**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 January 31, 2007





**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 36,819,483 shares of the issuer's common stock, par value $0.01,
      outstanding as of March 13, 2007.





Transitional
      Small Business Disclosure Format (Check one): Yes o No x










**METALLINE
      MINING COMPANY**


**QUARTERLY
      REPORTON FORM 10-QSB**


**FOR
      THE QUARTERLY PERIOD ENDED JANUARY 31, 2007**





**INDEX
      TO CONSOLIDATED FINANCIAL STATEMENTS**







**PAGE**




Consolidated
      Financial Statements:





Consolidated
                Balance Sheets as of January 31, 2007 and October 31, 2006
            F-2Consolidated
                Statements of Operations for the three-month periods endedJanuary
                31, 2007 and January 31, 2006 and for the period from inception(November
                8, 1993) to January 31, 2007
            F-3Consolidated
                Statements of Cash Flow for the three-month periods endedJanuary
                31, 2007 and January 31, 2006, and for the period from
                inception(November
                8, 1993) to January 31, 2007
            F-4Condensed
                Notes to Consolidated Financial Statements
            F-5















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




F-1
 **METALLINE
            MINING COMPANY**
 **(AN
              EXPLORATION STAGE COMPANY)**
 **CONSOLIDATED
                BALANCE SHEETS**


January
                  31,
              
              October
                  31,2007
              
              2006ASSETS
              
              
              (Unaudited)CURRENT
                  ASSETSCash
                  and cash equivalents
              
              $
              1,465,481
              
              $
              689,994Marketable
                  securities
              
              
              3,545,000
              
              
              5,925,000Accounts
                  receivable
              
              
              35,722
              
              
              35,934Tax
                  refunds receivable
              
              
              362,965
              
              
              -Prepaid
                  expenses
              
              
              48,690
              
              
              14,288Total
                  Current Assets
              
              
              5,457,858
              
              
              6,665,216PROPERTY
                  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
              
              
              605,355
              
              
              611,966Total
                  Equipment
              
              
              605,355
              
              
              611,966TOTAL
                  ASSETS
              
              $
              10,397,980
              
              $
              11,611,949LIABILITIES
                  AND STOCKHOLDERS' EQUITYCURRENT
                  LIABILITIESAccounts
                  payable
              
              $
              134,162
              
              $
              238,198Accounts
                  payable - related parties
              
              
              188,460
              
              
              125,460Accrued
                  liabilities and expenses
              
              
              82,103
              
              
              116,162Other
                  liabilities
              
              
              10,000
              
              
              10,000Total
                  Current Liabilities
              
              
              414,725
              
              
              489,820LONG-TERM
                  LIABILITIES
              
              
              -
              
              
              -COMMITMENTS
                  AND CONTINGENCIES
              
              
              -
              
              
              -STOCKHOLDERS'
                  EQUITYCommon
                  stock, $0.01 par value; 160,000,000 shares authorized,34,207,912
                  shares issued and outstanding
              
              
              342,079
              
              
              342,079Additional
                  paid-in capital
              
              
              39,689,836
              
              
              38,594,886Deficit
                  accumulated during exploration stage
              
              
              (30,048,660
              )
              
              (27,814,836
              )Total
                  Stockholders' Equity
              
              
              9,983,255
              
              
              11,122,129TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              10,397,980
              
              $
              11,611,949






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


F-2
 **METALLINE
              MINING COMPANY**
 **(AN
                EXPLORATION STAGE COMPANY)**
 **CONSOLIDATED
                    STATEMENTS OF OPERATIONS**


November
                  8,1993(Inception)Three
                  Months Ended
              
              toJanuary
                  31,
              
              January
                  31,
              
              January
                  312007
              
              2006
              
              2007(Unaudited)
              
              (Unaudited)
              
              (Unaudited)REVENUES
              
              $
              -
              
              $
              -
              
              $
              -GENERAL
                  AND ADMINISTRATIVE EXPENSESSalaries
                  and payroll expenses
              
              
              163,398
              
              
              130,696
              
              
              8,959,761Office
                  and administrative expenses
              
              
              331,807
              
              
              50,873
              
              
              1,736,034Taxes
                  and fees
              
              
              1,145
              
              
              119,542
              
              
              798,505Professional
                  services
              
              
              1,352,945
              
              
              106,351
              
              
              6,737,827Directors
                  fees
              
              
              78,000
              
              
              -
              
              
              1,914,195Property
                  expenses
              
              
              15,318
              
              
              9,935
              
              
              2,073,383Depreciation
              
              
              3,785
              
              
              20,600
              
              
              435,000Exploration
                  and research
              
              
              356,818
              
              
              18,152
              
              
              7,769,681TOTAL
                  GENERAL AND ADMINISTRATIVE EXPENSES
              
              
              2,303,216
              
              
              456,149
              
              
              30,424,386LOSS
                  FROM OPERATIONS
              
              
              (2,303,216
              )
              
              (456,149
              )
              
              (30,424,386
              )OTHER
                  INCOME (EXPENSES)Miscellaneous
                  ore sales, net of expenses
              
              
              -
              
              
              (41,537
              )
              
              134,242VAT
                  tax refunds
              
              
              -
              
              
              13,045
              
              
              132,660Rental
                  income
              
              
              -
              
              
              -
              
              
              94,000Miscellaneous
                  income
              
              
              96
              
              
              -
              
              
              (14,388
              )Interest
                  and investment income
              
              
              70,633
              
              
              17,726
              
              
              320,804Interest
                  and financing expense
              
              
              (1,337
              )
              
              (335
              )
              
              (291,623
              )TOTAL
                  OTHER INCOME
              
              
              69,392
              
              
              (11,101
              )
              
              375,695LOSS
                  BEFORE INCOME TAXES
              
              
              (2,233,824
              )
              
              (467,250
              )
              
              (30,048,691
              )INCOME
                  TAXES
              
              
              -
              
              
              -
              
              
              -NET
                  LOSS
              
              $
              (2,233,824
              )
              $
              (467,250
              )
              $
              (30,048,691
              )BASIC
                  AND DILUTED NET LOSS PERCOMMON
                  SHARE
              
              $
              (0.07
              )
              $
              (0.02
              )BASIC
                  AND DILUTEDWEIGHTED
                  AVERAGE NUMBEROF
                  COMMON SHARES OUTSTANDING
              
              
              34,207,912
              
              
              21,810,960


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




F-3
 **METALLINE
                MINING COMPANY**
 **(AN
                  EXPLORATION STAGE COMPANY)**
 **CONSOLIDATED
                        STATEMENTS OF CASH FLOWS**




Period
                  fromNovember
                  8, 1993(Inception)Three
                  Months Ended
              
              toJanuary
                  31,
              
              January
                  31,
              
              January
                  31,2007
              
              2006
              
              2007(Unaudited)
              
              (Unaudited)
              
              (Unaudited)CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (2,233,824
              )
              $
              (467,250
              )
              $
              (30,048,660
              )Adjustments
                  to reconcile net loss to net cash usedby
                  operating activities:Depreciation
              
              
              3,785
              
              
              20,600
              
              
              435,030Noncash
                  expenses
              
              
              2,825
              
              
              -
              
              
              129,689Common
                  stock issued for services
              
              
              -
              
              
              -
              
              
              1,025,487Common
                  stock issued for compensation
              
              
              -
              
              
              -
              
              
              977,106Options
                  issued for compensation
              
              
              -
              
              
              
              
              
              4,360,000Options
                  and warramts issued for directors fees
              
              
              -
              
              
              
              
              
              1,665,705Stock
                  options issued for services
              
              
              -
              
              
              -
              
              
              849,892Stock
                  options issued for financing fees
              
              
              -
              
              
              -
              
              
              276,000Common
                  stock issued for payment of expenses
              
              
              -
              
              
              -
              
              
              326,527Stock
                  warrants issued for services
              
              
              1,094,950
              
              
              -
              
              
              1,783,721(Increase)
                  decrease in:
              
              
              
              
              
              
              
              
              -Accounts
                  receivable
              
              
              (362,752
              )
              
              (21,173
              )
              
              (398,686
              )Prepaid
                  expenses
              
              
              (34,402
              )
              
              (43,865
              )
              
              (48,690
              )Employee
                  advances
              
              
              -
              
              
              (2,000
              )
              
              -Increase
                  (decrease) in:
              
              
              
              
              
              
              
              
              -Related
                  party payable
              
              
              63,000
              
              
              -
              
              
              188,460Accounts
                  payable
              
              
              (104,036
              )
              
              (2,028
              )
              
              134,162Contracts
                  payable
              
              
              -
              
              
              -
              
              
              -Accrued
                  liabilities and expenses
              
              
              (34,059
              )
              
              95,918
              
              
              92,103Net
                  cash used by operating activities
              
              
              (1,604,513
              )
              
              (419,798
              )
              
              (18,252,154
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Marketable
                  securities
              
              
              2,380,000
              
              
              -
              
              
              (3,545,000
              )Purchase
                  of investments
              
              
              -
              
              
              -
              
              
              (484,447
              )Proceeds
                  from investments
              
              
              -
              
              
              -
              
              
              484,447Equipment
                  purchases
              
              
              
              
              
              -
              
              
              (987,405
              )Mining
                  property acquisitions
              
              
              -
              
              
              -
              
              
              (4,452,631
              )Net
                  cash used by investing activities
              
              
              2,380,000
              
              
              -
              
              
              (8,985,036
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Proceeds
                  from sales of common stock
              
              
              -
              
              
              5,661,200
              
              
              27,581,814Proceeds
                  from sales of options and warrants
              
              
              -
              
              
              -
              
              
              981,140Deposits
                  for sale of stock
              
              
              -
              
              
              -
              
              
              125,500Proceeds
                  from shareholder loans
              
              
              -
              
              
              -
              
              
              30,000Payment
                  of note payable
              
              
              -
              
              
              (1,052
              )
              
              (15,783
              )Net
                  cash provided by financing activities:
              
              
              -
              
              
              5,660,148
              
              
              28,702,671Net
                  increase (decrease) in cash and cash equivalents
              
              
              775,487
              
              
              5,240,350
              
              
              1,465,481Cash
                  and cash equivalents beginning of period
              
              
              689,994
              
              
              213,369
              
              
              -Cash
                  and cash equivalents end of period
              
              $
              1,465,481
              
              $
              5,453,719
              
              $
              1,465,481SUPPLEMENTAL
                  CASH FLOW DISCLOSURES:Income
                  taxes paid
              
              $
              -
              
              $
              -
              
              $
              -Interest
                  paid
              
              $
              1,337
              
              $
              335
              
              $
              288,108NON-CASH
                  INVESTING AND FINANCING ACTIVITIES:Common
                  stock issued for equipment
              
              $
              -
              
              $
              -
              
              $
              25,000Common
                  stock options issued for financing fees
              
              $
              -
              
              $
              -
              
              $
              276,000




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


F-4
 **METALLINE
            MINING COMPANY**
 **(AN
            EXPLORATION STAGE COMPANY)**
 **CONDENSED
            NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JANUARY
            31, 2007**
 **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") and Contratistas
      de
      Sierra Mojada S.A. de C.V.





The
      Company’s efforts have been concentrated in expenditures related to exploration
      properties, principally in the Sierra Mojada project located in Coahuila,
      Mexico. The Company has not determined whether the exploration properties
      contain ore reserves that are economically recoverable. The ultimate realization
      of the Company’s investment in exploration properties is dependent upon the
      success of future property sales, the existence of economically recoverable
      reserves, the ability of the Company to obtain financing or make other
      arrangements for development, and upon future profitable production. The
      ultimate realization of the Company’s investment in exploration properties
      cannot be determined at this time, and accordingly, no provision for any asset
      impairment that may result, in the event the Company is not successful in
      developing or selling these properties, has been made in the accompanying
      financial statements.





The
      Company is actively seeking additional capital and management believes its
      properties can ultimately be sold or developed to enable the Company to continue
      its operations. However, there are inherent uncertainties in mining operations
      and management cannot provide assurances that it will be successful in this
      endeavor. Furthermore, the Company is in the exploration stage, as it has not
      realized any revenues from its planned operations.








**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, 2006. 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.





F-5
 **METALLINE
            MINING COMPANY**
 **(AN
            EXPLORATION STAGE COMPANY)**
 **CONDENSED
            NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JANUARY
            31, 2007**


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 three-month period ended January 31, 2007 are not necessarily
      indicative of the results that may be expected for the year ending October
      31,
      2007.




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 (including treasury inflation
      protected securities and auction rate 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 $304,043 and $27,470 at January 31, 2007
      and
      January 31, 2006, respectively, are denominated in pesos and are considered
      uninsured. Additionally, the Company maintained a Mexican petty cash balance
      of
      $1,013 at January 31, 2006. At January 31, 2007, the Company’s cash balances and
      marketable securities included $4,910,481 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 three months ended January 31, 2007 and 2006 were $356,818
      and $18,152, respectively. The exploration costs expensed during the Company’s
      exploration stage amount to $7,769,681.





Foreign
      Operations


The
      accompanying balance sheet at January 31, 2007 contains Company assets in
      Mexico, including: $4,334,767 in property concessions; $822,097 (before
      accumulated depreciation) of mining equipment; and $304,043 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.





F-6
 **METALLINE
            MINING COMPANY**
 **(AN
            EXPLORATION STAGE COMPANY)**
 **CONDENSED
            NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JANUARY
            31, 2007**


**NOTE
      3 - RECENT ACCOUNTING PRONOUNCEMENTS**





In
      September 2006, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 157, “Fair Value Measurements” (hereinafter
“SFAS No. 157”), which defines fair value, establishes a framework for measuring
      fair value in generally accepted accounting principles (GAAP), and expands
      disclosures about fair value measurements. SFAS No. 157 is effective for
      financial statements issued for fiscal years beginning after November 15, 2007,
      and interim periods within those fiscal years. Earlier adoption is encouraged.
      The Company does not expect the adoption of SFAS No. 157 to have a significant
      effect on its financial position or results of operation.




In
      June
      2006, the Financial Accounting Standards Board issued FASB Interpretation No.
      48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB
      Statement No. 109” (hereinafter “FIN 48”), which prescribes a recognition
      threshold and measurement attribute for the financial statement recognition
      and
      measurement of a tax position taken or expected to be taken in a tax return.
      FIN
      48 also provides guidance on de-recognition, classification, interest and
      penalties, accounting in interim periods, disclosure and transition. FIN 48
      is
      effective for fiscal years beginning after December 15, 2006. The Company does
      not expect the adoption of FIN 48 to have a material impact on its financial
      reporting, and the Company is currently evaluating the impact, if any, the
      adoption of FIN 48 will have on its disclosure requirements.





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.





F-7
 **METALLINE
            MINING COMPANY**
 **(AN
            EXPLORATION STAGE COMPANY)**
 **CONDENSED
            NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JANUARY
            31, 2007**


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.





In
      May
      2005, the Financial Accounting Standards Board issued Statement of Financial
      Accounting Standards No. 154, “Accounting Changes and error Corrections,”
(hereinafter “SFAS No. 154”) which replaces Accounting Principles Board Opinion
      No. 20, “Accounting Changes,” and SFAS No. 3, “Reporting Accounting Changes in
      Interim Financial Statements - An Amendment of APB Opinion No. 28.” SFAS No. 154
      provides guidance on accounting for and reporting changes in accounting
      principles and error corrections. SFAS No. 154 requires that changes in
      accounting principles be applied retrospectively to prior period financial
      statements and is effective for fiscal years beginning after December 15, 2005.
      Management does not expect SFAS No. 154 5o have a material impact on the
      Company’s financial position, results of operations, or cash flows.








**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.





F-8
 **METALLINE
            MINING COMPANY**
 **(AN
            EXPLORATION STAGE COMPANY)**
 **CONDENSED
            NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JANUARY
            31, 2007**


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.








**NOTE
      5 - PROPERTY AND EQUIPMENT**





The
      following is a summary of the Company's property and equipment at January 31,
      2007 and October 31, 2006, respectively:





January
                31, 2007
            
            October
                31, 2006Mining
                equipment
            
            $
            612,657
            
            $
            589,751Communication
                Equipment
            
            
            9,886
            
            
            10,179Buildings
                and structures
            
            
            137,006
            
            
            141,061Land
                - non mineral
            
            
            15,839
            
            
            15,839Vehicles
            
            
            125,311
            
            
            152,030Computer
                equipment
            
            
            122,482
            
            
            120,664Office
                equipment
            
            
            9,507
            
            
            9,446Furniture
                and fixtures
            
            
            888
            
            
            8881,033,576
            
            
            1,039,858Less:
                Accumulated depreciation
            
            
            (428,221
            )
            
            (427,892
            )$
            605,355
            
            $
            611,966





Depreciation
      expense for the periods ended January 31, 2007 and 2006 was $3,785 and $20,600,
      respectively.





F-9
 **METALLINE
            MINING COMPANY**
 **(AN
            EXPLORATION STAGE COMPANY)**
 **CONDENSED
            NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JANUARY
            31, 2007**


**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 year ended October 31, 2006, the Company issued
      13,456,084 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. In addition, warrants were exercised for 25,000
      shares of common stock for cash consideration at an average of $1.25 per share.
      There were also 54,000 shares of common stock granted as stock bonuses to the
      Company’s independent directors at an average value of $2.32 per share for
      services received under the 2006 Plan, described below. 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.





There
      were no shares of common stock issued in the three months ended January 31,
      2007.





Stock
      Options


On
      July
      7, 2006, the Company’s shareholders approved a qualified stock option plan (the
“2006 Plan”), which provides for non-statutory and incentive stock options for
      employees, directors and consultants, and has reserved a total of 5,000,000
      shares of common stock for issuance pursuant to the Plan.





On
      March
      1, 2001, the Company's shareholders approved a qualified stock option plan
      (the
“2001 Plan”), which provides for non-statutory and incentive stock options for
      employees, directors and consultants, and has reserved a total of 1,000,000
      shares of common stock for issuance pursuant to the Plan. Summarized information
      about stock options outstanding and exercisable at January 31, 2007 is as
      follows:




F-10
 **METALLINE
            MINING COMPANY**
 **(AN
            EXPLORATION STAGE COMPANY)**
 **CONDENSED
            NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JANUARY
            31, 2007**




Options
                Outstanding
            
            Options
                ExercisableExercise
              Price
            
            Number
              Outstanding
            
            Weighted
              Average
              Remaining
              Contractual
              Life
                (Years)
            
            Weighted
              Average
              Exercise
              Price
            
            Number
              Exercisable
            
            Weighted
              Average
              Exercise
              Price$1.30
            
            
            100,000
            
            
            2.52
            
            $
            1.30
            
            
            100,000
            
            $
            1.301.32
            
            
            310,000
            
            
            3.68
            
            
            1.32
            
            
            310,000
            
            
            1.322.59
            
            
            2,750,000
            
            
            9.25
            
            
            2.59
            
            
            2,750,000
            
            
            2.592.15
            
            
            200,000
            
            
            3.08
            
            
            2.15
            
            
            200,000
            
            
            2.15$1.30-2.59
            
            
            3,360000
            
            
            8.15
            
            $
            2.41
            
            
            3,360,000
            
            $
            2.41





Warrants


During
      the three months ended January 31, 2007, for services received, the Company
      issued warrants for 500,000 common shares, exercisable at $3.40 per share.
      A
      value of $1.86 per warrant was allocated to these warrants with a total
      allocated value of $928,750. The Company also issued warrants for 100,000 common
      shares, exercisable at $2.63 per share. A value of $1.66 per share was allocated
      to these warrants with a total allocated value of $166,200





**NOTE
      7 - INCOME TAXES**





At
      January 31, 2007, the Company had net deferred tax assets calculated at an
      expected rate of 34% of approximately $6,900,000, 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.





The
      significant components of the deferred tax assets at January 31, 2007 and
      October 31, 2006 are as follows:





January
                31,
            
            October
                31,2007
            
            2006Net
                operating loss carryforward
            
            $
            20,200,000
            
            $
            19,100,000Deferred
                tax asset
            
            $
            6,900,000
            
            $
            6,500,000Deferred
                tax asset valuation allowance
            
            $
            (6,900,000
            )
            $
            (6,500,000
            )





As
      of
      January 31, 2007, the Company had net operating loss carryforwards of
      approximately $20,200,000, which expire in the years 2008 through 2027. The
      Company has recognized approximately $1,095,000 of losses from the issuance
      of
      stock options and warrants for services in the three months ended January 31,
      2007, which were not deductible for tax purposes. The change in the allowance
      account from October 31, 2006 to January 31, 2007 was $400,000. The Company
      has
      immaterial temporary differences resulting from differences in tax depreciation
      of equipment.





F-11
 **METALLINE
            MINING COMPANY**
 **(AN
            EXPLORATION STAGE COMPANY)**
 **CONDENSED
            NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JANUARY
            31, 2007**





**NOTE
      8 - SUBSEQUENT EVENTS**





In
      February, 2007 the Company issued 54,000 shares of common stock to independent
      directors of the Company for services received in the prior fiscal year and
      18,000 shares of common stock for services received in the three months ended
      January 31, 2007, all as stock bonuses under the 2006 Plan. The Company also
      issued 126,000 shares of common stock upon the exercise of stock options under
      the 2001 Plan.





On
      March
      6, 2007, the Company completed a private offering of 2,413,571 shares of the
      Company’s common stock and warrants to purchase 1,206,785 shares of common
      stock, exercisable at $2.42 per share and expiring on March 6, 2011 (the
“Securities”). The Securities were purchased at a price of $4.70 per Unit, which
      consists of two shares of common stock and one warrant for an aggregate gross
      proceeds of $5,671,892.





F-12




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




*Cautionary
      Statement about Forward-Looking Statements*




This
      Quarterly Report on Form 10-QSB 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-QSB 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;




·
            Business
                strategies and development of our business plan;
                and




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 zinc 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 discussed Company's Annual Report
      on
      Form 10-KSB for the fiscal year ended October 31, 2006 under the caption
      "Risk Factors," many of which are beyond our control. Readers are cautioned
      that
      forward-looking statements are not guarantees of future performance and that
      actual results or developments may differ materially from those expressed or
      implied in the forward-looking statements.




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




**Plan
      of Operation**




The
      Company is 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
      currently owns mining concessions, which are located in the municipality of
      Sierra Mojada, Coahuila, Mexico (the “Property”). The Company's objective is to
      define sufficient mineral reserves on the Property to justify the development
      of
      a mechanized mining operation (the "Project"). The Company conducts its
      operations in Mexico through its wholly owned Mexican subsidiaries, Minera
      Metalin S.A. de C.V. (“Minera”) and Contratistas de Sierra Mojada S.A. de C.V.





The
      Company’s primary focus has been to explore the Sierra Mojada concessions to
      identify available mineral deposits, securing a legal right to exploit the
      deposit and defining a resource. From 1999 through early 2005 an oxide zinc
      mineralization 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 for the Company
      by
      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 and smithsonite manto mineralized material.
      The study consists of six major elements: Resource Model, Metallurgy, Mine
      Plan,
      Extraction, Reduction and Water Development.





1


The
      Resource Model is currently being revised and when the revision is complete
      it
      will be used interactively with the mining and concentrator team to optimize
      the
      baseline business case for the study. The Resource Model will then be subjected
      to a technical audit.





The
      Company will also audit and improve its sample collecting, sample preparation,
      and data logging technical processes. It will also acquire improved geological
      information requested by its engineers in completing their studies. The new
      studies will include geotechnical studies and other testing to confirm the
      applicability of various mining methods to the rocks at Sierra Mojada. The
      Company will analyze a large sampling of rocks from within the boundaries of
      the
      current Resource Model grade shell for other metals that might be recovered
      as
      coproducts of mining zinc. The elements being considered include silver,
      cadmium, indium, gallium, germanium, and cobalt.





Metallurgical
      studies will continue with an objective of improving the design of the
      concentrator circuit for processing of zinc as well as to evaluate the existing
      circuit as applied to the recovery of silver. The scoping study phase of the
      Mine Plan will be completed by evaluating interactions and optimizations between
      Mine Plan, concentrator and refinery sizing, and the Resource Model. On
      completion of this activity, the basic mine method(s) and project capacities
      will be frozen and mine planning will be carried to the next level of detail.
      The location of the refinery, the extraction and reduction plant will then
      be
      finalized, using the results of a previously performed alternatives analysis,
      and the details of refinery location and design will be attacked. GTI has
      previously completed fairly mature concentrator and refinery designs.





The
      Mine
      Plan studies contract has been awarded to the firm of Pincock, Allen and Holt.
      The Mine Plan studies involve three stages of progressively more definitive
      work. These are a scoping stage, a preliminary design phase, and a detailed
      design phase. The scoping stage of Mine Plan studies will evaluate methods
      to
      mine the deposit, determine the optimum method to mine the deposit, the
      associated capital and mining costs and determine feasible production rates.
      The
      production rate for the project is determined through an economic evaluation
      that seeks to optimize the expected return on investment based on consideration
      of the Resource Model and interactions with the mining method, the extraction
      and reduction plants in the context of the expected capital and operating costs
      of the entire system. A baseline design case using concentration of oxide zinc
      minerals and refining the concentrate using solvent extraction and
      electrowinning (SXEW) is used to compare the economic efficiency of various
      engineering alternatives. After the optimum approach is determined, the
      engineering design is developed in stages of increasing complexity and detail.
      Throughout this process, standard engineering practices are employed to
      progressively reduce the engineering and economic uncertainties.





A
      contract will be issued to Agapito Associates Inc., of Golden, Colorado, to
      perform geotechnical and rock mechanics studies at the site in support of mine
      planning activities. Late second quarter, 2007, we are planning to begin a
      drilling program to obtain large diameter core samples for testing in Agapito
      laboratories. This drilling will use one of the Company’s diamond drill
      units.





Water
      Development is in progress and consists of drilling for a groundwater supply
      capable of producing water for the mine and plant in volumes adequate to meet
      water supply requirements estimated by the engineering groups performing the
      feasibility study. Water Development will be completed, several wells will
      be
      completed and tested, and application will be made to the appropriate agency
      (the Comisión Nacional de Agua) to grant the Company water rights.
      Environmental, Social, and permitting studies will be continued and completed
      by
      our consultants. Weather-, noise-, and air-quality-monitoring will be performed.
      A documented community out-reach program is already underway and will be
      continued with our workers, the local community, the local government and
      appropriate agencies in State and Federal governments. All of this work will
      be
      done to comply with Mexican regulations, laws, and norms and with sustainable
      development considerations as described in the International Finance
      Corporations “Performance Standards on Social and Environmental Sustainability”
and the Environment Assessment required by the World Bank’s “Equator
      Principles”.





2


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.”


The
      Company estimates that completion of a feasibility study will cost an additional
      $3.5 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 secure financing for the construction of
      a
      mine and related infrastructure pursuant to a Mine Plan developed specifically
      for the Company's concessions and for Concentration and Reduction plants to
      extract metal from the ore that would be mined. The Company estimates that
      construction of a mine and extraction and reduction plant would cost
      approximately $400 million and take approximately two to three years to complete
      after completion of the feasibility study, assuming sufficient funding is
      available. The Company intends to finance construction costs by seeking 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.





The
      Company is improving its general business capabilities in Mexico so that it
      is
      capable of performing the ramp up in activity required by our business
      objectives. We are selectively improving the quality of our workforce at all
      levels. We will become fully compliant with labor registration, safety, health
      and training requirements, and environmental registration. Until that time,
      we
      do not have to comply in these areas because we were grandfathered into
      compliance.





Some
      overarching business objectives in our activities are: to systematically reduce
      the significant risk factors listed earlier in this document; to reach the
      level
      of certainty required to comply with SEC Industry Guide 7; and to meet the
      level
      of quality required for our feasibility study to be acceptable to financial
      institutions to support funding decisions. Two disciplines help us to reach
      these objectives. First, generally accepted international engineering practice
      is based on methodology to achieve progressive reduction of risk and progressive
      reduction in economic uncertainties as studies progress. Second, outside
      technical/engineering auditors are retained to insure that work is done to
      the
      quality required by the engineering norms.





The
      Company will continue its program to explore for new mineralization. This effort
      is most intensely focused on areas of silver-copper mineralization close to
      mine
      workings that might be constructed to access and work the zinc oxide manto.
      The
      purpose of this work is both to identify areas that might be mined as well
      as to
      insure that contemplated mine workings do not render mineralization unmineable
      that might otherwise be exploited. The Company is aware of other areas within
      its concessions that it believes may have significant exploration potential.
      As
      resources are available, or specific opportunities are identified, such areas
      may receive exploration attention.





In
      the
      past the Company has evaluated various opportunities for generating near-term
      revenues from small scale mining from its concessions, and it will continue
      to
      do so in the future. However, it will only engage in such operations if 1)
      they
      are not diversionary to the task of completing the feasibility study; 2) they
      are safe for our workers; 3) the business risk is low; 4) the opportunity is
      affordable; 5) the profit potential is significant to a company of our size.
      We
      have no current plans to enter any such venture.





3


*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. See “Risk Factors” in the Company's Annual Report on
      Form 10-KSB for the fiscal year ended October 31, 2006.





**Results
      of Operations**





During
      the three months ended January 31, 2007, the Company realized other income
      of
      $69,392 as compared to a negative $11,101 for the three month period ending
      January 31, 2006. General and administrative expenses increased to $2,303,216
      for the three month period ended January 31, 2007 as compared to $456,149 for
      the quarter ended January 31, 2006. The increase is primarily due to the
      increase in office and administrative expenses of $280,934, increase in
      exploration expenditures of $338,666, professional services increase of
      $1,246,594 and increase in administration costs of $280,934 *.* **** Of
      the
      total $1,352,945 booked as professional services, $1,094,950 was due to the
      expensing of warrants issued in the quarter for services rendered by outside
      consultants. This expensing of warrants is a non-cash item. The cash portion,
      totaling $257,995, consists mostly of payments to consultants in connection
      with
      the feasibility study, and legal and accounting fees. **** The **** increased
      expenditures were primarily due to increased exploration and feasibility
      expenditures following completion of the private placement of the Company’s
      common stock in the prior fiscal year. For the three months ** ended
      January 31, 2007, the Company experienced a loss of $2,233,824, or $0.07 per
      share, compared to a loss of $467,250, or $0.02 per share, during the comparable
      period in the previous year.





**Liquidity
      and Capital Resources**





The
      Company financed its obligations during the quarter year ended January 31,
      2007
      from cash on hand. At January 31, 2007, the Company's cash, cash equivalents
      and
      marketable securities decreased by $1,604,513 compared to the year ended October
      31, 2006. Also during this period, the Company used $1,604,513 in operating
      activities, principally in connection with maintaining the property,
      continuation of a surface exploration drilling program and continued feasibility
      study funding, which includes the water development drilling.





Subsequent
      to the three month period ended January 31, 2007, the Company completed a
      private offering of 2,413,571 shares of the Company’s common stock and warrants
      to purchase 1,206,785 shares of common stock, exercisable at $2.42 per share
      and
      expiring on March 6, 2011 (the “Securities”). The Securities were purchased at a
      price of $4.70 per Unit, which consists of two shares of common stock and one
      warrant for an aggregate gross proceeds of $5,671,892.60. As
      of March
      12, 2007, the Company’s cash position was $8,747,586.




The
      Company’s current operating expenses total $350,000 per month, for an expected
      operating expense of $4.2 million in the next 12 months. 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 $6.5 million, but there can be no assurance that
      this estimate will not be revised upward. Assuming adequate funding is
      available, the Company expects to spend approximately $3.5 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 **.** If
      at any
      time we think we have insufficient cash, we will adjust our program and
      expenditures appropriately.





4


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.







**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 Quarterly Report on
      Form
      10-QSB.





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.





5


Estimates


The
      process of preparing financial statements in conformity with accounting
      principles generally accepted in the United States of America requires the
      use
      of estimates and assumptions regarding certain types of assets, liabilities,
      revenues, and expenses. Such estimates primarily relate to unsettled
      transactions and events as of the date of the financial statements. Accordingly,
      upon settlement, actual results may differ from estimated amounts.





Foreign
      Currency Translation


While
      the
      Company’s functional currency is the U.S. dollar, the majority of its operations
      are in Mexico. The assets and liabilities relating to Mexican operations are
      exposed to exchange rate fluctuations. The Company has adopted Financial
      Accounting Standard No. 52. Monetary assets and liabilities denominated in
      foreign currencies are translated into United States dollars at rates of
      exchange in effect at the balance sheet date, and revenue and expenses are
      translated at the average exchange rate during the period. Realized gains or
      losses are included in income for the year as a result of operations.
      Non-monetary assets, liabilities and items recorded in income arising from
      transactions denominated in foreign currencies are translated at rates of
      exchange in effect at the date of the transaction.





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 affected by the issuance of SFAS No. 123R, except for how it relates to
      modification of existing options.





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





Warrants
      were valued using the Black-Scholes option pricing model. The assumptions used
      were as follows: volatility of 80%, a risk-free interest rate of 5% and an
      exercise term of from two to five years.





The
      fair
      value of options was determined using the Black-Scholes option pricing model
      using a risk free interest rate of 5% and a volatility of 80%.





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.





6


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, 2006 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.




**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.




7




**PART
      II - OTHER INFORMATION**





**ITEM
      6. Exhibits.**





3.1
            Articles
                of Incorporation.(1), (2), (3)





3.2
            Bylaws,
                as amended.(3)





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.
|--- | ----------------------------------------------------------------------------------------------

|(2) | Incorporated
              by reference from Form 10-QSB, filed September 19,
              2006.
|--- | -------------------------------------------------------------------------------------------------

|(3) | Incorporated
              by reference from Form 10-KSB, filed January 31,
              2007.
|--- | -----------------------------------------------------------------------------------------------




8


**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





March
              16, 2007
            By:
            /s/
              Merlin BinghamDate
            Merlin
              Bingham, President andChief
              Executive Officer


March
                16, 2007
              By:
              /s/
                Wayne L. SchoonmakerDate
              Wayne
                L. Schoonmaker,Principal
                Financial Officer andChief Accounting
                Officer






9