##### Table of Contents



U.S. SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-KSB
 (Mark One)
 þ
    
    ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES 
EXCHANGE ACT OF 1934
 FOR THE FISCAL YEAR ENDED October 31, 2007.
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD OF  TO .
 Commission File Number: 001-33125
 METALLINE MINING COMPANY
 (Name of small business issuer in its charter)
 Nevada
    
    91-1766677State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization
    
    Identification No.)
 1330 E. Margaret Ave., Coeur dAlene, ID 83815  (Address of principal executive offices, including zip code)
 (208) 665-2002
  Common Stock, $0.01 Par Value
 None
 o
  þ o
  o þ
 None.
   o þ
 o þ




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PART I
  Item 1. DESCRIPTION OF BUSINESS
 Background and Corporate Structure
  General Development of the Business
 Overview
        2




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Mineral Exploration
      3




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Feasibility Study
 Resource Model
      Metallurgy
    4




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Mine Planning
  Refinery
   5




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Water Development
  Site Evaluation, Environmental, and Regulatory
  Evaluation of Other Mineralization
    6




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Employees
  Risk Factors
   Exploration Stage Mining Company with No History of Operation
  Due to Our History of Operating Losses, We are Uncertain That We Will Be Able to Maintain
Sufficient Cash to Accomplish Our Business Objectives
   No Commercially Mineable Ore Body; Resources and Reserves
    7




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Our Business Plan is Highly Speculative and its Success Depends on Mineral Development in the
Sierra Mojada Concessions
  Risks Inherent in the Mining Industry
  
    
    competition from a large number of companies, many of which are significantly larger
than the Company, in the acquisition, exploration, and development of mining properties;
    
    the Company, the concession holder, might not be able raise enough money to pay the
fees, taxes and perform labor necessary to maintain the concessions in good force
    
    exploration for minerals is highly speculative and involves substantial risks, even when
conducted on properties known to contain significant quantities of mineralization, and most
exploration projects do not result in the discovery of commercially mineable deposits of
ore;
    
    the probability of an individual prospect ever having reserves that meet the
requirements of Securities Act Industry Guide 7 is extremely remote, and in all probability
the properties do not contain any reserves, and any funds spent on exploration will
probably be lost;
    
    operations are subject to a variety of existing laws and regulations relating to
exploration and development, permitting procedures, safety precautions, property
reclamation, employee health and safety, air quality standards, pollution and other
environmental protection controls and the Company may not be able to comply with these
regulations and controls;
    
    a large number of factors beyond the control of the Company, including fluctuations in
metal prices, inflation, and other economic conditions, will affect the economic
feasibility of mining;
    
    mining activities are subject to substantial operating hazards some of which are not
insurable or may not be insured due to economic considerations; and
    
    the availability of water, which is essential to mining and milling operations.
  8




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Nature of Zinc Exploration and Development
  Fluctuating Price for Metals
  Mining Concessions
  Title to Our Mineral Properties May be Challenged
  Our Activities are in Mexico, which is Subject to Political and Economic Instability
  
    
    political instability and violence;
  9




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
    
    war and civil disturbance;
    
    expropriation or nationalization;
    
    changing fiscal regimes;
    
    fluctuations in currency exchange rates;
    
    high rates of inflation;
    
    underdeveloped industrial and economic infrastructure; and
    
    unenforceability of contractual rights.
  
    
    production restrictions;
    
    price controls;
    
    export and import controls;
    
    income and other taxes;
    
    maintenance of claims;
    
    environmental legislation;
    
    foreign ownership restrictions;
    
    labor;
    
    welfare benefit policies;
    
    land use;
    
    land claims of local residents;
    
    water use; and
    
    mine safety.
  Environmental Controls
   10




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Availability of Water
  Shortages of Supplies and Materials
  Availability of Outside Engineers and Consultants
  Operational Hazards; Uninsured Risks
  Capital Requirements and Liquidity; Need for Subsequent Funding
   11




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Need for Additional Key Personnel; Reliance on Officers and Directors
   No Dividends Anticipated
  Our Stock Price Can Be Extremely Volatile
  Compliance with Section 404 of the Sarbanes-Oxley Act
    12




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Item 2. DESCRIPTION OF PROPERTY
 Sierra Mojada Mining Concessions
   Concession1
    
    Title No.
    
    
    HectaresSierra Mojada
    
    
    198513
    
    
    
    4,767.3154Mojada 3
    
    
    226756
    
    
    
    722.0000Unificacion Mineros Nortenos
    
    
    169343
    
    
    
    336.7905Esmeralda I
    
    
    211158
    
    
    
    95.4977Esmeralda
    
    
    212169
    
    
    
    117.5025La Blanca
    
    
    220569
    
    
    
    33.5044Fortuna
    
    
    160461
    
    
    
    13.9582Vulcano
    
    
    83507
    
    
    
    4.4904Mojada 2
    
    
    227585
    
    
    
    3,500.0000El Retorno
    
    
    216681
    
    
    
    817.6548Los Ramones
    
    
    223093
    
    
    
    8.6039El Retorno Fracc. 1
    
    
    223154
    
    
    
    5.5071Dormidos
    
    
    229323
    
    
    
    2,326.0953Agua Mojada1
    
    
    
    
    
    
    2,900.0000Alote1
    
    
    
    
    
    
    3,749.0000Volcan Dolores
    
    
    224873
    
    
    
    10.4946Total
    
    
    
    
    
    
    19,408.4148
 
 1 Title for this concession is pending.
    13




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14




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Mexico Facility
  Corporate Office
  Glossary of Common Terms
  Concession
    
    A grant of a tract of land made by a government or other controlling
authority in return for stipulated services or a promise that the land
will be used for a specific purpose.Exploration expenditures
    
    Costs incurred in identifying areas that may warrant examination and
in examining specific areas that are considered to have prospects that
may contain mineral deposit reserves.Mineralized Material
    
    Zinc bearing material that has been physically delineated by one or
more of a number of methods including drilling, underground work,
surface trenching and other types of sampling. This material has been
found to contain a sufficient amount of mineralization of an average
grade of metal or metals to have economic potential that warrants
further exploration evaluation. While this material is not currently
or may never be classified as reserves, it is reported as mineralized
material only if the potential exists for reclassification into the
reserves category. This material cannot be classified in the reserves
category until final technical, economic and legal factors have been
determined. Under the United States Securities and Exchange
Commissions standards, a mineral deposit does not qualify as a
reserve unless the recoveries from the deposit are expected to be
sufficient to recover total cash and non-cash costs for the mine and
related facilities and make a profit.Ore, Ore Reserve, or 
Mineable Ore Body
    
    The part of a mineral deposit which could be economically and legally
extracted or produced at the time of the reserve determination.Reserves
    
    Estimated remaining quantities of mineral deposit and related
substances anticipated to be recoverable from known accumulations,
from a given date forward, based on:(a) analysis of drilling, geological, geophysical and engineering data;(b) the use of established technology; and(c) specified economic conditions, which are generally accepted as
being reasonable, and which are disclosed.
  15




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Resources
    
    Those quantities of mineral deposit estimated to exist originally in
naturally occurring accumulations. 

Resources are, therefore, those quantities estimated on a particular
date to be remaining in known accumulations plus those quantities
already produced from known accumulations plus those quantities in
accumulations yet to be discovered.
Resources are divided into:(a) discovered resources, which are limited to known accumulations; and(b) undiscovered resources.Stratigraphic units
    
    A body of rock established as a distinct entity, geologically
classified, based on any of the properties or attributes or
combinations thereof that rocks possess.Tonne
    
    A metric ton which is equivalent to 2,200 pounds.Unproved property
    
    A property or part of a property to which no reserves have been
specifically attributed.
 Item 3. LEGAL PROCEEDINGS
  Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  Broker Non-Proposal
    
    For
    
    
    Against
    
    
    Abstain
    
    
    VotesProposal #1- To elect
the following four
persons as directors to
hold office until the
next annual meeting of
shareholders and until
their successors have
been elected and
qualifiedMerlin Bingham
    
    
    22,381,971
    
    
    
    
    
    
    
    179,800
    
    
    
    Roger Kolvoord
    
    
    22,383,866
    
    
    
    
    
    
    
    177,905
    
    
    
    Wesley Pomeroy
    
    
    22,401,562
    
    
    
    
    
    
    
    160,209
    
    
    
    Robert Kramer
    
    
    22,388,362
    
    
    
    
    
    
    
    173,409
    
    
    
    Proposal #2 To approve
the Companys Shareholder
Rights Agreement
    
    
    9,869,239
    
    
    
    506,029
    
    
    
    37,276
    
    
    
    
  16




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PART II
 Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 Market Information
 http://finance.google.com/finance
 Fiscal Quarter
    
    
    High
    
    
    LowFiscal Year End October 31, 2007
    
    4thQuarter (8/1/07  10/31/07)
    
    $
    3.55
    
    
    $
    2.103rdQuarter (5/1/07  7/31/07)
    
    $
    4.35
    
    
    $
    2.762ndQuarter (2/1/07  4/30/07)
    
    $
    3.65
    
    
    $
    2.251stQuarter (11/1/06  1/31/07)
    
    $
    4.50
    
    
    $
    2.48Fiscal Year End October 31, 2006
    
    4thQuarter (8/1/06  10/31/06)
    
    $
    3.24
    
    
    $
    1.513rdQuarter (5/1/06  7/31/06)
    
    $
    5.67
    
    
    $
    2.452ndQuarter (2/1/06  4/30/06)
    
    $
    2.97
    
    
    $
    1.821stQuarter (11/1/05  1/31/06)
    
    $
    2.44
    
    
    $
    0.72
  Holders
  Dividends
  Equity Compensation Plans Information
   Number of securities to beissued upon exercise of
    
    
    Weighted average exercise
    
    
    Number of securitiesoutstanding options, warrants
    
    
    price of outstanding
    
    
    remaining available forPlan Category
    
    and rights
    
    
    options, warrants and rights
    
    
    future issuanceEquity compensation
plans approved by
security holders
    
    
    3,650,000
    (1)
    
    $
    2.63
    
    
    
    1,980,000
    (2)Equity compensation
plans not approved
by security holders
    
    
    827,353
    (3)
    
    $
    2.72
    
    
    
    Total
    
    
    4,477,353
    
    
    $
    2.65
    
    
    
    1,980,000
 
 (1)
    
    Includes: (i) options to acquire 400,000 shares of Common Stock under the 2000
plan; and (ii) options to acquire 3,250,000 shares of common stock under the 2006 Plan.(2)
    
    Includes: (i) 230,000 shares of Common Stock available for issue under the 2000
Plan; and (ii) 1,750,000 shares of Common Stock available for issue under the 2006 Plan.
  17




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(3)
    
    Includes (i) warrants to purchase 6,103 shares of Common Stock as compensation
for services to Tomlinson Programs Inc., (ii) warrants to purchase 204,000 shares of Common
Stock as compensation for services to Aegis Capital Inc., (iii) warrants to purchase 17,250
shares of Common Stock to an independent director of the Company, (iv) warrants to purchase
100,000 shares of Common Stock as compensation for financial services to O&M Partners and
(v) warrants to purchase 500,000 shares as compensation for financial services to David
Nahmias.
 Recent Sales of Unregistered Securities
           18




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Item 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 Cautionary Statement about Forward-Looking Statements
  
    
    The amount and nature of future capital, development and exploration expenditures;
    
    The timing of exploration activities;
    
    Business strategies and development of our business plan; and
   Plan of Operation
    19




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Cautionary Note
  Results of Operation
   20




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Exploration and property holding costs
  General and Administrative Costs
  Other Income (Expense)
  Liquidity and Capital Resources
      21




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Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes  An Interpretation of FASB Statement No. 109 Accounting for Income Taxes.
 Fair Value Measurements
 Employers Accounting for Defined Benefit
Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88,106, and
132(R)
 The Fair Value Option for Financial Assets and
Financial Liabilities  including an amendment of FASB Statement No. 115
  22




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Business Combinations
 ,
Noncontrolling Interests in Consolidated Financial Statements
 Critical Accounting Policies
   Property Concessions
   Deferred tax assets and liabilities
  Estimates
   23




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Foreign Currency Translation
  Accounting for Stock Options and Warrants Granted to Employees and Non-employees
    Impairment of Long-Lived Assets
   24




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Environmental Matters
   Item 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  Item 8. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
      25




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Item 8A. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures.
    Changes In Internal Controls Over Financial Reporting
   26




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ITEM 8B. Other Information
  PART III
 Item 9.
    
    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A)
OF THE EXCHANGE ACT
 MANAGEMENT
   Name of Director orOfficer
    
    Officer orand Position in the
    
    DirectorCompany
    
    Since
    
    Age
    
    Office(s) Held and Other Business ExperienceMerlin Bingham
President and
Chairman of the
Board 
of Directors
    
    
    1996
    
    
    
    74
    
    
    Since October 1996, Mr. Bingham has been
the President and Chairman of the Board of
Directors of the Company. From 1963 to 1983
Mr. Bingham worked in exploration for
mining and oil companies in the western
U.S. and Alaska, Zambia, the United Arab
Emirates, Ecuador and Mexico. From 1983 to
1996, Mr. Bingham has been a consulting
geologist. Mr. Bingham received a B.S.
degree in Mineralogy from the University of
Utah in 1963Roger Kolvoord,
Executive Vice 

President and
Director
    
    Director
 since
2002;
 Officer 
since
2003
    
    
    68
    
    
    Dr. Kolvoord has been a director of the
Company since August 2002 and was appointed
Vice President, Business in April 2003. Dr.
Kolvoord has a B.S. degree in geology from
the University of Michigan, a M.S. in
Mineralogy form the University of Utah, and
a Ph.D. in geochemistry from the University
of Texas at Austin. He worked in
exploration and exploration research for
Kennecott Copper Company, Ranchers
Exploration and Development Corporation,
and ARCO, and operated a services company
providing field services to oil and gas and
mining companies. He has extensive mining
and energy exploration experience. He was a
manager with the Boeing Company for 14
years, working mainly in program management
and new business development capacities in
information systems and in remote sensing
and geospatial information (mapping)
ventures. An Associate Technical Fellow of
the Boeing Company, he returned to private
consulting practice in 2000. Mr. Kolvoord
is an active member of the American
Association of Petroleum Geologists, the
Society of Mining Engineers, and the
Geological Society of America. He resides
in the Puget Sound region of Washington.
  27




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Name of Director orOfficer
    
    Officer orand Position in the
    
    DirectorCompany
    
    Since
    
    Age
    
    Office(s) Held and Other Business ExperienceWesley Pomeroy, 
Director
    
    
    2005
    
    
    
    53
    
    
    Mr. Pomeroy was appointed to the Board of
Directors in September 2005. Mr. Pomeroy
was President of The Joe Dandy Mining
Company from 1995 to 2006. The Joe Dandy
Mining Company has had gold properties in
Cripple Creek, Colorado since 1887. He is a
member of the Front Range Oil and Gas LLC
and the POMOCO LLC (Pomeroy Oil Company).
He is also currently a consulting geologist
with Vortex Petroleum Inc. and has been
associated since 1977 with various
exploration and oil and gas companies. Also
since 1977 Mr. Pomeroy has been a member in
good standing of the American Association
of Petroleum Geologists and the Rocky
Mountain Association of Geologists. Mr.
Pomeroy received a Bachelor of Science
degree in geology from Colorado State
University in 1977 and an MBA from the
University of Colorado in 1990. Mr. Pomeroy
is a registered Professional Geologist for
the State of Wyoming. He resides in the
Denver, Colorado area.Robert Kramer, 
Director
    
    
    2006
    
    
    
    61
    
    
    Robert Kramer, C.A., was elected to the
Board of Directors in July 2006. Mr.
Kramer is the co-founder and Chief
Executive Officer of Current Technology
Corporation (OTCBB:CRTCF). The company was
formed in 1987 to research, develop and
commercialize electrotherapeutic products
for the treatment of hair loss. An
entrepreneur by nature, with a particular
interest in the financial sector, he has
been a founder/principal of a number of
private companies offering commercial
mortgages, venture capital and tax driven
investments. Prior to co-founding Current
Technology, he was a joint venture partner
in an enterprise that raised funding for
approximately 20 public mining companies
conducting exploration activities in
Western Canada. A graduate of the
University of California, Berkeley with a
degree in economics, Mr. Kramer has been a
member of the Canadian Institute of
Chartered Accountants and the Institute of
Chartered Accountants of British Columbia
for over 30 years. Mr. Kramer is a
Registered Certified Public Accountant in
the State of Illinois. In 2005 he was
admitted as a Fellow to The Institute of
Chartered Securities and Administrators.
  28




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Name of Director orOfficer
    
    Officer orand Position in the
    
    DirectorCompany
    
    Since
    
    Age
    
    Office(s) Held and Other Business ExperienceGregory Hahn, 
Director
    
    
    2007
    
    
    
    56
    
    
    Mr. Hahn was appointed to the Board of
Directors in October 2007. Mr. Hahn is a
Certified Professional Geologist and a
geological engineer with more than 25 years
experience in exploration, mine development
and operation, and particular expertise in
base and precious metals, ore reserve
calculations, slope stability, open pit
operations, project evaluations and
investment analysis. He is a board member
of Marathon PGM Corp. (TSX: MAR), and a
principal of Greg Hahn Consulting, LLC, a
mining and geological consulting firm.
From 1995 to 2007, Mr. Hahn was President,
Chief Executive Officer and Director of
Constellation Copper Corporation (TSX: CCU), where he was instrumental in bringing
the Lisbon Valley copper mine into
production, and involved with the
subsequent construction and development of
the mine. Prior to Mr. Hahns position with
Constellation Copper Corp., he was Vice
President for St. Mary Minerals Inc. for
four years and Chief Geological Engineer
for CoCa Mines Inc. for five years. He
also spent ten years with Noranda Inc.
where he was pre-development manager of the
Lik massive sulfide project in Alaska and
chief mine geologist at the Blackbird
cobalt-copper project in Idaho. Mr. Hahn
received a B.A. in Earth Sciences from
Dartmouth College and an M.S. in Geology
and Geological Engineering from Michigan
TechRobert Devers 
Chief Financial
Officer
    
    
    2007
    
    
    
    44
    
    
    Mr. Devers was appointed Chief Financial
Officer in June 2007. Mr. Devers brings
over 20 years of experience in corporate
finance, business operations, and financial
reporting and controls. Prior to joining
Metalline, he was Senior Director -
Financial Analysis and Internal Audit of
The Broe Companies Inc., a privately held
international company with investments in
commercial and residential real estate and
operations in oil and gas exploration and
coal mining. He has also served as a
corporate officer and financial executive
for privately-held and publicly traded
companies. Mr. Devers earned a Bachelor of
Arts degree in Accounting from Western
State College in 1985 and is a Certified
Public Accountant in the state of Colorado.Terry Brown, Vice 
President-Operations
    
    
    2005
    
    
    
    48
    
    
    Mr. Brown was appointed Vice
President-Operations in September 2005. Mr.
Brown has 22 years experience in the mining
industry in the United States, Mexico and
Chile and has most recently been active as
a consulting geologist in Mexico. His
background is in exploration and project
management, mine development and
feasibility studies, and mining operations.
Mr. Brown is a Certified Professional
Geologist and is a member of the American
Institute of Professional Geologists and
the Society of Economic Geologists. He
received a Bachelor of Science degree in
geology from the New Mexico Institute of
Mining & Technology in 1983. Mr. Brown
resides in Chihuahua, Mexico.Wayne Schoonmaker, 

Treasurer and 

Secretary
    
    
    1997
    
    
    
    70
    
    
    Mr. Schoonmaker was appointed Secretary &
Treasurer of the Company in August 1997 and
has held that position since that time. He
is also Secretary & Treasurer and Director
of Independence Lead Mines Company of
Wallace, Idaho. During the period of 1979
through 1993, Mr. Schoonmaker was employed
at Asarco Incorporated as Chief Accountant
of the Troy Mine and as Financial Manager
of Asarcos Northwest Mining Department.
From July 1978 to December 1978, Mr.
Schoonmaker was Assistant Treasurer of the
Bunker Hill Mining Company, and from 1964
to 1978, he was Assistant Secretary of
Hecla Mining Company. Mr. Schoonmaker
received a Bachelor of Science degree in
Accounting from the University of Montana
in 1962 and an MBA from the University of
Idaho in 1987. Mr. Schoonmaker is a
Certified Public Accountant in the states
of Idaho and Montana.
  29




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Audit Committee
  Section 16(a) Beneficial Ownership Reporting Compliance
   Code of Ethics
   30




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Item 10. EXECUTIVE COMPENSATION
 Compensation and other Benefits of Executive Officers
  SUMMARY COMPENSATION TABLE
 OptionName and
    
    Fiscal
    
    
    Salary
    
    
    Awards
    
    
    TotalPrincipal Position
    
    Year
    
    
    ($)
    
    
    ($) (1)
    
    
    ($)Merlin Bingham,
    
    
    2007
    
    
    $
    206,000
    
    
    $
    
    
    
    $
    206,000President
    
    
    2006
    
    
    $
    206,000
    
    
    $
    2,180,000
    (2)
    
    $
    2,386,000Roger Kolvoord,
    
    
    2007
    
    
    $
    187,000
    
    
    $
    
    
    
    $
    187,000Executive Vice President
    
    
    2006
    
    
    $
    187,000
    
    
    $
    1,635,000
    (3)
    
    $
    1,822,000Robert Devers,
    
    
    2007
    
    
    $
    55,769
    
    
    $
    306,705
    (5)
    
    $
    362,474Chief Financial Officer(4)
    
    
    2006
    
    
    $
    
    
    
    $
    
    
    
    $
    Terry Brown,
    
    
    2007
    
    
    $
    125,000
    
    
    $
    
    
    
    $
    125,000Vice President, Operations
    
    
    2006
    
    
    $
    125,000
    
    
    $
    545,000
    (6)
    
    $
    670,000
 
 (1)
    
    This column represents the dollar amount recognized for financial statement
reporting purposes with respect to the fair value of stock options granted to the named
executive officers, in accordance with SFAS 123R. See note 8 to the consolidated financial
statements for discussion regarding the assumptions used to calculate fair value under the
Black-Scholes-Merton valuation model.(2)
    
    Amount represents dollar amount recognized for financial statement reporting
purposes for fair value of options to purchase 1,000,000 shares of common stock in
accordance with SFAS 123. The options vested May 1, 2006.(3)
    
    Amount represents dollar amount recognized for financial statement reporting
purposes for fair value of options to purchase 750,000 shares of common stock in accordance
with SFAS 123. The options vested May 1, 2006.(4)
    
    Mr. Devers was appointed Chief Financial Officer on June 18. 2007.(5)
    
    Amount represents the dollar amount recognized for financial statement reporting
purposes for fair value of options to acquire 250,000 options in accordance with SFAS
123(R). The options vest 50,000 on October 31, 2007 and 100,000 on both October 31, 2008
and 2009.(6)
    
    Amount represents dollar amount recognized for financial statement reporting
purposes for fair value of options to purchase 250,000 shares of common stock in accordance
with SFAS 123. The options vested May 1, 2006.  31




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Employment Contracts and Termination of Employment and Change-in-Control Arrangements
 Merlin Bingham
   Roger Kolvoord
  Terry Brown
  Subsequent Events
     32




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Stock Option, Stock Awards and Equity Incentive Plans
  OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
 Option AwardsNumber of SecuritiesUnderlying Unexercised
    
    
    Option
    
    
    OptionOptions(1)(#)
    
    
    Exercise
    
    
    ExpirationName and Principal Position
    
    Exercisable
    
    
    Unexercisable
    
    
    Price ($)
    
    
    DateMerlin Bingham,
    
    
    1,000,000
    
    
    
    
    
    
    $
    2.59
    
    
    
    5/1/2016President
    
    
    100,000
    
    
    
    
    
    
    $
    2.15
    
    
    
    3/1/2010Roger Kolvoord,
    
    
    750,000
    
    
    
    
    
    
    $
    2.59
    
    
    
    5/1/2016Executive Vice President
    
    
    100,000
    
    
    
    
    
    
    $
    1.25
    
    
    
    8/6/2009Robert Devers,
    
    
    50,000
    (2)
    
    
    200,000
    
    
    $
    4.30
    
    
    
    6/18/2017Chief Financial OfficerTerry Brown,
    
    
    250,000
    
    
    
    
    
    
    $
    2.59
    
    
    
    5/1/2016Vice President, Operations
    
    
    10,000
    
    
    
    
    
    
    $
    2.00
    
    
    
    10/1/2012
 
 (1)
    
    Includes options granted under 2000 Equity Incentive Plan and 2006 Stock Option
Plan(2)
    
    On June 18, 2007, Mr. Devers was granted options to purchase 250,000 shares of
common stock; 50,000 of the options vested on October 1, 2007 and 100,000 vests on October
31, 2008 and 100,000 vests on October 31, 2009. Compensation of Directors
    33




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##### Table of Contents



DIRECTOR COMPENSATION
 Feesearnedor paid
    
    
    Stock
    
    
    Option
    
    
    All otherin cash
    
    
    awards
    
    
    awards
    
    
    compensation
    
    
    TotalName
    
    ($)
    
    
    ($)
    
    
    ($)(1)
    
    
    ($)
    
    
    ($)Wesley Pomeroy(2)
    
    $
    30,000
    
    
    $
    119,700
    
    
    $
    
    
    
    $
    
    
    
    $
    149,700Robert Kramer(3)
    
    $
    30,000
    
    
    $
    119,700
    
    
    $
    
    
    
    $
    
    
    
    $
    149,700Gregory Hahn(4) (5)
    
    $
    2,500
    
    
    $
    9,780
    
    
    $
    127,486
    
    
    $
    7,334
    (6)
    
    $
    147,100
 
 (1)
    
    This column represents the dollar amount recognized for financial statement
reporting purposes with respect to the fair value of stock options granted to the named
executive officers, in accordance with SFAS 123R. See note 8 to the consolidated financial
statements for discussion regarding the assumptions used to calculate fair value under the
Black-Scholes-Merton valuation model.(2)
    
    Mr. Pomeroy holds options to purchase 250,000 shares of the Companys common
stock. These options are fully vested. As of October 31, 2007, Mr. Pomeroy has been
issued an aggregate of 39,000 shares of common stock pursuant to the 2006 Stock Option Plan
and costs for an additional 9,000 shares have been accrued for services during the last
fiscal quarter.(3)
    
    Mr. Kramer holds options to purchase 500,000 shares of the Companys common
stock. These options are fully vested. As of October 31, 2007, Mr. Kramer has been issued
an aggregate of 39,000 shares of common stock pursuant to the 2006 Stock Option Plan and
costs for an additional 9,000 shares have been accrued for services during the last fiscal
quarter.(4)
    
    Mr. Hahn was appointed director on October 1, 2007.(5)
    
    Mr. Hahn holds options to purchase 250,000 shares of the Companys common stock.
These options vest as follows: (i) 50,000 shares vested immediately upon grant; (ii)
100,000 shares vest on October 1, 2008, and (iii) 100,000 shares vest on October 1, 2009;
or 100% of the options vest upon a Change in Control, as defined in Mr. Hahns stock
option agreement. As of October 31, 2007, the Company has accrued $9,780 for 3,000 shares
of common stock for services during the last fiscal quarter.(6)
    
    Includes consulting fees paid to Mr. Hahn for his services prior to becoming an
independent director.  Repricing of Options
   34




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##### Table of Contents



Item 11. SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
 Security Ownership of Certain Beneficial Owners
  Amount and Nature ofName and Address of
    
    Metalline
    
    
    Percent of MetallineBeneficial Owner
    
    Beneficial Ownership
    
    
    Common stockJohn C. Barrett
    
    
    3,376,800
    (2)
    
    
    8.2
    %2436 N. Fed. Hwy #366
Lighthouse Point, FL 33064Lazarus Investment Partners
    
    
    3,000,000
    
    
    
    7.6
    %LLP c/o Lazarus Management Company LLC 
2401 E. 2nd Avenue, #600
Denver, CO 80206Duncan Hsia
    
    
    2,647,328
    (1)
    
    
    6.5
    %3909 harvest Knoll Drive 
Richardson, TX 75082Steven Carlitz
    
    
    2,520,931
    (3)
    
    
    6.2
    %1411 Aster Lane 
Cupertino, CA 95014
 
 (1)
    
    Includes: (i) warrants to acquire 832,950 shares of the Companys common stock
held by Duncan Hsia Roth IRA and Duncan Hsia Revocable Living Trust; (ii) warrants to
acquire 480,000 shares of common stock held by Mr. Hsias spouse; (iii) warrants to acquire
143,250 shares of common stock held by Mr. Hsias children.(2)
    
    Includes warrants to acquire 1,465,000 shares of common stock held by John C.
Barrett and John C. Barrett Revocable Trust.(3)
    
    Includes warrants to acquire 967,000 shares of common stock.  35




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##### Table of Contents



Security Ownership of Management
  Name and Address of
    
    
    
    Amount and Nature of Metalline
    
    
    Percent of MetallineBeneficial Owner
    
    Position
    
    Beneficial Ownership
    
    
    Common stockMerlin Bingham
    
    President and
    
    
    2,445,639
    (1)
    
    
    6.0
    %1330 E. Margaret Ave.
    
    DirectorCoeur dAlene, ID 83815Roger Kolvoord
    
    Executive Vice
    
    
    1,210,406
    (2)
    
    
    3.0
    %1330 E. Margaret Ave.
    
    President andCoeur dAlene, ID 83815
    
    DirectorWesley Pomeroy
    
    Director
    
    
    577,000
    (3)
    
    
    1.4
    %1330 E. Margaret Ave.
Coeur dAlene, ID 83815Robert Kramer
    
    Director
    
    
    565,250
    (4)
    
    
    1.4
    %1330 E. Margaret Ave.
Coeur dAlene, ID 83815Gregory Hahn
    
    Director
    
    
    53,000
    (5)
    
    
    *1330 E. Margaret Ave.
Coeur dAlene, ID 83815Robert Devers
    
    Chief Financial
    
    
    50,000
    (6)
    
    
    *1330 E. Margaret Ave.
    
    OfficerCoeur dAlene, ID 83815Terry Brown
    
    Vice President-
    
    
    312,500
    (7)
    
    
    *1330 E. Margaret Ave.
    
    OperationsCoeur dAlene, ID 83815All current directors,
    
    
    
    
    5,213,795
    (8)
    
    
    12.2
    %executive officers and
named executive
officers as a group
(seven persons)
 
 *
    
    Indicates less than one percent.(1)
    
    Includes: (i) vested options to acquire 1,100,000 shares of common stock and (ii) vested
options held by Mr. Binghams spouse to acquire 50,000 shares of common stock.(2)
    
    Includes vested options to acquire 850,000 shares of common stock.(3)
    
    Includes: (i) vested options to acquire 250,000 shares of common stock, (ii) warrants to
acquire 150,000 shares of common stock, and 9,000 shares vested at October 31, 2007 for directors
services.  36




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##### Table of Contents



(4)
    
    Includes: (i) vested options to acquire 500,000 shares of common stock (ii) warrants to acquire
17,250 shares of common stock and (iii) and 9,000 shares vested at October 31, 2007 for directors
services.(5)
    
    Includes (i) vested options to acquire 50,000 shares of common stock and (ii) 3,000 shares
vested at October 31, 2007 for directors services. Excludes unvested options to acquire (i)
100,000 shares of common stock on October 31, 2008, and (iii) 100,000 shares of common stock on
October 31, 2009. Options vest 100% upon a Change in Control, as defined in Mr. Hahns stock
option agreement.(6)
    
    Includes vested options to acquire 50,000 shares of common stock. Excludes unvested options to
acquire (i) 100,000 shares of common stock on October 31, 2008, and (iii) 100,000 shares of common
stock on October 31, 2009. Options vest 100% upon a Change in Control, as defined in Mr. Devers
stock option agreement.(7)
    
    Includes vested options to acquire 260,000 shares of the Companys common stock.(8)
    
    Includes securities reflected in footnotes 1 - 7. Securities Authorized for Issuance Under Equity Plans
 Number of securities to beissued upon exercise of
    
    
    Weighted average exercise
    
    
    Number of securitiesoutstanding options, warrants
    
    
    price of outstanding
    
    
    remaining available forPlan Category
    
    and rights
    
    
    options, warrants and rights
    
    
    future issuanceEquity compensation
plans approved by
security holders
    
    
    3,650,000
    (1)
    
    $
    2.63
    
    
    
    1,980,000
    (2)Equity compensation
plans not approved
by security holders
    
    
    827,353
    (3)
    
    $
    2.72
    
    
    
    Total
    
    
    4,477,353
    
    
    $
    2.65
    
    
    
    1,980,000
 
 (1)
    
    Includes: (i) options to acquire 400,000 shares of Common Stock under the Companys 2000
Equity Incentive Plan; and (ii) options to acquire 3,250,000 shares of common stock under the
Companys 2006 Stock Option Plan.(2)
    
    Includes: (i) 230,000 shares of Common Stock under the Companys 2000 Equity Incentive Plan;
and (ii) 1,750,000 shares of common stock under the Companys 2006 Stock Option Plan.(3)
    
    Includes (i) warrants to purchase 6,103 shares of Common Stock as compensation for services
to Tomlinson Programs Inc., (ii) warrants to purchase 204,000 shares of Common Stock as
compensation for services to Aegis Capital Inc., (iii) warrants to purchase 17,250 shares of
Common Stock to an independent director of the Company, (iv) warrants to purchase 100,000
shares of Common Stock as compensation for financial services to O&M Partners and (v) warrants
to purchase 500,000 shares as compensation for financial services to David Nahmias.  37




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##### Table of Contents



Changes in Control
  Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
   PART IV
 Item 13.
    
    EXHIBITS(a)
    
    Exhibits3.1(a)
    
    Articles of Incorporation.13.1(b)
    
    Certificate of Amendment to Articles of Incorporation.23.2
    
    Bylaws.24.1
    
    Rights Agreement, dated as of June 11, 2007, between the Company and OTC Stock Transfer, as
Rights Agent.710.1
    
    2000 Equity Incentive Plan.510.2
    
    2006 Stock Option Plan.510.3
    
    Subscription Agreement between the Company and subscribers, dated March 6, 2006.310.4
    
    Employment Agreement with Merlin Bingham, effective January 1, 2007.510.5
    
    Employment Agreement with Roger Kolvoord, effective January 1, 2007.510.6
    
    Employment Agreement with Terry Brown, effective January 1, 2007.510.7
    
    Common Stock and Warrant Purchase Agreement, dated February 16, 2007.610.8
    
    Employment Agreement with Robert Devers, effective January 1, 2008.814
    
    Code of Ethics. 521.1
    
    Subsidiaries of the Registrant. 531.1
    
    Certification of CEO Pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.31.2
    
    Certification of CFO Pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.32.1
    
    Certification of CEO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, filed herewith.32.2
    
    Certification of CFO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, filed herewith.99.1
    
    Sierra Mojada location map.4
  38




---



##### Table of Contents



(1)
    
    Incorporated by reference from Form 10-SB, filed October 15, 1999.(2)
    
    Incorporated by reference from Form 10-QSB, filed September 19, 2006.(3)
    
    Incorporated by reference from Form 8-K, filed March 6, 2006.(4)
    
    Incorporated by reference from Form 10-KSB, filed January 31, 2006.(5)
    
    Incorporated by reference from Form 10-KSB, filed January 31, 2007.(6)
    
    Incorporated by reference from Form 10-QSB, filed June 18, 2007.(7)
    
    Incorporated by reference to Exhibit 1 to the Companys Registration Statement on Form 8-A
filed on June 11, 2007.(8)
    
    Incorporated by reference from Form 8-K filed January 22, 2008. Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
  Audit Fees
  Audit-Related Fees
  Tax Fees
  All Other Fees
  Audit Committees Pre-Approval Practice
 de minimis
 
    
    Pre-approve all audit services that the auditor may provide to us or any subsidiary
(including, without limitation, providing comfort letters in connection with securities
underwritings or statutory audits) as required by §10A(i)(1)(A) of the Exchange Act (as
amended by the Sarbanes-Oxley Act of 2002).
    
    Pre-approve all non-audit services (other than certain de minimisservices described
in §10A(i)(1)(B) of the Exchange Act (as amended by the Sarbanes-Oxley Act of 2002))
that the auditors propose to provide to us or any of our subsidiaries.
   39




---



##### Table of Contents



SIGNATURES
  METALLINE MINING COMPANYDate: January 28, 2008
    By:
    /s/ Merlin BinghamMerlin Bingham,President and Principal Executive OfficerDate: January 28, 2008
    By:
    /s/ Robert DeversRobert Devers,Chief Financial Officer and Principal Accounting
   Officer  Date: January 28, 2008
    By:
    /s/ Merlin BinghamMerlin Bingham, DirectorDate: January 28, 2008
    By:
    /s/ Roger KolvoordRoger Kolvoord, DirectorDate: January 28, 2008
    By:
    /s/ Wesley PomeroyWesley Pomeroy, DirectorDate: January 28, 2008
    By:
    /s/ Robert KramerRobert Kramer, DirectorDate: January 28, 2008
    By:
    /s/ Gregory HahnGregory Hahn, Director  40




---



##### 



METALLINE MINING COMPANY
 PAGE NO.Reports of Independent Registered Public Accounting Firms
    
    
    F-1 - F-2Financial Statements:Consolidated Balance Sheets
    
    
    F-3Consolidated Statements of Operations
    
    
    F-4Consolidated Statements of Changes in Stockholders Equity
    
    
    F-5 - F-8Consolidated Statements of Cash Flows
    
    
    F-9 - F-10Notes to Consolidated Financial Statements
    
    
    F-11Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
       HEIN & ASSOCIATES LLP
 
  F-1




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     Certified Public Accountants
   F-2




---



##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
 
 CONSOLIDATED BALANCE SHEETS
 October 31,
    
    
    October 31,2007
    
    
    2006ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    1,434,487
    
    
    $
    689,994Marketable securities
    
    
    7,900,000
    
    
    
    5,925,000Accounts receivable
    
    
    
    
    
    
    35,934Value-added tax receivable
    
    
    401,341
    
    
    
    Other receivables
    
    
    23,993
    
    
    
    Prepaid expenses
    
    
    17,827
    
    
    
    14,288Total Current Assets
    
    
    9,777,648
    
    
    
    6,665,216PROPERTY CONCESSIONSSierra Mojada District (Note 3)
    
    
    4,536,111
    
    
    
    4,334,767EQUIPMENTOffice and mining equipment, net of accumulated depreciation
of $407,457 and $427,892, respectively (Note 4)
    
    
    919,420
    
    
    
    611,966TOTAL ASSETS
    
    $
    15,233,179
    
    
    $
    11,611,949LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable
    
    $
    84,634
    
    
    $
    238,198Accounts payable  Related Parties
    
    
    68,460
    
    
    
    125,460Income Tax Payable
    
    
    55,331
    
    
    
    Accrued liabilities and expenses
    
    
    92,133
    
    
    
    116,162Other liabilities
    
    
    100,766
    
    
    
    10,000Total Current Liabilities
    
    
    401,324
    
    
    
    489,820COMMITMENTS AND CONTINGENCIES (Note 10)
    
    
    
    
    
    
    STOCKHOLDERS EQUITYCommon stock, $0.01 par value; 160,000,000 shares authorized,
39,144,977 and 34,207,912 shares issued and outstanding, respectively
    
    
    391,450
    
    
    
    342,079Additional paid-in capital
    
    
    49,273,440
    
    
    
    38,594,886Deficit accumulated during exploration stage
    
    
    (34,746,393
    )
    
    
    (27,814,836
    )Other comprehensive income (loss)
    
    
    (86,642
    )
    
    
    Total Stockholders Equity
    
    
    14,831,855
    
    
    
    11,122,129TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    15,233,179
    
    
    $
    11,611,949
   F-3




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 November 8,1993(Inception)Years Ended
    
    
    toOctober 31,
    
    
    October 31,
    
    
    October 31,2007
    
    
    2006
    
    
    2007REVENUES
    
    $
    
    
    
    $
    
    
    
    $
    EXPLORATION AND PROPERTY HOLDING COSTSExploration and property holding costs
    
    
    2,647,666
    
    
    
    2,418,826
    
    
    
    12,834,122Depreciation and asset write-off
    
    
    188,280
    
    
    
    48,967
    
    
    
    483,323TOTAL EXPLORATION AND PROPERY
HOLDING COSTS
    
    
    2,835,946
    
    
    
    2,467,793
    
    
    
    13,317,445GENERAL AND ADMINISTRATIVE EXPENSESSalaries and payroll expenses
    
    
    1,030,119
    
    
    
    5,558,746
    
    
    
    9,826,481Office and administrative expenses
    
    
    504,117
    
    
    
    498,169
    
    
    
    1,991,232Professional services
    
    
    2,564,601
    
    
    
    1,017,180
    
    
    
    7,949,453Directors fees
    
    
    439,166
    
    
    
    1,836,165
    
    
    
    2,275,331Depreciation
    
    
    39,184
    
    
    
    40,388
    
    
    
    175,386TOTAL GENERAL AND ADMINISTRATIVE
EXPENSES
    
    
    4,577,187
    
    
    
    8,950,648
    
    
    
    22,217,883LOSS FROM OPERATIONS
    
    
    (7,413,133
    )
    
    
    (11,418,441
    )
    
    
    (35,535,328
    )OTHER INCOME (EXPENSES)Interest and investment income
    
    
    434,793
    
    
    
    174,698
    
    
    
    684,964Foreign currency translation gain
    
    
    98,008
    
    
    
    
    
    
    
    98,008Miscellaneous ore sales, net of expenses
    
    
    
    
    
    
    (30,896
    )
    
    
    134,242VAT tax refunds
    
    
    
    
    
    
    13,045
    
    
    
    132,660Miscellaneous income (expense)
    
    
    2,818
    
    
    
    71,016
    
    
    
    82,334Interest and financing expense
    
    
    
    
    
    
    (2,459
    )
    
    
    (289,230
    )TOTAL OTHER INCOME
    
    
    535,619
    
    
    
    225,404
    
    
    
    842,978LOSS BEFORE INCOME TAXES
    
    
    (6,877,514
    )
    
    
    (11,193,037
    )
    
    
    (34,692,350
    )INCOME TAXES
    
    
    54,043
    
    
    
    
    
    
    
    54,043NET LOSS
    
    $
    (6,931,557
    )
    
    $
    (11,193,037
    )
    
    $
    (34,746,393
    )OTHER COMPREHENSIVE LOSS  Foreign
Currency Translation adjustments
    
    
    (86,642
    )
    
    
    
    
    
    
    (86,642
    )COMPREHENSIVE LOSS
    
    $
    (7,018,199
    )
    
    $
    (11,193,037
    )
    
    $
    (34,833,035
    )BASIC AND DILUTED NET LOSS PER COMMON SHARE
    
    $
    (0.20
    )
    
    $
    (0.36
    )BASIC AND DILUTED WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING
    
    
    35,253,047
    
    
    
    30,748,662
   F-4




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
 
 CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
 DeficitAccumulatedCommon Stock
    
    
    Additional
    
    
    Stock
    
    
    During
    
    
    OtherNumber
    
    
    
    
    
    
    Paid-in
    
    
    Subscriptions
    
    
    Exploration
    
    
    Comprehensiveof Shares
    
    
    Amount
    
    
    Capital
    
    
    Receivable
    
    
    Stage
    
    
    Income
    
    
    TotalCommon stock issuance prior to inception
(no value)
    
    
    576,480
    
    
    $
    5,765
    
    
    $
    (5,765
    )
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Net loss for the year ended October 31,
1994
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,831
    )
    
    
    
    
    
    
    (8,831
    )Balances, October 31, 1994
    
    
    576,480
    
    
    
    5,765
    
    
    
    (5,765
    )
    
    
    
    
    
    
    (8,831
    )
    
    
    
    
    
    
    (8,831
    )Net loss for the year ended October 31,
1995
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,761
    )
    
    
    
    
    
    
    (7,761
    )Balances, October 31, 1995
    
    
    576,480
    
    
    
    5,765
    
    
    
    (5,765
    )
    
    
    
    
    
    
    (16,592
    )
    
    
    
    
    
    
    (16,592
    )Issuances of common stock as follows:- for par value at transfer of ownership
    
    
    2,000
    
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20- for cash at an average of $0.11 per
share
    
    
    1,320,859
    
    
    
    13,209
    
    
    
    133,150
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    146,359- for services at an average of $0.08 per
share
    
    
    185,000
    
    
    
    1,850
    
    
    
    12,600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,450- for computer equipment at $0.01 per
share
    
    
    150,000
    
    
    
    1,500
    
    
    
    13,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,000- for mineral property at $0.01 per share
    
    
    900,000
    
    
    
    9,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,000Net loss for the year ended October 31,
1996
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (40,670
    )
    
    
    
    
    
    
    (40,670
    )Balances, October 31, 1996
    
    
    3,134,339
    
    
    
    31,344
    
    
    
    153,485
    
    
    
    
    
    
    
    (57,262
    )
    
    
    
    
    
    
    127,567Issuances of common stock as follows:- for cash at an average of $0.61 per share
    
    
    926,600
    
    
    
    9,266
    
    
    
    594,794
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    604,060- for services at an average of $0.74 per
share
    
    
    291,300
    
    
    
    2,913
    
    
    
    159,545
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    162,458- for payment of a loan at $0.32 per share
    
    
    100,200
    
    
    
    1,002
    
    
    
    30,528
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,530Options issued as follows:- 300,000 options for cash
    
    
    
    
    
    
    
    
    
    
    3,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,000Net loss for the year ended October 31,
1997
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (582,919
    )
    
    
    
    
    
    
    (582,919
    )Balances, October 31, 1997
    
    
    4,452,439
    
    
    
    44,525
    
    
    
    941,352
    
    
    
    
    
    
    
    (640,181
    )
    
    
    
    
    
    
    345,696Issuances of common stock as follows:- for cash at an average of $1.00 per share
    
    
    843,500
    
    
    
    8,435
    
    
    
    832,010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    840,445- for cash and receivables at $1.00 per
share
    
    
    555,000
    
    
    
    5,550
    
    
    
    519,450
    
    
    
    (300,000
    )
    
    
    
    
    
    
    
    
    
    
    225,000- for services at an average of $0.53 per
share
    
    
    41,800
    
    
    
    418
    
    
    
    21,882
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,300- for mine data base at $1.63 per share
    
    
    200,000
    
    
    
    2,000
    
    
    
    323,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    325,000Options issued or granted as follows:- 1,200,000 options for cash
    
    
    
    
    
    
    
    
    
    
    120,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120,000- for financing fees
    
    
    
    
    
    
    
    
    
    
    60,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,000- for consulting fees
    
    
    
    
    
    
    
    
    
    
    117,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    117,000Warrants issued for services
    
    
    
    
    
    
    
    
    
    
    488,980
    
    
    
    
    
    
    
    (488,980
    )
    
    
    
    
    
    
    Net loss for the year ended October 31,
1998
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (906,036
    )
    
    
    
    
    
    
    (906,036
    )Balance, October 31, 1998
    
    
    6,092,739
    
    
    $
    60,928
    
    
    $
    3,423,674
    
    
    $
    (300,000
    )
    
    $
    (2,035,197
    )
    
    $
    
    
    
    $
    1,149,405
   F-5




---



##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (CONTINUED)
 DeficitAccumulatedCommon Stock
    
    
    Additional
    
    
    Stock
    
    
    During
    
    
    OtherNumber of
    
    
    
    
    
    
    Paid-in
    
    
    Subscriptions
    
    
    Exploration
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Receivable
    
    
    Stage
    
    
    Income
    
    
    TotalBalance, October 31, 1998
    
    
    6,092,739
    
    
    $
    60,928
    
    
    $
    3,423,674
    
    
    $
    (300,000
    )
    
    $
    (2,035,197
    )
    
    $
    
    
    
    $
    1,149,405Issuances of common stock as follows:- for cash at an average of $1.04 per share
    
    
    818,800
    
    
    
    8,188
    
    
    
    842,712
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    850,900- for drilling fees at $0.90 per share
    
    
    55,556
    
    
    
    556
    
    
    
    49,444
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000Stock option and warrant activity as
follows:- exercise of options at $0.90 per share
    
    
    250,000
    
    
    
    2,500
    
    
    
    222,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    225,000- issuance of options for financing fees
    
    
    
    
    
    
    
    
    
    
    216,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    216,000Stock subscription received
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    300,000
    
    
    
    
    
    
    
    
    
    
    
    300,000Net loss for the year ended October 31,
1999
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,423,045
    )
    
    
    
    
    
    
    (1,423,045
    )Balance, October 31, 1999
    
    
    7,217,095
    
    
    
    72,172
    
    
    
    4,754,330
    
    
    
    
    
    
    
    (3,458,242
    )
    
    
    
    
    
    
    1,368,260Stock option and warrant activity as
follows:- Exercise of options at $0.86 per share
    
    
    950,000
    
    
    
    9,500
    
    
    
    802,750
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    812,250- Warrants issued for services
    
    
    
    
    
    
    
    
    
    
    55,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,000Issuances of common stock as follows:- for cash at an average of $2.77 per share
    
    
    1,440,500
    
    
    
    14,405
    
    
    
    3,972,220
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,986,625- for services at $1.28 per share
    
    
    120,000
    
    
    
    1,200
    
    
    
    152,160
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    153,360- for equipment at $1.67 per share
    
    
    15,000
    
    
    
    150
    
    
    
    24,850
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000Net loss for the year ended October 31,
2000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (882,208
    )
    
    
    
    
    
    
    (882,208
    )Balances, October 31, 2000
    
    
    9,742,595
    
    
    
    97,427
    
    
    
    9,761,310
    
    
    
    
    
    
    
    (4,340,450
    )
    
    
    
    
    
    
    5,518,287Stock option and warrant activity as
follows:- Warrants exercised at $0.75 per share
    
    
    20,000
    
    
    
    200
    
    
    
    14,800
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,000- Options issued for consulting fees
    
    
    
    
    
    
    
    
    
    
    740,892
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    740,892- Warrants issued for consulting fees
    
    
    
    
    
    
    
    
    
    
    144,791
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    144,791Issuances of common stock as follows:- for cash at $2.00 per share
    
    
    250,000
    
    
    
    2,500
    
    
    
    497,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500,000- for cash of $210 and services at $2.07
per share
    
    
    21,000
    
    
    
    210
    
    
    
    43,260
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,470- for cash of $180 and services at $2.05
per share
    
    
    18,000
    
    
    
    180
    
    
    
    36,720
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,900- for services at $2.45 per share
    
    
    6,000
    
    
    
    60
    
    
    
    14,640
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,700- for services at $1.50 per share
    
    
    12,000
    
    
    
    120
    
    
    
    17,880
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,000Net loss for the year ended October 31,
2001
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,069,390
    )
    
    
    
    
    
    
    (2,069,390
    )Balance, October 31, 2001
    
    
    10,069,595
    
    
    
    100,697
    
    
    
    11,271,793
    
    
    
    
    
    
    
    (6,409,840
    )
    
    
    
    
    
    
    4,962,650Issuances of common stock as follows:- for cash at $2.00 per share
    
    
    50,000
    
    
    
    500
    
    
    
    99,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,000- for cash and warrants at $1.50 per share
    
    
    96,000
    
    
    
    960
    
    
    
    143,040
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    144,000- for cash and warrants at $1.50 per share
    
    
    66,667
    
    
    
    667
    
    
    
    99,333
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,000- for compensation at an average of $1.23
per share
    
    
    86,078
    
    
    
    861
    
    
    
    104,014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    104,875Stock option activity as follows:- for compensation at $0.61 per share
    
    
    
    
    
    
    
    
    
    
    61,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61,000Net loss for the year ended October 31,
2002
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (765,765
    )
    
    
    
    
    
    
    (765,765
    )Balance, October 31, 2002
    
    
    10,368,340
    
    
    $
    103,685
    
    
    $
    11,778,680
    
    
    $
    
    
    
    $
    (7,175,605
    )
    
    $
    
    
    
    $
    4,706,760
   F-6




---



##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (CONTINUED)
 DeficitAccumulatedCommon Stock
    
    
    Additional
    
    
    Stock
    
    
    During
    
    
    OtherNumber of
    
    
    
    
    
    
    Paid-in
    
    
    Subscriptions
    
    
    Exploration
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Receivable
    
    
    Stage
    
    
    Income
    
    
    TotalBalance, October 31, 2002
    
    
    10,368,340
    
    
    $
    103,685
    
    
    $
    11,778,680
    
    
    $
    
    
    
    $
    (7,175,605
    )
    
    $
    
    
    
    $
    4,706,760Issuances of common stock as follows:- for cash at $2.00 per share
    
    
    100,000
    
    
    
    1,000
    
    
    
    199,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000- for cash at an average of $0.98 per share
    
    
    849,000
    
    
    
    8,489
    
    
    
    821,510
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    829,999- for cash and warrants at $1.50 per share
    
    
    7,000
    
    
    
    70
    
    
    
    10,430
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,500- for compensation at an average of $1.25
per share
    
    
    391,332
    
    
    
    3,913
    
    
    
    487,275
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    491,188- for services at an average of $1.23 per
share
    
    
    91,383
    
    
    
    914
    
    
    
    119,320
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120,234- for subscriptions receivable at $1.00
per share
    
    
    38,000
    
    
    
    380
    
    
    
    37,620
    
    
    
    (38,000
    )
    
    
    
    
    
    
    
    
    
    
    Net loss for the year ended October 31,
2003
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,107,228
    )
    
    
    
    
    
    
    (1,107,228
    )Balance, October 31, 2003
    
    
    11,845,055
    
    
    
    118,451
    
    
    
    13,453,835
    
    
    
    (38,000
    )
    
    
    (8,282,833
    )
    
    
    
    
    
    
    5,251,453Issuances of common stock as follows:- for cash at $1.00 per share, less
issuance costs of $698,863
    
    
    7,580,150
    
    
    
    75,801
    
    
    
    6,805,485
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,881,286- for compensation at an average of $1.26
per share
    
    
    120,655
    
    
    
    1,207
    
    
    
    151,064
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    152,271- for services at various prices
    
    
    141,286
    
    
    
    1,413
    
    
    
    153,801
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    155,214Stock subscription received
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,000
    
    
    
    
    
    
    
    
    
    
    
    38,000Miscellaneous corrections and adjustments
    
    
    64,263
    
    
    
    643
    
    
    
    (643
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss for the year ended October 31,
2004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,036,805
    )
    
    
    
    
    
    
    (5,036,805
    )Balance, October 31, 2004
    
    
    19,751,409
    
    
    
    197,515
    
    
    
    20,563,542
    
    
    
    
    
    
    
    (13,319,638
    )
    
    
    
    
    
    
    7,441,419Issuances of common stock as follows:- for cash at an average
of $0.98 per share with attached warrants
    
    
    476,404
    
    
    
    4,764
    
    
    
    461,965
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    466,729- for compensation at an
average of $1.00 per share
    
    
    176,772
    
    
    
    1,768
    
    
    
    175,005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    176,773Net loss for the year ended October 31,
2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,302,161
    )
    
    
    
    
    
    
    (3,302,161
    )Balance, October 31, 2005
    
    
    20,404,585
    
    
    $
    204,047
    
    
    $
    21,200,512
    
    
    $
    
    
    
    $
    (16,621,799
    )
    
    $
    
    
    
    $
    4,782,760
   F-7




---



##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (CONTINUED)
 DeficitAccumulatedCommon Stock
    
    
    Additional
    
    
    Stock
    
    
    During
    
    
    OtherNumber of
    
    
    
    
    
    
    Paid-in
    
    
    Subscriptions
    
    
    Exploration
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Receivable
    
    
    Stage
    
    
    Income
    
    
    TotalBalance, October 31, 2005
    
    
    20,404,585
    
    
    $
    204,047
    
    
    $
    21,200,512
    
    
    $
    
    
    
    $
    (16,621,799
    )
    
    $
    
    
    
    $
    4,782,760Issuance of common stock as follows:- for cash at an average price of
$.80 per share with attached
warrants
    
    
    13,374,833
    
    
    
    133,748
    
    
    
    11,077,879
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,211,627- for services at an average price
of $.80 per share with attached
warrants
    
    
    73,650
    
    
    
    736
    
    
    
    58,213
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,949- for compensation at an average
price of $.80 per share
    
    
    248,593
    
    
    
    2,486
    
    
    
    154,389
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    156,875- for adjustment of private
placement selling price
    
    
    81,251
    
    
    
    812
    
    
    
    (812
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock option and warrant activity
as follows:- stock based compensation for
options issued to officers and
independent directors at an average
fair value of $2.18 per share
    
    
    
    
    
    
    
    
    
    
    4,360,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,360,000- options & warrants for directors
fees at an average fair value of
$2.17 per share
    
    
    
    
    
    
    
    
    
    
    1,665,705
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,665,705- modification of options
    
    
    
    
    
    
    
    
    
    
    48,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48,000- exercise of warrants at an
average price of $1.25 per share
    
    
    25,000
    
    
    
    250
    
    
    
    31,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,250Net loss for the year ended October
31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,193,037
    )
    
    
    
    
    
    
    (11,193,037
    )Balance, October 31, 2006
    
    
    34,207,912
    
    
    $
    342,079
    
    
    $
    38,594,886
    
    
    $
    
    
    
    $
    (27,814,836
    )
    
    $
    
    
    
    $
    11,122,129Issuance of common stock as follows:- for cash at an average price of
$2.35 per share with attached
warrants
    
    
    2,413,571
    
    
    
    24,136
    
    
    
    5,647,757
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,671,893- for services at an average price
of $4.31 per share
    
    
    49,120
    
    
    
    491
    
    
    
    211,069
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    211,560- for directors fees at an average
price of $2.71 per share
    
    
    108,000
    
    
    
    1,080
    
    
    
    305,100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    306,180Stock option and warrant activity
as follows:- exercise of warrants at an
average price of $1.30 per share
    
    
    2,240,374
    
    
    
    22,404
    
    
    
    2,917,750
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,940,154- warrants issued for financial
services at an average fair value
of $1.82 per share
    
    
    
    
    
    
    
    
    
    
    1,094,950
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,094,950- stock based compensation for
options issued to officer and
independent director
    
    
    
    
    
    
    
    
    
    
    434,189
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    434,189- for cashless exercise of options
    
    
    126,000
    
    
    
    1,260
    
    
    
    (1,260
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    - Extension of warrant for services
    
    
    
    
    
    
    
    
    
    
    68,999
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68,999Other Comprehensive Income 
Foreign Currency Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (86,642
    )
    
    
    (86,642
    )Net loss for the year ended October
31, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,931,557
    )
    
    
    
    
    
    
    (6,931,557
    )Balance, October 31, 2007
    
    
    39,144,977
    
    
    $
    391,450
    
    
    $
    49,273,440
    
    
    $
    
    
    
    $
    (34,746,393
    )
    
    $
    (86,642
    )
    
    $
    14,831,855
   F-8




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Period fromNovember 8,1993 (Inception)Years Ended October 31,
    
    
    to October 31,2007
    
    
    2006
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (6,931,557
    )
    
    $
    (11,193,037
    )
    
    $
    (34,746,393
    )Adjustments to reconcile net loss to net cash used
by operating activities:Depreciation and equipment write-off
    
    
    229,474
    
    
    
    89,355
    
    
    
    660,719Noncash expenses
    
    
    
    
    
    
    
    
    
    
    126,864Foreign currency translation gain
    
    
    (98,008
    )
    
    
    
    
    
    
    (98,008
    )Common stock issued for services
    
    
    211,560
    
    
    
    58,949
    
    
    
    1,237,047Common stock issued for compensation
    
    
    
    
    
    
    156,875
    
    
    
    977,106Options issued for compensation
    
    
    434,189
    
    
    
    4,360,000
    
    
    
    4,794,189Common stock issued for directors fees
    
    
    306,180
    
    
    
    
    
    
    
    306,180Options and warrants issued for directors fees
    
    
    
    
    
    
    1,665,705
    
    
    
    1,665,705Stock options issued for services
    
    
    
    
    
    
    48,000
    
    
    
    849,892Stock options issued for financing fees
    
    
    
    
    
    
    
    
    
    
    276,000Common stock issued for payment of expenses
    
    
    
    
    
    
    
    
    
    
    326,527Stock warrants issued for services
    
    
    1,163,949
    
    
    
    
    
    
    
    1,852,720(Increase) decrease in:Accounts receivable
    
    
    35,815
    
    
    
    (12,314
    )
    
    
    Value added tax receivable
    
    
    (393,235
    )
    
    
    
    
    
    
    (393,235
    )Other receivables
    
    
    (23,553
    )
    
    
    9,560
    
    
    
    (23,672
    )Prepaid expenses
    
    
    (3,499
    )
    
    
    (1,046
    )
    
    
    (17,787
    )Increase (decrease) in:Accounts payable
    
    
    (153,696
    )
    
    
    152,009
    
    
    
    84,502Accounts payable  related parties
    
    
    (57,000
    )
    
    
    125,460
    
    
    
    68,460Income tax payable
    
    
    54,214
    
    
    
    
    
    
    
    54,214Accrued liabilities and expenses
    
    
    (24,348
    )
    
    
    (78,757
    )
    
    
    91,814Other liabilities
    
    
    88,732
    
    
    
    (4,209
    )
    
    
    98,732Net cash used by operating activities
    
    
    (5,160,783
    )
    
    
    (4,623,450
    )
    
    
    (21,808,424
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of investments
    
    
    (15,200,000
    )
    
    
    (5,925,000
    )
    
    
    (21,609,447
    )Proceeds from investments
    
    
    13,225,000
    
    
    
    
    
    
    
    13,709,447Equipment purchases
    
    
    (549,432
    )
    
    
    (210,437
    )
    
    
    (1,536,837
    )Mining property acquisitions
    
    
    (179,406
    )
    
    
    
    
    
    
    (4,632,037
    )Net cash used by investing activities
    
    
    (2,703,838
    )
    
    
    (6,135,437
    )
    
    
    (14,068,874
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from sales of common stock
    
    
    5,671,893
    
    
    
    11,211,627
    
    
    
    33,379,207Proceeds from sales of options and warrants
    
    
    
    
    
    
    
    
    
    
    949,890Proceeds from exercise of warrants
    
    
    2,940,154
    
    
    
    31,250
    
    
    
    2,971,404Proceeds from shareholder loans
    
    
    
    
    
    
    
    
    
    
    30,000Payment of note payable
    
    
    
    
    
    
    (7,365
    )
    
    
    (15,783
    )Net cash provided by financing activities:
    
    
    8,612,047
    
    
    
    11,235,512
    
    
    
    37,314,718Effect of exchange rates on cash
    
    
    (2,933
    )
    
    
    
    
    
    
    (2,933
    )Net increase (decrease) in cash and cash equivalents
    
    
    744,493
    
    
    
    476,625
    
    
    
    1,434,487Cash and cash equivalents beginning of period
    
    
    689,994
    
    
    
    213,369
    
    
    
    Cash and cash equivalents end of period
    
    $
    1,434,487
    
    
    $
    689,994
    
    
    $
    1,434,487
   F-9




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
 Period fromNovember 8,1993 (Inception)Years Ended October 31,
    
    
    to October 31,2007
    
    
    2006
    
    
    2007SUPPLEMENTAL CASH FLOW DISCLOSURES:Income taxes paid
    
    $
    
    
    
    $
    
    
    
    $
    Interest paid
    
    $
    
    
    
    $
    3,515
    
    
    $
    286,771NON-CASH INVESTING AND FINANCING ACTIVITIES:Common stock issued for equipment
    
    $
    
    
    
    $
    
    
    
    $
    25,000Common stock options issued for financing fees
    
    $
    
    
    
    $
    
    
    
    $
    276,000
   F-10




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
 
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2007
 NOTE 1  ORGANIZATION AND DESCRIPTION OF BUSINESS
     NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Accounting Method
  Reclassifications
  Accounts Receivable
    F-11




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2007
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Cash and Cash Equivalents
  Concentration of Risk
  Derivative Instruments
    Earnings Per Share
  Use of Estimates
   F-12




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2007
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Exploration Costs
  Exploration Stage Activities
  Fair Value of Financial Instruments
  Foreign Currency Translation
  Foreign Operations
  IVA Tax Receivable
   F-13




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2007
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Marketable Securities
 Accounting for Certain Investments in Debt and Equity Securities
  Mineral Concessions
   Principles of Consolidation
  Property and Equipment
  Revenue Recognition Policy
   F-14




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2007
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Stock-Based Compensation
 Share-Based Payment, Accounting for
Stock-Based Compensation.
   Income Taxes
  Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes  An Interpretation of FASB Statement No. 109 Accounting for Income Taxes.
  F-15




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2007
 NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Fair Value Measurements
 Employers Accounting for Defined Benefit
Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88,106, and
132(R)
 The Fair Value Option for Financial Assets and
Financial Liabilities  including an amendment of FASB Statement No. 115
 Business Combinations
 ,
Noncontrolling Interests in Consolidated Financial Statements
 NOTE 3  CONCESSIONS IN THE SIERRA MOJADA DISTRICT
 Sierra Mojada Mining Concessions
    F-16




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2007
 NOTE 3  CONCESSIONS IN THE SIERRA MOJADA DISTRICT (continued)
  AcquisitionConcession
    
    Method
    
    Date
    
    
    Hectares
    
    
    Cost BasisSierra Mojada
    
    Purchased
    
    
    5/30/2000
    
    
    
    4,767.32
    
    
    $
    15,942Mojada 3
    
    Purchased
    
    
    5/30/2000
    
    
    
    722.00
    
    
    
    Unificacion Mineros Nortenos
    
    Purchased
    
    
    8/30/2000
    
    
    
    336.79
    
    
    
    3,698,268Vulcano
    
    Purchased
    
    
    8/30/2000
    
    
    
    4.49
    
    
    
    Esmeralda 1
    
    Purchased
    
    
    8/20/2001
    
    
    
    95.50
    
    
    
    181,749Esmeralda
    
    Purchased
    
    
    3/20/1997
    
    
    
    117.50
    
    
    
    256,723La Blanca
    
    Purchased
    
    
    8/20/2001
    
    
    
    33.50
    
    
    
    123,277Fortuna
    
    Claim Filed
    
    
    12/8/1999
    
    
    
    13.96
    
    
    
    77,048Mojada 2
    
    Claim Filed
    
    
    7/17/2006
    
    
    
    3,500.00
    
    
    
    El Retorno
    
    Purchased
    
    
    4/10/2006
    
    
    
    817.65
    
    
    
    15,484Los Ramones
    
    Purchased
    
    
    4/10/2006
    
    
    
    8.60
    
    
    
    280El Retorno Fracc. 1
    
    Purchased
    
    
    4/20/2006
    
    
    
    5.51
    
    
    
    93Dormidos
    
    Claim Filed
    
    
    4/9/2007
    
    
    
    2,326.10
    
    
    
    Agua Mojada(1)
    
    Claim Filed
    
    
    1/26/2007
    
    
    
    2,900.00
    
    
    
    6,130Alote(1)
    
    Claim Filed
    
    
    5/17/2007
    
    
    
    3,749.00
    
    
    
    6,093Volcan Dolores
    
    Purchased
    
    
    9/24/2007
    
    
    
    10.49
    
    
    
    155,02419,408.41
    
    
    $
    4,536,111
 
 (1)
    
    Title for this concession is pending.
 NOTE 4  PROPERTY AND EQUIPMENT
  2007
    
    
    2006Mining equipment
    
    $
    838,635
    
    
    $
    589,751Communication equipment
    
    
    8,902
    
    
    
    10,179Buildings and structures
    
    
    153,590
    
    
    
    141,061Land  non mineral
    
    
    
    
    
    
    15,839Vehicles
    
    
    172,449
    
    
    
    152,030Computer equipment and software
    
    
    145,167
    
    
    
    120,664Office equipment
    
    
    8,134
    
    
    
    9,446Furniture and fixtures
    
    
    
    
    
    
    8881,326,877
    
    
    
    1,039,858Less: Accumulated depreciation
    
    
    (407,457
    )
    
    
    (427,892
    )$
    919,420
    
    
    $
    611,966
  F-17




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2007
  NOTE 5  RELATED PARTY TRANSACTIONS
  NOTE 6  SHAREHOLDER RIGHTS PLAN
   NOTE 7  COMMON STOCK
       F-18




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2007
 NOTE 7  COMMON STOCK (continued)
           F-19




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2007
 NOTE 7  COMMON STOCK (continued)
      NOTE 8  STOCK OPTIONS
  Share-Based Payment, Accounting for Stock-Based Compensation.
   F-20




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2007
 NOTE 8  STOCK OPTIONS (continued)
  Year Ended
    
    
    Year EndedOctober 31,
    
    
    October 31,Options
    
    2007
    
    
    2006Expected volatility
    
    
    74
    %
    
    
    80
    %Risk-free interest rate
    
    
    4.6
    %
    
    
    5.0
    %Dividend yield
    
    
    
    
    
    
    Expected term (in years)
    
    
    8.5
    
    
    
    10.0
   Weighted
    
    
    WeightedAverage
    
    
    Average
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicOptions
    
    Shares
    
    
    Price
    
    
    Life (Years)
    
    
    ValueOutstanding at November 1, 2005
    
    
    670,000
    
    
    $
    1.58Granted
    
    
    2,750,000
    
    
    
    2.59Exercised
    
    
    
    
    
    
    Forfeited or Expired
    
    
    (60,000
    )
    
    
    1.32Outstanding at October 31, 2006
    
    
    3,360,000
    
    
    $
    2.41Granted
    
    
    500,000
    
    
    
    3.58Exercised
    
    
    (126,000
    )
    
    
    1.32Forfeited or Expired
    
    
    (84,000
    )
    
    
    1.32Outstanding at October 31, 2007
    
    
    3,650,000
    
    
    $
    2.63
    
    
    
    7.66
    
    
    $
    2,562,000Vested or Expected to Vest at
October 31, 2007
    
    
    3,250,000
    
    
    $
    2.51
    
    
    
    7.71
    
    
    $
    2,480,000Exercisable at October 31, 2007
    
    
    3,250,000
    
    
    $
    2.51
    
    
    
    7.71
    
    
    $
    2,480,000
   F-21




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2007
 NOTE 8  STOCK OPTIONS (continued)
       Options Outstanding
    
    
    Options ExercisableWeightedAve.
    
    
    Weighted
    
    
    
    
    
    
    WeightedRemaining
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    Number
    
    Contractual
    
    
    Exercise
    
    
    Number
    
    
    ExercisePrice
    
    
    Outstanding
    
    Life (Years)
    
    
    Price
    
    
    Exercisable
    
    
    Price$
    1.25
    
    
    100,000
    
    
    1.77
    
    
    $
    1.25
    
    
    
    100,000
    
    
    $
    1.251.32
    
    
    100,000
    
    
    2.93
    
    
    
    1.32
    
    
    
    100,000
    
    
    
    1.322.15
    
    
    200,000
    
    
    2.34
    
    
    
    2.15
    
    
    
    200,000
    
    
    
    2.152.59
    
    
    2,750,000
    
    
    8.50
    
    
    
    2.59
    
    
    
    2,750,000
    
    
    
    2.592.85
    
    
    250,000
    
    
    4.92
    
    
    
    2.85
    
    
    
    50,000
    
    
    
    2.854.30
    
    
    250,000
    
    
    9.63
    
    
    
    4.30
    
    
    
    50,000
    
    
    
    4.30$
    1.25-4.30
    
    
    3,650,000
    
    
    7.66
    
    
    $
    2.61
    
    
    
    3,250,000
    
    
    $
    2.48
  F-22




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2007
 NOTE 8  STOCK OPTIONS (continued)
  Weighted-Average Grant-Nonvested Shares
    
    Shares
    
    
    Date Fair ValueNonvested at October 31, 2006
    
    
    
    
    
    $
    Granted
    
    
    500,000
    
    
    
    2.76Vested
    
    
    (100,000
    )
    
    
    2.63Forfeited
    
    
    
    
    
    
    Nonvested at October 31, 2007
    
    
    400,000
    
    
    $
    2.79
  NOTE 9  WARRANTS
   Weighted
    
    
    WeightedAverage
    
    
    Average
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicWarrants
    
    Shares
    
    
    Price
    
    
    Life (Years)
    
    
    ValueOutstanding at November 1, 2006
    
    
    14,875,123
    
    
    $
    1.28Issued with private placement
    
    
    1,206,785
    
    
    
    2.42Issued for services
    
    
    600,000
    
    
    
    3.27Exercised
    
    
    (2,240,374
    )
    
    
    1.31Forfeited or expired
    
    
    (61,387
    )
    
    
    3.91Outstanding at October 31, 2007
    
    
    14,380,147
    
    
    $
    1.44
    
    
    
    3.21
    
    
    $
    26,210,659
  F-23




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2007
 NOTE 9  WARRANTS (continued)
  Warrants Outstanding and ExercisableWeighted Ave.Remaining
    
    
    WeightedContractual Life
    
    
    Average ExerciseExercise Price
    
    
    
    
    Number Outstanding
    
    
    (Years)
    
    
    Price$
    1.25 - $1.75
    
    
    
    
    
    12,466,419
    
    
    
    3.18
    
    
    $
    1.25$
    2.00 - $2.63
    
    
    
    
    
    1,411,395
    
    
    
    3.12
    
    
    
    2.41$
    3.40 - $5.00
    
    
    
    
    
    502,333
    
    
    
    4.16
    
    
    
    3.41$
    1.25 - $5.00
    
    
    
    
    
    14,380,147
    
    
    
    3.21
    
    
    $
    1.44
         F-24




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2007
 NOTE 9  WARRANTS (continued)
   NOTE 10  COMMITMENTS AND CONTINGENCIES
 Compliance with Environmental Regulations
  Employment Agreements
  Royalty Agreement
  Mining Concessions
  NOTE 11  INCOME TAXES
 Provision for Taxes
    F-25




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2007
 NOTE 11  INCOME TAXES (continued)
  For the year endedOctober 31,2007
    
    
    2006Income tax benefit calculated at U.S. Federal Income Tax Rate
    
    
    (2,338,000
    )
    
    
    (3,806,000
    )Differences arising from:Permanent differences
    
    
    19,000
    
    
    
    3,000Benefit from lower foreign income tax rate
    
    
    151,000
    
    
    
    672,000Reclassification of loss carryforward to foreign subs
    
    
    307,000
    
    
    
    Adjustment to prior year taxes
    
    
    (2,427,000
    )
    
    
    1,631,000Increase in valuation allowance
    
    
    4,249,000
    
    
    
    1,500,000Other
    
    
    93,000
    
    
    
    Net income tax provision (benefit)
    
    
    54,000
    
    
    
    
  For the year endedOctober 31,2007
    
    
    2006Deferred tax assetsNet operating loss carry forwards
    
    $
    8,026,000
    
    
    $
    6,500,000Stock-based compensation
    
    
    2,723,000
    
    
    
    Total deferred tax assets
    
    
    10,749,000
    
    
    
    6,500,000Less: Valuation Allowance
    
    
    (10,749,000
    )
    
    
    (6,500,000
    )Net deferred tax asset
    
    $
    
    
    
    $
    
    F-26




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##### Table of Contents



METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2007
 NOTE 12  SEGMENT INFORMATION
   October 31,2007
    
    
    2006Identifiable assetsMexico
    
    $
    6,063,000
    
    
    $
    5,056,000United States
    
    
    9,170,000
    
    
    
    6,556,000$
    15,233,000
    
    
    $
    11,612,000
 Inception toFor the year ended
    
    
    dateOctober 31,
    
    
    October 31,2007
    
    
    2006
    
    
    2007Net loss for the periodMexico
    
    $
    2,571,000
    
    
    $
    1,893,000
    
    
    $
    7,618,000United States
    
    
    4,361,000
    
    
    
    9,300,000
    
    
    
    27,128,000Net deferred tax asset
    
    $
    6,932,000
    
    
    $
    11,193,000
    
    
    $
    34,746,000
 NOTE 13  SUBSEQUENT EVENTS
    ,
   F-27




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description3.1(a)
    
    Articles of Incorporation.13.1(b)
    
    Certificate of Amendment to Articles of Incorporation.23.2
    
    Bylaws.24.1
    
    Rights Agreement, dated as of June 11, 2007, between the Company and OTC Stock Transfer, as
Rights Agent.710.1
    
    2000 Equity Incentive Plan.510.2
    
    2006 Stock Option Plan.510.3
    
    Subscription Agreement between the Company and subscribers, dated March 6, 2006.310.4
    
    Employment Agreement with Merlin Bingham, effective January 1, 2007.510.5
    
    Employment Agreement with Roger Kolvoord, effective January 1, 2007.510.6
    
    Employment Agreement with Terry Brown, effective January 1, 2007.510.7
    
    Common Stock and Warrant Purchase Agreement, dated February 16, 2007.610.8
    
    Employment Agreement with Robert Devers, effective January 1, 2008.814
    
    Code of Ethics. 521.1
    
    Subsidiaries of the Registrant. 531.1
    
    Certification of CEO Pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.31.2
    
    Certification of CFO Pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.32.1
    
    Certification of CEO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, filed herewith.32.2
    
    Certification of CFO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, filed herewith.99.1
    
    Sierra Mojada location map.4
 
 (1)
    
    Incorporated by reference from Form 10-SB, filed October 15, 1999.(2)
    
    Incorporated by reference from Form 10-QSB, filed September 19, 2006.(3)
    
    Incorporated by reference from Form 8-K, filed March 6, 2006.(4)
    
    Incorporated by reference from Form 10-KSB, filed January 31, 2006.(5)
    
    Incorporated by reference from Form 10-KSB, filed January 31, 2007.(6)
    
    Incorporated by reference from Form 10-QSB, filed June 18, 2007.(7)
    
    Incorporated by reference to Exhibit 1 to the Companys Registration Statement on Form 8-A
filed on June 11, 2007.