SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549

                                FORM 10-KSB

(MARK ONE)

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934

                For the Fiscal Year Ended December 31, 2004

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

     For the transition period from _______________ to ________________

                      Commission File Number 000-31380

                            ATLAS MINING COMPANY
                           ----------------------
               (Name of small business issuer in its charter)

     Idaho                                                  82-0096527
-----------------------------------         -------------------------------
(State or other jurisdiction           (I.R.S. Employer Identification No.)
 of incorporation or organization)

                           630 East Mullan Avenue
                            Osburn, Idaho 83849
                         -------------------------
        (Address of principal executive offices including zip code)

Issuer's telephone number, including area code:  (208) 556-1181

Securities registered pursuant to Section 12(b) of the Act:

                                     Name of each exchange on
Title of each class                  which each is registered
----------------------        -------------------------------------------
    None                                          None

Securities registered pursuant to Section 12(g) of the Act:

                         Common Stock, no par value
                        ----------------------------
                              (Title of class)

     Check whether the issuer: (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such
reports); and (2) has been subject to such filing requirements for the past
90 days.

Yes [X] No [ ]

     Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]

     The issuer's revenues for the fiscal year ended December 31, 2004 were
$1,035,329.

     The number of shares of the registrant's common stock, no par value
per share, outstanding as of March 25, 2005 was 42,017,587. The aggregate
market value of the voting and non-voting common equity held by non-
affiliates of the registrant on March 25, 2005, based on the last sales
price on the OTC Bulletin Board as of such date, was approximately
$52,101,807.

          DOCUMENTS INCORPORATED BY REFERENCE

     None.

     Transition Small Business Disclosure Format:     Yes [ ]       No [X]



                             TABLE OF CONTENTS

                                                                       Page

PART I

     ITEM 1.   DESCRIPTION OF BUSINESS . . . . . . . . . . . . . . . . .4
     ITEM 2.   DESCRIPTION OF PROPERTY . . . . . . . . . . . . . . . . 11
     ITEM 3.   LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . 15
     ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . 15

PART II

     ITEM 5.   MARKET FOR COMMON EQUITY AND
               RELATED STOCKHOLDER MATTERS . . . . . . . . . . . . . . 15
     ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS. . . . . . . . . . 17
     ITEM 7.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . 24
     ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
               ON ACCOUNTING AND FINANCIAL DISCLOSURE. . . . . . . . . 24
     ITEM 8A   CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . 24
     ITEM 8B   OTHER INFORMATION . . . . . . . . . . . . . . . . . . . 24

PART III

     ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
               CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)
               OF THE EXCHANGE ACT . . . . . . . . . . . . . . . . . . 25
     ITEM 10.  EXECUTIVE COMPENSATION. . . . . . . . . . . . . . . . . 28
     ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
               AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. . . . . 29
     ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . . 30
     ITEM 13.  EXHIBITS. . . . . . . . . . . . . . . . . . . . . . . . 30
     ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES. . . . . . . . . 31
     SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32




                 NOTE REGARDING FORWARD LOOKING STATEMENTS

     This Annual Report on Form 10-KSB contains "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. These forward-
looking statements are based on our current expectations, assumptions,
estimates and projections about our business and our industry. Words such
as "believe," "anticipate," "expect," "intend," "plan," "will," "may," and
other similar expressions identify forward-looking statements. In addition,
any statements that refer to expectations, projections or other
characterizations of future events or circumstances are forward-looking
statements. These forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ materially from
those reflected in the forward-looking statements.  Factors that might
cause such a difference include, but are not limited to, those discussed in
the section of this Annual Report entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Factors
Affecting Business, Operating Results and Financial Condition", as well as
the following:

     -    our uncertainty whether a commercially viable deposits or
          "reserves" exist on any of our properties;

     -    our lack of capital and whether or not we will be able to raise
          capital when we need it;

     -    risks of loss of timber revenues due to fire, disease or weather;

     -    change of market prices for timber, halloysite clay or other
          marketable deposits we may find on any of our properties;

     -    whether or not we will continue to receive the services of our
          executive officers and directors, particularly our President,
          William T. Jacobson;

and other factors, some of which will be outside our control. You are
cautioned not to place undue reliance on these forward-looking statements,
which relate only to events as of the date on which the statements are
made. We undertake no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the date
hereof. You should refer to and carefully review the information in future
documents we file with the Securities and Exchange Commission.






                                     3

                                   PART I

ITEM 1.  BUSINESS

HISTORY AND DEVELOPMENT OF THE COMPANY
--------------------------------------

     We are a natural resources company engaged in the acquisition,
exploration and development of our resource properties in the states of
Idaho and Utah.  We also provide contract mining services and specialized
civil construction services for mine operators, exploration companies and
the construction and natural resources industries through our trade name
"Atlas Fausett Contracting." We were originally incorporated on March 4,
1924 in Idaho and commenced our operations on that date.

     From 1980 to 1997, we had no activities. In 1997, we acquired the
equipment of Fausett International, Inc. for $1,416,099 and began our
contracting business. In 1998, we acquired the Sierra Silver Lead Mining
Company, an Idaho corporation for $276,157. This merger added an additional
329.18 acres of mineral rights to our current holdings. In 1999, we also
acquired the majority outstanding shares of Olympic Silver Resources, Inc.,
a Nevada corporation for $228,566. The acquisition of Olympic gave us
control of an Olympic subsidiary mine in Zacatecas, Mexico. In 2001 our
agreement on the mine in Zacatecas expired and we no longer have any
interest there. In 1999 we acquired the Aulbach mining claims for $ 50,000,
approximately 100 acres of timber and mineral property in northern Idaho.
In 1999 we acquired 53% interest in the Park Copper Mining Company for
$72,825, which holds 100 acres of timber and mineral property in northern
Idaho. In 2001, we entered into a lease purchase agreement on the Dragon
Mine in Juab County, Utah for $100,000. We believe this property may
contain a deposit of high quality clay, which we are putting into
production.  In 2002, we cancelled our agreement with Fausett
International, Inc., returned the equipment, and settled the remaining
debt. We were not able to utilize this equipment enough to justify the cost
related to owning it.

     In the future, we intend to be able to acquire additional properties
near our current mines and elsewhere.

     We have brought the Dragon Mine from an exploration stage into a
production stage.  We intend to find other properties that can be acquired,
developed and mined with minimal costs, and environmental problems.

     In addition to the mineral resources, we also have harvestable timber
resources on our properties. We contract out logging of our timber to
create revenues and cash flows for our other operations. We have also
harvested timber on approximately 420 acres of our previously owned and
newly acquired properties.  We hope to acquire more properties in the
future with timber resources.

     We also intend to continue our contract mining services. These
services were originally developed and marketed to provide us with
operating revenues. We hope to increase the revenue derived from these
services and to utilize our expertise in this area to mine our owned
properties.



                                     4

     CONTRACT MINING
     ---------------

     Because of exploration costs and other budget constraints, mining
activity on our properties has remained idle since the 1980s. However, on
August 10, 1997 our board met and approved a plan to revitalize Atlas
Mining Company for the purpose of increasing shareholder value and, in the
long term, of making us an operating company with producing mines.

     The first step in this process was to form a contract mining service
under the trade name of Atlas Fausett Contracting, which we refer to as
AFC. We acquired equipment and tools and hired key employees from Fausett
International, Inc., or Fausett, a privately held mining contracting firm
with over 30 years experience in the mining industry. These employees
brought with them extensive knowledge and expertise in all aspects of
underground mining.

     AFC began contracting work on August 15, 1997. Among its many
services, AFC performs site evaluation, feasibility studies, trouble-
shooting and consultation prior to the undertaking of exploration and mine
development. AFC's projects include all types of underground mine
development, rehabilitation and specialized civil construction. Services
are contracted for either individually or as  joint ventures depending on
the requirements of a particular project or the specific needs of an
individual client. AFC also handles work under contract from government
agencies.

         AFC crews are experienced and have worked on projects in Idaho,
Montana, Oregon, Washington, Nevada, Colorado, Arizona, New Mexico, and
British Columbia. AFC has the required licenses to work in Idaho,
Washington and Montana and has the ability to be licensed in most states in
the western United States. AFC operates under a permit from the Mine Safety
and Health Administration and also possesses a permit to handle explosives
from the Bureau of Alcohol, Tobacco and Firearms.

         AFC was the main contractor at the Mayflower Mine, a Brimstone
Gold Corp. project, outside of Whitehall, Montana, and for the Holden Mine
closure, a U.S. Government and U.R.S. Corporation project on Lake Chelan,
Washington.   AFC has also maintained a labor contract with Echo Bay Mines,
now Kinross Gold Corporation, At Republic, Washington for the past five
years.

         AFC must also compete with other smaller companies that provide
contract services related to underground mining. However, AFC has
experience in a number of different mining techniques. Besides normal
underground mining activities, AFC has expertise in ground stabilization
(such as grouting, shotcrete, and rock bolting). AFC has provided tunnel
construction expertise for hydroelectric work. AFC also works with
government agencies and other mining companies with respect to mine
closures to help with industry efforts to alleviate potential hazards from
abandoned mines.

         Since AFC mainly concentrates on underground mining activities,
there is very little surface disturbance, which is the main environmental
concern faced by mining companies whose activities are centered on surface
mining.




                                     5


     TIMBER
     ------

     Our entry into the timber industry was commenced primarily as a means
of generating cash flow from our exploration properties in northern Idaho.
Our intention is to remain in this industry only to the extent that it
supplements our revenue while we are conducting our exploration activities.
With the amount of timber remaining on Atlas property, we can supplement
our revenue for the next couple of years. As we harvest this timber, we
will continue to seek out additional exploration properties with
harvestable timber. It takes approximately fifteen to twenty years for a
tree to mature in northern Idaho, and our current goal is to acquire enough
harvestable land to enable us to rotate our logging activities on a yearly
basis to allow previously harvested areas the time to grow and mature
marketable trees.

     When we sell or timber we contract our logging to a qualified logger,
Randy Mattson, whose experience and reputation in the industry qualifies
him to negotiate the sale of our timber to various lumber mills in the
area. We do not have a written contract with Mr. Mattson, but rather hire
him on an as needed basis. As with most commodities, timber is subject to
price fluctuations and to government regulation.

     The timber business is a cyclical business with lumber prices that
fluctuate based on a number of factors including new housing starts,
imports, and government regulations. North Idaho is predominately held by
the U.S. government, either by the Forest Service or by the Bureau of Land
Management. When these agencies decide to harvest timber the excess timber
can affect the price the mills are willing to pay. In recent years there
have been less government sales of timber due to the environmental and
bureaucratic policies related to these sales. This has created more demand
for privately held timber. We do not hold any contracts with any particular
mills. We do, however, supply timber to Louisiana Pacific, a local mill,
which constitutes 80% of our annual timber revenues generated, and maintain
a good relationship with them. Another factor that makes this aspect of our
business cyclical is the weather. North Idaho has a heavy snowfall each
winter, making logging difficult during those months. Consequently we do
the majority of our logging efforts in the summer and fall. Our property
consists primarily of pine, fir and larch, which is used predominately in
the building industry.

         Our logging activities are regulated by the Idaho State Department
of Lands. They inspect our logging practices and inform us of any
activities that may cause either a safety or an environmental problem. Our
logger carries workers compensation and liability insurance, and falls
under the guidelines of Occupational Safety and Health Act.



                                     6


     EXPLORATION
     -----------

     We intend to conduct our exploration activities for halloysite clay
and other minerals, and intend to acquire commercially feasible properties
that can be put into production with minimal environmental problems and
with limited financial resources. We do not intend to seek out and acquire
other properties unless they fit into the parameters we have set.  Further,
we will limit our acquisitions based on our ability to conduct our
feasibility surveys and other exploration work on these properties, and
until we have been able to bring our existing acquisitions into a income
generating stage.

         In August 2001, we acquired the Dragon Mine in Juab, Utah and
began our clay exploration. Our exploration and development expenses for
the period ending December 31, 2003, and 2004 were $51,140 and $340,657,
respectively on the halloysite clay project.

         The halloysite clay is considered a non-toxic material, and we
feel we can produce a sellable product with minimal environmental
consequences using proper containment and processing techniques. The
intended processing will be the crushing, drying, and packaging of the
product for shipment. In 2003 we completed  a small diamond drilling
program to verify location of clay beds at the Dragon Mine.   With that
information we have been able to formulate development and mining plans.
During 2004 we have worked to develop and bring the Dragon Mine into a
production stage. In December 2004 we booked our first sale of halloysite
clay.

     Our halloysite clay marketing efforts include contacting potential
customers and distributors, which we have done.  Each buyer may have a
different use for the product and the price and quantity will vary as a
result.  The sale of product cannot be formalized until we have verified
our ability to provide the quality and quantities as required by the
potential buyers.  From results of the product samples distributed we have
numerous potential buyers.

     Until the Dragon Mine is producing in a profitable manner we are not
aggressively looking for other properties. However it is our intent to look
for other properties that can be acquired, developed and mined with minimal
costs, and environmental problems.

     We have submitted a mining and reclamation bond to the proper state
authorities, and have received acceptance of our plan. In the future, we
may pursue additional acquisitions and exploration of other properties for
metals and industrial minerals, development of which will require
submission of new mining and reclamation plans to the proper state and
federal authorities.

BUSINESS STRATEGY
-----------------

     As was noted above, the creation of AFC was done for the purpose of
creating operating revenues for us. We also intend to expand our
exploration, and our timber production.

     To date our activities have been financed primarily through debt and
the sale of equity securities and the issuance of equity for the
acquisition of mining property. See "Management's Discussion and Analysis -
Results of Operations."

     We will need to obtain additional funding to pursue our business
strategy. At the present time, we anticipate seeking additional funding
through additional private placements, joint venture agreements, production
financing, and/or pre-sale loans.   Our inability to raise additional
capital to fund operations through the remainder of this year and through
the next fiscal year would have a detrimental effect on our viability and
ability to pursue our business plan.




                                     7


COMPETITION
-----------

     CONTRACT MINING
     ---------------

     A review of Dun and Bradstreet shows that the main competitors of AFC
in the contract mining business are: American Mine Services, Inc.; Dynatec
Mining Corporation; Tyson; J.S. Redpath and Small Mines Development. Each
of these companies are larger than AFC or part of larger companies which
gives them the depth to take on larger projects that require large capital
investments.

         Similarly, AFC must compete with other companies that provide
contract services related to underground mining. AFC has had the
opportunity to compete outside of this area on occasion in that it has used
its underground mining expertise in different ways. Such related use of
this expertise has been in such things as rock bolting, shotcrete, and
grouting for ground support. AFC has provided tunnel construction expertise
for hydroelectric work. AFC has also acquired and completed mine closure
projects under the jurisdiction of the Forest Service and State and Federal
Environmental Agencies.

         The amount of underground contracts for which AFC could bid
fluctuates greatly depending on the economic climate of the industry.
However on average the total contracts offered are generally between $100
and $120 million per year. Over the past year AFC has not pursued any of
the larger projects which  accounts for 80% to 90% of all projects
available, and has only looked at smaller projects in the  three state area
of Idaho, Montana  and Washington. In the future the company intends to use
some of it existing  AFC personnel to pursue any activities on its other
properties.

         However, we believe we are in a unique position due to our
manpower and mining knowledge and experience. AFC has the ability to
compete on larger projects because of its expertise. However, the issue of
whether to compete on larger projects depends on our willingness to devote
the necessary capital, bonding, and other resources to larger projects when
these resources might be better used in the exploration of our own
properties. The goal of our management at this time is to show continued
growth and profitability in AFC in order to support the total corporate
structure, and to utilize the talents and resources of the AFC for our own
exploration projects when those resources are available.

         Up until this past year we have noticed less activity in the
mining industry in the United States.  The price of metals and increased
costs due to regulations imposed on the industry have driven mining costs
upward making mining less profitable. Consequently, the  ability to
generate a sustainable revenues source from AFC has been hampered, and
management has decided to find mineable resources on its own properties to
utilize the manpower and equipment available to the company.  As the trend
in metals prices improves, the possibility of more contracting activity
should also improve.

         TIMBER
         ------

         Although our logging is a very small percentage of our activities,
we face large numbers of competitors in this industry, and our competitors
include individuals who may own property in northern Idaho and wish to sell
their lumber at market prices to local mills. We are affected by market
prices, and as prices fall and competing suppliers increase, our revenues
from this business may fall significantly. Logging activities in northern
Idaho are seasonal due to the large amount of snow that accumulates during
the winter. We do most of our logging activity in the summer and fall.



                                     8

     EXPLORATION
     -----------

     We face a large number of competitors with respect to our exploration
activities.  Although we may have some advantage with respect to companies
smaller than ours, we also face the common disadvantage against larger
companies with more available capital. Consequently over the past three
years we have limited our exploration activities to the clay property
(Dragon Mine). However with the moving of the Dragon Mine from an
exploration to a development and production stage, we can now start looking
more actively at other exploration targets.  Our one advantage over many
other smaller mining companies is that we have the ability to actually
mine.


GOVERNMENTAL REGULATION
-----------------------

     CONTRACT MINING
     ---------------

     We are subject to a variety of state and federal regulations with
respect to this aspect of our business. Most states require a contractors'
license before conducting business in their state. Each state has a
different procedure for licensing. We estimate the annual cost to maintain
our state Contractor's licenses to be approximately $500 per year. We
obtain and pay workers compensation insurance, unemployment, and state
withholding in all states in which we work. We handle these functions as a
part of our normal clerical process.

     Several states that we operate in require a permit to handle
explosives, and we maintain such a license under the U.S. Bureau of Alcohol
Tobacco and Firearms (ATF, USC18, Chapter 40). This license must be renewed
every three years. If we hire new employees that will handle our
explosives, we are required to submit information to the ATF. Over the past
year, the ATF has asked that we keep in contact with them regarding any
projects that require the use of explosives.

     Property owners must also obtain permits prior to mining. From the
contracting side, we have always required that the mine owner permit his
project with the proper regulatory authority prior to beginning work, which
relieves us of any cost or liability.  On our own properties, we will spend
approximately $2,000 per year to keep permits in place.

     We are licensed under the Mine Safety and Health Act of 1997 (MSHA)
(License number: VL-2). We are required to submit quarterly reports of our
activities MSHA and to conduct annual refresher courses for our employees.
The annual cost of these functions varies based on the amount of activity.
We estimate that compliance with the described state and federal
regulations costs us approximately $3,000 per year.




                                     9

     TIMBER
     ------

     Our timber business is regulated by the Idaho state Department of
Lands under the Idaho Forestry Act Title 38, Chapter 1. Under this
regulation, a logger must apply for and obtain a Notification of Forest
Practices prior to starting a logging project. This permit requires the
logger to maintain proper logging practices, including erosion abatement,
and fire prevention. The State of Idaho retains $4 per thousand board feet
from all logs hauled to the mill, and once the project is completed, along
with a State inspection verifying that the project was completed according
to Idaho Forest Practices Act, the logger applies for a release of these
funds. Although we contract out our logging, we may be liable, as the
landowner, for problems created by the logger. However, we take measures to
ensure that our contracted loggers are reputable and incidents do not
occur. We do not currently have any direct costs related to this
regulation.  The process of obtaining access to our ground when it is
necessary to enter through Forest Service or BLM property can delay timber
harvesting.  Although the law does not allow either of these agencies to
restrict access to the private landowner, the permitting process is time
consuming and reflects a cost to the landowner.  We estimate the cost of
this process will be about $5,000 per year.

         EXPLORATION AND DEVELOPMENT
         -----------

         Should we decide to conduct exploration activities in Idaho, we
must notify the Idaho State Bureau of Mines as required under Title 47,
Chapter 1, the Department of Lands, and the federal Mine Safety and Health
Administration of our intent. If we produce any ground disturbance, we will
then need to notify the State Department of Environmental Quality to ensure
that we are working within their guidelines. However, we do not intend to
conduct any exploration in Idaho at this time.

         We have conducted some exploration and have developed and brought
into production the Dragon Mine in Juab County, Utah. The Utah Department
of Natural Resources sets the guidelines for Exploration, development and
mining activities based on provisions of the Mined Land Reclamation Act,
Title 40-8, Utah Code Annotated 1953, as amended, and the General Rules and
Rules of Practice and Procedures, R647-1 through R647-5. We have applied
for and received the proper permit from them.  We also applied for and
received authority from the Utah Department of Commerce to conduct business
as a foreign corporation in the state as required by Utah Code, Title 16-
10A-1501.  Compliance with these regulations is expected to cost us
approximately $1,200 per year.  As we hire additional people for this
project we have covered them under proper state workman compensation,
withholding and unemployment laws as required by both Utah and Idaho State
employment regulations. We carry a Mine Safety and Health Administration
(MSHA) license (#4202383) for this property and report as required to this
agency. We estimate the cost of compliance to MSHA to be approximately
$5,000 per year.

EMPLOYEES
---------

    As of December 31, 2004, Atlas Mining and its subsidiaries have twelve
employees. We have also outsourced some of our logging work to a logging
contractor who employs approximately six people. In addition, we
periodically utilize the services of various individuals on a consulting
basis. In 2003 and 2004, we hired the services of a geologist and
industrial minerals consultants for their consulting services. We have one
employment agreement with our CEO. None of our employees are covered by a
collective bargaining agreement, we have never experienced a work stoppage,
and we consider our labor relations to be excellent.




                                     10

ITEM 2.  DESCRIPTION OF PROPERTY

PRINCIPAL OFFICE
----------------

    We rent office space from the Mcgillvray Environmental in Osburn,
Shoshone County, Idaho. The address of the property is 630 East Mullan
Avenue, Osburn, Idaho 83849. The property is a two-room office, containing
approximately 800 square feet, in a business complex in the downtown area
of Osburn, Idaho. The rent is $300 per month and there is no rental
agreement.

MINING PROPERTIES
-----------------

    We have assets of real property, mineral leases and options. The
following section describes our right, title, or claim to our properties
and each property's location. This section also discusses our present plans
for exploration of the properties, and an estimate of mineralized material
located on each property. Please refer to our Glossary at the end of this
section for definitions of technical terms used in our discussion.

SHOSHONE COUNTY, IDAHO
----------------------

    Exploration
    -----------

    We own approximately 900 acres of fee simple property and patented
mining claims, and 260 acres of mineral rights and unpatented claims,
located in the Coeur d'Alene mining district in Shoshone County, Idaho,
commonly referred to as the Silver Valley of North Idaho. Atlas was
originally incorporated to pursue mining activities on the Atlas mine
property near Mullan, Idaho. This property had some past production of
silver, lead, zinc and copper in the early 1900's. However, the existence
of minerals on this property cannot be determined without extensive
exploration. Any revenues we may eventually generate may be used to further
explore mines within the Shoshone County area or to acquire and explore new
properties wholly unrelated to our Shoshone County properties. We have no
plans for exploration of the Shoshone County mines at this time.

    Our properties in Shoshone County are divided into five separate
tracts. These sections are named for the mines located in that specific
section. The section location and estimated acreage are as follows:


    Section Of The Coeur D'Alene Mining District Estimated Acres
    ------------------------------------------------------------
<Table>

<S>                               <C>
Atlas Mine                        540 acres fee simple and patented,
                                  180 unpatented
Sierra Trapper Creek               80 acres patented
Aulbach, Section 6 & 7            100 acres patented
Sierra Silver, Woodland Pk & 9 Mi  60 acres patented, 80 acres mineral rights
Sierra Hardscrabble                20 acres patented
L& N claims                       108 acres patented

</Table>



                                     11

     The largest section is the Atlas Mine. The underground Atlas Mine,
idle since the early 1980's due to exploration budget restraints, is
located on the east end of the Coeur d'Alene Mining District in Shoshone
County. The property is accessible by interstate freeway and a county
maintained road. Geologically, the property lies just south of the Osburn
Fault in the Wallace and St. Regis formations. The Mine has over 7,000 feet
of tunnels with a rail system and a 2,000-foot internal shaft which can be
accessed for future exploration.

     The other properties in Shoshone County have no accessible workings.
All the properties are accessible either by state highway, county road or
forest service roads.  As time and the economic trends merit it we will be
looking find ways to make these properties more productive or to sell them.

     The Atlas property currently carries a first mortgage to CLS Mortgage,
and a second mortgage to American National Mortgage. We owe CLS Mortgage
$119,236, on which we pay $1,614 per month. We owe American National
Mortgage $711,174. However, American National Mortgage has been closed down
by state regulators and has filed bankruptcy. We are in the process of
settling this debt with the court appointed trustee.

     Timber
     ------

     We estimate that our properties in Shoshone County contain
approximately 2 million board feet of harvestable timber. We contract with
independent loggers to harvest the timber and deliver it to mills. We
contract our logging activities to Randy Mattson, who has over 20 years of
experience in the industry. The current return to Atlas is approximately
$150 per thousand board feet. A board foot of lumber is one foot by one
foot by one inch. We implement reforestation techniques to replenish its
timber supply.  Much of the remaining timer on Atlas lands requires access
through U S Forest Service or BLM properties.  Permitting for access
through these entities is somewhat time consuming and we do not know
whether we will be able to log very much of our properties in the near
future.

     We acquired our Sierra properties through the acquisition of Sierra
Silver Lead Mining Company. Through this purchase the Company acquired
approximately 329 acres of mineral rights that include approximately 250
acres of surface land and timber. Although there was a small amount of zinc
mined on the Sierra Silver property, there has been no mining activity for
over forty years. Subsequent to the purchase we sold approximately 100
acres. The majority of the Sierra property lies south of the Osburn Fault
in the Wallace formation, and has no reserves. The property does have
approximately 500,000 board feet of timber, which we value at approximately
$75,000.

     We acquired our Aulbach claims in March 1999 from Trail Gulch Gold
Mining Company. Through this purchase, we acquired approximately 100 acres
of surface land and mineral rights, including timber rights. To date, we
have logged approximately 650,000 board feet of timber on the property with
an approximate net value of $105,000.





                                     12

JUAB COUNTY, UTAH
-----------------

     Dragon Mine
     -----------

     The Dragon Mine property, located in Juab County, Utah near the City
of Eureka (Tintic Mining District) has been principally exploited for
halloysite clay, a rare and high unit value clay mineral. The property
consists of 38 patented mining claims, approximately 230 acres, located in
the following sections: T10S, R2W, sections 29, 30, 31, and T10S, R3W,
Section 36, all relative to the Salt Lake Meridian. Since July 10, 2001,
Atlas Mining Company has leased the property from Conjecture Silver Mines,
Inc., whose address is P.O.B. 14006, Spokane, Washington 99214. Conjecture
Mines has since been  merged into Chester Mines, Inc. with the same
address.  We initially paid 400,000  shares of our common stock, valued at
$100,000, for a one-year lease. Under the terms of the lease agreement, we
have the right to renew the lease annually in exchange for 100,000
additional shares of our common stock, or we may buy the property for
$500,000 if we have $1,000,000 in sales from the mine in a 12-month period.
On June 22, 2004, we notified Conjecture Silver Mines of our intent to
renew our lease for an additional year. On July 15, 2004, we issued an
additional 100,000 shares of common stock to Conjecture Silver Mines, Inc.
for rights to the property for another year. Should we mine the property,
if warranted, before we have completed purchase of the property, we are
liable to pay a 3% cash royalty on the gross sales of product from the
property.

     Conjecture Mines acquired the claims through a Quit Claim deed and
share exchange with Grand Central Silver Mines, Inc. From 1950 to 1977, the
Dragon Mine was owned by Anaconda and operated by Filtrol Corporation. The
property has been idle since 1977. Examination of the mine maps, the open
pit and surviving correspondence, coupled with informal interviews of
former employees, all lead us to the conclusion that the mining techniques
were likely inefficient which combined with developments of synthetic
catalysts (the halloysite was mined for petroleum cracking) led the mine to
price itself out of business.  In 2004 Chester Mines, Inc acquired
Conjectures Silver Mines, Inc.  The address remains the same as does the
principal officer.

     Previous owners' records indicate that over 1.1 million tons were
mined at the property from 1950 until it closed. Those records also
indicate approximately 300,000 tons of mineralized material remain on the
property. The previous owners also conducted some exploration core drilling
and some reverse circulation drilling, but the records of the results are
incomplete. The figures in this paragraph depend on the assumption that the
old records and maps are accurate. Our analysis of the surviving maps and
record lead us to believe that their estimates of 300,000 tons of
mineralized material are still valid. In 2003 we  conducted a small
exploration drilling program, and have been able to further  validate this
information. The previous owners' geologists determined the area of
influence was no more than 80 feet along strike and 100 feet along dip.
There were  no chemically quantifiable cutoffs to the mineralized material.
It appeared that the  most distinguishable factors were visual indicators.
The specific gravity they used  was a density of 17 cubic feet per ton.

     The property is located in the arid mountains approximately 2 miles
west of Eureka, Utah and can be accessed via state highway and county road.
The only evidence of mining prior to our lease was an open pit area and an
abandoned head frame. The Union Pacific Railroad has a spur approximately 2
miles from the property. Power is approximately 1.5 miles from the site,
and  no evidence of water except in the shaft.



                                     13

     In 2004 we were able to bring the property to the stage of production.
We built a mill site which includes a lay down and sorting area for
product, a 50X60 building with KDS processing machine. We installed a 650
KW electrical generator with service to the mill, office and mine, a water
and septic system, and compressor.  We have developed the underground mine
with over 500 feet of decline and access tunnels and have exposed the
halloysite clay bed approximately 100 feet underground where mining
activities have begun.  To facilitate these activities we have increased
our equipment purchases in 2004.

     We believe the halloysite material formed through the alteration of a
shale bed lying between a limestone bed and igneous rocks. The base of the
limestone was selectively replaced by iron oxide material with abundant
manganese. The shale was altered to halloysite. This unit is evident in the
open pit. Following the alteration event, halloysite was squeezed into
northeast-striking faults upward through the limestone to the top of the
bedrock in places. Our geologists see added potential to the northeast
along these faults and in the replaced beds to the east and northeast. This
potential has not yet been quantified.

     Samples taken from surface and underground exposures of the halloysite
material have been made available to parties interested in conducting
suitability tests. Samples have been taken from seven areas within the open
pit. On the surface, the halloysite material is chalky white, often stained
by iron leaking downward from the iron cap, but a few inches beneath the
surface, the halloysite material turns to soft, wet-looking and soapy
feeling, often with a bluish tinge. However, this material loses its water
content and turns chalky within a few days of exposure to air.

                      DESCRIPTION OF PROPERTY GLOSSARY
                      --------------------------------

Alteration:         Changes in chemical or mineralogical composition of a
                    rock generally produced by weathering or hydrothermal
                    solutions.

Clay:               A size term regarding particles, regardless of mineral
                    composition, with a diameter of less than four microns,
                    or a group of hydrous alumino-silicate minerals related
                    to the micas.

Development:        The preparation of an established commercially mineable
                    deposit (reserves) for its extraction which are not in
                    the production stage.

Exploration:        The search for mineral deposits (reserves) which are
                    not in either the development or production stage.

Fault:              A fracture or fracture zone along which there has been
                    displacement of the sides relative to one another
                    parallel to the fracture.

Formation:          The primary unit of formal mapping or description.

Grout:              A form of ground stabilization where in cement is
                    pumped into the rock formation.



                                     14

Halloysite:         A clay mineral related to kaolin with essentially the
                    same chemical composition, but has crystals which are
                    slender hollow tubes.

Mineral:            A naturally formed chemical element or compound having
                    a definite range in chemical composition and usually a
                    characteristic crystal form.

Mining Claim:       That portion of mineral lands that a miner takes and
                    holds in accordance with mining laws.

Open Pit:           A hole in the ground left by the extraction of
                    material.

Reserve:            That part of an identified resource from which a
                    useable commodity can be economically and legally
                    extracted at the time of determination.

Resource:           A concentration of naturally occurring materials in
                    such form that economic extraction is currently or
                    potentially feasible.

Shaft:              An excavation of limited area compared to its depth.

Shotcrete:          A form of ground stabilization where concrete is
                    sprayed on the rock to give it strength.

ITEM 3.  LEGAL PROCEEDINGS

          None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          None.

                                  PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
          MATTERS

     Our common stock is quoted on the National Association of Securities
Dealers, Inc. Electronic Bulletin Board (the "OTC Bulletin Board"), and is
traded under the symbol "ALMI". Our common stock began trading on the OTC
Bulleting Board on July 19, 2002; prior to that date our stock traded on
the Over-The-Counter Pink Sheets under the symbol "ALMI". These quotations
reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not represent actual transactions.



                                      2004                     2003
                                 High        Low         High         Low
                              -------      -------     -------      -------
          First Quarter        $0.25        $0.105      $0.15        $0.08
          Second Quarter       $0.255       $0.15       $0.12        $0.055
          Third Quarter        $0.33        $0.17       $0.16        $0.05
          Fourth Quarter       $0.40        $0.245      $0.19        $0.08





                                     15

     As of March 25, 2005, there were approximately 1,701 holders of record
of our common stock. This number does not include an indeterminate number
of shareholders whose shares are held by brokers in street name. Since we
have become a reporting company, we have never declared or paid any cash
dividend on our common stock. We expect to continue to retain all earnings
generated by our operations for the development and growth of our business,
and do not anticipate paying any cash dividends to our shareholders in the
foreseeable future. The payment of future dividends on our common stock and
the rate of such dividends, if any, will be determined by our board of
directors in light of our earnings, financial condition, capital
requirements and other factors.

         Our Board of Directors has adopted two equity compensation plans,
the Stock Option Plan of Atlas Mining Company, and the Incentive Stock
Option Plan of Atlas Mining Company. Both plans were adopted in 1998.
Options under the Stock Option Plan of Atlas Mining Company will expire 5
years from the date of grant, and the price per share for each option
granted will be set by the Administrative Committee. As of December 31,
2004, one option has been granted under the Stock Option Plan of Atlas
Mining Company to the CEO. Options issued under the Incentive Stock Option
Plan of Atlas Mining Company will have a price per share at least equal to
the fair market value of the Company's common stock on the date of the
grant. As of December 31, 2004, no options have been granted under the
Incentive Stock Option Plan of Atlas Mining Company.

RECENT SALES OF UNREGISTERED SECURITIES

     On March 5, 2004, the Company issued 1,071 shares of its common stock
to an individual investor for $150 in cash. This issuance was exempt  from
registration pursuant to Section 4(2) and Rule 506 of the Securities Act
of 1933 because this issuance was not a public offering.

     On July 15, 2004, the Company issued 100,000  shares of its common
stock valued at $20,000 to Conjecture Mines, Inc for payment its annual
lease payment  on the Dragon Mine. The issuance of the shares was exempt
from registration pursuant  to Section 4(2) and Rule 506 of the Securities
Act of 1933 because this issuance was not a public offering.

     On October 26, 2004, the Company issued 10,000 shares of its common
stock valued at $2,900 to an accredited investor for services. The issuance
of the shares was exempt from registration pursuant  to Section 4(2) and
Rule 506 of the Securities Act of 1933 because this issuance was not a
public offering.

     On December 7, 2004 the Company issued 400,000 shares of its common
stock for $100,000 cash to an accredited investor. This issuance was exempt
from registration pursuant to Section 4(2) and Rule 506 of the Securities
Act of 1933 because this issuance was not a public offering.

     On December 8, 2004 the Company issued 200,000 shares of its common
stock for $50,000 cash to an accredited investor. This issuance was exempt
from registration pursuant to Section 4(2)
and Rule 506 of the Securities Act of 1933 because this issuance was not a
public offering.

     On December 9, 2004, the Company issued 120,000 shares of its common
stock for $30,000 cash to an accredited investor.  This issuance was exempt
from registration pursuant to Section 4(2) and Rule 506 of the Securities
Act of 1933 because this issuance was not a public offering.

     On December 10, 2004, the Company issued 180,000 shares of its common
stock for $45,000 cash to an accredited investor.  This issuance was exempt
from registration pursuant to Section 4(2) and Rule 506 of the Securities
Act of 1933 because this issuance was not a public offering.


                                     16

     On December 16, 2004, the Company issued 420,000 shares of its common
stock for $105,000 cash to an accredited investor.  This issuance was
exempt from registration pursuant to Section 4(2) and Rule 506 of the
Securities Act of 1933 because this issuance was not a public offering.

     On December 27, 2004, the Company issued 85,000 shares of its common
stock for $21,500 cash to an accredited investor.  This issuance was exempt
from registration pursuant to Section 4(2) and Rule 506 of the Securities
Act of 1933 because this issuance was not a public offering.

RECENT ISSUES OF COMMON STOCK WARRANTS

     On December 3, 2004, the Company issued a one year warrant to an
accredited investor to purchase 1,000,000 restricted common shares of stock
for $350,000 cash.

     On December 14, 2004 the Company issued a two year warrant to an
accredited investor to purchase 40,000 restricted common shares of stock
for $20,000.

     On December 16, 2004 the Company issued a two year warrant to an
accredited investor to purchase 40,000 restricted common shares of stock
for $20,000.

     On December 17, 2004 the Company issued a two year warrant to an
accredited investor to purchase 100,000 restricted common shares of stock
for $50,000.

     On December 17, 2004 the Company issued a two year warrant to an
accredited investor to purchase 30,000 restricted common shares of stock
for $15,000.

     On December 17, 2004 the Company issued a two year warrant to an
accredited investor to purchase 20,000 restricted common shares of stock
for $10,000.

     On December 17, 2004 the Company issued a two year warrant to an
accredited investor to purchase 40,000 restricted common shares of stock
for $20,000.

     On December 31, 2004 the Company issued a two year warrant to an
accredited investor to purchase 10,000 restricted common shares of stock
for $5,000.

     On December 31, 2004 the Company issued 16 separate two year warrants
to 16 separate accredited investors to purchase 154,000 restricted common
shares of stock for $30,800.


ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

     Our discussion and analysis of our financial condition and results of
operations are based upon our financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires us to
make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses. On an on-going basis, we evaluate our
estimates based on historical experience and various other assumptions that
are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or
conditions.

     We are a natural resources company engaged in the acquisition and
exploration of our resource properties in the states of Idaho and Utah. We
also provide contract mining services and specialized civil construction
services for mine operators, exploration companies and the construction and
natural resource industries through our trade name "Atlas Fausett
Contracting." Currently, our primary source of revenue is generated by our
Atlas Fausett Contracting operations. However, we also have our halloysite
clay deposit and timber.
                                     17

CONTRACT MINING

In the past our contract mining normally generates 80% or more of our
revenues. This may decrease as we are able to increase operations on our
owned properties, and we will adjust our resources accordingly. At this
time, we anticipate that our contracting will still be a contributing
factor to our revenues.

PROPERTY EXPLORATION

We are currently considered an exploration company. Our efforts in
exploration are dependent upon the available funds we can raise to pursue
our exploration efforts.  We have no assurances that our exploration will
result in proving any commercially viable deposits. We realize that
additional steps will need to be taken to move from an exploration stage to
a development or productions stage.

The majority of our exploration has been at the Dragon Mine in Juab County,
Utah. We have furnished samples of the halloysite clay extracted from this
property to potential buyers and distributors. The preliminary results of
these samples have been favorable, and we have received purchase orders as
a result; and we have received non binding letters of intent from potential
buyers. We have moved into the production stage of this property.

TIMBER

We will continue to harvest timber on our property. Timber harvesting will
be dependent upon lumber prices and weather.

FISCAL YEAR ENDED DECEMBER 31, 2004 COMPARED TO FISCAL YEAR ENDED DECEMBER
31, 2003.

Our operations for the period ended December 31, 2004, and the period ended
December 31, 2003 consisted mostly of our contracting work, logging income,
and development and exploration activities.

REVENUES

Our total revenues for the period ending December 31, 2004 were $1,035,329,
compared to $304,851 for the period ending December 31, 2003, resulting in
a 239% increase from the same period the previous fiscal year.  Our
contract mining revenue for the period ending December 31, 2004 was
$696,264 compared to $298,707 for the period ended December 31, 2003, or an
increase of 133%.  Our timber revenue for the period ending December 31,
2004 was $89,064 compared to $3,955, for the same period ended December 31,
2003, which is a 21.5 time increase from 2003 to 2004. We also received
$250,000 from halloysite clay sales in 2004 while there was no revenue from
that source in 2003.

GROSS PROFIT

Our Gross profit for the year ended December 31, 2004 was $467,784 compared
to $(30,253) for the year ended December 31, 2003.  This is an increase of
16 times greater than the previous year.  The main reasons for this
increased contracting revenues, timber sales and the sale of halloysite
clay in 2004, compared to 2003.

GENERAL AND ADMINISTRATIVE EXPENDITURES

Our general and administrative expenditures for the period ending December
31, 2004 were $1,010,781 compared to $1,255,182 in 2003, which is a 20%
decrease from the same period the previous fiscal year. The reason for this
is attributable to additional costs in professional fees in 2003 not
incurred in 2004.


                                     18

CAPITAL EXPENDITURES

We had no capital expenditures for the period ending December 31, 2003.
During 2004 we purchased approximately 100 acres in north Idaho for
$60,250.  We constructed a mill site for $100,688 and bought mining,
milling and related equipment for $363,180.

INTEREST PAYMENTS

Our interest payments for the period ending December 31, 2004 were $23,210,
which is an 75% decrease from the same period the previous fiscal year.
The reason for this is due to regulatory closure and subsequent bankruptcy
of American National Mortgage, our major creditor, resulting in our
suspension of payments pending settlement of the debts.  We also liquidated
some of our smaller debts during the year.

EXPLORATION & DEVELOPMENT EXPENDITURES

Our exploration expenses for the period ending December 31, 2004 was
$340,657 compared to $51,140 for the previous fiscal year, which is a 566%
increase from the same period the previous fiscal year.  These expenses
were incurred at the Dragon Mine, in Juab County, Utah, where we have
worked to bring the property into a production stage property.

NET PROFIT (LOSS)

Our net losses for the period ending December 31, 2004, ($946,274), is a
33% decrease over the same period the previous fiscal year. The reason for
this is attributed to additional revenue and less general and
administrative expenses in 2004 compared to 2003.

LIQUIDITY AND CAPITAL RESOURCES

To date our activities have been financed primarily through the sale of
equity securities, borrowings, and revenues from Atlas Fausett Contracting,
logging operations and the sale of halloysite clay. We intend to continue
pursuing contracting work and to log our timber properties to help pay for
our operations.  We also intend to sell more halloysite clay.   In 2004 and
2003 the contracting work accounted for about 67% and 98% of the total
revenues respectively. Halloysite clay sales accounted for 24% of the
revenue in 2004, while there were none in 2003.  In 2004 and 2003 timber
sales accounted for 8% and 2% of the total revenue respectively.  We have
also issued common shares of restricted stock and borrowed from various
sources to finance our activities. Our current debt structure is explained
below.

We have a note payable to William Jacobson, an officer and director, which
is payable on demand and bearing no interest. The proceeds of this
obligation were used for general working capital. The current amount due as
of December 31, 2004 is $91,488.  We had an unsecured line of credit with
Textron Financial at an interest rate of prime plus 6%. The balance of the
line of credit at December 31, 2004 and 2003 was  -0- and $23,094,
respectively.  The funds were used for general working capital.  Accounts
payable and accrued liabilities due as of December 31, 2004 were $304,925
and are the result of daily operations and taxes owed.

We have a note payable to Moss Adams, LLP, an accounting firm, for $53,250
due in monthly payments of $1,000 with a balloon payment due at maturity.
The note matured on August 16, 2002. We have negotiated the terms of
repayment, and can pay this debt for approximately 50% of the value.  The
note was for accounting services provided to us in 1999 and 2000.  As of
December 31, 2004 our current balance, including interest is $77,370.  We
have notes in the amount $582,498payable to American National Mortgage due
in monthly installments for interest and fees of $18,743.79, maturing on
May 31, 2003, and secured by property in northern Idaho. American National
Mortgage has filed bankruptcy, and we have negotiated a settlement on this
debt.  We also have a note payable to CLS Mortgage Company, due in monthly
installments of $1,614, including interest at 16%. The note has a current
balance of $118,920, and is due in August 2005, secured by the proceeds of
our logging activities and collateralized by land and a building on our
property in northern Idaho.

                                     19

     Our principal sources of cash flow are from our timber properties,
which averaged $7,422 per month in fiscal year 2004 and $330 per month in
2003, our contract mining, which averaged $58,022 per month in fiscal year
2004 and $24,892 in 2003, and halloysite clay sales which averaged $20,833
per month in fiscal year 2004 and  0- in 2003.  In addition, we also rely
on our credit facilities and any public or private equity issuances we may
conduct in the future.

     Cash flow from financing activities for the fiscal year ended December
31, 2004 was $1,138,553 compared to $593,498 for the same period in 2003, a
difference of $545,055. The main difference was the collection of
subscriptions receivable in 2004.

     The Company realized a use of funds of ($447,504) from investing
activities for the fiscal year ended December 31, 2004, compared to
($45,341) for the same period in 2003, a difference of $402,163.  The main
difference is attributed to the purchase of equipment in 2004 of $524,119
compared to  0- for the same period ended December 31, 2003.

Cash flow from operating activities for the fiscal year ended December 31,
2004, was ($491,228) compared to ($546,589) for the same period in 2003, a
difference of $55,361.  The Company had less operating losses in 2004
because of the increase in revenues and decreased general and
administrative costs.

As of April 1, 2003, we rent office space at 630 E. Mullan Avenue in
Osburn, Idaho for $300 per month, on a month-to-month basis from the
Mcgillvray Environmental.

If we do not reduce any of this debt from proceeds of our offering, if we
do not renegotiate any of this debt or if repayment is demanded, we would
be obligated to pay an average of $85,973per month or $1,031,672 for the
next fiscal year.

In anticipation of the cash needs for the upcoming year, we have completed
a sale of restricted common stock in December 2004,and January 2005, and we
have subsequently sold additional shares of restricted common stock in
February 2005.

We will need to obtain additional funding to pursue our business strategy
during the next fiscal year. At the present time, we anticipate seeking
additional funding through additional private placements, joint venture
agreements, production financing, and/or pre-sale loans. Our inability to
raise additional capital to fund operations through the remainder of this
year and through the next fiscal year could have a detrimental effect on
our ability to pursue our business plan, and possibly our ability to
continue as a going concern.

In anticipation of the above funding sources, we have attempted to satisfy
our debts through a negotiated settlement, and/or ask for extended terms
until we can become more profitable.  We cannot assure you that any of
these events will occur or, if they do occur, when they will occur.

     Following is summary financial information reflecting our operations
for the periods indicated.

<Table>
<Caption>
                                                   Year Ended December 31,
                                                     2004          2003
                                                 ------------  ------------
     <S>                                        <C>           <C>
     Net revenues                                $  1,035,329  $    304,851
     Cost of revenues                            $    567,545  $    335,104
     Gross profit                                $    467,784  $   (30,253)
     Selling, general and administrative         $  1,010,781  $  1,255,182
     Gain (Loss) from operations                 $  (883,654)  $(1,336,575)
     Net gain (loss)                             $  (946,274)  $(1,382,038)

</Table>

FACTORS AFFECTING BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION

     AN INVESTMENT IN OUR SECURITIES IS VERY SPECULATIVE AND INVOLVES A
HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK
FACTORS, ALONG WITH THE OTHER MATTERS REFERRED TO IN THIS ANNUAL REPORT,
BEFORE YOU DECIDE TO BUY OUR SECURITIES. IF YOU DECIDE TO BUY OUR
SECURITIES, YOU SHOULD BE ABLE TO AFFORD A COMPLETE LOSS OF YOUR
INVESTMENT.
                                     20
     WE ARE CURRENTLY IN DEFAULT ON ONE OR MORE OF OUR LOANS.

     We have a note payable to Moss Adams, LLP for accounting services
provided to us in 1999 and 2000. The principal of the note is $53,250, with
an interest rate of 9% per annum, due in monthly payments of $1,000. The
note matured on August 16, 2001. As of December 31, 2004 the current
balance, including interest is $77,370. We have renegotiated terms of
repayment, and can pay this debt for approximately 50% of the amount
otherwise due.  We have notes in the amount $582,498payable to American
National Mortgage due in monthly installments for interest and fees of
$18,743.79, maturing on May 31, 2003, and secured by property in northern
Idaho.  American Mortgage has filed bankruptcy, and we have negotiated a
settlement on this debt.  If we are unable to pay these debts, it would
have a material adverse impact on our ability to conduct business, and our
financial position.


     WE HAVE EXPERIENCED ANNUAL OPERATING LOSSES SINCE SEPTEMBER 1997 AND
OUR AUDITORS HAVE INDICATED UNCERTAINTY CONCERNING OUR ABILITY TO CONTINUE
OPERATIONS AS A GOING CONCERN.

     We have experienced annual operating losses since our reactivation in
September 1997. As of December 31, 2004, we had an accumulated deficit of
$(5,861,240). We may need to raise additional capital to continue as a
going concern. Our auditors have indicated uncertainty concerning our
ability to continue as a going concern. We can not assure you that that our
proposed projects and services, if fully developed, can be successfully
marketed or that we will ever achieve significant revenues or profitable
margins.

     WE ARE AN EXPLORATION STAGE COMPANY, AND THERE IS NO ASSURANCE THAT A
COMMERCIALLY VIABLE DEPOSIT OR "RESERVE" EXISTS IN ANY OF OUR PROPERTIES.

     We are an exploration stage company and cannot assure you that a
commercially viable deposit, or "reserve," exists in any of our exploration
properties. Therefore, determination of the existence of a reserve will
depend on appropriate and sufficient exploration work and the evaluation of
legal, economic, and environmental factors. If we fail to find a
commercially viable deposit on any of our properties, or if we fail to
bring one of our properties into a profitable operating mode, our financial
condition and results of operations will be materially adversely affected.

     WE HAVE RECORDED MINIMAL INCOME FOR OUR EXPLORATION/DEVELOPMENT
ACTIVITIES, AND MAY DO SO IN THE FUTURE.

     To date, of our exploration properties have produced minimal income
from activities.

     Additionally, although our timber harvesting and contracting
activities have generated revenue, we as a company have not yet generated
any profit. We may not be able to develop these activities to commercially
viable enterprises or to obtain additional properties that are commercially
viable. The commodities extracted from our properties may never generate
significant revenues or achieve profitability, which will adversely impact
our financial condition.

     WE MAY NEED ADDITIONAL FINANCING TO FULLY IMPLEMENT OUR BUSINESS PLAN,
AND IF WE FAIL TO OBTAIN ADDITIONAL FUNDING WE MAY NOT BE ABLE TO CONTINUE
OUR OPERATIONS.

     Since September 1997, we have focused our efforts on developing our
business in underground mine contracting primarily to companies in
the mining and civil industries, and other resource development and
property acquisitions. We will need to raise additional capital to
implement fully our business plan and establish adequate operations. We
cannot assure you that we will be able to recover additional public or
private financing, including debt or equity financing, as needed, or, if
available, on terms favorable to us.


                                     21

     Furthermore, debt financing, if available, will require payment of
interest and may involve restrictive covenants that could impose
limitations on our operating flexibility. Our failure to successfully
obtain additional future funding may jeopardize our ability to continue our
business and operations.

     WE REQUIRE SUBSTANTIAL FUNDS MERELY TO DETERMINE WHETHER COMMERCIAL
MINERAL DEPOSITS EXIST ON OUR PROPERTIES.

     Any potential development and production of our exploration properties
depends upon the results of exploration programs and/or feasibility studies
and the recommendations of duly qualified engineers and geologists. Such
programs require substantial additional funds. Any decision to further
expand our operations on these exploration properties will involve
consideration and evaluation of several significant factors including, but
not limited to:

     -    Costs of bringing each property into production, including
          exploration work, preparation of production feasibility
     -    studies, and construction of production facilities;
     -    Availability and costs of financing;
     -    Ongoing costs of production;
     -    Market prices for the minerals to be produced;
     -    Environmental compliance regulations and restraints; and
     -    Political climate and/or governmental regulation and control.

     WE DO NOT CARRY INSURANCE ON OUR TIMBER ASSETS AND A SIGNIFICANT LOSS
OF STOCK DUE TO FIRE, DISEASE OR OTHER CATASTROPHE MAY MATERIALLY REDUCE
THE VALUE OF OUR TIMBER ASSETS.

     We do not carry insurance for fire or disease on its timber reserves
due to the prohibitive cost and our limited financial resources. As a
result, any catastrophic event may significantly reduce the value of our
reserves, and consequently reduce our financial position. The timber
industry is affected by lumber price movements and adjustments, downturns
in the housing industry, and interest rate movements. These factors can
reduce the price of timber and lumber on the open market. A significant
decrease in the price of timber may reduce income and therefore reduce the
value of our stock.

     OUR SUCCESS DEPENDS A LARGE PART ON OUR ABILITY TO ATTRACT AND RETAIN
OR HIRE KEY PERSONNEL, WHICH WE MAY OR MAY NOT BE ABLE TO DO.

     To operate successfully and manage our potential future growth, we
must attract and retain highly qualified key engineering, managerial and
financial personnel. We face intense competition for qualified personnel in
these areas, and we cannot assure you that we will be able to attract and
retain qualified personnel. If we lose our key personnel, which includes
our president, William T. Jacobson, or are unable to hire and retain
additional qualified personnel in the future, our business, financial
condition and operating results could be adversely affected. We do not have
any employment agreements with any of our officers, directors or employees.

     WE MAY NOT BE ABLE TO IMPLEMENT OR MAINTAIN FINANCIAL AND MANAGEMENT
SYSTEMS WHICH COULD HAVE A MATERIAL ADVERSE AFFECT ON OUR BUSINESS,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

     If we fail to implement and maintain financial and management
information systems, controls and procedures, add internal capacity,
facilities and third-party sourcing arrangements or attract, train, retain,
motivate and manage effectively our employees, it could have a material
adverse effect on our business, financial condition and results of
operations.


                                     22

     THE VALUE OF TIMBER ASSETS MAY FLUCTUATE DUE TO CHANGING TIMBER
PRICES, WHICH MAY ADVERSELY IMPACT OUR REVENUES AND OUR FINANCIAL POSITION.

     Although we attempt to harvest timber only when the lumber prices
merit it, timber is subject to fluctuation in price. To help offset a
change in prices, we try to obtain a price agreement with the lumber mills
prior to going into any logging program. We do not currently have any
agreements with mills.

     Although we attempt to offset this by obtaining agreements with our
purchasing mills prior to beginning our logging, we may not be able to
account entirely for price variations, which may result in lower revenues
than anticipated.

     OUR MARKET VALUE MAY DECREASE IN THE FUTURE.

     Our stock is listed on the over-the-counter market. There has been
significant fluctuation in our market price, and the market price of our
common stock may decrease at any time as a result of poor operating
results, sales of our shares, and other factors.

     THERE IS COMPREHENSIVE FEDERAL, STATE AND LOCAL REGULATION OF THE
EXPLORATION INDUSTRY THAT COULD HAVE A NEGATIVE IMPACT OUR MINING
OPERATIONS.

     Exploration operations are subject to federal, state and local laws
relating to the protection of the environment, including laws regulating
removal of natural resources from the ground and the discharge of materials
into the environment. Exploration operations are also subject to federal,
state and local laws and regulations which seek to maintain health and
safety standards by regulating the design and use of exploration methods
and equipment. We require various permits from government bodies for
exploration operations to be conducted. We cannot assure you that such
permits will be received. No assurance can be given that environmental
standards imposed by federal, state or local authorities will not be
changed or that any such changes would not have material adverse effects on
our activities. Moreover, compliance with such laws may cause substantial
delays or require capital outlays in excess of those anticipated, thus
causing an adverse effect on us. Additionally, we may be subject to
liability for pollution or other environmental damages that we may elect
not to insure against due to prohibitive premium costs and other reasons.
Management is aware of the necessity of obtaining proper permits prior to
conducting any exploration activity. However, at this point we are not
close enough to the production stage to start the permitting process.

     APPLICABILITY OF "PENNY STOCK RULES" TO BROKER-DEALER SALES OF OUR
COMMON STOCK COULD HAVE A NEGATIVE EFFECT ON THE LIQUIDITY AND MARKET PRICE
OF OUR COMMON STOCK.


                                     23

     Our common stock is listed on the Over-the-Counter Bulletin Board. It
is not quoted on any exchange or on NASDAQ, and no other exemptions
currently apply. Therefore, the SEC "penny stock" rules govern the trading
in our common stock. These rules require, among other things, that any
broker engaging in a transaction in our securities provide its customers
with the following:

     -    a risk disclosure document,
     -    disclosure of market quotations, if any,
     -    disclosure of the compensation of the broker and its
     -    salespersons in the transaction, and
     -    monthly account statements showing the market values of our
     -    securities held in the customer's accounts.

     The broker must provide the bid and offer quotations and compensation
information before effecting the transaction. This information must be
contained on the customer's confirmation. Generally, brokers subject to the
"penny stock" rules when effecting transactions in our securities may be
less willing to do so. This may make it more difficult for investors to
dispose of our common stock. In addition, the broker prepares the
information provided to the broker's customer. Because we do not prepare
the information, we cannot assure you that such information is accurate,
complete or current.

ITEM 7.  FINANCIAL STATEMENTS

     The financial statements, together with the independent auditors'
report thereon of Chisholm, Bierwolf & Nilson, LLC. follow.






                                     24




/Letterhead/




                        INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Stockholders
of Atlas Mining Company

We have audited the accompanying consolidated balance sheets of Atlas
Mining Company as of December 31, 2004 and 2003 and the related
consolidated statements of operations, stockholders' equity and cash flows
for the years then ended.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with the standards of the Public
Accounting Oversight Board (United States).  Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether
the consolidated financial statements are free of material misstatement.
The Company has determined that it is not required to have, nor were we
engaged to perform, an audit of its internal control over financial
reporting.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall consolidated financial statement presentation.  We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Atlas Mining Company as of December 31, 2004 and 2003 and the
results of its operations and cash flows for the years then ended in
conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  The Company has suffered
recurring losses from operations which raises substantial doubt about its
ability to continue as a going concern.  Management's plans in regard to
these matters are described in Note 2.  The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.


/S/ Chisholm, Bierwolf & Nilson, LLC

Chisholm, Bierwolf & Nilson, LLC
Bountiful, UT
January 28, 2005


                    Atlas Mining Company and Subsidiary
                        Consolidated Balance Sheets
<Table>
<Caption>
                                   ASSETS


                                                             December 31,
                                                     2004          2003
                                                 ------------  ------------
<S>                                                          <C>             <C>
Current Assets
 Cash                                            $    206,635  $      6,814
 Accounts receivable (net of allowance of $0)         273,014        32,253
 Investments - available for sale                      19,538        12,796
 Advances                                                   0         7,696
 Deposits and prepaids                                 65,738             0
 Advances - related party                                   0        74,693
                                                 ------------  ------------
   Total Current Assets                               564,925       134,252

Property and Equipment
 Land and tunnels                                     405,410       345,159
 Buildings and equipment                              178,368        77,680
 Mining equipment                                     104,201        26,000
 Milling equipment                                    242,669             0
 Office equipment                                       1,300         1,300
 Vehicles                                              70,305        27,995
 Less:  Accumulated depreciation                    (152,507)     (121,914)
                                                 ------------  ------------
   Total Property and Equipment                       849,746       356,220

Other Assets
 Mining supplies                                        9,000         9,000
                                                 ------------  ------------
   Total Other Assets                                   9,000         9,000
                                                 ------------  ------------
   Total Assets                                  $  1,423,671  $    499,472
                                                 ============  ============

</Table>


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


                                    F-4



                    Atlas Mining Company and Subsidiary
                        Consolidated Balance Sheets
<Table>
<Caption>

                    LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                       December 31,
                                                     2004          2003
                                                 ------------  ------------
<S>                                                          <C>             <C>

Current Liabilities
 Accounts payable and accrued liabilities        $    304,925  $    214,855
 Line of credit                                             0        23,094
 Current portion of long-term debt                  1,031,672       725,131
                                                 ------------  ------------
   Total Current Liabilities                        1,336,597       963,080

Long-Term Liabilities
 Notes payable                                        811,373       729,795
 Notes payable - related party                        250,354        70,829
 Less: current portion of long-term debt          (1,031,672)     (725,131)
                                                 ------------  ------------
   Total Long-Term Liabilities                         30,055        75,493

Minority Interest                                      52,649        52,652
                                                 ------------  ------------

Stockholders' Equity (Deficit)
 Preferred stock, $1.00 par value, 10,000,000
  shares authorized, noncumulative, nonvoting,
  nonconvertible, none issued or outstanding                -             -
 Common stock, no par value, 60,000,000 shares
  authorized, 39,892,422 and 34,725,151 shares
  issued and outstanding, respectively              6,006,657     4,994,977
 Cost of treasury stock, 1,313,022 in 2004
  and 2003                                          (131,221)     (131,221)
 Accumulated Deficit                              (5,861,240)   (4,914,966)
 Accumulated other comprehensive income (loss)            174      (10,843)
 Prepaid expenses                                    (10,000)       (5,000)
 Subscription receivable                                    -     (524,700)
                                                 ------------  ------------
   Total Stockholders' Equity (Deficit)                 4,370     (591,753)
                                                 ------------  ------------
   Total Liabilities and Stockholders' Equity    $  1,423,671  $    499,472
                                                 ============  ============





</Table>


 The accompanying notes are an integral part of these financial statements.
                                    F-5


                    Atlas Mining Company and Subsidiary
                   Consolidated Statements of Operations

<Table>
<Caption>
                                                                    For the Year Ended
                                                                       December 31,
                                                     2004          2003
                                                 ------------  ------------
<S>                                                          <C>             <C>
Revenues                                         $  1,035,329  $    304,851

Cost of Sales                                         567,545       335,104
                                                 ------------  ------------
Gross Profit (Loss)                                   467,784      (30,253)
                                                 ------------  ------------
Operating Expenses
 Exploration & development costs                      340,657        51,140
 General & administrative                           1,010,781     1,255,182
                                                 ------------  ------------
   Total Operating Expenses                         1,351,438     1,306,322
                                                 ------------  ------------
   Net Operating Income (Loss)                      (883,654)   (1,336,575)
                                                 ------------  ------------
Other Income(Expense)
 Interest income                                           36             8
 Interest expense                                    (56,224)     (106,659)
 Miscellaneous income                                     750         4,013
 Minority interest                                          3        16,474
 Gain (loss) on sale of investments
  available for sale                                 (10,049)       (6,606)
 Gain (loss) on settlement of debt                      2,864        47,307
                                                 ------------  ------------
   Total Other Income(Expense)                       (62,620)      (45,463)

   Income (Loss) Before Income Taxes                (946,274)   (1,382,038)

Provision (Benefit) for Income Taxes                        -             -
                                                 ------------  ------------

Net Income (Loss)                                $  (946,274)  $(1,382,038)
                                                 ============  ============

Net Income (Loss) Per Share (Basic and Diluted)  $     (0.02)  $     (0.06)
                                                 ============  ============

Weighted Average Shares Outstanding                37,268,310    21,363,537
                                                 ============  ============





</Table>


 The accompanying notes are an integral part of these financial statements.
                                    F-6

                    Atlas Mining Company and Subsidiary
               Consolidated Statement of Stockholders' Equity
               For the Years Ended December 31, 2004 and 2003

<Table>
<Caption>

                                                         Accumulated
                                                               Other            Subscr
            Common Stock                   Treasury Stock     Compre            iption
       --------------------  Accumulated -----------------   hensive  Prepaid    Recei-
          Shares     Amount    Deficit    Shares    Amount    Income  Expenses  vables
       --------- ---------- ------------ --------- -------- --------- -------- -------
<S>    <C>       <C>        <C>          <C>      <C>      <C>       <C>      <C>
Balance,
December
31,
2002   9,949,945 $2,689,545 $(3,532,928) $(18,106)$(1,738) $(27,696) $(5,000) $     -

1/6/03
Stock
issued
for
services
at $0.10
per
share    250,000     25,000            -         -       -         -        -       -

1/27/03
Stock
issued
for note
payable
at $0.10
per
share  1,000,000    100,000            -         -       -         -        -       -

2/12/03
Stock
issued
for
services
at $0.10
per
share     68,000      6,800            -         -       -         -        -       -

3/13/03
Stock
issued
for
services
at $0.10
per
share    100,000     10,000            -         -       -         -        -       -


3/27/03
Stock
issued to
subsidiary
for cash at
$0.10 per
share    500,000     50,000            - (500,000)(50,000)         -        -       -

3/27/03
Stock
issued
for
services
at $0.10
per
share    600,000     60,000            -         -       -         -        -       -


3/28/03
Stock
issued
for
services
at $0.10
per
share    200,000     20,000            -         -       -         -        -       -

3/28/03
Stock
issued
for
services
at $0.10
per
share    150,000     15,000            -         -       -         -        -       -

3/31/03
Stock
issued
for cash
at $0.10
per
share  2,500,000    250,000            -         -       -         -        -       -

4/4/03
Stock
issued
for
services
at $0.10
per
share  1,250,000    125,000            -         -       -         -        -       -

4/25/03
Stock
issued
for
services
at $0.10
per
share     45,000      4,500            -         -       -         -        -       -

5/03/03
Cash
received
from sale
of
treasury
stock          -      (252)            -         -  10,084     1,000        -       -

5/9/03
Stock
issued
for
services
at $0.10
per
share      1,000        100            -         -       -         -        -       -

5/28/03
Stock
issued
for
services
at $0.10
per
share    250,000     25,000            -         -       -         -        -       -

</Table>
 The accompanying notes are an integral part of these financial statements
                                    F-7

                    Atlas Mining Company and Subsidiary
               Consolidated Statement of Stockholders' Equity
               For the Years Ended December 31, 2004 and 2003

<Table>
<Caption>

                                                         Accumulated
                                                               Other            Subscr
            Common Stock                   Treasury Stock     Compre            iption
       --------------------  Accumulated -----------------   hensive  Prepaid    Recei-
          Shares     Amount    Deficit    Shares    Amount    Income  Expenses  vables
       --------- ---------- ------------ --------- -------- --------- -------- -------
<S>    <C>       <C>        <C>          <C>      <C>      <C>       <C>      <C>

7/1/03
Shares
issued
for
services
at $.09
per
share    250,000     22,500            -         -       -         -        -       -

7/13/03
Purchased
treasury
stock          -          -            -   (5,000)   (483)         -        -       -

7/14/03
Stock
issued
for
lease
at $.10
per
share    100,000     10,000            -         -       -         - (10,000)       -

7/28/03
Stock
issued
for
accounts
payable
at $.08
per
share    875,000     70,000            -         -       -         -        -       -

7/28/03
Stock
issued
for
services
at $.08
per
share  1,100,000     88,000            -         -       -         -        -       -

7/29/03
Exchanged
treasury
stock for
services       -    (2,000)            -   200,000  20,000         -        -       -

8/8/03
Stock
issued
for cash
at $.10
per
share  7,650,000    765,000            -         -       -         -        -    (765,000)


8/8/03
Stock
issued
for cash
to
subsidiary
at $.10
per
share  1,750,000    175,000            -       (1,750,000) (175,000)        -       -    -

8/26/03
Stock
issued
for
services
at $.08
per
share    125,000     10,000            -         -       -                  -       -

9/03/03
Stock
issued
for
services
at $.07
per
share    400,000     28,000            -         -       -         -        -       -

9/04/03
Cash
received
from
subscription
receivable
               -          -            -         -       -         -        -  40,000

9/22/03
Cash
received
from
subscription
receivable
               -          -            -         -       -         -        -  30,000


9/23/03
Stock
issued
for
services
at $.07 per
share
       3,020,000    211,400            -         -       -         -        -       -

9/30/03
Cash
received
from sale
of
treasury
stock          -     55,000            -   750,000  75,000         -        -       -


10/02/03
Stock
issued
for
services
at $.07
per
share     20,000      1,400            -         -       -         -        -       -

</Table>
 The accompanying notes are an integral part of these financial statements
                                    F-8

                    Atlas Mining Company and Subsidiary
               Consolidated Statement of Stockholders' Equity
               For the Years Ended December 31, 2004 and 2003

<Table>
<Caption>

                                                         Accumulated
                                                               Other            Subscr
            Common Stock                   Treasury Stock     Compre            iption
       --------------------  Accumulated -----------------   hensive  Prepaid    Recei-
          Shares     Amount    Deficit    Shares    Amount    Income  Expenses  vables
       --------- ---------- ------------ --------- -------- --------- -------- -------
<S>    <C>       <C>        <C>          <C>      <C>      <C>       <C>      <C>

10/14/03
Stock
issued for
services
at $.07
per
share    600,000     42,000            -         -       -         -        -       -


10/20/03
Stock
issued
for
services
at $.07
per
share    908,857     63,620            -         -       -         -        -       -

10/30/03
Stock
issued
for
services
at $.07
per
share     10,000        700            -         -       -         -        -       -

12/5/03
Stock
issued
to
located
shareholder
from Sierra
Silver
Mine at
$0.07 per
share      6,649        465            -         -       -         -        -       -

12/09/03
Stock
issued for
services
at $.07
per
share  1,045,000     73,150            -         -       -         -        -       -

12/09/03
Stock
issued
for
services
at $.07
per
share        700         49            -         -       -         -        -       -

12/31/03
Cash
received
from
subscription
receivable
               -          -            -         -       -         -        - 170,300

Amortization
of prepaid
expenses
               -          -            -         -       -         -   10,000       -

Net
change
in
unrealized
gains
(losses) on
available
for sale
securities     -          -            -         -       -    16,853        -       -

Net loss
for the
year ended
December
31, 2003       -          -  (1,382,038)         -       -         -        -       -
       --------- ---------- ------------ --------- -------- --------- -------- -------
Balance,
December
31, 2003

      34,725,151  4,994,977  (4,914,966)(1,313,022)(131,221)  (10,843) (5,000)(524,700)

1/22/04
Shares
issued for
services
at $.10   50,000      5,000            -         -       -         -        -       -

2/12/04
Shares
issued for
services
at $.10  500,000     50,000            -         -       -         -        -       -

2/13/04
Shares
issued for
services
at $.10  250,000     25,000            -         -       -         -        -       -


2/20/04
Shares
issued for
services
at $.10  500,000     50,000            -         -       -         -        -       -


2/24/04
Shares
issued for
services
at $.10  150,000     15,000            -         -       -         -        -       -

3/5/04
Shares
issued for
cash
at $.14    1,071        150            -         -       -         -        -       -

3/6/04
Shares
issued for
services
at $.15  500,000     75,000            -         -       -         -        -       -


3/19/04
Shares
issued for
services
at $.15  150,000     22,500            -         -       -         -        -       -

4/19/04
Shares
issued for
services
at $.20  195,000     39,000            -         -       -         -        -       -

5/17/04
Shares
issued for
services
at $.20      200         40            -         -       -         -        -       -


7/08/04
Shares
issued for
services
at $.20  100,000     20,000            -         -       -         -        -       -

7/15/04
Shares
issued for
dragon
mine lease
at $.20  100,000     20,000            -         -       -         - (20,000)       -

7/15/04
Shares
issued for
services
at $.20   10,000      2,000            -         -       -         -        -       -


8/10/04
Shares
issued for
services
at $.20   50,000     10,000            -         -       -         -        -       -

8/10/04
Shares
issued
for
services
at $.20  250,000     50,000            -         -       -         -        -       -

8/10/04
Shares
issued
for
services
at $.20  200,000     40,000            -         -       -         -        -       -


10/13/04
Shares
issued
for
services
at $.30  150,000     45,000            -         -       -         -        -       -

10/15/04
Shares
issued
for
services
at $.30    1,000        300            -         -       -         -        -       -

10/26/04
Shares
issued
for
services
at $ .29  10,000      2,900            -         -       -         -        -       -

10/26/04
Shares
issued
for
services
at $.29   90,000     26,100            -         -       -         -        -       -

11/08/04
Shares
issued
for
services
at $.27  200,000     54,000            -         -       -         -        -       -


11/30/04
Shares
issued
for
services
at $.25   30,000      7,500            -         -       -         -        -       -

12/7/04
Shares
issued
for cash
at $.25  400,000    100,000            -         -       -         -        -       -

12/8/04
Shares
issued for
services
at $.30    5,000      1,500            -         -       -         -        -       -

12/8/04
Shares
issued
for cash
at $.25  200,000     50,000            -         -       -         -        -       -

12/9/04
Shares
issued for
services
at $.31  250,000     77,500            -         -       -         -        -       -

12/9/04
Shares
issued for
cash at
$.25     120,000     30,000            -         -       -         -        -       -

12/10/04
Shares
issued
for cash
at $.25  180,000     45,000            -         -       -         -        -       -


12/16/04
Shares
issued
for cash
at $.25  420,000    105,000            -         -       -         -        -       -

12/27/04
Shares
issued for
services
at $.25   20,000      5,000            -         -       -         -        -       -


12/27/04
Shares
issued
for cash
at $.25   85,000     21,250            -         -       -         -        -       -

12/31/04
Warrants
issued
for
brokerage
fee            -     16,940            -         -       -         -        -       -

Cash
received
for
subscriptions
receivable     -          -            -         -       -         -        - 524,700


Amortization
of prepaid
expenses       -          -            -         -       -         -   15,000       -

Net change
in
unrealized
gains
(losses) on
available
for sale
securities     -          -            -         -       -    11,017        -       -

Net loss
for the
year ended
December
31, 2004       -          -    (946,274)         -       -         -        -       -
       --------- ---------- ------------ --------- -------- --------- -------- -------
Balance,
December
31,
2004  39,892,422 $6,006,657 $(5,861,240)(1,313,022)$(131,221)    $174 $(10,000) $    -
      ========== ========== ============ ========= ========= ======== ========= ======

</Table>


 The accompanying notes are an integral part of these financial statements.
                                    F-9
                    Atlas Mining Company and Subsidiary
                   Consolidated Statements of Cash Flows

<Table>
<Caption>
                                                     For the Year Ended
                                                        December 31,
                                                     2004          2003
                                                 ------------  ------------
<S>                                             <C>             <C>

Cash Flows from Operating Activities:
  Net Income (Loss)                              $  (946,274)  $(1,382,038)
  Adjustments to Reconcile Net Loss to Net Cash
  Provided by Operations:
   Depreciation                                        30,593         7,075
   (Gain) loss on sale of investments available
     for sale                                          10,049         6,606
   Stock and warrants issued for services             637,530       850,684
   Amortization of prepaid expense (equity)            15,000        10,000
   Minority interest                                      (3)      (16,474)
   (Gain) loss on settlement of debt                        -      (28,500)
   Bad debt expense                                         -         4,000
  Change in Operating Assets and Liabilities:
   (Increase) Decrease in:
     Accounts receivable                            (240,761)      (32,253)
     Deposits and prepaids                           (65,738)        25,835
     Accounts payable and accrued expenses             68,376         8,476
                                                 ------------  ------------
Net Cash Provided(Used) by Operating Activities     (491,228)     (546,589)

Cash Flows from Investing Activities:
  Purchases of equipment                            (524,119)             -
  Proceeds from advances                              320,693       465,543
  Proceeds from sale of investments available
   for sale                                             1,922        10,503
  Payments for advances                             (246,000)     (521,387)
                                                 ------------  ------------
Net Cash Provided (Used) by Investing Activities    (447,504)      (45,341)

Cash Flows from Financing Activities:
  Proceeds from notes payable                         328,489        10,766
  Payments for notes payable                         (67,386)      (32,903)
  Payments for line of credit                         (1,400)       (4,930)
  Proceeds from issuance of common stock              354,150       490,300
  Proceeds from collection of subscriptions
   receivable                                         524,700             -
  Proceeds from sale of treasury stock                      -       130,748
  Purchase of treasury stock                                -         (483)
                                                 ------------  ------------
Net Cash Provided (Used) by Financing Activities    1,138,553       593,498

Increase (Decrease) in Cash                           199,821         1,568

Cash and Cash Equivalents at Beginning of Period        6,814         5,246
                                                 ------------  ------------
Cash and Cash Equivalents at End of Period            206,635         6,814
                                                 ============  ============

</Table>

 The accompanying notes are an integral part of these financial statements.
                                    F-10



                    Atlas Mining Company and Subsidiary
             Consolidated Statements of Cash Flows (Continued)
<Table>
<Caption>
                                                     For the Year Ended
                                                        December 31,
                                                     2004          2003
                                                 ------------  ------------
<S>                                             <C>             <C>

Cash Paid For:
  Interest                                       $     23,210  $     91,337
  Income Taxes                                   $          -  $          -

Supplemental Disclosure of Non-Cash Investing
and Financing Activities:
  Stock issued for services                      $    637,530  $    850,684
  Stock issued for prepaid expenses              $     20,000  $     10,000
  Stock issued for notes payable                 $          -  $    100,000
  Stock issued for accounts payable              $          -  $     70,000


</Table>
The accompanying notes are an integral part of these financial statements.
                                    F-11

                    Atlas Mining Company and Subsidiary
               Notes to the Consolidated Financial Statements
                         December 31, 2004 and 2003

NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     a.  Organization

     Atlas Mining Company, ("the Company") was incorporated in the state of
     Idaho on March 4, 1924.  The Company was formed for the purpose of
     exploring and developing the Atlas mine, a consolidation of several
     patented mining claims located in Coeur d' Alene mining district near
     Mullan, Idaho.  The Company eventually became inactive as a result of
     low silver prices.

     In September 1997, the Company became active and purchased
     substantially all of the operating equipment and mining supplies from
     Fausett International, Inc., a related party.  The purchase price
     totaled $1,416,099, which consisted of $50,000 cash, 875,000 shares of
     the Company's common stock valued at $350,000 and a note payable of
     $1,016,094.  After the purchase, the Company commenced contracting
     operations through the trade name, Atlas Fausett Contracting.  Through
     Atlas Fausett Contracting, the Company provides shaft sinking,
     underground mine development and contracting primarily to companies in
     the mining and civil industries.  The Company also pursues property
     acquisitions and resource development projects.  In 2002 the Company
     settled out the debt to Fausett International and returned the
     majority of the unusable equipment, however the Company continues to
     pursue contracting activities.

     In 1997 and 1998, the Company was to exchange 844,560 shares of its
     common stock for all of the outstanding shares of Sierra Silver Lead
     Mines, Inc. (Sierra), an Idaho corporation.  As of December 31, 2004,
     384,465 shares of the Company's common stock had not been exchanged.
     The Company was unable to locate some of the shareholders of Sierra.
     Therefore, the Company agreed to transfer the stock to an Atlas Mining
     Company Trust account in trust for the unlocated shareholders of
     Sierra Silver. The acquisition of Sierra has been recorded as a
     purchase.  The purchase price totaled $276,157.  All of the assets and
     liabilities of Sierra were transferred to the Company and Sierra
     ceased to exist.

     In April 1999, the Company exchanged 741,816 shares of its common
     stock and paid cash of $15,770 for all of the outstanding shares of
     Olympic Silver Resources, Inc. (Olympic), a Nevada corporation.
     Olympic holds the rights to the San Acacio Mine in Zacatecas, Mexico.
     The purchase price totaled $228,566.  The acquisition has been
     recorded as a purchase and all of the assets and liabilities were
     transferred to the Company.  In 2001 the Company did not renew the
     rights to the property due to increased carrying costs.






                                    F-12

                    Atlas Mining Company and Subsidiary
               Notes to the Consolidated Financial Statements
                         December 31, 2004 and 2003

NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     In 1998 and 1999, the Company exchanged 71,238 shares of its common
     stock for 53% of the outstanding shares of Park Copper and Gold
     Mining, Ltd. (Park Copper), an Idaho corporation.  The purchase price
     totaled $72,825.  The acquisition has been recorded as a purchase.

     In July 2001, Atlas Mining Company began leasing the Dragon Mine from
     Conjecture Silver Mines, Inc. in Spokane, Washington. Conjecture Mines
     has since been merged into Chester Mines, Inc. at the same location.
     We initially paid 400,000 shares of our common stock, valued at
     $100,000, for a one-year lease. Under the terms of the lease
     agreement, we have the right to renew the lease annually in exchange
     for 100,000 additional shares of our common stock, or we may buy the
     property for $500,000 if we have $1,000,000 in sales from the mine in
     a 12-month period.  The property consists of 38 patented mining claims
     on approximately 230 acres.

     b.  Revenue and Cost Recognition

     The Company recognizes income and expenses on the accrual basis of
     accounting.  Revenues from unit price contracts are recognized on the
     units produced method which management considers the best available
     measure of progress on contracts.

     Contract costs include all direct material and labor costs and those
     indirect costs related to contract performance, such as indirect
     labor, supplies, tools, repairs, and depreciation costs.  Costs
     associated with the start-up of contracts are capitalized as deferred
     contract costs and amortized to expense over the life of the contract.
     General and administrative costs are charged to expense as incurred.
     Provisions for estimated losses on uncompleted contracts are made in
     the period in which such losses are determined.  Changes in job
     performance, job conditions, and estimated profitability, including
     those arising from contract penalty provisions, and final contract
     settlements may result in revisions to costs and income and are
     recognized in the period in which revisions are determined.

     Contract claims are included in revenue when realization is probable
     and can be reliably estimated.



















                                    F-13

                    Atlas Mining Company and Subsidiary
               Notes to the Consolidated Financial Statements
                         December 31, 2004 and 2003


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

c.   Bad Debts

     Bad debts on receivables are charged to expense in the year the
     receivable is determined uncollectible, therefore, no allowance for
     doubtful accounts is included in the financial statements.  Amounts
     determined as uncollectible are not significant to the overall
     presentation of the financial statements.

d.  Basis of Consolidation

     The consolidated financial statements include the accounts of Park
     Copper & Gold Mining Ltd.  All significant inter-company accounts and
     transactions have been eliminated in the consolidation.

e.  Earnings (Loss) Per Share

     The computation of earnings per share of common stock is based on the
     weighted average number of shares outstanding at the date of the
     financial statements.

<Table>
<Caption>
                                               Net Loss       Shares       Per-Share
                                              (Numerator) (Denominator)     Amount
                                             ------------  ------------  ------------
     <S>                                     <C>           <C>           <C>
     For the year ended December 31, 2004:
      Basic EPS
      Net loss to common Shareholders        $  (946,274)    37,268,310   $    (0.03)
                                             ============  ============  ============
     For the year ended December 31, 2003:
      Basic EPS
      Net loss to common Shareholders        $(1,382,038)    21,363,537   $    (0.06)
                                             ============  ============  ============

</Table>

     f.  Cash and Cash Equivalents

     The Company considers all highly liquid investments with maturities of
     three months or less to be cash equivalents.












                                    F-14

                    Atlas Mining Company and Subsidiary
               Notes to the Consolidated Financial Statements
                         December 31, 2004 and 2003

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

g.   Income Taxes

     Income taxes are provided for the tax effects of transactions reported
     in the financial statements and consist of taxes currently due plus
     deferred taxes. Deferred taxes are provided on a liability method
     whereby deferred tax assets are recognized for deductible temporary
     differences and operating loss, tax credit carry-forwards, and
     deferred tax liabilities are recognized for taxable temporary
     differences. Temporary differences are the differences between the
     reported amounts of assets and liabilities and their tax bases.
     Deferred tax assets are reduced by a valuation allowance when, in the
     opinion of management, it is more likely than not that some portion or
     all of the deferred tax will not be realized. Deferred tax assets and
     liabilities are adjusted for the effects of changes in tax laws and
     rates on the date of enactment.

<Table>
<Caption>
                                                     For the Year Ended
                                                        December 31,
                                                     2004          2003
                                                 ------------  ------------
     <S>                                        <C>           <C>

     Deferred Tax Assets:
      Net Operating Loss Carry-forwards           $   687,450   $   552,000
      Contribution Carry-forwards                         148           148
      Unrealized Loss on Available for Sale
       Securities                                           -        16,853
                                                 ------------  ------------
       Total Deferred Tax Assets                      687,598       569,001
       Valuation Allowance for Deferred
       Tax Assets                                   (680,361)     (562,001)
                                                 ------------  ------------
                                                        7,237         7,000
     Deferred Tax Liabilities:
      Unrealized gain on Available for Sale
       Securities                                       1,653             -
      Tax over Book Depreciation                        5,584         7,000
                                                 ------------  ------------
       Total Deferred Tax Liabilities                   7,237         7,000
       Total Deferred Tax Assets                  $         -   $         -
                                                 ============  ============
</Table>

     At December 31, 2004, the Company has net operating losses of
     approximately $4,583,000 which expire from 2005 through 2020.



                                    F-15



                    Atlas Mining Company and Subsidiary
               Notes to the Consolidated Financial Statements
                         December 31, 2004 and 2003

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

      h.  Available for Sale Investments

          Management determines the appropriate classification of marketable
          equity security investments at the time of purchase and reevaluates
          such designation as of each balance sheet date. Unrestricted
          marketable equity securities have been classified as available for
          sale. Available for sale securities are carried at fair value, with
          the unrealized gains and losses, net of tax, reported as a net amount
          in accumulated other comprehensive income. Realized gains and losses
          and declines in value judged to be other-than-temporary on available
          for sale securities are included in investment income or loss. The
          cost of securities sold is based on the specific identification
          method. Interest and dividends on securities classified as available
          for sale are included in investment income.

          The following is a summary of available for sale equity securities
          which are concentrated in companies in the mining industry:

<Table>
<Caption>

                                          Gross       Gross
                                        Unrealized  Unrealized    Estimated
                             Cost         Gains       Losses     Fair Value
                          -----------  ----------- -----------  -----------
     <S>                  <C>          <C>         <C>          <C>
     December 31, 2004     $   19,364   $      174  $        -   $   19,538
     December 31, 2003     $   23,639   $        -  $ (10,843)   $   12,796
</Table>

     i.  Mining Supplies

     Mining supplies, consisting primarily of bits, steel, and other mining
     related equipment, are stated at the lower of cost (first-in, first-
     out) or market. In addition, equipment repair parts and maintenance
     items are also included at cost.

     j.  Use of Estimates

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates
     and assumptions that affect reported amounts of assets and
     liabilities, disclosure of contingent assets and liabilities at the
     date of the financial statements and revenues and expenses during the
     reporting period.  In these financial statements assets and
     liabilities involve extensive reliance on management's estimates.
     Actual results could differ from those estimates.




                                    F-16

                    Atlas Mining Company and Subsidiary
               Notes to the Consolidated Financial Statements
                         December 31, 2004 and 2003

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     k.  Property and Equipment

     Property and equipment are carried at cost. Depreciation and
     amortization is computed on the straight-line method over the
     estimated useful lives of the assets as follows:

                                                                  Estimated
                                                                Useful Life
                                                                -----------
     Building                                                      39 years
     Mining equipment                                             2-8 years
     Office and shop furniture and equipment                      5-8 years
     Vehicles                                                       5 years


     In accordance with Financial Accounting Standards Board Statement No.
     144, the Company records impairment of long-lived assets to be held
     and used or to be disposed of when indicators of impairment are
     present and the undiscounted cash flows estimated to be generated by
     those assets are less than the carrying amount. At December 31, 2004
     and 2003, no impairments were recognized.  Depreciation expense for
     the years ended December 31, 2004 and 2003 totaled $30,593 and $7,075,
     respectively.

     l.  Financial Instruments

     The recorded amounts of financial instruments, including cash
     equivalents, receivables, investments, accounts payable and accrued
     expenses, and long-term debt approximate their market values as of
     December 31, 2004 and 2003.  The Company has no investments in
     derivative financial instruments.

     m. Mining Exploration and Development Costs

     The company has elected to expense all mining exploration and
     development costs due to the uncertainty of bringing its projects into
     production, and in accordance with generally accepted accounting
     principles in the mining industry. At such a time as mining continues
     in any of the Company's properties, the Company will capitalize costs
     of successfully developing the properties, when future benefit of the
     costs can be identified.

















                                    F-17



                    Atlas Mining Company and Subsidiary
               Notes to the Consolidated Financial Statements
                         December 31, 2004 and 2003

n.  Stock Options and Warrants

     The Company has stock option plans that provide for stock-based
     employee compensation, including the granting of stock options, to
     certain key employees. The plans are more fully described in Note 7.
     The Company accounts for the stock option plans in accordance with the
     recognition and measurement principles of APB Opinion No. 25,
     "Accounting for Stock Issued to Employees", and related
     Interpretations. Under this method, compensation expense is recorded
     on the date of grant only if the current market price of the
     underlying stock exceeds the exercise price.

     During the periods presented in the accompanying financial statements
     the Company has granted options under the 1998 Stock Options Plans.
     The Corporation has adopted the disclosure-only provisions under
     Statement of Financial Accounting Standards No. 123, "Accounting for
     Stock-Based Compensation."  Accordingly, no compensation cost under
     SFAS No.123 has been recognized for the stock option plans or other
     agreements in the accompanying statement of operations.  Had
     compensation cost for the Company's stock option plans and agreements
     been determined based on the fair value at the grant date for awards
     in 2004 and 2003 consistent with the provisions of SFAS No. 123, the
     Company's net earnings net of taxes and earnings per share would have
     been reduced to the pro forma amounts indicated below:

<Table>
<Caption>
                                                     2004          2003
                                                 ------------  ------------
     <S>                      <C>                <C>           <C>
     Net Loss                 As reported        $  (946,274)  $(1,382,038)
                                                 ------------  ------------
                              Proforma           $  (946,274)  $(1,382,038)
                                                 ------------  ------------
     Basic earnings per share As reported        $     (0.03)  $     (0.06)
                              Proforma           $     (0.03)  $     (0.06)

</Table>

     Warrants issued for services are recorded at fair market value in
     accordance with SFAS No. 123 as compensation expenses.

NOTE 2 -GOING CONCERN

     The accompanying financial statements have been prepared assuming that
     the Company will continue as a going concern.  The Company is
     dependent upon raising capital to continue operations.  The financial
     statements do not include any adjustments that might result from the
     outcome of this uncertainty.  It is management's plan to reduce the
     Company's debt through a negotiated settlement with its major creditor
     (see Note 9) and the initiation of the operations at the Dragon Mine.
     The Company has also negotiated an equipment line of credit in order
     to finance the required equipment for the mining operations. Further,
     Company has been able to sell shares of its restricted stock to help
     support its financing activities.   Management believes settlement of
     it debts, the mining operations, and the sale of stock will provide
     sufficient cash flows to continue as a going concern.





                                    F-18

                    Atlas Mining Company and Subsidiary
               Notes to the Consolidated Financial Statements
                         December 31, 2004 and 2003

NOTE 3 - LONG-TERM LIABILITIES

<Table>
<Caption>

     Long- term liabilities are detailed in the following schedules as of
     December 31, 2004 and 2003:

                                                          2004          2003
                                                      ------------  ------------
     <S>                                              <C>           <C>
     Note payable to a company, due in monthly
     payments of $1,000 with a balloon payment
     due at maturity, including interest at 9%.
     The note matured August 16, 2001, past due.       $    53,455   $    53,250

     Note payable to a lending company, due in
     Monthly installments of $688, including interest
     at 7.59%.  The note matures in March 2010 and
     is collateralized by a vehicle.                        35,630             -

     Note payable to a lending company, due
     in monthly installments of $578, including
     interest at 11.99%. The note matured August
     2003, secured by a vehicle, past due.                       -         5,001

     Note payable to a mortgage company, due in
     monthly installments of $1,614, including
     interest at 16%. The note is due in August
     2005, secured by the proceeds of a logging
     agreement and collateralized by land and a
     building.                                             118,920       119,236

     Note payable to a lending company, balloon
     payment due at maturity, bears interest at 8%
     per month.  The note is secured by land owned
     by a related party and matured in March 2003,
     past due.                                             120,700       120,700

     Note payable to a mortgage company, principal
     due at maturity and bears interest at 3.5% per
     month.  The note matured in October 2003,
     secured by property, past due.                         86,100        86,100

     Note payable to a lending company, principal
     due at maturity and bears interest at 5% per
     month.  The note matured in May 2003, secured
     by land, past due.                                    345,508       345,508








</Table>






                                    F-19

                    Atlas Mining Company and Subsidiary
               Notes to the Consolidated Financial Statements
                         December 31, 2004 and 2003

<Table>
<Caption>

NOTE 4 -  LONG-TERM LIABILITIES (Continued)
                                                          2004          2003
                                                      ------------  ------------
     <S>                                              <C>           <C>
     Note payable to a company, principal due at
     maturity with no interest.  The note matures
     in May 2005.                                           17,000             -

     Note payable to a company, principal due at
     maturity with interest at 10.2%.  The note
     matures in February 2005.                              34,060             -
                                                      ------------  ------------

     Total Notes Payable                              $    811,373  $    729,795
                                                      ------------  ------------

     Notes payable - related party:

     Note payable to a company with a common officer,
     payable on demand and bears no interest          $    158,866  $          -

     Note payable to an officer, payable on demand
     and bears no interest.                                 91,488        70,829

     Total Notes Payable - Related Party                   250,354        70,829
                                                      ------------  ------------
     Total Long-Term Liabilities                         1,061,727       800,624

     Less Current Portion                                (781,318)     (654,302)
     Less Current Portion-Related Party                  (250,354)      (70,829)
                                                      ------------  ------------

     Total Current Portion                               1,031,672       725,131
                                                      ------------  ------------
     Total Long-Term Liabilities                      $     30,055  $     75,493
                                                      ============  ============

     Future minimum principal payments on notes payable are as follows:

     2005                                           $    1,031,672
     2006                                                    6,194
     2007                                                    6,681
     2008                                                    7,206
     2009                                                    9,974
     Thereafter                                                  -
                                                    --------------
     Total                                          $    1,061,727
                                                    ==============





</Table>


                                    F-20

                    Atlas Mining Company and Subsidiary
               Notes to the Consolidated Financial Statements
                         December 31, 2004 and 2003

NOTE 5 - LINE OF CREDIT

     In 2004 and 2003, the Company has an unsecured line of credit for
     $50,000 at an interest rate of prime plus 6%. The balance of the line
     of credit at December 31, 2004 and 2003 is $0 and $23,094,
     respectively.

NOTE 6 - RELATED PARTY TRANSACTIONS

     During 2004 and 2003, the Company paid advances to a company with a
     common officer.  The balance of the advances at December 31, 2004 and
     2003 is $0 and $74,693, respectively.

     During 2004 and 2003, an officer loaned the Company $34,659 and
     10,766, respectively.  During 2004, the Company paid cash of $14,000
     as partial payment for the note.  During 2003, the Company paid cash
     of $1,009 and issued 1,000,000 shares of stock valued at $10,000 as
     partial payment for the note.  The balance of the note payable at
     December 31, 2004 and 2003 is $91,488 and $70,829, respectively.

NOTE 7 - STOCK OPTIONS AND WARRANTS

     Stock options
     -------------
     In 1998, the Company adopted a non-qualified stock option plan
     authorizing the granting to officers, directors, or employees options
     to purchase common stock. Options are granted by the Administrative
     Committee, which is elected by the Board of Directors. The number of
     options granted under this plan and any other plans active may not
     exceed 10% of the currently issued and outstanding shares of the
     Company's common stock. The term of each option granted is determined
     by the Committee, but cannot be for more than five years from the date
     the option is granted. The option price per share with each option
     granted will be fixed by the Administrative Committee on the date of
     grant.

     The Company adopted an incentive stock option plan in 1998. The stock
     option plan permits the Company to grant to key employees options to
     purchase shares of stock in the Company at the direction of the
     Committee. The price of shares purchased must be equal to or greater
     than fair market value of the common stock at the date.  At December
     31, 2004, no options have been granted under this plan.

     During 2004, the company's board of directors approved an option to
     the Company's CEO to acquire up to 3.5 million shares of common stock
     over a five year period at $0.18 per share under the non-qualified
     stock option plan.  The options vest 43% on January 1, 2005, and 14%
     on January 1, 2006 -2009.










                                    F-21

                    Atlas Mining Company and Subsidiary
               Notes to the Consolidated Financial Statements
                         December 31, 2004 and 2003

NOTE 7 - STOCK OPTIONS AND WARRANTS (Continued)

     The fair value of each option granted is estimated on the date granted
     using the Black-Scholes option pricing model. Assumptions used to
     compute the weighted-average grants during the year ended December 31,
     2004 include risk-free interest rates of 2%, expected dividend yields
     of 0%, expected life of 3 years, and expected volatility 150%.  During
     2004, the Company granted options to purchase up to 3.5 million of its
     common shares with a calculated weighted average fair value of $0.13
     each.

     Warrants
     --------
     During December 2004, the Company issued warrants as follows:

<Table>
<Caption>
        Number of shares
    underlying the warrants   Exercise price           Issued       Expire
    -----------------------  ----------------  ------------------  --------
    <S>                      <C>               <C>                 <C>
          1,000,000                $ 0.35      With common shares     12/05
            280,000                  0.50      With common shares     12/06
            154,000                  0.25            For services     12/06

</Table>

     The fair value of warrants issued for services is estimated on the
     date issued using the Black-Scholes option pricing model and total
     $16,940 during 2004 as administrative expenses. Assumptions used to
     compute the weighted-average of shares underlying warrants during the
     year ended December 31, 2004 include risk-free interest rates of
     3.58%, expected dividend yields of 0%, expected life of 2 years, and
     expected volatility 75%.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

     On July 10, 2001, the Company entered into an agreement to lease and
     possibly purchase a mine in Juab County, Utah.  The Company has the
     sole option to renew the lease on an annual basis.  The agreement
     requires the lease payments be made through the issuance of 100,000
     shares of the Company's common stock each year.  In July 2004, the
     Company issued 100,000 shares of common stock valued at $20,000 to
     renew the lease.  In July 2003, the Company issued 100,000 shares of
     common stock valued at $10,000 to renew the lease.  The Company has
     the option to purchase the mine for $500,000 at anytime, or when it
     sells $1,000,000 of product from the mine during a twelve month
     period.






                                    F-22


                    Atlas Mining Company and Subsidiary
               Notes to the Consolidated Financial Statements
                         December 31, 2004 and 2003


NOTE 9   SUBSEQUENT EVENTS

     On February 16, 2005, a Settlement Agreement was entered into between
     the Company and  the court appointed receiver for American National
     Mortgage Company regarding the resolution of  approximately $582,498
     principal debt owed by Atlas plus unpaid interest.  According to the
     agreement, Atlas is to pay $406,000 plus 175,000 shares of common
     stock valued at $78,750.  The agreement becomes effective upon
     approval by the courts which is anticipated in April, 2005.

     On February 16, 2005 the Company sold a total of 1,000,000 shares of
     restricted common stock at a price of $0.50 per share for a total of
     $500,000.








































                                    F-23

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     We have experienced no recent change in or disagreement with our
accountant. Our present auditor, Chisolm, Bierwolf & Nilson, LLC, Box
540216, No. Salt Lake, UT 84054, has been the Company's auditor since 1999.
Management of the Company intends to keep Chisolm, Bierwolf & Nilson, LLC
as its auditor for the foreseeable future.

ITEM 8A   CONTROLS AND PROCEDURES

     As of December 31, 2004, an evaluation was performed under the
supervision and with the participation of the Company's management,
including the Chief Executive Officer, who is our principal executive
officer and principal financial officer, of the effectiveness of the design
and operation of our disclosure controls and procedures. Based on that
evaluation, our management, including the Chief Executive Officer,
concluded that our disclosure controls and procedures were effective as of
that date. There have been no significant changes in our internal controls
or in other factors that could significantly affect internal controls
subsequent to that date.

ITEM 8B     OTHER INFORMATION

     We entered into, on October 1, 2004, an employment agreement with our
CEO, William T Jacobson, commencing on October 1, 2004 and ending September
30, 2009.  At the end of the initial term of employment, the agreement
shall automatically be renewed for additional one-year periods, unless
either party provides at least 120 days written notice of its decision not
to renew the agreement.  Mr. Jacobson shall be paid compensation as
follows:

     (i)  for the first year, a salary at the annual rate of $120,000;
     (ii) for the second year, a salary at the annual rate of $150,000;
     (iii) for the third year, a salary at the annual rate of $200,000;
     (iv) for the fourth year, a salary at the annual rate of $225,000;
     (v)  for the fifth year, a salary at the annual rate of $250,000.

     Mr. Jacobson is entitled to a bonus program based on hallmarks as
follows:

     (a.) Obtain adequate funding package for Company.
     (b.) Achieve profitability through the Company's activities.
     (c.) Increase market cap of Company stock to the benefit of
          shareholders.

     Bonus payments will be no more than 40% of Mr. Jacobson base salary
     for each hallmark.  Payments may be in the form of cash or common
     stock as mutually agreed by Mr. Jacobson and the Company.

     In addition to the foregoing salary, the Company granted Mr. Jacobson
     an option to purchase up to 3,500,000 shares of the Company's common
     stock at an option exercise price of $.18 per share during the term of
     employment as follows:

     (a)  1,500,000 shares shall vest and become exercisable commencing
          January 1, 2005;
     (b)  500,000 shares shall vest and become exercisable commencing on
          January 1, 2006;
     (c)  500,000 shares shall vest and become exercisable commencing on
          January 1, 2007;
     (d)  500,000 shares shall vest and become exercisable commencing on
          January 1, 2008;
     (e)  500,000 shares shall vest and become exercisable commencing on
          January 1, 2009.  Any options, which are not exercised during the
          Term of Employment, shall terminate and be of no further force
          and effect at the end of the Term of Employment.


                                     46

     In the event of the Mr. Jacobson's involuntary termination of
     employment for any reason, other than for just cause due to theft or
     fraud, Mr. Jacobson shall be entitled to immediate severance
     compensation equal to an amount equal to Mr. Jacobson's base salary
     for the remaining period of the term of employment.  Additionally, Mr.
     Jacobson will be eligible to continue to participate in the employee
     health and dental benefit plans (to the extent permissible therein)
     for a period of one and one half years from the date of such
     involuntary termination of employment.  Cost of such participation for
     Mr. Jacobson and eligible dependents shall be born by the Company.

     During the term of employment, if Mr. Jacobson shall, for a period of
     more than three (3) consecutive months or for periods aggregating more
     than twelve (12) weeks in any fifty-two consecutive weeks, be unable
     to perform the services provided for herein, as a result of illness or
     incapacity or a physical, mental, or other disability of any nature,
     the Company may, upon not less than thirty (30) days notice, terminate
     Mr. Jacobson's employment hereunder.  Mr. Jacobson shall be considered
     unable to perform the services provided for herein if he is unable to
     attend to the normal duties required of him.  In such event, the
     Company shall pay to Mr. Jacobson, or to his legal representatives,
     his base compensation for a period of twelve (12) months from the date
     of termination.

     The Company has agreed that it will not consolidate or merge into or
with another corporation or entity, or transfer all or substantially all of
its business and/or assets to another entity, directly or indirectly,
unless such other entity (hereinafter referred to as the "Successor") shall
assume Mr. Jacobson's employment agreement and the obligations of the
Company thereunder; and upon such assumption, Mr. Jacobson and the
Successor shall become obligated to perform the terms and conditions
thereof.  However, if during the first 180 days following any such
consolidation or merger, the Executive determines that he does not desire
to remain employed by the Successor or the Successor determines that the
services of Mr. Jacobson are no longer required, such consolidation or
merger shall be deemed an involuntary termination of Mr. Jacobson's
employment, and Mr. Jacobson shall be paid an amount equal to his annual
base salary at the time of the consolidation or merger.  This payment will
be made to Mr. Jacobson in a single lump sum at the time of the
termination.



                                     47

                                  PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT

IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS

     The following table sets forth certain information regarding our
directors and executive officers.




Name                          Age       Position
----------------------------  -------   ----------------------------------
William T. Jacobson           58        Chairman of the Board, Chief
                                        Executive Officer
----------------------------  -------   ----------------------------------
Jack Harvey                   83        Vice President, Director

----------------------------  -------   ----------------------------------
Kurt Hoffman                  39        Treasurer, Director

----------------------------  -------   ----------------------------------
Thomas E. Groce               84        Director

----------------------------  -------   ----------------------------------
Marqueta Martinez             55        Secretary
----------------------------  -------   ----------------------------------


     There are no family relationships among any of the directors or
officers of the Company.


BUSINESS EXPERIENCE

     WILLIAM T. JACOBSON, CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER.
Mr. Jacobson has been Chairman of the Board and Chief Executive Officer of
Atlas Mining Company since August 1997. From 1994 to 1997, Mr. Jacobson
served as Secretary of Atlas and Treasurer of Fausett International, Inc.
He has had a twenty year career in the mining industry and spent fifteen
years in the banking industry. Prior to joining the Company, Mr. Jacobson
was a president and director of the Silver Trend Mining Company, located in
Kellogg, Idaho. Mr. Jacobson holds a business degree from the University of
Idaho. Mr. Jacobson does not hold a board seat in any other public company.

     JOHN "JACK" HARVEY, VICE PRESIDENT, DIRECTOR. Mr. Harvey has been Vice
President of Atlas Mining Company for 19 years. He received his mining
engineering degree from Montana Tech. He worked in Butte, Montana with
Anaconda and Arco until he retired about 17 years ago, after a 41 year
career. Mr. Harvey does not hold a board seat in any other public company.

     KURT HOFFMAN, TREASURER, DIRECTOR. Mr. Hoffman is the treasurer of
Atlas Mining Company and has been the president of Trend Mining Company
since 1998 which is a publicly traded company traded on the over the
counter bulletin board under the symbol "TRDM." Mr. Hoffman also owns and
has operated Hoffman Mining and Land Services since 1995. Other than TRDM,
Mr. Hoffman does not hold a board seat in any other public company.

     THOMAS E. GROCE, DIRECTOR. Mr. Groce has been a director of Atlas
Mining Company for 34 years. He retired 18 years ago after a 30-year career
at Kaiser Aluminum. Mr. Groce held the position of secretary treasurer for
16 years. Mr. Groce does not hold a board seat in any other public company.
Mr. Groce received a metallurgical engineering degree from Montana Tech.


                                     48

     MARQUETA MARTINEZ. SECRETARY. Ms. Martinez is the secretary for the
corporation, and works as a full time employee for the Company. She has
worked in the mining industry since 1991. Ms. Martinez does not hold a
board seat in any other public company. Ms. Martinez is also a past
treasurer for the Shoshone County Habitat for Humanity.

     All directors hold office until the next annual meeting of
shareholders and the election and qualification of their successors.
Officers are elected annually by, and serve at the discretion of, the Board
of Directors. Members of the Board of Directors are not compensated for
serving as directors of Atlas Mining, however expenses may be reimbursed.

     None of the foregoing Directors or Executive Officers has, during the
past five years:

     (a) Had any bankruptcy petition filed by or against any business of
which such person was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that time;

     (b) Been convicted in a criminal proceeding or subject to a pending
criminal proceeding;

     (c) Been subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; and

     (d) Been found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the judgment
has not been reversed, suspended, or vacated.

     No individual on our Board of Directors possesses all of the
attributes of an audit committee financial expert and no one on our Board
of Directors is deemed to be an audit committee financial expert. In
forming our Board of Directors, we sought out individuals who would be able
to guide our operations based on their business experience, both past and
present, or their education. Our business model is not complex and our
accounting issues are straightforward. Responsibility for our operations is
centralized within management. We rely on the assistance of others, such as
our accountant, to help us with the preparation of our financial
information. We recognize that having a person who possesses all of the
attributes of an audit committee financial expert would be a valuable
addition to our Board of Directors, however, we are not, at this time, able
to compensate such a person therefore, we may find it difficult to attract
such a candidate.

     Atlas Mining Company has adopted a Code of Ethical Conduct.

COMPLIANCE WITH SECTION 16(A) OF EXCHANGE ACT

     Section 16(a) of the Securities Exchange Act requires our directors,
executive officers and persons who own more than 10% of our Common Stock to
file reports of ownership and changes in ownership of our common stock with
the Securities and Exchange Commission. Directors, executive officers and
persons who own more than 10% of our common stock are required by
Securities and Exchange Commission regulations to furnish to us copies of
all Section 16(a) forms they file.


                                     49

     To our knowledge, based solely upon review of the copies of such
reports received or written representations from the reporting persons, we
believe that during our 2004 fiscal year our directors, executive officers
and persons who own more than 10% of our common stock complied with all
Section 16(a) filing requirements with the exception of the following: Form
3s for William T. Jacobson, John Harvey, Kurt Hoffman, Thomas E. Groce and
Marqueta Martinez were filed in March 2003 rather than in July 2002.

ITEM 10. EXECUTIVE COMPENSATION

     During the 2004 fiscal year, no officer received compensation in
excess of $100,000 per year. The following table sets forth information as
to the compensation paid or accrued to William T. Jacobson, our Chairman
and Chief Executive Officer, for the three years ended December 31, 2004,
December 31, 2003 and December 31, 2002:


<Table>
<Caption>

                    Long Term Compensation             Long Term        Compensation
                                                     Awards           Payouts

                                                     Restr                        All
Name &                                               icted              LTIP    Other
Principal                                   Compen   Stock  Options   Payout   Compen
Position           Year   Salary    Bonus   sation  Awards  /SARs #      ($)   sation
-------------------------------------------------------------------------------------
<S>            <C>      <C>      <C>      <C>     <C>      <C>      <C>      <C>
William T.
 Jacobson          2004  $78,000      ---      ---     ---      ---      ---      ---
Chairman and
Chief              2003  $78,000      ---      ---     ---      ---      ---      ---
Executive Officer  2002  $78,000      ---      ---     ---      ---      ---      ---

</Table>
-------------

(1) Mr. Jacobson owns 1,643,660 shares of restricted stock worth
approximately $2,038,138.

EMPLOYMENT AGREEMENTS

     We have an employment agreement with our CEO, William T Jacobson,
commencing on October 1, 2004 and ending September 30, 2009.  At the end of
the initial term of employment, the agreement shall automatically be
renewed for additional one-year periods, unless either party provides at
least 120 days written notice of its decision not to renew the agreement.
, Mr. Jacobson shall be paid compensation as follows:

     (i)  for the first year, a salary at the annual rate of $120,000;
     (ii) for the second year, a salary at the annual rate of $150,000;
     (iii)for the third year, a salary at the annual rate of $200,000;
     (iv) for the fourth year,, a salary at the annual rate of $225,000;
     (v)  for the fifth year, a salary at the annual rate of $250,000.

     Mr. Jacobson is entitled to a bonus program based on hallmarks as
follows:
          (d.) Obtain adequate funding package for Company.
          (e.) Achieve profitability through the Company's activities.
          (f.) Increase market cap of Company stock to the benefit of
               shareholders.
     Bonus payments will be no more than 40% of Mr. Jacobson base salary
for each hallmark.  Payments may be in the form of cash or common stock as
mutually agreed by Mr. Jacobson and the Company.


                                     50

     In addition to the foregoing salary, the Company granted Mr. Jacobson
an option to purchase up to 3,500,000 shares of the Company's common stock
at an option exercise price of $.18 per share during the term of employment
as follows:

     (a)  1,500,000 shares shall vest and become exercisable commencing
          January 1, 2005;
     (b)  500,000 shares shall vest and become exercisable commencing on
          January 1, 2006;
     (c)  500,000 shares shall vest and become exercisable commencing on
          January 1, 2007;
     (d)  500,000 shares shall vest and become exercisable commencing on
          January 1, 2008;
     (e)  500,000 shares shall vest and become exercisable commencing on
          January 1, 2009.  Any options, which are not exercised during the
          term of employment, shall terminate and be of no further force
          and effect at the end of the term of employment.

     In the event of the Mr. Jacobson's involuntary termination of
     employment for any reason, other than for just cause due to theft or
     fraud, Mr. Jacobson shall be entitled to immediate severance
     compensation equal to an amount equal to Mr. Jacobson's base salary
     for the remaining period of the term of employment. Additionally,Mr.
     Jacobson will be eligible to continue to participate in the employee
     health and dental benefit plans (to the extent permissible therein)
     for a period of one and one half years from the date of such
     involuntary termination of employment.  Cost of such participation for
     Mr. Jacobson and eligible dependents shall be born by the Company.

     During the Term of Employment, if Mr. Jacobson shall, for a period of
     more than three (3) consecutive months or for periods aggregating more
     than twelve (12) weeks in any fifty-two consecutive weeks, be unable
     to perform the services provided for herein, as a result of illness or
     incapacity or a physical, mental, or other disability of any nature,
     the Company may, upon not less than thirty (30) days notice, terminate
     Mr. Jacobson's employment hereunder.  Mr. Jacobson shall be considered
     unable to perform the services provided for herein if he is unable to
     attend to the normal duties required of him.  In such event, the
     Company shall pay to Mr. Jacobson, or to his legal representatives,
     his base compensation for a period of twelve (12) months from the date
     of termination.

     The Company has agreed that it will not consolidate or merge into or
     with another corporation or entity, or transfer all or substantially
     all of its business and/or assets to another entity, directly or
     indirectly, unless such other entity (hereinafter referred to as the
     "Successor") shall assume Mr. Jacobson's employment agreement and the
     obligations of the Company thereunder; and upon such assumption, Mr.
     Jacobson and the Successor shall become obligated to perform the terms
     and conditions thereof.  However, if during the first 180 days
     following any such consolidation or merger, Mr. Jacobson determines
     that he does not desire to remain employed by the Successor or the
     Successor determines that the services of Mr. Jacobson are no longer
     required, such consolidation or merger shall be deemed an involuntary
     termination of Mr. Jacobson's employment, and Mr. Jacobson shall be
     paid an amount equal to his annual base salary at the time of the
     consolidation or merger.  This payment will be made to Mr. Jacobson in
     a single lump sum at the time of the termination.



                                     51


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth, as of March 25 2005, information
regarding the beneficial ownership of our common stock with respect to each
of our executive officers, each of our directors, each person known by us
to own beneficially more than 5% of the common stock, and all of our
directors and executive officers as a group. The term "executive officer"
is defined as the Chief Executive Officer, Secretary, Treasurer and the
Vice-President. Each individual or entity named has sole investment and
voting power with respect to shares of common stock indicated as
beneficially owned by them, subject to community property laws, where
applicable, except where otherwise noted. The percentage of common stock
beneficially owned is based on 42,017,587 shares of common stock
outstanding as of March 25, 2005.


<Table>
<Caption>

                                          Number of
                                          Shares of         Percentage of
                                          Common Stock      Common Stock
                                          Beneficially      Beneficially
Name and Address (1)                      Owned (2)         Owned
----------------------------------------- --------------    --------------
<S>                                       <C>               <C>
William T. Jacobson (3)(4)                1,643,660                3.9%
John Harvey (3)(4)                           60,767                   *
Kurt Hoffman (3)(4)                          22,500                   *
Thomas E. Groce (4)                         121,340                   *
Marqueta Martinez (3)                        47,728                   *
----------------------------------------- --------------    --------------
All Officers and Directors as a Group
(5 persons)                               1,895,995                4.5%
----------------------------------------- --------------    --------------
</Table>

*    Less than 1%.

(1)  Unless otherwise indicated, the address of the persons named in this
     column is c/o Atlas Mining Company, 630 East Mullan Avenue, Osburn,
     Idaho 83849.
(2)  Included in this calculation are shares deemed beneficially owned by
     virtue of the individual's right to acquire them within 60 days of the
     date of this report that would be required to be reported pursuant to
     Rule 13d-3 of the Securities Exchange Act of 1934.
(3)  Executive Officer.
(4)  Director.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     We engage in a number of transactions with interested parties. We make
every effort to ensure that these transactions are conducted as arm length
transactions. However, at this time we do not have a formal conflicts of
interest policy.

     William Jacobson has loaned Atlas Mining sums of money over the past
several years.  In January 2003, Mr. Jacobson accepted 1,000,000 shares of
our common stock, valued at $0.10 per share, for a $100,000 reduction in
the note balance. The outstanding balance as of March 25, 2005 is $91,463.

     Further discussions of these transactions are described in
"Management's Discussion and Analysis of Plan of Operation - Liquidity and
Capital Resources."



                                     52

<PAGE>
ITEM 13. EXHIBITS

(a)  Exhibits

     Exhibit
     Number    Description of Exhibit
     -------   ----------------------
      3.1      Articles of Incorporation, as amended.(1)
      3.2      Bylaws, as amended.(1)
     10.1      Atlas Mining Company Common Stock Subscription Agreement.(1)
     10.2      Dragon Mine Lease Purchase Agreement.(1)
     10.3      Article of Merger of Sierra Silver-Lead Mining Company and
               Atlas Mining Company.(1)
     10.4      Stock Option Plan of Atlas Mining Company.(1)
     10.5      Incentive Stock Option Plan of Atlas Mining Company.(1)
     10.6      Investment Marketing Agreement.(1)
     10.7      Moss Adams, LLP Promissory Note.(1)
     10.8      CLS Mortgage Company Promissory Note.(1)
     10.9      Attorney-Client Fee Agreement.(2)
     10.10     Professional Adjusters Inc. Appraisal and Clyde James
               Resume. (2)
     10.11     Employment Agreement William Jacobson
     20.1      Code of Ethical Conduct adopted December 15, 2004
     21.1      Subsidiaries of the Registrant.(1)
     31.1      Certification  pursuant to Rule 13a-14 of the Securities
               Exchange Act, as adopted pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002, of the Chief Executive Officer
               and Principal Financial Officer
     32.1      Certification  pursuant  to 18 U.S.C.  Section  1350,  as
               adopted pursuant to Section 906 of the  Sarbanes-Oxley Act
               of 2002, of the Chief Executive Officer and Principal
               Financial Officer

     (1)  Incorporated by reference to the similarly described exhibit
          included in the Registrant's Amendment No. 4 to its SB-2,
          Commission File No. 333-72830, filed with the Commission on June
          11, 2002
     (2)  Incorporated by reference to the similarly described exhibit
          included in the Registrant's Amendment No. 5 to its SB-2,
          Commission File No. 333-72830, filed with the Commission on July
          1, 2002.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

The aggregate fees billed by the Company's auditors for professional
services rendered in connection with the audit of the Company's annual
consolidated financial statements for fiscal 2004 and 2003 and reviews of
the consolidated financial statements included in the Company's Forms 10-
QSB  were $13,600 for 2003 and $14,000 for 2004.

Audit-Related Fees

For fiscal 2004 and 2003, the Company's auditors did not bill any fees for
assurance and related services that are reasonably related to the
performance of the audit or review of the Company's financial statements
and are not reported under "Audit Fees" above.

Tax Fees

The aggregate fees billed by the Company's auditors for professional
services for tax compliance, tax advice, and tax planning for fiscal 2004
and 2003 was $850 and $850, respectively.

All Other Fees

No fees were billed by the Company's auditors for all other non-audit
services rendered to the Company, such as attending meetings and other
miscellaneous financial consulting, in fiscal 2004 and 2003.


                                     53


Audit Committee

The audit committee meets prior to filing of any Form 10-QSB or 10-KSB to
approve those filings. In addition, the committee meets to discuss audit
plans and anticipated fees for audit and tax work prior to the commencement
of that work. Approximately 100% of all fees paid to our independent
auditors for fiscal 2004 are pre-approved by the audit committee.



                                 SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on this 25th day of March 2005.

                              ATLAS MINING COMPANY



                              By: /s/ William T. Jacobson
                              ------------------------------
                                      William T. Jacobson
                                      Chairman of the Board and Chief
                                      Executive Officer


     In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.

Signature                Title                           Date
-------------            ---------------------------     ------------


/s/ William T. Jacobson  Chairman of the Board and       March 25, 2005
-----------------------  Chief Executive Officer
William T. Jacobson


/s/ John Harvey          Vice-President, Director        March 25, 2005
-----------------------
John Harvey


/s/ Kurt Hoffman         Treasurer, Director             March 25, 2005
-----------------------
Kurt Hoffman


/s/ Thomas E. Groce      Director                        March 25, 2005
-----------------------
Thomas E. Groce


/s/ Marqueta Martinez    Secretary                       March 25, 2005
-----------------------
Marqueta Martinez







                                     54