Trend Mining (TRDM) 10QSB 2005 Q4 Quarterly report (small business)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________

FORM 10-QSB

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2005

TREND MINING COMPANY

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

Delaware	81-0304651
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5439 South Prince Street

Littleton Colorado 80120

(Address of principal executive offices)

Issuer's telephone number: (303) 798-7363

Not Applicable.

(Former name, former address and former fiscal year, if changed since last report)

________________________________________________________________________________

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

The number of shares of common stock, par value $0.01 per share, outstanding as of February 16, 2006: 40,424,081 shares

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

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Balance Sheets	2
Statements of Operations	3
Statement of Stockholders’ Equity (Deficit)	4
Statements of Cash Flows	10
NOTES TO THE FINANCIAL STATEMENTS	11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	24
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	24
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	25
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	25
ITEM 5. OTHER INFORMATION	26
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K	26

1

TREND MINING COMPANY
(An Exploration Stage Company)
BALANCE SHEETS
	December 31,			September 30,
	2005			2005
	(unaudited)			(restated)
ASSETS
CURRENT ASSETS
Cash	$	639,644		$	64,391
Accounts Receivable		42,500			42,500
Receivable from sale of mining interest		-			1,122,975
Prepaid expenses		9,285			13,494
TOTAL CURRENT ASSETS		691,429			1,243,360
MINERAL PROPERTIES		-			-
PROPERTY AND EQUIPMENT, net of depreciation		12,337			13,027
OTHER ASSETS
Reclamation Bind		1,000			6,500
TOTAL ASSETS	$	704,766		$	1,262,887
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable	$	184,611		$	519,631
Accounts payable related party		15,000			15,000
Accrued expenses		5,941			76,082
Interest payable, related parties		235,864			209,786
Interest payable, convertible debt		26,715			12,747
Loans payable to related parties		1,632,857			1,692,857
Current portion of long term convertible debt		304,404			304,404
TOTAL CURRENT LIABILITIES		2,405,392			2,830,507
LONG-TERM LIABILITES
Convertible Debt		329,151			290,983
COMMITMENTS AND CONTINGENCIES		-			-
STOCKHOLDERS' DEFICIT
Preferred stock, $0.01 par value, 20,000,000 shares
authorized; none issued and outstanding		-			-
Common stock, $0.01 par value, 100,000,000
shares authorized; 40,043,717 and
37,373,300 shares issued and outstanding, respectively		400,437			373,733
Additional paid-in capital		8,326,726			8,025,700
Stock options and warrants		1,762,647			1,762,647
Pre-exploration stage accumulated deficit		(558,504	)		(558,504	)
Accumulated deficit during exploration stage		(12,396,003	)		(11,897,099	)
Beneficial Conversion rights		434,920			434,920
TOTAL STOCKHOLDERS' DEFICIT		(2,029,777	)		(1,858,603	)
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT	$	704,766		$	1,262,887

See accompanying condensed notes to interim financial statements.

2

TREND MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
							Period from
							October 1, 1996
							(Inception of
	Three Months			Three Months			Exploration Stage)
	Ended			Ended			to
	December 31,			December 31,			December 31,
	2005			2004			2005
	(unaudited)			(unaudited)			(unaudited)
REVENUES	$	-		$	-		$	-
EXPENSES
Exploration expense		7,051			19,013			3,151,172
General and administrative		58,518			40,910			3,225,475
Officers and directors compensation		140,938			29,992			2,227,604
Legal and professional		168,433			11,511			1,846,832
Depreciation		689			892			56,193
Total Expenses		375,629			102,318			10,507,276
OPERATING LOSS		(375,629	)		(102,318	)		(10,507,276	)
OTHER INCOME (EXPENSE)
Dividend and interest income		3,367			-			15,693
Settlement Expense								(26,250	)
Gain (loss) on disposition and impairment of assets		-			-			(175,019	)
Gain on sale of mineral properties		-			-			69,805
(Gain) loss on investment sales		-			-			(63,813	)
Financing expense		(108,477	)		-			(1,830,145	)
Interest expense		(66,165	)		(28,644	)		(577,789	)
Exchange gain (loss)								(6,015	)
Other income		-			-			26,845
Forgiveness of debt		48,000			-			677,961
Total Other Income (Expense)		(123,275	)		(28,644	)		(1,888,727	)
LOSS BEFORE INCOME TAXES		(498,904	)		(130,962	)		(12,396,003	)
INCOME TAXES		-			-			-
NET LOSS	$	(498,904	)	$	(130,962	)	$	(12,396,003	)
BASIC AND DILUTED NET LOSS PER SHARE	$	(0.01	)	$	nil
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING		38,709,272			35,974,382

See accompanying condensed notes to interim financial statements.

3

TREND MINING COMPANY
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
	Common Stock				Additional		Stock					Other
	Number				Paid-in		Options and		Accumulated			Comprehensive
	of Shares		Amount		Capital		Warrants		Deficit			Income (Loss)			Total
Balance, October 1, 1996		1,754,242	$	17,542	$	663,218	$	-	$	(558,504	)	$	-		$	122,256
Common stock issuances as follows:
- for cash at $0.50 per share		200,000		2,000		98,000		-		-			-			100,000
- for payment of liabilities and expenses at $0.50
per share		45,511		455		22,301		-		-			-			22,756
Net loss for the year ended September 30, 1997		-		-		-		-		(128,614	)		-			(128,614	)
Balance, September 30, 1997		1,999,753		19,997		783,519		-		(687,118	)		-			116,398
Issuance of common stock as follows:
- for mineral property at $0.50 per share		150,000		1,500		73,500		-		-			-			75,000
- for lease termination at $0.50 per share		12,000		120		5,880		-		-			-			6,000
- for debt at $0.50 per share		80,000		800		39,200		-		-			-			40,000
- for cash at $0.20 per share		7,500		75		1,425		-		-			-			1,500
- for compensation at $0.50 per share		9,000		90		4,410		-		-			-			4,500
Issuance of stock options for financing activities		-		-		-		2,659		-			-			2,659
Net loss for the year ended September 30, 1998		-		-		-		-		(119,163	)		-			(119,163	)
Change in market value of investments		-		-		-		-		-			117,080			117,080
Balance, September 30, 1998		2,258,253		22,582		907,934		2,659		(806,281	)		117,080			243,974
Common stock issuances as follows:
- for cash at an average of $0.07 per share		555,000		5,550		35,450		-		-			-			41,000
- for prepaid expenses at $0.33 per share		50,000		500		16,000		-		-			-			16,500
- for consulting services at an average of
$0.20 per share		839,122		8,391		158,761		-		-			-			167,152
- for mineral property at $0.13 per share		715,996		7,160		82,470		-		-			-			89,630
- for officers' compensation at an average of
$0.24 per share		300,430		3,004		70,522		-		-			-			73,526
- for debt, investment and expenses at $0.30 per share		9,210		92		2,671		-		-			-			2,763
- for directors' compensation at an average of
$0.25 per share		16,500		165		3,960		-		-			-			4,125
- for rent at $0.25 per share		1,000		10		240		-		-			-			250
- for equipment at $0.30 per share		600,000		6,000		174,000		-		-			-			180,000
Net loss for the year ended September 30, 1999		-		-		-		-		(716,759	)		-			(716,759	)
Other comprehensive loss		-		-		-		-		-			(79,179	)		(79,179	)
Balance, September 30, 1999		5,345,511	$	53,454	$	1,452,007	$	2,659	$	(1,523,040	)	$	37,901		$	22,982

See accompanying condensed notes to interim financial statements.

4

TREND MINING COMPANY
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
	Common Stock					Additional		Stock						Other
	Number					Paid-in		Options and			Accumulated			Comprehensive
	of Shares			Amount		Capital		Warrants			Deficit			Income (Loss)			Total
Balance, September 30, 1999		5,345,511		$	53,454	$	1,452,007	$	2,659		$	(1,523,040	)	$	37,901		$	22,982
Common stock and option issuances as follows:
- for employee, officer and director
compensation at an average of
$0.61 per share		231,361			2,314		140,446		15,820			-			-			158,580
- for officers' and directors' compensation
at an average of $1.19 per share		11,500			115		13,615		-			-			-			13,730
- for services at an average of $0.47 per share		530,177			5,302		246,333		-			-			-			251,635
- for mineral property at $0.89 per share		1,000,000			1,000		88,000		-			-			-			89,000
- for investments at $0.33 per share		200,000			2,000		64,000		-			-			-			66,000
- for cash at $0.08 per share		456,247			4,562		28,969		-			-			-			33,531
- for cash, options and warrants		100,000			10,000		2,414		87,586			-			-			100,000
- for incentive fees at $0.33 per share		65,285			653		20,891		-			-			-			21,544
- for deferred mineral property acquisition
costs at $0.13 per share		129,938			1,299		14,943		-			-			-			16,242
- for modification of stockholder agreement
at $0.60 per share		200,000			2,000		118,000		30,000			-			-			150,000
- for modification of stockholder agreement		-			-		4,262		10,379			-			-			14,641
-from exercise of options at $0.12 per share		9,962,762			99,628		1,103,016		(37,524	)		-			-			1,165,120
Cash received for the issuance of common stock
warrants for 7,979,761 shares of stock		-			-		-		10,000			-			-			10,000
Miscellaneous common stock adjustments		(5	)		-		-		-			-			-			-
Net loss for the year ended September 30, 2000		-			-		-		-			(2,186,541	)		-			(2,186,541	)
Other comprehensive income (loss)		-			-		-		-			-			(38,314	)		(38,314	)
Balance, September 30, 2000		18,232,776		$	182,327	$	3,296,896	$	118,920		$	(3,709,581	)	$	(413	)	$	(111,850	)

See accompanying condensed notes to interim financial statements.

5

TREND MINING COMPANY
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (continued)
	Common Stock				Additional		Stock						Other
	Number				Paid-in		Options and			Accumulated			Comprehensive
	of Shares		Amount		Capital		Warrants			Deficit			Income (Loss)			Total
Balance, September 30, 2000		18,232,776	$	182,327	$	3,296,896	$	118,920		$	(3,709,581	)	$	(413	)	$	(111,850	)
Common stock and option issuances as follows:
- for cash of $1.00 per share		192,000		1,920		190,080		-			-			-			192,000
- for cash and consulting services from
options for $0.39 per share		33,333		333		12,737		(3,070	)		-			-			10,000
- for services at an average of $0.92 per share		13,700		137		12,463		-			-			-			12,600
- for officer and employee compensation at
$1.13 per share		5,200		52		5,828		-			-			-			5,880
- for payment of accrued officer's compensation
at $1.35 per share		10,000		100		13,400		-			-			-			13,500
- for consulting services at an ave of $0.77 per share		45,461		455		34,247		-			-			-			34,702
- for directors' compensation at $0.85 per share		75,000		750		63,000		-			-			-			63,750
- for modification of contract at $0.78 per share		3,000		30		2,310		-			-			-			2,340
- for interest payment on contract
at an average of $0.80 per share		10,000		100		7,900		-			-			-			8,000
- for mineral property expenses at $0.85 per share		1,000		10		840		-			-			-			850
- for debt at $1.00 per share		134,500		1,345		133,155		-			-			-			134,500
Options issued to officers, directors and employees for services		-		-		-		354,000			-			-			354,000
Warrants issued as follows:
- for consulting services		-		-		-		170,521			-			-			170,521
- for loan agreements		-		-		-		141,547			-			-			141,547
- for extension of exercise period
on outstanding warrants		-		-		-		608,058			-			-			608,058
Net loss for the year ended September 30, 2001		-		-		-		-			(3,437,354	)		-			(3,437,354	)
Other comprehensive income		-		-		-		-			-			413			413
Balance, September 30, 2001		18,755,970	$	187,559	$	3,772,856	$	1,389,976		$	(7,146,935	)	$	-		$	(1,796,543	)

See accompanying condensed notes to interim financial statements.

6

TREND MINING COMPANY

(An Exploration Stage Company)

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (continued)        

	Common Stock				Additional		Stock						Other
	Number				Paid-in		Options and			Accumulated			Comprehensive
	of Shares		Amount		Capital		Warrants			Deficit			Income (Loss)		Total
Balance, September 30, 2001		18,755,970	$	187,559	$	3,772,856	$	1,389,976		$	(7,146,935	)	$	-	$	(1,796,543	)
Common stock issuances as follows:
- for cash at $0.10 per share		2,500,000		25,000		225,000		-			-			-		250,000
- for a note payable at $1.00 per share		25,000		250		24,750		-			-			-		25,000
- for consulting fees payable at $0.55 per share		12,536		126		6,769		-			-			-		6,895
- for mineral properties at $0.70 per share		1,100,000		11,000		759,000		-			-			-		770,000
- for services at an average of $0.49 per share		112,500		1,125		53,625		-			-			-		54,750
- for financing expense at an average of $0.44 per share		82,429		824		35,369		-			-			-		36,193
Options issued to officers, directors and employees for services		-		-		-		29,528			-			-		29,528
Warrants issued as follows:																-
- for loan agreements		-		-		-		55,352			-			-		55,352
Expiration of stock options and warrants		-		-		91,814		(91,814	)		-			-		-
Interest expense forgiven by shareholders		-		-		42,950		-			-			-		42,950
Net loss for the year ended September 30, 2002		-		-		-		-			(1,168,171	)		-		(1,168,171	)
Balance, September 30, 2002		22,588,435		225,884		5,012,133		1,383,042			(8,315,106	)		-		(1,694,046	)
Common stock issuances as follows:
- miscellaneous common stock adjustment		29,555		296		-		-			-			-		296
- for cash at $0.10 per share		5,500,000		55,000		495,000		-			-			-		550,000
- for consulting services at an average of $0.15 per share		1,763,779		17,638		243,362		-			-			-		261,000
- for loans payable at an average of $0.10 per share		369,160		3,692		33,225		-			-			-		36,917
- for prior period services at an average of $.13 per share		245,000		2,450		30,550		-			-			-		33,000
- for investments at $0.21 per share		450,000		4,500		88,668		-			-			-		93,168
- to officers and directors for services at $.10 per share		1,423,156		14,232		129,024		-			-			-		143,256
- penalty shares at $.26 per share		860,000		8,600		215,000		-			-			-		223,600
Change in marekt value of investments		-		-		-		-			-			1,800		1,800
Net loss for the year ended September 30, 2003		-		-		-		-			(966,958	)		-		(966,958	)
Balance, September 30, 2003		33,229,085	$	332,291	$	6,246,963	$	1,383,042		$	(9,282,064	)	$	1,800	$	(1,317,968	)

See accompanying condensed notes to interim financial statements.

7

TREND MINING COMPANY
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (continued)
	Common Stock				Additional		Stock			Beneficial						Other
	Number				Paid-in		Options and			Conversion			Accumulated			Comprehensive
	of Shares		Amount		Capital		Warrants			Rights			Deficit			Income (Loss)			Total
Balance, September 30, 2003		33,229,085	$	332,291	$	6,246,963	$	1,383,042		$	-		$	(9,282,064	)	$	1,800		$	(1,317,968	)
Common stock issuances as follows:
- for cash at $0.20 per share		1,675,000		16,750		318,250		-			-			-			-			335,000
- for consulting services at an average of $0.35 per share		162,500		1,625		54,800		-			-			-			-			56,425
- for accounts payable at an average of $.24 per share		626,130		6,261		144,584		-			-			-			-			150,845
- for investments at $0.20 per share		125,000		1,250		23,750		-			-			-			-			25,000
- to officers and directors for services at $.12 per share		150,000		1,500		16,500		-			-			-			-			18,000
Expired options & warrants		-		-		503,774		(503,774	)		-			-			-			-
Options issued to officers and directors for services		-		-		-		95,000			-			-			-			95,000
Gain on sale of internal securities		-		-		210,194		-			-			-			-			210,194
-
Change in market value of investments		-		-		-		-			-			-			(1,800	)		(1,800	)
Net loss for the year ended September 30, 2004		-		-		-		-			-			(992,688	)		-			(992,688	)
Balance, September 30, 2004		35,967,715		359,677		7,518,815		974,268			-			(10,274,752	)		-			(1,421,992	)
Common stock issuances as follows:
- for services at an average of $.23 per share		199,585		1,996		44,591		-			-			-			-			46,587
- for financing expenses at $0.345 per share		210,000		2,100		70,350		-			-			-			-			72,450
- for financing expenses at an average of $0.24 per share		66,000		660		15,500		-			-			-			-			16,160
- to officers and directors for services at $.23 per share		634,518		6,345		139,655		-			-			-			-			146,000
- for convertible debt and interest		295,482		2,955		55,669		-			-			-			-			58,624
Convertible debt issuance:
- class A warrants at $0.15 per share		-		-		-		51,577			-			-			-			51,577
- class B warrants at $0.10 per share		-		-		-		42,248			-			-			-			42,248
- beneficial conversion rights at $0.19 per share		-		-		-		-			77,158			-			-			77,158
Cancellation of warrants and beneficial conversion rights		-		-		170,983		(93,825	)		(77,158	)		-			-			-
Options issued to officers and directors for services		-		-		-		143,840			-			-			-			143,840
Expiration of warrants		-		-		10,137		(10,137	)		-			-			-			-
Convertible debt issuance:
- class A warrants at an average of $0.15 per share		-		-		-		386,275			-			-			-			386,275
- class B warrants at and average of $0.08 per share		-		-		-		183,136			-			-			-			183,136
- beneficial conversion rights at $0.19 per share		-		-		-		-			306,587			-			-			306,587
Convertible debt issuance:
- class A warrants at of $0.10 per share		-		-		-		66,990			-			-			-			66,990
- class B warrants at and average of $0.02 per share		-		-		-		18,275			-			-			-			18,275
- beneficial conversion rights at $0.25 per share		-		-		-		-			128,333			-			-			128,333
Net loss for the year ended September 30, 2005 (restated)		-		-		-		-			-			(2,180,851	)		-			(2,180,851	)
Balance, September 30, 2005(restated)		37,373,300	$	373,733	$	8,025,700	$	1,762,647		$	434,920		$	(12,455,603	)	$	-			(1,858,603	)

See accompanying condensed notes to interim financial statements.

8

TREND MINING COMPANY
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (continued)
	Common Stock				Additional		Stock		Beneficial
	Number				Paid-in		Options and		Conversion		Accumulated
	of Shares		Amount		Capital		Warrants		Rights		Deficit			Total
Balance, September 30, 2005 (restated)		37,373,300	$	373,733	$	8,025,700	$	1,762,647	$	434,920	$	(12,455,603	)	$	(1,858,603	)
Common stock issuances as follows:
- for services at $0.23 per share		7,912		79		1,721		-		-		-			1,800
- for financing cash at $0.10 per share		1,500,000		15,000		135,000		-		-		-			150,000
- to officers and directors for services at $0.15 per share		600,000		6,000		84,000		-		-		-			90,000
- for convertible debt and interest at an average
of $0.15 per share		562,505		5,625		80,305		-		-		-			85,930
Net loss for the three months ended December 31, 2005
(unaudited)		-		-		-		-		-		(498,904	)		(498,904	)
Balance, December 31, 2005 (unaudited)		40,043,717	$	400,437	$	8,326,726	$	1,762,647	$	434,920	$	(12,954,507	)	$	(2,029,777	)

See accompanying condensed notes to interim financial statements.

9

TREND MINING COMPANY
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
							Period from
							October 1, 1996
							(Inception of
	Three Months			Three Months			Exploration Stage)
	Ended			Ended			to
	December 31,			December 31,			December 31,
	2005			2004			2005
	(unaudited)			(unaudited)			(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net gain (loss)	$	(498,904	)	$	(130,962	)	$	(12,396,003	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation		689			892			56,193
Amortization of debt discount		108,477			-			605,909
Loss on investment sales		-			6,220			68,969
Loss (gain) on disposition and impairment of assets		-			-			183,391
Gain on sale of minining interest		-			-			(69,805	)
Gain on sale of mineral property claims for securities		-			-			(500	)
Gain on trade-in of property and equipment		-			-			(7,872	)
Gain on forgiveness of debt		(48,000	)		-			(249,581	)
Interest expense forgiven by related parties		-			-			20,848
Common stock issued for services
and financing expenses		1,800			-			1,266,971
Common stock issued for payables and accrued expenses					-			219,656
Common stock and options issued as compensation		90,000			-			1,211,215
Stock options and warrants issued for financing activities		-			-			822,257
Common stock issued for investments		-			-			93,168
Common stock and warrants issued to acquire mineral
property options		-			-			1,114,873
Warrants issued for consulting fees		-			-			170,521
Common stock issued for incentive fees		-			-			21,544
Investment traded for services		-			-			45,939
Common stock issued for payment of interest		15,619			-			32,779
Changes in assets and liabilities:
Prepaid expenses		4,209			1,796			(5,480	)
Accounts receivable		1,122,975						1,080,475
Accounts payable		(335,019	)		1,811			97,421
Accounts payable, related parties		-			-			15,000
Accounts payable - checks in excess of bank balance		-			-			7
Accrued expenses		(22,141	)		5,912			(20,244	)
Reclamation bond		5,500			-			(1,000	)
Interest payable, related parties		26,078			22,424			209,806
Interest payable, convertible debt		13,970			-			26,717
Net cash used by operating activities		485,253			(91,907	)		(5,386,826	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of equipment		-			-			37,626
Purchase of fixed assets		-			-			(10,023	)
Proceeds from sales of mineral property		-			-			223,000
Costs of mining interest		-			-			(1,011,395	)
Purchase of furniture and equipment		-			-			(46,053	)
Proceeds from investments sold		-			-			183,161
Net cash provided by investing activities		-			-			(623,684	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable and short-term borrowings		(60,000	)		-			(434,556	)
Payments on convertible debt		-			-			-
Proceeds from internal securities sale		-			-			210,194
Sale of warrants for common stock		-			-			10,000
Proceeds from borrowings		-			197,038			3,794,157
Sale of common stock, subscriptions
and exercise of options		150,000			-			2,843,151
Issuance of penalty shares		-			-			223,600
Net cash provided by financing activities		90,000			197,038			6,646,546
NET INCREASE IN CASH		575,253			105,131			636,037
CASH, BEGINNING OF PERIOD		64,391			8,313			3,607
CASH, END OF PERIOD	$	639,644		$	113,444		$	639,644
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	$	10,000		$	-		$	177,680
Income taxes paid	$	-		$	-		$	-
NON-CASH FINANCING AND INVESTING ACTIVITIES:
Common stock and warrants issued to acquire
mineral properties	$	-		$	-		$	344,873
Common stock issued to acquire mineral property	$	-		$	-		$	845,000
Common stock issued for acquisition of
mining equipment	$	-		$	-		$	180,000
Common stock issued for services and expenses	$	91,800		$	-		$	1,356,971
Common stock issued for investment	$	-		$	-		$	185,168
Common stock issued for payables and accrued expenses	$	-		$	-		$	219,656
Common stock issued for incentive fees	$	-		$	-		$	21,544
Common stock and options issued as compensation	$	-		$	-		$	1,121,215
Common stock and options issued for payment of convertible debt	$	70,311		$	-		$	111,775
Common stock and options issued for payment of interest	$	15,619		$	-		$	32,779
Stock options and warrants issued for financing activities	$	-		$	-		$	822,257
Warrants issued for consulting fees	$	-		$	-		$	170,521
Deferred acquisition costs on mining property	$	-		$	-		$	46,242
Purchase of equipment with financing agreement	$	-		$	-		$	21,814
Investments received for mineral property	$	-		$	-		$	5,500
Investments traded for services	$	-		$	-		$	45,939
Equipment for loans payable	$	-		$	-		$	4,500
Warrants issued with convertible debt	$	-		$	-		$	654,676
Beneficial conversion rights	$	-		$	-		$	434,920

See accompanying condensed notes to interim financial statements.

10

TREND MINING COMPANY

(AN EXPLORATION STAGE COMPANY)

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2005

NOTE 1 - BASIS OF PRESENTATION OF UNAUDITED INTERIM FINANCIAL INFORMATION

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with instructions to Form 10-QSB pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information required by accounting principles generally accepted in the United States of America for complete financial statements.

The accompanying financial statements should be read in conjunction with the audited financial statements of the Company included in the Company's September 30, 2005 Annual Report on Form 10-KSB.

In the opinion of management, all adjustments, consisting only of normal recurring accruals considered necessary for a fair presentation, have been included. The results of operations for the nine-month period ended December 31, 2005 are not necessarily representative of operating results to be expected for the entire fiscal year.

NOTE 2 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Trend Mining Company (formerly Silver Trend Mining Company) (“the Company” or “Trend”) was incorporated on September 7, 1968 under the laws of the State of Montana for the purpose of acquiring, exploring and developing mining properties. From 1984 to late 1996, the Company was dormant. In November 1998, the Company changed its focus to exploration for platinum and palladium related metals primarily in the United States. In February of 1999, the Company changed its name to Trend Mining Company to better reflect the Company’s change of focus and diversification into platinum group metals. In 2004, the Company further diversified into uranium properties although actual exploration has not yet commenced. The Company conducts operations primarily from its offices in Littleton, Colorado. The Company has a September 30 fiscal year-end.

On March 28, 2001, the Company reincorporated in Delaware. This reincorporation represented a change of corporate domicile and had no accounting impact. Under its amended certificate of incorporation, Trend has authorized the issuance of 100,000,000 shares of common stock with a par value of $0.01 per share and 20,000,000 shares of authorized preferred stock with a par value of $0.01, with rights and preferences to be determined by the Company’s board of directors. One share of Series A preferred stock was created and issued to Mr. Thomas S. Kaplan which required the holder’s approval for all stock and equity issuances. In October 2002, this preferred share was cancelled.

11

TREND MINING COMPANY

(AN EXPLORATION STAGE COMPANY)

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2005

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements. The financial statements and notes rely on the integrity and objectivity of the Company’s management. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Basic and Diluted Loss per Share

Basic and diluted loss per share are computed by dividing the net loss by the weighted average number of shares outstanding during the year or period. The weighted average number of shares is calculated by taking the number of shares outstanding and weighting them by the length of time that they were outstanding.

Outstanding options and warrants and convertible debt representing an aggregate potential conversion into 22,938,178 and 10,068,174 shares of common stock, as of December 31, 2005 and 2004, respectively, have been excluded from the calculation of diluted loss per share as they would be antidilutive.

Accounting for Convertible Notes and Securities with Beneficial Conversion Features

Following guidance provided by EITF 00-27, the Company allocates proceeds received from convertible notes and/or securities first to warrants granted the note holders. The value of the warrants and the beneficial conversion feature are recorded on the balance sheet as a debt discount and as an increase to shareholders equity. The discounts are amortized over the life of the loans.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 reporting period. Actual results could differ from those estimates.

Exploration Costs

In accordance with accounting principles generally accepted in the United States of America, the Company expenses exploration costs as incurred. Exploration costs expensed during the periods ended December 31, 2005 and 2004 were $7,051 and $19,013, respectively. As of December 31, 2005, cumulative exploration costs expensed during the Company’s exploration stage totaled $3,151,172.

12

TREND MINING COMPANY

(AN EXPLORATION STAGE COMPANY)

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2005

Exploration Stage Activities

The Company has been in the exploration stage since October 1, 1996, when the Company emerged from a period of dormancy, and has no revenues from operations. The Company is primarily engaged in the acquisition and exploration of mineral properties. Should the Company locate a commercially viable reserve, the Company would expect to actively prepare the site for extraction. The Company’s accumulated deficit prior to the exploration stage was $558,504.

Going Concern

As shown in the accompanying financial statements, at December 31, 2005, the Company has limited cash, negative working capital, no revenues, incurred a net loss of $498,902 for the fiscal year, and has an exploration stage accumulated deficit of $12,396,004. These factors indicate that the Company may be unable to continue in existence in the absence of receiving additional funding. The financial statements do not include any adjustments related to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

The Company estimates that approximately $1,000,000 is required to fund operations of the Company for the next 12 months assuming minimal exploration activities. The Company’s management believes that it will be able to generate sufficient cash from public or private debt or equity financing in order for the Company to continue to operate based on current expense projections.

Impaired Asset Policy

The Company adopted Financial Accounting Standards Board Statement No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets.” In complying with these standards, the Company reviews its long-lived assets quarterly to determine if any events or changes in circumstances have transpired which indicate that the carrying value of its assets may not be recoverable. The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by its assets to their respective carrying amounts whenever events or changes in circumstances indicate that an asset may not be recoverable.

The amount of loss, if any, is measured by the amount that the carrying value of the long-lived asset exceeds its fair value in accordance with SFAS No. 144. Properties are acquired and recorded at fair values negotiated in arm’s length transactions. The Company expenses the exploration and maintenance of its properties and claims. If results of exploration warrant an assessment of the carrying value of a mineral property’s acquisition cost, or if the Company has an indication that a property’s recorded fair value has declined, such costs will be reviewed and the related impairment, if any, will be recognized at that time.

13

TREND MINING COMPANY

(AN EXPLORATION STAGE COMPANY)

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2005

Option and Warrant Fair Value Calculations

The Company utilizes the Black-Scholes valuation model to calculate the fair value of options and warrants issued for financing, acquisition, compensation and payment for services. The parameters used in such valuations include a risk free rate of 5%, the assumption that no dividends are paid, exercise periods ranging from 1 week to 3 years, depending upon the terms of the instrument issued, and a volatility ranging from 78%-91% which is calculated annually based on estimates of expected volatility, in accordance with Statement of Financial Accounting Standards No. 123. See Note 5.

Recent Accounting Pronouncements

In May 2005, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 154, “Accounting Changes and Error Corrections,” (hereinafter “SFAS No. 154”) which replaces Accounting Principles Board Opinion No. 20, “Accounting Changes”, and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements - An Amendment of APB Opinion No. 28”. SFAS No. 154 provides guidance on accounting for and reporting changes in accounting principle and error corrections. SFAS No. 154 requires that changes in accounting principle be applied retrospectively to prior period financial statements and is effective for fiscal years beginning after December 15, 2005. Management does not expect SFAS No. 154 to have a material impact on the Company’s financial position, results of operations, or cash flows.

Provision for Taxes

Income taxes are provided based upon the liability method of accounting pursuant to Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (hereinafter “SFAS No. 109”). Under this approach, deferred income taxes arise from temporary differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end, and the expected future benefits of net operating loss carryforwards, tax credit and other carryforwards. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard imposed by SFAS No. 109 to allow recognition of such an asset.

At December 31, 2005, the Company had net deferred tax assets, calculated at an expected rate of 34% of approximately $2,521,000 (net of a deferred tax liability of approximately $24,000) principally arising from net operating loss carryforwards for income tax purposes. As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the net deferred tax asset, a valuation allowance equal to the net deferred tax asset has been established at September 30, 2005.

14

TREND MINING COMPANY

(AN EXPLORATION STAGE COMPANY)

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2005

The tax effects of significant temporary differences and carryforwards which give rise to the Company's deferred tax assets and liabilities at December 31, 2005 and September 30, 2005 and 2004 , are as follows:

	December 31, 2005			September 30, 2005			September 30 2004
Deferred Tax Assets:
Net operating loss carryforward	$	2,802,000		$	2,304,000		$	1,681,000
Other		67,000			67,000			—
		2,869,000			2,371,000			1,681,000
Deferred Tax Liabilities		(24,000	)		(24,000	)		—
Valuation Allowance:
Beginning of year		(2,347,000	)		(1,681,000	)		(1,450,000	)
(Increase) decrease		(174,000	)		(666,000	)		(231,000	)
End of year		(2,521,000	)		(2,347,000	)		(1,681,000	)
Net Deferred Tax Assets	$	—		$	—		$	—

During 2005 and 2004, the Company had deferred tax benefits that resulted primarily from net operating losses for which there were no currently refundable federal taxes. The calculation for deferred tax assets does not include approximately $780,000 of expenses for non-deductible options, warrants and beneficial conversion rights and approximately $70,000 on the gain on the sale of the mining interest (see Note 4). At December 31, 2005, the Company has federal net operating loss carryforwards of approximately $7,273,000 which, if not utilized, will expire in the years 2009 through 2026.

NOTE 4 -  MINERAL PROPERTIES

The following describes the Company’s significant mineral properties at December 31, 2005:

Andacollo Mine, Chile

During the fourth quarter of 2005, Trend entered into negotiations to purchase 100% of Compania Minera Dayton (“CMD”), a Chilean corporation that owns and operated the Andacollo Mine in Chile. On September 20, 2005, Trend bought 30% of the corporation’s shares (and effectively 30% of the aforementioned mine) while a separate group of investors purchased the remaining 70% on the same date.

15

TREND MINING COMPANY

(AN EXPLORATION STAGE COMPANY)

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2005

The Company paid an initial $900,000 in cash for the acquisition. The Company also paid out additional related expenses for which it was to be repaid 70% by the other investors. Before the end of the year, the investor group then initiated an offer to buy Trend’s 30% stake in exchange for cash of$1,122,975, a 1% net smelter returns royalty, and a 30% back-in right excercisable through April 1, 2006. At September 30, 2005 the cash portion of the purchase price had not been received by the Company. As a result of this transaction, the Company recognized a gain of $69,804. During the period ended December 31, 2005 the Company received $1,000,000 on October 6 and the remaining $122,975 on December 9, 2005.

The final operating permits were obtained on December 27, 2005 for the mine, which is expected to be fully operational by the second quarter of 2006, after which time Trend is contractually entitled to receive 1% of gold revenues from the mine in monthly installments.

Diabase Peninsula, Cree Lake Area, Saskatchewan, Canada

In December 2004, Trend announced that it and Nuinsco Resources Limited (“Nuinsco”) signed a Letter of Intent to form a 50-50 joint venture to own, operate and explore the three Cree Lake/Diabase Peninsula claims. The agreement provides that Nuinsco, at its expense, will immediately undertake an exploration program consisting of geophysical surveys and geochemical sampling to be followed by drilling. A definitive joint venture agreement was executed on September 29, 2005, under terms of which Nuinsco must maintain all three claims in good standing and must spend CDN $2 million by December of 2007 in order to earn its 50% share of the joint venture. Additionally, Nuinsco will grant to the Company 250,000 freely trading shares of Nuinsco common stock. At December 31, 2005 the value of the Nuinsco shares was $42,500 and is included in accounts receivable in the financial statements.

NOTE 5 -  COMMON STOCK, OPTIONS AND WARRANTS

Common Stock

During the three months ended December 31, 2005, the Company issued 7,912 shares of common stock valued at $1,800 for services, 600,000 shares of common stock valued at $146,000 for director, officer and employee compensation, 1,500,000 shares of common stock valued at $150,000 for cash and 562,505 shares of common stock valued at $80,305 for convertible debt. Of these shares 600,000 were issued under the 2000 Equity Incentive Plan.

Following is a summary of stock options for the three months ended December 31, 2005

16

TREND MINING COMPANY

(AN EXPLORATION STAGE COMPANY)

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2005

	Number of Shares		Weighted Average Exercise Price
Outstanding at October 1, 2005		2,200,000	$	0.37
Granted		-		-
Exercised		-		-
Expired		-		-
Outstanding at December 31, 2005		2,200,000	$	0.37
Options exercisable at December 31, 2005		1,650,000	$	0.39
Weighted average fair value of options granted at December 31, 2005				-

Total compensation costs related to non-vested stock options as of December 31, 2005	$	84,760
Weighted average period of nonvested stock options as of December 31, 2005		9 months

Following is a summary of warrants outstanding at December 31, 2005:

Number of Warrants	Strike Price		Expiration Date
2,166,667	$	0.25		2/21/2006
825,002	$	0.25		2/21/2006
250,000	$	0.25		2/21/2006
7,954,761	$	0.40		9/30/2006
150,000	$	1.00		1/30/2007
520,000	$	1.00		9/30/2007
113,413	$	1.00		5/31/2007
1,733,333	$	0.50		1/27/2010
825,002	$	0.50		1/27/2010
200,000	$	0.50		3/22/2010
14,738,178

17

TREND MINING COMPANY

(AN EXPLORATION STAGE COMPANY)

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2005

For the three month period ended December 31, 2005, there were no common stock issuances due to the exercise of warrants. In accordance with SFAS 123, the Company utilizes the Black Scholes fair value model to value all option and warrant grants.

No options or warrants were granted during the three months ended December 31, 2005.

NOTE 6 -  RELATED PARTY TRANSACTIONS

Notes Payable - Shareholders

During the three months ended December 31, 2005, the Company repaid the principal balances of the loans to Mr. Ishiung Wu and NW Exploration ) totaling 3$9,000 and $21,000 respectively.

Employment Agreements

In July 2000, the Company entered into an employment agreement with Mr. John Ryan, the then chief financial officer, secretary and treasurer of the Company, under which Mr. Ryan was to receive 3,000 shares per month of Trend common stock as compensation for his services. When Mr. Ryan resigned in December 2000, this agreement was terminated. In July 2001, Mr. Ryan was again designated as the Company’s chief financial officer, secretary and treasurer. A revised employment agreement was reached in September 2002 where Mr. Ryan receives $3,000 per month, which amount was augmented to $4,000 per month in July of 2005. Mr. Ryan took stock in lieu of cash for July and August 2005, and then the Company reverted to paying Mr. Ryan in cash on September 1, 2005. If the Company is unable to pay the salary in cash, then Mr. Ryan has the option to receive $4,000 worth of the Company’s common stock at the prevailing rate of which shares are or were most recently sold by the Company. As of December 31, 2005 and 2004, respectively, $4,000 and $0 were owed to Mr. Ryan under this agreement.

On November 1, 2005, the Company entered into an employment agreement with Mr. Thomas Loucks, the president and chief executive officer, for a term of one year, which can be extended each year for a period of one year. Under the agreement the Company Mr. Loucks will be paid $120,000 per year, or $10,000 per month. Prior to this agreement, Mr. Loucks received $6,500 per month, increased to $10,000 per month in September 2005.

NOTE 7 - CONVERTIBLE DEBT

2005 - Convertible Debt

In January 2005, the Company completed a private placement of secured, convertible promissory notes in the amount of $1,300,000. This offering retired, replaces and supersedes the terms of the $250,000 offering of December 8, 2004. As part of this offering, the Company issued promissory notes due on January 28, 2008, bearing interest at a rate per annum equal to the “prime rate,” plus 3% percent but not less than 10%, with principal and interest payable monthly starting June 1, 2005. The promissory notes are convertible into shares of the Company’s common stock at a rate of one share for each $0.30 of principal and interest outstanding. Additionally the Company issued two series of warrants (Class A and Class B) with the promissory notes. The Class A warrants allow for the purchase of up to 1,733,333 shares of the Company’s common stock at an exercise price of $0.50 per share and Class B warrants allow for the purchase of up to 2,166,667 shares of common stock at an exercise price of $0.25 per share. The Class A warrants have a maturity of five years and the Class B warrants expire 120 days after the Company files a registration statement registering the shares issuable upon conversion of the notes and exercise of the warrants.

18

TREND MINING COMPANY

(AN EXPLORATION STAGE COMPANY)

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2005

In addition to the warrants issued to the investors, the Company also issued to Ghillie Finanz, Class A and Class B warrants and paid them approximately $169,000 in cash as a finders fee in relation to the convertible debentures. The Class A warrants allow for the purchase of up to 650,000 shares of the Company’s common stock at an exercise price of $0.50 per share and Class B warrants allow for the purchase of up to 650,000 shares of common stock at an exercise price of $0.25 per share. The Class A warrants have a maturity of five years and the Class B warrants expire 120 days after the Company files a registration statement registering the shares issuable upon conversion of the notes and exercise of the warrants. The value of the warrants and financing fees paid are being amortized over the life of the convertible debt and the amortized amounts are included in financing expenses in the financial statements.

In March 2005, the Company completed a private placement of secured, convertible promissory notes in the amount of $150,000. As part of this offering, the Company issued promissory notes due on January 28, 2008, bearing interest at a rate per annum equal to the “prime rate,” plus 3% percent but not less than 10%, with principal and interest payable monthly starting June 1, 2005. The promissory notes are convertible into shares of the Company’s common stock at a rate of one share for each $0.30 of principal and interest outstanding. Additionally, the Company issued two series of warrants (Class A and Class B) with the promissory notes. The Class A warrants allow for the purchase of up to 200,000 shares of the Company’s common stock at an exercise price of $0.50 per share and Class B warrants allow for the purchase of up to 250,000 shares of common stock at an exercise price of $0.25 per share. The Class A warrants have a maturity of five years and the Class B warrants expire 120 days after the Company files a registration statement registering the shares issuable upon conversion of the notes and exercise of the warrants.

In July 2005, the Company completed a private placement of secured, convertible promissory notes in the amount of $350,000. As part of this offering, the Company issued promissory notes due on January 28, 2008, bearing interest at a rate per annum equal to the “prime rate,” plus 3% percent but not less than 10%, with principal and interest payable monthly starting July 1, 2005. The promissory notes are convertible into shares of the Company’s common stock at a rate of one share for each $0.30 of principal and interest outstanding. Additionally, the Company issued two series of warrants (Class A and Class B) with the promissory notes. The Class A warrants allow for the purchase of up to 466,667 shares of the Company’s common stock at an exercise price of $0.50 per share and Class B warrants allow for the purchase of up to 583,333 shares of common stock at an exercise price of $0.25 per share. The Class A warrants have a maturity of five years and the Class B warrants expire 120 days after the Company files a registration statement registering the shares issuable upon conversion of the notes and exercise of the warrants.

19

TREND MINING COMPANY

(AN EXPLORATION STAGE COMPANY)

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2005

In addition to the warrants issued to the investors, the Company also issued to Ghillie Finanz, Class A and Class B warrants and paid them approximately $45,000 in cash as a finders fee in relation to the convertible debentures. The Class A warrants allow for the purchase of up to 175,001 shares of the Company’s common stock at an exercise price of $0.50 per share and Class B warrants allow for the purchase of up to 175,001 shares of common stock at an exercise price of $0.25 per share. The Class A warrants have a maturity of five years and the Class B warrants expire 120 days after the Company files a registration statement registering the shares issuable upon conversion of the notes and exercise of the warrants. The value of the warrants and financing fees paid are being amortized over the life of the convertible debt and the amortized amounts are included in financing expenses in the financial statements.

As of December 31, 2005, the Company has paid $292,188 in principal and $110,264 in interest on these notes in cash and common stock. At December 31, 2005 the Company is showing the principal value of the debt, less the unamortized debt discounts of approximately $633,000 as the carrying value of the debt. The Company has accrued approximately $26,700 of accrued interest related to these notes as of December 31, 2005.

NOTE 8 -  COMMITMENTS AND CONTINGENCIES

Lease Agreement

In July 2005 the company entered into a lease agreement for one year for office facilities in Littleton, Colorado. The office lease requires monthly payments of $2,100 and expires June 30, 2006. During the three months ended December 31, 2005, the Company paid $6,300, with an additional $12,600 payable under terms of the lease.

Legal Proceedings

In May, 2002, one of the Company’s vendors, Nevada Southwest Investments LLC, obtained a judgment in the Second Judicial District, Washoe County, Nevada to collect $18,574 due under a rental lease agreement for office space the Company chose to vacate. The judgment bears interest at 18% until paid in full. Included in the accounts payable balance as of September 30, 2005 is approximately $32,000 related to this judgment. The Company negotiated with the creditor to make suitable payment arrangements to pay this judgment over time. The creditor had scheduled a debtor’s hearing in the early part of 2004 but the hearing was cancelled and not rescheduled.

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TREND MINING COMPANY

(AN EXPLORATION STAGE COMPANY)

CONDENSED NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2005

On August 24, 2005, a complaint was filed against the Company in the United States District Court for the Eastern District of New York, seeking $52,500 in legal fees, under Section 16(b) of the Securities Exchange Act of 1934, which were allegedly incurred in connection with the Company's recovery of alleged short-swing trading profits from an insider of the Company. The case was dismissed with prejudice on or about November 29, 2005, pursuant to a compromise and settlement under which the Company paid plaintiff the sum of $26,250. The Company has paid the settlement amount during the three months ended December 31, 2005.

NOTE 9 -  CONCENTRATIONS

The Company has significantly relied on Mr. Thomas Kaplan and various associated entities of Mr. Kaplan, as well as Mr. Howard Schraub and various associated entities, for operating capital.

NOTE 10 -  FORGIVENESS OF DEBT

Included in the September 30, 2005 and 2004 financial statements is $73,000 of accrued wages owing to Mr. David Mooney, the former chief geologist for the Company. In October 2005, the Company and Mr. Mooney agreed to a settlement of $25,000, with the remaining amount of the debt, $48,000, to be forgiven.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

General

Trend is an exploration stage company. Trend’s primary expenditures at this stage consist of payment of various governmental fees to maintain the priority of Trend’s unpatented mining claims, payment of Trend’s debt service, payment of accounting and legal fees, and general office expenses.

Results of Operations

The Company’s operating losses for the three-month period ended December 31, 2005 totaled $498,904 as compared to a loss of $130,962 for the quarter ended December 31, 2004. The accumulated deficit since inception of the current exploration stage is $12,396,003, and Trend’s total loss since inception of the company is $12,954,507. The first quarter operating loss is due primarily to general and administrative expenses of $44,313, officer and director compensation of $140,938, exploration expenses of $7,051, consulting expenses of $14,205 and legal and professional fees of $168,433. Operating cash at the end of the quarter totaled $639,644 as compared to $113,444 for the quarter ended December 31, 2004.

Liquidity and Capital Resources

Trend’s primary, near term business objective is to raise sufficient capital to retain the Company’s current mineral properties, to explore them and acquire additional projects, and to pay Trend’s general and administrative expenses. As reflected in our accompanying financial statements, we have limited cash, negative working capital, no revenues and an accumulated deficit of $12,954,507. These factors indicate that we may be unable to continue in existence in the absence of receiving additional funding. Our operating expenses average approximately $40,000 per month, consisting of Trend’s accounting and legal fees and general and administrative expenses. The Company may also enter into payment arrangement plans with creditors which could add between $50,000 and $60,000 per month to this monthly budget figure. In that case, the Company’s monthly budget would rise to between $90,000 and $100,000 per month. Moreover, management’s plans for the next twelve months include approximately $600,000 of cash expenditures for exploration activity on the Lake Owen, Peter Lake and new Stillwater properties.

Trend estimates that approximately $1,000,000 will be required to fund its operations for the next 12 months assuming minimal exploration activities and excluding the cost of acquisitions, if any. Trend currently holds sufficient capital to continue current operations through fiscal 2006. Trend believes that it now has capital and quality projects to become more active in its exploration and is seeking additional capital to extend its operations into and through 2006.

To fund its operations, the Company intends to seek additional financing from the public or private debt or equity markets to continue its business activities. Under the Company’s Delaware certificate of incorporation, Trend has 100,000,000 authorized shares of common stock and is authorized to issue 20,000,000 shares of preferred stock. Trend currently has no preferred shares issued and outstanding. We believe that we will generate sufficient cash from the Andocollo royalty and a public or private debt or equity financing in order for the Company to continue to operate based on current expense projections and exploration plans. Nevertheless, we are unable to provide assurances that we will be successful in obtaining sufficient sources of capital. There can be no assurance that Electrum, LCM Holdings, or others will continue to advance funds to Trend or that Trend's efforts to obtain additional financing will be successful. Further, there can be no assurance that additional financing will be available on terms acceptable to the Company. If we fail to raise the necessary funds to continue operations we might be required to significantly reduce their scope or completely cease our operations.

The Company’s business plan, contingent upon raising at least $1 million to cover calendar 2006, includes the hiring of Denver-based accounting staff with greater proficiency in the mining industry; and hiring a controller to oversee the Company’s financial system and closely supervise the preparation of monthly, quarterly and annual financial information.

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Off-Balance Sheet Arrangements

None.

ITEM 3. CONTROLS AND PROCEDURES.

(a) Evaluation of disclosure controls and procedures.

Within the 90 days prior to the filing of this Quarterly Report on Form 10-QSB (the "Evaluation Date"), the Company carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and its Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Exchange Act). Based upon that evaluation, the Company's Chief Executive Officer and its Chief Financial Officer concluded that the Company's disclosure controls and procedures are not effective to ensure that material information required to be disclosed by it in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

It should be noted, that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

(b) Changes in internal controls.

The Company evaluates its internal controls for financial reporting purposes on a regular basis. Based upon the results of these evaluations, the Company considers what revisions, improvements and/or corrective actions are necessary in order to ensure that its internal controls are effective.

During the fiscal quarter ended December 31, 2005, there have been no changes to the Company's internal controls over financial reporting that has materially affected or is reasonably likely to materially affect the Company's internal controls over financial reporting. However, since the Company’s internal controls over financial reporting did not comply with the procedures set forth in Rules 13a-15(e) or 15d-15(e) under the Exchange Act it is currently in the process of improving its internal controls and procedures.

In January 2006, the Company discovered that an asset had been classified as an expense, rather than an asset, in the financials statements for the fiscal year ending September 30, 2005. During fiscal 2005, the Company made three installment payments for the purchase of interests in DMC Cayman, Inc. Prior to the fiscal year end, the Company entered into an agreement to sell its interests in DMC Cayman, Inc. for cash that was received subsequent to the fiscal year end, thus, resulting in an account receivable and a capital gain as of September 30, 2005. Upon each payment, an exploration expense rather than a capital asset was recognized. Thus, as a result, the capital gain and the outstanding account receivable were not recognized on the financial statements as of September 30, 2005. This involved only a misclassification of accounts. Upon discovery of the misclassification, the Company restated its financial statements previously filed on Form 10-KSB for the fiscal year ended September 30, 2005.

In light of the recent restatement, the Company has begun taking actions to improve, and plans to evaluate its internal controls and certain disclosure controls and procedures. As part of this commitment, Trend’s Chief Financial Officer and Chief Executive Officer are initiating steps which include: (i) hiring new accounting staff with greater proficiency in the mining industry; and (ii) hiring a controller to oversee the Company’s financial system and closely supervise the preparation of monthly, quarterly and annual financial information.

The Company’s Chief Executive Officer and Chief Financial Officer believe that these steps, set forth in the preceding paragraph, will be sufficient to strengthen its disclosure procedures and that no other changes to the Company's disclosure controls and procedures are needed in response to the discovery of the misclassification described above.

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FORWARD-LOOKING STATEMENTS

This Form 10-QSB contains forward-looking statements that involve substantial risks and uncertainties. Investors and prospective investors in our common stock can identify these statements by forward-looking words such as "may," "will," "expect," "intend," "anticipate," believe," "estimate," "continue" and other similar words. Statements that contain these words should be read carefully because they discuss our future expectations, make projections of our future results of operations or of our financial condition or state other "forward-looking" information.

We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able to predict accurately or control. The factors listed in the section captioned "Management's Discussion and Analysis or Plan of Operation," as well as any cautionary language in this Form 10-QSB, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Investors and prospective investors in our common stock should be aware that the occurrence of the events described in the "Management's Discussion and Analysis or Plan of Operation" section and elsewhere in this Form 10-QSB could have a material adverse effect on our business, operating results and financial condition.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Nothing to report at this time.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Common Stock

We had 40,043,717 shares of common stock issued and outstanding as of December 31, 2005. The issuances discussed under this section are exempted from registration under Rule 506 of the Securities Act of 1933, as amended (the “Securities Act”), or Section 4(2) of the Securities Act, as indicated. All purchasers of the issued securities represented to us that they acquired the shares for investment purposes only and all stock certificates contain appropriate restrictive legends. No underwriters or brokers or dealers were involved in connection with the sales of securities referred to in this section.

In general, under Rule 144, a person who has beneficially owned shares privately acquired directly or indirectly from Trend or from one of Trend’s affiliates, for at least one year is entitled to sell, within any three-month period, a number of shares that do not exceed the greater of 1% of the then outstanding shares or the average weekly trading volume in Trend’s shares during the four calendar weeks immediately preceding such sale. Sales under Rule 144 are also subject to certain manner of sale provisions, notice requirements and the availability of current public information about us. A person who is not deemed to have been an affiliate at any time during the 90 days preceding a sale, and who has beneficially owned restricted shares for at least two years, is entitled to sell all such shares under Rule 144 without regard to the volume limitations, current public information requirements, manner of sale provisions or notice requirements.

On October 1, 2005, Trend issued an aggregate of 307,274 shares of common stock, all to accredited investors, as payment of interest and principal on promissory notes outstanding. The Company relied on the exemption from registration found in Section 4(2) in connection with this issuance.

On November 1, 2005, Trend issued 40,873 shares of common stock, to an accredited investor, as payment of interest and principal on promissory notes outstanding. The Company relied on the exemption from registration found in Section 4(2) in connection with this issuance.

On November 10, 2005, pursuant to Trend’s 2000 Equity Incentive Plan, each of Trend’s six directors received a grant of 100,000 shares each of Trend’s common stock, valued at $0.15 per share, for board services rendered during fiscal 2005. The Company relied on the exemption from registration found in Section 4(2) in connection with this issuance.

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On November 10, 2005, the board also approved the issuance of 7,912 shares of common stock in lieu of cash compensation for $1,800 worth of consulting services rendered by a director. The Company relied on the exemption from registration found in Section 4(2) in connection with this issuance.

On December 1, 2005, Trend issued 48,797 shares of common stock, to an accredited investor, as payment of interest and principal on promissory notes outstanding. The Company relied on the exemption from registration found in Section 4(2) in connection with this issuance.

On December 12, 2005, Trend issued 1,500,000 shares of common stock to an accredited investor for an aggregate purchase price of $150,000. The Company relied on the exemption from registration under Rule 506 in connection with this issuance.

In February 2006, Trend issued 292,795 shares of common stock, to an accredited investor, as payment of interest and principal on promissory notes outstanding. The Company relied on the exemption from registration found in Section 4(2) in connection with this issuance.

Each investor involved in the above financing transactions (other than shares issued for services) represented to us that they were an accredited investor.

The Company entered into each of the transactions described for different purposes. As discussed above, during the three months ended December 31, 2005, 7,912 shares were issued to consultants in connection with specific services rendered, 600,000 shares were issued to Trend’s directors for their services, 396,944 shares were issued as payment on promissory notes outstanding and 1,500,000 shares were issued in a the sale of shares. 2,504,856 shares were issued in the fiscal quarter ending December 31, 2005.

All shares issued in connection with the above described events were issued to existing stockholders or individuals or entities previously known to us. The investor involved in the above financing transaction represented to us that they he is an accredited investor. At the time of each issuance, Trend was not aware of any such investor having any current intent to resell Trend’s stock.

Options

None issued during the reporting period.

Warrants

None issued during the reporting period

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

As of December 31, 2005, the Company had entered into negotiations with certain holders of promissory notes to modify the terms thereof. The parties agreed that during the negotiation period, all payments required to be paid pursuant to the notes would be suspended. On February 17, 2006, the negotiations concluded and the parties agreed to modify certain terms of the notes. Included as part of the agreement was a confirmation whereby the noteholders agreed that as of the agreement date and during the negotiation period no default exists or existed under the terms of the notes. One noteholder was not a party to the modification. Payments to this one investor are current through the period ending December 31, 2006. The total amount in arrears to this investor is $18,775 which will be paid in cash or stock shortly.

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

None.

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ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits None.

(b) Reports on Form 8-K.

Current report on Form 8-K including items 7.01 and 9.01 filed with the Securities and Exchange Commission (the “Commission”) on October 28, 2005.

Current report on Form 8-K including items 7.01 and 9.01 filed with the Commission on November 7, 2005.

Current report on Form 8-K including items 7.01 and 9.01 filed with the Commission on December 5, 2005.

Current report on Form 8-K including items 1.01, 3.02 and 9.01 filed with the Commission on December 29, 2005.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TREND MINING COMPANY
Date: February 21, 2006	By:	/s/ Thomas Loucks
		Thomas Loucks
		President and Chief Executive Officer (Principal Executive Officer)

By:	/s/ John P. Ryan
	John P. Ryan
	Treasurer and Chief Financial Officer (Principal Financial Officer)

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