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 March 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)

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


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  31,110,621
shares of Common Stock outstanding as of May 10, 2002.

<PAGE>

                                AZCO MINING INC.

                          PART I. FINANCIAL INFORMATION


Item 1. Financial Statements

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
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                             7-12

</TABLE>

<PAGE>
AZCO MINING INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)

<TABLE>
<CAPTION>
ASSETS
                                                                               March 31, 2002                 June 30, 2001
                                                                               --------------                 -------------
<S>                                                                            <C>                            <C>
Current assets:
Cash and cash equivalents                                                      $                 845,812      $              39,920
Income tax receivable (Note 7)                                                                   998,053
Prepaids and other                                                                               201,925                     74,689
Inventories (Note 3)                                                                           1,097,501                  1,061,447
     Total current assets                                                                      3,143,291                  1,176,056
Property and equipment:
Mineral properties, plant & equipment (Note 2)                                                10,247,005                 10,130,668
Capital assets                                                                                   313,850                    407,421
                                                                                              10,560,855                 10,538,089
Restricted cash                                                                                  290,400                    190,400
     Total assets                                                              $              13,994,546      $          11,904,545

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued liabilities                                       $                 171,108      $             690,719
Notes payable (Note 4)                                                                         1,046,657                    715,280
   Total current liabilities                                                   $               1,217,765      $           1,405,999
Other liabilities                                                                                302,439                    341,143
Long-term financing lease (Note 4)                                                             1,933,587

Contingencies and commitments (Note 5)
Stockholders' equity
Common stock: $.002 par value, 100,000,000 shares authorized                                      60,941                    60,101
30,070,621 shares outstanding as of March 31, 2002 and
30,050,621 shares outstanding as of June 30, 2001
Additional paid-in capital                                                                    30,564,591                28,753,656
Deficit                                                                                      (20,084,777)              (18,656,354)
                                                                                              10,540,755                10,157,403
      Total liabilities and stockholders' equity                               $              13,994,546      $         11,904,545

</TABLE>

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

<PAGE>

AZCO MINING INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

<TABLE>
<CAPTION>
                                                                       Three Months Ended              Nine Months Ended
                                                                            March 31,                       March 31,
                                                                      2002            2001           2002           2001
                                                                      ----            ----           ----           ----
<S>                                                                   <C>             <C>            <C>            <C>
Revenue:
     Sales of mica
                                                                          31,280          17,600           56,080         17,600

Expenses:
     Cost of sales                                                        14,400           8,800           27,200          8,800
     Salaries                                                             75,954          56,739          242,202        375,934
     General and administrative                                          274,833         130,214          554,666        500,249
     Exploration & development                                            89,839         166,134          173,425        360,626
     Write-down of inventory                                             438,326         252,888          891,891      1,132,532
     Amortization & depreciation                                          33,429          15,841          103,095         47,605
     Reclamation expense                                                      41               -              133            371
                                                                      $  926,822      $  630,616      $ 1,992,612    $ 2,426,117

Other income/expense:
     Interest expense                                                   (284,721)              -         (496,047)             -
     Interest Income                                                       4,190          16,083            6,103        120,768
     Other income                                                                            980                             980
                                                                        (280,531)         17,063         (489,944)       121,748
Income tax benefit                                                      (998,053)              -         (998,053)             -
Net loss                                                              $ (178,020)     $ (595,953)     $(1,428,423)   $(2,286,769)
Basic loss per common share                                           $    (0.01)     $    (0.02)     $     (0.05)   $     (0.08)
Diluted loss per common share                                         $    (0.01)     $    (0.02)     $     (0.05)   $     (0.08)
Weighted average common shares                                        30,052,843      30,021,277       30,051,351     29,934,234

</TABLE>

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

<PAGE>

AZCO MINING INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

<TABLE>
<CAPTION>
                                                                                                Nine Months Ended March 31,
                                                                                                  2002              2001
                                                                                                  ----              ----
<S>                                                                                               <C>               <C>
Cash flows from operating activities:
    Net loss                                                                                      $     (1,428,423) $    (2,286,769)
    Adjustments to reconcile net loss to net cash used in operations:
        Depreciation and amortization                                                                      103,228           59,482
        Write down of inventory                                                                            891,891        1,132,532
        Gain on sale of furniture and equipment                                                                                (980)
        Amortization debt discount                                                                         303,689                -
    Changes in assets and liabilities, net:
        Prepaid and other                                                                                 (130,036)          55,577
        Income tax receivable                                                                             (998,053)
        Inventories                                                                                       (927,945)      (1,193,201)
        Accounts payable and accrued liabilities                                                          (519,611)         (53,142)
Net cash used in operating activities                                                                   (2,705,260)      (2,286,501)

Cash flows from investing activities:
    Proceeds from sale of furniture and equipment                                                                -              980
    Purchase of investment                                                                                (100,000)               -
    Mineral properties, plant & equipment                                                                 (123,194)      (2,097,437)
Net cash used for investing activities                                                                    (223,194)      (2,096,457)

Cash flows from financing activities:
    Issuance of notes payable                                                                              843,500          800,000
    Payments on notes payable                                                                             (243,500)               -
    Issuance of financing lease                                                                          3,000,000                -
    Proceeds from stock sale                                                                               164,250                -
    Payments on capital lease obligations                                                                  (38,704)               -
    Proceeds from exercise of options                                                                        8,800           96,891

Net cash provide by financing activities                                                                 3,734,346          896,891
Net increase (decrease) in cash and cash equivalents                                                       805,892       (3,486,067)
Cash and cash equivalents at beginning of period                                                            39,920        4,324,886
Cash and cash equivalents at end of period                                                        $        845,812  $       838,819

</TABLE>

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

<PAGE>

AZCOM MINING INC.
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
(Unaudited)

<TABLE>
<CAPTION>
                                                      Common Stock            Additional Paid-In
                                                   Shares        Amount       Capital               Deficit             Total
                                                   ------        ------       -------               -------             -----
<S>                                                <C>           <C>          <C>                   <C>                 <C>
Balance June 30, 2001                               30,050,621   $  60,101    $     28,753,656      $    (18,656,354)   $10,157,403

Warrants issued (Note 4)                                                             1,638,725                            1,638,725

Subscription of Stock (Note 6)                                         800             163,450                              164,250

Exercise of options                                     20,000          40               8,760                                8,800

Net loss                                                                                                  (1,428,423)    (1,428,423)

Balance March 31, 2002 (unaudited)                   30,070,621  $  60,941    $     30,564,591      $    (20,084,777)   $10,540,755

</TABLE>

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

<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, 2001. 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.

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 a 30% interest in the Piedras Verdes Project in Sonora, Mexico.

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 January  17,  2002,  the Company
completed a financing lease transaction that yielded the Company net proceeds of
$2,842,500.  The Company will need additional funds to continue  operations into
fiscal 2003. Management is actively seeking additional financing however,  there
is no assurance that these efforts will be successful on terms acceptable to the
Company.  These matters raise some 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 of  impairment  for
plant and equipment which could be significant,  should the Company be unable to
continue as a going concern.

Construction  of  the  Black  Canyon  Mica  Project  production  facilities  was
completed  in the  previous  fiscal  year.  Due  to  earlier  cash  constraints,
production and marketing efforts progressed on a limited basis through March 31,
2002. If the mica project does not achieve  commercial  production  levels or if
the Company is unable to successfully  market the mica product during the next 6
months,  the  Company  will  need  increased  additional  financing  to meet its
operating expenses and pay obligations as they become due.

<PAGE>

Azco Mining Inc.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(Continued)

Note 2. Black Canyon Mica Project (Arizona)

During the  quarter  ended  March 31,  2002,  production  and  commissioning  of
production circuits  progressed on a limited basis.  Marketing efforts continued
as well but additional funding will be necessary to advance the project further.

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

<TABLE>
<CAPTION>
                                                                      March 31,                     June 30,
                                                                        2002                          2001
                                                                   ----------------           -----------------
<S>                                                                <C>                        <C>
Acquisition of mineral properties                                  $         2,219,996        $         2,219,996
Mining and processing plant and equipment                                    7,006,063                  6,882,869
Development costs                                                            1,104,966                  1,104,966
Accumulated amortization                                                       (84,020)                   (77,163)
                                                                  ---- ----------------     ---- -----------------

Total                                                              $        10,247,005        $        10,130,668
                                                                  ---- ----------------     ---- -----------------

</TABLE>

Detail of other capital assets is as follows:

<TABLE>
<CAPTION>
                                                                       March 31,                    June 30,
                                                                         2002                         2001
                                                                   ----------------           -----------------
<S>                                                                <C>                        <C>
Office building                                                    $           152,997        $           152,997
Furniture and equipment                                                        381,383                    381,383
Vehicles                                                                        81,146                     81,146
Accumulated depreciation                                                      (301,676)                  (208,105)
                                                                  ---- ----------------          -----------------

Total                                                              $           313,850        $           407,421
                                                                  ---- ----------------     ---- -----------------
</TABLE>

Note 3. Inventories

<TABLE>
<CAPTION>
                                                                       March 31,               June 30,
                                                                         2002                    2001
                                                                   ----------------         ---------------
<S>                                                                <C>                      <C>
Broken ore                                                         $           778,221      $         814,107
Work-in-process                                                                252,080                187,540
Finished goods                                                                  67,200                 59,800
                                                                       ----------------        ---------------
Total                                                              $         1,097,501      $       1,061,447
                                                                       ----------------        ---------------
</TABLE>

<PAGE>

Azco Mining Inc.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(Continued)


During the  three-month and nine month periods ended March 31, 2002, the Company
expensed  $438,326  and  $891,891,   respectively,   as  inventory  write  downs
representing  mica project  operating  costs incurred in excess of the estimated
realizable value of inventories produced during the quarter.


Note 4. Notes payable and warrants

On October 12, 2001, the Company  restructured  its $800,000 loan agreement with
Mr. 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 to purchase the Company's stock at an exercise price of $0.40.
The warrants  vested in December  2001 and shall expire on October 12, 2003.  In
addition,  effective  October 1, 2001, the interest rate payable on the $800,000
Olson loan was adjusted from prime plus 1% to 12% annually.

On October 19, 2001,  the Company  received a one-year  $100,000  loan,  bearing
interest at 12% per annum,  from a sophisticated  investor and  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.  This warrant vested in
December 2001 and is excercisable through October 19, 2002.

On December 3, 2001, the Company received an additional  one-year $100,000 loan,
bearing  interest at 12% per annum,  from the same  sophisticated  investor  and
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.  This
warrant vests in February 2002 and is excercisable through December 3, 2002.

During the quarter  ended  December  31, 2001 and through  January  17,2002,  an
insider  provided  unsecured  short-term  financing  amounting  to  a  total  of
$243,500.  These funds were offered on a 6.5% short-term basis,  until alternate
financing  could be secured.  Subsequent to the closing of the  financing  lease
agreement in January 2002 whereby Azco secured alternate financing,  these notes
along with all interest and fees associated were repaid in full.

In January 2002, Azco completed a financing lease  transaction  that yielded the
Company net  procedds of  $2,842,500.  Under the terms of the  transaction,  the
Company sold a 40 percent  ownership in the Company's 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 stake 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,  for he
second 6 months they  increase to $37,500  after which time they are $45,000 per
month.

<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 16, 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.

The fair value of the warrants have been determined by the Company using a Blach
Scholes valuation model and have been reflected as additional paid in capital.

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

<TABLE>
<CAPTION>
                                                      Principal           Unamortized Discount
-------------------------------------------------- ----------------- --------------------------------
<S>                                                   <C>                 <C>
12% note due August 27, 2002                             200,000           $       34,938
12% note due September 4, 2002                           200,000                   36,823
12% note due October 19, 2002                            100,000                   20,349
12% note due March 15, 2003                              800,000                  239,926
12% note due December 3, 2002                            100,000                   21,307
Total                                                 $1,400,000           $      353,343
-------------------------------------------------- ----------------- --------------------------------
Financing lease                                       $1,933,587           $    2,566,413

</TABLE>

Note 5. Contingencies

Termination of Management Agreements
------------------------------------

In  October  2000,  the  Company  notified  two of its  former  officers  of its
intention  to not renew the  contracts  with each of their  personal  management
companies contracts which were scheduled to expire in February 2001.

The parties have demanded payment of termination fees of $297,675 each, pursuant
to their personal  management  company  contracts.  The Company has disputed its
obligation  to pay these  amounts  and, in December  2000,  filed a  declaratory
judgment  action in United  States  District  Court for the  district of Arizona
seeking a declaration that the dispute is not subject to arbitration and further
that the Company was not obligated to pay a termination fee under the management
contracts.   In  January  2001,  the  named   defendants  filed  an  answer  and
counterclaim  each seeking an award of damages and prejudgment  interest alleged
to be owed as termination fee under the management  contracts and declaration of
stock option rights alleged to be owed them after  termination of the management
contracts.  The litigation is pending with a pretrial conference set for June 3,
2002. No accrual has been made for the termination fees as a liability,  if any,
is not yet determinable.

<PAGE>

Azco Mining Inc.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(Continued)

Litigation
----------

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 $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.

Note 6. Capital Stock and Outstanding Options

Options to purchase 2,305,500 and 2,765,500 shares of the Company's common stock
were  outstanding  under the  Company's  Stock Option Plan at March 31, 2002 and
2001,  respectively.  The impact of these  options  has been  excluded  from the
diluted EPS 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.

As of March 31, 2002, 375,000 shares of the Company's common stock subscribed to
by an investor on August 10, 2001 had not been issued. In addition,  as of March
31, 2002,  the Company had not issued but has agreed to issue  25,000  shares of
the  Company's  common stock as a legal  retainer.  The shares were issued under
Rule 144 of the Securities and Exchange Act of 1933 on April 9, 2002.

Note 7. Income Tax Recevable

The Company recorded an income tax receivable during the quarter ended March 31,
2002 due to a  $998,053  income  tax  refund  from the IRS  associated  with the
carryback of net operating losses resulting from the March 2002 enactment of the
Job Creation and worker Assistance Act of 2002.

<PAGE>

Azco Mining Inc.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(Continued)

Note 8. New Pronouncements

In October 2001, the Financial  Accounting  Standards Board issued  Statement of
Financial Accounting Standards (SFAS) No.144,  "Accounting for the Impairment or
Disposal of Long-Lived  Assets." 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 is  effective as of the  beginning of
fiscal 2003.

In August 2001, the FASB issued Statement of Financial  Accounting Standards No.
143,  "Accounting for Asset  Retirement  Obligations."  The Statement  addresses
financial accounting and reporting obligations associated with the retirement of
tangible long-lived assets and the associated asset retirement costs. Under this
Statement,  retirement obligations will be recognized when they are incurred and
displayed as liabilities and the initial  measurement  will be at fair value. In
addition,  the asset cost will be  capitalized  as part of the asset's  carrying
value and  subsequently  allocated to expense over the asset's useful life. This
Statement is required to be adopted by the Company on July 1, 2003.

The  Company  is  currently  in the  process  of  assessing  the impact of these
statements on its financial condition and results of operations.

<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) 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;  (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) 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.

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.  Material  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 recently  constructed  operating
facilities to produce high quality  muscovite mica and feldspathic sand from our
100% owned Black Canyon mica project located near Phoenix,  Arizona.  The recent
funding  obtained by the Company has enabled  limited  production  and marketing
efforts  to  continue.  It is most  likely  that  additional  financing  will be
necessary,  in fiscal 2003, to bring our mica project to  commercial  production
levels.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Azco believes the following significant  assumptions and estimates influence its
more critical  practices and accounting  policies used in the preparation of its
consolidated financial statements.

Azco has  initially  estimated  its ore  reserves at the Black  Canyon Mica Mine
based on its exploration  program completed in 1999.  Uncertainties are inherent
in estimating quantities of reserves,  including many factors beyond the control
of the Company.  Ore reserve  estimates  are  currently  based upon  engineering
evaluations  of assay  values  from 41 drill  holes and  samples of  outcropping
surface  structures.  Azco uses its ore  reserve  estimate  in  calculating  the
depreciation of production  assets and the  amortization of accrued  reclamation
costs. Changes in ore reserve estimates could materially influence these items.

<PAGE>

Environmental  liabilities are based on bonding requirements placed on the Black
Canyon  Mica Mine by the State of  Arizona  and the  Bureau of Land  Management.
Currently a total bond of $190,400 is in place with these agencies. Azco records
the liability when incurred and books the reclamation expense as the ore reserve
is processed.

Results of Operations
---------------------

Three Months ended March 31, 2002 compared to Three Months ended
March 31, 2001

The net loss for the three months  ended March 31, 2002 was $178,020  ($0.01 per
share) compared to a net loss of $595,953 ($0.02 per share) for the three months
ended March 31, 2001. The decreased net loss is the result of a $998,053  income
tax refund booked in the current quarter. This has been partially offset, during
the quarter ended March 31, 2002, by increased  operating  costs  expensed as an
inventory  write-down and increased general and  administrative  expenses due to
financing efforts.

General and administrative expense was $274,833 for the three months ended March
31, 2002  compared to $130,214 for the three  months  ended March 31, 2001.  The
increase  in general and  administrative  expense is due to  increased  investor
relations and financing activity.

Write-down  of  inventory  expense for the three months ended March 31, 2002 was
$438,326  compared to $252,888 for the three  months ended March 31, 2001.  This
increase is due to increased production activities in the current quarter.

Interest expense was $284,721 for the three months ended March 31, 2002 compared
to $0 for the three months ended March 31, 2001. The increase is due to interest
expense  associated  with loans,  entered into over the last year,  and with the
amortization of the value of the warrants attached to the loans.

Nine Months ended March 31, 2002 compared to Nine Months ended
March 31, 2001

The net loss for the nine months ended March 31, 2002 was $1,428,423  ($0.05 per
share)  compared  to a net loss of  $2,286,769  ($0.05  per  share) for the nine
months ended March 31, 2001.  The decreased net loss is the result of a $998,053
income tax refund discussed earlier.

<PAGE>

Salaries  expense was $242,202 for the nine months ended March 31, 2002 compared
to $375,934  for the nine months  ended March 31,  2001.  The decrease in salary
expense is due to the closure of the Vancouver office and the non-renewal of the
contracts with the personal management companies of two former officers.

Write-down  of  inventory  expense for the nine months  ended March 31, 2002 was
$891,891  compared to $1,132,532 for the nine months ended March 31, 2001.  This
decrease is due to reduced operating activities in the current period.

Interest  expense was $496,047 for the nine months ended March 31, 2002 compared
to $0 for the nine months ended March 31, 2001.  The increase is due to interest
expense  associated  with loans,  entered into over the last year,  and with the
amortization of the value of the warrants attached to the loans.

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

As of March 31, 2002, we had unrestricted cash of $845,812.

Net cash used in operating  activities  was $2,705,260 for the first nine months
of fiscal 2002 as compared to  $2,286,501  in the same period of the prior year.
The increase was due to an increase in unamortized lease costs.

Azco used $123,194 in cash flows from  investing  activities for the nine months
ended March 31, 2002 as  compared to  $2,096,457  used in the same period of the
prior year for purchases of mineral property, plant and equipment. An additional
$100,000 was expended on the purchase of an investment as collateral  for a loan
in the current period.

Net cash flows  from  financing  activities  was  $3,734,346  for the first nine
months of fiscal  2002 as  compared  to $896,891 in the same period of the prior
year.

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 the Company's 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 stake 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,  for the
second 6 months they  increase to $37,500  after which time they are $45,000 per
month.

<PAGE>

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 16, 2007.

The financing  lease  transaction  enables  production and marketing  efforts to
continue.   Depending  on  the  success  of  the  Company's  marketing  efforts,
additional funds could be necessary as early as the first quarter of fiscal 2003
to bring our mica project to commercial production levels

Cobre del Mayo S.A. de C.V.  ("Cobre del Mayo") is a Mexican  corporation set up
to develop the Piedras Verdes copper project in Sonora, Mexico. Azco owns 30% of
Cobre  del  Mayo and in March  2002  Minera  Phelps  Dodge  Mexico  sold its 70%
operating  interest  in Cobre del Mayo to a  Canadian  privately  held  company,
Frontera Copper  Corporation  ("Frontera").  Frontera plans to secure  necessary
financing  for  the  Piedras  Verdes  Proect  and to  advance  it to a  bankable
feasability  stage as soon as  possible.  Under the Cobre del Mayo  shareholders
agreement,  we are obligated to fund 30% of the development expenses incurred in
connection  with the  Piedras  Verdes  project.  The type,  amount and timing of
development are determined at the sole discretion of Frontera. Azco has informed
Frontera that until it has secured a more stable  financial  position it will be
unable to fund its 30% portion of development  expenses.  Under the terms of the
Cobre del Mayo shareholders agreement Azco's ownership in Cobre del Mayo S.A. de
C.V. will be diluted  proportionate  to the  contributions at any time at a rate
equal to its  ownership  level at that time.  During the nine months ended March
31, 2002 our share of these development costs was $116,895.

In conjunction  with the departure of Alan Lindsay and Anthony Harvey on October
25,  2000,  we may be  obliged  to pay  termination  fees under the terms of the
management  agreements between us and the personal management companies pursuant
to which we employed  each of Messrs.  Lindsay and Harvey.  Messrs.  Lindsay and
Harvey had demanded  payment of termination  fees of $297,675 each,  pursuant to
their personal management company contracts.  We have disputed any obligation to
pay these amounts and, in December 2000, filed a declaratory judgement action in
the United  States  District  Court for the District of Arizona to determine our
duties in this regard. This litigation is pending.

Lease Arrangements and Contractual Obligations
----------------------------------------------

Azco leases its 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.

<PAGE>

Currently  Azco has a total of $1,400,000  of  short-term  notes due and payable
before   March  15,  2003.   In  addition,   the  Company  has  entered  into  a
sale-leaseback financing arrangement where it plans to re-purchase the equipment
it sold under this  transaction  in  January of 2004,  but is not  contractually
obligated to do so until 2011.

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

<TABLE>
<CAPTION>
                             Payments due     Payments due    Payments due in    Payments due
                           through 12/31/02   in 1-3 years       4-5 years          after
                                                2003-2005        2006-2007          2007
-------------------------- ----------------- ---------------- ----------------- ----------------
<S>                        <C>                <C>             <C>               <C>
Equipment leases                    104,663          100,669                 -                -
Office lease                         44,500           60,790                 -                -
Notes payable                       707,000          823,000                 -                -
Financing lease                     315,000        1,620,000         1,080,000        4,875,000
Total contractual
obligations                       1,171,163        2,604,459         1,080,000        4,875,000

</TABLE>

The Company is currently  sub-leasing  its leased office space in Vancouver B.C.
for $3,140 per month.

Item 3: Quantitative and Qualitative Disclosures about Market Risk

None.


                           PART II. OTHER INFORMATION

Item 1: Legal Proceedings

In  October  2000,  the  Company  notified  two of its  former  officers  of its
intention  to not renew the  contracts  with each of their  personal  management
companies contracts which were scheduled to expire in February 2001.

The parties have demanded payment of termination fees of $297,675 each, pursuant
to their personal  management  company  contracts.  The Company has disputed its
obligation  to pay these  amounts  and, in December  2000,  filed a  declaratory
judgment  action in United  States  District  Court for the  district of Arizona
seeking a declaration that the dispute is not subject to arbitration and further
that the Company was not obligated to pay a termination fee under the management
contracts.   In  January  2001,  the  named   defendants  filed  an  answer  and
counterclaim  each seeking an award of damages and prejudgment  interest alleged
to be owed as termination fee under the management  contracts and declaration of
stock option rights alleged to be owed them after  termination of the management
contracts.  The litigation is pending with a pretrial conference set for June 3,
2002. No accrual has been made for the termination fees as a liability,  if any,
is not yet determinable.

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 $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.

                                   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:  May 14, 2002                                  BY:   /s/ Lawrence G. Olson
                                                           ---------------------
                                                               Lawrence G. Olson
                                                     CEO, President and Chairman


Date:  May 14, 2001                                  BY:     /s/ Ryan A. Modesto
                                                             -------------------
                                                                 Ryan A. Modesto
                                                         Vice President Finance,
                                                             Corporate Secretary