SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended October 31, 2001
OR
[ ] 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: 000-27667

METALLINE MINING COMPANY
(Exact name of registrant as specified in its charter)

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

1330 E. MARGARET AVE.
COEUR D'ALENE, ID 83815
(Address of principal executive offices)

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

Securities registered pursuant to Section 12 (b) of the Act: None

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

Common Stock The OTC-Bulletin Board
Title of each class Name of each exchange on which registered

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period as the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or other
information statements incorporated by reference in Part III of this Form
10-K or any amendments to this Form 10-K. [ ]

The aggregate market value of the voting stock held by non-affiliates of
the registrant at January 11, 2002 was $7,028,093. The number of shares of
common stock outstanding at such date was 10,067,595 shares. An additional
1,901,500 were deemed outstanding at such date pursuant to presently
exercisable options.

METALLINE MINING COMPANY ANNUAL REPORT
ON FORM 10-K FOR THE FISCAL YEAR
ENDED OCTOBER 31, 2001

TABLE OF CONTENTS Page
SAFE HARBOR STATEMENT . . . . . . . . . . . . . . . . . . . . . . . (ii)
PART I
Item 1: Description of Business . . . . . . . . . . . . . 1

Item 2: Risk Factors . . . . . . . . . . . . . . . . . . . 6

Item 3: Description of Properties . . . . . . . . . . . . 8

Item 4: Legal Proceedings . . . . . . . . . . . . . . . . . 9

Item 5: Indemnification of Directors and Officers . . . . . 9

Item 6: Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . 9
PART II
Item 7: Market for Registrant's Common Equity and
Related Stockholder Matters . . . . . . . . . . . 9

Item 8: Recent Sale of Unregistered Securities . . . . . . 10

Item 9: Selected Financial Data . . . . . . . . . . . . . 12

Item 10: Description of Securities . . . . . . . . . . . . 13

Item 11: Management's Discussion and Analysis of
Financial Condition and Plan of Operations . . . . 14

Item 12: Financial Statements and Supplementary Data . . . 15

Item 13: Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure . . . . . 15
PART III
Item 14: Directors and Executive Officers
of the Registrant . . . . . . . . . . . . . . . . 16

Item 15: Executive Compensation . . . . . . . . . . . . . 17

Item 16: Security Ownership of Certain Beneficial Owners
and Management . . . . . . . . . . . . . . . . . 18

Item 17: Certain Relationships and Related Transactions . . 19
PART IV
Item 18: Exhibits, Financial Statement Schedules, and
Reports on Form 8-K . . . . . . . . . . . . . . . 21

Index to Financials . . . . . . . . . . . . . . . . . . . . . . . . 22

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F/S - 18
(i)

METALLINE MINING COMPANY ANNUAL REPORT
ON FORM 10-K FOR THE FISCAL YEAR
ENDED OCTOBER 31, 2001

SAFE HARBOR STATEMENT

This report contains both historical and prospective statements
concerning the Company and its operations. Historical statements are
based on events that have already happened; examples include the
reported financial and operating results, descriptions of pending and
completed transactions, and management and compensation matters.
Prospective statements, on the other hand, are based on events that are
reasonably expected to happen in the future; examples include the
timing of projected operations, the likely effect or resolution of
known contingencies or other foreseeable events, and projected
operating results.

Prospective statements (which are known as "forward-looking
statements" under the Private Securities Litigation Reform Act of 1995)
may or may not prove true with the passage of time because of future
risks and uncertainties. The Company cannot predict what factors might
cause actual results to differ materially from those indicated by
prospective statements. The risks and uncertainties associated with
prospective statements contained in this report include, among others,
the following:

[The balance of this page has been intentionally left blank.]

(ii)

METALLINE MINING COMPANY ANNUAL REPORT
ON FORM 10-K FOR THE FISCAL YEAR
ENDED OCTOBER 31, 2001

PART I

ITEM 1. DESCRIPTION OF BUSINESS.

Background

Metalline Mining Company is a development stage enterprise formed
under the laws of the State of Nevada, on August 20, 1993, to engage
in the business of mining.

Current Operations

Metalline currently owns one mining property located in Mexico
known as the Sierra Mojada Property. Metalline conducts its operations
in Mexico through its wholly owned subsidiary corporation, Minera
Metalin S.A. de C.V.

The Sierra Mojada Property

The Mexican government owns the mineral rights. The exclusive
right to explore and exploit the mineral rights is granted by issuance
of a concession to a company or individual that denounces the area
desired for exploration or exploitation. After the concession has been
issued an annual fee is paid to the government and annual Proof of
Labor must be filed to maintain the title to the concession. The
annual fee is determined on the basis of the area of the concession
and the type of activity on the concession. The concession can be held
for 6 years under the exploration fee, after 6 years the exploitation
fee is paid.

The Sierra Mojada Property is comprised of eight concessions
totaling 7,060 hectares (17,446 acres). The concessions were acquired
by purchase agreements from the titled owners. The Company controls
100% of the concessions and has made all payments necessary to acquire
title to all eight concessions.

A summary of the concessions is as follows:

Concession Title No. Hectares
- ---------- -------- ---------
Sierra Mojada 198513 4767.3154
Mojada 3 199246 1689.2173
Esmeralda 188765 117.5025
Esmeralda 1 187776 97.6839
Unification Mineros Nortenos 169343 336.7905
La Blanca 188326 33.5044
Fortuna 160461 13.9582
Vulcano 83507 4.4904
-------
Total 7060.4626
=========
Location and Access

The Sierra Mojada Mining District is located in the west central
part of the state of Coahuila, Mexico, near the Coahuila-Chihuahua
state border some 200 kilometers south of the Big Bend of the Rio
Grande River. The principal mining area extends for some 5 kilometers
in an east-west direction along the base of the precipitous, 1,000
meter high, Sierra Mojada Range.
Page 1
Location and Access

Vehicle access from Torreon is by 200 kilometers on paved road to
the Penoles chemical plant at Laguna del Rey and then another 50
kilometers of gravel road to Sierra Mojada. There is a well
maintained, 1200 meter, gravel airstrip. The District has high voltage
electric power and is served by a rail line, which was constructed
from Escalon to the district in 1891 and later connected to Monclova.

This part of Mexico is remote, arid and sparsely populated; the
region is known as the "zone of silence".

History

The initial discovery of silver ore in the Sierra Mojada Property
was made in 1879. Over the next 12 years numerous small mines
developed along an oxidized silver lead ore body known as the "lead
manto" (a bed, layer or strata). The lead manto was mined continuously
for 3 kilometers and discontinuously for another 2 kilometers. Ore was
selectively mined and hauled by wagon to Escalon on the railroad main
line from El Paso to Mexico City; from there it went to smelters in
Mexico and the United States.

In September of 1891 the Mexican Northern Railroad completed its
spur line from Escalon to the district. Rail access stimulated
development and the period from 1891 to the late 1920's was the peak
of productivity of the district. The main lead manto was nearly mined
out by 1905, the same year that the discovery of the first silver-
copper ore body was made. Additional discoveries of silver, silver-
copper, and silver-copper-zinc-lead ores provided production through
the 1930's. Between 1922 and 1931 additional lead manto silver-lead
ore was discovered and mined to the southwest for some 1,400 meters
under the Sierra Mojada range, this manto was eventually mined for
more than 2 kilometers.

By the mid 1920's many of the mines were under control of Penoles
Corporation ("Penoles") and ASARCO Corporation ("ASARCO"). ASARCO
ceased mining in the district in the late 1930's. Both companies still
owned properties during the 1940's and Penoles mined until the late
1950's when the Mineros Nortenos Cooperative acquired the Penoles
properties. The Mineros Nortenos Cooperative ("Mineros Nortenos") has
operated the San Salvador, Encantada and Fronteriza mines since 1957
and direct shipped high-grade oxide zinc and lead-silver ore to
smelters in Mexico.

The lead manto produced 3 to 3.5 million tonnes with another 1.5
million tonnes of similar ore coming from other ore bodies to the west
and to the southwest.

Mineros Nortenos has mined about 600,000 tonnes of predominantly
oxide zinc ore with grades of 20 to 50% zinc. Some of this ore was
oxide silver-lead and silver, copper, zinc and lead sulfide at grades
of 1 to 4 kilogram silver per tonne, 1 to 5% copper, 10 to 30% zinc
and 30 to 70% lead. Production records from 1978 to 1981 for the San
Salvador mine average 33.5% zinc.

The Sierra Mojada Property has produced in excess of 10 million
tonnes of high-grade ore that graded in excess of 20% lead, 20% zinc,
1% copper and 1 kg (31 ounces) silver per tonne that was shipped
directly to the smelter. The district has never had a mill to
concentrate ore. All of the mining was done selectively for ore of
sufficient grade to direct ship; mill grade ore was left unmined. More
than
Page 2

50 kilometers of underground workings are spread through the 5
kilometer by 2 kilometer area from which more than 45 mines have
produced ore. The deepest workings have ore grade mineralization and
provide some of the best targets for reserve development. In spite of
the amount of historic work, when a map of all of the historic
workings is viewed there is much more unexplored area in the 5 by 2
kilometer area than has been explored and the vertical extent greater
than 100 meters is totally unexplored.

The sediments are predominantly carbonate with some sandstone and
shale and the attitudes are near horizontal. The mines are dry and the
rocks are competent, there is very little unstable ground and the ore
thickness is amenable to high volume mechanized mining methods. Sierra
Mojada has ideal mining conditions and grades for low cost production.

Based upon the foregoing, Metalline is of the opinion that the
magnitude of the Sierra Mojada mineral system and its exploration
potential is capable of providing new reserves for many more years of
mining. However, there is no assurance as to the quantity or quality
of the undeveloped reserves.

Geology

The Sierra Mojada District is located on the southern margin of
the Sabinas Basin, a large rift basin in northeastern Mexico, which
formed during Late Jurassic and Cretaceous tectonic extension.

Beginning in Latest Jurassic the Sabinas basin began to form with
the basin being dropped down to the north relative to the Coahuila
Peninsula that was being uplifted to the south. The Sierra Mojada
fault is, possibly, one of the faults that contributed to the rift
basin forming process, which occurred over a time span in excess of 80
million years. During basin formation the Sierra Mojada fault, if
present, would have been a normal fault due to crustal extension. The
most recent motion on the Sierra Mojada fault is post mineral and
reverse. The reverse motion most likely occurred as a result of Late
Cretaceous Laramide tectonic compression about 60 million years ago.

Stratigraphy

Upper Jurassic and Lower Cretaceous marine carbonate, sandstone
and shale, the La Casita and Menchaca Formations, are overlain by
Lower Cretaceous red beds, the San Marcos Formation, composed of
conglomerate, sandstone, siltstone, shale, tuff and mineralized
carbonate sediments. The San Marcos is overlain by a marine carbonate
sequence of Early and Middle Cretaceous age, the Cupido, La Pena,
Aurora and Georgetown Formations.

Mineralization

Sierra Mojada has two mineral systems separated by the east west
trending Sierra Mojada Fault. North of the fault the mineralization is
chemical sedimentary disseminated to massive silver, copper, zinc and
lead sulfide deposited in the Menchaca Formation. South of the fault
the mineralization is deposited in the La Pena and Aurora Formations
and consists of oxide zinc and lead mantos and solution cavern
filling, karst and interformational breccia.

These two mineral systems have been brought into proximity to
each other by post mineral reverse motion on the Sierra Mojada Fault
that faults the San Marcos and Menchaca Formations against Aurora. The
San Marcos and Menchaca Formations are 25 million years older than the
Aurora Formation.

The mineral systems have been mined in an east-west direction for
over 5 kilometers, in a north-south direction in excess of 2
kilometers and for a vertical extent of 100 meters.

Page 3

The Sierra Mojada mineral systems are chemical sedimentary and
brine related. The ore minerals are in chemical equilibrium with the
host rocks, which are limestone, dolomite, carbonate shale and
sandstone. There is no alteration, silicification or skarn
mineralization.

Mineralization has been episodically deposited in certain beds,
resulting in a vertical repetition of mineralized beds and ore bodies
in the Menchaca Formation and in the Aurora Formation. This
Intermittent or episodic deposition of mineralization has occurred
over at least the 25 million years represented by these two formations
and it is possible that this process was ongoing during deposition of
the other units above the basement rocks. The thickness and character
of the rock units below the existing workings is unknown and will have
to be determined by drilling. With the evidence of the repetitive
nature of the mineralization the potential for additional discovery at
depth is high.

Exploration and Development.

The Company has spent the last 5 years collecting historic data
on the district, geologic mapping and sampling of the surface and the
underground mines and has completed a reverse circulation drilling
program consisting of 24 holes and a total of 6630 meters of drilling.
During 2000 the North Limited drilled 26 reverse circulation holes
totaling 6,618 meters.

The drilling and channel sampling are the first step in
developing ore reserves at Sierra Mojada. Metalline's drilling
consisted of fifteen holes drilled on a grid of about 30 meters by 60
meters on the Encantada North zone, north of the Sierra Mojada fault,
to evaluate the silver, copper, zinc and lead mineralization. Nine
holes were drilled in the San Salvador, Encantada and Fronteriza mines
to test the oxide zinc mineral system south of the Sierra Mojada
fault. These holes were spaced at about 100 to 200 meter intervals
over a 1500 meter extent in the three mines. North's holes were all
drilled to test the oxide zinc mineralization in the San Salvador,
Encantada and Fronteriza mines. Three step out holes extent the
mineralization 2 kilometers to the west of the San Salvador mine.
Three step out holes to the south did not encounter mineralization.

The results confirm and expand the mineralization of the
Encantada North and the oxide zinc mantos. Multiple intersections of
ore grade mineralization over thick intervals were obtained, with some
intersects of exceptional grade and thickness. The results of the
drill program have been released in news releases dating from February
1999 through November 2000 and are available from Metalline.

Exploration and evaluation of the mineral systems of the district
and the Metalline's total land position to define the limits of the
known mineralization and for discovery of new mineralization will
continue and accelerate.

The oxide zinc system in the San Salvador, Encantada and
Fronteriza mines and the Encantada North silver, copper, zinc, lead
zone will move to development stage for drilling, sampling and
defining of an ore reserve. This will involve surface and underground
drilling and channel sampling, drifting and raising in sufficient
detail to determine the tonnage and grade of an ore reserve and
perform a feasibility study, including metallurgical studies, to
determine if the reserves are commercially viable.

Costs of these programs at this time have not been estimated, but
will be estimated as each stage of the exploration and development
programs are planned and budgeted.

Joint Venture Agreement

In October, 1999 Minera Metalin signed a Joint Venture Letter
Agreement with Minera North S. de R.L. de C.V. a wholly owned
subsidiary of North Limited of Melbourne Australia, a major
Page 4

international mining company. The agreement allows North to acquire a
60% participating interest in Sierra Mojada by exploring and
completing a feasibility study (which shall be of a standard
acceptable to international banks as enabling them to lend funds to
the project) over a "Earn In Period" of not more than 5 years.

In August, 2000 Rio Tinto Ltd purchased North Ltd for their iron
ore holding and has subsequently terminated the agreement with Minera
Metalin.

On the 15th of November, 2001 Metalline Mining Company and its
Mexican Subsidiary Minera Metalin, S.A. de C.V. signed an Agreement
with Minas Penoles, S.A. de C.V. and Compania Minera La Parrena, S.A.
de C.V. The Agreement allows Minas Penoles to earn a 60% interest in
the Sierra Majada project by exploring and completing a feasibility
study over an "Earn in Period" of not more than 5 years. The study is
to be of sufficient detail and quality to be used to secure debt
financing for the development and operation of the project. Minas
Penoles is committed to complete US $1,000,000 (one million US
Dollars) of Qualified Expenditures on the Property as may be
recommended by the Technical Committee during the first year as of the
date of signing the Agreement. Minas Penoles is to be the Operator;
operations are under the control of the Technical Committee that will
be composed of 2 representatives from Metalin and 3 from Minas
Penoles. In addition, Minas Penoles will purchase Metalline Mining
Company shares at a fixed price of US $2.00 per share in the following
schedule and manner:

(i).- 50,000 shares upon signing the Agreement, purchased by Minas
Penoles, S.A. de C.V. by means of a capital contribution to Metalline.
Subsequently, and always following this same mechanism (i.e.- capital
contribution to Mealline), if Penoles should elect to continue
exploration after twelve months time as of the Effective Date, then
(ii).- Minas Penoles, S.A. de C.V. shall purchase 100,000 additional
Metalline shares at US $2.00 per share; (iii).- if Penoles should
continue exploration after twenty-four months, Minas Penoles, S.A. de
C.V. shall purchase an additional 100,000 Metalline shares at US $2.00
per share.

It is the parties' intent and understanding that, in order to
carry out to completion the Project once the Earn-In has been achieved
or at whatever other time the Parties shall agree to in writing, the
parties shall form a joint venture vehicle (the "Joint Venture
Company") subject to the terms of the Agreement. The terms and
conditions of the Joint Venture will be established in separate
document(s) as the parties may deem necessary, in which Joint Venture,
Minas Penoles, S.A. de C.V. shall have a 60% participation, and
Metalin a 40% participation, subject to the terms of the Agreement.

Timetable

Definition of a 2 million tonne sulfide reserve and completion of
a feasibility study is estimated to take 1.5 to 2 years. Construction
and development of a 1000 tonne per day mine and mill will require an
additional 2 years.

Defining a 20 million tonne oxide reserve would require 2 to 3
years of drilling, an additional 1 to 2 years for completing a
feasibility study and about 5 years to develop the mine and build a
hydrometallurgical plant.

There is potential for long-term reserve expansion within the
known extent of the mineral systems. There is potential to discover
ore deposits in unexplored portions of the land position and at depth
in unexplored stratigraphy. There is however, no assurance that the
Company will have the monetary resources to continue to explore for,
develop, or retrieve any of the minerals located in the Sierra Mojada
Property.

Page 5

ITEM 2. RISK FACTORS

1. EXPLORATION STAGE MINING COMPANY WITH NO HISTORY OF
OPERATION. The Company is in its exploration stage, has no operating
history and is subject to all the risks inherent in a new business
enterprise. The likelihood of success of the Company must be
considered in light of the problems, expenses, difficulties,
complications and delays frequently encountered in connection with a
new business, and the competitive and regulatory environment in which
the Company will operate. See "Business."

2. NO COMMERCIALLY MINEABLE ORE BODY. No commercially mineable
ore body has been delineated on the properties, nor have any reserves
been identified. See "Business."

3. RISKS INHERENT IN THE MINING INDUSTRY. The Company is subject
to all of the risks inherent in the mining industry including, without
limitation, the following: competition from a large number of
companies, many of which are significantly larger than the Company, in
the acquisition, exploration, and development of mining properties;
the concession holder must pay fees and perform labor on the
concessions to maintain the concessions title; exploration for
minerals is highly speculative and involves substantial risks, even
when conducted on properties known to contain significant quantities
of mineralization, and most exploration projects do not result in the
discovery of commercially mineable deposits of ore; operations are
subject to a variety of existing laws and regulations relating to
exploration and development, permitting procedures, safety
precautions, property reclamation, employee health and safety, air
quality standards, pollution and other environmental protection
controls; a large number of factors beyond the control of the Company,
including fluctuations in metal prices, inflation, and other economic
conditions, will affect the economic feasibility of mining; mining
activities are subject to substantial operating hazards some of which
are not insurable or may not be insured due to economic
considerations; and, the availability of water, which is essential to
milling operations.

4. NATURE OF THE INDUSTRY. Exploration, development and mining
of mineral properties is highly speculative and involves unique and
greater risks than are generally associated with other businesses. The
Company's operations will be subject to all the operating hazards and
risks normally incident to the exploration, development and mining of
mineral properties, including risks enumerated above and below.

5. FLUCTUATING PRICE FOR METALS. The Company's operations will
be greatly influenced by the prices of silver, copper, lead, zinc and
other metals. These prices fluctuate widely and are affected by
numerous factors beyond the Company's control, including expectations
for inflation, the strength of the United States dollar, global and
regional demand and political and economic conditions and production
costs in major metal producing regions of the world.

6. MINING CONCESSIONS. The Company holds mining concessions in
Mexico. Concessions require work and financial expenditures to retain
their validity. See "Business."

7. ENVIRONMENTAL CONTROLS. Compliance with statutory
environmental quality requirements may necessitate significant capital
outlays, may materially affect the earning power of the Company, or
may cause material changes in the Company's intended activities. No
assurance can be given that environmental standards imposed by either
federal or state governments will not be changed or become more
stringent, thereby possibly materially adversely affecting the
proposed activities of the Company.

8. GOVERNMENTAL REGULATION AND ENVIRONMENTAL CONTROLS. The
Company's activities are subject to extensive Mexican laws and
regulations controlling not only the exploration for and development
of mineral properties, but also the possible effect of such activities
upon the environment. In its mining operations, the Company will use
certain equipment which will subject the Company to Mexican safety
Page 6
and health regulations. While the Company intends to act in compliance
with all such regulations, any adverse ruling under any regulations,
any imposition of a fine, or any imposition of more stringent
regulations could require the Company to make additional capital
expenditures that could impair its operations.

9. AVAILABILITY OF WATER SHORTAGES OF SUPPLIES AND MATERIALS.
Water is essential in all phases of the exploration and development of
mineral properties. It is used in such processes as exploration,
drilling, leaching, placer mining, dredging, testing, and hydraulic
mining. Any water that may be found will be subject to acquisition
pursuant to appropriate governing laws. The Company has definitely not
determined the availability of water at Sierra Mojada, except to note
that adequate water supplies are generally developed by drilling, but
has not determined the cost of acquisition. Both the lack of available
water and the cost of acquisition may make an otherwise viable project
economically impossible to complete. The mineral industry has
experienced from time to time shortages of certain supplies and
materials necessary in the exploration for and evaluation of mineral
deposits. The prices at which such supplies and materials are
available have also greatly increased. There is a possibility that
planned operations may be subject to delays due to such shortages and
that further price escalations will increase the costs of the Company.

10. UNINSURED RISKS. The Company may not be insured against all
losses or liabilities, which may arise from operations, either because
such insurance is unavailable or because the Company has elected not
to purchase such insurance due to high premium costs or other reasons.

11. NEED FOR SUBSEQUENT FUNDING. The Company has an immediate
need for additional funds in order to finance its proposed business
operations. The Company's continued operations therefore will depend
upon the availability of cash flow, if any, from its operations or its
ability to raise additional funds through bank borrowings or equity or
debt financing. There is no assurance that the Company will be able to
obtain additional funding when needed, or that such funding, if
available, can be obtained on terms acceptable to the Company. If the
Company cannot obtain needed funds, it may be forced to curtail or
cease its activities.

12. NEED FOR ADDITIONAL KEY PERSONNEL. At the present, the
Company employs three full time and two part-time employees. The
success of the Company's proposed business will depend, in part, upon
the ability to attract and retain qualified employees. The Company
believes that it will be able to attract competent employees, but no
assurance can be given that the Company will be successful in this
regard. If the Company is unable to engage and retain the necessary
personnel, its business would be materially and adversely affected.

13. RELIANCE UPON DIRECTORS AND OFFICERS. The Company is wholly
dependent, at the present, upon the personal efforts and abilities of
its Officers and Directors who will exercise control over the day to
day affairs of the Company. While the Company may solicit business
through its Officers, there can be no assurance as to the volume of
business, if any, which the Company may succeed in obtaining, nor that
its proposed operations will prove to be profitable. As of the date
hereof, the Company does not have any commitments regarding its
proposed operations and there can be no assurance that any commitments
will be forthcoming. See "Business" and "Management."

14. NON-ARMS'S LENGTH TRANSACTION. The number of shares of Common
Stock issued to present shareholders of the Company for cash was
arbitrarily determined and may not be considered the product of arm's
length transactions. See "Principal Shareholders."

15. INDEMNIFICATION OF OFFICERS AND DIRECTORS FOR SECURITIES
LIABILITIES. The Bylaws of the Company provide that the Company may
indemnify any Director, Officer, agent and/or employee as to
Page 7
those liabilities and on those terms and conditions as are specified
in the Nevada Business Corporation Act. Further, the Company may
purchase and maintain insurance on behalf of any such persons whether
or not the corporation would have the power to indemnify such person
against the liability insured against. The foregoing could result in
substantial expenditures by the Company and prevent any recovery from
such Officers, Directors, agents and employees for losses incurred by
the Company as a result of their actions. Further, the Company has
been advised that in the opinion of the Securities and Exchange
Commission, indemnification is against public policy as expressed in
the Securities Act of 1933, as amended, and is, therefore,
unenforceable.

16. COMPETITION. The Company believes that it will have
competitors and potential competitors, many of whom may have
considerably greater financial and other resources than the Company.

17. PUBLIC MARKET FOR SECURITIES. At present, the Company's
common stock is traded under the symbol MMGG on the OTC Bulletin Board
operated by the National Association of Securities Dealers, Inc. This
market is a thinly traded market and lacks the liquidity of other
public markets with which some investors may have more experience.

18. CUMULATIVE VOTING, PREEMPTIVE RIGHTS AND CONTROL. There are
no preemptive rights in connection with the Company's Common Stock.
The shareholders purchasing in this offering may be further diluted in
their percentage ownership of the Company in the event additional
shares are issued by the Company in the future. Cumulative voting in
the election of Directors is not provided for. Accordingly, the
holders of a majority of the shares of Common Stock, present in person
or by proxy, will be able to elect all of the Company's Board of
Directors. See "Description of the Securities."

19. NO DIVIDENDS ANTICIPATED. At the present time the Company
does not anticipate paying dividends, cash or otherwise, on its Common
Stock in the foreseeable future. Future dividends will depend on
earnings, if any, of the Company, its financial requirements and other
factors. Investors who anticipate the need of an immediate income from
their investment in the Company's Common Stock should refrain from the
purchase of the securities being offered hereby. See "Dividend
Policy."

ITEM 3. DESCRIPTION OF PROPERTIES.

The Company does not own any real or personal property other than
the following eight mining concessions:

Concession Title No. Hectares
- ----------- ---------- --------------
Sierra Mojada 198513 4767.3154
Mojada 3 199246 1689.2173
Esmeralda 188765 117.5025
Esmeralda 1 187776 97.6839
Unification Mineros Nortenos 169343 336.7905
La Blanca 188326 33.5044
Fortuna 160461 13.9582
Vulcano 83507 4.4904
---------
Total 7060.4626
===========
The Company's corporate offices are located at 1330 East Margaret
Avenue, Coeur d'Alene, Idaho 83815 and its telephone number is (208)
665-2002 and FAX is (208) 665-0041. Minera Metalin has its operations,
consisting of offices, residences, shops, and warehouse buildings,
located at Calle Mina #1, La Esmeralda, Coahuila, Mexico and its
telephone and FAX number is 52 177 52100.
Page 8

ITEM 4. LEGAL PROCEEDINGS.

The Company is not a party to any pending or threatened
litigation and to its knowledge, no action, suit or proceedings has
been threatened against its officers and its directors.

ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The laws of the state of Nevada under certain circumstances
provide for indemnification of the Company's Officers, Directors and
controlling persons against liabilities, which they may incur in such
capacities. A summary of the circumstances in which such
indemnification is provided for is contained herein, but this
description is qualified in its entirety by reference to the Company's
Articles of Incorporation and to the statutory provisions.

In general, any Officer, Director, employee or agent may be
indemnified against expenses, fines, settlements or judgments arising
in connection with a legal proceeding to which such person is a party,
if that person's actions were in good faith, were believed to be in
the Company's best interest, and were not unlawful. Unless such person
is successful upon the merits in such an action, indemnification may
be awarded only after a determination by independent decision of the
Board of Directors, by legal counsel, or by a vote of the
shareholders, that the applicable standard of conduct was met by the
person to be indemnified.

The circumstances under which indemnification is granted in
connection with an action brought on behalf of the Company is
generally the same as those set forth above; however, with respect to
such actions, indemnification is granted only with respect to expenses
actually incurred in connection with the defense or settlement of the
action. In such actions, the person to be indemnified must have acted
in good faith and in a manner believed to have been in the Company's
best interest, and have not been adjudged liable for negligence or
misconduct.

The Company's Articles of Incorporation and Bylaws do not contain
any provisions for indemnification as described above.

ITEM 6. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The annual meeting of the shareholders of Metalline Mining
Company was held on March 1, 2001. The following items were presented
for a vote of the shareholders, all of which were approved:

1. Election of three directors.
2. Authorization of a Qualified Stock Option Plan.
3. Amendment of the Company's Articles of Incorporation to
authorize one million shares of Preferred Stock, $0.01 par
value per share.
4. Ratification of the appointment of Williams & Webster,
Certified Public Accountants, to audit the financial statements
of the Company for the year ending October 31, 2001.

PART II

ITEM 7. MARKET PRICE FOR COMMON EQUITY AND OTHER SHAREHOLDER
MATTERS.

The Company's shares are traded on the Bulletin Board operated by
the National Association of Securities Dealers, Inc. (the "Bulletin
Board") under the trading symbol "MMGG." The Company's shares began
trading November 19, 1996. Summary trading by quarter for 2001, 2000,
and 1999 are as follows:
Page 9
Fiscal Quarter High Bid [1] Low Bid [1]
- --------------- --------------- --------------
2001
Fourth Quarter 2 11/32 1 1/5
Third Quarter 2 1/2 1 5/8
Second Quarter 2 3/4 1 5/8
First Quarter 2 3/4 2

2000
Fourth Quarter 4 1/4 1 3/4
Third Quarter 4 3/8 3 1/4
Second Quarter 4 2 1/8
First Quarter 3 1/8 2

1999
Fourth Quarter 4 3/8 2 3/16
Third Quarter 4 3/8 1 1/2
Second Quarter 2 1/16 3/4
First Quarter 1 3/32 7/16

[1] These quotations reflect inter-dealer prices, without retail mark-
up, mark-down or commissions and may not represent actual
transactions.

As of October 31, 2001, the Company has 120 holders of record of
its Common Stock.

The Company has not paid any dividends since its inception and
does not anticipate paying any dividends on its Common Stock in the
foreseeable future.

ITEM 8. RECENT SALES OF UNREGISTERED SECURITIES.

The Company has 10,067,595 shares of Common Stock issued and
outstanding as of October 31, 2001. Of the 10,067,595 shares of the
Company's Common Stock outstanding, 4,481,545 shares are freely
tradeable and 5,586,050 shares can only be resold in compliance with
Reg. 144 adopted under the Securities Act of 1933 (the "Act").

In general, under Rule 144 as currently in effect, a person (or
persons whose Shares are aggregated) who has beneficially owned Shares
privately acquired directly or indirectly from the Company or from an
affiliate, for at least one year, or who is an affiliate, is entitled
to sell within any three month period a number of such Shares that
does not exceed the greater of 1% of the then outstanding shares of
the Company's Common Stock or the average weekly trading volume in the
Company's Common Stock 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 the Company. A person (or persons
whose Shares are aggregated) who is not deemed to have been an
affiliate at any time during the 90 day 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 August 24, 1993, the Company issued 960,800 of its $0.01 par
value shares to Precious Metal Mines, Inc. ("PMM"), for 16 unpatented
mining claims located near Philipsburg, Montana comprising the Kadex
property group. The foregoing shares were issued pursuant to Section
4(2) of the Securities Act of 1933 (the "Act").
Page 10
On August 31, 1994, the directors of Cadgie Co. declared a 1:5
reverse stock split of the outstanding Cadgie Co. shares, thus
reducing the number of outstanding shares from 960,800 to 192,160
shares.

On August 4, 1995, the directors of Cadgie Co. declared a 3:1
forward stock split of the outstanding Cadgie Co. shares, thus
increasing the number of outstanding shares from 192,160 to 576,480.

During November 1995, Cadgie Co. directors approved an issue of
45,000 shares of Common Stock to Mr. Ryan for services rendered at
$0.01 per share. The foregoing shares were issued pursuant to Section
4(2) of the Act.

In June 1996, the Company completed a private placement of common
stock resulting in net proceeds of $25,000. The Company issued 250,000
common shares in connection with this private placement. The Company
also issued 900,000 shares to Messrs. Bingham, Gorski and Ryan who had
formed a partnership to advance development of the mining concession
located in Coahuila, Mexico. The partnership had an informal joint
venture agreement with Dakota covering the mining concessions. By
acquiring the partnership interest, the Company was able to negotiate
and sign a formal joint venture agreement with Dakota in July 1996.
The foregoing shares were issued pursuant to Section 4(2) of the Act.

During June 1996, the Company issued 900,000 shares of Common
Stock for the assignment of mineral rights in the Sierra Mojada
Project in Coahuila, Mexico valued at $0.01. The foregoing shares were
issued pursuant to Section 4(2) of the Act.

In October 1996, the Company completed a private placement of
common stock resulting in net proceeds of $125,500. The Company issued
1,255,000 shares in connection with this placement. The Company also
issued 120,000 shares to Mr. Gorski in payment for his services for
the months of September and October. The Company issued 20,000 shares
of Common Stock to Mr. Ryan as payment for services in those same
months. Further, the Company issued 150,000 shares of common stock for
computer equipment. The foregoing shares were issued pursuant to
Section 4(2) of the Act.

During February 1997, the Company borrowed $30,000 from
shareholders and issued 24,900 shares of Common Stock as a loan
incentive. The foregoing shares were issued pursuant to Section 4(2)
of the Act.

In March 1997, the Company completed an issuance of Common Stock
resulting in net proceeds of $17,500. The foregoing shares were issued
pursuant to Section 4(2) of the Act.

A total of 77,600 shares of Common Stock were issued in exchange
for wages during the months of January, February and March 1997 at
$0.35 per share. A total of 31,300 shares of Common Stock were issued
to cover expenses incurred by shareholders at $0.35 per share. The
foregoing shares were issued pursuant to Section 4(2) of the Act.

On June 5, 1997, the Company issued 50,000 shares of Common Stock
in consideration of services rendered. The foregoing shares were
issued pursuant to Section 4(2) of the Act.
Page 11

In 1997 and 1998, the Company issued warrants to eight persons.
Each warrant entitles the holder to acquire one share of common stock
at exercise prices ranging from $0.35 to $2.25. A total of 1,046,500
warrants were issued and 996,500 are currently outstanding; 50,000 of
the warrants have been exercised. The warrants were issued pursuant to
Section 4(2) of the Act.

Between August 14, 1998 and November 23, 1998, the Company sold
565,000 shares of common stock to eight persons/entities in
consideration of $565,000. The foregoing shares were sold pursuant to
Section 4(2) of the Securities Act of 1933.

Between March 8, 1999 and June 11, 1999, the Company sold 662,500
shares of common stock to eight persons/entities in consideration of
$662,500. The foregoing shares were sold pursuant to Section 4(2) of
the Securities Act of 1933.

In July and November 1999, options for 1,200,000 shares of common
stock were exercised as a price of $0.90 per share, pursuant to
Section 4(2) of the Act.

In August, 2000, the Company sold 1,440,500 shares for common
stock at a price of $2.77 per share. The foregoing shares were sold
pursuant to Section 4(2) of the Securities Act of 1933.

During the year ended October 31, 2000 the company issued 120,000
shares for services rendered and 15,000 shares for equipment. The
foregoing shares were issued pursuant to Section 4(2) of the
Securities Act of 1933.

During the year ended October 31, 2001 the Company issued 20,000
shares of common stock for the exercise of warrants valued at $10,760
and cash of $15,000. Additionally, 57,000 shares of common stock were
issued for services valued at $112,420 and cash of $570 and 250,000
shares of common stock with 125,000 warrants attached were issued for
$500,000 in cash. The foregoing shares were issued pursuant to Section
4(2) of the Securities Act of 1933.

ITEM 9. SELECTED FINANCIAL DATA.

The selected financial data set forth below has been derived
from, and should be read in conjunction with the Company's financial
statements and the notes thereto, and Item 11 of this report entitled
"Management's Discussion and Analysis of Financial Condition and
Results of Operations. The selected financial data for the three years
ended October 31, 2000 have been derived from the Company's
consolidated financial statements appearing elsewhere in this report,
which have been audited by Williams & Webster P.S., Spokane,
Washington.

The selected financial data should be read in conjunction with
and is qualified by such financial statements and the notes thereto.
[The balance of this page has been intentionally left blank.]
Page 12
<Table>
<caption>
Selected Financial Data

2001 2000 1999
Summary of Balance Sheets: ------ ------ ------
<s> <c> <c> <c>
Working capital $570,389 $1,090,094 $194,731
Current assets 589,762 1,111,886 248,997
Total assets 4,982,003 5,540,059 1,422,506
Current liabilities 19,373 21,792 54,266
Long-term obligation 0 0 0
Total liabilities 19,373 21,792 54,266
Stockholder's equity 4,962,630 5,518,267 1,368,240

Summary of Statements of Operations:

Revenues 0 0 0
Net loss <F1> (2,069,390) (882,208) (1,423,045)
Net loss per share (0.21) (0.10) (0.22)
- -----------
<FN>
<F1> Cumulative losses for period from inception (Nov. 8, 1993)
through October 31, 2001 were $6,409,800.
</FN>
</Table>

ITEM 10. DESCRIPTION OF SECURITIES.

Common Stock

The authorized Common Stock of the Company consists of 50,000,000
shares of $0.01 par value Common Stock. As of October 31, 2001,
10,067,595 shares are issued and outstanding of which 4,481,545 are
freely tradable.

In general, under Reg.144, an affiliate of the Company (officers,
directors, and owners of more than ten percent (10%) of the
outstanding shares of Common Stock are affiliates of the Company) may
sell in ordinary market transactions through a broker or with a market
maker, within any three (3) month period a number of shares which does
not exceed the greater of one percent (1%) of the number of
outstanding shares of Common Stock or the average of the weekly
trading volume of the Common Stock during the four calendar weeks
prior to such sale. Sales under Reg.144 require the filing of Form 144
with the Securities and Exchange Commission. If the shares of Common
Stock have been held for more than two (2) years by a person who is
not an affiliate, there is no limitation on the manner of sale or the
volume of shares that may be sold and no Form 144 is required. Sales
under Reg. 144 may have a depressive effect on the market price of the
Company's Common Stock.

All shares have equal voting rights and are not assessable.
Voting rights are not cumulative and, therefore, the holders of more
than 50% of the Common Stock could, if they chose to do so, elect all
of the directors of the Company.

Upon liquidation, dissolution, or winding up of the Company, the
assets of the Company, after the payment of liabilities, will be
distributed pro rata to the holders of the Common Stock. The holders
of the Common Stock do not have preemptive rights to subscribe for any
securities of the Company and have no right to require the Company to
redeem or purchase their shares. The shares of Common Stock presently
outstanding are fully paid and non-assessable.
Page 13
Dividends

Holders of the Common Stock are entitled to share equally in
dividends when, as and if declared by the Board of Directors of the
Company, out of funds legally available therefore. No dividend has
been paid on the Common Stock since inception, and none is
contemplated in the foreseeable future.

Options and Warrants

Currently, the Company has outstanding stock options and warrants
to acquire up to 1,901,500 shares of common stock at exercise prices
ranging from $0.35 to $5.00 per share. Each option or warrant permits
the holder thereof to acquire one share of common stock. The options
and warrant expiration periods range from December 6, 2001 to March 1,
2010.

Transfer Agent

The transfer agent for the Company's Common Stock is Columbia
Stock Transfer Co., 421 Coeur d'Alene Avenue, Coeur d'Alene, Idaho
83814.

ITEM 11. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

Results of Operations - Inception (August 20, 1993) through October
31, 2001.

Metalline Mining Company (the "Company") is an exploration stage
enterprise formed under the laws of the State of Nevada, on August 20,
1993, to engage in the business of mining. The Company has no
operating history and is subject to all the risks inherent in a new
business enterprise. The likelihood of success of the Company must be
considered in light of the problems, expenses, difficulties,
complications and delays frequently encountered in connection with a
new business, and the competitive and regulatory environment in which
the Company will operate.

From inception until May 1996, the Company was essentially
dormant having as its only asset unpatented mining claims located in
the State of Montana ("Kadex Property"). Since May 1996, the focus of
the Company has been the Sierra Mojada Project in Mexico and the
Company has dropped the Kadex Property claims.

The Company does not intend to purchase a plant or significant
equipment.

The Company will hire employees on an as needed basis, however,
the Company does not expect any significant changes in the number of
employees.

Liquidity and Capital Resources.

The Company has insufficient funds to carry on operations during
the next twelve months. 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. The Company's plan of
operation, subject to maintaining sufficient funds, calls for
continued geologic mapping of the surface and underground workings,
sampling and drilling to explore for additional mineralization and to
develop an ore reserve, and compilation of the data into a computer
data base for reserve calculation.

Due to the Company's lack of revenues, the Company's independent
certified public accountants included a paragraph in the Company's
2001 financial statements relative to a going concern uncertainty. The
Company has financed its obligations during the 2000 - 2001 fiscal year
by its sale of 327,000 shares at an average price of $1.58 per share.
Page 14
The Company is engaged in the business of mining. The Company
currently owns one mining property located in Mexico known as the
Sierra Mojada Property. The Company conducts its operations in Mexico
through its wholly owned subsidiary corporation, Minera Metalin S.A.
de C.V. ("Minera Metalin").

EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS.

In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No.133,
Accounting for Derivative Instruments and Hedging Activities. SFAS
No.133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. It requires that an
entity recognize all derivatives as either assets or liabilities in
the balance sheet and measure those instruments at fair value. At
October 31, 2001, the Company has not engaged in any transactions that
would be considered derivative instruments or hedging activities.

In September 2000, the FASB issued SFAS No.140 "Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities." This statement provides accounting and reporting
standards for transfers and servicing of financial assets and
extinguishment of liabilities and also provides consistent standards
for distinguishing transfers of financial assets that are sales from
transfers that are secured borrowings. SFAS No.140 is effective for
recognition and reclassification of collateral and for disclosures
relating to securitization transactions and collateral for fiscal
years ending after December 15, 2000, and is effective for transfers
and servicing of financial assets and extinguishments of liabilities
occurring after March 31, 2001. The Company believes that the adoption
of this standard will not have a material effect on the Company's
results of operations or financial position.

In June 2001, the FASB issued SFAS No.141, "Business
Combinations" and SFAS No.142, "Goodwill and Other Intangible Assets."
SFAS No.141 provides for the elimination of the pooling-of-interests
method of accounting for business combinations with an acquisition
date of July 1,2001 or later. SFAS No.142 prohibits the amortization
of goodwill and other intangible assets with indefinite lives and
requires periodic reassessment of the underlying value of such assets
for impairment. SFAS No.142 is effective for fiscal years beginning
after December 15, 2001. An early adoption provision exists for
companies with fiscal years beginning after March 15, 2001. On October
31, 2001, the Company adopted SFAS No.142. Application of the
nonamortization provision of SFAS No.142 is expected to result in no
change in net income in fiscal 2002. The Company is currently
evaluating the impact of the transitional provisions of the statement.

ITEM 12. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements of the Company for the years ended
October 31, 2001, 2000, and 1999 included elsewhere in this report
have been audited by Williams & Webster, P.S., Spokane, Washington. An
index to such financial statements appears at Page 17 of this report.

ITEM 13. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.

There have been no disagreements on accounting and financial
disclosures through the date of this 10-K.
Page 15
PART III

ITEM 14. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS.

The officers and directors of the Company are as follows:

Name Age Position

Merlin Bingham 68 President and Chairman of the Board of
Directors

Daniel Gorski 64 Vice President of Operations and a member
of the Board of Directors

Jim Czirr 47 Member of the Board of Directors and
Consultant

Wayne Schoonmaker 64 Secretary & Treasurer

All directors hold office until the next annual meeting of
shareholders or until their successors have been elected and
qualified. The Company's officers are elected by the Board of
Directors at the annual meeting and hold office until their death, or
until they resign, or have been removed from office.

Officer and Director Biographies:

Merlin Bingham, President and Chairman of the Board of Directors

Since October 1996, Mr. Bingham has been the President and
Chairman of the Board of Directors of the Company. From 1963 to 1983
Mr. Bingham worked in exploration for mining and oil companies in the
western U.S. and Alaska, Zambia, the United Arab Emirates, Ecuador and
Mexico. Since 1983, Mr. Bingham has been a consulting geologist. Mr.
Bingham received a B.S. degree in Mineralogy from the University of
Utah in 1963.

Daniel Gorski, Vice President of Operations and a member of the Board
of Directors

Since June 1996, Mr. Gorski has been the Vice President of
Operations and a member of the Board of Directors of the Company. Mr.
Gorski has been a consulting geologist and mine manager since 1974
working in the western U.S. and Mexico. From January 1992 to June
1996, Mr. Gorski was employed as a contract geologist, working in
Mexico, employed by USMX, Inc., an exploration and mining company
located in Denver, Colorado. Mr. Gorski received a B.S. degree in
Geology from Ross State College, Alpine Texas and a M.A. in Geology
from the University of Texas in 1970.

Jim Czirr - Director and Financial Consultant

Since June 1998, Mr. Czirr has been a member of the Board of
Directors and a financial consultant to the company since December
1997. Mr. Czirr has over 20 years experience as a financial and public
relations consultant in the areas of business strategies, marketing,
incentive programs, finance and capital formation and has extensive
experience in the brokerage business and in oil and gas limited
partnerships.
Page 16

Wayne Schoonmaker - Secretary & Treasurer

From 1981 to 1993, Mr. Schoonmaker was Financial Manager of the
Northwest Mining Department of ASARCO and from 1978 to 1981, he was
Chief Accountant at ASARCO's Troy Unit in Montana, where he was
responsible for the installation and implementation of the accounting
system for the start-up of the Troy Mine. From July 1978 to December
1978, Mr. Schoonmaker was Assistant Treasurer of the Bunker Hill
Mining Company, and from 1964 to 1978, he was Assistant Corporation
Secretary of Hecla Mining Company. Mr. Schoonmaker currently serves as
Secretary and Treasurer of Sterling Mining Company, which position he
has held since July 1999. Mr. Schoonmaker received a Bachelor of
Science degree in Accounting from the University of Montana in 1962
and an MBA from the University of Idaho in 1987. Mr. Schoonmaker is a
Certified Public Accountant in the states of Idaho and Montana.

ITEM 15. EXECUTIVE COMPENSATION.

Summary Compensation.

The following table sets forth the compensation paid by the
Company from January 1, 1997 through December 31, 2001, for each
officer and director of the Company. This information includes the
dollar value of base salaries, bonus awards and number of stock
options granted, and certain other compensation, if any.

SUMMARY COMPENSATION TABLE
<Table>
<Caption>
Long-Term Compensation
Annual Compensation Awards Securities
Names Other Under Restricted
Executive Annual Options/ Shares or
Officer and Compen- SARs Restricted LTIP
Principal Year Salary Bonus sation Granted Share Payouts
Position Ended (US$) (US$) (US$) (#) Units(US$) (US$)
<c> <c> <c> <c> <c> <c> <c>
Merlin 2001 72,000 0 0 100,000 0 0
Bingham 2000 72,000 0 0 0 0 0
President 1999 72,000 0 0 0 0 0
1998 72,000 0 0 0 0 0
1997 33,000 0 0 0 0 0

Daniel 2001 72,000 0 0 100,000 0 0
Gorski 2000 72,000 0 0 0 0 0
Vice 1999 72,000 0 0 0 0 0
President 1998 78,000 0 0 0 0 0
1997 54,000 0 0 0 0 0

Jim 2001 0 0 130,000 100,000 0 0
Czirr 2000 0 0 35,745 0 0 0
Director 1999 0 0 36,000 0 0 0
1998 0 0 36,000 100,000 0 0
1997 0 0 0 100,000 0 0

Wayne 2001 18,000 0 0 50,000 0 0
Schoonmaker 2000 18,000 0 0 0 0 0
Secretary/ 1999 18,000 0 0 0 0 0
Treasurer 1998 7,500 0 0 0 0 0
1997 0 0 0 0 0 0
</Table>
Page 17

There are no other stock option plans, retirement, pension, or
profit sharing plans for the benefit of the Company's officers and
directors.

Option/SAR Grants.

The following grants of stock options, whether or not in tandem
with stock appreciation rights ("SARs") and freestanding SARs have
been made to officers and/or directors:

<Table>
<Caption>
Number of
Securities
Number of Underlying
Securities Options/SARs
Underlying Granted Exercise Number of
Options During Last or Base Options Expiration
Name SARs Granted 12 Months Price($/Sh) Exercised Date
- ------- ------------ ------------- ----------- ---------- --------------
<s> <c> <c> <c> <c> <c>
James
Czirr 100,000 0 $0.75 -0- 11/01/04

James
Czirr 100,000 0 $1.00 -0- 09/15/05

Merlin D.
Bingham 100,000 100,000 2.15 -0- 03/01/10

Daniel E.
Gorski 100,000 100,000 2.15 -0- 03/01/10

James C.
Czirr 100,000 100,000 2.15 -0- 03/01/10

Wayne L.
Schoonmaker 50,000 50,000 1.32 -0- 10/04/06
</Table>

Long-Term Incentive Plan Awards.

The Company's shareholders approved a Qualified Stock Option Plan
at the annual meeting of shareholders held March 1, 2001. During the
year ended October 31, 2001, options for 350,000 shares were granted
to officers and directors of the Company.

Compensation of Directors.

In general, the Directors do not receive any compensation for
serving as members of the Board of Directors. The Board has not
implemented a plan to award options to any Directors. There are no
contractual arrangements with any member of the Board of Directors
other than with James Czirr. Mr. Czirr has entered into a consulting
agreement with the Company whereby Mr. Czirr supplies financial and
business consulting services and is compensated in stock and options.
See "Certain Relationships and Related Transaction."

ITEM 16. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.

The following table sets forth the Common Stock ownership of each
person known by the Company to be the beneficial owner of five percent
or more of the Company's Common Stock each director individually and
all officers and directors of the Company as a group. Each person has
sole voting and investment power with respect to the shares of Common
Stock shown, unless otherwise noted, and all ownership is of record
and beneficial.
Page 18

Name Number of % of Outstanding
of owner Shares Position Shares
- ------------ ------- ----------- ----------
Merlin Bingham 935,000 President, CEO and
Chairman of the 9.29%
Board of Directors

Daniel Gorski 766,600 Vice President of
Operations and member 7.61%
of the Board of Directors

Jim Czirr 490,100 Member of the Board of 4.87%
Directors

Wayne Schoonmaker 0 Secretary & Treasurer 0.00%

All officers and 2,191,700 21.77%
directors as a
group (4 persons)

Britannia Holdings 3,190,500 31.69%
King's House
The Grange
St. Peter Port
Guernsey
Channel Islands

ITEM 17. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The Company was formed on November 8, 1993, by Mr. Carman Ridland
of Las Vegas, Nevada as a spin-off from its predecessor Precious Metal
Mines, Inc. ("PMM").

The Company issued 960,800 of its $0.01 par value shares to PMM,
for 16 unpatented mining claims located near Philipsburg, Montana
comprising the Kadex property group.

PMM distributed the 960,800 shares of Cadgie Co. to its
shareholders, one share of Cadgie Co. for each share of PMM held by
holders of record as of August 31, 1993.

On August 31, 1994, the directors of Cadgie Co. declared a 1:5
reverse stock split of the outstanding Cadgie Co. shares, thus
reducing the number of outstanding shares from 960,800 to 192,160
shares.

On August 4, 1995, the directors of Cadgie Co. declared a 3:1
forward stock split of the outstanding Cadgie Co. shares, thus
increasing the number of outstanding shares from 192,160 to 576,480.

During November 1995, Metalline Mining Company's directors
approved an issue of 45,000 shares of Common Stock to Mr. Ryan for
services rendered at $0.01 per share.

In January 1996, Carman Ridland in a private sale, sold a
controlling interest in the corporation to Howard Crosby. On January
12, 1996, Mr. Ridland transferred control of Cadgie Co. to Mr. Howard
Crosby and Mr. Robert Jorgensen.
Page 19
In May 1996, Messrs. Crosby and Jorgensen were made aware of
certain potentially valuable mining properties and concessions located
at Sierra Mojada, Coahuila, Mexico. Messrs. Crosby and Jorgensen
transferred control of Cadgie Co. to Messrs. Bingham, Gorski and Ryan
so that Cadgie Co. could focus on the opportunity presented at Sierra
Mojada.

During June 1996, the Company issued 900,000 shares of Common
Stock for the assignment of mineral rights in the Sierra Mojada
Project in Coahuila, Mexico valued at $0.01.

In August 1996, the Company changed its name to Metalline Mining
Company and increased the authorized capital to 50,000,000 shares.

During February 1997, the Company borrowed $30,000 from
shareholders and issued 24,900 shares of Common Stock as a loan
incentive.

In March 1997, the Company completed an issuance of Common Stock
resulting in net proceeds of $17,500.

In April 1997, the Company issued to Royal Silver Mines, Inc.,
200,000 shares of Common Stock resulting in proceeds of $70,000. The
Company issued 133,800 shares of Common Stock were issued for services
and expenses. A total of 24,900 shares of Common Stock were issued as
loan incentives (interest) for $30,000 in loans from shareholders.
These shares were issued at $0.30 per share. A total of 77,600 shares
of Common Stock were issued in exchange for wages during the months of
January, February and March 1997 at $0.35 per share. A total of 31,300
shares of Common Stock were issued to cover expenses incurred by
shareholders at $0.35 per share.

On June 5, 1997, the Company issued 50,000 shares of Common Stock
to Mario Ayub Touche in consideration of services rendered.

In December 1997, the Company entered into a consulting agreement
with James Czirr, a member of the Board of Directors. Pursuant to the
consulting agreement, Mr. Czirr supplies financial and business
consulting services and is compensated in stock and options.
Page 20

PART IV

ITEM 18. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

EXHIBITS. The following exhibits are filed as part of this report.
Exhibits previously filed are incorporated by reference, as noted.

EXHIBIT NO. EXHIBIT

3.1 Articles of Incorporation of the registrant. Filed as
an exhibit to the registrant's registration statement
on Form 10 SB (Commission File No.000-27667) and
incorporated by reference herein.

3.2 Bylaws of registrant. Filed as an exhibit to the
registrant's registration statement on Form 10 SB and
incorporated by reference herein.

3.3 Articles of Amendment to the Articles of Incorporation.
Filed as an exhibit to the registrant's registration
statement on Form 10 SB and incorporated by reference
herein.

4.1 Specimen stock certificate of the registrant. Filed as
an exhibit to the registrant's registration statement
on Form 10 SB and incorporated by reference herein.

10.1 Master agreement between the registrant and USMX, Inc.
relating to development and exploration of certain
mineral properties. Filed as an exhibit to the
registrant's registration statement on Form 10 SB and
incorporated by reference herein.

10.2 Royal Silver letter regarding Joint Venture Agreement
between Royal Silver, Minera Metalin S.A. de C.V. and
its registrant. Filed as an exhibit to the registrant's
registration statement on Form 10 SB and incorporated
by reference herein.

10.3 Consulting Agreement dated December 1, 1997 between the
registrant and James Czirr. Filed as Exhibit 99.1 on
the registrant's Form 10-SB and incorporated by
reference herein.

10.4 Consulting addendum dated August 24, 1998 between the
registrant and James Czirr. Filed as Exhibit 99.2 on
the registrant's Form 10-SB and incorporated by
reference herein.

REPORTS ON FORM 8-K. NONE.

[The balance of this page has been intentionally left blank.]

Page 21
METALLINE MINING COMPANY

INDEX TO FINANCIAL STATEMENTS

PAGE

Report of Independent Certified
Public Accountanats . . . . . . . . . . . . . . . . . . . . F/S 1

Financial Statements:

Balance Sheets as of October 31, 2001
and October 31, 2000 . . . . . . . . . . . . . . . . . . . .F/S 2

Statements of Loss for the Years Ended
October 31, 2001, 2000, 1999, and for
the period from inception (November 8, 1993)
to October 31, 2001 . . . . . . . . . . . . . . . . . . . . F/S 3

Statements of Changes in Stockholder's Equity
for the period from inception (November 8, 1993)
to October 31, 2001 . . . . . . . . . . . . . . . . . . . . F/S 4

Statements of Cash Flow for the Years Ended
October 31, 2001, 2000, 1999, and for the
period from inception (November 8, 1993) to
October 31, 2001 . . . . . . . . . . . . . . . . . . . . . F/S 8

Notes to Financial Statements . . . . . . . . . . . . . . . F/S 9

Summary of Accounting Policies . . . . . . . . . . . . . . .F/S 9

Signatures . . . . . . . . . . . . . . . . . . . . . . . . .F/S 18

[The balance of this page has been intentionally left blank.]

Page 22

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors
Metalline Mining Company
Coeur d'Alene, Idaho

INDEPENDENT AUDITOR'S REPORT
---------------------------------------------

We have audited the accompanying balance sheets of Metalline
Mining Company (an exploration stage company) as of October 31, 2001
and 2000, and the related statements of operations, shareholders'
equity, and cash flows for the years then ended, and for the period
from November 8, 1993 (inception) through October 31, 2001. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
Metalline Mining Company as of October 31, 2001 and 2000, and the
results of its operations and cash flows for the years then ended and
for the period from November 8, 1993 (inception) to October 31, 2001
in conformity with accounting principles generally accepted in the
United States of America.

The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2
to the financial statements, the Company's significant operating
losses raise substantial doubt about its ability to continue as a
going concern. Management's plans regarding those matters also are
described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

Williams & Webster, P.S.
CERTIFIED PUBLIC ACCOUNTANTS
Spokane, Washington
January 9, 2002

F/S 1

METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEETS
<Table>
<Caption>
October 31, 2001 October 31, 2000
---------------- ----------------
<s> <c> <c>
ASSETS

CURRENT ASSETS
Cash $ 31,032 $ 550,557
Investments 484,447 -
Foreign tax refund receivable 59,288 547,237
Prepaid expenses 3,849 3,228
Employee advances 11,146 10,864
------- -------
Total Current Assets 589,762 1,111,886
-------- ---------
MINERAL PROPERTIES 4,334,767 4,348,785
--------- --------
OTHER ASSETS
Office and mining equipment,
net of accumulated
depreciation 57,474 79,388
-------- ------
Total Other Assets 57,474 79,388
------- ------
TOTAL ASSETS $ 4,982,003 $ 5,540,059
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable $ 5,275 $ 5,625
Accrued liabilities 14,098 16,167
------- -------
Total Current Liabilities 19,373 21,792
------- ------
COMMITMENTS AND CONTINGENCIES 0 0
----- ----
STOCKHOLDERS' EQUITY
Prefered stock, $0.01 par value;
1,000,000 shares authorized,
no shares outstanding 0 0
Common stock, $0.01 par value;
50,000,000 shares authorized,
10,067,595 shares issued and
9,740,595 shares issued and
outstanding,respectively 100,677 97,407
Additional paid-in capital 9,849,466 9,217,330
Stock options and warrants 1,422,327 543,980
Deficit accumulated during
exploration stage (6,409,840) (4,340,450)
---------- ----------
Total Stockholders' Equity 4,962,630 5,518,267
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 4,982,003 $5,540,059
=========== ============
The accompanying notes are an integral part of these financial
statements.
</Table>
F/S 2

METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF OPERATIONS
<Table>
<Caption>
Years Ended Period from
------------- November 8, 1993
October 31, October 31, (Inception) to
2001 2000 October 31,2001
------- ------- --------------
<s> <c> <c> <c>
REVENUES $ 0 $ 0 $ 0
------ ----- -------
GENERAL AND
ADMINISTRATIVE EXPENSES
Salaries 234,480 224,616 890,874
Office 111,279 91,196 291,252
Taxes and fees 58,193 50,244 108,678
Professional services 1,261,376 371,379 3,151,061
Property expenses 361,647 49,215 1,434,476
Depreciation 28,498 25,830 116,686
Exploration and research 38,332 78,459 167,574
Financing Costs 0 0 276,000
------ ------ -------
Total General and
Administrative Expenses 2,093,805 890,939 6,436,601
---------- ------- ---------
LOSS FROM OPERATIONS $(2,093,805) (890,939) (6,436,601)
========== ========= ==========
OTHER INCOME (EXPENSES)
Miscellaneous ore sales,
net of expenses 14,098 20 14,118
Interest income 10,317 8,711 22,242
Interest expense 0 0 (9,599)
------ ----- ------
Total Other Income 24,415 8,731 26,801
======== ======= =======
LOSS BEFORE INCOME TAXES (2,069,390) (882,208) (6,409,800)

INCOME TAXES 0 0 0
------ ----- ------
NET LOSS $(2,069,390) $(882,208) $(6,409,800)
========= ========= =========
BASIC AND DILUTED LOSS
PER COMMON SHARE $ (0.21) $ (0.10) $ (2.00)
======= ======= =======
BASIC AND DILUTED WEIGHTED
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 9,912,262 8,573,927 3,199,971
========= ========= =========
The accompanying notes are an integral part of these financial
statements.
</Table>
F/S 3

METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY
<Table>
<Caption>
Accumulated
Common Stock Stock Stock Deficit
----------------- Additional Sub- Options During Ex-
Number of Paid-in scriptions and ploration
Shares Amount Capital Receivable Warrants Stage Total
-------- ------- ---------- ---------- -------- --------- -----
<s> <c> <c> <c> <c> <c> <c> <c>
Common stock issuance
prior to inception
(no value) 960,800 $ 9,608 $(9,608) $ - $ - $ - $ -

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

Loss for the year ended
October 31, 1994 - - - - - (8,831) (8,831)
------- ------ ------ ------ ----- ------ ------
Balances,
October 31, 1994 192,160 1,922 (1,922) - - (8,831) (8,831)

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

Loss for the year ended
October 31, 1995 - - - - - (7,761) (7,761)
------ ----- ------ ----- ----- ------- ------
Balance,
October 31, 1995 576,480 $ 5,765 $(5,765) $ - $ - $(16,592) $(16,592)
--------- -------- ------- ----- ----- --------- -------
Issuance of common
stock as follows:
- - for cash at an average
of $0.11 per share 1,320,859 13,209 133,150 - - - 146,359

- - for services
at $0.08 per share 185,000 1,850 12,600 - - - 14,450

- - for computer equipment
at $0.01 per share 150,000 1,500 13,500 - - - 15,000

- - for mineral property
at $0.01 per share 900,000 9,000 - - - - 9,000

Loss for the year ended
October 31, 1996 - - - - - (40,670) (40,670)
------ ------- ------- ----- ----- -------- -------
Balances,
October 31, 1996 3,132,339 $31,324 $153,485 $ - $ - $(57,262) $127,547
- -------- ---------- -------- -------- ----- ----- -------- -------
Table continued on next page.
The accompanying notes are an integral part of these financial statements.
F/S 4
</Table>
METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY
(CONTINUED)
<Table>
<Caption>
Accumulated
Common Stock Stock Stock Deficit
----------------- Additional Sub- Options During Ex-
Number of Paid-in scriptions and ploration
Shares Amount Capital Receivable Warrants Stage Total
-------- ------- ---------- ---------- -------- --------- -----
<s> <c> <c> <c> <c> <c> <c> <c>
Balance brought Forward 3,132,339 $ 31,324 $ 153,485 $ - $ - $(57,262) $127,547

Issuance of common
Stock as follows:
- - for cash at an average
of $0.61 per share 926,600 9,266 594,794 - - - 604,060

- - for services at an average
of $0.74 per share 291,300 2,913 159,545 - - - 162,458

- - for payment of a loan
at $0.32 per share 100,200 1,002 30,528 - - - 31,530

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

Loss for year ended
October 31, 1997 - - - - - (582,919) (582,919)
----- ----- ----- ----- ----- ------- -------
Balances at
October 31, 1997 4,450,439 $44,505 $941,352 $ - $ - $(640,181 $345,676

Issuance of common
stock as follows:
- - for cash at an average
of $1.00 per share 843,500 8,435 832,010 - - - 840,445

- - for cash and receivables
at $1.00 per share 555,000 5,550 519,450 (300,000) - - 225,000

- - for services at an
average of $0.53 per
share 41,800 418 21,882 - - - 22,300

- - for mine data base
at $1.63 per share 200,000 2,000 323,000 - - - 325,000

Options issued or
granted as follows:
- - 1,200,000 options
for cash - - 120,000 - - - 120,000

- - for financing fees - - - - 60,000 - 60,000

- - for consulting fees - - - - 117,000 - 117,000

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

Loss for year ended
October 31, 1998 - - - - - (906,036) (906,036)
----- ----- ------ ----- ----- ----- ------
Balance,
October 31, 1998 6,090,739 $60,908 $2,757,694 $(300,000)$665,980 $(2,035,197)$(1,149,385)
--------- ------ --------- -------- ------- --------- ---------
- ---------
Table continued on next page. The accompanying notes are an integral part of these financial
statements.
</Table>
F/S 5

METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY
(CONTINUED)
<Table>
<Caption>
Accumulated
Common Stock Stock Stock Deficit
----------------- Additional Sub- Options During Ex-
Number of Paid-in scriptions and ploration
Shares Amount Capital Receivable Warrants Stage Total
-------- ------- ---------- ---------- -------- --------- -----
<s> <c> <c> <c> <c> <c> <c> <c>
Balance brought Forward 6,090,739 $60,908 $2,757,694 $(300,000) $665,980 $(2,035,197) $(1,149,385)

Issuance of common
stock as follows:
- - for cash at an average
of $1.04 per share 818,800 8,188 842,712 - - - 850,900

- - for drilling fees
at $0.90 per share 55,556 556 49,444 - - - 50,000

Stock options and warrant
activity as follows:
- - exercise of options
at $0.90 per share 250,000 2,500 267,500 - (45,000) - 225,000

- - issuance of options
for financing fees - - - - 216,000 - 216,000

- - expiration of options - - 60,000 - (60,000) - -

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

Loss for year ended
October 31, 1999 - - - - - (1,423,045) (1,423,045)
----- ----- ----- ----- ----- -------- --------
Balance,
October 31, 1999 7,215,095 $72,152 $3,977,350 $ - $776,980 $(3,458,242) $1,368,240

Exercise of options at
$0.86 per share 950,000 9,500 1,090,750 - (288,000) - 812,250

Issuance of common
stock as follows:
- - for cash at an average
of $2.77 per share 1,440,500 14,405 3,972,220 - - - 3,986,625

Issuance of common stock
for services at
$1.28 per share 120,000 1,200 152,160 - - - 153,360

Issuance of common stock
for equipment
at $1.67 per share 15,000 150 24,850 - - - 25,000

Warrants issued for services - - - - 55,000 - 55,000

Loss for the year
ended October 31, 2000 - - - - - (882,208) (882,208)
----- ----- ----- ----- ----- ------ ------
Balance,
October 31, 2000 9,740,595 $97,407 $9,217,330 $ - $543,980 $(4,340,450) $5,518,267
--------- ------- --------- ----- ------- ---------- ---------
- ---------
Table continued on next page. The accompanying notes are an integral part of these financial
statements.
</Table>
F/S 6

METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY
(CONTINUED)
<Table>
<Caption>
Accumulated
Common Stock Stock Stock Deficit
----------------- Additional Sub- Options During Ex-
Number of Paid-in scriptions and ploration
Shares Amount Capital Receivable Warrants Stage Total
-------- ------- ---------- ---------- -------- --------- -----
<s> <c> <c> <c> <c> <c> <c> <c>
Balance brought
Forward 9,740,595 $97,407 $9,217,330 $ - $543,980 $(4,340,450) $5,518,267

Warrants exercised at
$0.75 per common share 20,000 200 25,560 - (10,760) - 15,000

Issuance of stock for
cash at $2.00
per common share 250,000 2,500 494,076 - 3,424 - 500,000

Issuance of stock for
cash of $210 and services
valued at $2.07 per
common share 21,000 210 43,260 - - - 43,470

Issuance of stock for
cash of $180 and services
valued at $2.05 per
common share 18,000 180 36,720 - - - 36,900

Issuance of stock for
services valued at $2.45
per common share 6,000 60 14,640 - - - 14,700

Stock issued for services
valued at $1.50 per
common share 12,000 120 17,880 - - - 18,000

Options issued for
consulting fees - - - - 740,892 - 740,892

Warrants issued for
consulting fees - - - - 144,791 - 144,791

Loss for the year
ended October 31,2001 - - - - - (2,069,390)(2,069,390)
----- ---- ----- ----- ----- --------- ---------
Balance,
October 31, 2001 10,067,595 $100,677 $9,849,466 $ - $1,422,327 $(6,409,840) $4,962,630
========== ======= ========= ===== ========= ========= ==========
- ------
The accompanying notes are an integral part of these financial statements.
</Table>
F/S 7

METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF CASH FLOWS
<Table>
<Caption>
Years Ended Period from
------------------ November 8, 1993
October 31, October 31, (Inception)to
2001 2000 October 31,2001
------- ------- -----------
<s> <c> <c> <c>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $(2,069,390) $(882,208) $(6,409,840)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Depreciation 28,498 25,830 116,656
Noncash expenses 126,864 - 126,864
Payment of services from
issuance of stock 112,680 153,000 586,215
Payment of services from
issuance of options 740,892 - 740,892
Payment of financing fees from
the issuance of stock options - - 276,000
Payment of expenses with
issuance of stock - - 326,527
Warrants issued for services 144,791 55,000 688,771
(Increases) decreases in:
Foreign property tax
refund receivable 487,949 (547,236) (59,287)
Prepaid expenses (621) (101) (3,849)
Employee advances (282) (5,656) (11,146)
Investments (484,447) - (484,447)
Increases (decreases) in:
Accounts payable (350) (11,141) 5,275
Accrued liabilities (2,069) (21,334) 14,098
----- ------ ------
Net cash used by
operating activities (915,485) (1,233,846) (4,087,271)
------ -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Equipment purchases (6,584) (10,380) (134,128)
Mining property acquisitions (112,846) (3,245,114) (4,452,631)
----- -------- ---------
Net cash used by
investing activities (119,430) (3,255,494) (4,586,759)
----- ------ -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sales
of common stock 515,390 3,986,625 7,652,312
Proceeds from sales of options - 812,250 935,250
Deposits for sale of stock - - 87,500
Proceeds from shareholder loans - - 30,000
---- ---- -----
Net cash provided by
financing activities: 515,390 4,799,235 8,705,062
----- ------- --------
Net increase (decrease)
in cash and cash equivalents (519,525) 309,895 31,032
Cash beginning of period 550,557 240,662 -
----- ----- ------
Cash at end of period $31,032 $550,557 $31,032
====== ======= ======
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Income taxes paid $ - $ - $ -
Interest paid $ - $ - $ -
NON-CASH FINANCING ACTIVITIES:
Common stock issued for services $112,680 $153,360 $586,215
Common stock issued for
payment of expenses $ - $ - $326,527
Common stock issued for equipment $ - $25,000 $25,000
Common stock options issued
for financing fees $ - $ - $276,000
Options issued for services $740,892 $ - $740,892
Warrants issued for services $144,791 $55,000 $688,771
The accompanying notes are an integral part of these financial statements.
</Table>
F/S 8

METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 2001

NOTE 1 ORGANIZATION AND DESCRIPTION OF BUSINESS

Metalline Mining Company ("the Company") was incorporated in the
State of Nevada on November 8, 1993 as the Cadgie Company for the
purpose of acquiring and developing mineral properties. The Cadgie
Company was a spin-off from its predecessor, Precious Metal Mines,
Inc. The articles of incorporation of Cadgie Company were executed
on August 20, 1993. On June 28, 1996, at a special directors
meeting, the Company's name was changed to Metalline Mining
Company. The Company's fiscal year-end is October 31.

The Company's efforts have been concentrated in expenditures
related to exploration properties, principally in the Sierra
Mojada project located in Coahuila, Mexico. The Company has not
determined whether the exploration properties contain ore reserves
that are economically recoverable. The ultimate realization of the
Company's investment in exploration properties is dependent upon
the success of future property sales, the existence of
economically recoverable reserves, the ability of the Company to
obtain financing or make other arrangements for development, and
upon future profitable production. The ultimate realization of the
Company's investment in exploration properties cannot be
determined at this time, and accordingly, no provision for any
asset impairment that may result, in the event the Company is not
successful in developing or selling these properties, has been
made in the accompanying financial statements.

The Company is actively seeking additional capital and management
believes its properties can ultimately be sold or developed to
enable the Company to continue its operations. However, there are
inherent uncertainties in mining operations and management cannot
provide assurances that it will be successful in this endeavor.
Furthermore, the Company is in the exploration stage, as it has
not realized any revenues from its planned operations.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies is presented to
assist in understanding the financial statements. The financial
statements and notes are representations of the Company's
management, which is responsible for their integrity and
objectivity. These accounting policies conform to accounting
principles generally accepted in the U.S. and have been
consistently applied in the preparation of the financial
statements.

ACCOUNTING METHOD
The Company's financial statements are prepared using the accrual
method of accounting.

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.

RECLASSIFICATIONS
Certain amounts from prior periods have been reclassified to
conform to the current period presentation. This reclassification
has resulted in no changes to the Company's accumulated deficit or
net losses presented.

EXPLORATION STAGE ACTIVITIES
The Company has been in the exploration stage since November 8,
1993 and has no revenues from operations. The Company is primarily
engaged in the acquisition and exploration of mineral properties.
Should the Company locate a commercial minable reserve, the
Company would expect to actively prepare the site for extraction.

F/S 9
METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 2001

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
SEGMENT REPORTING
The Company adopted SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information," in the fiscal year ended
October 31, 1999. SFAS No. 131 requires disclosures about products
and services, geographic areas and major customers. The adoption
of SFAS No. 131 did not affect the Company's results of operations
or financial position. The Company's mineral properties were not
engaged in any production activity. The Company had no segments
engaged in business activities at October 31, 2001 and, therefore,
no segment reporting is required.

FOREIGN OPERATIONS
The accompanying balance sheet includes $4,334,767 of the
Company's mineral properties $62,429 (before accumulated
depreciation) of mining equipment, $2,590 of the Company's cash
and a $59,288 tax refund receivable in Mexico. Although this
country is considered economically stable, it is always possible
that unanticipated events in foreign countries could disrupt the
Company's operations.

The Mexican government does not require foreign entities to
maintain cash reserves in Mexico.

FOREIGN CURRENCY TRANSLATION
Assets and liabilities of the Company's foreign operations are
translated into U.S. dollars at the year-end exchange rates, and
revenue and expenses are translated at the average exchange rates
during the period. Exchange differences arising on translation
are disclosed as a separate component of shareholders' equity.
Realized gains and losses from foreign currency transactions are
reflected in the results of operations.

FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments, as defined by SFAS No. 107
"Disclosures about Fair Value of Financial Instruments," include
cash, advances to employee, foreign tax return receivable,
investments, accounts payable and accrued expenses. All
instruments are accounted for on a historical cost basis, which,
due to the short maturity of these financial instruments,
approximates fair value at October 31, 2001.

CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with an
original maturity of three months or less to be cash equivalents.

INVESTMENT IN SECURITIES
Pursuant to Statement of Financial Accounting Standards (SFAS) No.
115, the Company's investments in securities are classified as
either trading, held to maturity, or available-for-sale. During
the year ended October 31, 2001 the Company did not own any
securities classified as either trading or held to maturity.
However, at October 31, 2001, the Company did own securities
classified as available-for-sale, which consists of debt and
equity securities.

Unrealized holding gains and losses, net of tax, on securities
available-for-sale are reported as a net amount in a separate
component of other comprehensive income. At October 31, 2001, the
Company did not have any unrealized holding gains or losses.

Gains and losses on the sale of securities available-for-sale are
determined using the specific identification method and are
included in earnings.

GOING CONCERN
As shown in the accompanying financial statements, the Company has
no revenues, has incurred a net loss of $2,069,390 for the year
ended October 31, 2001 and has an accumulated deficit. These
factors indicate that the Company may be unable to continue in
existence. 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.
F/S 10
METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 2001

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The Company's management believes that significant and imminent
private placements will generate sufficient cash for the Company
to continue to operate based on current expense projections.

CONCENTRATION OF RISK
The Company maintains its domestic cash in primarily one
commercial bank in Coeur d'Alene, Idaho. Accounts are guaranteed
by the Federal Deposit Insurance Corporation (FDIC) up to
$100,000. At October 31, 2000, the Company exceeded the insured
amount by $233,687. The Company also maintains cash in a bank in
Mexico. This account, which had a balance of $2,590 at October 31,
2001, is denominated in pesos and is considered uninsured. The
Company also has recorded a refund receivable at October 31, 2001
from the overpayment of Mexican property taxes. This receivable,
originating from the payment of assessed taxes on the Company's
Mexican property concessions, is considered fully collectible.

DERIVATIVE INSTRUMENTS
The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No.133, "Accounting for
Derivative Instruments and Hedging Activities," as amended by SFAS
No.137, "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB No.133", and
SFAS No.138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities", which is effective for the Company as
of January 1, 2001. This standard establishes accounting and
reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, and for
hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the balance sheet
and measure those instruments at fair value.

If certain conditions are met, a derivative may be specifically
designated as a hedge, the objective of which is to match the
timing of gain or loss recognition on the hedging derivative with
the recognition of (i) the changes in the fair value of the hedged
asset or liability that are attributable to the hedged risk or
(ii) the earnings effect of the hedged forecasted transaction. For
a derivative not designated as a hedging instrument, the gain or
loss is recognized in income in the period of change.

Historically, the Company has not entered into derivatives
contracts to hedge existing risks or for speculative purposes.

At October 31, 2001 and 2000, the Company has not engaged in any
transactions that would be considered derivative instruments or
hedging activities.

ACCOUNTING PRONOUNCEMENTS
In September 2000, the FASB issued SFAS No.140 "Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities." This statement provides accounting and reporting
standards for transfers and servicing of financial assets and
extinguishment of liabilities and also provides consistent
standards for distinguishing transfers of financial assets that
are sales from transfers that are secured borrowings. SFAS No.140
is effective for recognition and reclassification of collateral
and for disclosures relating to securitization transactions and
collateral for fiscal years ending after December 15, 2000, and is
effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after March 31, 2001. The
Company believes that the adoption of this standard will not have
a material effect on the Company's results of operations or
financial position.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
SFAS No.142 is effective for fiscal years beginning after December
15, 2001. An early adoption provision exists for companies with
fiscal years beginning after March 15, 2001. On October 31, 2001,
the Company adopted SFAS No.142. Application of the
nonamortization provision of SFAS No.142 is expected to result in
no change in net income in fiscal 2002. The Company is currently
evaluating the impact of the transitional provisions of the
statement.

RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform to
the fiscal 2001 presentation.

PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Major additions and
improvements are capitalized. Minor replacements, maintenance and
repairs that do not increase the useful life of the assets are
expensed as incurred. Depreciation of property and equipment is
determined using the straight-line and accelerated methods over
the expected useful lives of the assets of five years.

IMPAIRED ASSET POLICY
In March 1995, the Financial Accounting Standards Board issued
SFAS No.121 titled "Accounting for Impairment of Long-lived
Assets." In complying with this standard, 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. The Company does not believe any adjustments are
needed to the carrying value of its assets at October 31, 2001.

MINERAL PROPERTIES
Costs of acquiring mineral properties are capitalized by project
area upon purchase or staking of the associated claims. Costs to
maintain the mineral rights and leases are expensed as incurred.
When a property reaches the production stage, the related
capitalized costs will be amortized, using the units of production
method on the basis of periodic estimates of ore reserves.

Mineral properties are periodically assessed for impairment of
value and any diminution in value is charged to operations at the
time of impairment. Should a property be abandoned, its
capitalized costs are charged to operations. The Company charges
to operations the allocable portion of capitalized costs
attributable to properties sold. Capitalized costs are allocated
to properties abandoned or sold based on the proportion of claims
abandoned or sold to the claims remaining within the project area.

REVENUE RECOGNITION POLICY
Revenues from sales of product will be recognized when the product
is shipped.

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 year ended
October 31, 2001 were $38,332. The exploration costs expensed
during the Company's exploration stage are $167,574.

STOCK-BASED COMPENSATION
In October 1995, the Financial Accounting Standards Board issued
SFAS No.123 titled "Accounting for Stock-Based Compensation." This
statement encourages, but does not require, companies to recognize
compensation expense for grants of stock, stock options, and other
equity instruments to employees based on fair value. Transactions
in equity instruments with non-employees for goods or services
must be accounted for on the fair value method. The Company has
adopted the fair value accounting prescribed by SFAS No.123.
F/S 12
METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 2001

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
PROVISION FOR TAXES
At October 31, 2001, the Company had net deferred tax assets of
$1,200,000, principally arising from net operating loss
carryforward 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 October 31, 2001.

At October 31, 2001, the Company has net operating loss
carryforward of approximately $5,000,000, which expire in the
years 2008 through 2021. The Company recognized approximately
$998,753 of losses for the issuance of common stock, stock options
and stock warrants for services in 2001, which were not deductible
for tax purposes.

EARNINGS PER SHARE
The Company has adopted SFAS No. 128, which provides for
calculation of "Basic" and "Diluted" earnings per share. Basic
earnings per share includes no dilution and is computed by
dividing net income available to common shareholders by the
weighted average common shares outstanding for the period.
Diluted earnings per share reflect the potential dilution of
securities that could share in the earnings of an entity similar
to fully diluted earnings per share. Although there were common
stock equivalents outstanding October 31, 2001, they were not
included in the calculation of earnings per share because they
would have been considered anti-dilutive.

NOTE 3 INVESTMENTS

The Company's securities investments are classified as available
for sale securities which are recorded at fair value in
investments on the balance sheet, with the change in fair value
during the period excluded from earnings and recorded net of tax
as a component of other comprehensive income. The Company has no
securities, which are classified as trading securities.

At October 31, 2001, the market values of investments were as
follows:

Boulder Total Return Fund $200,000
Eaton Vance Senior Income Trust 200,000
Pilgrim Prime Rate Trust 75,000
Money Market Funds 9,447
--------
484,447
========

NOTE 4 PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is
provided using the straight-line method over the estimated useful
lives of the assets. The useful lives of property, plant and
equipment for purposes of computing depreciation are five to seven
years. The following is a summary of property, equipment, and
accumulated depreciation:
October 31, October 31,
2001 2000
------ ------
Mining equipment $62,429 $62,429
Vehicles 23,618 23,618
Computer equipment 78,948 72,364
Furniture fixtures 9,135 9,135
----- -----
Total assets 174,130 167,546
Less accumulated depreciation (116,656) (88,158)
------- ------
$57,474 $79,388
====== ======
F/S 13
METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 2001

NOTE 4 PROPERTY AND EQUIPMENT (continued)
Depreciation expense for the years ended October 31, 2001 and 2000
was $28,498 and $25,830, respectively. The Company evaluates the
recoverability of property and equipment when events and
circumstances indicate that such assets might be impaired. The
Company determines impairment by comparing the undiscounted future
cash flows estimated to be generated by these assets to their
respective carrying amounts. Maintenance and repairs are expensed
as incurred. Replacements and betterments are capitalized. The
cost and related reserves of assets sold or retired are removed
from the accounts, and any resulting gain or loss is reflected in
results of operations.

NOTE 5 MINERAL PROPERTIES

SIERRA MOJADA MINING CONCESSIONS
In June of 1996, USMX (now named Dakota) and the Company entered
into a joint venture agreement, whereby the Company could acquire
a 65% interest in a mining concession named the Sierra Mojada
Project, located in Coahuila, Mexico. Under the terms of the
agreement, the Company was to contribute two million dollars
($2,000,000) in work commitments over the following seven years.

After the execution of the USMX agreement, Dakota's interest (35%)
in the joint venture was sold to an entity, which subsequently
defaulted on its joint venture obligations. This action in 1998
triggered the elimination of the joint venture and resulted in the
Company assuming 100% control of the Sierra Mojada concession
without the need to spend $2,000,000 to vest its interest.

During the period August 23, 1996 to September 2, 1997, the
Company executed five separate agreements for the acquisition of
exploration concessions in the same mining region as the Sierra
Mojada Project in Mexico. Each agreement enables the Company to
explore the underlying property by paying stipulated annual
payments, which shall be applied in full toward the contracted
purchase price of the related concession.

Under the terms of the agreements, the Company was obligated to
pay and in fact did pay $103,076 and $3,355,384 during the years
ended October 31, 2001 and 2000, respectively.

During August 2000, the Company made the final payment for the
first year and acquired title to the Unificacion Mineros Nortenos
Concession in the Sierra Mojada Project. With this transaction,
the Company has acquired title to all of its concessions at Sierra
Mojada.

NOTE 6 RELATED PARTY TRANSACTIONS

The Company receives rent-free office space in Coeur d'Alene,
Idaho from its president. The value of the space is not considered
materially significant for financial reporting purposes.

NOTE 7 COMMON STOCK

During the year ended October 31, 2001 the Company issued 20,000
shares of common stock for the exercise of warrants valued at
$10,760 and cash of $15,000. Additionally, 57,000 shares of common
stock were issued for services valued at $112,680 and cash of $390
and 250,000 shares of common stock with 125,000 warrants attached
were issued for $500,000 in cash.

During the year ended October 31, 2000, the Company sold 1,440,500
shares of its common stock for $3,968,625 cash, issued 120,000
shares of common stock for services valued $153,360, issued 15,000
shares of common stock for equipment valued at $25,000 and issued
950,000 shares of common stock for options exercised at $0.86 per
share.
F/S 14
METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 2001

NOTE 7 COMMON STOCK (continued)
During the year ended October 31, 1999, the Company sold 1,068,800
shares of common stock for $1,075,900 cash. In addition the
Company received $37,500 as a deposit toward the purchase of
50,000 shares (this stock was issued in December 1999) and
$300,000 for payment of subscriptions receivable. The Company also
issued 55,556 shares for payment of drilling expenses valued at
$50,000.

In February 1998, 200,000 shares of common stock were issued for a
mine database. The shares were valued at $1.625 per share,
resulting in a transaction valued at $325,000. Services valued at
$22,300 were paid with 41,800 shares of common stock. An
additional 1,398,500 shares of common stock were issued for
$1,065,445 cash and a subscription receivable of $300,000, between
February and October 1998.

In April 1997, 250,000 common stock shares were issued for cash of
$87,500 and 133,800 shares of common stock were issued for
services valued at $45,583. In May and June 1997, 181,600 shares
of common stock were issued for $63,560 cash and 62,500 shares of
common stock were issued for services valued at $21,875. In August
and October 1997, 420,000 and 75,000 shares of common stock were
issued for cash of $378,000 and $75,000, respectively.
Additionally, during August 1997, 100,200 shares of common stock
were issued for debt of $31,530 and 95,000 shares of common stock
for services valued at $95,000.

During November 1995, Metalline Mining Company's directors
approved the issuance of 45,000 shares of common stock for
services rendered at $0.01 per share. During June 1996, Metalline
Mining Company issued 900,000 shares of common stock for the
assignment of mineral rights in the Sierra Mojada Project in
Coahuila, Mexico valued at $0.01 per share.

During October 1996, Metalline Mining Company issued 150,000
shares of common stock for computer equipment valued at $15,000.
Also during October 1996, Metalline Mining Company issued 120,000
shares of common stock to Mr. Gorski and an additional 20,000
shares of common stock to Mr. Ryan for services rendered valued at
$14,000.

In January 1996, Mr. Carmen Ridland, in a private sale, sold a
controlling interest in the corporation to Mr. Howard Crosby. On
January 12, 1996, Mr. Ridland transferred control of Cadgie Co. to
Mr. Crosby and Mr. Robert Jorgensen.

The Company also issued 900,000 shares to Messrs. John Ryan,
Merlin Bingham, and Daniel Gorski, who had formed a partnership to
advance development of the mining concession located in Coahuila,
Mexico. The partnership had an informal joint venture agreement
with USMX, Inc. covering the mining concessions. By acquiring the
partnership interest, the Company was able to negotiate and sign a
formal joint venture agreement with USMX in July 1996. (See Note
4.)

In August 1996, the Company changed its name to Metalline Mining
Company.

On August 4, 1995 the directors of Cadgie Co. declared a 3:1
forward stock split of the outstanding Cadgie Co. shares, thus
increasing the number of outstanding shares from 192,160 to
576,480.

On August 31, 1994, the directors of Cadgie Co. declared a 1:5
reverse stock split of the outstanding Cadgie Co. shares, thus
reducing the number of outstanding shares from 960,800 to 192,160
shares.

The Company (Cadgie Co.) was formed in August of 1993 and
incorporated in November 1993 by Mr. Carman Ridland of Las Vegas,
Nevada as a spin-off from its predecessor, Precious Metal Mines,
Inc. The Company issued 960,800 of its $0.01 par value shares to
Precious Metal Mines, Inc. for 16 unpatented mining claims located
near Philipsburg, Montana comprising the Kadex property group.
Precious Metal Mines, Inc. distributed the 960,800 shares of
Cadgie Company to its shareholders. One share of Cadgie Co. was
exchanged for each share of Precious Metal Mines, Inc. held by
holders of record as of August 31, 1993.
F/S 15

METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 2001

NOTE 8 STOCK OPTIONS

Following is a summary of the stock options during the years
ending October 31, 2001 and 2000:

Weighted
Average
Number Exercise
Of Shares Price
--------- ---------
Outstanding at 11/1/99 950,000 $ .90
Granted - -
Exercised 950,000 -
Forfeited - .90
Expired - -
------- -------
Outstanding at 10/31/00 - $ -
======= =======
Options exercisable at 10/31/00 - -
======= =======
Weighted
Average
Number Exercise
Of Shares Price
--------- ----------
Outstanding at 11/1/00 - $ -
Granted 720,000 1.86
Exercised - -
Forfeited - -
Expired - -
-------- --------
Outstanding at 10/31/01 720,000 $ 1.86
======== ========
Weighted average fair value of options
granted during 2001 $ 1.02
========
Options exercisable at 10/31/01 720,000
========

The Company granted 720,000 options with exercise prices ranging
from $1.32 to $2.15 and expire at various dates through 2010. The
fair value of each option is estimated on the issue date using the
Black-Scholes Option Price Calculation. The following assumptions
were made in estimating fair value: risk free interest 5%,
volatility is 50% and expected life is 9 to 5 years. Consulting
expenses recognized for these options were $740,892 for the year
ended October 31, 2001.

NOTE 9 WARRANTS

During the year ended October 31, 2001 the Company issued 250,000
shares of stock with 125,000 warrants attached. These warrants
were valued at $3,424. Additionally 20,000 warrants were exercised
for $15,000 in cash and services valued at $10,760. The Company
also issued 80,000 warrants for services, which were valued at
$144,791.

At October 31, 2000, there were outstanding warrants to purchase
996,500 shares of the Company's common stock, at prices ranging
from $0.75 to $2.00 per share. The warrants, which became
exercisable in 1999, but have not been exercised, expire at
various dates through 2005. The Company has reserved 996,500
shares for the expected exercise of these warrants. These warrants
are valued at $543,980 using the method described below.

The fair value of each warrant is estimated on the issue date
using the Black-Scholes Option Price Calculation. The following
assumptions were made in estimating fair value: risk free interest
is 5%, volatility is 0.3 and 0.5 and expected life is 5 to 10
years. Consulting expenses recognized for these warrants were
$144,791 and $55,000 for the fiscal years ended October 31, 2001
and 2000, respectively.
F/S 16
METALLINE MINING COMPANY
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 2001

NOTE 10 COMMITMENTS AND CONTINGENCIES

COMPLIANCE WITH ENVIRONMENTAL REGULATIONS
The Company's mining activities are subject to laws and
regulations controlling not only the exploration and mining of
mineral properties, but also the effect of such activities on the
environment. Compliance with such laws and regulations may
necessitate additional capital outlays, affect the economics of a
project, and cause changes or delays in the Company's activities.

NOTE 11 JOINT VENTURE AGREEMENT

On October 7, 1999, the Company announced that it entered into a
five-year "earn-in" type of a joint venture agreement with North
Limited. The agreement gives North Limited the right to earn into
60% of the Company's Sierra Mojada Project by providing all funds
necessary to complete a feasibility study delivered in no more
than five years that is acceptable to international banking
institutions for lending development capital. North Limited is a
large Australian mining company based in Melbourne, Australia and
was known as North Broken Hill Peko before a name change in 1994.
North Limited is dedicated to natural resource development that
produces iron, uranium, base and precious metals and forestry
products. At October 31, 2001, North Limited had no vested
interest in the Sierra Mojada Project.

NOTE 12 SUBSEQUENT EVENTS

On November 15, 2001, the Company entered into an agreement with
Compania Minera La Parrena S.A. de C.V. ("Penoles") whereby
Penoles may earn the right to acquire a 60% interest in certain
mining concessions located in the Sierra Mojada region of
Coahuila, Mexico. The earn-in right is contingent upon the
following: delivery by Penoles within four years of a pre-
feasibility study, completion by Penoles of $1,000,000 of
qualified expenditures on the aforementioned mining consessions,
and Penoles's purchase of up to 250,000 shares of Metalline's
common stock $2.00 per share.
[The balance of this page has been intentionally left blank.]
F/S 17
METALLINE MINING COMPANY
An Exploration Stage Company
October 31, 2001

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.

METALLINE MINING COMPANY

BY: /s/ Merlin Bingham
-----------------------
Merlin Bingham,
its President
Date: January 28, 2002

BY: /S/ WAYNE SCHOONMAKER
----------------------
Wayne Schoonmaker, its
Principal Accounting Officer
Date: January 28, 2002

Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in
the capacities and on the dates indicated:

By: /s/ Merlin Bingham By: /s/Jim Czirr
-------------------- ---------------------
Merlin Bingham Jim Czirr
Director Director
Date: January 28, 2002 Date: January 28, 2002

By: /s/ Daniel Gorski By: /s/Wayne Schoonmaker
-------------------- ---------------------
Daniel Gorski Wayne Schoonmaker
Vice President/Director Secretary/Treasurer,
Date: January 28, 2002 Director
Date: January 28, 2002

F/S 18