issued 300,000 and 3,820,530 units, each unit consisting of
one share of unregistered common stock and one stock purchase warrant, at an
average price of $0.15 per unit. These units consisted of both brokered and non
brokered units.

4.            Fair
Value Measurement

The table below sets forth our financial assets that were
accounted for at fair value on at September 30, 2010 and December 31, 2009, and
their respective hierarchy level. Hierarchy level is determined by segregating
fair value measurements using quoted prices in active markets for identical
assets or liabilities (Level 1), significant other observable inputs (Level 2),
and significant unobservable inputs (Level 3).We had no other financial assets
or liabilities accounted for at fair value at September 30, 2010 and December
31, 2009.

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Balance at September 30, 2010
    Balance at December 31, 2009
    Hierarchy LevelInvestments in marketable
      equity securities
    $   9,672
    $21,665
    Level 1


5.            Mining
Venture Agreements

Newmont Venture Agreement

The Company entered into a venture agreement with Newmont North
  America Exploration Limited ("Newmont") in March 2008, relating to exploration
  of the Company's Toboggan Project. Newmont is conducting exploration in a 38
  square mile area centered on the prospects that the Company has staked. To earn
  a participating interest in the Venture, Newmont is required to contribute $2,000,000
  in exploration expenditures as follows: $300,000 on or before March 2009, an
  additional $700,000 by March 2010, and an additional $1,000,000 by March 2011.
  Newmont has completed two field seasons of exploration work and is currently
  conducting the third season in 2010. Newmont has made satisfactory progress
  toward completing their required expenditures under the agreement. NJMC has
  been providing drilling services on a per footage fee basis to Newmont for this
  project.

6.     
      Subsequent Events

Subsequent to the end of the third quarter of 2010, a Letter of
Intent (LOI) was signed with United Mine Services, Inc. (UMS) to form a joint
venture for the Companys mill. UMS would fund the capital necessary to expand
the mill to process 15 tonnes/hr and would own 1/3 of the joint venture. The
Company would operate the mill and process ores from its own properties as well
as from the Crescent mine, operated by UMS. A Definitive Agreement would be
signed before the end of 2010. In the LOI, UMS agrees to pay the Company for
engineering services related to the mill expansion prior to signing the
Definitive Agreement.

Item 2:      MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

When we use the terms "New Jersey Mining Company," the
"Company," "we," "us," or "our," we are referring to New Jersey Mining Company
(the "Company") and its subsidiaries, unless the context otherwise requires.

Cautionary Statement about Forward-Looking Statements

This Quarterly Report on Form 10-Q includes certain statements
that may be deemed to be "forward-looking statements." All statements, other
than statements of historical facts, included in this Form 10-Q that address
activities, events or developments that our management expects, believes or
anticipates will or may occur in the future are forward-looking statements. Such
forward-looking statements include discussion of such matters as:

- The amount and nature of future capital, development and exploration
  expenditures;
- The timing of exploration activities; and
- Business strategies and development of our business plan.

Forward-looking statements also typically include words such as
"anticipate," "estimate," "expect," "potential," "could" or similar words
suggesting future outcomes. These statements are based on certain assumptions
and analyses made by us in light of our experience and our perception of
historical trends, current conditions, expected future developments and other
factors we believe are appropriate in the circumstances. Such statements are
subject to a number of assumptions, risks and uncertainties, including such
factors as the volatility and level of metal prices, currency exchange rate
fluctuations, uncertainties in cash flow, expected acquisition benefits,
exploration mining and operating risks, competition, litigation, environmental
matters, the potential impact of government regulations, and other matters
related to the mining industry, many of which are beyond our control. Readers
are cautioned that forward-looking statements are not guarantees of future
performance and that actual results or developments may differ materially from
those expressed or implied in the forward-looking statements.

The Company is under no duty to update any of these
forward-looking statements after the date of this report. You should not place
undue reliance on these forward-looking statements.

Plan of Operation

The Company is executing its strategy to conduct exploration
for gold, silver and base metal deposits in the greater Coeur dAlene Mining
District of northern Idaho while concurrently conducting mining and mineral
processing operations on ore reserves it has located on its exploration
properties. The financial strategy is to generate cash from these operations to
pay for corporate expenses and to provide additional funds for exploration, thus
reducing the need to raise funds through financing activities including sale of
common stock. The strategy includes finding and developing ore reserves in order
to increase production of gold, silver, and base metals. In addition, the sale
or joint venture of mineral properties is used as a source of funds and to
reduce exploration costs.

The Company has several properties at which most exploration is
being conducted; the Toboggan Project, the Niagara, the Golden Chest, the Silver
Strand, and the Coleman. The Toboggan Project is a group of prospects in the
Murray, Idaho District that contain gold and silver

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telluride minerals. The Toboggan Project is being explored by
Newmont North America Exploration Limited under a joint venture agreement.
Newmont is conducting exploration in a 38 square mile area centered on prospects
that the Company has staked previously and on new claims staked by Newmont.
Newmont commenced drilling of certain targets in the second quarter of 2010 and
continued through the third quarter. The Niagara copper-silver deposit, also
located in the Murray, Idaho area, in the Revett formation was drilled in the
1970s, and the Company drilled five holes since which expanded the resource.
The Company is searching for joint venture opportunities in order to acquire
funding to develop the reserves at the Golden Chest mine. An exploration drill
hole was completed at the Golden Chest in the second quarter and a thin, high
grade vein was intercepted. Production of silver-gold ore commenced at the
Silver Strand mine in May 2010, but late in the second quarter crews were
reassigned to exploration at the Golden Chest. At the Coleman underground mine,
during the first quarter a raise on the vein was started to help determine
whether reserves can be calculated on the deeper parts of the Coleman vein.

The Company commenced core drilling operations at the Toboggan
Project for Newmont under a service agreement in June 2010 and continued through
the end of October 2010.

Subsequent to the end of the third quarter of 2010, a Letter of
Intent was signed with United Mine Services, Inc. (UMS) to form a joint venture
for the Companys mill. UMS would fund the capital necessary to expand the mill
to process 15 tonnes/hr and would own 1/3 of the joint venture. The Company
would operate the mill and process ores from its own properties as well as from
the Crescent mine, operated by UMS. A Definitive Agreement would be signed
before the end of 2010.

Changes in Financial Condition

The Company maintains an adequate cash balance by increasing
  or decreasing its exploration expenditures as limited by availability of cash
  from operations or from financing activities. The cash balance at the end of
  the third quarter was $21,839, and Figure 1 shows the corresponding balances
  for previous accounting periods.



The cash balance decreased during the third quarter due to lack
of financing activities and limited revenue.

Results of Operations

Income Earned during the Development Stage (Revenue) for the
  third quarter of 2010 was $136,013 as compared to $193,171 for the comparable
  period of 2009. Revenue was lower in 2010 due to lower gold sales. Figure 2
  shows a net loss for the third quarter of 2010 of $76,207 compared to a loss
  of $165,352 for the third quarter of 2009. The net loss for the third quarter
  of 2010 was less than the third quarter of 2009 because of reduced operating
  costs.

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There was no gold production in the third quarter of 2010 nor
was there any in the comparable period of 2009. No gold production is expected
for the remainder of 2010.

At the Golden Chest mine, production depends upon the ability
to complete development of reserves. If the Idaho vein ramp development can be
completed there will be more than 200,000 tonnes available. There are no plans
in 2010 to commence ramp development unless a joint venture partner or other
means of financing can be arranged.

Ore production started at the Silver Strand mine in the second
quarter of 2010 but was suspended due to low metallurgical recovery in the
concentrate leach plant. While management expects that it can solve the
metallurgical problems with Silver Strand ore, no production will be possible
for the remainder of the operating season.

The amount of money to be spent on exploration at the Companys
mines and prospects will depend upon the amount of gross profit generated by
operations and the amount of money raised by financing activities. Management
expects that minimal work will be done at the Companys mines for the remainder
of 2010 and that the mineral processing plant will remain idle the remainder of
the year.

The Company will continue to look for a joint venture partner
at the Golden Chest mine and to pursue equity financing. The Company is drilling
for Newmont at the Toboggan Project on a contract basis during the 2010 summer
and fall season. Newmont currently pays for all exploration activities on the
Toboggan Project. We expect to receive cash flow by providing drilling services
to Newmont on our joint venture (see note 5. Mining Venture Agreements  Newmont
Venture Agreement).

Changes in Direct Production Costs Direct
production costs decreased for the three and nine month periods ending September
30, 2010 compared to the comparable periods last year because the mining and
milling properties have been shut down for the majority of the year.

Changes in Management CostsManagement
expenses decreased for the three and nine month periods ending September 30,
2010 compared to the comparable periods last year because of limited activity in
2010. Management continues to receive a portion of payment in stock.

Changes in Exploration Costs Exploration
expenses increased for the nine month period ending September 30, 2010 compared
to the comparable period last year. Exploration projects were put on hold in
2009 while production occurred at the Golden Chest property. In March of 2010
exploration activities were resumed at the Coleman and Golden Chest properties.

Item 3:      QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for small reporting companies.

Item 4:      CONTROLS AND
PROCEDURES

Disclosure Controls and Procedures

The Companys President and Chief Executive Officer who
  also serves as the Companys principal financial officer, has evaluated
  the effectiveness of the Companys disclosure controls and procedures pursuant
  to Rule 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934
  (the Exchange Act), as of the end of the period covered by this
  report. Based on such evaluation, the Companys President, Chief Executive
  Officer, and principal financial officer has concluded that, as of the end of
  such period, the Companys disclosure

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controls and procedures are effective in recording, processing,
summarizing, and reporting, on a timely basis, information required to be
disclosed by the Company in the reports that it files under the Exchange Act.

Changes in internal control over financial reporting.

The President, Chief Executive Officer, and principal financial
  officer conducted evaluations of the Companys internal controls over financial
  reporting to determine whether any changes occurred during the quarter ended
  September 30, 2010 that have materially affected, or are reasonably likely to
  materially affect, the Companys internal control over financial reporting.
  No material changes in internal control over financial reporting occurred in
  the quarter ended September 30, 2010.

PART II - OTHER INFORMATION

Item 1.      LEGAL PROCEEDINGS

The Company is currently a plaintiff along with Shoshone
County, Idaho, and George E. Stephenson in a complaint against the USA,
Secretary of the Department of Agriculture, Chief of the Forest Service, etc.,
for Declaratory Judgment and Quiet Title regarding a public right-of-way for the
East Fork of Eagle Creek Road near Murray, Idaho. The complaint was filed on
October 5, 2009 in the United States District Court, District of Idaho. The
plaintiffs are bringing the action to adjudicate/declare under the Quiet Title
Act, and under the Declaratory Judgment Act that the East Fork Eagle Creek Road
is a public road as it crosses the lands owned by the USA in accordance with
R.S. 2477.

Item 2.      UNREGISTERED SALES OF
EQUITY SECURITIES AND USE OF PROCEEDS.

Neither the constituent instruments defining the rights of the
Companys securities filers nor the rights evidenced by the Companys
outstanding common stock have been modified, limited or qualified.

During the third quarter of 2010 the Company issued 300,000
shares of unregistered common stock, each unit of stock was accompanied by a
purchase warrant. for net proceeds of $51,000 to certain accredited and
sophisticated individuals in exchange for cash. In managements opinion, the
sale of the restricted shares, as defined under Rule 144, was made in reliance
on exemptions from registration provided by Section 4(2) and Rule 506 of
Regulation D of the Securities Act of 1933, as amended and other applicable
Federal and state securities laws.

During the third quarter of 2010 the Company issued 2,600
shares of unregistered common stock at $0.20 for accounts payable and 72,250
shares of unregistered common stock at an average price of $0.21 for goods and
services to other accredited and sophisticated individuals. In managements
opinion, the securities were issued pursuant to exemptions from registration
under Section 4(2) of the Securities Act of 1933, as amended.

Item 3.      DEFAULTS UPON SENIOR
SECURITIES

The Company has no outstanding senior securities.

Item 4.      REMOVED AND
RESERVED

Item 5.      OTHER INFORMATION

None

Item 6.      EXHIBITS

|Number | Description                                                                                                                                                                                  
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                              
|3.1    | Articles of Incorporation.
        Filed as an exhibit to the registrant's registration statement on Form
        10-SB (Commission File No. 000-28837) and incorporated by reference herein.
|       |                                                                                                                                                                                              
|3.2    | Bylaws. Filed
        as an exhibit to the registrant's registration statement on Form 10-SB
        (Commission File No. 000-28837) and incorporated by reference herein.                   
|       |                                                                                                                                                                                              
|31.1   | Certification
        pursuant to Section 302 of the Sarbanes-Oxley act of 2002.                                                                                                             
|       |                                                                                                                                                                                              
|31.2   | Certification
        pursuant to Section 302 of the Sarbanes-Oxley act of 2002.                                                                                                             
|       |                                                                                                                                                                                              
|32.1   | Certification
        pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
        of the Sarbanes-Oxley Act of 2002.                                                      
|       |                                                                                                                                                                                              
|32.2   | Certification
        pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
        of the Sarbanes-Oxley Act of 2002.                                                      

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

NEW JERSEY MINING COMPANY

| | By: | /s/ Fred W. Brackebusch              
| | --- | -------------------------------------
| |     |                                      
| |     | Fred W. Brackebusch, its             
| |     | President, Treasurer &
      Director
| |     | Date November 11, 2010               
| |     |                                      
| |     |                                      
| | By: | /s/ Grant A. Brackebusch             
| |     |                                      
| |     | Grant A. Brackebusch, its            
| |     | Vice President & Director            
| |     | Date: November 11, 2010              

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