Independence Lead Mines (ILDS) 10QSB/A 2007 Q1 Quarterly report (small business) (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB/A

Amendment No. 1

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2007

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission file number: 001-000316

INDEPENDENCE LEAD MINES COMPANY

(Exact name of registrant as specified in its charter)

Arizona	82-0131980
(State or other jurisdiction	(IRS Employer Identification No.)
of incorporation or organization)

510 Cedar Street

Wallace, Idaho 83873

(Address of principal executive offices)

Issuer’s telephone number, including area code: (208) 753-2525

Check whether the issuer (1) has filed all documents and reports required to be filed by Sections 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 filings for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act:

Large accelerated filer o    Accelerated filer oNon-accelerated filerþ

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act.): Yes oNo þ

APPLICABLE ONLY TO CORPORATE ISSUERS:

There were 5,255,793 shares of the issuer’s common stock, par value $0.10, outstanding as of May 1, 2007.

Transitional Small Business Disclosure format (check one): Yes oNo þ

INDEPENDENCE LEAD MINES COMPANY QUARTERLY REPORT

ON FORM 10-QSB/A FOR THE QUARTERLY PERIOD

ENDED MARCH 31, 2007

TABLE OF CONTENTS

			Page
PART I - FINANCIAL INFORMATION
	Item 1:	Financial Statements	3
	Item 2:	Management's Discussion and Analysis of Financial Condition and Results of Operations	10
	Item 3:	Controls and Procedures	12
PART II - OTHER INFORMATION
	Item 1:	Legal Proceedings	12
	Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	13
	Item 3:	Defaults upon Senior Securities	13
	Item 4:	Submission of Matters to a Vote of Security Holders	13
	Item 5:	Other Information	13
	Item 6:	Exhibits	14
Signatures			15

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

The unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information with the instructions to Form 10-QSB and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the Company's management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended Mach 31, 2007 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2007.

For further information refer to the financial statements and footnotes thereto in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2006 incorporated by reference herein.

INDEPENDENCE LEAD MINES COMPANY

INDEX TO FINANCIAL STATEMENTS

	Page
Balance Sheets as of March 31, 2007 and December 31, 2006	4
Statements of Operations for the three-month periods Ended March 31, 2007 and March 31, 2006	5
Statement of Changes in Stockholders’ Equity	6
Statements of Cash Flow for the three-month periods Ended March 31, 2007 and March 31, 2006	7
Notes to Interim Financial Statements	8

3

INDEPENDENCE LEAD MINES COMPANY

BALANCE SHEETS

March 31, 2007 and December 31, 2006

	March 31			December 31
	2007			2006
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	193,414		$	148,046
Certificate of Deposit		71,767			40,129
Royalties receivable		1,500			1,500
Marketable securities		1,813			1,532
Total Current Assets		268,494			191,207
TOTAL ASSETS	$	268,494		$	191,207
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	3,277		$	3,748
Accounts payable – related parties		23,190			-
Total Current Liabilities		26,467			3,748
DEFERRED INCOME		450,500			446,000
TOTAL LIABILITIES		476,967			449,748
STOCKHOLDERS' EQUITY
Common stock, $0.10 par value; 10,000,000 shares authorized,5,075,793 shares issued and outstanding		507,579			507,579
Stock subscriptions		270,000			-
Less – subscriptions receivable		(75,000	)		-
Additional paid-in capital		4,206,972			4,206,972
		4,909,551			4,714,551
Less deficit accumulated		(5,118,024	)		(4,973,092	)
Total Stockholders' Equity (Deficit)		(208,473	)		(258,541	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	268,494		$	191,207

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

4

INDEPENDENCE LEAD MINES COMPANY

STATEMENTS OF OPERATIONS

	Three Months Ended
	March  31,			March 31,
	2007			2006
	(unaudited)			(unaudited)
REVENUE	$	-		$	-
GENERAL AND ADMINISTRATIVE EXPENSES
Consulting		-			-
Directors fees		142,080			-
Office and administration		227			195
Office services		150			150
Shareholder Relations		1,214			1,420
Transportation		870			1,382
Accounting		-			4,360
Legal		1,871			3,035
TOTAL GENERAL AND ADMINISTRATIVE EXPENSES		146,412			10,542
LOSS FROM OPERATIONS		(146,412	)		(10,542	)
OTHER INCOME (EXPENSES)
Interest and investment income		1,199			678
Unrealized gain on investments		281			510
TOTAL OTHER INCOME		1,480			1,188
INCOME (LOSS) BEFORE INCOME TAXES		(144,932	)		(9,354	)
INCOME TAXES		-			-
NET LOSS	$	(144,932	)	$	(9,354	)
BASIC AND DILUTED NET LOSS PER COMMON SHARE	$	(0.029	)	$	(0.002	)
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		5,020,015			5,000,793

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

5

INDEPENDENCE LEAD MINES COMPANY

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

	Common Stock
	Number				Additional
	of				Paid in		Stock		Accumulated
	Shares		Amount		Capital		Subscriptions		Deficit			Total
Balances, December 31, 2005		4,975,793	$	497,579	$	4,144,472		-	$	(4,899,727	)	$	(257,676	)
Sale of common stock		100,000		10,000		62,500		-		-			72,500
Net loss for year ended December 31, 2006		-		-		-		-		(73,365	)		(73,365	)
Balances, December 31, 2006		5,075,793	$	507,579	$	4,206,972		-	$	(4,973,092	)	$	(258,541	)
Stock subscriptions for purchase of common stock		-		-		-	$	195,000		-			195,000
Net loss for three Months ended March 31, 2007		-		-		-		-		(144,932	)		(144,932	)
Balances, March 31, 2007		5,075,793	$	507,579	$	4,206,972	$	195,000	$	(5,118,024	)	$	(208,473	)

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

(The balance of this page has been intentionally left blank.)

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INDEPENDENCE LEAD MINES COMPANY

STATEMENTS OF CASH FLOW

	Three Months Ended
	March 31,			March 31,
	2007			2006
	(unaudited)			(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(144,932	)	$	(9,354	)
Adjustments to reconcile net loss to net cash used by operating activities:
Interest accrued on certificates of deposit		(572	)		-
Changes in operating assets and liabilities:
(Increase) decrease in prepaid expenses		-			472
Increase (decrease) in accounts payable		22,719			(1,950	)
Increase (decrease) in deferred income		4,500			4,500
Unrealized (gain) on investments		(281	)		(510	)
Net cash used in operating activities		(118,566	)		(6,842	)
Investing activities:
Purchase of certificate of deposit		(31,066	)		-
Decrease in certificate of deposit		-			(183	)
Net cash used in investing activities		(31,066	)		(183	)
Financing activities:
Stock subscriptions prepaid		195,000			-
Proceeds from sale of common stock		-			72,500
Net cash provided by financing activities		195,000			72,500
Net increase (decrease) in cash and cash equivalents		45,368			65,475
Cash and cash equivalents, beginning of period		148,046			143,522
Cash and cash equivalents end of period	$	193,414		$	208,997
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Income taxes paid	$	-		$	-
Interest paid	$	-		$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Noncash expenses	$	-		$	-

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

7

INDEPENDENCE LEAD MINES COMPANY

NOTES TO INTERIM FINANCIAL STATEMENTS

Note 1 - Organization and Description of business

Independence Lead Mines Company (“the Company”) is a corporation organized under the laws of the State of Arizona on September 16,1929. The Company is the owner of fifteen patented and thirteen unpatented mining claims. In addition, the Company has ownership by quitclaim deed to all interest in lots 5 and 8, more particularly described as tax parcel numbers 48NO5E-26-3715 and 48NO5E-27-1815, which mineral rights were acquired through a 1997 BLM sliver land exchange, as recorded in the Shoshone County, Idaho, records as Instrument #377033. This claim group (the “property”) is situated Northwest of Hecla Mining Company’s Lucky Friday Mine in the Coeur d’Alene Mining District, Shoshone County Idaho. The Company’s property is part of the “DIA Area” which is currently being developed and mined by Hecla Mining Company. The Company has been in the exploration stage since its inception. The Company’s only recurring source of funds has been a monthly advance royalty from Hecla Mining Company of $1,500. In March 2002, the Company notified Hecla Mining Company that it considered the DIA Lease terminated and as a result would no longer accept advance royalty payments. Subsequent to that notice, the Company began accepting advance royalty payments, pending the outcome of the dispute between the Company and Hecla Mining Company. On July 19, 2004 the court ruled in favor of Hecla Mining Company. Subsequently, the Company appealed the court’s decision to the Idaho Supreme Court, and on April 24, 2006 the Court ruled against Independence. On May 26, 2006 the Company requested that the Court grant rehearing of the case, which was subsequently denied. The Company is currently considering further options.

Note 2 – Basis of Presentation

The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Regulation S-B as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited interim financial statements should be read in conjunction with the financial statements for the year ended December 31, 2006. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.

The preparation of financial statements in accordance with generally accepted accounting principles in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions and could have a material effect on the reported amounts of the Company’s financial position and results of operations.

Certain balances from prior year financial statements have been reclassified to conform with the current year presentation.

Operating results for the three month period ended March 31, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.

Note 3 – Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (hereinafter “SFAS No. 157”), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. Where applicable, SFAS No. 157 simplifies and codifies related guidance within GAAP and does not require any new fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier adoption is encouraged. The Company does not expect the adoption of SFAS No. 157 to have a significant effect on its financial position or results of operation.

In June 2006, the Financial Accounting Standards Board issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109” (hereinafter “FIN 48”), which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company adopted FIN 48 on January 1, 2007, which did not have an impact on its financial reporting,.

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In March 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 156, “Accounting for Servicing of Financial Assets-an Amendment of FASB Statement No. 140.” This statement requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in any of the following situations: a transfer of the servicer’s financial assets that meets the requirements for sale accounting; a transfer of the servicer’s financial assets to a qualifying special-purpose entity in a guaranteed mortgage securitization in which the transferor retains all of the resulting securities and classifies them as either available-for-sale securities or trading securities in accordance with FASB Statement No. 115; or an acquisition or assumption of an obligation to service a financial asset that does not relate to financial assets of the servicer or its consolidated affiliates. The statement also requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable and permits an entity to choose either the amortization or fair value method for subsequent measurement of each class of servicing assets and liabilities. This statement is effective for fiscal years beginning after September 15, 2006 with early adoption permitted as of the beginning of an entity’s fiscal year. The adoption of this statement on January 1, 2007, had no impact on the Company’s financial condition or results of operations.

In February 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 155, “Accounting for Certain Hybrid Financial Instruments, an Amendment of FASB Standards No. 133 and 140” (hereafter “SFAS No. 155”). This statement established the accounting for certain derivatives embedded in other instruments. It simplifies accounting for certain hybrid financial instruments by permitting fair value re-measurement for any hybrid instrument that contains an embedded derivative that otherwise would require bifurcation under SFAS No. 133 as well as eliminating a restriction of the passive derivative instruments that a qualifying special-purpose entity (“SFE) may hold under SFAS No. 140. This statement allows a public entity to irrevocably elect to initially and subsequently measure a hybrid instrument that would be required to be separated into a host contract and derivative in its entirety at fair value (with changes in fair value recognized in earnings) so long as that instrument is not designated as a hedging instrument pursuant to the statement. SFAS No. 140 previously6 prohibited a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. This statement is effective for fiscal years beginning after September 15, 2006, with early adoption permitted as of the beginning of an entity’s fiscal year. The adoption of this statement on January 1, 2007 had no impact on the Company’s financial condition or results of operations.

Note 4 – Marketable Securities

The Company’s investments in equity securities are intended to be held for a short period and are classified as trading securities. These securities are recorded at fair value as current assets on the balance sheet under the caption of marketable securities. The Company’s marketable securities consist of capital stock of other companies in the mining industry.

Note 5 – Mineral Properties

The Company is the owner of fifteen patented and thirteen unpatented mining claims. In addition, the Company has ownership by quitclaim deed to all interest in lots 5 and 8, more particularly described as tax parcel numbers 48NO5-E26-3715 and 48NO5E-27-1815, which mineral rights were acquired through a 1997 BLM sliver land exchange, as recorded in the Shoshone County, Idaho, records as Instrument #377033. This claim group (“the property”) is situated Northwest of Hecla Mining Company’s Lucky Friday Mine in the Coeur d’Alene Mining District, Shoshone County, Idaho. Adjacent are the community of Mullan and U.S. Interstate Highway 90.

Pursuant to the terms of an agreement dated February 8, 1968, among Hecla Mining Company (“Hecla”), Day Mines, Inc. (“Day”), Abot Mining Company (“Abot”), and the Company (the “Unitization Agreement”), the Eastern portion of the Company’s Property (approximately five-eighths of the Property) was unitized with certain adjoining and near-by properties owned by Day and Abot into a unitized area, consisting of 55 claims, (known as the “DIA Area”).

By a second agreement also dated February 8, 1968 (the “Lease Agreement”), Hecla leased the DIA Area for a period of fifty (50) years, subject to a 30-year extension, for the purpose of conducting mineral exploration and development of the DIA Area and mining such commercial ore as may be discovered in the DIA Area by Hecla.

The Lease Agreement provides that all costs and expenses incurred in the exploration, development, and operation of the DIA Area are to be paid by Hecla subject to the right of Hecla to be reimbursed for such costs and expenses, together with all advance royalties paid, out of any future net profits realized from the operation of the DIA Area. After recovery of Hecla’s costs and expenses and amounts paid as advance royalties, and the establishment of a three month working capital reserve, net profit royalties are to be paid to the Company and the other property owners. The Company is currently receiving $1,500 per month in advance royalties.

9

Note 6 – Restatements

As discussed in Note 2, the Company has restated its financial statements to reflect a retroactive adjustment to write off the costs of previously impaired mining property ($2,945,407) and unrecovered exploration costs ($187,920). The adjustment resulted in an increase of the balance of accumulated deficit at March 31, 2007 and December 31, 2006 of $3,133,327 and corresponding reductions in the mining property and unrecovered exploration cost accounts at those dates.

Note 7 – Capital Stock

Preferred Stock

The Company has no preferred stock authorized.

Common stock:

On March 28, 2007 the Company announced that a forward stock split of one additional share of common stock for each ten shares of common stock held. The stock split is effective July 11, 2007, and there is no record date. Our transfer agent, OTC Stock Transfer, Inc., 231 East 2100 South, Salt Lake City, Utah 84115 will issue new stock certificates upo0n surrender of the old certificates.

On March 19, 2007 the Company initiated a private offering of common stock to purchase, in the aggregate, 200,000 shares of common stock of Independence Lead Mines Company at a price of $1.50 per share. The offering was limited to Directors, Management, and key consultants for the Company. The offering was not fully subscribed and the offering was closed on April 24, 2007 after the sale of 180,000 shares. The private placement shares are restricted from sale or other transfers for a period of 48 months.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This Quarterly Report on Form 10-QSB, including this Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements regarding future events and the Company’s future results that are subject to the safe harbors created under the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on current expectations, estimates, forecasts, and projections about the industry in which the Company operates and the beliefs and assumptions of the Company’s management. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” variations of such words, and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of the Company’s future financial performance, the Company’s anticipated growth and potentials in its business, and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified elsewhere herein and in the Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006 under “Risk Factors.” Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. The Company undertakes no obligation to revise or update any forward-looking statements for any reason.

Overview

The Company is the owner of fifteen patented and thirteen unpatented mining claims. In addition, the Company has ownership by quitclaim deed to all interest in lots 5 and 8, more particularly described as tax parcel numbers 48NO5E-26-3715 and 48NO5E-27-1815, which mineral rights were acquired through a 1997 BLM sliver land exchange, as recorded in the Shoshone County, Idaho, records as Instrument #377033. This claim group (“the property”) is situated Northwest of Hecla Mining Company’s Lucky Friday Mine in the Coeur d’Alene Mining District, Shoshone County Idaho. Adjacent is the community of Mullan and U.S. Interstate Highway 90.

10

Pursuant to the terms of an agreement dated February 8, 1968, among Hecla Mining Company (“Hecla”), Day Mines, Inc. (“Day”), Abot Mining Company (“Abot”), and the Company (the “Unitization Agreement”), the Eastern portion of the Company’s Property (approximately five-eighths of the Property) was unitized with certain adjoining and near-by properties owned by Day and Abot into a unitized area, consisting of 55 claims, (known as the “DIA Area”). Under the terms of the Unitization Agreement, ores and minerals in place are owned by the parties thereto in the following percentages:

Day (now Hecla by merger)	47.70	%
Independence	46.30	%
Abot	6.00	%

By a second agreement also dated February 8, 1968 (the “Lease Agreement”), Hecla leased the DIA Area for a period of fifty (50) years, subject to a 30-year extension, for the purpose of conducting mineral exploration and development of the DIA Area and mining such commercial ore as may be discovered in the DIA Area by Hecla.

The Lease Agreement provides that all costs and expenses incurred in the exploration, development, and operation of

the DIA Area are to be paid by Hecla subject to the right of Hecla to be reimbursed for such costs and expenses, together with

all advance royalties paid, out of any future net profits realized from the operation of the DIA Area. After recovery of Hecla’s costs and expenses and amounts paid as advance royalties, and the establishment of a three month working capital reserve,

net profit royalties are to be paid to the Company and the other property owners as follows:

Day (now Hecla by merger)	19.08	%
Independence	18.52	%
Abot	2.40	%

Under the terms of the Unitization Agreement, one-half of the first net profit royalties received by the Company are to be paid over to Day (now Hecla) until Day recovers the sum of $450,000. The relationship of the parties to the Agreement may, under certain circumstances, be converted to a joint venture at the option of the property owners, where after the property owners would become participating, non-operating working interest owners who would share profits and expenses in connection with the DIA Area in the same ratio as exists pursuant to lease arrangement with Hecla described above.

Until Hecla commences to pay net profit royalties and during such period as the Lease Agreement is in effect, Hecla is obligated to pay an advance royalty to the Company of $750 per month subject to increase to $1,500 if production for the DIA Area exceeds 2,000 tons per month. The Company currently receives an advance royalty of $1,500 per month, which is recorded in the financial statements as deferred income.

Pursuant to the terms of the February 8, 1968, agreements, Hecla will be obligated to pay a royalty of 18.52 percent of defined net profits after Hecla has recouped its costs to explore and develop this property from the new discovery to Independence Lead Mines Company.

Since June 30, 1999 the Company has experienced substantial differences with the Lessee. In January 1997, Hecla chose to go forward with the DIA Project’s Phase III and by June 1, 1998 the Project reached full production. In the first year of full production the Project lost $785,000 after mining and milling 260,000 tons. Independence requested Hecla to stop mining to prevent loss of the resource. Hecla’s management has refused all requests to act with prudence, and continues to mine at this writing. Since Hecla chose to go forward with Phase III, through the end of 2004 there have been 1,428,000 tons mined and milled and all development costs have been lost. Request for prudence over the years has failed. During 2003 Hecla mined and milled 151,991 tons containing 15.76 oz. Silver per ton, 9.05% lead, and 2.18% zinc, and during 2004 164,624 tons were mined and milled assaying 13.17 oz. silver per ton, 7.78% lead, and 2.36% zinc. For the year 2003 the Project lost $723,147 and for the year 2004 the Project lost $3,000,605. The DIA Project total cost at December 31, 2004 was $36,353,259, and as of December 2005 Hecla has reported mining and milling 1,723,510 tons over the life of the DIA Project. Total un-recouped project costs reached a new high of $43,279,805. During 2005 the lessee mined and milled 214,158 tons containing an average grade of 12.2 ounces of silver, 7.3% lead, and 2.74% zinc. Total DIA Project production for 2006 was 276,393 tons, and Total Project Costs were reduced by $12,577,900. For the first three months of 2007 DIA project Costs were reduced by $5,857,085, leaving total remaining project costs of $24,760,457. The Company remains opposed to lessee’s actions taken over approximately nine years on Independence’s mining claims.

Results of Operations for the Period Ended March 31, 2007.

Threemonths ended March 31, 2007 compared to the three months ended March 31, 2006:

During the three months ended March 31, 2007 the Company realized no income. General and administrative expenses increased to $146,412 for the three-month period ended March 31, 2007 as compared to $10,542 for the three-month period ended March 31, 2006. The increase was primarily due to payment of retroactive directors’ fees of $142,080. For the three months ended March 31, 2007, the Company experienced a loss of $144,932, or $0.029 per share, compared to $9,354, or $0.002 per share, during the comparable period in the previous year.

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Liquidity and Capital Resources.

The Company financed its obligations during the three months ended March 31, 2007 from cash on hand. During this period the Company’s cash position increased by$45,368, primarily from the pre-payment of $195,000 from the private placement sale of the Company’s common stock. During the three months ended March 31, 2007 the Company used $118,566 in operating activities, principally in connection with the payment of legal fees and directors’ fees. The Company’s only recurring source of funds has been a monthly advance royalty from Hecla Mining Company of $1,500. The Company has incurred operating losses since inception; these factors indicate doubt as to the ability of the company to continue business as a going concern. The financial statements do not contain any adjustments which might be necessary if the Company is unable to continue as a going concern. In order to maintain operations, the Company will have to raise additional capital through loans or through the sale of securities. If the Company is unable to raise additional capital, it may have to cease operations.

Subsequent to the three month period ended March 31, 2007, the Company completed a private offering of 200,000 shares of the Company’s common stock at a price of $1.50 per share.. The offering was limited to Directors, Management, and key consultants for the Company. The offering was not fully subscribed and the offering was closed on April 24, 2007 after the sale of 180,000 shares. The shares were issued as restricted stock which prohibits the sale or other transfer of the shares for a period of 48 months.

The current officers and directors of the Company are not considered by the Company to be employees.

ITEM 3. Controls and Procedures

Disclosure Controls and Procedures.

The Company’s principal executive officer and principal financial officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-13(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, the Company’s principal executive officer and principal financial officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.

Changes in Internal Control Over Financial Reporting.

There was no change in the Company’s internal control over financial reporting that occurred during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is currently in litigation with Hecla Mining Company over Hecla’s operation of the Lucky Friday Mine under the agreement covering the DIA Project. The Company has retained the Boise law firm of Marcus, Merrick, Christian and Hardee as it’s attorneys. As required by terms of the 1968 Lease Agreement with Hecla Mining Company, our Company gave notice of termination of that agreement in early March 2002. This agreement covered the DIA Project, which is Hecla's principle operation at the Lucky Friday mine near Mullan, Idaho. Both parties agreed to waive the arbitration requirement contained in the lease and agreed to a trial without a jury

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A nine-day trial was held from March 22^nd through April 1^st of 2004, and closing written arguments were submitted to the court by April 30, 2004. Further, the court required the parties to submit to the court a written rebuttal to the other party’s closing arguments by May 17, 2004. On July 19, 2004 the court ruled in favor of Hecla Mining Company and on April 24, 2006 the Idaho Supreme Court upheld the First District Court decision. In reaction to that decision Independence requested the Court grant rehearing of this matter on the 26^th of May 2006, which was subsequently denied.

The Company then filed a complaint against Hecla Mining Company on Decdember 11, 2006 in the United States District Court for the District of Idaho. On January 5, 2007 the Company filed a Complaint for Rescission of Contract against Hecla Mining Company in the First Judicial District of the State of Idaho in and for the County of Shoshone. A hearing was held on May 9, 2007 and the judge ruled in favor of Hecla. The Company subsequently filed a petition for the appeal to be heard in federal court, which was denied. The Company has now appealed the case to the Ninth Circuit Court of Appeals in San Francisco

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the year ended December 31, 2006 the Company sold 100,000 shares of the company’s common stock in private placement transactions without registration under the Securities Act in reliance upon the exemptions from the registration requirements provided by Section 4(2), and Rule 506 of Regulation D under the Securities Act. The proceeds of $72,500 have been used for Company operations and to finance the litigation with Hecla Mining Company.

During the three months ended March 31, 2007 the Company initiated a private placement of 200,000 shares of common stock with officers and directors of the Company at a price of $1.50 per share. The offering was closed on April 24, 2007 after the sale of 180,000 shares. Pre-payment for 130,000 shares was received in the first quarter 2007 with the shares issuable in the second quarter. The shares sold in the private placement will be restricted for a period of 48 months, during which period the sale or transfer of the shares will be prohibited. The proceeds of $270,000 from the sale of the shares will be used for Company operations and to pursue litigation against Hecla Mining Company.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

The Company’s annual meeting of shareholders was held on September 23, 2005. The following items were submitted to a vote of the shareholders at the meeting and approved.

a) Re-election of five directors to serve for terms ranging from one year to three years.

b)Amendment of the Company’s Articles of Incorporation to increase the capitalization of the Company from 5,000,000 shares of $1.00 par value common stock to 10,000,000 shares of $0.10 par value common stock.

Item 5. Other Information.

None.

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Item 6. Exhibits.

(a) Documents which are filed as a part of this report:

1. Financial Statements: The required financial statements are contained in Pages F/S-1 through F/S-7 of this Form 10-QSB.

2. Financial Statement Schedules: Financial statement schedules have been omitted as they are not applicable or the information is included in the Financial Statements.

3. Exhibits:

31.1 Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act. Filed herewith.

31.2 Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act. Filed herewith.

32.1 Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350. Furnished herewith.

32.2 Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350. Furnished herewith.

99.1 Notification of Forward Stock Split. Incorporated by reference from Form 8-K filed April 25, 2007.

(b) See (a)(3) above for all exhibits filed herewith.

(c) All schedules are omitted as the required information is not applicable or the information is presented in the Financial Statements or related notes.

(The balance of this page has been intentionally left blank)

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INDEPENDENCE LEAD MINES COMPANY

SIGNATURES

In accordance with Section 12, 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized

INDEPENDENCE LEAD MINES COMPANY
	By:	/s/ Bernard C. Lannen
		Bernard C. Lannen, its
		President
		Date: March 18, 2008
	By:	/s/ Wayne L. Schoonmaker
		Wayne L. Schoonmaker, its
		Principal Accounting Officer
		Date: March 18, 2008

EXHIBIT INDEX

31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act. Filed herewith.
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act. Filed herewith.
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350. Furnished herewith.
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350. Furnished herewith.

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