---

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, 2009

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 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 3, 2009, 38,163,632 shares of the registrants
common stock were outstanding.

---

|NEW JERSEY MINING COMPANY    
|-----------------------------
|QUARTERLY REPORT ON FORM 10-Q
|FOR THE QUARTERLY PERIOD     
|ENDED SEPTEMBER 30, 2009     
|                             
|                             
|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 | 9   
|Item
      3: Quantitative and Qualitative Disclosures about Market Risk                                  | 12  
|Item
      4: Controls and Procedures                                                                     | 12  
|Item
      4T: Controls and Procedures                                                                    | 12  
|PART II  OTHER INFORMATION                                                                               |     
|Item
      1: Legal Proceedings                                                                           | 13  
|Item
      2: Unregistered Sales of Equity Securities and Use of Proceeds                                 | 13  
|Item
      3: Defaults Upon Senior Securities                                                             | 13  
|Item
      4: Submission of Matters to a Vote of Security Holders                                         | 13  
|Item
      5: Other Information                                                                           | 13  
|Item
      6: Exhibits                                                                                    | 13  
|SIGNATURES                                                                                                | 14  
|CERTIFICATIONS                                                                                            |     

2

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PART I-FINANCIAL INFORMATION

Item 1: FINANCIAL STATEMENTS

|New Jersey Mining Company               
|----------------------------------------
|(A Development Stage Company)           
|Balance Sheets (Unaudited)              
|September 30, 2009 and December 31, 2008

|ASSETS                                                                |  
|--------------------------------------------------------------------- | -
|                                                                      |  
|                                                                      |  
|Current assets:                                                       |  
|Cash and cash equivalents                                             | $
|Investment in marketable
      equity security at market              |  
|(cost-September
      30-$6,331, December 31-$6,531)                  |  
|Interest receivable                                                   |  
|Miscellaneous receivable                                              |  
|Contract drilling receivable                                          |  
|Prepaid expense                                                       |  
|Prepaid claim fees                                                    |  
|Inventory                                                             |  
|Total current assets                                                  |  
|                                                                      |  
|Property, plant, and equipment, net of
      accumulated depreciation |  
|Mineral properties, net of accumulated amortization                   |  
|Reclamation bonds                                                     |  
|Total assets                                                          | $
|                                                                      |  
|                                                                      |  
|LIABILITIES AND
      STOCKHOLDERS EQUITY                            |  
|                                                                      |  
|Current liabilities:                                                  |  
|Accounts payable                                                      | $
|Note and interest payable,
      related party                        |  
|Accrued payroll and related payroll expenses                          |  
|Obligations under capital
      lease, current                        |  
|Notes payable, current                                                |  
|Total current liabilities                                             |  
|                                                                      |  
|Accrued reclamation costs                                             |  
|Obligations under capital lease, non-current                          |  
|Notes payable, non-current                                            |  
|                                                                      |  
|Total liabilities                                                     |  
|                                                                      |  
|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, 2009-38,143,132 and                                     |  
|December 31,
      2008-37,160,392                                    |  
|shares issued and outstanding                                         |  
|Deficit accumulated during the development
      stage                |  
|Accumulated other
      comprehensive income                          |  
|Unrealized gain in
      marketable equity security                   |  
|Total stockholders equity                                            |  
|                                                                      |  
|Total liabilities and stockholders equity                            | $

3

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

---

|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, 2009 and 2008,
|And from Inception (July 18, 1996) through September
      30, 2009          

|                                                  |   |                    |        |   |                    |   |   |              |   |   |             |         |   |                          |  
|------------------------------------------------- | - | ------------------ | ------ | - | ------------------ | - | - | ------------ | - | - | ----------- | ------- | - | ------------------------ | -
|                                                  |   |                    |        |   |                    |   |   |              |   |   |             |         |   | From Inception           |  
|                                                  |   |                    |        |   |                    |   |   |              |   |   |             |         |   | (July 18, 1996)          |  
|                                                  |   | September 30, 2009 |        |   | September 30, 2008 |   |   | Through      |  
|                                                  |   | Three Months       |        |   | Nine Months        |   |   | Three Months |   |   | Nine Months |         |   | September 30,
      2009 |  
|Income earned during the
      development stage: |   |                    |        |   |                    |   |   |              |   |   |             |         |  
|Sales of gold                                     | $ | 98,512             |        | $ | 262,171            |   | $ |              |   | $ | 50,559      |         | $ | 411,886                  |  
|Sales of concentrate                              |   |                    |        |   |                    |   |   |              |   |   |             |         |   | 601,168                  |  
|Contract drilling income                          |   | 94,659             |        |   | 161,131            |   |   |              |   |   |             |         |   | 161,131                  |  
|                                                  |   | 193,171            |        |   | 423,302            |   |   |              |   |   | 50,559      |         |   | 1,174,185                |  
|                                                  |   |                    |        |   |                    |   |   |              |   |   |             |         |   |                          |  
|Cost and expenses:                                |   |                    |        |   |                    |   |   |              |   |   |             |         |   |                          |  
|Direct production costs                           |   | 108,174            |        |   | 280,445            |   |   | 15,304       |   |   | 117,443     |         |   | 1,229,982                |  
|Management                                        |   | 94,597             |        |   | 281,668            |   |   | 73,683       |   |   | 207,882     |         |   | 1,561,651                |  
|Exploration                                       |   | 17,956             |        |   | 67,500             |   |   | 204,909      |   |   | 492,643     |         |   | 2,236,775                |  
|Contract drilling
      expense                   |   | 48,224             |        |   | 76,386             |   |   |              |   |   |             |         |   | 76,386                   |  
|Gain on sale of mineral property                  |   |                    |        |   |                    |   |   |              |   |   |             |         |   | (90,000                  | )
|Gain on default of
      mineral                  |   |                    |        |   |                    |   |   |              |   |   |             |         |   |                          |  
|property sale                                     |   |                    |        |   |                    |   |   | (270,000     | ) |   | (270,000    | )       |   | (270,000                 | )
|Depreciation and
      amortization               |   | 22,932             |        |   | 108,536            |   |   | 49,766       |   |   | 154,926     |         |   | 653,163                  |  
|General and administrative expenses               |   | 55,851             |        |   | 191,668            |   |   | 158,218      |   |   | 404,340     |         |   | 2,318,041                |  
|Total operating expenses                          |   | 347,734            |        |   | 1,006,203          |   |   | 231,880      |   |   | 1,107,234   |         |   | 7,715,998                |  
|                                                  |   |                    |        |   |                    |   |   |              |   |   |             |         |   |                          |  
|                                                  |   |                    |        |   |                    |   |   |              |   |   |             |         |   |                          |  
|Other (income) expense:                           |   |                    |        |   |                    |   |   |              |   |   |             |         |   |                          |  
|Timber sales                                      |   |                    |        |   |                    |   |   |              |   |   |             |         |   | (54,699                  | )
|Timber expense                                    |   |                    |        |   |                    |   |   |              |   |   |             |         |   | 14,554                   |  
|Royalties and other
      income                  |   | (234               | )      |   | (237               | ) |   | (156         | ) |   | (1,500      | )       |   | (71,940                  | )
|Royalty expense                                   |   | 6,219              |        |   | 9,816              |   |   | 500          |   |   | 1,156       |         |   | 44,089                   |  
|Contract income                                   |   |                    |        |   |                    |   |   |              |   |   |             |         |   | (23,725                  | )
|Gain on sale of marketable
      equity security  |   |                    | (1,912 | ) |                    |   |   |              |   |   |             | (72,021 | )
|Interest income                                   |   | (111               | )      |   | (548               | ) |   | (4,526       | ) |   | (13,971     | )       |   | (46,990                  | )
|Interest expense                                  |   | 4,915              |        |   | 15,930             |   |   |              |   |   | 3,251       |         |   | 76,180                   |  
|Write-off of goodwill                             |   |                    |        |   |                    |   |   |              |   |   |             |         |   | 30,950                   |  
|Write-off of investment                           |   |                    |        |   |                    |   |   |              |   |   |             |         |   | 90,000                   |  
|Total other (income) expense                      |   | 10,789             |        |   | 23,049             |   |   | (4,182       | ) |   | (11,064     | )       |   | (13,602                  | )
|                                                  |   |                    |        |   |                    |   |   |              |   |   |             |         |   |                          |  
|Net loss                                          |   | 165,352            |        |   | 605,950            |   |   | 227,698      |   |   | 1,045,611   |         |   | 6,528,211                |  
|                                                  |   |                    |        |   |                    |   |   |              |   |   |             |         |   |                          |  
|Other comprehensive income:                       |   |                    |        |   |                    |   |   |              |   |   |             |         |   |                          |  
|Unrealized (gain) loss on marketable              |   |                    |        |   |                    |   |   |              |   |   |             |         |   |                          |  
|equity security                                   |   | (3,324             | )      |   | (7,614             | ) |   | 40,820       |   |   | 334,724     |         |   | (17,411                  | )
|                                                  |   |                    |        |   |                    |   |   |              |   |   |             |         |   |                          |  
|Comprehensive loss                                | $ | 162,028            |        | $ | 598,336            |   | $ | 268,518      |   | $ | 1,380,335   |         | $ | 6,510,800                |  
|                                                  |   |                    |        |   |                    |   |   |              |   |   |             |         |   |                          |  
|Net loss per common share-basic                   | $ | Nil                |        | $ | 0.02               |   | $ | 0.01         |   | $ | 0.03        |         | $ | 0.33                     |  
|                                                  |   |                    |        |   |                    |   |   |              |   |   |             |         |   |                          |  
|Weighted average common shares                    |   |                    |        |   |                    |   |   |              |   |   |             |         |   |                          |  
|outstanding-basic                                 |   | 37,903,858         |        |   | 37,535,281         |   |   | 36,845,266   |   |   | 35,503,762  |         |   | 19,838,068               |  

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, 2009
      and 2008,
|And from Inception (July 18, 1996) through September
      30, 2009

|                                                               |   |               |   |   |                 |   |   | From Inception     |  
|-------------------------------------------------------------- | - | ------------- | - | - | --------------- | - | - | ------------------ | -
|                                                               |   | September 30, |   |   | (July 18, 1996) |  
|                                                               |   |               |   |   |                 |   |   | through            |  
|                                                               |   | 2009          |   |   | 2008            |   |   | September 30, 2009 |  
|Cash flows from operating activities:                          |   |               |   |   |                 |   |   |                    |  
|Net loss                                                       | $ | (605,950      | ) | $ | (1,045,611      | ) | $ | (6,528,211         | )
|Adjustments to
      reconcile net loss to net cash            |   |               |   |   |                 |   |   |                    |  
|Used by operating activities:                                  |   |               |   |   |                 |   |   |                    |  
|Depreciation and amortization                                  |   | 108,536       |   |   | 154,926         |   |   | 653,164            |  
|Write-off of
      equipment                                   |   |               |   |   |                 |   |   | 11,272             |  
|Write-off of goodwill and investment                           |   |               |   |   |                 |   |   | 120,950            |  
|Gain on sale of
      mineral property                         |   |               |   |   |                 |   |   | (90,000            | )
|Gain on default of mineral property sale                       |   |               |   |   | (270,000        | ) |   | (270,000           | )
|Gain on sale of
      marketable equity securities             |   | (1,912        | ) |   |                 |   |   | (72,021            | )
|Common stock issued
      for:                                 |   |               |   |   |                 |   |   |                    |  
|Management and
      directors fees                           |   | 221,498       |   |   | 58,050          |   |   | 996,535            |  
|Services and other                                             |   | 16,323        |   |   | 25,500          |   |   | 209,633            |  
|Exploration                                                    |   | 11,250        |   |   | 14,540          |   |   | 95,521             |  
|Mineral property agreement                                     |   |               |   |   |                 |   |   | 15,000             |  
|Change in:                                                     |   |               |   |   |                 |   |   |                    |  
|Prepaid expense                                                |   | 572           |   |   |                 |   |   |                    |  
|Prepaid claim fees                                             |   | (25,538       | ) |   |                 |   |   | (25,538            | )
|Inventory                                                      |   | 63,583        |   |   | (1,779          | ) |   | (35,509            | )
|Miscellaneous
      receivable                                 |   | 5,516         |   |   | (5,730          | ) |   |                    |  
|Interest receivable                                            |   | 118           |   |   | 469             |   |   | (206               | )
|Contract drilling
      receivable                             |   | (48,073       | ) |   |                 |   |   | (48,073            | )
|Other assets                                                   |   |               |   |   |                 |   |   | (778               | )
|Accounts payable                                               |   | 10,274        |   |   | 16,851          |   |   | 64,188             |  
|Accrued payroll and related payroll expenses                   |   | (30,118       | ) |   | 19,909          |   |   | 15,588             |  
|Note and interest
      payable, related party                 |   | 70,048        |   |   |                 |   |   | 70,048             |  
|Accrued reclamation costs                                      |   |               |   |   |                 |   |   | 20,300             |  
|Net cash used by operating activities                          |   | (203,873      | ) |   | (1,032,875      | ) |   | (4,798,137         | )
|Cash flows from investing activities:                          |   |               |   |   |                 |   |   |                    |  
|Purchases of property, plant, and
      equipment              |   | (4,392        | ) |   | (100,991        | ) |   | (1,084,248         | )
|Purchase of mineral
      property                             |   |               |   |   |                 |   |   | (17,904            | )
|Proceeds from sale of mineral property                         |   |               |   |   |                 |   |   | 120,000            |  
|Deposit received on
      sale of mineral property             |   |               |   |   | 270,000         |   |   | 270,000            |  
|Redemption (purchase) of reclamation
      bonds               |   | 2,432         |   |   | (286            | ) |   | (121,088           | )
|Purchase of marketable
      equity security                   |   |               |   |   |                 |   |   | (7,500             | )
|Proceeds from sales of marketable
      equity securities      |   | 2,112         |   |   |                 |   |   | 73,190             |  
|Cash of acquired
      companies                               |   |               |   |   |                 |   |   | 38,269             |  
|Deferral of development costs                                  |   |               |   |   | (249,291        | ) |   | (759,209           | )
|Net cash provided (used) by investing
      activities         |   | 152           |   |   | (80,568         | ) |   | (1,488,490         | )
|Cash flows from financing activities:                          |   |               |   |   |                 |   |   |                    |  
|Exercise of stock
      purchase warrants                      |   |               |   |   | 1,740,000       |   |   | 2,537,600          |  
|Sales of common stock, net of issuance
      costs             |   | 30,000        |   |   | 950             |   |   | 4,256,576          |  
|Principal payments on
      capital lease                      |   | (24,212       | ) |   | (28,325         | ) |   | (181,044           | )
|Principal payments on notes payable                            |   | (86,345       | ) |   | (88,000         | ) |   | (289,529           | )
|Net cash provided (used) by financing
      activities         |   | (80,557       | ) |   | 1,624,625       |   |   | 6,323,603          |  
|Net change in cash and cash equivalents                        |   | (284,278      | ) |   | 511,182         |   |   | 36,976             |  
|Cash and cash equivalents, beginning of
      period           |   | 321,254       |   |   | 271,473         |   |   | 0                  |  
|Cash and cash equivalents, end of period                       | $ | 36,976        |   | $ | 782,655         |   | $ | 36,976             |  
|                                                               |   |               |   |   |                 |   |   |                    |  
|Supplemental disclosure of cash flow information:              |   |               |   |   |                 |   |   |                    |  
|Interest paid in cash, net of amount
      capitalized         | $ | 14,482        |   | $ | 25,433          |   | $ | 65,368             |  
|Non-cash investing and financing activities:                   |   |               |   |   |                 |   |   |                    |  
|Common stock issued
      for:                                 |   |               |   |   |                 |   |   |                    |  
|Property, plant,
      and equipment                           |   |               |   | $ | 5,600           |   | $ | 50,365             |  
|Mineral properties                                             |   |               |   |   |                 |   | $ | 315,300            |  
|Payment of
      accounts payable                              |   |               |   |   |                 |   | $ | 12,205             |  
|Acquisitions of companies, excluding cash                      |   |               |   |   |                 |   | $ | 743,653            |  
|Capital lease obligation incurred for
      equipment acquired |   |               |   |   |                 |   | $ | 178,588            |  
|Notes payable for
      property and equipment acquired        |   |               |   |   |                 |   | $ | 482,634            |  

5

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

---

|New Jersey Mining Company    
|-----------------------------
|Notes 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 nine month period ended
September 30, 2009, are not necessarily indicative of the results that may be
expected for the full year ending December 31, 2009.

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, 2008.

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.

Management of the Company has evaluated all events subsequent
to the balance sheet date of September 30, 2009, through the date of filing this
Form 10-Q with the SEC on November 13, 2009 and determined that there are no
subsequent events that require recognition or disclosure in these financial
statements.

|2. | Description of Business
|-- | -----------------------

The Company was incorporated as an Idaho corporation on July
18, 1996. The Company's primary business is exploring for and developing gold,
silver, and base metal mining resources in Idaho.

|3. | Going Concern
|-- | -------------

As shown in the accompanying financial statements, the Company
has minimal revenue, negative working capital at September 30, 2009, and
incurred an accumulated deficit of $6,528,211 through September 30, 2009. These
factors raise substantial doubt about the Companys ability to continue as a
going concern. Management intends to seek additional capital from new equity
securities offerings and joint venture agreements that will provide funds needed
to increase liquidity, fund internal growth and fully implement its business
plan.

The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets, or the
amounts and classification of liabilities that might be necessary in the event
the Company cannot continue in existence.

Should the Company be unable to raise capital through future
private placements and/or joint venture agreements or achieve significant
revenues from its operations, its business, and, as a result, its financial
position, results of operations and cash flow will likely be materially
adversely impacted.

6

---

|4. | Line of Credit, Related Party
|-- | -----------------------------

Throughout the second and third quarters of 2009 an unsecured
line of credit with annual interest rates ranging from 1% to 5.25% and a maximum
of $100,000 has been extended to the Company by President Fred Brackebusch for
cash shortfalls. As of September 30, 2009 the balance was $70,048 which included
$1,448 in interest and fees payable.

|5. | Equity
|-- | ------

Private Placement

In September of 2009 the Company initiated a private placement,
each unit selling for $0.25 and consisting of one share of common stock and one
warrant, exercisable at $0.40 until October of 2012. As of September 30, 2009,
120,000 units have been sold for net proceeds of $30,000.

Common Stock Issued for Cash, Goods, and
Services

The Company issued 166,660 and 486,320 shares respectively of
unregistered common stock to President Fred W. Brackebusch for management
services rendered in the three and nine month periods ending September 30, 2009.
The shares were valued at $0.30 per share. The Company also issued 86,000 and
252,200 shares respectively of unregistered common stock to Vice President Grant
A. Brackebusch for management services rendered in the three and nine month
periods ending September 30, 2009. The shares were valued at $0.30 per
share.

During the three and nine month periods ended September 30,
2009, the Company issued 16,330 and 74,420 shares respectively of unregistered
common stock to individuals for goods and services at fair value prices ranging
from $0.20 to $0.30 per share.

During the three and nine month periods ended September 30,
2009, the Company issued 12,500 and 50,000 shares respectively of unregistered
common stock to individuals for exploration services. The shares were valued at
fair value prices ranging from $0.20 to $0.30 per share.

|6. | Fair Value Measurement
|-- | ----------------------

The table below sets forth our financial assets that were
accounted for at fair value on a recurring basis at September 30, 2009 and
December 31, 2008, and their respective hierarchy level. We had no other
financial assets or liabilities accounted for at fair value at September 30,
2009 and December 31, 2008.

Balance at September 30, 2009
    Balance at December 31, 2008
    Hierarchy LevelInvestments in marketable
              equity securities
    $ 23,742
    $16,328
    Level 1Inventories
    35,509
    99,092
    Level 2


The Company has one nonfinancial liability that is accounted
for at fair value on a non-recurring basis. Effective January 1, 2009, new asset
retirement obligation layers are subject to fair value measurement accounting
guidance. New layers added to our asset retirement obligations fall within Level
3 of the fair value hierarchy because the estimates of environmental remediation
costs developed by management involve unobservable inputs. During the three
month and nine month period ended September 30, 2009 we did not record a new
asset retirement obligation layer.

7

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|7. | New Accounting Pronouncements
|-- | -----------------------------

Effective January 1, 2009, we adopted provisions which enhance
disclosure about an entitys derivative and hedging activities without a
material effect on our results of operations and financial position.

Effective January 1, 2009, we adopted provisions which
establish accounting and reporting standards for the non controlling ownership
interest in a subsidiary and for the deconsolidation of a subsidiary without a
material effect on our results of operations and financial position.

Effective January 1, 2009, we adopted guidance changes for the
method of accounting for assets acquired and liabilities assumed in a business
combination without a material effect on our results of operations and financial
position. These changes include:

- Acquisition costs are generally expensed as incurred;
- Non controlling interests are valued at fair value at the acquisition
  date;
- Acquired contingent liabilities are recorded at fair value at the
  acquisition date and subsequently measured at either the higher of such amount
  or the amount determined under existing guidance for non acquired
  contingencies;
- In-process research and development are recorded at fair value as an
  indefinite-lived intangible asset at the acquisition date;
- Restructuring costs associated with a business combination are generally
  expensed subsequent to the acquisition date; and
- Changes in deferred tax asset valuation allowances and income tax
  uncertainties after the acquisition date generally do affect income tax
  expense.

In April 2009, the FASB issued authoritative guidance for
estimating fair value when the volume and level of activity for the asset or
liability have significantly decreased and for identifying circumstances that
indicate a transaction is not orderly. This guidance became effective for
interim and annual reporting periods ending after June 15, 2009, and is to be
applied prospectively. The Company adopted this guidance without a material
effect on its results of operations and financial position.

In April 2009, the FASB amended the other-than-temporary
impairment guidance for debt securities to make the guidance more operational
and to improve the presentation and disclosure of other-than-temporary
impairments on debt and equity securities in the financial statements. This
guidance does not amend existing recognition and measurement guidance related to
other-than-temporary impairments of equity securities and became effective for
interim and annual reporting periods ending after June 15, 2009. The Company
adopted this guidance without a material effect on its financial position or
results of operations.

In April 2009, the FASB amended guidance to require disclosures
about fair value of financial instruments for interim reporting periods of
publicly traded companies as well as in annual financial statements. It is
effective for interim reporting periods ending after June 15, 2009, and was
adopted without a material effect on the Companys financial position or results
of operations.

In May 2009, the FASB issued authoritative guidance related to
subsequent events, which establishes general standards of accounting for and
disclosure of events that occur after the balance sheet date but before the
financial statements are issued or are available to be issued. Guidance is
provided relating to the period after the balance sheet date during which
management of a reporting entity should evaluate events or transactions that may
occur for potential recognition or disclosure in the financial statements, the
circumstances under which an entity should recognize events or transactions
occurring after the balance sheet date in its financial statements and the
disclosures that an entity should make about events or transactions that
occurred after the balance sheet date. This guidance became effective for the
Company for interim or annual periods ending after June 15, 2009 and was adopted
without a material effect on its financial position or results of
operations.

In June 2009, the FASB issued an update which establishes the
FASB Accounting Standards Codification (the

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Codification) as the source of authoritative accounting
principles recognized by the FASB to be applied by nongovernmental entities in
the preparation of financial statements in conformity with generally accepted
accounting principles (GAAP). The Codification became effective for interim and
annual periods ending after September 15, 2009. The adoption of the Codification
did not have an impact on the Companys financial position or results of
operations.

|8. | Mining Venture Agreements
|-- | -------------------------

Newmont Venture AgreementThe 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. During 2009
NJMC is providing drilling services on a per footage fee basis to Newmont for
this project.

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
StatementsThis 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 OperationThe Companys strategy is 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 higher grade 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.

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The Company has several properties at which most exploration is
being conducted; the Toboggan Project, the Niagara, the Golden Chest, the Silver
Strand, the Coleman, and the Giant Ledge. The Toboggan Project is a group of
prospects in the Murray, Idaho District that appear to be related to alkaline
magmatism and contain gold and silver 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 the prospects that the Company has staked previously and on new
claims staked by Newmont. Newmont commenced drilling certain targets in the
second quarter of 2009 and continued drilling throughout the third quarter of
2009. 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 5
holes in 2008 which expanded the resource. When permitting is completed and
exploration funds are available, the Company will continue in-fill drilling on
the known resource and will drill to intercept a deeper stratabound target in
the Revett formation. At the Golden Chest mine, remnant mining was completed
during the second quarter of 2009 and the mine was placed on care and
maintenance until financing is available to complete development of reserves.
The Company is discussing sale of a joint venture interest in the Golden Chest
with multiple parties. Permits are in place and development of infrastructure
has been completed in order to be able to begin production of silver-gold ore at
the Silver Strand mine but because of lack of working capital, it was decided to
not operate the mine in 2009. At the Coleman underground mine, no work is
planned in 2009.

The Company commenced core drilling operations in the second
quarter of 2009 at the Toboggan Project for Newmont and continued drilling
throughout the third quarter of 2009.

The New Jersey mineral processing plant was idled during May
2009 except that leaching and recovery of gold from concentrates continued
during the third quarter.

Changes in Financial ConditionThe
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 of
2009 was $36,976, and Figure 1 shows the corresponding balances for previous
accounting periods.



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The cash balance increased slightly during the third quarter
due to increased revenue from contract drilling.

Results of OperationsIncome earned during the
Development Stage (Revenue) for the third quarter of 2009 was $193,171 including
contract drilling income, gold sales were $98,512 as compared to $0 for the
third quarter of 2008. Figure 2 shows a net loss for the third quarter of 2009
of $165,352 compared to $227,698 for the third quarter of 2008.



Gold production was 0 ounces in the third quarter of 2009 as
compared to 20 ounces for the comparable period of 2008. No gold production is
planned for the remainder of 2009 due to the lack of ore from the Golden Chest
mine.

Ore mining operations at the Golden Chest mine ended in May 2009 when all
  known remnants were mined. If financing can be obtained, ramp access will be
  extended to the Idaho vein ore reserve block. If the Idaho vein ramp development
  can be completed there will be more than 200,000 tonnes available that grade 5
  grams/tonne gold.

Ore production at the Silver Strand mine has been delayed
indefinitely because of lack of working capital. The Company is also seeking a
joint venture partner at the Silver Strand.

No capital expenditures are planned at the New Jersey mineral
processing plant.

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 all mines and the mineral processing plant will remain idle for the
remainder of 2009. The Company started to drill for Newmont at the Toboggan
Project on a contract basis during the second quarter and continued through the
third quarter. Newmont currently pays for all exploration activities on the
Toboggan Project.

For the remainder of 2009, the Company will continue to limit
its discretionary exploration expenditures as well as its overhead expenses.
With these reductions, the Company believes it will only need an estimated
$100,000 to continue operations through the next three months. Near the end of
the third quarter, a private placement was commenced.

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As shown in the accompanying financial statements, the Company
has minimal revenue and incurred an accumulated deficit of $6,528,211 through
September 30, 2009. These factors raise substantial doubt about the Companys
ability to continue as a going concern. Management intends to seek additional
capital from new equity securities offerings and joint venture agreements that
will provide funds needed to increase liquidity, fund internal growth and fully
implement its business plan.

The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets, or the
amounts and classification of liabilities that might be necessary in the event
the Company cannot continue in existence.

Should the Company be unable to raise capital through future
private placements and/or joint venture agreements or achieve significant
revenues from its operations, its business, and, as a result, its financial
position, results of operations and cash flow will likely be materially
adversely impacted.

Changes in Direct Production CostsDirect
production costs increased for the three month period ending September 30, 2009
compared to the comparable period last year because of increased sales of gold
and other precious metals.

Changes in Management CostsManagement
expenses increased for the three month period ending September 30, 2009 compared
to the comparable period last year. Although management compensation has
increased, over 80% was paid in common stock to help conserve available cash
funds.

Changes in Exploration CostsExploration
expenses decreased for the three month period ending September 30, 2009 compared
to the comparable period last year. The decrease was due to a lack of
discretionary funding being available.

Changes in General and Administrative
CostsGeneral and administrative cost decreased for the three month
periods ending September 30, 2009 compared to the comparable period last year.
The Company decreased the number of its employees, and other costs were cut to
conserve available funds.

Changes in Contract Drilling Income and
ExpenseBoth contract drilling and expense increased because of the
companys drilling activities related to the Toboggan Project. This is the first
year for these activities.

Item 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

Not required for small reporting companies.

Item 4: CONTROLS AND PROCEDURES

Disclosure Controls and ProceduresThe
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
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, 2009 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, 2009.

Item 4T. CONTROLS AND PROCEDURES

Information regarding internal control over financial reporting
has been set forth in Item 4.

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PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

None

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 2009 the Company issued 120,000
shares of unregistered common stock for net proceeds of $30,000 to certain
accredited and sophisticated individuals in connection with a private placement.
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.

The Company issued 166,660 shares of unregistered common stock
to President Fred W. Brackebusch for management services rendered on September
30, 2009. The shares were valued at a price of $0.30 per share. In managements
opinion, the securities were issued pursuant to exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended.

The Company issued 86,000 shares of unregistered common stock
to Vice President Grant A. Brackebusch for management services rendered on
September 30, 2009. The shares were valued at a price of $0.30 per share. In
managements opinion, the securities were issued pursuant to exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended.

During the third quarter the Company issued 8,330 shares of
unregistered common stock at an average price of $0.24 to other accredited and
sophisticated individuals for goods and services, 8,000 shares priced at $0.25
to certain hourly employees for service awards during the quarter, and 12,500
shares valued at $0.30 for exploration services during the quarter. 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. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS

None

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.                                                       
|---- | ---------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                        
|32.1 | 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:                      
| |                          
| |                          
| |                          
| |                          
| |                          
| |                          
| | By:                      
| |                          
| |                          
| |                          
| |                          

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