Edgar Filing: METALLINE MINING CO

FORM 10-QSB

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2007

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT

For the transition period from _____________ to _____________

Commission file number: 000-27667

Metalline Mining Company

(Exact name of small business issuer as specified in its charter)

Nevada	91-1766677
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

1330 E. Margaret Ave.

Coeur d'Alene, ID 83815

(Address of principal executive offices)

Issuer's telephone number, including area code: (208) 665-2002

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

There were 37,053,733 shares of the issuer's common stock, par value $0.01, outstanding as of June 12, 2007.

Transitional Small Business Disclosure Format (Check one): Yes o No x

METALLINE MINING COMPANY

QUARTERLY REPORTON FORM 10-QSB

FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2007

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	PAGE

Consolidated Financial Statements:

Consolidated Balance Sheets as of April 30, 2007 and October 31, 2006	F-2

Consolidated Statements of Operations for the six-month periods ended April 30, 2007 and April 30, 2006 and for the period from inception (November 8, 1993) to April 30, 2007	F-3

Consolidated Statements of Cash Flow for the six-month periods ended April 30, 2007 and April 30, 2006, and for the period from inception (November 8, 1993) to April 30, 2007	F-4

Condensed Notes to Consolidated Financial Statements	F-9

F-1

METALLINE MINING COMPANY

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS

	April 30,			October 31,
	2007			2006
ASSETS	(Unaudited)

CURRENT ASSETS
Cash and cash equivalents	$	6,844,346		$	689,994
Marketable securities		2,500,000			5,925,000
Accounts receivable		32,640			35,934
Tax refunds receivable		501,032			-
Other receivables		29,343			-
Employee advances		1,903			-
Prepaid expenses		29,855			14,288
Total Current Assets		9,939,119			6,665,216

PROPERTY CONCESSIONS
Sierra Mojada, Mojada 3		15,875			15,875
Fortuna		76,725			76,725
Esmeralda		255,647			255,647
Esmeralda I		180,988			180,988
U.M. Nortenos, Vulcano		3,682,772			3,682,772
La Blanca		122,760			122,760
Total Property Concessions		4,334,767			4,334,767

EQUIPMENT
Office and mining equipment, net		592,533			611,966
Total Equipment		592,533			611,966

TOTAL ASSETS	$	14,866,419		$	11,611,949

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable	$	100,096		$	238,198
Accounts payable - related parties		55,800			125,460
Accrued liabilities and expenses		82,854			116,162
Other liabilities		10,000			10,000
Total Current Liabilities		248,750			489,820

LONG-TERM LIABILITIES		-			-

COMMITMENTS AND CONTINGENCIES		-			-

STOCKHOLDERS' EQUITY
Common stock, $0.01 par value; 160,000,000 shares authorized, 36,885,733 and 34,207,912 shares issued and outstanding, respectively		368,857			342,079
Additional paid-in capital		45,607,786			38,594,886
Deficit accumulated during exploration stage		(31,358,974	)		(27,814,836	)
Total Stockholders' Equity		14,617,669			11,122,129

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	14,866,419		$	11,611,949

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

F-2

METALLINE MINING COMPANY

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

													November 8,
													1993
													(Inception)
	Three Months Ended						Six Months Ended						to
	April 30,			April 30,			April 30,			April 30,			April 30,
	2007			2006			2007			2006			2007
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

REVENUES	$	-		$	-			-		$	-		$	-

GENERAL AND ADMINISTRATIVE EXPENSES
Salaries and payroll expenses		168,614			707,418			332,012			838,114			9,128,375
Office and administrative expenses		88,640			114,610			420,447			165,483			1,824,674
Taxes and fees		122,342			54,136			123,487			173,678			920,847
Professional services		303,777			505,538			1,656,722			611,889			7,041,604
Directors fees		70,800						148,800			-			1,984,964
Property expenses		-			135,492			15,318			145,427			2,073,383
Depreciation		3,785			20,843			7,570			41,443			438,785
Exploration and research		621,391			53,710			978,209			71,862			8,391,073
TOTAL GENERAL AND ADMINISTRATIVE EXPENSES		1,379,349			1,591,747			3,682,565			2,047,896			31,803,705

LOSS FROM OPERATIONS		(1,379,349	)		(1,591,747	)		(3,682,565	)		(2,047,896	)		(31,803,705	)

OTHER INCOME (EXPENSES)
Miscellaneous ore sales, net of expenses		-			-			-			(41,537	)		134,242
VAT tax refunds		-			-			-			13,045			132,660
Miscellaneous income		2,718			61,500			2,814			61,500			(11,670	)
Interest and investment income		67,148			(3,292	)		137,781			14,434			387,952
Interest and financing expense		(830	)		(520	)		(2,167	)		(855	)		(292,453	)
Rental income		-			-			-						94,000

TOTAL OTHER INCOME		69,036			57,688			138,428			46,587			444,731

LOSS BEFORE INCOME TAXES		(1,310,313	)		(1,534,059	)		(3,544,137	)		(2,001,309	)		(31,358,974	)

INCOME TAXES		-			-			-			-			-

NET LOSS	$	(1,310,313	)	$	(1,534,059	)		(3,544,137	)	$	(2,001,309	)		(31,358,974	)

BASIC AND DILUTED NET LOSS PER COMMON SHARE	$	(0.04	)	$	(0.05	)		(0.10	)	$	(0.07	)

BASIC AND DILUTED
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING		35,650,954			32,770,130			34,915,983			27,209,376

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

F-3

METALLINE MINING COMPANY

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

							Period from
							November 8, 1993
							(Inception)
	Six Months Ended						to
	April 30			April 30			April 30
	2007			2006			2007
	(Unaudited)			(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(3,544,137	)	$	(2,001,309	)	$	(31,358,973	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation		44,277			41,443			475,522
Noncash expenses					-			126,864
Common stock issued for services		-			-			1,025,487
Common stock issued for compensation		-			668,715			977,106
Options issued for compensation		-			-			4,360,000
Common stock issued for directors fees.		188,460						188,460
Options and warrants issued for directors fees		-						1,665,705
Stock options issued for services		-			-			849,892
Stock options issued for financing fees		-			-			276,000
Common stock issued for payment of expenses		-			-			326,527
Stock warrants issued for services		1,094,950			-			1,783,721
(Increase) decrease in:
Accounts receivable		3,294			(1,673	)		(32,640	)
Tax refunds receivable		(501,032	)					(501,032	)
Other receivables		(29,343	)					(29,343	)
Prepaid expenses		(15,567	)		(24,857	)		(29,855	)
Employee advances		(1,903	)		(6,791	)		(1,903	)
Increase (decrease) in:
Related party payable		(69,660	)		-			55,800
Accounts payable		(138,102	)		25,947			100,096
Accrued liabilities and expenses		(33,308	)		(22,199	)		92,854
Net cash used by operating activities		(3,002,071	)		(1,320,724	)		(19,649,712	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Marketable securities		3,425,000			-			(2,500,000	)
Purchase of investments		-			-			(484,447	)
Proceeds from investments		-			-			484,447
Equipment purchases		(24,845	)		(2,424	)		(1,012,250	)
Mining property acquisitions		-			-			(4,452,631	)
Net cash used by investing activities		3,400,155			(2,424	)		(7,964,881	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sales of common stock		5,671,893			10,758,737			33,253,707
Proceeds from sales of options and warrants		84,375			-			1,065,515
Deposits for sale of stock		-			-			125,500
Proceeds from shareholder loans		-			-			30,000
Payment of note payable		-			(2,105	)		(15,783	)
Net cash provided by financing activities:		5,756,268			10,756,632			34,458,939
Net increase (decrease) in cash and cash equivalents		6,154,352			9,433,484			6,844,346
Cash and cash equivalents beginning of period		689,994			213,369			-
Cash and cash equivalents end of period	$	6,844,346		$	9,646,853		$	6,844,346

SUPPLEMENTAL CASH FLOW DISCLOSURES:

Income taxes paid	$	-		$	-		$	-
Interest paid	$	2,167		$	855		$	288,938

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Common stock issued for equipment	$	-		$	-		$	25,000
Common stock options issued for financing fees	$	-		$	-		$	276,000
Common stock options issued for non-cash options	$	59,220		$	-		$	59,220

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

F-4

METALLINE MINING COMPANY

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

															Accumulated
	Common Stock						Additional			Stock			Stock		Deficit During
	Number of						Paid-in			Subscriptions			Options and		Exploration
	Shares			Amount			Capital			Receivable			Warrants		Stage			Total

Common stock issuance prior to inception (no value)		960,800		$	9,608		$	(9,608	)	$	-		$	-	$	-		$	-

1:5 reverse common stock split		(768,640	)		(7,686	)		7,686			-			-		-			-

Net loss for the year ended October 31, 1994		-			-			-			-			-		(8,831	)		(8,831	)

Balances, October 31, 1994		192,160			1,922			(1,922	)		-			-		(8,831	)		(8,831	)

3:1 common stock split		384,320			3,843			(3,843	)		-			-		-			-

Net loss for the year ended October 31, 1995		-			-			-			-			-		(7,761	)		(7,761	)

Balances, October 31, 1995		576,480			5,765			(5,765	)		-			-		(16,592	)		(16,592	)

Issuances of common stock as follows:
- for par value at transfer of ownership		2,000			20			-			-			-		-			20
- for cash at an average of $0.11 per share		1,320,859			13,209			133,150			-			-		-			146,359
- for services at an average of $0.08 per share		185,000			1,850			12,600			-			-		-			14,450
- for computer equipment at $0.01 per share		150,000			1,500			13,500			-			-		-			15,000
- for mineral property at $0.01 per share		900,000			9,000			-			-			-		-			9,000

Net loss for the year ended October 31, 1996		-			-			-			-			-		(40,670	)		(40,670	)

Balances, October 31, 1996		3,134,339			31,344			153,485			-			-		(57,262	)		127,567

Issuances of common stock as follows:
- for cash at an average of $0.61 per share		926,600			9,266			594,794			-			-		-			604,060
- for services at an average of $0.74 per share		291,300			2,913			159,545			-			-		-			162,458
- for payment of a loan at $0.32 per share		100,200			1,002			30,528			-			-		-			31,530

Options issued as follows:
- 300,000 options for cash		-			-			3,000			-			-		-			3,000

Net loss for the year ended October 31, 1997		-			-			-			-			-		(582,919	)		(582,919	)

Balances, October 31, 1997		4,452,439			44,525			941,352			-			-		(640,181	)		345,696

Issuances of common stock as follows:
- for cash at an average of $1.00 per share		843,500			8,435			832,010			-			-		-			840,445
- for cash and receivables at $1.00 per share		555,000			5,550			519,450			(300,000	)		-		-			225,000
- for services at an average of $0.53 per share		41,800			418			21,882			-			-		-			22,300
- for mine data base at $1.63 per share		200,000			2,000			323,000			-			-		-			325,000

Options issued or granted as follows:
- 1,200,000 options for cash		-			-			120,000			-			-		-			120,000
- for financing fees		-			-			-			-			60,000		-			60,000
- for consulting fees		-			-			-			-			117,000		-			117,000

Warrants issued for services		-			-			-			-			488,980		(488,980	)		-

Net loss for the year ended October 31, 1998		-			-			-			-			-		(906,036	)		(906,036	)

Balance, October 31, 1998		6,092,739		$	60,928		$	2,757,694		$	(300,000	)	$	665,980	$	(2,035,197	)	$	1,149,405

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

F-5

METALLINE MINING COMPANY

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (CONTINUED)

													Accumulated
	Common Stock				Additional		Stock			Stock			Deficit During
	Number of				Paid-in		Subscriptions			Options and			Exploration
	Shares		Amount		Capital		Receivable			Warrants			Stage			Total

Balance, October 31, 1998		6,092,739	$	60,928	$	2,757,694	$	(300,000	)	$	665,980		$	(2,035,197	)	$	1,149,405

Issuances of common stock as follows:
- for cash at an average of $1.04 per share		818,800		8,188		842,712		-			-			-			850,900
- for drilling fees at $0.90 per share		55,556		556		49,444		-			-			-			50,000

Stock option and warrant activity as follows:
- exercise of options at $0.90 per share		250,000		2,500		267,500		-			(45,000	)		-			225,000
- issuance of options for financing fees		-		-		-		-			216,000			-			216,000
- expiration of options		-		-		60,000		-			(60,000	)		-			-

Stock subscription received		-		-		-		300,000			-			-			300,000

Net loss for the year ended October 31, 1999		-		-		-		-			-			(1,423,045	)		(1,423,045	)

Balance, October 31, 1999		7,217,095		72,172		3,977,350		-			776,980			(3,458,242	)		1,368,260

Stock option and warrant activity as follows:
Exercise of options at $0.86 per share		950,000		9,500		1,090,750		-			(288,000	)		-			812,250
Warrants issued for services		-		-		-		-			55,000			-			55,000

Issuances of common stock as follows:
- for cash at an average of $2.77 per share		1,440,500		14,405		3,972,220		-			-			-			3,986,625
- for services at $1.28 per share		120,000		1,200		152,160		-			-			-			153,360
- for equipment at $1.67 per share		15,000		150		24,850		-			-			-			25,000

Net loss for the year ended October 31, 2000		-		-		-		-			-			(882,208	)		(882,208	)

Balances, October 31, 2000		9,742,595		97,427		9,217,330		-			543,980			(4,340,450	)		5,518,287

Stock option and warrant activity as follows:
- Warrants exercised at $0.75 per share		20,000		200		25,560		-			(10,760	)		-			15,000
- Options issued for consulting fees		-		-		-		-			740,892			-			740,892
- Warrants issued for consulting fees		-		-		-		-			144,791			-			144,791

Issuances of common stock as follows:
- for cash at $2.00 per share		250,000		2,500		494,076		-			3,424			-			500,000
- for cash of $210 and services at $2.07 per share		21,000		210		43,260		-			-			-			43,470
- for cash of $180 and services at $2.05 per share		18,000		180		36,720		-			-			-			36,900
- for services at $2.45 per share		6,000		60		14,640		-			-			-			14,700
- for services at $1.50 per share		12,000		120		17,880		-			-			-			18,000

Net loss for the year ended October 31, 2001		-		-		-		-			-			(2,069,390	)		(2,069,390	)

Balance, October 31, 2001		10,069,595		100,697		9,849,466		-			1,422,327			(6,409,840	)		4,962,650

Issuances of common stock as follows:
- for cash at $2.00 per share		50,000		500		99,500		-			-			-			100,000
- for cash and warrants at $1.50 per share		96,000		960		134,400		-			8,640			-			144,000
- for cash and warrants at $1.50 per share		66,667		667		93,333		-			6,000			-			100,000
- for compensation at an average of $1.23 per share		86,078		861		104,014		-			-			-			104,875

Stock option activity as follows:
- for compensation at $0.61 per share		-		-		-		-			61,000			-			61,000

Net loss for the year ended October 31, 2002		-		-		-		-			-			(765,765	)		(765,765	)

Balance, October 31, 2002		10,368,340	$	103,685	$	10,280,713	$	-		$	1,497,967		$	(7,175,605	)	$	4,706,760

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

F-6

METALLINE MINING COMPANY

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (CONTINUED)

													Accumulated
					Additional			Stock			Stock		Deficit During
	Common Stock				Paid-in			Subscriptions			Options and		Exploration
	Shares		Amount		Capital			Receivable			Warrants		Stage			Total

Balance, October 31, 2002		10,368,340	$	103,685	$	10,280,713		$	-		$	1,497,967	$	(7,175,605	)	$	4,706,760

Issuances of common stock as follows:
- for cash at $2.00 per share		100,000		1,000		199,000			-			-		-			200,000
- for cash at an average of $0.98 per share		849,000		8,489		821,510			-			-		-			829,999
- for cash and warrants at $1.50 per share		7,000		70		9,847			-			583		-			10,500
- for compensation at an average of $1.25 per share		391,332		3,913		487,275			-			-		-			491,188
- for services at an average of $1.23 per share		91,383		914		119,320			-			-		-			120,234
- for subscriptions receivable at $1.00 per share		38,000		380		37,620			(38,000	)		-		-			-

Net loss for the year ended October 31, 2003		-		-		-			-			-		(1,107,228	)		(1,107,228	)

Balance, October 31, 2003		11,845,055		118,451		11,955,285			(38,000	)		1,498,550		(8,282,833	)		5,251,453

Issuances of common stock as follows:
- for cash at $1.00 per share, less issuance costs of $698,863		7,580,150		75,802		6,805,485			-			-		-			6,881,287
- for compensation at an average of $1.26 per share		120,655		1,207		151,064			-			-		-			152,271
- for services at various prices		141,286		1,413		153,801			-			-		-			155,214

Stock subscription received		-		-		-			38,000			-		-			38,000

Miscellaneous corrections and adjustments		64,263		643		(643	)		-			-		-			-