UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

For the quarterly period ended December 31, 2002

                                       OR

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

For the transition period from . . . . . . . . . . to . . . . . . . . . . . .

Commission file number 0-20430

                                AZCO MINING INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


                  Delaware                                       84-1094315
---------------------------------------------                ------------------
(State or other jurisdiction of incorporation                (I.R.S. Employer
 or organization)                                            Identification No.)

                             7239 N. El Mirage Road
                            Glendale, Arizona 85307
                    ---------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (623) 935-0774
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


    -------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                    report)

     Indicate  by  check  mark  whether the registrant (1) has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12  months  (or  for  such shorter period 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
    ---       ---

     Indicate  the  number of shares outstanding of each of the issuer's classes
of  common  stock,  as  of  the  latest  practicable  date.

     The  Company  had  37,573,983  shares  of  Common  Stock  outstanding as of
February  12,  2003.


                                      -1-
<PAGE>
                                AZCO MINING INC.


                         PART I.  FINANCIAL INFORMATION


ITEM 1.   FINANCIAL STATEMENTS


                                                                        PAGE
                                                                        ----


         Consolidated Balance Sheets                                      3

         Consolidated Statements of Operations                            4

         Consolidated Statements of Cash Flows                            5

         Consolidated Statement of Stockholders' Equity                   6

         Notes to Interim Consolidated Financial Statements               7-16


                                      -2-
<PAGE>
<TABLE>
<CAPTION>
AZCO  MINING  INC.
CONSOLIDATED  BALANCE  SHEETS


                                                             DECEMBER 31,     JUNE 30,
                      ASSETS                                     2002           2002
                                                             (UNAUDITED)
<S>                                                         <C>             <C>
Current assets:
  Cash and cash equivalents                                 $      10,971   $    884,647
  Prepaids and other                                              240,978        179,225
  Inventories (Note 2)                                          1,089,594      1,095,780
                                                            --------------  -------------
          Total current assets                                  1,341,543      2,159,652
                                                            --------------  -------------

Capital assets (Note 3):
  Mineral properties, plant & equipment, net                   10,176,175     10,352,872
  Capital assets, net                                             239,966        288,148
                                                            --------------  -------------
                                                               10,416,141     10,641,020
                                                            --------------  -------------

Restricted cash                                                   178,659        190,400
                                                            --------------  -------------
          Total assets                                      $  11,936,343   $ 12,991,072
                                                            ==============  =============

           LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable and accrued liabilities                  $     603,339   $    540,768
  Notes payable (Note 4)                                          500,000        443,672
  Convertible debenture and option (Note 4)                        89,607
  Accrued settlement obligation (Note 5)                          240,000        586,000
                                                            --------------  -------------
                                                                1,432,946      1,570,440
Long term liabilities:
  Accrued settlement obligation (Note 5)                          300,000        444,900
  Financing lease liability (Note 4)                            2,062,350      1,975,650
  Notes payable to related party (Note 4)                         663,186        615,068
  Other liabilities                                                98,170        275,127
                                                            --------------  -------------
                                                                3,123,706      3,310,745
                                                            --------------  -------------
          Total liabilities                                     4,556,652      4,881,185
                                                            --------------  -------------

Contingencies and commitments (Note 6)

STOCKHOLDERS' EQUITY
Common stock: $.002 par value, 100,000,000 shares
authorized; 35,490,019 shares outstanding as of December           69,909         62,304
31, 2002 and 31,151,121 shares outstanding as of June 30,
2002
Additional paid-in capital                                     32,567,560     30,951,523
Accumulated deficit                                           (25,257,778)   (22,903,940)
                                                            --------------  -------------
                                                                7,379,691      8,109,887
                                                            --------------  -------------
        Total liabilities and stockholders' equity          $  11,936,343   $ 12,991,072
                                                            ==============  =============
</TABLE>


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


                                      -3-
<PAGE>
<TABLE>
<CAPTION>
AZCO MINING INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)

                                                         THREE MONTHS ENDED           SIX MONTHS ENDED
                                                            DECEMBER 31,                DECEMBER 31,
                                                         2002          2001          2002          2001
                                                     ------------  ------------  ------------  ------------
<S>                                                  <C>           <C>           <C>           <C>
SALES                                                $    10,363   $    24,800   $    30,825   $    24,800

OPERATING COSTS AND EXPENSES
     Production costs                                    227,607       221,448       764,641       466,365
     General and administrative                          280,086       238,659       431,812       446,081
     Exploration                                          13,832        35,720        29,059        83,586
     Amortization & depreciation                          37,008        37,028       114,352        69,758
     Financing consulting fees                            41,349             -       432,349             -
     Accretion of asset retirement obligation
     (Note 6)                                              1,250             -         2,500             -
                                                     ------------  ------------  ------------  ------------

     Total operating costs and expenses                  601,132       532,855     1,774,713     1,065,790
                                                     ------------  ------------  ------------  ------------

OPERATING LOSS                                       $  (590,769)  $  (508,055)  $(1,743,888)  $(1,040,990)

OTHER INCOME/EXPENSE:
     Interest expense                                   (204,310)     (189,896)     (480,146)     (211,326)
     Interest income                                         215         1,110         3,210         1,913
     Miscellaneous expense, net                          (84,109)            -       (84,109)            -
                                                     ------------  ------------  ------------  ------------
                                                        (288,204)     (188,786)     (561,045)     (209,413)
                                                     ------------  ------------  ------------  ------------

LOSS BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE      (878,973)     (696,841)   (2,304,933)   (1,250,403)

Cumulative effect of accounting change,                        -             -        13,902             -
net of taxes of $0 (Note 8)
                                                     ------------  ------------  ------------  ------------

NET LOSS                                             $  (878,973)  $  (696,841)  $(2,318,835)  $(1,250,403)
                                                     ============  ============  ============  ============

Basic loss per share before cumulative                     (0.03)        (0.02)        (0.07)        (0.04)
effect of accounting change
Cumulative effect of accounting change                         -             -             -             -
                                                     ------------  ------------  ------------  ------------
Basic loss per share                                 $     (0.03)  $     (0.02)  $     (0.07)  $     (0.04)
                                                     ============  ============  ============  ============

Diluted loss per share before cumulative                   (0.03)        (0.02)        (0.07)        (0.04)
effect of accounting change
Cumulative effect of accounting change                         -             -             -             -
                                                     ------------  ------------  ------------  ------------
Diluted loss per common share                        $     (0.03)  $     (0.02)  $     (0.07)  $     (0.04)
                                                     ============  ============  ============  ============

WEIGHTED AVERAGE COMMON SHARES                        33,263,460    30,050,621    32,570,543    30,050,621
                                                     ============  ============  ============  ============
</TABLE>


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


                                      -4-
<PAGE>
<TABLE>
<CAPTION>
AZCO MINING INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


                                                          SIX MONTHS ENDED
                                                            DECEMBER 31,
                                                         2002          2001
                                                     ------------  ------------
<S>                                                  <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                        $(2,318,835)  $(1,250,403)
     Adjustments to reconcile net loss to net cash
     used in operations:
           Depreciation and amortization                 114,352        69,758
           Accretion of asset retirement obligation        2,500
           Stock compensation and other
                 non-cash expenses                       363,000
           Amortization of debt discount                 203,683       150,269
           Mark to market adjustments                     84,109
           Cumulative effect of accounting change         13,902
     Changes in assets and liabilities, net:
           Prepaid and other                            (109,820)       39,364
           Inventories                                     6,186       (18,631)
           Restricted cash                                11,741
           Accounts payable and accrued liabilities      389,772        23,440
           Accrued settlement obligation                (184,900)
                                                     ------------  ------------
Net cash used in operating activities                 (1,424,310)     (986,203)
                                                     ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Proceeds from notes payable                        665,000       811,000
      Payments on notes payable                         (100,000)            -
      Proceeds from stock sale                                 -       164,250
      Payments on capital lease obligations              (34,766)      (21,502)
      Proceeds from exercise of options                   20,400             -
                                                     ------------  ------------

Net cash provided by financing activities:               550,634       953,748
                                                     ------------  ------------

Net decrease in cash and cash equivalents               (873,676)      (32,455)

Cash and cash equivalents at beginning of period         884,647        39,920
                                                     ------------  ------------

Cash and cash equivalents at end of period           $    10,971   $     7,465
                                                     ============  ============
</TABLE>

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


                                      -5-
<PAGE>
<TABLE>
<CAPTION>
AZCO MINING INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)


                                 COMMON
                                  STOCK          ADDITIONAL
                                                  PAID-IN     ACCUMULATED
                             SHARES    AMOUNT     CAPITAL       DEFICIT        TOTAL
<S>                        <C>         <C>      <C>          <C>            <C>
Balance June 30, 2002      31,152,121  $62,304  $30,951,523  $(22,903,940)  $ 8,109,887

Dividend to shareholders
(Note 4)                                             35,003       (35,003)            -

Common shares issued
 (Note 7)                   4,307,898    7,545    1,560,694                   1,568,239

Exercise of options            30,000       60       20,340                      20,400

Net loss                                                       (2,318,835)   (2,318,835)
                           ----------  -------  -----------  -------------  ------------

Balance December 31,
2002                       35,490,019  $69,909  $32,567,560  $(25,257,778)  $ 7,379,691
                           ==========  =======  ===========  =============  ============
</TABLE>

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


                                      -6-
<PAGE>
AZCO MINING INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


NOTE 1.   BASIS OF PRESENTATION AND GOING CONCERN
-------------------------------------------------

The  unaudited  consolidated  financial  information  presented  herein has been
prepared  in  accordance with the instructions to Form 10-Q and does not include
all  of  the  information  and  note  disclosures required by generally accepted
accounting  principles.  Therefore,  this  information  should  be  read  in
conjunction  with  the  consolidated  financial  statements  and  notes  thereto
included in the Azco Mining Inc. ("Azco" or "the Company") Annual Report on Form
10-K  for  the  fiscal  year  ended  June  30,  2002.  This  interim  financial
information  reflects  all  adjustments  that are, in the opinion of management,
necessary  to  a  fair  statement  of  the  results  for  the  interim  period.

The  consolidated  balance  sheet  as  of June 30, 2002 included herein has been
derived  from  the  audited consolidated balance sheet included in the Company's
annual  report  on  Form  10-K  for  the  year ended June 30, 2002, but does not
include  all  the  disclosures  required  by  generally  accepted  accounting
principals.

Azco  Mining  Inc.  is  a  mining company incorporated in Delaware.  Its general
business  strategy  is  to acquire, explore and develop mineral properties.  The
Company's  principal  assets  are  the  100%  owned Black Canyon Mica Project in
Arizona  and  an  interest in the Piedras Verdes Project in Sonora, Mexico.  The
Company  is  currently  focused  on  producing  high  quality muscovite mica and
feldspathic  sand  that  is  produced  as  a  by-product  of  mica.

The  accompanying  consolidated financial statements have been prepared assuming
that  the  Company will continue to operate as a going concern.  The Company has
suffered  recurring  losses  from  operations  and  the  Company  will  require
additional  funds  to  continue operations.  On November 12, 2002, the Company's
Registration  Statement  on  Form  S-1,  filed  with the Securities and Exchange
Commission  in  regard  to an Equity Line of Credit Agreement, became effective.
Management  is  actively  seeking  additional  financing;  however,  there is no
assurance  that  these  efforts will be successful or on terms acceptable to the
Company.  These  matters  raise substantial doubt about the Company's ability to
continue  as  a  going  concern.  These consolidated financial statements do not
include  the  adjustments  that  would  be  necessary, including a provision for
impairment of plant and equipment which could be material, should the Company be
unable  to  continue  as  a  going  concern.

During  the  first  and  second quarters of fiscal 2003, the Company had been in
discussions  with  a  lender  for  a $15 million financing in the form of equity
and/or  debt which would have been used to expand and carry-out certain upgrades
to its processing facilities and to retire existing high interest rate debt.  In
late  December,  the  potential  lender  withdrew  from  these  discussions.
Accordingly,  the  Company  has  initiated further efforts through its financial
consultants  to  actively  seek  alternate financing arrangements, including the
possibility  of  selling  a  substantial  interest  in  the  mica


                                      -7-
<PAGE>
AZCO MINING INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)


project.  In  this  connection,  discussions  are  ensuing  with three potential
sources  regarding  a  joint  venture arrangement and several other sources have
been  contacted.

The  Company  will need a minimum of $3 million of additional funding during the
remainder  of calendar 2003 to support production and marketing of our products.
These  requirements  include  costs  for  general  operating  purposes including
planned  production,  payments  due  on  existing  debt  obligations  (including
interest costs) and costs associated with the generation of plastic pellets.  In
order  to  achieve  a level of planned production necessary to achieve continued
operations,  the  Company  will likely require additional funding over and above
the  $3  million  during  2003.

The  Company  anticipates  the expenditure of $3.5 million on additional capital
improvements.  These  expenses  will  cover  enhancements  to  the  sand  plant
facilities  including  additional  rare  earth  magnets  and  bagging  equipment
enabling it to sell a much larger portion of its sand production into the stucco
and  high-end  sand  markets.

The  Company has several mica products inventoried and continues its development
of  mica  filled  plastic  pellets  in  conjunction  with three manufacturers of
reinforced  plastics.  Azco  has  recently  initiated  production  on an initial
2,000-pound  order  for  its  mica filled polyethylene masterbatch.  The Company
anticipates  that  its  current  inventory  of mica is sufficient to support its
continued  plastics  product  development  until  mica  and  sand  production is
resumed.

There  is  no  assurance that the Company can secure financing by way of a joint
venture or otherwise, and if at all, on terms acceptable to the Company.  Should
such  financing  not  be  arranged within the next few months, then it is likely
that  the  Company  will  need  to reassess the carrying value of its production
assets  (which  are  currently  recorded  at  historical  cost  less any related
depreciation)  as  the  likelihood of recovering their value would be diminished
and  a  write-down  of  these  asserts  may  be  appropriate.


                                      -8-
<PAGE>
AZCO MINING INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)


NOTE 2.  INVENTORIES
--------------------

                                         DECEMBER 31,   JUNE 30,
                                            2002          2002
                                        -------------  ----------
Broken ore                              $     634,351  $  725,202
Mica work-in-process                          357,443     277,378
Mica finished goods                            93,200      93,200
Sand finished goods                             4,600           0
                                        -------------  ----------

Total                                   $   1,089,594  $1,095,780
                                        ============= ===========


NOTE 3.  CAPITAL ASSETS
-----------------------

Detail of mica project mineral properties, plant and equipment is as follows:

<TABLE>
<CAPTION>
                                             DECEMBER 31,    JUNE 30,
                                                2002           2002
                                           --------------  ------------
<S>                                        <C>             <C>
Acquisition of mineral properties          $   2,219,996   $ 2,219,996
Mining and processing plant and equipment      7,122,679     7,122,679
Development costs                                943,704     1,104,966
Accumulated amortization                        (110,204)      (94,769)
                                           --------------  ------------

Total                                      $  10,176,175   $10,352,872
                                           --------------  ------------
</TABLE>

Detail of other capital assets is as follows:

<TABLE>
<CAPTION>
                                          DECEMBER 31,    JUNE 30,
                                              2002          2002
                                         --------------  ----------
<S>                                      <C>             <C>
Office building                          $     152,997   $ 152,997
Furniture and equipment                        381,383     381,383
Vehicles                                        81,146      81,146
Accumulated depreciation                      (375,560)   (327,378)
                                         --------------  ----------

Total                                    $     239,966   $ 288,148
                                         --------------  ----------
</TABLE>


                                      -9-
<PAGE>
AZCO MINING INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)


NOTE 4.  NOTES PAYABLE, WARRANTS AND OTHER FINANCING
----------------------------------------------------

In December 2002, the Company issued a $250,000 note to Cornell Capital Partners
LP ("Cornell") in conjunction with the Equity Line of Credit.  A 5% discount was
deducted  resulting  in  net  proceeds to the Company of $237,500.  The note was
paid  off  before the due date of February 2003 by issuing 864,436 shares in the
second  quarter  and  an  additional  758,150  shares  during the third quarter.

In  January  2003 the Company received an additional $226,983 from the sale of a
$250,000  note  to Cornell in conjunction with the Equity Line of Credit.  Legal
fees  of  $10,517  and a 5% discount of $12,500 were deducted from the proceeds.
The  note  accrues interest at 24% per year and is due March 17, 2003.  Interest
is  due  only  if  the  note  is  not  paid  in  full  by  the  due  date.

In  October  2002, Azco issued a $500,000 convertible debenture to Cornell.  The
debenture  accrues  interest  at  6%  per  year and is due October 8, 2004.  The
Company  has  not  accrued  interest  as  it is only due if the debenture is not
converted  by the due date.  The debenture is convertible into Azco common stock
based upon the average of the three lowest closing prices of Azco's common stock
for  the  five  trading  days immediately preceding the conversion date.  At the
time of issuance, the Company determined that the conversion option qualified as
a  derivative  under Statement of Financial Accounting Standards (SFAS) No. 133.
The  amount  associated  with  the  conversion  option  has been classified as a
derivative  and  recorded  at its fair value (as determined through a discounted
cash  flow  model)  of  $14,803  at December 31, 2002.  As of December 31, 2002,
$400,000  of  the  debentures  had  been converted into 1,920,373 shares of Azco
common  stock.  In  January  2003,  the remaining $100,000 was converted into an
additional  861,377  shares  of  Azco  common  stock.

In  January  2002, Azco completed a financing lease transaction that yielded the
Company  net  proceeds  of  $2,842,500.  Under the terms of the transaction, the
Company  sold  a 40 percent ownership in its mica processing facility located in
Glendale,  Arizona.  Subsequently,  Azco leased the property back for an initial
period  of  10  years, with an option to repurchase the 40 percent ownership for
120 percent of the purchase price after the second year. The repurchase price of
the  property increases by 10 percent of the purchase price each year the option
remains  unexercised  up  to  a  maximum  of  150 percent of the purchase price.
Payments  for  the first 6 months under the lease agreement are $30,000, $37,500
for  the  second  six  months  and  $45,000  thereafter.


                                      -10-
<PAGE>
AZCO MINING INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)


In  connection  with  this transaction, the Company issued a warrant to purchase
2,550,000  shares  of the Company's common stock at $.50 per share. This warrant
vested  in  January  2002  and  is  exercisable  through  January  2007.

The  notes  payable, financing lease and related warrants have been reflected in
the  accompanying  balance  sheet  at  their relative fair values.  The discount
associated  with  the  notes payable and financing lease is being amortized over
the  term  of  the  respective  instrument  using  an effective interest method.

In  December  2001,  the  Company  received  a  one-year  $100,000 loan, bearing
interest  at 12% per annum, from Luis Barrenachea, a shareholder.  In connection
with  this  loan, the Company issued a warrant to purchase 125,000 shares of the
Company's  common  stock  at  $.40 per share. In December 2002, the terms of the
loan  and  the  warrants were extended an additional year through December 2003.
The  Company's policy is to account for the increase in the value of the warrant
(resulting  from  an  extension  of  the  exercise  date)  as  a  dividend  to a
shareholder.  Accordingly,  an  additional  $7,188  has  been  reflected  as  an
increase  to  accumulated deficit and additional paid-in-capital in the December
31,  2002  Consolidated  Statement  of  Stockholders'  Equity.

In October 2001, the Company received a one-year $100,000 loan, bearing interest
at  12%  per  annum,  from  Mr.  Barrenachea.  In connection with this loan, the
Company  issued  a  warrant  to  purchase 125,000 shares of the Company's common
stock  at  $.40  per  share.  In  October  2002,  the loan and the warrants were
extended  an  additional  year through October 2003.  The Company's policy is to
account  for  the  increase  in  the  value  of  the  warrant (resulting from an
extension of the exercise date) as a dividend to a shareholder.  Accordingly, an
additional  $11,617 has been reflected as an increase to accumulated deficit and
additional  paid-in-capital  in  the December 31, 2002 Consolidated Statement of
Stockholders'  Equity.

In  September  2001,  the  Company  received  a  one-year $200,000 loan, bearing
interest  at 12% per annum, from Mr. Barrenachea.  In connection with this loan,
the  Company issued a warrant to purchase 125,000 shares of the Company's common
stock  at  $.40  per  share.  In  September  2002  the terms of the loan and the
warrants were extended an additional year through September 2003.  The Company's
policy  is  to  account  for the increase in the value of the warrant (resulting
from  an  extension  of  the  exercise  date)  as  a  dividend to a shareholder.
Accordingly,  an  additional  $16,198  has  been  reflected  as  an  increase to
accumulated  deficit  and  additional  paid-in-capital  in the December 31, 2002
Consolidated  Statement  of  Stockholders'  Equity.

In  October  2001,  the  Company  restructured  its $800,000 loan agreement with
Lawrence  Olson  the Company's Chairman, CEO and President.  Mr. Olson agreed to
extend  the  note  payable an additional year to March 15, 2003 in consideration
for  700,000  warrants


                                      -11-
<PAGE>
AZCO MINING INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)


to  purchase  the  Company's  stock at an exercise price of $0.40.  The warrants
vested  in  December  2001  and  shall  expire in October 2003.  In addition the
annual  interest rate was adjusted from prime plus 1% to 12%.  In June 2002, the
loan  was extended an additional year and Azco entered into a security agreement
with  Mr.  Olson,  whereby Azco's assets secured the loan.  The Company's assets
also  secure  the  lease  payments  due  on  the  financing lease as well as the
payments due under the settlement agreement.  The loan is currently due in March
2004.

The  fair  value of the warrants issued has been determined by the Company using
the  Black  Scholes valuation model and has been reflected as additional-paid in
capital.

Notes payable at December 31, 2002 consisted of the following:

<TABLE>
<CAPTION>
==============================================================================
                                             Principal   Unamortized Discount
------------------------------------------------------------------------------
<S>                                          <C>         <C>

24% note, due February 2003                  $  100,000  $                   -
12% note, due September 2003                    200,000                      -
12% note, due October 2003                      100,000                      -
12% note, due December 2003                     100,000                      -
12% note, due March 2004                        800,000                136,814
                                             ---------------------------------
Total                                        $1,300,000  $             136,814
                                             ---------------------------------
6% convertible debenture, due October 2004   $  100,000  $              25,196

Financing lease liability, due January 2011  $2,062,350  $           2,437,650
==============================================================================
</TABLE>


NOTE 5.  SETTLEMENT OBLIGATION
------------------------------

In  July  2002,  Azco  entered into settlement agreements regarding fees payable
under  terminated  management  agreements  with  two  of its former officers and
directors, Alan P. Lindsay and Anthony R. Harvey. Azco agreed to pay each former
director the sum of $350,000.  The amount is to be paid in an initial payment of
$20,000  each, due upon the signing of the Agreement, and in monthly payments of
$10,000  thereafter,  with  the  entire balance due within 24 months of the date
this  Agreement  is signed. In addition, Azco paid $24,898 representing one half
of  the  legal  fees  incurred  by the former directors.  Under the terms of the
agreement,  Azco  also  provided  Harvey and Lindsay each with 150,000 shares of
common stock, which shares shall be unrestricted as allowed pursuant to Rule S-8
of  the  Rules  of  the  Securities and Exchange Commission.  As of December 31,
2002,  $540,000  remained  outstanding  under  the  agreement.


                                      -12-
<PAGE>
AZCO MINING INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)


NOTE 6.  COMMITMENTS AND CONTINGENCIES
--------------------------------------

On  January 22, 1999, the trustee (Petitioner) in bankruptcy proceedings against
Eagle  River  served a petition, in the Quebec Superior Court, District of Hull,
upon  the  Company  in  order to recover assets from the Company. The Petitioner
alleges  that,  through  the  Company's involvement with Eagle River in the Mali
Project,  the Company is guilty of contractual breaches in excess of $4,300,000.
No  accrual has been made for this claim because the Company does not believe it
is  probable  that  the  case  will  be  determined  against  the  Company.

On  June  25,  2002  Azco  received  a  demand for arbitration filed by iCapital
Corporation  seeking  $144,000  in relief due to failure to pay under a June 26,
2001 Financial Consulting Agreement.  It is the position of Azco and its counsel
that the contract is void and it is unlikely that iCapital will prevail on their
claim.

NOTE 7.  CAPITAL STOCK AND OUTSTANDING OPTIONS
----------------------------------------------

In  November  2002, the Company's Registration Statement on Form S-1, filed with
the  Securities  and Exchange Commission in regard to the Equity Line of Credit,
became  effective.  The  Company  is  now  eligible  to,  at  its  discretion,
periodically  issue and sell shares of common stock to Cornell for up to a total
purchase  price of $5 million for a period of up to two years after November 12,
2002, whichever comes first.  For each share of common stock purchased under the
Equity Line of Credit, Cornell will pay 92.5% of the lowest closing bid price of
our  common  stock  on  the  American  Stock  Exchange for the five trading days
immediately following the notice date.  The amount of each advance is subject to
a  maximum  of $500,000 per advance, with a minimum of five trading days between
advances.  In  addition, Cornell will retain 5% of each advance under the Equity
Line  of  Credit.  Cornell received 237,624 shares of common stock as a one-time
commitment  fee,  which was equal to $240,000 based on a closing bid of $1.01 on
June  19,  2002.

On  December  18,  2002,  the  Company  issued  10,000 shares for legal services
rendered  in  conjunction  with  an August 2002 filing on Form S-8 in connection
with  the  settlement  agreement  discussed  in Note 5.  The value of the shares
issued  was  $10,200  recorded  as  general and administrative expense in fiscal
2002.

Options to purchase 1,234,500 and 2,815,500 shares of the Company's common stock
were  outstanding under the Company's Stock Option Plan at December 31, 2002 and
2001,  respectively.  The  impact  of  these  options has been excluded from the
diluted  earnings per share calculation, as their effect would be anti-dilutive.
These  options  are  exercisable  between  $0.44  and  $1.20 per common share at
varying  dates  through  2007.


                                      -13-
<PAGE>
AZCO MINING INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)


NOTE 8.  GUARANTEES
-------------------

In  November  2002, the Financial Accounting Statements Board (FASB) issued FASB
Interpretation  No.  45, "Guarantor's Accounting and Disclosure Requirements for
Guarantees,  Including  Indirect Guarantees of Indebtedness of Others" (FIN 45).
FIN  45  requires  that  upon  issuance  of certain guarantees, a guarantor must
recognize  a  liability  for  the  fair value of an obligation assumed under the
guarantee.  FIN  45  also  requires significant new disclosures, in both interim
and  annual  financial  statements, by a guarantor, about obligations associated
with guarantees issued.  FIN 45 disclosure requirements are effective for Azco's
fiscal  quarter  ended  December  31,  2002  and  the  initial  recognition  and
measurement  provisions  are  applicable  on  a  prospective basis to guarantees
issued  or  modified  after  December  31,  2002.

Azco,  as  the guarantor, has a sole guarantee related to the written put option
related  to  the  Company's  convertible debenture where the put option has been
accounted  for  under  SFAS 133.  This guarantee is characterized by FIN 45 as a
market  value/derivative  guarantee.

The  following table discloses Azco's obligation under guarantees as of December
31,  2002:

<TABLE>
<CAPTION>
-----------------------  -------------------------  ----------------  -----------
                         Maximum Potential Amount      Liability
                            Of Future Payments      Carrying Amount   Collateral
-----------------------  -------------------------  ----------------  -----------
<S>                      <C>                        <C>               <C>
Market value guarantees  $                 100,000  $         14,803  $         -
-----------------------  -------------------------  ----------------  -----------
</TABLE>


NOTE 9.   ACCOUNTING FOR ASSET RETIREMENT OBLIGATIONS
-----------------------------------------------------

On  July  1,  2002, the Company adopted the provisions of Statement of Financial
Accounting  Standards  No.  143,  "Accounting  for Asset Retirement Obligations"
(SFAS  No.  143).  SFAS No. 143 addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs estimated to aggregate approximately $250,000.
Specifically,  the  Statement requires that retirement obligations be recognized
when they are incurred and displayed as liabilities with the initial measurement
being  at  the  present  value  of estimated third party costs. In addition, the
asset  retirement  cost is capitalized as part of the asset's carrying value and
subsequently  allocated  to  expense  over  the  assets  useful  life.


                                      -14-
<PAGE>
AZCO MINING INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)


The  asset  retirement  costs  associated  with  the  Mica  project  consist  of
reclamation  of  disturbed  property  as well as the disposal and dismantling of
related  property  and  equipment.  The  Company  previously accounted for these
costs through periodic charges to earnings using the units-of-production method.
The  change  in  accounting  resulted  in a cumulative effect charge to earnings
during  the  period  of  $13,902.

As  of December 31, 2002, the Company maintained the following restricted assets
associated with reclamation costs for the Black Canyon Mica property pursuant to
regulatory  requirements:

     -    $50,000  held on deposit for the Arizona State Treasurer in a one-year
          automatically  renewable  short-term  investment;  and
     -    $128,659 held as collateral against an irrevocable letter of credit of
          the  same  amount to the U.S. Bureau of Land Management, which renewed
          October  9,  2002  for  an  additional  year.

A roll forward of the Company's asset retirement obligation through December 31,
2002  is  as  follows:


Initial liability recognition, July 1, 2002          $45,309
Accretion                                              2,500
                                                     -------
Balance, December 31, 2002                           $47,809
                                                     -------



NOTE  10.  NEW  PRONOUNCEMENTS
------------------------------

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets"  (SFAS No. 144). SFAS No. 144 replaces certain
previously  issued  accounting  guidance, develops a single accounting model for
long-lived  assets  other  than  goodwill  and indefinite-lived intangibles, and
broadens  the  framework  previously established for assets to be disposed of by
sale  (whether previously held or newly acquired).  This Statement was effective
as  of  the  beginning  of fiscal 2003 and did not have a material impact on the
Company's  financial  position,  results  of  operations  or  cash  flows.


                                      -15-
<PAGE>
AZCO MINING INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)


In  April  2002, the FASB issued SFAS No.145, "Rescission of FASB Statements No.
4,  44,  and 64, Amendments of FASB Statement No. 13, and Technical Corrections"
(SFAS  No.145).  This  Statement  rescinds  SFAS  No. 4, SFAS No. 64 and further
clarifies  debt  extinguishments, which classify as extraordinary. Additionally,
SFAS  No.  145  amends  SFAS  No.  13 in order to clarify the accounting for the
treatment of lease modifications. Provisions of this Statement are effective for
fiscal  year  2003  and  the pronouncement did not have a material impact on its
financial  position,  results  of  operations  or  cash  flows.

In  June  2002,  the  FASB issued SFAS No. 146, "Accounting for Costs Associated
with  Exit  or  Disposal  Activities"  (SFAS  No.  146).  SFAS  No. 146 replaces
Emerging  Task Force Issue No. 94-3, "Liability Recognition for Certain Employee
Termination  Benefits  and  Other  Costs to Exit and Activity (including Certain
Costs  Incurred  in  a  Restructuring)".  The  primary  difference from existing
guidance  is  that  SFAS  No.  146 requires the recognition of exit cost at fair
value  when  a  liability  is  incurred,  versus  at  the  date of the exit plan
approval.  This  Statement  is effective for exit and disposal activities of the
Company  that  are  initiated  after  December  31,  2002.  The  Company has not
historically  had  significant  exit  or  disposal  activities.

In  December  2002,  the  FASB  issued  SFAS No. 148 "Accounting for Stock-Based
Compensation  -  Transition and Disclosure - an amendment of FAS 123".  SFAS No.
148  provides alternative methods of transition for voluntary change to the fair
value  based  method  of  accounting  for stock-based employee compensation.  In
addition,  the  Statement  amends the disclosure requirements of SFAS No. 123 to
require  prominent  disclosures  in both interim and annual financial statements
about  the  method  of  accounting for stock-based employee compensation and the
effect  of  the  method  used  on reported results.  Azco continues to apply the
intrinsic  value  method  of  accounting  for stock options and will provide the
enhanced  disclosure  requirements  in  its  third  quarter  Form  10-Q.

In  January  2003,  the  FASB  issued  FASB  Interpretation  No.  46  (FIN  46),
Consolidation  of  Variable  Interest Entities, an Interpretation of ARB No. 51.
FIN  46  provides  guidance in determining (1) whether consolidation is required
under the "controlling financial interest" model of Accounting Research Bulletin
No.  51  (ARB  51),  Consolidated  Financial  Statements,  or (b) other existing
authoritative  guidance,  or,  alternatively,  (2) whether the variable-interest
model  under  FIN  46  should  be used to account for existing and new entities.
Azco  has  considered  the guidance in FIN 46 and has determined that it did not
have  a  material  effect  on its financial position, results of operations cash
flows  or  note  disclosures  thereto.


                                      -16-
<PAGE>
ITEM 2.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
RESULTS  OF  OPERATIONS


Management's  Discussion  and  Analysis  of  Financial  Condition and Results of
Operations  contains  statements  concerning  trends  and  other forward-looking
information,  within  the  meaning  of  the  federal  securities  laws.  Such
forward-looking  statements are subject to uncertainties and factors relating to
our  operations  and business environment, all of which are difficult to predict
and many of which are beyond our control. We believe that the following factors,
among  others,  could  affect our future performance and cause actual results to
differ  materially from those expressed or implied by forward-looking statements
made  by  us  or on our behalf: (1) our lack of necessary financial resources to
complete  development  of  the mica product and by-products, successfully market
our  mica  product  and  fund  our  other  capital commitments;  (2) the lack of
commercial  acceptance  of  our  mica  product  or  by-products;  (3) changes in
environmental  laws;  (4)  problems  regarding  availability  of  materials  and
equipment;  (5)  failure  of the mica project equipment to process or operate in
accordance  with  specifications,  including  expected  throughput,  which could
prevent  the  project  from  producing  commercially  viable  output;  and  (6)
unfavorable  weather  conditions,  in  particular, high water levels in the Agua
Fria  river  which  could temporarily limit access to the Black Canyon mica mine
site.

References  to "we", "us", "our", and Azco Mining, refer to Azco Mining Inc. and
its  subsidiaries,  on  a  consolidated  basis,  unless  the  context  otherwise
requires.

GENERAL
-------

We  were  formed  in 1988.  In December 1995, we sold our Sanchez copper project
and a 70% interest in our Mexican copper project, the Piedras Verdes Project, to
Phelps  Dodge  Corporation for $40 million.  Principal income since the sale has
been  a  result  of interest earned on the proceeds of the sale of these assets.

We  are  currently  focused  on  the  start up of our facilities to a consistent
production  capacity  designed  to  produce  high  quality  muscovite  mica  and
feldspathic  sand  from  our  100%  owned Black Canyon mica project located near
Phoenix,  Arizona.  The  Company  is seeking financing that will be necessary to
continue  operations.


RESULTS  OF  OPERATIONS
-----------------------

THREE MONTHS ENDED DECEMBER 31, 2002 COMPARED TO THREE MONTHS ENDED DECEMBER 31,
2001

The  net  loss  for the three months ended December 31, 2002 was $878,973 ($0.03
per  share)  compared to a net loss of $ 696,841 ($0.02 per share) for the three
months  ended  December  31,  2001.  The  increased  net  loss  is the result of
increased  miscellaneous  and  financing  expenses  in  the  current  period.


                                      -17-
<PAGE>
Miscellaneous  expense  was $84,109 for the three months ended December 31, 2002
compared  to  $0  for the three months ended December 31, 2001.  The increase in
miscellaneous  expense  reflects  mark to market adjustments associated with the
conversion  option.

Financial  consulting  fees were $41,349 for the three months ended December 31,
2002  compared to $0 for the three months ended December 31, 2001.  The increase
in  financial  consulting  fees  is  due to continued efforts to find a suitable
financing  arrangement  for  the  Company.

SIX  MONTHS  ENDED  DECEMBER  31, 2002 COMPARED TO SIX MONTHS ENDED DECEMBER 31,
2001

The  net  loss  for the six months ended December 31, 2002 was $2,318,835 ($0.07
per  share)  compared to a net loss of $ 1,250,403 ($0.04 per share) for the six
months  ended  December  31,  2001.  The  increased  net  loss  is the result of
increased production costs, general and administrative and financing expenses in
the  current  period.

Production  expense  for  the  six  months  ended  December 31 2002 was $764,641
compared  to  $466,365  for  the  six months ended December 31, 2001.  Increased
expenses  in  the  current  period are due to the initial production for sale of
feldspathic  sand.

Exploration  expense  was  $29,059  for  the  six months ended December 31, 2002
compared to $83,586 for the six months ended December 31, 2001.  The decrease in
exploration expense is due to the fact that the Company is currently not funding
its  share  of  the  costs  associated with Cobre del Mayo and has opted for its
interest  to  be  diluted  until  suitable  financing  can  be  arranged.

Financial  consulting  fees  were $432,349 for the six months ended December 31,
2002  compared  to  $0  for the six months ended December 31, 2001, and reflects
$363,000  for  the  value  of  shares  provided to a financial consultant of the
Company  as  well  as  current  period  efforts  to  find  suitable  financing
arrangements  for  the  Company.

Interest expense was $480,146 for the six months ended December 31 2002 compared
to  $211,326 for the six months ended December 31, 2001.  The increase is due to
the amortization of the discount associated with the notes payable and financing
lease  agreement.

FINANCIAL  CONDITION
--------------------

As of December 31 2002, we had unrestricted cash of $10,971.

Net cash used in operating activities was $1,424,310 for the first six months of
fiscal  2002  as compared to $986,203 in the same period of the prior year.  The
increase was due primarily to payments for the settlement obligation with former
officers  combined  with  the  increase in production activities undertaken this
quarter  partially  offset  by an increase in accounts payable due to lower cash
levels.


                                      -18-
<PAGE>
Net  cash flows provided by financing activities were $550,634 for the first six
months  of  fiscal  2002 as compared to $953,748 in the same period of the prior
year.  The  variance  from  the same period of the prior year is the result of a
reduction  in  the  proceeds  from  notes  issued.

The  Company  has suffered recurring losses from operations and assuming it will
continue  to  operate  as  a  going  concern it will require additional funds to
continue  operations.  On  November  4,  2002  the  Company  temporarily  ceased
production at its Black Canyon Mine crushing and concentrating facilities due to
cash  constraints.  Production will start again once adequate financing has been
raised.  On  November  12,  2002, the Company's Form S-1 Registration Statement,
filed with the Securities and Exchange Commission in regard to an Equity Line of
Credit  Agreement,  became  effective.  The  Company  is now eligible to, at our
discretion,  periodically  issue  and sell to Cornell Capital Partners shares of
common  stock for a total purchase price of $5 million for a period of up to two
years  after  November 12, 2002, whichever comes first. The Company has raised a
total  of $1,000,000 through February 12, 2002 through the sale of securities to
Cornell  through  the  Equity  Line  of  Credit.  The  Company  plans to use the
proceeds  for  immediate  cash needs until a major financing deal can be closed.
Management  is actively seeking additional major financing; however, there is no
assurance  that  these  efforts will be successful or on terms acceptable to the
Company.   These  matters raise substantial doubt about the Company's ability to
continue  as  a  going  concern.  These consolidated financial statements do not
include  the  adjustments  that  would  be  necessary, including a provision for
impairment of plant and equipment which could be material, should the Company be
unable  to  continue  as  a  going  concern.

During  the  first  and  second quarters of fiscal 2003, the Company had been in
discussions  with  a  lender  for  a $15 million financing in the form of equity
and/or  debt which would have been used to expand and carry-out certain upgrades
to its processing facilities and to retire existing high interest rate debt.  In
late  December,  the  potential  lender  withdrew  from  these  discussions.
Accordingly,  the  Company  has  initiated further efforts through its financial
consultants  to  actively  seek  alternate financing arrangements, including the
possibility  of  selling  a  substantial  interest in the mica project.  In this
connection,  discussions  are  ensuing  with three potential sources regarding a
joint  venture  arrangement  and  several  other  sources  have  been contacted.

The  Company  will need a minimum of $3 million of additional funding during the
remainder  of calendar 2003 to support production and marketing of our products.
These  requirements  include  costs  for  general  operating  purposes including
planned  production,  payments  due  on  existing  debt  obligations  (including
interest costs) and costs associated with the generation of plastic pellets.  In
order  to  achieve  a level of planned production necessary to achieve continued
operations,  the  Company  will likely require additional funding over and above
the  $3  million  during  2003.


                                      -19-
<PAGE>
The  Company  anticipates  the expenditure of $3.5 million on additional capital
improvements.  These  expenses  will  cover  enhancements  to  the  sand  plant
facilities  including  additional  rare  earth  magnets  and  bagging  equipment
enabling it to sell a much larger portion of its sand production into the stucco
and  high-end  sand  markets.

The  Company has several mica products inventoried and continues its development
of  mica  filled  plastic  pellets  in  conjunction  with three manufacturers of
reinforced  plastics.  Azco  has  recently  initiated  production  on an initial
2,000-pound  order  for  its  mica filled polyethylene masterbatch.  The Company
anticipates  that  its  current  inventory  of mica is sufficient to support its
continued  plastics  product  development  until  mica  and  sand  production is
resumed.

There  is  no  assurance that the Company can secure financing by way of a joint
venture or otherwise, and if at all, on terms acceptable to the Company.  Should
such  financing  not  be  arranged within the next few months, then it is likely
that  the  Company  will  need  to reassess the carrying value of its production
assets  (which  are  currently  recorded  at  historical  cost  less any related
depreciation)  as  the  likelihood of recovering their value would be diminished
and  a  write-down  of  these  asserts  may  be  appropriate.

LEASE ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS
----------------------------------------------

Azco  leases  some  heavy equipment.  Certain equipment leases are classified as
capital  leases  and,  accordingly,  the  equipment  and  related obligation are
recorded  on  our  balance  sheet.  The Company is committed to lease its former
executive  office  in Vancouver BC through April 2004 and currently has a tenant
under  a  sub-lease  contract.

Currently,  Azco  has  a total of $1,200,000 of short-term notes due and payable
before  March  15,  2004.  In  addition,  the  Company  has  entered  into  a
sale-leaseback  financing  arrangement where it may re-purchase the equipment it
sold  under  this  transaction  in  January  2004  or  thereafter,  but  is  not
contractually  obligated  to  do  so  until  2011.  (See  Note  5 for additional
information)

In conjunction with the departure of two former executives in October 2000, Azco
entered into a severance agreement in June 2002 whereby Azco is required to make
monthly  payments  of  $10,000,  to  each  director, through June 2004, with the
remaining  balance  of  $90,000 due in July 2004.  The Company has paid $184,906
through  December 31, 2002.  Under the terms of the agreement, Azco was required
to  provide  Messrs. Harvey and Lindsay each with 150,000 shares of unrestricted
common  stock  in  Azco  Mining  Inc.  The  shares  were  issued  in  July 2002.

The  following table is provided to detail our contractual obligations and lease
commitments:


                                      -20-
<PAGE>
<TABLE>
<CAPTION>
                                                           PAYMENTS DUE
                                          PAYMENTS DUE IN       IN       PAYMENTS DUE
                   PAYMENTS DUE THROUGH      1-3 YEARS      4-5 YEARS       AFTER
                       JUNE 30, 2003         2003-2005      2006-2007        2007
                   ---------------------  ---------------  ------------  ------------
<S>                <C>                    <C>              <C>           <C>
Equipment leases   $              34,398           84,727             -             -
Office lease                      30,168           51,400             -             -
Settlement
payments                         120,000          420,000             -             -
Notes payable                    200,000        1,200,000             -             -
Financing lease                  270,000        1,080,000     1,080,000     6,930,000
                   ---------------------  ---------------  ------------  ------------

Total contractual
obligations        $             654,566        2,836,127     1,080,000     6,930,000
                   =====================  ===============  ============  ============
</TABLE>


NEW  ACCOUNTING  PRONOUNCEMENTS
-------------------------------

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets" (SFAS No. 144).  SFAS No. 144 replaces certain
previously  issued  accounting  guidance, develops a single accounting model for
long-lived  assets  other  than  goodwill  and indefinite-lived intangibles, and
broadens  the  framework  previously established for assets to be disposed of by
sale  (whether previously held or newly acquired).  This Statement was effective
as  of  the  beginning  of fiscal 2003 and did not have a material impact on the
Company's  financial  position,  results  of  operations  or  cash  flows.

In  April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No.
4,  44,  and 64, Amendments of FASB Statement No. 13, and Technical Corrections"
(SFAS  No.  145).  This  Statement  rescinds SFAS No. 4, SFAS No. 64 and further
clarifies  debt  extinguishments, which classify as extraordinary. Additionally,
SFAS  No.  145  amends  SFAS  No.  13 in order to clarify the accounting for the
treatment of lease modifications. Provisions of this Statement are effective for
fiscal  year  2003  and  the pronouncement did not have a material impact on its
financial  position,  results  of  operations  or  cash  flows.

In  June  2002,  the  FASB issued SFAS No. 146, "Accounting for Costs Associated
with  Exit  or  Disposal  Activities". SFAS No. 146 replaces Emerging Task Force
Issue  No.  94-  3,  "Liability  Recognition  for  Certain  Employee Termination
Benefits  and Other Costs to Exit and Activity (including Certain Costs Incurred
in  a  Restructuring)"  (SFAS  No.  146).

The  primary difference from existing guidance is that SFAS No. 146 requires the
recognition  of  exit cost at fair value when a liability is incurred, versus at
the  date  of  the exit plan approval.  This Statement is effective for exit and
disposal  activities  of the Company that are initiated after December 31, 2002.
The  Company  has  not historically had significant exit or disposal activities.


                                      -21-
<PAGE>
On  July  1,  2002, the Company adopted the provisions of Statement of Financial
Accounting  Standards  No.  143,  "Accounting  for Asset Retirement Obligations"
(SFAS  No.  143).  SFAS No. 143 addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs estimated to aggregate approximately $250,000.
Specifically,  the  Statement requires that retirement obligations be recognized
when they are incurred and displayed as liabilities with the initial measurement
being  at  the  present  value  of estimated third party costs. In addition, the
asset  retirement  cost is capitalized as part of the asset's carrying value and
subsequently  allocated  to  expense  over  the  assets  useful  life.

The  asset  retirement  costs  associated  with  the  Mica  project  consist  of
reclamation  of  disturbed  property  as well as the disposal and dismantling of
related  property  and  equipment.  The  Company  previously accounted for these
costs through periodic charges to earnings using the units-of-production method.
The  change  in  accounting  resulted  in a cumulative effect charge to earnings
during  the  period  of  $13,902.  See  Note  9  for  additional  information.

In  November  2002,  the  FASB  issued  FASB Interpretation No. 45, "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees  of  Indebtedness  of  Others"  (FIN  45).  FIN 45 requires that upon
issuance  of  certain guarantees, a guarantor must recognize a liability for the
fair  value  of an obligation assumed under the guarantee.  FIN 45 also requires
significant new disclosures, in both interim and annual financial statements, by
a  guarantor,  about  obligations  associated  with  guarantees  issued.  FIN 45
disclosure  requirements  are effective for Azco's fiscal quarter ended December
31,  2002  and the initial recognition and measurement provisions are applicable
on a prospective basis to guarantees issued or modified after December 31, 2002.

Azco,  as  the guarantor, has a sole guarantee related to the written put option
related  to  the  Company's  convertible debenture where the put option has been
accounted  for  under  SFAS 133.  This guarantee is characterized by FIN 45 as a
market  value/derivative  guarantee.

The  following table discloses Azco's obligation under guarantees as of December
31, 2002:

<TABLE>
<CAPTION>
-----------------------  -------------------------  ----------------  -----------
                         Maximum Potential Amount      Liability
                            Of Future Payments      Carrying Amount   Collateral
-----------------------  -------------------------  ----------------  -----------
<S>                      <C>                        <C>               <C>
Market value guarantees  $                 100,000  $         14,803  $         -
-----------------------  -------------------------  ----------------  -----------
</TABLE>


                                      -22-
<PAGE>
In  December  2002,  the  FASB  issued  SFAS No. 148 "Accounting for Stock-Based
Compensation  -  Transition and Disclosure - an amendment of FAS 123".  SFAS No.
148  provides alternative methods of transition for voluntary change to the fair
value  based  method  of  accounting  for stock-based employee compensation.  In
addition,  the  Statement  amends the disclosure requirements of SFAS No. 123 to
require  prominent  disclosures  in both interim and annual financial statements
about  the  method  of  accounting for stock-based employee compensation and the
effect  of  the  method  used  on reported results.  Azco continues to apply the
intrinsic  value  method  of  accounting  for stock options and will provide the
enhanced  disclosure  requirements  in  its  third  quarter  Form  10-Q.

In  January  2003,  the  FASB  issued  FASB  Interpretation  No.  46  (FIN  46),
Consolidation  of  Variable  Interest Entities, an Interpretation of ARB No. 51.
FIN  46  provides  guidance in determining (1) whether consolidation is required
under the "controlling financial interest" model of Accounting Research Bulletin
No.  51  (ARB  51),  Consolidated  Financial  Statements,  or (b) other existing
authoritative  guidance,  or,  alternatively,  (2) whether the variable-interest
model  under  FIN  46  should  be used to account for existing and new entities.
Azco  has  considered  the guidance in FIN 46 and has determined that it did not
have  a  material  effect  on its financial position, results of operations cash
flows  or  note  disclosures  thereto.

ITEM 3:   QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK
          ----------------------------------------------------------------

The  carrying  value of the Company's conversion option is dependent on the fair
value analysis, which considers among other items, the current risk free rate of
return.  Movements  in  this  market  rate  would  cause  an  adjustment  to the
determined  fair  value.  This  option  was  converted  in  January  2003.

ITEM 4:   CONTROLS  AND  PROCEDURES
          -------------------------

The  Company  maintains  a  system of disclosure controls and procedures that is
designed  to  ensure  information  required  to  be  disclosed by the Company is
accumulated  and  communicated to management in a timely manner.  Management has
reviewed this system of disclosure controls and procedures within 90 days of the
date  hereof,  and  has  concluded  that  the  current  system  of  controls and
procedures  is  effective.

The Company maintains a system of internal controls and procedures for financial
reporting.  Since the date of management's most recent evaluation, there were no
significant  changes  in  internal  controls  or  in  other  factors  that could
significantly  affect  internal  controls.

PART II.  OTHER INFORMATION
---------------------------

ITEM 1:   LEGAL PROCEEDINGS
          -----------------


On  January 22, 1999, the trustee (Petitioner) in bankruptcy proceedings against
Eagle  River  served a petition, in the Quebec Superior Court, District of Hull,


                                      -23-
<PAGE>
upon  the  Company  in  order to recover assets from the Company. The Petitioner
alleges  that,  through  the  Company's involvement with Eagle River in the Mali
Project,  the Company is guilty of contractual breaches in excess of $3,400,000.
In  management's  opinion, this claim is unfounded although the eventual outcome
of  the  case  is  not yet determinable. No accrual has been made for this claim
because  the  Company  does  not  believe  it  is probable that the case will be
determined  against  the  Company.

On  June  25,  2002  Azco  received  a  demand for arbitration filed by iCapital
Corporation  seeking  $144,000  in relief due to failure to pay under a June 26,
2001 Financial Consulting Agreement.  It is the position of Azco and its counsel
that the contract is void and it is unlikely that iCapital will prevail on their
claim.



                                   SIGNATURES

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

                                                   AZCO MINING INC.
                                             -----------------------------------
                                                    (Registrant)


Date:  February 17, 2003                     BY:  /s/  Lawrence G. Olson
       -----------------                          ----------------------
                                                  Lawrence G. Olson
                                                  CEO, President and Chairman


Date:  February 17, 2003                     BY:  /s/  Ryan A. Modesto
       -----------------                          --------------------
                                                  Ryan A. Modesto
                                                  Vice President Finance,
                                                  Corporate Secretary


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection  with the Quarterly Report of Azco Mining Inc. (the "Company") on
Form  10-K  for  the period ended June 30, 2002 as filed with the Securities and
Exchange  Commission on the date hereof (the "Report"), each of the undersigned,
in the capacities and on the dates indicated below, hereby certifies pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act  of  2002,  that  to  his  knowledge:


                                      -24-
<PAGE>
1.     The Quarterly Report on Form 10-Q for the quarterly period ended December
31,  2002  as  filed  with  the  Securities  and Exchange Commission on the date
hereof,  fully  complies  with the requirements of Section 13(a) or 15(d) of the
Securities  Exchange  Act  of  1934;  as  amended;  and

2.     The information contained in the Quarterly Report fairly presents, in all
material  respects,  the  financial  condition  and results of operations of the
Company.


                                            /s/ Lawrence G. Olson
                                            ------------------------------------
                                            Lawrence G. Olson, Chief Executive
                                            Officer

                                            /s/ Ryan Modesto
                                            ------------------------------------
                                            Ryan Modesto, Vice President Finance

Certifications
--------------

I, Lawrence G. Olson, Chief Executive Officer, certify that:

l.   I  have  reviewed  this  quarterly report on Form 10-Q of AZCO Mining Inc.;

2.   Based  on  my  knowledge, this quarterly report does not contain any untrue
     statement  of a material fact or omit to state a material fact necessary to
     make  the  statements  made, in light of the circumstances under which such
     statements  were made, not misleading with respect to the period covered by
     this  quarterly  report;

3.   Based  on  my  knowledge,  the  financial  statements,  and other financial
     information  included  in  this  quarterly  report,  fairly  present in all
     material  respects  the financial condition, results of operations and cash
     flows  of  the  registrant  as  of,  and for, the periods presented in this
     quarterly  report;

4.   The  registrant's  other  certifying  officer  and  I  are  responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in  Exchange  Act  Rules  13a-14  and  15d-14) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures  to  ensure that
          material  information  relating  to  the  registrant,  including  its
          consolidated  subsidiaries, is made known to us by others within those
          entities,  particularly  during  the  period  in  which this quarterly
          report  is  being  prepared;

     b)   evaluated  the  effectiveness  of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this  quarterly  report  (the  "Evaluation  Date");  and

     c)   presented  in  this  quarterly  report  our  conclusions  about  the
          effectiveness  of  the disclosure controls and procedures based on our
          evaluation  as  of  the  Evaluation  Date;

5.   The  registrant's  other  certifying officer and I have disclosed, based on
     our  most  recent  evaluation,  to  the registrant's auditors and the audit
     committee  of  registrant's  board  of directors (or persons performing the
     equivalent  functions):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which  could  adversely  affect  the registrant's ability to
          record,  process,  summarize  and  report  financial  data  and  have
          identified  for  the  registrant's auditors any material weaknesses in
          internal  controls;  and


                                      -25-
<PAGE>
     b)   any  fraud, whether or not material, that involves management or other
          employees  who  have  a  significant role in the registrant's internal
          controls;  and

6.   The  registrant's  other  certifying  officer  and I have indicated in this
     quarterly  report  whether  there  were  significant  changes  in  internal
     controls  or  in  other  factors  that  could significantly affect internal
     controls  subsequent  to  the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

February 17, 2003

/s/  Lawrence G. Olson
----------------------
Chief Executive Officer



I, Ryan Modesto, Vice President Finance, certify that:

l.   I have reviewed this quarterly report on Form 10-Q of AZCO Mining Inc.;

2.   Based  on  my  knowledge, this quarterly report does not contain any untrue
     statement  of a material fact or omit to state a material fact necessary to
     make  the  statements  made, in light of the circumstances under which such
     statements  were made, not misleading with respect to the period covered by
     this  quarterly  report;

3.   Based  on  my  knowledge,  the  financial  statements,  and other financial
     information  included  in  this  quarterly  report,  fairly  present in all
     material  respects  the financial condition, results of operations and cash
     flows  of  the  registrant  as  of,  and for, the periods presented in this
     quarterly  report;

4.   The  registrant's  other  certifying  officer  and  I  are  responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in  Exchange  Act  Rules  13a-14  and  15d-14) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures  to  ensure that
          material  information  relating  to  the  registrant,  including  its
          consolidated  subsidiaries, is made known to us by others within those
          entities,  particularly  during  the  period  in  which this quarterly
          report  is  being  prepared;

     b)   evaluated  the  effectiveness  of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this  quarterly  report  (the  "Evaluation  Date");  and

     c)   presented  in  this  quarterly  report  our  conclusions  about  the
          effectiveness  of  the disclosure controls and procedures based on our
          evaluation  as  of  the  Evaluation  Date;

5.   The  registrant's  other  certifying officer and I have disclosed, based on
     our  most  recent  evaluation,  to  the registrant's auditors and the audit
     committee  of  registrant's  board  of directors (or persons performing the
     equivalent  functions):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which  could  adversely  affect  the registrant's ability to
          record,  process,  summarize  and  report  financial  data  and  have
          identified  for  the  registrant's auditors any material weaknesses in
          internal  controls;  and


                                      -26-
<PAGE>
     b)   any  fraud, whether or not material, that involves management or other
          employees  who  have  a  significant role in the registrant's internal
          controls;  and

6.   The  registrant's  other  certifying  officer  and I have indicated in this
     quarterly  report  whether  there  were  significant  changes  in  internal
     controls  or  in  other  factors  that  could significantly affect internal
     controls  subsequent  to  the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

February 17, 2003

/s/ Ryan Modesto
----------------
Vice President Finance


                                      -27-
<PAGE>