UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549


___________





**FORM
      10-QSB**





**x QUARTERLY
      REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF**


**THE
      SECURITIES EXCHANGE ACT OF 1934**


For
      the
      quarterly period ended July 31, 2006





**o TRANSITION
      REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF**


**THE
      SECURITIES EXCHANGE ACT**


For
      the
      transition period from _____________ to _____________





Commission
      file number: 000-27667





**Metalline
      Mining Company**


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





Nevada
            91-1766677(State
                or other jurisdiction
            (IRS
                Employer Identification No.)of
                incorporation or organization)





1330
      E.
      Margaret Ave.


Coeur
      d'Alene, ID 83815


(Address
      of principal executive offices)





Issuer's
      telephone number, including area code: (208) 665-2002








Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
      for
      such shorter period that the registrant was required to file such reports),
      and
      (2) has been subject to such filing requirements for the past 90 days.
      Yes x No o





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





There
      were 34,126,661 shares of the issuer's common stock, par value $0.01,
      outstanding as of August 1, 2006.





Transitional
      Small Business Disclosure Format (Check one): Yes oNo x











**METALLINE
      MINING COMPANY**


**QUARTERLY
      REPORTON FORM 10-QSB**


**FOR
      THE QUARTERLY PERIOD ENDED JULY 31, 2006**





**INDEX
      TO CONSOLIDATED FINANCIAL STATEMENTS**





PAGE





Consolidated
      Financial Statements:





Consolidated
                Balance Sheets as of July 31, 2006
            2Consolidated
                Statements of Operations for the three-month and
                nine-monthperiods
                ended July 31, 2006 andJuly
                31, 2005 and for the period from inception(November
                8, 1993) to July 31, 2006
            3Consolidated
                Statements of Cash Flow for the nine-monthperiods
                ended July 31, 2006 and July 31, 2005, andfor
                the period from inception (November 8, 1993)to
                July 31, 2006
            4Condensed
                Notes to Consolidated Financial Statements
            5









[The
      balance of this page has been intentionally left blank.]





1


**METALLINE
                  MINING COMPANY****(AN
                  EXPLORATION STAGE COMPANY)****CONSOLIDATED
                  BALANCE SHEETS**
 
  July
                  31,2006
              
              October
                  31,(unaudited)
              
              2005ASSETSCURRENT
                  ASSETSCash
                  and cash equivalents
              
              $
              8,432,472
              
              $
              213,369Accounts
                  receivable
              
              
              35,720
              
              
              23,620Prepaid
                  expenses
              
              
              31,301
              
              
              13,242Employee
                  advances
              
              
              1,142
              
              
              9,560Total
                  Current Assets
              
              
              8,500,635
              
              
              259,791PROPERTY
                  CONCESSIONSSierra
                  Mojada, Mojada 3
              
              
              15,875
              
              
              15,875Fortuna
              
              
              76,725
              
              
              76,725Esmeralda
              
              
              255,647
              
              
              255,647Esmeralda
                  I
              
              
              180,988
              
              
              180,988U.M.
                  Nortenos, Vulcano
              
              
              3,682,772
              
              
              3,682,772La
                  Blanca
              
              
              122,760
              
              
              122,760Total
                  Property Concessions
              
              
              4,334,767
              
              
              4,334,767EQUIPMENTOffice
                  and mining equipment, net
              
              
              483,817
              
              
              490,884Total
                  Equipment
              
              
              483,817
              
              
              490,884TOTAL
                  ASSETS
              
              $
              13,319,219
              
              $
              5,085,442LIABILITIES
                  AND STOCKHOLDERS' EQUITYCURRENT
                  LIABILITIESAccounts
                  payable
              
              $
              82,507
              
              $
              86,189Accrued
                  liabilities and expenses
              
              
              50,302
              
              
              189,046Other
                  liabilities
              
              
              28,744
              
              
              15,873Note
                  payable, current portion
              
              
              4,209
              
              
              4,209Total
                  Current Liabilities
              
              
              165,762
              
              
              295,317LONG-TERM
                  LIABILITIESNote
                  payable, net of current portion
              
              
              4,208
              
              
              7,365COMMITMENTS
                  AND CONTINGENCIES
              
              
              -
              
              
              -STOCKHOLDERS'
                  EQUITYCommon
                  stock, $0.01 par value; 50,000,000 shares authorized,34,126,661
                  and 20,404,585 shares issued and outstanding,
                  respectively
              
              
              341,267
              
              
              204,047Additional
                  paid-in capital
              
              
              27,256,925
              
              
              19,852,673Stock
                  options and warrants
              
              
              5,265,069
              
              
              1,347,839Deficit
                  accumulated during exploration stage
              
              
              (19,714,012
              )
              
              (16,621,799
              )Total
                  Stockholders' Equity
              
              
              13,149,249
              
              
              4,782,760TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              13,319,219
              
              $
              5,085,442
   2
  **METALLINE
                    MINING COMPANY****(AN
                    EXPLORATION STAGE COMPANY)****CONSOLIDATED
                    STATEMENTS OF OPERATIONS**
 
 November
                    8,1993(Inception)Three
                    Months Ended
                
                Nine
                    Months Ended
                
                toJuly
                    31,
                
                July
                    31,
                
                July
                    31,
                
                July
                    31,
                
                July
                    31,2006
                
                2005
                
                2006
                
                2005
                
                2006(unaudited)
                
                (unaudited)
                
                (unaudited)
                
                (unaudited)
                
                (unaudited)REVENUES
                
                $
                -
                
                $
                -
                
                $
                -
                
                $
                -
                
                $
                -GENERAL
                    AND ADMINISTRATIVE EXPENSESSalaries
                    and payroll expenses
                
                
                127,295
                
                
                109,929
                
                
                965,409
                
                
                682,925
                
                
                4,203,026Office
                    and administrative expenses
                
                
                93,193
                
                
                70,985
                
                
                258,676
                
                
                247,568
                
                
                1,247,622Taxes
                    and fees
                
                
                127,428
                
                
                969
                
                
                301,106
                
                
                47,996
                
                
                790,547Professional
                    services
                
                
                219,191
                
                
                141,585
                
                
                831,080
                
                
                765,724
                
                
                5,198,782Property
                    expenses
                
                
                12,370
                
                
                44,281
                
                
                157,797
                
                
                115,816
                
                
                2,101,900Depreciation
                
                
                26,060
                
                
                20,630
                
                
                67,503
                
                
                62,927
                
                
                409,363Exploration
                    and research
                
                
                599,787
                
                
                83,093
                
                
                671,649
                
                
                819,614
                
                
                6,005,735TOTAL
                    GENERAL AND ADMINISTRATIVE EXPENSES
                
                
                1,205,324
                
                
                471,472
                
                
                3,253,220
                
                
                2,742,570
                
                
                19,956,974LOSS
                    FROM OPERATIONS
                
                
                (1,205,324
                )
                
                (471,472
                )
                
                (3,253,220
                )
                
                (2,742,570
                )
                
                (19,956,974
                )OTHER
                    INCOME (EXPENSES)Miscellaneous
                    ore sales, net of expenses
                
                
                10,426
                
                
                (13,710
                )
                
                (31,111
                )
                
                (12,351
                )
                
                134,027VAT
                    tax refunds
                
                
                -
                
                
                -
                
                
                13,045
                
                
                -
                
                
                132,660Miscellaneous
                    income
                
                
                24,000
                
                
                10,000
                
                
                85,500
                
                
                10,000
                
                
                94,000Interest
                    and investment income
                
                
                81,197
                
                
                3,249
                
                
                95,631
                
                
                29,542
                
                
                171,104Interest
                    and financing expense
                
                
                (1,203
                )
                
                (152
                )
                
                (2,058
                )
                
                (455
                )
                
                (288,829
                )TOTAL
                    OTHER INCOME
                
                
                114,420
                
                
                (613
                )
                
                161,007
                
                
                26,736
                
                
                242,962LOSS
                    BEFORE INCOME TAXES
                
                
                (1,090,904
                )
                
                (472,085
                )
                
                (3,092,213
                )
                
                (2,715,834
                )
                
                (19,714,012
                )INCOME
                    TAXES
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -NET
                    LOSS
                
                $
                (1,090,904
                )
                $
                (472,085
                )
                $
                (3,092,213
                )
                $
                (2,715,834
                )
                $
                (19,714,012
                )BASIC
                    AND DILUTED NET LOSS PERCOMMON
                    SHARE
                
                $
                (0.03
                )
                $
                (0.02
                )
                $
                (0.10
                )
                $
                (0.14
                )BASIC
                    AND DILUTEDWEIGHTED
                    AVERAGE NUMBEROF
                    COMMON SHARES OUTSTANDING
                
                
                34,118,509
                
                
                20,045,873
                
                
                29,555,877
                
                
                19,934,446
   3
  **METALLINE
                    MINING COMPANY****(AN
                    EXPLORATION STAGE COMPANY)****CONSOLIDATED
                    STATEMENTS OF CASH FLOWS**
 
 Period
                    fromNovember
                    8, 1993(Inception)9
                    Months Ended
                
                toJuly
                    31,
                
                July
                    31,
                
                July
                    31,2006
                
                2005
                
                2006(unaudited)
                
                (unaudited)
                
                (unaudited)CASH
                    FLOWS FROM OPERATING ACTIVITIES:Net
                    loss
                
                $
                (3,092,213
                )
                $
                (2,715,834
                )
                $
                (19,714,012
                )Adjustments
                    to reconcile net loss to net cash usedby
                    operating activities:Depreciation
                
                
                67,503
                
                
                62,927
                
                
                409,363Noncash
                    expenses
                
                
                -
                
                
                -
                
                
                126,864Common
                    stock issued for services
                
                
                -
                
                
                -
                
                
                966,538Common
                    stock issued for compensation
                
                
                668,715
                
                
                176,772
                
                
                1,488,946Stock
                    options issued for services
                
                
                -
                
                
                -
                
                
                801,892Stock
                    options issued for financing fees
                
                
                -
                
                
                -
                
                
                276,000Common
                    stock issued for payment of expenses
                
                
                -
                
                
                -
                
                
                326,527Stock
                    warrants issued for services
                
                
                -
                
                
                -
                
                
                688,771Gain
                    on sale of fixed assets
                
                
                -
                
                
                (10,000
                )
                
                (10,000
                )(Increase)
                    decrease in:Marketable
                    securities
                
                
                -
                
                
                650,000
                
                
                -Reclassification
                    of marketable securities
                
                
                -
                
                
                600,000
                
                
                -Accounts
                    receivable
                
                
                (12,100
                )
                
                74,490
                
                
                (35,720
                )Prepaid
                    expenses
                
                
                (18,059
                )
                
                (30,893
                )
                
                (31,301
                )Employee
                    advances
                
                
                8,418
                
                
                24,462
                
                
                (1,142
                )Increase
                    (decrease) in:Accounts
                    payable
                
                
                (3,682
                )
                
                (51,792
                )
                
                82,507Other
                    liabilities
                
                
                12,871
                
                
                (30,918
                )
                
                17,080Accrued
                    liabilities and expenses
                
                
                (138,744
                )
                
                12,022
                
                
                81,958Net
                    cash used by operating activities
                
                
                (2,507,291
                )
                
                (1,238,764
                )
                
                (14,525,729
                )CASH
                    FLOWS FROM INVESTING ACTIVITIES:Purchase
                    of investments
                
                
                -
                
                
                -
                
                
                (484,447
                )Proceeds
                    from investments
                
                
                -
                
                
                -
                
                
                484,447Proceeds
                    from sale of fixed assets
                
                
                -
                
                
                10,000
                
                
                10,000Equipment
                    purchases
                
                
                (60,436
                )
                
                (7,598
                )
                
                (853,217
                )Mining
                    property acquisitions
                
                
                -
                
                
                -
                
                
                (4,452,571
                )Net
                    cash used by investing activities
                
                
                (60,436
                )
                
                2,402
                
                
                (5,295,788
                )CASH
                    FLOWS FROM FINANCING ACTIVITIES:Proceeds
                    from sales of common stock with warrants
                
                
                10,758,737
                
                
                296,329
                
                
                27,128,924Proceeds
                    from sales of options and warrants
                
                
                -
                
                
                -
                
                
                949,890Proceeds
                    from exercise of warrants
                
                
                31,250
                
                
                
                
                
                31,250Deposits
                    for sale of stock
                
                
                -
                
                
                -
                
                
                125,500Proceeds
                    from shareholder loans
                
                
                -
                
                
                -
                
                
                30,000Payment
                    of note payable
                
                
                (3,157
                )
                
                (3,157
                )
                
                (11,575
                )Net
                    cash provided by financing activities:
                
                
                10,786,830
                
                
                293,172
                
                
                28,253,989Net
                    increase (decrease) in cash and cash equivalents
                
                
                8,219,103
                
                
                (943,190
                )
                
                8,432,472Cash
                    and cash equivalents beginning of period
                
                
                213,369
                
                
                1,384,030
                
                
                -Cash
                    and cash equivalents end of period
                
                $
                8,432,472
                
                $
                440,840
                
                $
                8,432,472SUPPLEMENTAL
                    CASH FLOW DISCLOSURES:Income
                    taxes paid
                
                $
                -
                
                $
                -
                
                $
                -Interest
                    paid
                
                $
                520
                
                $
                455
                
                $
                287,291NON-CASH
                    INVESTING AND FINANCING ACTIVITIES:Common
                    stock issued for equipment
                
                $
                -
                
                $
                -
                
                $
                25,000





4
 **METALLINE
              MINING COMPANY**
 **(AN
              EXPLORATION STAGE COMPANY)**
 **CONDENSED
              NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JULY
              31, 2006**
 **NOTE
      1 - ORGANIZATION AND DESCRIPTION OF BUSINESS**





Metalline
      Mining Company ("the Company") was incorporated in the State of Nevada on
      November 8, 1993 as the Cadgie Company for the purpose of acquiring and
      developing mineral concessions. The Cadgie Company was a spin-off from its
      predecessor, Precious Metal Mines, Inc. On June 28, 1996, at a special directors
      meeting, the Company's name was changed to Metalline Mining Company. The
      Company's fiscal year-end is October 31.





The
      Company expects to engage in the business of mining. The Company currently
      owns
      concessions located in a mining region known as the Sierra Mojada District
      that
      is located in the municipality of Sierra Mojada, Coahuila, Mexico. The Company
      conducts its operations in Mexico through its wholly owned subsidiary
      corporation, Minera Metalin S.A. de C.V. ("Minera Metalin").








**NOTE
      2 - BASIS OF PRESENTATION**





The
      foregoing unaudited interim financial statements have been prepared in
      accordance with generally accepted accounting principles for interim financial
      information and with the instructions to Form 10-QSB and Regulation S-B as
      promulgated by the Securities and Exchange Commission ("SEC"). Accordingly,
      these financial statements do not include all of the disclosures required by
      generally accepted accounting principles in the United States of America for
      complete financial statements. These unaudited interim financial statements
      should be read in conjunction with the audited financial statements for the
      year
      ended October 31, 2005. In the opinion of management, the unaudited interim
      financial statements furnished herein include all adjustments, all of which
      are
      of a normal recurring nature, necessary for a fair statement of the results
      for
      the interim period presented.





The
      preparation of financial statements in accordance with generally accepted
      accounting principles 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 and 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 July 31, 2006 are not necessarily
      indicative of the results that may be expected for the year ending October
      31,
      2006.


5
 **METALLINE
              MINING COMPANY**
 **(AN
              EXPLORATION STAGE COMPANY)**
 **CONDENSED
              NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JULY
              31, 2006**
 Concentration
      of Risk


The
      Company maintains its domestic cash in two commercial depository accounts.
      One
      of these accounts is insured by the Federal Deposit Insurance Corporation (FDIC)
      for up to $100,000. The other account consists of money market funds,
      certificates of deposit and preferred securities, all of which are not insured.
      The Company also maintains cash in banks in Mexico. These accounts, which had
      U.S. dollar balances of $431,751 and $21,152 at July 31, 2006 and 2005,
      respectively, are denominated in pesos and are considered uninsured.
      Additionally, the Company maintained a Mexican petty cash balance of $983 at
      July 31, 2005. At July 31, 2006, the Company’s cash balances included $8,332,472
      which was not federally insured.





Exploration
      Costs


In
      accordance with accounting principles generally accepted in the United States
      of
      America, the Company expenses exploration costs as incurred. Exploration costs
      expensed during the nine months ended July 31, 2006 and 2005 were $671,649
      and
      $819,614, respectively. The exploration costs expensed during the Company’s
      exploration stage amount to $6,005,735.





Foreign
      Operations


The
      accompanying balance sheet at July 31, 2006 contains Company assets in Mexico,
      including: $4,334,767 in property concessions; $514,855 (before accumulated
      depreciation) of mining equipment; and $431,751 of cash. Although this country
      is considered economically stable, it is always possible that unanticipated
      events in foreign countries could disrupt the Company’s operations. The Mexican
      government does not require foreign entities to maintain cash reserves in
      Mexico.


6
 **METALLINE
              MINING COMPANY**
 **(AN
              EXPLORATION STAGE COMPANY)**
 **CONDENSED
              NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JULY
              31, 2006**
 **NOTE
      3 - RECENT ACCOUNTING PRONOUNCEMENTS**





In
      March
      2006, the Financial Accounting Standards Board issued Statement of Financial
      Accounting Standards No. 156, “Accounting for Servicing of Financial Assets—an
      amendment of FASB Statement No. 140.” This statement requires an entity to
      recognize a servicing asset or servicing liability each time it undertakes
      an
      obligation to service a financial asset by entering into a servicing contract
      in
      any of the following situations: a transfer of the servicer’s financial assets
      that meets the requirements for sale accounting; a transfer of the servicer’s
      financial assets to a qualifying special-purpose entity in a guaranteed mortgage
      securitization in which the transferor retains all of the resulting securities
      and classifies them as either available-for-sale securities or trading
      securities; or an acquisition or assumption of an obligation to service a
      financial asset that does not relate to financial assets of the servicer or
      its
      consolidated affiliates. The statement also requires all separately recognized
      servicing assets and servicing liabilities to be initially measured at fair
      value, if practicable and permits an entity to choose either the amortization
      or
      fair value method for subsequent measurement of each class of servicing assets
      and liabilities. The statement further permits, at its initial adoption, a
      one-time reclassification of available for sale securities to trading securities
      by entities with recognized servicing rights, without calling into question
      the
      treatment of other available for sale securities under Statement 115, provided
      that the available for sale securities are identified in some manner as
      offsetting the entity’s exposure to changes in fair value of servicing assets or
      servicing liabilities that a servicer elects to subsequently measure at fair
      value and requires separate presentation of servicing assets and servicing
      liabilities subsequently measured at fair value in the statement of financial
      position and additional disclosures for all separately recognized servicing
      assets and servicing liabilities. This statement is effective for fiscal years
      beginning after September 15, 2006, with early adoption permitted as of the
      beginning of an entity’s fiscal year. Management believes the adoption of this
      statement will have no immediate impact on the Company’s financial condition or
      results of operations.





In
      February 2006, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 155, “Accounting for Certain Hybrid Financial
      Instruments, an Amendment of FASB Standards No. 133 and 140” (hereinafter “SFAS
      No. 155”). This statement established the accounting for certain derivatives
      embedded in other instruments. It simplifies accounting for certain hybrid
      financial instruments by permitting fair value remeasurement for any hybrid
      instrument that contains an embedded derivative that otherwise would require
      bifurcation under SFAS No. 133 as well as eliminating a restriction on the
      passive derivative instruments that a qualifying special-purpose entity (“SPE”)
      may hold under SFAS No. 140. This statement allows a public entity to
      irrevocably elect to initially and subsequently measure a hybrid instrument
      that
      would be required to be separated into a host contract and derivative in its
      entirety at fair value (with changes in fair value recognized in earnings)
      so
      long as that instrument is not designated as a hedging instrument pursuant
      to
      the statement. SFAS No. 140 previously prohibited
      a qualifying special-purpose entity from holding a derivative financial
      instrument that pertains to a beneficial interest other than another derivative
      financial instrument. This
      statement is effective for fiscal years beginning after September 15, 2006,
      with
      early adoption permitted as of the beginning of an entity’s fiscal year.
      Management believes the adoption of this statement will have no immediate impact
      on the Company’s financial condition or results of operations.


7
 **METALLINE
              MINING COMPANY**
 **(AN
              EXPLORATION STAGE COMPANY)**
 **CONDENSED
              NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JULY
              31, 2006**


**NOTE
      4 - CONCESSIONS IN THE SIERRA MOJADA DISTRICT**





Sierra
      Mojada Mining Concessions


During
      the period of August 23, 1996 to July 18, 2000, the Company executed six
      separate agreements for the acquisition of eight concessions in the mining
      region known as the Sierra Mojada District located in Sierra Mojada, Coahuila,
      Mexico. Each agreement enabled the Company to explore the underlying concession
      in consideration for the payment of stipulated annual payments. Each of the
      concession agreements included an option to purchase the concession and the
      annual payments, which were applied in full toward the contracted purchase
      price
      of the related concession.





The
      Company subsequently completed the purchase of the eight concessions, as
      follows: Esmeralda, consisting of approximately 118 hectares, on March 20,
      1997;
      Fortuna, consisting of approximately 14 hectares, on December 8, 1999; Sierra
      Mojada and Mojada 3, consisting of approximately 4,767 and 1,689 hectares,
      respectively, on May 30, 2000; Unificacion Mineros Nortenos and Vulcano,
      consisting of approximately 337 and 4 hectares, respectively, on August 30,
      2000; Esmeralda I, consisting of approximately 98 hectares, on August 20, 2001;
      and La Blanca, consisting of approximately 34 hectares, on August 20, 2001.
      The
      Company has recorded the concessions at acquisition cost.





All
      of
      the concessions were acquired by purchase agreements with Mexican entities
      and/or Mexican individuals and all of the concessions were paid for in cash.
      In
      the acquisition of Sierra Mojada and Mojada 3 there was one purchase agreement
      for both concessions. Also, in the acquisition of Unificacion Mineros Nortenos
      and Vulcano, there was one purchase agreement for both concessions.





Because
      all eight concessions are located in the same mining region and in close
      proximity to one another, the concessions are routinely treated as one major
      prospect area and are collectively referred to as the Sierra Mojada Project.
      The
      primary work performed on the Company's concessions has consisted of geologic
      mapping, sampling, and drilling. This work has resulted in establishing the
      presence of mineralized material (zinc) of sufficient quantity and grade to
      justify in the Company's opinion a feasibility study which commenced in
      2005.


8
 **METALLINE
              MINING COMPANY**
 **(AN
              EXPLORATION STAGE COMPANY)**
 **CONDENSED
              NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JULY
              31, 2006**
 **NOTE
      5 - PROPERTY AND EQUIPMENT**





The
      following is a summary of the Company's property and equipment at July 31,
      2006
      and October 31, 2005, respectively:





July
                31, 2006
            
            October
                31, 2005Mining
                equipment
            
            $
            514,855
            
            $
            514,855Buildings
                and structures
            
            
            141,061
            
            
            141,061Land
                - non mineral
            
            
            15,839
            
            
            15,839Vehicles
            
            
            76,856
            
            
            42,068Computer
                equipment
            
            
            114,435
            
            
            88,787Office
                equipment
            
            
            4,183
            
            
            4,183Furniture
                and fixtures
            
            
            8,186
            
            
            8,186875,415
            
            
            814,979Less:
                Accumulated depreciation
            
            
            (391,598
            )
            
            (324,095
            )$
            483,817
            
            $
            490,884





Depreciation
      expense for the periods ended July 31, 2006 and 2005 was $67,503 and $62,927,
      respectively.








**NOTE
      6 - CAPITAL STOCK**





Common
      Stock


In
      March
      2005, the Company's board of directors authorized a private placement of up
      to
      5,333,334 shares of the Company's restricted common stock at a price of $1.125
      per share for total proceeds of $6,000,000. Purchasers of these shares also
      received a warrant to purchase one share of the Company's common stock at an
      exercise price of $2.00 per share with an exercise period of five years. In
      September 2005, a modification of the private placement terms was authorized.
      The modified terms allow for the issuance of shares of common stock at a price
      of $0.80 per share, a warrant exercise price of $1.25 per share and an exercise
      period of five years. During the nine months ended July 31, 2006, the Company
      issued 13,448,483 shares of common stock under the aforementioned private
      placement, for cash consideration at $0.80 per share with attached warrants
      valued at an average of $0.29 per share. Net proceeds from this private
      placement were $10,758,737. The commission and other costs associated with
      this
      private placement were $339,816. During the nine months ended July 31, 2006,
      warrants for 25,000 shares were exercised for a cash consideration of $1.25
      per
      share. In addition to the common stock issued through the private placement,
      248,593 shares of common stock were issued for prior compensation at $2.69
      per
      share.





Stock
      Options


On
      March
      1, 2001, the Company's shareholders approved a qualified stock option plan.
      The
      number of shares eligible for issuance under the qualified plan is to be
      determined by the Company's board of directors. The Company has not issued
      any
      new options since 2002. As of July 31, 2006, there were 670,000 options
      outstanding and exercisable. Of this amount, 250,000 were granted to officers
      and directors of the Company.


9
 **METALLINE
              MINING COMPANY**
 **(AN
              EXPLORATION STAGE COMPANY)**
 **CONDENSED
              NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JULY
              31, 2006**
 Summarized
      information regarding stock options outstanding and exercisable at July 31,
      2006
      is as follows:





Options
                Outstanding
            
            Options
                ExercisableExercise
                Price
            
            Number
                Outstanding
            
            Weighted
                Average Remaining Contractual Life (Years)
            
            Weighted
                Average Exercise Price
            
            Number
                Exercisable
            
            Weighted
                Average Exercise Price$
            1.25
            
            100,000
            
            3.02
            $
            1.25
            
            100,000
            $
            1.251.32
            
            370,000
            
            0.18
            
            1.32
            
            370,000
            
            1.322.15
            
            200,000
            
            3.59
            
            2.15
            
            200,000
            
            2.15$
            1.25-2.15
            
            670,000
            
            1.62
            $
            1.60
            
            670,000
            $
            1.56





Warrants


During
      the nine months ended July 31, 2006, the Company issued 13,448,483 common stock
      warrants, exercisable at $1.25 per share. A value of $0.29 per warrant was
      allocated to these warrants with a total allocated value of $3,924,480 as part
      of the investment unit priced at $0.80 per share. During the nine months ended
      July 31, 2006, warrants for 25,000 shares were exercised for $1.25 per
      share.








**NOTE
      7 - INCOME TAXES**





At
      July
      31, 2006, the Company had net deferred tax assets calculated at an expected
      rate
      of 34% of approximately $5,653,000, principally arising from net operating
      loss
      carryforwards for income tax purposes. As management of the Company cannot
      determine that it is more likely than not that the Company will realize the
      benefit of the net deferred tax asset, there is a valuation allowance equal
      to
      the net deferred tax asset.





10
 **METALLINE
            MINING COMPANY**
 **(AN
            EXPLORATION STAGE COMPANY)**
 **CONDENSED
            NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JULY
            31, 2006**


The
      significant components of the deferred tax assets at July 31, 2006 and October
      31, 2005 are as follows:





July
                31,
            
            October
                31,2006
            
            2005Net
                operating loss carryforward
            
            $
            16,625,000
            
            $
            13,572,000Deferred
                tax asset
            
            $
            5,653,000
            
            $
            4,614,000Deferred
                tax asset valuation allowance
            
            $
            (5,653,000
            )
            $
            (4,614,000
            )





As
      of
      July 31, 2006, the Company had net operating loss carryforwards of approximately
      $16,625,000, which expire in the years 2008 through 2026. The Company has
      recognized approximately $1,491,000 of losses from the issuance of stock options
      and warrants for services through fiscal 2005, which were not deductible for
      tax
      purposes. The change in the allowance account from October 31, 2005 to July
      31,
      2006 was $1,039,000. The Company has immaterial temporary differences resulting
      from differences in tax depreciation of equipment.








**NOTE
      8 - SUBSEQUENT EVENTS**





The
      Company’s Board of Directors approved and adopted the 2006 Stock Option Plan,
      with a maximum of 5,000,000 shares of common stock. As of July 31, 2006, the
      exercise of options granted under “the Plan” is subject to the approval of
      shareholders to increase the Company’s authorized common stock.







11








**ITEM
      2.**  **Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations.**




*Forward-Looking
      Statements*





This
      Quarterly Report on Form 10-QSB, including Management's Discussion and Analysis
      of Financial Condition and Results of Operations, contains forward-looking
      statements regarding future events and the Company's future results that are
      subject to the safe harbors created under the Securities Act of 1933 (the
      "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act").
      These statements are based on current expectations, estimates, forecasts, and
      projections about the industry in which the Company operates and the beliefs
      and
      assumptions of the Company's management. Words such as "expects," "anticipates,"
      "targets," "goals," "projects," "intends," "plans," "believes," "seeks,"
      "estimates," "continues," "may," variations of such words, and similar
      expressions are intended to identify such forward-looking statements. In
      addition, any statements that refer to projections of the Company's future
      financial performance, the Company's anticipated growth and potentials in its
      business, and other characterizations of future events or circumstances are
      forward-looking statements. Readers are cautioned that these forward-looking
      statements are only predictions and are subject to risks, uncertainties, and
      assumptions that are difficult to predict, including those identified elsewhere
      herein and in the Company's Annual Report on Form 10-KSB for the fiscal year
      ended October 31, 2005 under "Risk Factors." Therefore, actual results may
      differ materially and adversely from those expressed in any forward-looking
      statements. The Company undertakes no obligation to revise or update any
      forward-looking statements for any reason.





*Plan
      of Operation*




The
      Company is an exploration stage company formed under the laws of the state
      of
      Nevada on August 20, 1993, to engage in the business of mining. The Company
      (through its subsidiary) currently owns eight concessions that are located
      in
      the municipality of Sierra Mojada, Coahuila, Mexico. The Company's objective
      is
      to define sufficient mineral reserves on these concessions to justify the
      development of a mechanized mining operation (the "Project"). The Company
      conducts its operations in Mexico and owns these eight concessions through
      its
      wholly owned Mexican subsidiary, Minera Metalin S.A. de C.V.




The
      Company’s primary focus has been to explore the Sierra Mojada concessions to
      identify available mineral deposits and define a resource. From 1999 through
      early 2005 an oxide zinc resource has been defined that management has
      determined contains sufficient estimated zinc metal to justify a feasibility
      study of the mineralized material. A Feasibility Study has been initiated with
      Green Team International of Johannesburg, South Africa as the prime contractor.
      The Company’s plan of operation for the next 12 months is to continue work on
      the feasibility study to determine whether a mining operation may be profitably
      conducted on the Company's concessions. The study is a detailed engineering
      and
      economic valuation of the iron oxide manto mineralized material. The study
      consists of five major elements: Metallurgy, Mine Plan, Extraction, Reduction
      and Water Development. The Metallurgy studies have been completed, results
      of
      which have been announced in a news release dated July 12, 2005. The Mine Plan
      studies contract has been awarded to Pincock Allen & Holt of Lakewood,
      Colorado. The mine plan studies are in progress and are estimated to require
      an
      additional four months to complete. The Mine Plan studies will determine the
      method used to mine the deposit, the associated mining costs and determine
      the
      production rate. When the production rate is determined the Extraction and
      Reduction plant can be designed and costed. The contemplated Extraction and
      Reduction process is known as Solvent Extraction Electrowinning (SXEW). Water
      Development is in progress and consists of drilling for a groundwater acquifer
      capable of producing sufficient water for the mine and plant.





12


The
      Company estimates that completion of a feasibility study will cost an additional
      $3.3 million and the Company expects that it will take an additional 12 to
      18
      months to complete. Following the completion of a successful feasibility study,
      the Company would then proceed to the construction phase, which would entail
      construction of a mine and related infrastructure pursuant to a Mine Plan
      developed specifically for the Company's concessions, and construction of an
      Extraction and Reduction plant to extract metal from the ore that would be
      mined. The Company estimates that construction of a Mine (based on the Mine
      Plan) and Extraction and Reduction plant would cost approximately $400 million
      and take approximately 2 to 3 years to complete after completion of the
      feasibility study, assuming sufficient funding is available. The Company intends
      to finance construction costs with a combination of equity and debt. In addition
      the Company may seek joint venture partners or other alternative financing
      sources as necessary to complete development of the project.





In
      order
      to finance the feasibility study and the business operations described above
      for
      corporate overhead through completion of the feasibility study, the Company
      has
      raised capital by selling unregistered shares of its common stock as described
      below in “Liquidity and Capital Resources.”





*Cautionary
      Note*





The
      Company is an exploration stage company and does not currently have any known
      reserves and cannot be expected to have reserves unless and until a feasibility
      study is completed for the Sierra Mojada concessions that shows proven and
      probable reserves. There can be no assurance that the Company's concessions
      contain proven and probable reserves and investors may lose their entire
      investment in the Company.





Set
      forth
      in the Company's Annual Report on Form 10-KSB and in other documents we
      file with the Securities and Exchange Commission are risks and uncertainties
      that could cause actual results to differ materially from the results
      contemplated by the forward-looking statements contained in this Quarterly
      Report on Form 10-QSB.





*Results
      of Operations for the Period Ended July 31, 2006.*





Nine
      months ended July 31, 2006 compared to the nine months ended July 31,
      2005:





During
      the nine months ended July 31, 2006, the Company realized other income of
      $62,464 from the sale of zinc carbonate ore from the Company's San Salvadore
      mine, in accordance with a contract with Cameron Chemicals Inc., Norfolk,
      Virginia. Costs associated with the sale of the ore totaled $93,575 in the
      nine-month period ended July 31, 2006. There were ore sales of $235,021 in
      the
      nine-month period ended July 31, 2005. General and administrative expenses
      increased to $3,253,220 for the nine-month period ended July 31, 2006 as
      compared to $2,742,570 for the nine-month period ended July 31, 2005. The
      increase is primarily due to the costs associated with resumption of drilling
      activity on the Company's property, resulting in an increase in
      exploration-related expenditures of $170,501. Additionally, there was an
      increase in payroll costs of $282,484. For the nine months ended July 31, 2006,
      the Company experienced a loss of $3,092,213, or $0.10 per share, compared
      to a
      loss of $2,715,834, or $0.14 per share, during the comparable period in the
      previous year.





13


*Liquidity
      and Capital Resources.*





The
      Company financed its obligations during the fiscal year ended October 31, 2005
      by the sale of 7,580,150 shares of its common stock during the previous fiscal
      year at an average price of $1.00 per share, less issuance costs of $698,863,
      and the sale of 476,404 shares of common stock during the year ended October
      31,
      2005 at an average price of $0.98 per share. During the nine months ended July
      31, 2006 the Company sold 13,448,483 shares in private placement transactions
      at
      a price of $0.80 per share, and issued 25,000 shares at $1.25 per share for
      exercise of a warrant. Due to the Company's substantial losses and minimal
      revenues, the Company's independent certified public accountants included a
      paragraph in the Company's 2005 financial statements relative to a going concern
      uncertainty.





The
      Company continues to maintain a sampling and drilling program that is budgeted
      at approximately $50,000 per month, not including analytical costs which can
      vary from $20,000 to $40,000 per month. The Company has estimated that
      completion of a feasibility study will cost approximately $6.3 million, but
      there can be no assurance that this estimate will not be revised upward. The
      Company expects to spend approximately $3.3 million in the next 12 months on
      the
      feasibility study. The Company believes the feasibility study will be completed
      in the next 12 to 18 months.





The
      Company's management believes that private placements of its shares have
      provided sufficient cash for the Company to continue to operate for at least
      the
      next twelve months based on current expense projections. Following the
      completion of a successful feasibility study, the Company would then proceed
      to
      the construction phase, which would entail construction of a mine and related
      infrastructure pursuant to a mine plan developed specifically for the Company's
      concessions, and construction of an extraction plant to extract metal from
      the
      ore that would be mined. In order to proceed with the construction phase, the
      Company would need to rely on additional equity or debt financing, or the
      Company may seek joint venture partners or other alternative financing
      sources.





*Cash
      flows for the nine months ended July 31, 2006 were as follows:*





During
      the nine-month period ended July 31, 2006, the Company's cash position increased
      by $8,219,103, due to the private placement sale of 13,448,483 shares of the
      Company's common stock at a price of $0.80 per share. Also during this period,
      the Company used $2,507,291 in operating activities, principally in connection
      with maintaining the property and costs of the private placement, and
      implementation of a drilling program.





*Critical
      Accounting Policies*





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make a variety of estimates and
      assumptions that affect (i) the reported amounts of assets and liabilities
      and
      disclosure of contingent assets and liabilities as of the date of the financial
      statements and (ii) the reported amounts of revenues and expenses during the
      reporting periods covered by the financial statements.




Our
      management routinely makes judgments and estimates about the effect of matters
      that are inherently uncertain. As the number of variables and assumptions
      affecting the future resolution of the uncertainties increase, these judgments
      become even more subjective and complex. Although we believe that our estimates
      and assumptions are reasonable, actual results may differ significantly from
      these estimates. Changes in estimates and assumptions based upon actual results
      may have a material impact on our results of operation and/or financial
      condition. We have identified certain accounting policies that we believe are
      most important to the portrayal of our current financial condition and results
      of operations. Our significant accounting policies are disclosed in Note 2
      to
      the Consolidated Financial Statements included in this Annual Report on Form
      10-KSB.





14


Fair
      Value of Financial Instruments


The
      Company's financial instruments as defined by Statement of Financial Accounting
      Standards No. 107, "Disclosures about Fair Value of Financial Instruments,"
      include cash and cash equivalents, marketable securities, receivables, advances
      to employees, accounts payable and accrued expenses. All instruments are
      accounted for on a historical cost basis, which, due to the short maturity
      of
      these financial instruments, approximates fair value at October 31, 2005 and
      2004.





Property
      Concessions


Costs
      of
      acquiring property concessions are capitalized by project area upon purchase
      or
      staking of the associated claims. Costs to maintain the property concessions
      and
      leases are expensed as incurred. When a property concession reaches the
      production stage, the related capitalized costs will be amortized, using the
      units of production method on the basis of periodic estimates of ore reserves.
      To date no concessions have reached production stage.




Property
      concessions are periodically assessed for impairment of value and any diminution
      in value is charged to operations at the time of impairment. Should a property
      concession be abandoned, its capitalized costs are charged to operations. The
      Company charges to operations the allocable portion of capitalized costs
      attributable to property concessions sold. Capitalized costs are allocated
      to
      property concessions abandoned or sold based on the proportion of claims
      abandoned or sold to the claims remaining within the project area.





Deferred
      tax assets and liabilities


The
      Company recognizes the expected future tax benefit from deferred tax assets
      when
      the tax benefit is considered to be more likely than not of being realized.
      Assessing the recoverability of deferred tax assets requires management to
      make
      significant estimates related to expectations of future taxable income.
      Estimates of future taxable income are based on forecasted cash flows and the
      application of existing tax laws in each jurisdiction. To the extent that future
      cash flows and taxable income differ significantly from estimates, the ability
      of the Company to realize deferred tax assets could be impacted. Additionally,
      future changes in tax laws in the jurisdictions in which the Company operates
      could limit the Company’s ability to obtain the future tax
      benefits.





Property
      and equipment


Property
      and equipment are stated at cost. Depreciation is provided using the
      straight-line or accelerated methods over the estimated useful lives of the
      assets. The useful lives of property, plant and equipment for purposes of
      computing depreciation are five to seven years for equipment, and 39 years
      for
      buildings.





The
      Company evaluates the recoverability of property and equipment when events
      and
      circumstances indicate that such assets might be impaired. The Company
      determines impairment by comparing the undiscounted future cash flows estimated
      to be generated by these assets to their respective carrying amounts.
      Maintenance and repairs are expensed as incurred. Replacements and betterments
      are capitalized. The cost and related reserves of assets sold or retired are
      removed from the accounts, and any resulting gain or loss is reflected in
      results of operations.





Accounting
      for Stock Options and Warrants Granted to Employees and Nonemployees


The
      Company currently reports stock issued to employees under the rules of SFAS
      No.
      123 and therefore, the Company’s accounting for stock options and warrants are
      not effected by the issuance of SFAS No. 123R.





15


In
      December 2004, the Financial Accounting Standards Board revised SFAS No. 123
      and
      issued SFAS No. 123R.





The
      warrants were valued using the Black-Scholes option pricing model. The
      assumptions used were as follows: volatility of 58%, a risk-free interest rate
      of 3% and an exercise term of five years.





The
      fair
      value of options was determined using the Black-Scholes option pricing model
      using a risk free interest rate of 3.25% and a volatility of
      42.49%.





Impairment
      of Long-Lived Assets


We
      review
      the net carrying value of all facilities, including idle facilities, on a
      periodic basis. We estimate the net realizable value of each property based
      on
      the estimated undiscounted future cash flows that will be generated from
      operations at each property, the estimated salvage value of the surface plant
      and equipment and the value associated with property interests. These estimates
      of undiscounted future cash flows are dependent upon the estimates of metal
      to
      be recovered from proven and probable ore reserves and mineral resources
      expected to be converted into mineral reserves, future production cost estimates
      and future metals price estimates over the estimated remaining mine life. If
      undiscounted cash flows are less than the carrying value of a property, an
      impairment loss is recognized based upon the estimated expected future cash
      flows from the property discounted at an interest rate commensurate with the
      risk involved.




Environmental
      Matters


When
      it
      is probable that costs associated with environmental remediation obligations
      will be incurred and they are reasonably estimable, we accrue such costs at
      the
      most likely estimate. Accruals for estimated losses from environmental
      remediation obligations generally are recognized no later than completion of
      the
      remedial feasibility study for such facility and are charged to provisions
      for
      closed operations and environmental matters. We periodically review our accrued
      liabilities for such remediation costs as evidence becomes available indicating
      that our remediation liability has potentially changed. Costs of future
      expenditures for environmental remediation are not discounted to their present
      value unless subject to a contractually obligated fixed payment schedule. Such
      costs are based on our current estimate of amounts that are expected to be
      incurred when the remediation work is performed within current laws and
      regulations. Recoveries of environmental remediation costs from other parties
      are recorded as assets when their receipt is deemed probable.





Future
      remediation costs for inactive mines are accrued based on management’s best
      estimate at the end of each period of the undiscounted costs expected to be
      incurred. Such costs estimates include, where applicable, ongoing care,
      maintenance and monitoring costs. Changes in estimates are reflected in earnings
      in the period an estimate is revised.








Accounting
      for reclamation and remediation obligations requires management to make
      estimates unique to each mining operation of the future costs the Company will
      incur to complete the reclamation and remediation work required to comply with
      existing laws and regulations. Actual costs incurred in future periods could
      differ from amounts estimated. Additionally, future changes to environmental
      laws and regulations could increase the extent of reclamation and remediation
      work required. Any such increases in future costs could materially impact the
      amounts charged to earnings. At October 31, 2005 the Company has no accrual
      for
      reclamation and remediation obligations because management cannot make a
      reasonable estimate. Any reclamation or remediation costs related to abandoned
      concessions has been previously expensed





16




**ITEM
      3.**  **Controls
      and Procedures.**





*Disclosure
      Controls and Procedures.*





The
      Company's principal executive officer and principal financial officer have
      evaluated the effectiveness of the Company's disclosure controls and procedures
      (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
      Act) as of the end of the period covered by this report. Based on such
      evaluation, the Company's principal executive officer and principal financial
      officer have concluded that, as of the end of such period, the Company's
      disclosure control 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 or submits under the
      Exchange Act.





The
      Company's management has also concluded that the Company's disclosure controls
      and procedures are effective to ensure that information required to be disclosed
      in the Company's reports filed under the Exchange Act is accumulated and
      communicated to management, including the principal executive officer and
      principal financial officer, to allow timely decisions regarding required
      disclosure.








*Changes
      in Internal Control Over Financial Reporting.*




There
      was
      no change in the Company's internal control over financial reporting that
      occurred during the fiscal quarter to which this report relates that has
      materially affected, or is reasonably likely to materially affect, the Company's
      internal control over financial reporting.





**PART
      II - OTHER INFORMATION**





**ITEM
      6. Exhibits.**





3.1
            Articles
                of Incorporation.(1)





3.2
            Certificate
                of Amendment to Articles of Incorporation, filed
                herewith.





3.3
            Bylaws,
                as amended, filed herewith.





31.1
            Certification
                of CEO Pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted
                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed
                herewith.





31.2
            Certification
                of CFO Pursuant to Exchange Act Rules 13a-14 and 15d-14, as adoptedpursuant
                to Section 302 of the Sarbanes-Oxley Act of 2002, filed
                herewith.





32.1
            Certification
                of CEO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection
                906 of the Sarbanes-Oxley Act of 2002, filed
                herewith.





32.2
            Certification
                of CFO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
                Section
                906 of the Sarbanes-Oxley Act of 2002, filed
                herewith.





(1)
            Incorporated
                by reference from Form 10-SB, filed October 15,
                1999.





17


**METALLINE
      MINING COMPANY**


**An
      Exploration Stage Company**








**SIGNATURES**




In
      accordance with Section 12, 13 or 15(d) 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.




METALLINE
      MINING COMPANY





September
              18,
              2006
            By:
            /s/
              Merlin D. BinghamDate
            Merlin
              D. Bingham, its President


September
              18, 2006
            By:
            /s/
              Wayne L. SchoonmakerDate
            Wayne
              L. Schoonmaker, itsPrincipal Financial
              Officer







18


**EXHIBIT
      INDEX**








3.1
            Articles
                of Incorporation(1)





3.2
            Certificate
                of Amendment to the Articles of Incorporation, filed
                herewith





3.3
            Bylaws,
                as amended, filed herewith.





31.1
            Certification
                of Principal Executive Officer pursuant to Rule 13a-14(a) of the
                Exchange
                Act. Filed herewith.





31.2
            Certification
                of Principal Financial Officer pursuant to Rule 13a-14(a) of the
                Exchange
                Act. Filed herewith.





32.1
            Certification
                of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.
                Furnished herewith.





32.2
            Certification
                of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.
                Furnished herewith.








(1)
            Incorporated
                by reference from Form 10-SB, filed October 15,
                1999.










E-1