**UNITED
        STATES SECURITIES AND EXCHANGE COMMISSION**
 **Washington,
        D.C. 20549**
 
 **FORM
        10-QSB**
 
 (Mark
        One)
  x
        QUARTERLY REPORT
        PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
        1934
  For
        the
        Quarterly Period Ended June 30, 2007
   ̈
        TRANSITION REPORT
        PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
        1934
  For
        the
        transition period from _____ to _____.
  
 Commission
        File No.  333-135376
 
 **PIEDMONT
        MINING COMPANY, INC.**
 (Exact
        Name of Registrant as Specified in Its Charter)
 **North
                    Carolina**
                
                **56-1378516**(State or Other Jurisdiction
                  Of
                    Incorporation or Organization)
                
                (I.R.S.
                    Employer Identification
                  Number)**18124
                    Wedge Parkway, Suite 214**
                  **Reno,
                    Nevada**
                
                **89511**(Address
                    of Principal Executive Offices)
                
                (Zip
                    Code)
  Registrant’s
        telephone number, including area code **(212)
        734-9848**
  Indicate
        by check mark whether the registrant (1) has filed all reports required to
        be
        filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
        the
        preceding 12 months (or for such shorter period that the Registrant was required
        to file such reports); and (2) has been subject to such filing requirements
        for
        the past 90 days.
 
 Yes
x                No
         ̈
 
 Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act.
 
 Yes
 ̈                No
        x
 
 As
        of  August 3, 2007 there were  58,469,294 outstanding shares
        of the issuer’s common stock.
 
 Transitional
        Small Business Disclosure Format (Check one):
 Yes
 ̈                No
        x
  
  **PIEDMONT
        MINING COMPANY, INC.**
 
 **FORM
        10-QSB INDEX**
 
 Page
                NumberPART
                  I – FINANCIAL INFORMATIONItem
                  1. Financial StatementsConsolidated
                  Balance Sheets as of  June 30, 2007 (unaudited) and December 31,
                  2006
              3Consolidated
                  Statements of Loss for the Three Months Ended June 30, 2007 and
                  2006, Six
                  Months Ended June 30, 2007 and 2006 (unaudited)
              4Consolidated
                  Statements of Cash Flows for the  Six Months Ended June 30, 2007
                  and 2006 (unaudited)
              6Notes
                  to Consolidated Financial Statements (unaudited)
              7Item
                  2. Management’s Discussion and Analysis or Plan of
                  Operation
              20Item
                  3. Controls and Procedures
              24PART
                  II – OTHER INFORMATIONItem
                  1. Legal Proceedings
              25Item
                  2. Unregistered Sales of Equity Securities and Use of
                  Proceeds
              25Item
                  3. Defaults Upon Senior Securities
              25Item
                  4. Submission of Matters to a Vote of Security Holders
              25Item
                  5. Other Information
              25Item
                  6. Exhibits
              26Signature
                  Page
              27
 
 
 
 
 
 
 
 
 
 
  2
  **PART
        I – FINANCIAL INFORMATION**
 
 **Item
        1. Financial Statements**
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **CONSOLIDATED
        BALANCE SHEETS**
 
 **June
                  30,**
              
              
              **December
                  31,****2007**
                **(unaudited)**
              
              
              **2006****CURRENT
                  ASSETS**
              
              $
              
              
              $Cash
                  and cash equivalents
              
              
              545
              
              
              
              17,222Prepaid
                  expenses and other
              
              
              44,578
              
              
              
              27,682Total
                  current assets
              
              
              45,123
              
              
              
              44,904**MINERAL
                  PROPERTIES (Note 3)**
              
              
              252,167
              
              
              
              177,167**PROPERTY
                  AND EQUIPMENT (Note 4)**
              
              
              596
              
              
              
              1,527Total
                  Assets
              
              
              297,886
              
              
              
              223,598**CURRENT
                  LIABILITIES**Accounts
                  payable and accrued liabilities
              
              
              96,813
              
              
              
              116,341Due
                  to related parties (Note 5)
              
              
              191,495
              
              
              
              136,728Total
                  current liabilities
              
              
              288,308
              
              
              
              253,069**STOCKHOLDERS’
                  EQUITY (DEFICIENCY)**Capital
                  Stock (Note 6)Authorized:25,000,000
                  Preferred stock $1.00 par value100,000,000
                  Common stock no par valueCommon
                  stock issued and outstanding:56,594,294
                  common (2006 – 54,063,660)
              
              
              14,588,719
              
              
              
              14,189,969Additional
                  paid-in capital
              
              
              601,771
              
              
              
              494,442Accumulated
                  deficit
              
              
              (12,564,287
              )
              
              
              (12,564,287
              )Deficit
                  accumulated during exploration stage
              
              
              (2,616,625
              )
              
              
              (2,149,595
              )Total
                  stockholders’ equity (deficiency)
              
              
              9,578
              
              
              
              (29,471
              )Total
                  liabilities and stockholders’ equity (deficiency)
              
              
              297,886
              
              
              
              223,598
 
    
 The
        accompanying notes are an integral part of these financial
        statements.
  3
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **CONSOLIDATED
        STATEMENTS OF LOSS**
 **(unaudited)**
 
 Three
                  months
                Ended
                June
                  30, 2007
              
              
              Three
                  months Ended
                June
                  30, 2006
              
              
              Six
                  months Ended
                June
                  30, 2007
              
              
              Six
                  months
                Ended
                June
                  30, 2006
              
              
              For
                  the Period from January 1, 2002 (inception) to
                June
                  30, 2007$
              
              
              $
              
              
              $
              
              
              $
              
              
              $**EXPENSES**Exploration,
                  geological and geophysical costs and property research and
                  development
              
              
              22,834
              
              
              
              357,837
              
              
              
              106,302
              
              
              
              381,042
              
              
              
              993,257Management
                  fees
              
              
              67,946
              
              
              
              43,800
              
              
              
              177,311
              
              
              
              76,100
              
              
              
              465,482Professional
                  fees
              
              
              53,648
              
              
              
              44,345
              
              
              
              113,880
              
              
              
              54,038
              
              
              
              484,852General
                  and administrative
              
              
              27,318
              
              
              
              23,436
              
              
              
              67,475
              
              
              
              42,890
              
              
              
              448,468Depreciation
                  expense
              
              
              465
              
              
              
              250
              
              
              
              930
              
              
              
              500
              
              
              
              144,497172,211
              
              
              
              469,668
              
              
              
              465,898
              
              
              
              554,570
              
              
              
              2,536,556**LOSS
                  BEFORE OTHER ITEMS**
              
              
              (172,211
              )
              
              
              (469,668
              )
              
              
              (465,898
              )
              
              
              (554,570
              )
              
              
              (2,536,556
              )**INTEREST
                  INCOME**
              
              
              -
              
              
              
              3,548
              
              
              
              1
              
              
              
              3,548
              
              
              
              5,912**INTEREST
                  EXPENSE**
              
              
              (394
              )
              
              
              (1,721
              )
              
              
              (1,133
              )
              
              
              (2,492
              )
              
              
              (39,391
              )**LOSS
                  ON OTHER NON-OPERATING ACTIVITIES**
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (46,590
              )**NET
                  LOSS FOR THE  PERIOD**
              
              
              (172,605
              )
              
              
              (467,841
              )
              
              
              (467,030
              )
              
              
              (553,514
              )
              
              
              (2,616,625
              )**BASIC
                  AND DILUTED NET LOSS  PER SHARE**
              
              
              (0.00
              )
              
              
              (0.01
              )
              
              
              (0.01
              )
              
              
              (0.01
              )**WEIGHTED
                  AVERAGE COMMON SHARES OUTSTANDING, BASIC AND
                  DILUTED**
              
              
              55,527,025
              
              
              
              51,016,030
              
              
              
              54,947,175
              
              
              
              51,016,030
 
 
 
 
 
 
 
   
 The
        accompanying notes are an integral part of these financial
        statements.
  4
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
 **(unaudited)**
 
 Six
                  Months Ended
                June
                  30,
              
              
              For
                  the Period from January 1, 2002 (inception) to2007
              
              
              2006
              
              
              June
                  30, 2007$
              
              
              $
              
              
              $**CASH
                  FLOWS FROM OPERATING ACTIVITIES**Net
                  loss
              
              
              (467,030
              )
              
              
              (553,514
              )
              
              
              (2,616,625
              )Adjustments
                  to reconcile net loss to net cash from operating
                  activities:Stock
                  based compensation
              
              
              129,311
              
              
              
              24,700
              
              
              
              252,678Depreciation
              
              
              930
              
              
              
              500
              
              
              
              144,498Gain
                  (loss) on other non-operating activities
              
              
              -
              
              
              
              -
              
              
              
              (21,000
              )Changes
                  in operating assets and liabilities:Prepaid
                  expenses and other
              
              
              (16,896
              )
              
              
              15,908
              
              
              
              (41,629
              )Accounts
                  payable and accrued liabilities
              
              
              (19,528
              )
              
              
              112,634
              
              
              
              194,085Due
                  to related parties
              
              
              54,767
              
              
              
              (121,420
              )
              
              
              54,767**NET
                  CASH FLOWS USED IN OPERATING ACTIVITIES**
              
              
              (318,445
              )
              
              
              (521,192
              )
              
              
              (2,033,226
              )**CASH
                  FLOWS FROM FINANCING ACTIVITIES**Issuance
                  of shares for cash, net of issuance costs
              
              
              361,768
              
              
              
              1,312,070
              
              
              
              1,865,766Convertible
                  notes
              
              
              -
              
              
              
              (27,000
              )
              
              
              291,145Related
                  party advances (repayments)
              
              
              -
              
              
              
              (83,190
              )
              
              
              (14,005
              )**NET
                  CASH FLOWS FROM FINANCING ACTIVITIES**
              
              
              361,768
              
              
              
              1,201,880
              
              
              
              2,142,906**CASH
                  FLOWS FROM INVESTING ACTIVITIES**Purchase
                  of property and equipment
              
              
              -
              
              
              
              (1,290
              )
              
              
              (4,290
              )Proceeds
                  from non-operating activities
              
              
              -
              
              
              
              -
              
              
              
              97,125Payments
                  made on exploration projects
              
              
              (60,000
              )
              
              
              (35,000
              )
              
              
              (202,667
              )**NET
                  CASH FLOWS USED IN INVESTING ACTIVITIES**
              
              
              (60,000
              )
              
              
              (36,290
              )
              
              
              (109,832
              )**INCREASE
                  (DECREASE) IN CASH AND CASH EQUIVALENTS**
              
              
              (16,677
              )
              
              
              644,398
              
              
              
              (152
              )**CASH
                  AND CASH EQUIVALENTS, BEGINNING**
              
              
              17,222
              
              
              
              400
              
              
              
              697**CASH****AND CASH EQUIVALENTS**,
                  **END**
              
              
              545
              
              
              
              644,798
              
              
              
              545**SUPPLEMENTAL
                  CASH FLOW INFORMATION AND NON-CASH INVESTING AND FINANCING
                  ACTIVITIES** (Note 9)
 
     The
        accompanying notes are an integral part of these financial
        statements.
  5
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 NOTE
                  1:
              NATURE
                  OF OPERATIONS
 
 Piedmont
        Mining Company, Inc. (the Company) was formed in 1983 under the laws of North
        Carolina, USA.  However, significant changes to the Company’s business
        and operations occurred from 1983 to 2002.  The Company is currently
        in the exploration stage, which is characterized by significant expenditures
        for
        the examination and development of exploration properties.  As a
        result, under Statement of Financial Accounting Standards No. 7 (SFAS)
*Accounting and Reporting by Development Stage Enterprises,* the Company
        re-established itself as an exploration stage company in 2003 and began
        reporting under exploration stage guidelines.
 
 The
        Company has entered into option and earn-in agreements on seven (7) different
        exploration properties in the state of Nevada and may opt to acquire one
        or more
        of the properties that the Company currently leases pursuant to option and
        earn-in agreements. Management’s plan is to conduct exploration for gold and
        silver at these properties to assess whether they might possess economic
        deposits of gold and/or silver which could be recovered at a profit. The
        Company
        does not intend to build an exploration staff but rather to work with competent
        exploration groups who can manage the exploration activities on these properties
        with the Company’s funding.
 
 The
        Company’s focus for the foreseeable future will be on exploration of its various
        existing mineral properties and exploration of new properties.  Since
        April 2005, The Company has entered into agreements,  directly and
        under options, for the purpose of exploring for economic deposits of gold
        and
        silver in the State of Nevada.  In April 2006 the Company commenced
        exploration on the Trinity Silver Project in Pershing County, Nevada. (Note
        3)
 
 **Going
        Concern**
 These
        financial statements have been prepared in accordance with generally accepted
        accounting principles in the United States of America with the on-going
        assumption applicable to a going concern which contemplates the realization
        of
        assets and the satisfaction of liabilities and commitments in the normal
        course
        of business
 
 The
        Company is in the exploration stage and to date has not yet generated any
        net
        revenues or cash flow from its activities. The Company has a history of losses
        and has a working capital deficit of $243,185 and a deficit of $15,180,912
        at
        June 30, 2007. This
        creates an uncertainty as to how the Company will fund its operations and
        maintain sufficient cash flow to operate as a going concern. These financial
        statements do not reflect any adjustments to the carrying values of assets
        that
        might result from the outcome of this uncertainty.
 
 The
        Company intends to fund its ongoing operations by way of private placements
        of
        its securities as may be required.  Since 2002, private placements of
        stock with warrants and the exercise of some of those warrants have resulted
        in
        total cash proceeds of $1,880,766 through June 30, 2007.  (Refer to
        Note 9.)
 
 Management
        believes these efforts will contribute toward funding the Company’s activities
        until appropriate levels of funding can be arranged and/or revenue can be
        earned
        from the properties either through production or sale.  The Company’s
        ability to meet its cash requirements in the next year is dependent upon
        its
        continuing to obtain financing and satisfying certain obligations, such as
        compensating its officers and consultants either through monetary means or
        the
        granting of stock options.  If this is not achieved, there is
        substantial doubt the Company may be able to continue as a going concern.
        (Refer
        to Note 9)
 
  6
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 **NOTE
                    1:**
                **NATURE
                    OF OPERATIONS
                    (continued)**
 
 **Unaudited
        Interim Financial Statements**
 The
        accompanying unaudited interim consolidated financial statements have been
        prepared in accordance with United States generally accepted accounting
        principles for interim financial information and with the instructions to
        Form
        10-QSB of Regulation S-B. They may not include all information and footnotes
        required by United States generally accepted accounting principles for complete
        financial statement disclosure. However, except as disclosed herein, there
        have
        been no material changes in the information disclosed in the notes to the
        financial statements for the year ended December 31, 2006, included in the
        Company’s form 10-KSB filed with the Securities and Exchange Commission. The
        unaudited interim consolidated financial statements should be read in
        conjunction with those financial statements included in the Form 10-KSB.
        In the
        opinion of Management, all adjustments considered necessary for a fair
        presentation, consisting solely of normal recurring adjustments, have been
        made.
        Operating results for the six months ended June 30, 2007 are not necessarily
        indicative of the results that may be expected for the year ending December
        31,
        2007.
  
 **NOTE
                    2:**
                **SUMMARY
                    OF SIGNIFICANT ACCOUNTING
                    POLICIES**
 
 **Basis
        of  Presentation**
 These
        financial statements are presented in United States dollars and have been
        prepared in accordance with accounting principals generally accepted in the
        United States of America.
 
 **Basis
        of Consolidation**
 The
        accompanying consolidated financial statements include the accounts of the
        Company and its wholly owned subsidiaries, NetColony, LLC and Piedmont Gold
        Company, Inc.   Neither subsidiary has material operations,
        tangible assets or liabilities.  All significant intercompany accounts
        and transactions, if any, have been eliminated in consolidation.
 
 **Cash
        and Cash Equivalents**
 The
        Company considers all highly liquid instruments with an original maturity
        of
        three months or less at the time of issuance to be cash
        equivalents.
 
 **Comparative
        figures**
 Certain
        comparative figures have been reclassified in order to conform to the current
        year’s financial statement presentation.
 
 **Use
        of Estimates**
 The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the reported amounts of assets and liabilities and disclosure of
        contingent assets and liabilities at the date of the financial statements
        and
        the reported amounts of revenues and expenses during the
        period.  Actual results could differ from those
        estimates.  Significant areas requiring management’s estimates and
        assumptions are determining the fair value of shares of common stock,
        convertible debentures and financial instruments. Other areas requiring
        estimates include deferred tax balances, valuation allowances, allocations
        of
        expenditures to mineral property interests and asset impairment
        tests.
 
 **Mineral
        Property Costs**
 The
        Company is primarily engaged in the acquisition, exploration and development
        of
        mineral properties.
 
  7
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 **NOTE
                    2:**
                **SUMMARY
                    OF SIGNIFICANT ACCOUNTING POLICIES
                    (continued)**
 
 **Mineral
        Property Costs
        (continued)**
 Pursuant
        to Emerging Issues Task Force (EITF) 04-02, mineral rights are capitalized
        at
        cost. This includes lease payments under exploration agreements.  The
        projects are assessed for write-off when facts and circumstances indicate
        their
        carrying values exceed the recoverable values, such as failure to discover
        mineable ore.  If a mineable ore body is found, these costs will be
        amortized when production begins using a units-of-production method.  These
        costs are recorded to exploration projects on the consolidated balance
        sheets.  Other exploration, geological costs and research and
        development costs are expensed as incurred.
 
 Mineral
        property acquisition costs are capitalized when management has determined
        that
        probable future benefits consisting of a contribution to future cash inflows
        have been identified and adequate financial resources are available or are
        expected to be available as required to meet the terms of property acquisition
        and budgeted exploration and development expenditures.  Mineral
        property acquisition costs are expensed as incurred if the criteria for
        capitalization are not met.  In the event that mineral property
        acquisition costs are paid or settled with Company shares, those shares are
        valued at market at the time the shares are issued.
 
 When
        it
        has been determined that a mineral property can be economically developed
        as a
        result of establishing proven and probable reserves and pre-feasibility,
        the
        costs incurred to develop such property to production are
        capitalized.
 
 Estimated
        future removal and site restoration costs, when determinable are provided
        over
        the life of proven reserves on a units-of-production basis.  Costs,
        which include production equipment removal and environmental remediation,
        are
        estimated each period by management based on current regulations, actual
        expenses incurred, and technology and industry standards.  Any charge
        is included in exploration expense or the provision for depletion and
        depreciation during the period and the actual restoration expenditures are
        charged to the accumulated provision amounts as incurred.
 
 As
        of the
        date of these financial statements, all of the Company’s exploration costs have
        been expensed.
 
 To
        date
        the Company has not established any proven or probable reserves on its mineral
        properties.
 
 **Asset
        Retirement Obligations**
 The
        Company has adopted the provisions of SFAS No. 143 "Accounting for Asset
        Retirement Obligations," which establishes standards for the initial measurement
        and subsequent accounting for obligations associated with the sale, abandonment
        or other disposal of long-lived tangible assets.  The adoption of this
        standard has had no effect on the Company's financial position or results
        of
        operations.  To December 31, 2006 any potential costs relating to the
        ultimate disposition of the Company's mineral property interests are not
        determinable.
 
 **Impairment
        of Long-Lived Assets**
 The
        Company reviews property and equipment and certain identifiable intangibles,
        excluding goodwill, for impairment in accordance with SFAS No. 144, Accounting
        for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
        Of. Long-lived assets are reviewed for impairment whenever events or changes
        in
        circumstances indicate the carrying amount of an asset may not be
        recoverable.  Recoverability of these assets is measured by comparison
        of its carrying amount to future undiscounted cash flows the assets are expected
        to generate.  If property, plant, and equipment and certain
        identifiable intangibles are considered to be impaired, the impairment to
        be
        recognized equals the amount by which the carrying value of the assets exceeds
        fair market value.  For the six months ended June 30, 2007 and the
        fiscal year ended December 31, 2006, the Company had no material impairment
        of
        its long-lived assets.
 
  8
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 **NOTE
                    2:**
                **SUMMARY
                    OF SIGNIFICANT ACCOUNTING POLICIES
                    (continued)**
 
 **Financial
        Instruments**
 The
        fair
        values of cash and cash equivalents, accounts payable and accrued liabilities
        and amounts due to related parties were estimated to approximate their carrying
        values due to the immediate or short-term maturity of these financial
        instruments.  The fair value of the Company’s net smelter royalty
        obligations (refer to Note 3) is not determinable at the current stage of
        the
        Company’s exploration program.  Accordingly, no value has been
        assigned by management.   The Company’s operations and financing
        activities are conducted primarily in United States dollars, and as a result
        the
        Company is not subject to significant exposure to market risks from changes
        in
        foreign currency rates.  Management has determined that the Company is
        not exposed to significant credit risk.
 
 **Loss
        per Common Share**
 Basic
        loss per share (“LPS”) includes no dilution and is computed by dividing loss
        attributable to common stockholders by the weighted average number of common
        shares outstanding for the period.  Diluted earnings per share
        reflects the potential dilution of securities that could share in the earnings
        (loss) of the Company.  The common shares potentially issuable upon
        exercise of stock options and warrants were not included in the calculation
        of
        weighted average number of shares outstanding because the effect would be
        anti-dilutive.
 
 Net
        loss
        used in determining basic LPS for the  six months ended June 30, 2007
        and 2006 was ($467,030) and ($553,514), respectively. The weighted average
        number of shares of common stock used in determining basic LPS for the six
        months ended June 30, 2007 and 2006 was 54,978,252 and 51,016,030,
        respectively.
 
 **Foreign
        Currency Translation**
 The
        financial statements are presented in United States dollars.  In
        accordance with SFAS No. 52, “Foreign Currency Translation”, foreign denominated
        monetary assets and liabilities are translated to their United States dollar
        equivalents using foreign exchange rates which prevailed at the balance sheet
        date.  Revenue and expenses are translated at average rates of
        exchange during the year. Related translation adjustments are reported as
        a
        separate component of stockholders’ equity, whereas gains or losses resulting
        from foreign currency transactions are included in results of
        operations.
 
 **Income
        Taxes**
 The
        Company follows the liability method of accounting for income
        taxes.  Under this method, deferred tax assets and liabilities are
        recognized for the future tax consequences attributable to differences between
        the financial statement carrying amounts of existing assets and liabilities
        and
        their respective tax balances.  Deferred tax assets and liabilities
        are measured using enacted or substantially enacted tax rates expected to
        apply
        to the taxable income in the years in which those differences are expected
        to be
        recovered or settled.  The effect on deferred tax assets and
        liabilities of a change in tax rates is recognized in income in the period
        that
        includes the date of enactment or substantive enactment.  As at June
        30, 2007, the Company had net operating loss carry forwards; however, due
        to the
        uncertainty of realization, the Company has provided a full valuation allowance
        for the potential deferred tax assets resulting from these losses carry
        forwards.
 
  9
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 **NOTE
                    2:**
                **SUMMARY
                    OF SIGNIFICANT ACCOUNTING POLICIES
                    (continued)**
 
 **Stock-Based
        Compensation**
 On
        January 1, 2006, the Company adopted SFAS No. 123 (revised 2004) (SFAS No.
        123R), Share-Based Payment, which addresses the accounting for stock-based
        payment transactions in which an enterprise receives employee services in
        exchange for (a) equity instruments of the enterprise or (b) liabilities
        that
        are based on the fair value of the enterprise’s equity instruments or that may
        be settled by the issuance of such equity instruments.  In January
        2005, the Securities and Exchange Commission (SEC) issued Staff Accounting
        Bulletin (SAB) No. 107, which provides supplemental implementation guidance
        for
        SFAS No. 123R. SFAS No. 123R eliminates the ability to account for stock-based
        compensation transactions using the intrinsic value method under Accounting
        Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees,
        and instead generally requires that such transactions be accounted for using
        a
        fair-value-based method.  The Company uses the Black-Scholes-Merton
        (“BSM”) option-pricing model to determine the fair-value of stock-based awards
        under SFAS No. 123R, consistent with that used for pro forma disclosures
        under
        SFAS No. 123, Accounting for Stock-Based Compensation.  The Company
        has elected the modified prospective transition method as permitted by SFAS
        No.
        123R and accordingly prior periods have not been restated to reflect the
        impact
        of SFAS No. 123R.  The modified prospective transition method requires
        that stock-based compensation expense be recorded for all new and unvested
        stock
        options, restricted stock, restricted stock units, and employee stock purchase
        plan shares that are ultimately expected to vest as the requisite service
        is
        rendered beginning on January 1, 2006 the first day of the Company’s fiscal year
        2006.  Stock-based compensation expense for awards granted prior to
        January 1, 2006 is based on the grant date fair-value as determined under
        the
        pro forma provisions of SFAS No. 123.
 
 Prior
        to
        the adoption of SFAS No. 123R, the Company measured compensation expense
        for its
        employee stock-based compensation plans using the intrinsic value method
        prescribed by APB Opinion No. 25.  The Company applied the disclosure
        provisions of SFAS No. 123 as amended by SFAS No. 148, Accounting for
        Stock-Based Compensation – Transition and Disclosure, as if the fair-value-based
        method had been applied in measuring compensation expense.  Under APB
        Opinion No. 25, when the exercise price of the Company’s employee stock options
        was equal to the market price of the underlying stock on the date of the
        grant,
        no compensation expense was recognized.
 
 **Property
        and Equipment**
 Property
        and equipment is comprised of computer equipment that is recorded at cost
        and
        amortized over 3 years on a straight-line basis.
  **Recent
        Accounting Pronouncements**
 In
        December 2006, the FASB issued FSP EITF 00-19-02, Accounting for Registration
        Payment Arrangements (“FSP 00-19-2”) which addresses accounting for registration
        payment arrangements.  FSP 00-19-2 specifies that the contingent
        obligation to make future payments or otherwise transfer consideration under
        a
        registration payment arrangement, whether issued as a separate agreement
        or
        included as a provision of a financial instrument or other agreement, should
        be
        separately recognized and measured in accordance with FASB Statement No.
        5,
        Accounting for Contingencies.  FSP 00-19-2 further clarifies that a
        financial instrument subject to a registration payment arrangement should
        be
        accounted for in accordance with other applicable generally accepted accounting
        principles without regard to the contingent obligation to transfer consideration
        pursuant to the registration payment arrangement.  For registration
        payment arrangements and financial instruments subject to those arrangements
        that were entered into prior to the issuance of EITF 00-19-2, this guidance
        is
        effective for financial statements issued for fiscal years beginning after
        December 15, 2006 and interim periods within those fiscal years.  The
        Company has determined the adoption of FSP 00-19-2 will not have a significant
        impact upon its financial position, results of operations or cash
        flows.
 
  10
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 **NOTE
                    2:**
                **SUMMARY
                    OF SIGNIFICANT ACCOUNTING POLICIES
                    (continued)**
 
 **Recent
          Accounting Pronouncements (continued)**
 In
          February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
          Financial Assets and Financial Liabilities”. This Statement permits entities to
          choose to measure many financial assets and financial liabilities at fair
          value.
          Unrealized gains and losses on items for which the fair value option has
          been
          elected are reported in earnings. SFAS No. 159 is effective for fiscal
          years
          beginning after November 15, 2007. The Company is currently assessing the
          impact of SFAS No. 159 on its financial position and results of
          operations.
 
 
 **NOTE
                    3:**
                **MINERAL
                    PROPERTIES**
 
 The
        Company entered into various property agreements during the years ended December
        31, 2006 and 2005. These include the following:
 
 **A.**
              **Antelope
                  Ridge Project**
 Under
        the
        terms of a Mining Lease with Option to Purchase dated April 26th, 2005 (the
        “Agreement”), the Company has entered into a Mining Lease with Option to
        Purchase on 50 claims in the Fish Creek Mining District, Eureka County, Nevada
        (the “Antelope Ridge Project”) for 10 years pursuant to the following
        terms:
 1.
              Lease
                  and option payments required:
 (a)         initial
        consideration of $4,000 plus federal and county filing fees of $2,406 as
        well as
        payments to each of the two property owners of $3,000 cash and 50,000 shares
        of
        common stock; and a further payment to one of the owners, of $2,000 for
        additional claims location costs were made;
 (b)         on
        April 26, 2006, payments to each of the owners of $5,000 cash and shares
        of
        common stock having a value of $5,000 were made;
 (c)         on
        April 26, 2007, payments to each of the owners of $7,500 cash and shares
        of
        common stock having a value of $7,500 were made; and
 (d)         on
        April 26, 2008 and each subsequent anniversary of the effective date, payments
        to each of  the Owners of $10,000 cash and shares of common stock
        having a value of $10,000 as required.
 2.
              The
                  Company must expend the following sums on exploration and maintenance
                  of
                  the property during the first three years of the
                  Agreement:
 (a)        
        Year one - $20,000; (b) Year two - $100,000; and (c) Year three -
        $100,000.
 3.
              The
                  Company has the right to purchase the property for the sum of $1,000,000.
                  All payments made to the owners pursuant to clause 1. above shall
                  be
                  applied to the purchase price.  The purchase option must be
                  exercised prior to the commencement of production from the
                  property.
 4.
              The
                  property is subject to a 3% net smelter returns royalty (“NSR”) on
                  production.
 5.
              The
                  Company may purchase (a) one-third of the reserved royalty (i.e.
                  1% NSR)
                  for $1,000,000; and (b) a second one-third of the reserved royalty
                  (i.e.
                  1% NSR) for an additional
                  $4,000,000.
 6.
              The
                  Company may terminate this Agreement at any time on 60 days
                  notice.
 
 As
        at
        June 30, 2007, the Company has made lease payments and option payments totaling
        $68,500 and has expensed $67,615 in exploration costs with respect to the
        Antelope Ridge Project. As at June 30, 2007, the option agreement is in good
        standing however, although the Company has completed all of the prescribed
        option payments and has met the first year expenditure requirements, both
        parties to the agreement have agreed to extend the year two expenditure
        requirements in order to provide the Company the opportunity to complete
        the
        first drill program.  The completion of the first drill program is
        anticipated to occur in the fall of 2007.  Management currently
        estimates that the cost of this drill program will be approximately $100,000
        and
        expects to fund it with proceeds from the sale of common stock and
        warrants.
 
  11
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 **NOTE
                    3:**
                **MINERAL
                    PROPERTIES
                    (continued)**
 
 **B.**
              **Bullion
                  Mountain Project**
 Effective
        November 11, 2005, the Company entered into a ten year Mining Lease with
        Option
        to Purchase on 17 claims in Lander County, Nevada (the ‘Bullion Mountain
        Project’) pursuant to the following terms:
 1.
              Lease
                  payments required:
 a)
              On
                  signing:
              $5,000
                  plus $2,274 for claims fees reimbursement have been
                  paid
 b)
              First
                  anniversary:
              $5,000
                  was paid
 c)
              Second
                  anniversary:
              $10,000
 d)
              Third
                  anniversary and each anniversary
                  thereafter:   $15,000
 2.          The
        Company must expend the following additional amounts in exploration and
        maintenance of the property during the first two years of the
        Agreement:
 a)
              By
                  November 2006:
              $20,000
 b)
              By
                  November 2007:
              $50,000
 3.          The
        Company has the option to purchase this property at any time for $500,000,
        which
        must be exercised before production can commence. All lease, work requirement
        and property maintenance payments made up to this point would be deducted
        from
        the purchase price.
 4.          Upon
        exercise of the purchase option, the Company would be required to pay a 3%
        net
        smelter returns royalty on production from the property.
 5.          The
        Company has the right to terminate this agreement at any time by giving 60
        days
        prior written notice.
 
 As
        at
        June 30, 2007, the Company has made lease payments totaling $10,000 and has
        incurred $21,650 in exploration costs.
 
 **C.**
              **Dome-Hi-Ho
                  Project**
 Effective
        on April 26, 2005, the Company entered into a five year Exploration and Option
        to Enter Into a Joint Venture Agreement on 44 claims in Lander County, Nevada
        (the ‘Dome HiHo Project’), pursuant to the following terms:
 1.
              Lease
                  and option payments:
 a)
              On
                  signing Letter of Intent April 2005:
              $10,000
                  was paid in cash
 b)
              On
                  signing the Agreement August 2005:
              $21,000
                  was paid in cash, and
 $16,000
        in 200,000 shares of common stock
 c)
              Lease
                  payment August 2005:
              $5,000
                  was paid  in cash
 d)
              Lease
                  payment March 16, 2006:
              $10,000
                  was paid in cash
 e)
              Lease
                  payment July 2006:
              $6,667
                  was paid in cash
 f)           Lease
        payment March 2007 and each year thereafter:  $10,000 in cash until
        the Company has either earned a 51% interest in the project or terminated
        the
        Agreement.
 The
        agreement was subsequently amended on April 3, 2006. The Company must elect
        by
        April 26, 2011 to exercise the underlying option on 20 of the claims by paying
        $200,000.
 2.
              Required
                  expenditures for exploration and property
                  maintenance:
 a)
              First
                  lease year:
              $180,000
 b)
              Second
                  lease year:
              $180,000
 c)
              Third
                  lease year:
              $400,000
 d)
              Fourth
                  lease year:
              $500,000
 e)
              Fifth
                  lease year:
              $540,000
 3.        
        Upon completing the above work requirements, the Company will have earned
        a 51%
        interest in the property and the project, at which point a joint venture
        will be
        formed with the Company as the operator.
 4.       
         The underlying purchase option on 20 of the claims was renegotiated in
        2006.  Accordingly, payments now required on the underlying purchase
        option are as follows:
 a)
              On
                  signing the option amendment in April 2006:
              $10,000
 b)
              On
                  first anniversary of amendment in April 2007:
              $10,000
 
  12
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 **NOTE
                    3:**
                **MINERAL
                    PROPERTIES
                    (continued)**
 
 **Dome-Hi-Ho
        Project (continued)**
 
 c)
              On
                  second anniversary of amendment in April 2008:
              $20,000
 d)
              Option
                  exercise price by April 2009:
              $200,000,
                  less above payments.
 5.         In
        addition, the Company is obligated to pay the underlying claims maintenance
        and
        property holding costsas well as annual rental payments under a pre-existing
        lease agreement with a third party. The term of this lease is twenty years,
        beginning July 21, 2003. The Company will therefore be required to pay the
        following lease amounts:
 a)
              2007
              $8,333
                  (paid)
 b)
              After
                  the 2007 anniversary date, the annual rental amount will be increased
                  based on the Consumer Price Index.
 6.         The
        Company would be required to pay royalties based on a graduated scale, ranging
        from 3.0% to 4.0% should production occur on the property.
 
 As
        at
        June 30, 2007, the Company has made lease and option payments totaling $93,667
        and has incurred approximately $275,315 in exploration costs with respect
        to the
        Dome-Hi-Ho Project.  Both parties to the agreement have extended the
        deadline for the second year expenditure requirement until the second drill
        program can be completed which is now expected to occur in the fall of 2007.
        Management currently estimates that the cost of this drill program will be
        approximately $50,000 and expects to fund it with proceeds from the sale
        of
        common stock and warrants.
 
 **D.**
              **Trinity
                  Silver Project**
 Effective
        on September 15, 2005, the Company entered into an Exploration and Development
        Agreement on the Trinity Silver Project (‘TSP’) in Pershing County,
        Nevada.  The TSP consists of 40 claims, 1,280 acres of fee land and
        2,560 acres of sub-leased fee land. Pursuant to the terms of the
        Agreement:
 
 1.
              Lease
                  and option payments required:
 a)
              On
                  signing:
              $10,000
                  was paid.
 2.
              Required
                  expenditures for exploration and property
                  maintenance:
 a)
              In
                  year 1:
              $75,000
                  (completed).
 b)
              In
                  year 2:
              $125,000
                  (completed).
 c)
              Prior
                  to September 15, 2008: a total of $1,000,000 in order to earn an
                  initial
                  25% interest in the TSP.
 d)
              Prior
                  to September 15, 2010: an additional $1,000,000, in order to earn
                  an
                  additional 26% interest (51% in total) in the
                  TSP.
 e)
              Prior
                  to September 15, 2013: an additional $2,000,000 in order to earn
                  an
                  additional 9% interest (for a total of 60%) in the
                  TSP.
 3.       
         Upon achieving its 51% or its 60% interest, the Company may then elect to
        form a joint venture, and the Company would be the operator of the joint
        venture.
 4.      
          The Company may terminate this agreement at any time upon 30 days
        written notice.
 
 As
        at
        June 30, 2007, the Company has made lease payments totaling $10,000 and has
        incurred $375,394 in exploration and property maintenance costs with respect
        to
        the Trinity Silver Project.
 
 **E.**
              **Pasco
                  Canyon Project**
 On
        February 14, 2006, the Company entered into a five year Option Agreement
        (the
‘Agreement’) on 24 claims in Nye County, Nevada (the ‘Pasco Canyon Project’),
        pursuant to the following terms:
 
 1.
              Option
                  payment required: On signing: $10,000
                  (paid)
 
  13
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 **NOTE
                    3:**
                **MINERAL
                    PROPERTIES
                    (continued)**
  
 **E.**
              **Pasco
                  Canyon Project (continued)**
 2.         The
        Company is required to expend the following sums on exploration and maintenance
        of the property during the term of the Agreement:
 Year
                  1
              $  50,000
 Year
                  2
              $100,000
 Year
                  3
              $200,000
 Year
                  4
              $200,000
 Year
                  5
              $450,000
 
 3.         Upon
        completion of the required expenditures, the Company will have acquired a
        60%
        undivided interest in the property. At that point, a formal joint venture
        agreement will be entered into by the Company with the Company being the
        operator of the joint venture.
 4.         
        The Company has the right to terminate this agreement at any time, subsequent
        to
        the first year’s expenditure requirement of $50,000, by giving 30 days prior
        written notice.
 
 As
        at
        June 30, 2007, the Company has made lease payments totaling $10,000 and has
        incurred $30,837 in exploration costs with respect to the Pasco Canyon Project.
        As of June 30, 2007 the Company has not completed all of the prescribed
        exploration expenditures because a drilling permit has not yet been
        received.   However, both parties to the agreement have agreed to
        extend the first year expenditure requirements until the required drilling
        permit from the United States Forest Services is received and a drill rig
        can be
        obtained.
 
 **F.**
              **Dutch
                  Flat Gold Project**
 On
        July
        2, 2006, the Company entered into a five year Exploration Agreement with
        Option
        to Form Joint Venture (the ‘Agreement’), on 114 claims in Humboldt County,
        Nevada (the Dutch Flat Project) pursuant to the following terms:
 1.
              Payment
                  upon
                  signing:    $35,000
 2.         The
        Company shall expend the following sums on exploration and maintenance of
        the
        property during the first 5 years of the Agreement:
 Year
                  1
              $200,000
 Year
                  2
              $300,000
 Year
                  3
              $500,000
 Year
                  4
              $500,000
 Year
                  5
              $500,000
 
 3.         Upon
        completion of the $2,000,000 in exploration expenditures over the 5-year
        period,
        the Company shall have earned a 51% interest in the property and can then
        elect
        to either 1) form a joint venture at that point whereby the Company would
        own
        51%, or 2) earn an additional 19% interest in property by funding a positive
        feasibility study and then form a joint venture.  The Company would be
        the operator of the joint venture.
 
 4.         Six
        of these claims are subject to a 1.5% net smelter returns
        royalty.  Another company, in which one of the Company’s Directors has
        an interest, holds a 1% net smelter returns royalty on another sixteen of
        these
        claims.
 
 5.         The
        Company may terminate this Agreement at any time after the first year on
        30 days
        notice.
 
 As
        at
        June 30, 2007, the Company has made lease payments totaling $35,000 and has
        incurred $124,609 in exploration costs and had made an additional $35,000
        payment towards the forthcoming drilling program with respect to the Dutch
        Flat
        Gold Project which has been included in prepaid expenses.
 
  14
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 **NOTE
                    3:**
                **MINERAL
                    PROPERTIES
                    (continued)**
  
 **G.**
              **PPM
                  Gold Project**
 In
        April,
        2007, the Company signed an “Exploration Agreement with Option to Form Joint
        Venture” (the “Exploration Agreement”) with Miranda US, Inc., a wholly-owned
        subsidiary of Miranda Gold Corp. (“Miranda”), a British Columbia, Canada
        corporation listed on the TSX Venture Exchange.
 
 Under
        the
        terms of the Exploration Agreement, Piedmont has an option to earn a 55%
        interest in 44 mining claims, located in Humboldt County, Nevada by incurring
        $1,750,000 in exploration activities during a five year period as
        follows:
 
 (i)
              paying  $25,000
                  to Miranda within 30 days of the effective date of the Exploration
                  Agreement (paid);
 (ii)
              incurring
                  at least $175,000 in exploration work during the first year of
                  the
                  Exploration Agreement;
 (iii)
              incurring
                  an additional $200,000 in exploration work during the second
                  year;
 (iv)
              incurring
                  an additional $300,000 in exploration work during the third
                  year;
 (v)
              incurring
                  an additional $425,000 in exploration work during the fourth year;
                  and
 (vi)
              incurring
                  an additional $650,000 in exploration work during the fifth
                  year.
 
 Upon
        completing the total $1,750,000 work expenditure requirement, the Company
        will
        have earned a 55% interest in the property and the project.  At that
        point, the Company will enter into a joint venture with Miranda, with the
        Company being the operator.  After the first year of the agreement,
        the Company may terminate the agreement at any time on 30 days written notice.
        The Company must pay all claims maintenance fees, which will be creditable
        against the work commitment expenditure requirement.
 
 As
        at
        June 30, 2007, the Company has made the initial payment of $25,000 and has
        incurred $13,800 in exploration costs with respect to the PPM Gold
        Project
 
 A
        summary
        of capitalized expenditures, per property, is as follows:
 
 **Balance
                  as at**
                **December
                  31, 2006**
              
              
              **Option
                  Payments**
              
              
              **Balance
                  as at**
                **June 30,
                  2007****$**
              
              
              $
              
              
              **$**Antelope
                  Ridge
              
              ****
              **38,500**
              
              
              
              30,000
              
              
              ****
              **68,500**Bullion
                  Mountain
              
              ****
              **10,000**
              
              
              
              -
              
              
              ****
              **10,000**Dome
                  Hi-Ho
              
              ****
              **73,667**
              
              
              
              20,000
              
              
              ****
              **93,667**Dutch
                  Flat
              
              ****
              **35,000**
              
              
              
              -
              
              
              ****
              **35,000**Pasco
                  Canyon
              
              ****
              **10,000**
              
              
              
              -
              
              
              ****
              **10,000**Trinity
                  Silver
              
              ****
              **10,000**
              
              
              
              -
              
              
              ****
              **10,000**PPM
                  Gold
              
              ****
              **-**
              
              
              
              25,000
              
              
              ****
              **25,000******
              **177,167**
              
              
              
              75,000
              
              
              ****
              **252,167**
 
 
 
 
 
 
 
  15
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 **NOTE
                    4:**
                **PROPERTY
                    AND EQUIPMENT**
  
 June 30,
                  2007
              
              
              December
                  31, 2006Computer
                  Equipment
              
              $
              4,290
              
              
              $
              4,290Less:
                  accumulated depreciation
              
              
              (3,693
              )
              
              
              (2,763
              )$
              597
              
              
              $
              1,527
 
 
 **NOTE
                    5:**
                **DUE
                    TO RELATED PARTIES AND RELATED PARTY
                    TRANSACTIONS**
 
 The
        Board
        of Directors has authorized a monthly management fee of $8,000 to the Company’s
        President and CEO, which was increased to $10,000 per month, effective August
        1,
        2007. The unpaid portion of the monthly management fees at March 31, 2007
        and
        June 30, 2007 and December 31, 2006 was $143,000, $159,500 and $119,000,
        respectively.  Unpaid administrative expenses incurred by the
        President and CEO at March 31, 2007 and June 30, 2007 and December 31, 2006
        were
        $4,794, $3,086 and $1,852, respectively. The Company reimburses the President
        for office rent, which totaled $3,600 for the three months ended March 31,
        2007
        and June 30, 2007, and $14,000 for the year ended December 31,
        2006.
  The
        unpaid portion of exploration costs incurred by the Company’s Vice-President at
        March 31, 2007 and June 30, 2007 and December 31, 2006 were $32,305, $28,909
        and
        $14,376, respectively.
 
 The
        directors receive a fee of $200 per meeting for participating in Board meetings
        and Compensation and Audit Committee meetings. The Chairman of the Board
        of
        Directors receives $300 per meeting.  The unpaid portion of these fees
        was $1,500 at March 31, 2007 and December 31, 2006, and was paid as of June
        30,
        2007.
 
 From
        time
        to time, the Company’s officers and directors advance monies to the Company.
        These loans bear interest at 5% annually. These loans are unsecured and have
        no
        fixed repayment terms. The unpaid balances related to these advances at March
        31, 2007 and December 31, 2006  were $9,000 and $nil, respectively.
        All advances had been repaid at June 30, 2007
 
 The
        Company granted stock options to certain directors and officers during the
        three
        months ended March 31, 2007 for 250,000 shares, with a fair value of $27,500
        and
        2,600,000 stock options during 2006 with a fair value of $349,900. . No stock
        options were granted for the three months ended June 30, 2007.
 
 All
        related party transactions involving provision of services or tangible assets
        were recorded at the exchange amount, which is the value established and
        agreed
        to by the related parties reflecting arms length consideration payable for
        similar services or transfers.  (Other related party transactions are
        disclosed in Note 6.)
 
 
 **NOTE
                    6:**
                **CAPITAL
                    STOCK**
 
 **Share
        Capital**
 The
        Company’s capitalization at December 31, 2006 and June 30, 2007 was 25,000,000
        authorized preferred shares with a par value of $1.00 per share and 100,000,000
        common shares with no par value.
 
 The
        holders of the Company’s common stock are entitled to one vote for each share
        held of record on all matters submitted to a vote of
        shareholders.  Holders of common stock are entitled to receive ratably
        such dividends, if any, as may be declared by the Board of Directors out
        of
        funds legally available.
 
  16
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 **NOTE
                    6:**
                **CAPITAL
                    STOCK (continued)**
 
 The
        Company did not declare or pay any cash dividends during the past two
        years.  The Company has no present plan for the payment of any
        dividends.
 
 **Common
        share transactions**
 
 1.
              During
                  the six months ended June 30, 2007 the
                  Company:
 
 (a)
              Issued
                  425,000 common shares upon the exercise of warrants at an exercise
                  price
                  of $0.15 and 125,000 common shares upon the exercise of warrants
                  at an
                  exercise price of $0.16 per share for net proceeds of  $83,750;
                  and
 
 (b)
              issued
                  1,875,000 units consisting of one common share at $0.16 and one
                  half
                  common share purchase warrant at $0.20 per unit for proceeds of
                  $278,018,
                  net of commissions of $21,982. The 937,500 common stock purchase
                  warrants
                  issued entitle the owner to purchase a common share of the Company
                  at a
                  price of $0.20 per share for a period of two
                  years.
  (c)
              issued
                  105,634 shares of common stock at a fair value of $15,000 under
                  the terms
                  of its mineral property
                  option  agreements.
  2.
              During
                  the year ended December 31, 2006 the
                  Company:
 
 (a)
              issued
                  357,143 common shares upon the exercise of warrants at an exercise
                  price
                  of $0.095 and 100,000 common shares upon the exercise of warrants
                  at an
                  exercise price of $0.13 per share   for net proceeds of
                  $46,928;
 
 (b)
              issued
                  2,226,665 units consisting of one common share and one common share
                  purchase warrant to accredited investors.  The common stock
                  purchase warrants entitle the owners to purchase an equal number
                  of shares
                  at an exercise price range of $0.15 to $0.20 within one year. The
                  units
                  were subscribed to at a range of $0.12 to $0.15 per unit, for net
                  proceeds
                  of $289,750;
 
 (c)
              issued
                  7,378,333 units consisting of one common share and one half common
                  share
                  purchase warrant at $0.15 per unit for proceeds of $1,022,310,
                  net
                  of  commissions of $88,540 and legal fees of $17,736. The
                  3,689,167 common stock purchase warrants issued entitle the owner
                  to
                  purchase a common share of the Company at a price of $0.26 per
                  share for a
                  period of two years. In lieu of an additional cash fee for this
                  private
                  placement, the Company issued a total of 737,834 broker warrants
                  with the
                  same terms; and
  (d)
              issued
                  43,478 shares of common stock at a fair value of $10,000 under
                  the terms
                  of its mineral property option
                  agreements.
 
 **Stock-Based
        Compensation and Other Equity Transactions**
 The
        Company does not have a stock-based compensation plan in place.  The
        Company’s compensation committee makes recommendations to the Board of Directors
        for the granting of awards of stock options to its officers and directors
        on a
        case-by-case basis.
 
 For
        options issued to service providers, the Company follows SFAS No. 123,
        Accounting for Stock-Based Compensation, which requires recording the options
        at
        the fair value of the service provided.
 
 At
        the
        time of issuance, the exercise price of all options was in excess of the
        market
        price of the stock, and therefore the options had no intrinsic
        value.
 
  17
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 **NOTE
                    6:**
                **CAPITAL
                    STOCK (continued)**
  
 **Stock-Based
        Compensation and Other Equity Transactions (continued)**
 The
        fair
        value of options issued during the six months ended June 30, 2007 and the
        year
        ended December 31, 2006 was determined using the Black-Scholes option pricing
        model with the following assumptions:
  Six
                  months ended
                June
                  30, 2007
              
              Year
                  ended
                December
                  31, 2006Risk-free
                  interest rates
              
              3.76%
                  to 5.02%
              
              3.76%
                  to 5.02%Volatility
                  factor
              
              100%
              
              100%Contractual
                  life of options, in years
              
              3
                  to 5
              
              3
                  to 5Service
                  period in years
              
              1
                  to 3
              
              1
                  to 3Weighted
                  average calculated value of options granted
              
              $0.023
              
              $0.030
  No
        stock
        options were granted during the three months ended June 30, 2007.
 
 Of
        the
        250,000 stock options granted during the three months ended March 31, 2007
        and
        the 2,600,000 stock options granted during the year ended December 31, 2006,
        850,000 vested in 2006; 983,333 vest in 2007; and the remainder vest in 2008
        and
        2009. The terms of these awards are three to five years. The fair value of
        these
        options was $81,200 at the 2006 grant date. Total compensation expense for
        the
        year ended December 31, 2006 equaled $123,367, which corresponds to the vesting
        schedule. As of June 30, 2007, the total compensation expense related to
        non-vested awards to be recognized in future periods is $116,463. This expense
        will be recognized ratably as the stock options vest on the anniversary dates
        of
        the grants during 2007, 2008 and 2009.
 
 Of
        the
        2,925,000 stock options granted during the year ended December 31, 2005,
        1,241,667 vested immediately; 841,667 vested on February 5, 2006, the first
        anniversary date; and 841,667 vested on February 5, 2007, the second anniversary
        date.
 
 No
        options were exercised and no proceeds were received for either the six months
        ended June 30, 2007 or the years ended December 31, 2006 and 2005.
 
 In
        accordance with APB 25, the Company did not record stock based compensation
        to
        its employees and directors for the years ended December 31, 2005 and 2004.
        Had
        compensation cost been recorded based on the fair value at grant date, the
        effect on net loss would have been immaterial.
 
 Below
        is
        a summary of the stock option activity for the period ended June 30, 2007
        and
        the years ended December 31, 2006 and 2005:
 
 
  18
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 **NOTE
                    6:**
                **CAPITAL
                    STOCK (continued)**
  
 **Stock-Based
        Compensation and Other Equity Transactions (continued)**
 
 Number
                  ofShares
              
              WeightedSubject
                  to
              
              AverageOptions
              
              Exercise
                  Price$Outstanding,
                  December 31, 2005
              3,425,000
              
              0.236Granted,
                  February  8, 2006
              1,200,000
              
              0.230Expired,
                  April 13, 2006
              (500,000)
              
              0.300Granted,
                  June 16, 2006
              1,150,000
              
              0.250Granted,
                  December 28, 2006
              250,000
              
              0.270Outstanding,
                  December 31, 2006
              5,525,000
              
              0.233Granted
                  March 29, 2007
              250,000
              
              0.250Outstanding,
                  June 30, 2007
              5,775,000
              
              0.234
   WeightedNonvested
              
              AverageOptions
              
              Fair
                  Value**Nonvested
                  Options**
              
              
              
              $Nonvested
                  options, December 31, 2005
              1,683,333
              
              -Granted,
                  February 8, 2006
              1,200,000
              
              0.037Granted,
                  June 16, 2006
              1,150,000
              
              0.027Granted,
                  December 28, 2006
              250,000
              
              0.023Vested
              (1,691,666)
              
              0.011Nonvested
                  options, December 31, 2006
              2,591,667
              
              0.020Granted
                  March 29, 2007
              250,000
              
              0.011Vested
              (1,741,667)
              
              -Nonvested
                  options June 30, 2007
              1,100,000
              
              0.013
 
  The
        following tables summarize information and terms of the options outstanding
        and
        exercisable:
  Options
                  Outstanding at December 31, 2006
              
              Options
                  Exercisable at December 31, 2006Weighted
              
              
              
              WeightedAverage
              
              
              
              AverageRemaining
              
              
              
              RemainingRange
                  of
              
              Contractual
              Weighted
              
              
              Contractual
              WeightedExercise
              Number
              Life
              Average
              
              Number
              Life
              AveragePrices
              of
                  Shares
              (in
                  years)
              Exercise
                  Price
              
              of
                  Shares
              (in
                  years)
              Exercise
                  Price$
                  0.20 – 0.27
              5,525,000
              3.99
              $      0.234
              
              2,591,667
              4.13
              $     0.251
 
  19
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 **NOTE
                    6:**
                **CAPITAL
                    STOCK (continued)**
  
 **Stock-Based
        Compensation and Other Equity Transactions (continued)**
 
 Options
                  Outstanding at June 30, 2007
              
              Options
                  Exercisable at June 30, 2007Weighted
              
              
              
              WeightedAverage
              
              
              
              AverageRemaining
              Weighted
              
              
              Remaining
              WeightedRange
                  of
              
              Contractual
              Average
              
              
              Contractual
              AverageExercise
              Number
              Life
              Exercise
              
              Number
              Life
              ExercisePrices
              of
                  Shares
              (in
                  years)
              Price
              
              of
                  Shares
              (in
                  years)
              Price$
                  0.20 – 0.27
              5,775,000
              3.68
              $      0.234
              
              4,675,000
              3.62
              $     0.232
 
 **Common
        stock purchase warrants**
 Outstanding
        total warrants at June 30, 2007 were 7,838,980.  The exercise prices
        on all warrants range from $0.08 to $0.26 per share. The warrants are
        exercisable immediately upon issuance and the expiration dates range between
        one
        year and two years after the date of issuance.
 
 During
        the year ended December 31, 2006, the Company issued warrants granting holders
        the right to purchase 6,653,666 shares of common stock.  (Refer to
        Note 6.1)  The Company estimated the total fair market value of these
        warrants to be $119,781 at the date of grant, using the same methods and
        assumptions employed above in valuing the stock options. The exercise prices
        on
        these warrants range from $.08 to $.13 per share. The warrants were exercisable
        immediately upon issuance and the expiration dates range between one year
        and
        two years after issuance.
 
 During
        the year ended December 31,
        2005, the Company issued warrants granting the holders the right to purchase
        a
        total of 3,098,290 shares of common stock. (Refer to Notes 6 and
        7.2(b)).  The Company estimated the total fair market value of these
        warrants to be $4,300 at the date of grant, using the same methods and
        assumptions employed above in valuing the stock options. The exercise prices
        on
        these warrants range from $.08 to $.13 per share. The warrants were exercisable
        immediately upon issuance and the expiration dates range between one year
        and
        two years after issuance.
 
 A
        summary
        of the Company’s stock purchase warrants is presented below:
 
 Number
                  of
                Warrants
              
              
              Weighted
                  average
                exercise
                  price
              
              
              Weighted
                  average
                remaining
                  life (years)$Balance,
                  December 31, 2005
              
              
              3,098,290
              
              
              
              0.09
              
              
              
              1.30Issued
              
              
              6,653,666
              
              
              
              0.22
              
              
              
              -Exercised
              
              
              (457,143
              )
              
              
              0.10
              
              
              
              -Expired
              
              
              (166,667
              )
              
              
              -
              
              
              
              -Balance,
                  December 31, 2006
              
              
              9,128,146
              
              
              
              0.18
              
              
              
              0.84Exercised
              
              
              (550,000
              )
              
              
              015
              
              
              
              -Expired
              
              
              (1,676,666
              )
              
              
              -
              
              
              
              -Issued
              
              
              937,500
              
              
              
              0.20
              
              
              
              -Balance,
                  June 30, 2007
              
              
              7,838,980
              
              
              
              0.19
              
              
              
              1.26
 
  20
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 **NOTE
                    7:**
                **INCOME
                    TAXES**
  
 The
        Company has adopted FASB No. 109 for reporting purposes.  As of June
        30, 2007, the Company had net operating loss carry forwards of approximately
        $13,665,425 that may be available to reduce future years’ taxable
        income.  These carry forwards will begin to expire, if not utilized,
        commencing in 2009.  Future tax benefits which may arise as a result
        of these losses have not been recognized in these financial statements, as
        their
        realization is determined not likely to occur and accordingly, the Company
        has
        recorded a valuation allowance for the deferred tax asset relating to these
        tax
        loss carry forwards.
 
 The
        Company reviews its valuation allowance requirements on an annual basis based
        on
        projected future operations.  When circumstances change that causes a
        change in management’s judgment about the recoverability of future tax assets,
        the impact of the change on the valuation allowance is generally reflected
        in
        current income.
 
 Income
        taxes are paid only to the United States government and applicable state
        governments. The Company’s federal and state income tax expense (benefit)
        consists of the following:
 
 June
                  30, 2007
              
              
              December
                  31, 2006Deferred:Federal  35%
              
              $
              4,782,899
              
              
              $
              4,664,861State       
                  7%
              
              
              956,580
              
              
              
              932,972Total
                  deferred
              
              
              5,739,479
              
              
              
              5,597,833Less
                  valuation allowance
              
              
              (5,739,479
              )
              
              
              (5,597,833
              )Net
                  deferred tax asset
              
              $
              -
              
              
              $
              -
 
 A
        reconciliation of the provision (benefit) for income taxes with amounts
        determined by applying the statutory U.S. federal and state income tax rates
        to
        income before income taxes is as follows:
 
 
 June
                  30, 2007
              
              
              December
                  31, 2006Net
                  loss before taxes
              
              $
              (467,030
              )
              
              $
              (1,140,612
              )Federal
                  and State Statutory rate
              
              
              42%
              
              
              
              42%Expected
                  tax recovery
              
              
              (196,153
              )
              
              
              (479,057
              )(Decrease)
                  increase in taxes resulting from:Temporary
                  differences
              
              
              72
              
              
              
              173Non-deductible
                  stock based compensation
              
              
              54,311
              
              
              
              51,814Increase
                  in valuation allowance
              
              
              141,770
              
              
              
              427,070Income
                  tax expense(benefit) from continuing operations
              
              $
              -
              
              
              $
              -Effective
                  income tax rate
              
              
              0%
              
              
              
              0%
 
 
 
 
 
 
  21
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 **NOTE
                    7:**
                **INCOME
                    TAXES (continued)**
  
 As
        the
        criteria for recognizing future income tax assets have not been met due to
        the
        uncertainty of realization, a valuation allowance of 100% has been recorded
        for
        the current and prior year.
 
 The
        deferred tax assets result from net operating loss carry-forwards. These
        losses
        will reverse either upon their utilization against taxable income or upon
        their
        statutory expiration.  Federal net operating loss carry-forwards of
        $13,665,425 and $13,328,174 remained at June 30, 2007 and December 31, 2006,
        respectively, and expire as follows:
 
 Expiration
              
              Net
                  Operating
                Loss2009
              
              $
              2,126,0002010
              
              
              1,695,0002011
              
              
              2,958,0002012
              
              
              1,300,0002017
              
              
              778,0002018
              
              
              573,0002019
              
              
              336,0002020
              
              
              1,368,0002021
              
              
              202,0002022
              
              
              179,0002023
              
              
              171,5452024
              
              
              161,7552025
              
              
              462,7592026
              
              
              1,017,1152027
              
              
              337,251$
              13,665,425
 
 **NOTE
                    8:**
                **SUPPLEMENTAL
                    CASH FLOW INFORMATION AND NONCASH INVESTING AND FINANCING
                    ACTIVITIES**
 
 Six
                  months
                ended
                June
                  30, 2007
              
              
              Six
                  months
                ended
                June
                  30, 2006$
              
              
              $Interest
                  paid
              
              
              -
              
              
              
              -Income
                  taxes paid
              
              
              -
              
              
              
              -Common
                  stock issued under the terms of option agreements
              
              
              15,000
              
              
              
              10,000
 
 1.      During
        the six months ended June 30, 2007 the Company issued 105,634 shares of common
        stock at a fair value of $15,000 under the terms of its mineral property
        option
        agreements.
 2.      During
        the year ended December 31, 2006 the Company issued 43,478 shares of common
        stock at a fair value of $10,000 under the terms of its mineral property
        option
        agreements.
  22
  **PIEDMONT
        MINING COMPANY, INC.**
 **(An
        Exploration Stage Company)**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
        30, 2007**
 **(unaudited)**
 
 **NOTE
                    9:**
                **SUBSEQUENT
                    EVENTS**
  
 In
        July,
        the Company received $300,000 from the sale of 1,875,000 units at $0.16 per
        unit.  Each unit was comprised of one share of the Company’s Common
        Stock and one two year warrant exercisable at $0.20 per share.  These
        warrants are callable when the bid price of the Common Stock exceeds $0.40
        pr
        share for 15 consecutive trading days.  The Company issued options and
        warrants as compensation for obtaining this financing, all of which were
        issued
        to non-related parties, unless otherwise noted, as follows:
 
 (a)
              Three
                  year warrants to acquire 550,000 shares of common stock at an exercise
                  price of $0.25 per share;
 (b)
              Three
                  year warrants to acquire 500,000 shares of common stock at an exercise
                  price of $0.40 per share;
 (c)
              A
                  five year warrant to acquire 187,500 shares of common stock at
                  an exercise
                  price of $0.16 per share was issued to a broker for arranging some
                  of the
                  private placement; and
 (d)
              A
                  Director was awarded  a three year option to purchase
                  100,000   shares of common stock  at an exercise
                  price of  $0.25 per
                  share.
 
 On
        July
        3, 2007, one Director and officer of the Company was issued a three year
        option
        to acquire 100,000 shares of the Company’s Common Stock with an exercise price
        of $0.25 for ongoing management services.
 
 The
        fair
        value of these options will be expensed ratably as the stock options vest
        on the
        anniversary dates of the grants during 2008, 2009 and 2010.
 
 
 
 
 
 
 
 
 
 
 
  23
  **Item
        2. Management’s Discussion And Analysis Or Plan Of
        Operation**
 
 ***Forward-Looking
        Statements and Associated Risks.*****Except for
        statements of historical facts, this report contains forward-looking statements
        involving risks and uncertainties. You can identify these statements by
        forward-looking words including “believes,” “considers,”
“intends,”  “expects,” “may,” “will,” “should,” “forecast, “ or
“anticipates,” or the equivalents of those words or comparable terminology, and
        by discussions of strategies that involve risks and uncertainties.
        Forward-looking statements are not guarantees of our future performance or
        results, and our actual results could differ materially from those anticipated
        in these forward-looking statements. We wish to caution readers to consider
        the
        important factors, among others, that in some cases have affected, and in
        the
        future could affect our actual results and could cause actual consolidated
        results for future fiscal years to differ materially from those expressed
        in any
        forward-looking statements made by us or on our behalf. These factors include
        without limitation, our ability to obtain capital and other financing in
        the
        amounts and at the times needed, identification of suitable exploration
        properties for acquisition, the successful discovery of gold, silver or other
        precious metals in quantities economically feasible for profitable production,
        changes in gold and silver prices, changes in the political climate for gold
        and
        silver exploration, and other risk factors listed from time to time in our
        Securities and Exchange Commission reports, including in particular the factors
        and discussions under the heading “Risk Factors” in the SB-2/A that was filed
        with the Securities and Exchange Commission and became effective on September
        20, 2006.
 
 **Overview
        of Business**
 
 We
        are a North Carolina corporation
        formed in 1983. From our inception until mid-1992, we were engaged in the
        exploration for, and production of, gold and other precious metals and the
        evaluation of gold properties in North and South Carolina. From 1983 we were
        engaged in exploration and from early 1985 until May 1992, we were also engaged
        in the mining and production of gold and silver at our Haile Mine Property
        near
        Kershaw, South Carolina. In May 1992, we entered into a joint venture at
        our
        Haile Mine Property with AGI. Our operations ceased at the Haile Mine Property
        in 1994 and litigation commenced between us and AGI in 1995. This litigation
        was
        settled in March 1999. We did not again become engaged in exploration activities
        until 2004, when we relocated our principal place of business to Reno, Nevada.
        Since October 2003, we have been an exploration stage company engaged in
        the
        acquisition and exploration of mineral properties. We have now entered into
        seven option and earn-in agreements on seven different exploration properties
        in
        the state of Nevada. Our plan is to conduct exploration for gold and silver
        at
        each of these properties to assess whether they possess economic deposits
        of
        gold and/or silver, which can be recovered at a profit. We do not intend
        to
        build an exploration staff, but rather to joint venture our projects with
        competent exploration groups who can manage the exploration activities with
        our
        funding, although in some cases we may conduct exploration on our own using
        contractors. We do not know whether a commercially viable ore body will be
        located on any of our mineral claims or leased properties. Our current plans
        are
        strictly limited to research and exploration in the state of
        Nevada.
  **Going
        Concern**
  The
        report of our independent auditors in our December 31, 2006 financial statements
        includes an explanatory paragraph indicating that there is substantial doubt
        about our ability to continue as a going concern due to recurring losses
        from
        operations, an accumulated deficit of $14,713,882 and a working capital deficit
        of $208,165 at December 31, 2006. Our ability to continue as a going concern
        will be determined by our ability to raise adequate funds and conduct one
        or
        more successful exploration programs. Our financial statements do not include
        any adjustments that might result from the outcome of this
        uncertainty.
  
   24
  **Critical
        Accounting Policies**
  The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States of America requires management to
        make a
        wide variety of estimates and assumptions that affect: (1) the reported amounts
        of assets and liabilities and disclosure of contingent assets and liabilities
        as
        of the date of the financial statements, and (2) the reported amounts of
        revenues and expenses during the reporting periods covered by the financial
        statements. Our management routinely makes judgments and estimates about
        the
        effect of matters that are inherently uncertain. As the number of variables
        and
        assumptions affecting the future resolution of the uncertainties increases,
        these judgments become even more subjective and complex. We have identified
        certain accounting policies that are most important to the portrayal of our
        current financial condition and results of operations. Our significant
        accounting policies are disclosed in Note 1 of the Notes to the Financial
        Statements.
  Several
        of those critical accounting policies are as follows.  Please refer to
        Note 1, Nature of Business and Significant Accounting Policies, including
        Note
        1b, Basis of Presentation; Note 1d, Use of Estimates; Note 1h, Research and
        Development Costs and Exploration Projects; and Note 1j, Income
        Taxes.
  **Results
        of Operations**
  ***Discussion
        of Revenues***
  We
        have
        no revenues at this time and have not had any revenues in recent years, because
        we are an exploration company. We do not anticipate that significant revenues
        will be achieved until we either:
  ·
              locate
                  one or more economic mineral deposits which could then be put into
                  production, from which we would then be able to extract gold or
                  silver at
                  a profit; or
  ·
              enter
                  into a joint venture arrangement on one or more of our leased properties;
                  or
  ·
              consummate
                  a merger or acquisition with an operating
                  company.
  There
        is
        no guaranty that our exploration activities will locate viable gold and/or
        silver reserves, or if an economic mineral deposit were discovered that we
        would
        be able to commence commercial production, or that if we do locate viable
        mineralization that we would be able to secure the funding necessary to proceed
        with the mining and production of the ore.
 
  
   25
  ***Expenses
        for the Six Month Period ending June 30, 2007 vs. June 30,
        2006***
 ***and
        the Three Month Period ending June 30, 2007 v.s June 30,
        2006***
  Exploration,
        geological and geophysical costs decreased by $335,003, or (93.6%), to $22,834
        for the three months ended June 30, 2007 as compared to $357,837 for the
        three
        months ended June 30, 2006.  The principal reason for this decrease
        was due to a decrease in exploration activity on various
        properties.
  Exploration,
        geological and geophysical costs decreased by $274,740, or 72.1%, to $106,302
        for the six months ended June 30, 2007 as compared to $381,042 for the six
        months ended June 30, 2006.  The principal reason for this decrease
        was due to decreased exploration activity on various
        properties.
  Management
        fees increased by $24,146, or 35.5%, to $67,946 for the three months ended
        June
        30, 2007 as compared to $43,800 for the three months ended June 30,
        2006.  The principal reason for this increase was due to recording the
        expense of vested options.
  Management
        fees increased by $101,211, or 1337%, to $177,311 for the six months ended
        June
        30, 2007 as compared to $76,100 for the six months ended June 30,
        2006.  The principal reason for this increase was due to recording the
        expense of vested options.
  For
        the
        three months ended June 30, 2007, Professional fees increased $9,303, or
        21.0%,
        to $53,648 as compared to $44,345 for the three months ended June 30,
        2006.  This change for the three month period is due to a decrease in
        accounting fees of $15,865 and an increase in legal fees of $25,168 related
        to
        the sale of stock through private placement and preparation of documents
        for the
        sale of units with warrants attached.
  For
        the
        six months ended June 30, 2007, Professional fees increased $59,842, or 110.7%,
        to $113,880 as compared to $54,038 for the six months ended June 30,
        2006.  This increase for the six month period is due to accounting and
        legal fees related to the issuance of  2006 year end financial
        statements and filings that were not accrued.
  Depreciation
        expense increased by $215, or 86%, to $465 for the three months ended June
        30,
        2007 as compared to $250 for the three months ended June 30,
        2006.  The principal reason for this increase was the depreciation on
        additional office equipment.
  Depreciation
        expense increased by $430, or 86%, to $930 for the six months ended June
        30,
        2007 as compared to $500 for the six months ended June 30, 2006.  The
        principal reason for this increase was the depreciation on additional office
        equipment.
  **Liquidity
        and Financial Condition**
  ***Cash
        and Working Capital***
  We
        had an
        accumulated deficit of ($14,713,882) from our inception in 1983 to December
        31,
        2006, and an accumulated deficit of ($15,180,912) at June 30, 2007. We have
        no
        contingencies or long-term obligations except for our work commitments under
        our
        seven (7) option and earn-in agreements on our leased properties. All of
        these
        agreements can be terminated by us upon either 30 or 60 days
        notice.
   26
  We
        had a
        cash balance of $17,222 on December 31, 2006 and a cash balance of $545 on
        June
        30, 2007.  For the six month period ending June 30, 2007, we had net
        cash outflows of $16,677.
  The
        cash
        flows used in operations for the six-month period ended June 31, 2007 were
        $318,445 compared with $521,192 for the same period in 2006.  Cash
        flows used in operations for the six-month period ended June 30, 2007 consisted
        primarily of a net loss of $467,030 offset by stock based compensation of
        $129,311, with changes in working capital assets and liabilities consisting
        of
        an increase in prepaid expenses of $16,896 and an increase in accounts payable
        and accrued liabilities of $35,239.
 
 The
        cash
        flows used in investing activities for the six month period ended June 30,
        2007
        were $60,000 compared to $36,290 for the same period in 2006. Cash flows
        used in
        investing activities consisted of lease payments of $60,000 on the Company’s
        mineral properties.
 
 Net
        cash
        flows provided by equity financing activities were $361,768 versus $1,312,070
        during the same period in 2006.  During the same period in 2006, the
        Company used $110,190 of proceeds realized on equity financings to repay
        convertible notes and related party advances.
  ***Internal
        and External Sources of Liquidity***
  Over
        the
        next 12 months period, we plan to fund our operations through issuances of
        Common Stock or Common Stock with warrants. We could enter into a joint venture
        arrangement on one or more of our leased properties. In the event our
        exploration is successful and mining eventually commences on one or more
        of our
        leased properties, we could then commence receiving revenues from the sale
        of
        gold and/or silver produced on these properties.
  ***Contractual
        Obligations***
  We
        have
        no commitments for capital expenditures.
  We
        do not
        engage in hedging transactions and we have no hedged mineral
        resources.
  We
        were
        and are committed to making certain exploration work expenditures, lease
        and
        option payments, and claims maintenance payments on properties signed at
        June
        30, 2007 over the forthcoming 12 months period:
  
  27
  **Bullion
        Mountain Project:**
  ·
              Required
                  work expenditure by 6/30/07;  $20,000 of which $31,650 has
                  already been completed;
  ·
              Claims
                  maintenance: $2,273;
  ·
              Annual
                  payment:  $5,000 due November,
                  2007;
  **Antelope
        Ridge:**
  ·
              Required
                  work expenditure by 6/30/07: $120,000, of which $67,615 has already
                  been
                  completed; a $50,000 to $100,000 drill program will commence this
                  fall.
  ·
              Claims
                  maintenance: $6,679;
  ·
              Annual
                  payments: $15,000 cash and $15,000 in Common Stock; due April,
                  2007 have
                  been made;
  **Dome
        HiHo Project:**
  ·
              Required
                  work expenditure by 6/30/07: $360,000, of which $275,315 has already
                  been
                  completed; a second drill program is expected to be completed in
                  September, 2007 and is expected to cost an additional $25,000 to
                  $50,000.
  ·
              Claims
                  maintenance:  $5,878;
  ·
              Annual
                  payments:  $28,333, of which $20,000 was paid, $8,333 was paid
                  in July, 2007
  **Trinity
        Silver Project**:
  ·
              Required
                  work expenditure: $75,000, of which $375,394 has already been completed,
                  which more than completes our work requirement for the first two
                  years. The next drill program is expected to commence this
                  fall.
  ·
              Claims
                  maintenance:  $5,478;
  ·
              Annual
                  payments:  $0.
  **Pasco
        Canyon Gold Project:**
  ·
              Required
                  work expenditure by 6/30/07;  $50,000, of which $40,837 has
                  already been completed, awaiting drill permit from U.S. Forest
                     Service;
  ·
              Annual
                  payments; $0
  **Dutch
        Flat Gold Project:**
  ·
              Required
                  work expenditure by 6/30/07;  $0; $200,000 required by July,
                  2007, of which $194,609 has already been expended. A second drill
                  program
                  is expected to commence in September,
                  2007
  ·
              Annual
                  payments;  $0
  **PPM
        Miranda Gold Project:**
  ·
              Required
                  work expenditure for first year;  $175,000, of which $13,800 has
                  already been completed.
  ·
              Annual
                  payment;  $0
  All
        of
        these property agreements can be terminated on 30 to 60 days advance
        notice.
   28
  **Off-Balance
        Sheet Arrangements**
  We
        have
        no off-balance sheet arrangements. We do not engage in hedging transactions
        and
**we** have no hedged resources.
 
 **Item
        3. Controls And Procedures**
 
 (A)
              Evaluation
                  of Disclosure Controls and
                  Procedures
 
 Disclosure
        controls and procedures are designed to ensure that information required
        to be
        disclosed in the reports filed or submitted by us under the Securities Exchange
        Act of 1934 is recorded, processed, summarized and reported, within the time
        periods specified in the rules and forms of the Securities and Exchange
        Commission. Disclosure controls and procedures include, without limitation,
        controls and procedures designed to ensure that information required to be
        disclosed in the reports filed under the Securities Exchange Act of 1934
        is
        accumulated and communicated to our management, including our principal
        executive and financial officers, as appropriate, to allow timely decisions
        regarding required disclosure.
 
 We
        carried out an evaluation, under the supervision and with the participation
        of
        our management, including our principal executive officer and principal
        financial officer, of the effectiveness of the design and operation of our
        disclosure controls and procedures as of the end of the period covered by
        this
        report. Based upon and as of the date of that evaluation, our principal
        executive officer and financial officers concluded that there were material
        weaknesses in our internal controls, including those which relate to the
        review,
        approval and reconciliation of accounting data and entries. We are addressing
        these issues by reviewing and revising our internal accounting policies and
        procedures.
 
 (B)
              Changes
                  in Internal Controls
 
 There
        were no changes in our internal
        controls or in other factors that could have significantly affected those
        controls subsequent to the date of our most recent
        evaluation.
  
   ***PART
        II – OTHER INFORMATION***
  **Item
        1. Legal Proceedings**
 
 None.
 
 **Item
        2. Unregistered Sales of Equity Securities and Use of
        Proceeds**
 
 In
        February, 2007, four warrants were exercised at $0.15 and $0.16 with proceeds
        of
        $83,750 and 550,000 common shares were issued.
 In
        May,
        2007, 1,250,000 common shares were sold at $0.16 per share with net proceeds
        of
        $178,018.
 In
        June,
        2007, 625,000 common shares were sold at $0.16 per share with proceeds of
        $100,000.
 In
        July,
        2007, 1,875,000 common shares were sold at $0.16 per share with proceeds
        of
        $300,000
 
 
  29
  The
        issuances of Common Stock was made by us in reliance upon the exemptions
        from
        registration provided under Section 4(2) and 4(6) of the Securities Act and
        Rule
        506 of Regulation D, promulgated by the SEC under federal securities laws
        and
        comparable exemptions for sales to “accredited” investors under state securities
        laws.  The original sale of the Warrants in the private placement was
        made to accredited investors as defined in Rule 501(a) under the Securities
        Act,
        no general solicitation was made by us or any person acting on our behalf;
        the
        securities sold were subject to transfer restrictions, and the certificates
        for
        those shares contain an appropriate legend stating that they have not been
        registered under the Securities Act and may not be offered or sold absent
        registration or pursuant to an exemption there from.
 
 **Item
        3. Defaults Upon Senior Securities**
 
 None.
 
 
 **Item
        4. Submission Of Matters To A Vote Of Security Holders**
 
 None.
 
 
 **Item
        5. Other Information**
 
 None.
 
 
 
 
 
 
 
  30
  **Item
        6. Exhibits**
 
 
 **Exhibit
                  No.**
              
              **Description**
              
              **Location**10.1
              
              Exploration
                  Agreement with Option to Form Joint Venture (PPM GOLD PROJECT)
                  Miranda
                  U.S.A., Inc. and Piedmont Mining Company, Inc., dated April 17,
                  2007
              
              Incorporated
                  by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
                  for April 17, 2007, as filed with the SEC on April 23,
                  200710.2
              
              Services
                  Agreement between Miranda Gold U.S.A, a Nevada corporation having
                  and
                  Piedmont Mining Company, Inc.
              
              Incorporated
                  by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
                  for April 17, 2007, as filed with the SEC on April 23,
                  200710.3
              
              Form
                  of Subscription Agreement with Registration Rights
                  Provision
              
              Incorporated
                  by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
                  for July 20, 2007, as filed with the SEC on July 26,
                  200710.4
              
              Form
                  of Subscription Agreement with Piggy Back Registration Rights
                  Provision
              
              Incorporated
                  by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
                  for July 20, 2007, as filed with the SEC on July 26,
                  200731.1
              
              Certification
                  Pursuant to Section 302
              
              Provided
                  herewith31.2
              
              Certification
                  Pursuant to Section 302
              
              Provided
                  herewith32.1
              
              Certification
                  Pursuant to 18 U.S.C. Section 1350
              
              Provided
                  herewith32.2
              
              Certification
                  Pursuant to 18 U.S.C. Section 1350
              
              Provided
                  herewith
 
 
 
   31
  **SIGNATURES**
 Pursuant
              to the requirements of Section
              13 or 15(d) of the Securities and Exchange Act of 1934 the registrant
              has duly
              caused this 10-QSB Quarterly Report for the period ended June 30, 2007
              to be
              signed on its behalf by the undersigned, thereunto duly
              authorized.
 
 
 **PIEDMONT
                    MINING COMPANY, INC.,**
                a
                    North Carolina CorporationDated
                  August 14, 2007
              /s/
                  Robert M. Shields,
                  Jr.By:  Robert
                  M. Shields, Jr.
                Its:  Chief
                  Executive Officer
                (PrincipalExecutive
                  Officer) and
                Chief
                  Financial Officer
                (Principal
                  Financial Officer and
                PrincipalAccounting
                  Officer)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 32


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