UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-QSB

[ x ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2006

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 333-130696

TOUCHSTONE MINING LIMITED
(Exact name of registrant as specified in its charter)

NEVADA 98-0468420
(State of other jurisdiction of incorporation or (IRS Employer Identification Number)
organization)  

808 Nelson Street
Suite 2103 Vancouver, British Columbia
Canada V6Z 2H2
(Address of principal executive offices)

(604) 684-7619
(Registrant's telephone number, including area code)

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

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

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As at July 31, 2006 there were 3,100,000 common shares.

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


PART I. FINANCIAL INFORMATION

ITEM 1. INTERIM FINANCIAL STATEMENTS


TOUCHSTONE MINING LIMITED

(An Exploration Stage Company)

INTERIM FINANCIAL STATEMENTS

JUNE 30, 2006

Expressed in US Funds

Unaudited



Touchstone Mining Limited Statement 1
(An Exploration Stage Company)  
Interim Balance Sheet  
Expressed in US Funds  

    As at     As at  
    June 30,     September 30,  
    2006     2005  
ASSETS   (Unaudited)     (Audited)  
Current            
     Cash and cash equivalents $  43,936   $  11,986  
     Prepaid expenses (Note 5)   -     15,000  
  $  43,936   $  26,986  
             
             
             
             
LIABILITIES            
             
Current            
     Accrued liabilities $  2,000   $  3,500  
     Due to related party (Note 4)   29,033     15,383  
    31,033     18,883  
             
             
Going Concern (Note 1)            
             
             
             
             
STOCKHOLDERS’ EQUITY            
             
Capital Stock (Note 3)            
     Authorized:            
               100,000,000 common shares, $0.00001 par value            
             
     Issued, allotted and outstanding shares:            
                         600,000 common shares – Statement 3   6     6  
                         2,500,000 common shares allotted – Statement 3   25     -  
     Capital in excess of par value – Statement 3   61,969     11,994  
     Deficit accumulated during the exploration stage - Statement 3   (49,097 )   (3,897 )
Equity Statement 3   12,903     8,103  
  $  43,936   $  26,986  

- See Accompanying Notes -



Touchstone Mining Limited Statement 2
(An Exploration Stage Company)  
Interim Statements of Loss  
Expressed in US Funds  
Unaudited  

    Cumulative from              
    Inception              
    (September 12,     Nine-Months     Three-Months  
    2005) to   Ended     Ended  
    June 30, 2006     June 30, 2006     June 30, 2006  
 Expenses                  
       Professional fees $  45,400   $  41,609   $  9,193  
       Office and administrative   197     91     (158 )
                   
 Loss Before Other Items   (45,597 )   (41,700 )   (9,035 )
                   
 Other Items                  
       Mineral property costs   (3,500 )   (3,500 )   -  
 Loss for the Period $  (49,097 ) $  (45,200 ) $  (9,035 )
                   
                   
                   
                   
Basic and Diluted Loss per Common Share   (0.07 ) $ (0.07 ) $ (0.01 )
                   
                   
                   
Weighted Average Number of Shares Outstanding   673,260     673,260     817,780  

- See Accompanying Notes -



Touchstone Mining Limited Statement 3
(An Exploration Stage Company)  
Interim Statements of Stockholders’ Equity  
Expressed in US Funds  
Unaudited  

                      Deficit        
                      Accumulated        
                Capital in     During the        
    Common Shares     Excess of     Exploration        
    Shares     Amount     Par Value     Stage     Total  
                               
Inception – September 12, 2005      $ -   $  -   $  -   $  -  
   Common shares issued for cash                              
      at $0.02 per share   600,000     6     11,994     -     12,000  
   Loss for the period   -     -     -     (3,897 )   (3,897 )
Balance – September 30, 2005                              
(audited)   600,000     6     11,994     (3,897 )   8,103  
                               
   Loss for the period   -     -     -     (32,169 )   (32,169 )
Balance – December 31, 2005                              
(unaudited)   600,000     6     11,994     (36,066 )   (24,066 )
                               
   Loss for the period   -     -     -     (3,996 )   (3,996 )
Balance – March 31, 2006                              
(unaudited)   600,000     6     11,994     (40,062 )   (28,062 )
   Common shares allotted for cash                              
     at $0.02 per share   2,500,000     25     49,975     -     50,000  
                               
   Loss for the period   -     -     -     (9,035 )   (9,035 )
Balance – June 30, 2006                              
(unaudited)   3,100,000     $ 31   $  61,969   $  (49,097 ) $  12,903  

- See Accompanying Notes -



Touchstone Mining Limited Statement 4
(An Exploration Stage Company)  
Interim Statements of Cash Flows  
Expressed in US Funds  
Unaudited  

    Cumulative           Three-  
    from Inception     Nine-Months     Months  
    (September 12,     Ended     Ended  
    2005) to June   June 30,     June 30,  
Cash Resources Provided By (Used In)   30, 2006     2006     2006  
Operating Activities                  
     Loss for the period $  (49,097 ) $  (45,200 ) $  (9,035 )
                   
Changes in operating assets and liabilities:                  
     Prepaid expense   -     15,000     -  
     Accrued liabilities   2,000     (1,500 )   (500 )
    (47,097 )   (31,700 )   (9,535 )
                   
Financing Activities                  
     Advances from related party   29,033     13,650     2,770  
     Shares subscription received in advance   -     -     (15,000 )
     Issuance of capital stock   12,000     -     -  
     Common shares allotted   50,000     50,000     50,000  
    91,033     63,650     37,770  
                   
Net Increase in Cash and Cash Equivalents   43,936     31,950     28,235  
     Cash and cash equivalent position – Beginning of period   -     11,986     15,701  
Cash and Cash Equivalents Position – End of Period $  43,936   $  43,936   $  43,936  
                   
                   
                   
                   
Supplemental Cash Flow Disclosure:                  
     Cash paid for interest $  -   $  -   $  -  
     Cash paid for income taxes $  -   $  -   $  -  

- See Accompanying Notes -



Touchstone Mining Limited
(An Exploration Stage Company)
Notes to Interim Financial Statements
June 30, 2006
Expressed in US Funds
Unaudited
 

1.

Organization and Going Concern

     

The Company is a Nevada corporation incorporated on September 12, 2005. It is based in Vancouver, British Columbia, Canada.

     

The Company is an exploration stage company that intends to engage principally in the acquisition, exploration and development of resource properties. The Company signed an option agreement to acquire a property (Note 6). Prior to this, the Company’s activities have been limited to its formation and the raising of equity capital.

     

Going Concern and Liquidity Considerations

     

The accompanying unaudited interim financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As at June 30, 2006, the Company has a loss from operations of $45,200 and an accumulated deficit of $49,097. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending September 30, 2006.

     

The ability of the Company to emerge from the exploration stage is dependent upon, among other things, obtaining additional financing to continue operations, explore and develop mineral properties and the discovery, development and sale of ore reserves.

     

In response to these problems management intends to raise additional funds through public or private placement offerings.

     

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying unaudited interim financial statements do not include any adjustments that might result from the outcome of this uncertainty.

   
     
2.

Significant Accounting Policies

     
a)

Basis of Presentation

     

The accounting and reporting policies of the Company conform to United States generally accepted accounting principles applicable to exploration stage enterprises.

     
b)

Fiscal Periods

     

The Company’s fiscal year end is September 30. The Company was incorporated on September 12, 2005; therefore, there are no comparative figures for the same period ended June 30, 2006.

     
c)

Use of Estimates

     

The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.




Touchstone Mining Limited
(An Exploration Stage Company)
Notes to Interim Financial Statements
June 30, 2006
Expressed in US Funds
Unaudited
 

2.

Significant Accounting Policies - Continued

     
d)

Cash and Cash Equivalents

     

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.

     
e)

Mineral Property Costs

     

The Company has been in the exploration stage since its formation in September 12, 2005 and has not yet realized any revenue from its planned operations. It is primarily engaged in the acquisition, exploration and development of mining properties. Mineral property acquisition and exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property, are capitalized. Such costs will be depreciated using the units-of-production method over the estimated life of the probable reserve.

     
f)

Environmental Expenditures

     

The operations of the Company have been, and may in the future, be affected from time to time in varying degree by changes in environmental regulations, including those for future reclamation and site restoration costs. Both the likelihood of new regulations and their overall effect upon the company vary greatly and are not predictable. The Company's policy is to meet or, if possible, surpass standards set by relevant legislation, by application of technically proven and economically feasible measures.

     

Environmental expenditures that relate to ongoing environmental and reclamation programs are charged against earnings as incurred or capitalized and amortized depending on their future economic benefits. Estimated future reclamation and site restoration costs, when the ultimate liability is reasonably determinable, are charged against earnings over the estimated remaining life of the related business operation, net of expected recoveries.

     
g)

Fair Value of Financial Instruments and Derivative Financial Instruments

     

The Company has adopted Statement of Financial Accounting Standards (“SFAS”) Number 119, “Disclosure About Derivative Financial Instruments and Fair Value of Financial Instruments.” The carrying amounts of cash and cash equivalents and amount due to related party approximate their fair values because of the short maturity of these items. Certain fair value estimates may be subject to and involve, uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. The Company does not hold or issue financial instruments for trading purposes, nor does it utilize derivative instruments in the management of its foreign exchange, commodity price or interest rate market risks.

     
h)

Segmented Reporting

     

SFAS Number 131, “Disclosure About Segments of an Enterprise and Related Information”, changed the way public companies report information about segments of their business in their quarterly reports issued to shareholders. It also requires entity-wide disclosures about the products and services an entity provides, the material countries in which it holds assets and reports revenues and its major customers.




Touchstone Mining Limited
(An Exploration Stage Company)
Notes to Interim Financial Statements
June 30, 2006
Expressed in US Funds
Unaudited
 

2.

Significant Accounting Policies Continued

       
i)

Income Taxes

       

Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes in accordance with SFAS Number 109, “Accounting for Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carryforwards when realization is more likely than not.

       
j)

Earnings (Loss) per Share

       

The Company has adopted Financial Accounting Standards Board (“FASB”) Statement Number 128, “Earnings per Share,” (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying unaudited interim financial statements, basic earnings (loss) per share is computed by dividing net income/loss by the weighted average number of shares of common stock outstanding during the period. Allotted shares are not included in the EPS calculation.

       
k)

Risks and Uncertainties

       

The Company operates in the resource exploration industry that is subject to significant risks and uncertainties, including financial operational, technological and other risks associated with operating a resource exploration business, including the potential risk of business failure.

       
l)

Foreign Currency Translations

       

The Company’s functional currency is the Canadian dollar. The Company’s reporting currency is the U.S. dollar. All transactions initiated in Canadian dollars are translated into U.S. dollars in accordance with SFAS No. 52 "Foreign Currency Translation" as follows:

       
i)

Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date.

ii)

Equity at historical rates.

iii)

Revenue and expense items at the average rate of exchange prevailing during the period.

       

Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ equity as a component of comprehensive income or loss. Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income.

       

For foreign currency transactions, the Company translates these amounts to the Company’s functional currency at the exchange rate effective on the invoice date. If the exchange rate changes between the time of purchase and the time actual payment is made, a foreign exchange transaction gain or loss results which is included in determining net income for the period.




Touchstone Mining Limited
(An Exploration Stage Company)
Notes to Interim Financial Statements
June 30, 2006
Expressed in US Funds
Unaudited
 

2.

Significant Accounting Policies Continued

     
m)

Concentrations of Credit Risk

     

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management also routinely assesses the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

     
n)

Derivative Financial Instruments

     

The Company was not a party to any derivative financial instruments during the reported fiscal period.

     
o)

Stock-Based Compensation

     

Effective January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123(R), “Share-Based Payment”, which establishes accounting for equity instruments exchanged for employee services. Under the provisions of SFAS 123(R), stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employees’ requisite service period (generally the vesting period of the equity grant). Before January 1, 2006, the Company accounted for stock-based compensation to employees in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and complied with the disclosure requirements of SFAS No. 123, “Accounting for Stock-Based Compensation”. The Company adopted FAS 123(R) using the modified prospective method, which requires the Company to record compensation expense over the vesting period for all awards granted after the date of adoption, and for the unvested portion of previously granted awards that remain outstanding at the date of adoption. Accordingly, financial statements for the periods prior to January 1, 2006 have not been restated to reflect the fair value method of expensing share-based compensation. Adoption of SFAS No. 123(R) does not change the way the Company accounts for share-based payments to non-employees, with guidance provided by SFAS 123 (as originally issued) and Emerging Issues Task Force Issue No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services”.




Touchstone Mining Limited
(An Exploration Stage Company)
Notes to Interim Financial Statements
June 30, 2006
Expressed in US Funds
Unaudited
 

2.

Significant Accounting Policies - Continued

     
p)

Comprehensive Income (Loss)

     

SFAS No. 130, “Reporting Comprehensive Income”, establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements. For the period ended June 30, 2006, the Company had no items of other comprehensive income. Therefore, net loss equals comprehensive loss for the period ended June 30, 2006.

     
     
3.

Capital Stock

     
a)

Authorized Stock

     

The Company has authorized 100,000,000 common shares with a par value of $0.00001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholder of the Company is sought.

     
b)

Share Issuance

     

Since inception, the Company has issued 600,000 common shares at $0.02 per share for total proceeds of $12,000 being $6 for par value shares and $11,994 for capital in excess of par to directors and officers of the Company.

     

The Company has allotted for issuance an additional 2,500,000 common share at $0.02 per share for total proceeds of $50,000 being $25 for par value shares and $49,975 for capital in excess of par to 44 independent investors.

     
     
4.

Due to Related Party

     

As of June 30, 2006, the Company was obligated to a director, who is also an officer, and a shareholder, for a non-interest bearing demand loan with a balance of $29,033.

   
     
5.

Commitments

     

The Company signed an agreement to pay $25,000 in legal fees once the SB-2 Registration Statement has been declared effective. The Company advanced its legal counsel $15,000 which was accordingly classified as prepaid expenses. During the nine month period ended June 30, 2006, the SB-2 registration statement was declared effective. The entire $25,000 has been classified as a professional fee expense. The remaining $10,000 owing was paid during the period.

   



Touchstone Mining Limited
(An Exploration Stage Company)
Notes to Interim Financial Statements
June 30, 2006
Expressed in US Funds
Unaudited
 

6.

Mineral Property Costs

   

By agreement dated November 23, 2005 with Mineral Exploration Services Ltd. (“MES”), the Company acquired an option to earn a 100% interest in certain properties consisting of 10 unpatented mineral claims, known as the Boulder Claims, (the “Property”) located in Humbolt County, Nevada, USA.

   

Upon execution of the agreement, MES transferred 100% interest in the mineral claims to the Company for $50,000 to be paid, at the Company’s option, as follows:


      Cash Payments  
  Upon signing of the agreement and transfer of title (paid) $  3,500  
  On or before November 23, 2006   3,500  
  On or before November 23, 2007   8,000  
  On or before November 23, 2008   10,000  
  On or before November 23, 2009   10,000  
  On or before November 23, 2010   15,000  
    $  50,000  

All payments shall be made within 30 days of the due date or the Property and all rights will revert back to MES.

In addition, the Company must incur exploration expenditures of $50,000 on the Property over five years. A professional geologist has recommended a work program of $18,619 that must be completed in 2006. The program consists of trenching, sampling and geological mapping to determine the source of certain high-grade gold specimens found on the Property.

As of June 30, 2006, the Company spent $3,500 on property option payments and no exploration has been performed on the Property.

The Company is also responsible for maintaining the mineral claims in good standing by paying all the necessary rents, taxes, and filing fees associated with the Property. As of June 30, 2006, the Company met these obligations.

The Property is subject to a 3% Net Smelter Return (“NSR”) to MES. The NSR can be reduced to 1.5% upon payment to MES of $1,000,000 at any time.



Touchstone Mining Limited
(An Exploration Stage Company)
Notes to Interim Financial Statements
June 30, 2006
Expressed in US Funds
Unaudited
 

7.

New Accounting Pronouncements

     

Recent accounting pronouncements that are listed below did and/or are not currently expected to have a material effect on the Company’s financial statements.

     

FASB Statements:

     
  • Number 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.

  • Number 151, Inventory Costs – an amendment of ARB No. 43, Chapter 4

  • FAS 153, Exchanges of Nonmonetary Assets.

  • FAS 154, Accounting Changes and Error Corrections.

  • FAS 155, Accounting for Certain Hybrid Financial Instruments.

  • FAS 156, Accounting for Servicing of Financial Assets.



    ITEM 2. PLAN OF OPERATION

         This report includes a number of forward looking statements that reflect our current views with respect to future events and financial performance. Forward looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward looking statements, which apply only as of the date of this prospectus. These forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

    Plan of Operation

         We are a start-up, exploration stage corporation and have not yet generated or realized any revenues from our business operations.

         Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we begin removing and selling minerals. There is no assurance we will ever reach this point. Accordingly, we must raise cash from sources other than the sale of minerals found on the property. Our only other source for cash at this time is investments by others. We must raise cash to implement our project and stay in business. The $50,000 raised from the initial offering together with the loans and purchase of shares by the directors ($29,033 in loans and $12,000 in share purchases) will last a minimum of twelve months.

         We will be conducting research in the form of exploration of the property. Our exploration program is explained in as much detail as possible in the business section of this prospectus. We are not going to buy or sell any plant or significant equipment during the next twelve months.

         The property consists of 10 unpatented mineral claims called the Boulder group in Humboldt County, Nevada.

         Our exploration target is to find an ore body containing gold. Our success depends upon finding mineralized material. This includes a determination by our consultant if the property contains reserves. The Company has selected William Utterback of Gold Property Services, Winnemucca, Nevada to contract the exploration work on the mineral claims. Mr. Utterback did the initial report on the property and will complete the initial recommendations contained in that report. Mr. Utterback is a professional Geologist and lives within 50 miles of the Company Mineral Claims.


    Mineralized material is a mineralized body, which has been delineated by appropriate spaced drilling or underground sampling to support sufficient tonnage and average grade of metals to justify removal. If we do not find mineralized material or we cannot remove mineralized material, either because we do not have the funds to do it or because it is not economically feasible to do it, we will cease operations and you will lose your investment.

         In addition, we may not have enough money to complete our exploration of the property. If it turns out that we have not raised enough money to complete our exploration program, we will try to raise additional funds from a second public offering, a private placement, and/or loans. At the present time, we have not made any plans to raise additional money and there is no assurance that we would be able to raise additional money in the future. If we need additional money and can’t raise it, we will have to suspend or cease operations.

         We must conduct exploration to determine what amount of minerals, if any, exist on our properties and if any minerals, which are found, can be economically extracted and profitably processed.

         The property is undeveloped raw land. Exploration and surveying has not been initiated and will not be initiated until we raise money in this offering. That is because we do not have money to start exploration. We intend to start exploration operations in September 2006 weather permitting. To our knowledge, the property has never been mined. The only event that has occurred is the staking of the property at the direction of Mineral Exploration Services and a property examination and report by Professional Geologist William Utterback.

         Before minerals retrieval can begin, we must explore for and find mineralized material. After that has occurred we have to determine if it is economically feasible to remove the mineralized material. Economically feasible means that the costs associated with the removal of the mineralized material will not exceed the price at which we can sell the mineralized material. We cannot predict what that will be until we find mineralized material.

         We do not know if we will find mineralized material. We believe that activities occurring on adjoining properties are not material to our activities. The reason is that what ever is located under adjoining property may or may not be located under the property.

         We do not claim to have any minerals or reserves whatsoever at this time on any of the properties.

         We intend to implement an exploration program, which consists of establishing a grid and taking samples at regular intervals. Trenching with a backhoe or similar equipment


    will be utilized to uncover prospective areas. The samples will be analyzed to determine if elevated amounts of minerals are present. The results will be plotted on a map to determine where the elevated areas of mineralization occur. Rock samples and geological mapping and prospecting will be done by competent professionals. Preliminary geophysical surveying will also be done if sufficient funds are available to try and locate anomalies, which may be caused by mineralization, which is not evident on surface. Based upon the results of the exploration Mr. Scheving will determine, in consultation with our consultants, if the property is to be dropped or further exploration work done. Mr. Scheving will not receive fees for his services. The proceeds from this offering are designed only to fund the costs of an exploration program recommended by professional geologist, William Utterback. Additional funding will be required to take the property to a more advanced stage of exploration. We intend to take our samples to Chemex Laboratories, analytical chemists geochemists, and registered assayers. Chemex has an office in Winnemucca near our mineral claims.

         We estimate the cost of the proposed work program to be $18,619.

         We estimate it will take up to 15 days to complete the program. We are scheduled to begin the program in September 2006 weather conditions permitting.

         We do not intend to interest other companies in the property if we find mineralized materials. We intend to try to develop the reserves ourselves through the use of consultants. We have no plans to interest other companies in the property if we do not find mineralized material.

         If we are unable to complete any phase of exploration because we do not have enough money, we will cease operations until we raise more money.

         We do not intend to hire additional employees at this time. All of the work on the property will be conducted by unaffiliated independent contractors that we will hire. The independent contractors will be responsible for surveying, geology, engineering, exploration, and excavation. The geologists will evaluate the information derived from the exploration and excavation and the engineers will advise us on the economic feasibility of removing the mineralized material.

    Limited Operating History; Need for Additional Capital

         There is no historical financial information about us upon which to base an evaluation of our performance. We are an exploration stage corporation and have not generated any revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.

         To become profitable and competitive, we conduct research and exploration of our properties before we start production of any minerals we may find. We are seeking equity


    financing to provide the capital required to implement our research and exploration phases. We believe that the funds raised from the SB-2 offering, sales of shares to directors, and loans from directors and others, will allow us to operate for one year.

         We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.

    Liquidity and Capital Resources

         To meet our need for cash we have rasied money from an SB2 offering. We cannot guarantee that we will be able to raise enough money through this offering to stay in business. Whatever money we do raise, will be applied to the items set forth in the Use of Proceeds section of our prospectus. If we find mineralized material and it is economically feasible to remove the mineralized material, we will attempt to raise additional money through a subsequent private placement, public offering or through loans. If we do not raise all of the money we need from this offering to complete our exploration of the property, we will have to find alternative sources, like a second public offering, a private placement of securities, or loans from our officers or others.

         We have discussed this matter with our officers and directors and Mr. Scheving has agreed to pay the cost of reclamation of the property should mineralized material not be found thereon. Mr. Scheving has advanced $29,033 to date. At the present time, we have not made any arrangements to raise additional cash, other than through the initial offering. If we need additional cash and cannot raise it we will either have to suspend operations until we do raise the cash, or cease operations entirely. The funds raised in this offering, together with the loans advanced, will allow the company to operate for a minimum of one year. Other than as described in this paragraph, we have no other financing plans.

         We acquired one property containing ten claims. The property is staked and we expect to start exploration operations in September 2006, weather permitting. As of the date of this report we have yet to being operations and therefore we have yet to generate any revenues.

         Since inception, we have issued 600,000 shares of our common stock to Directors and received $12,000. On June 22, 2006 the initial offering of 2,500,000 was completed and the $50,000 USD was removed from the conditions of the Trust account. A total of 3,100,000 shares have been allocated for a total cash consideration of $62,000. Island Stock Transfer agency has been retained to act as the Company Transfer Agent.

         We have received $29,033 in loans from Mr. Scheving, one of our directors.

         As of the date of this report, we have yet to begin operations and therefore have not generated any revenues.


         We issued 600,000 shares of common stock pursuant to the exemption from registration set forth in section 4(2) of the Securities Act of 1933 in September 2005. The purchase price of the shares was $12,000. This was accounted for as an acquisition of shares. Mr. Scheving covered our initial expenses of $25,360 for incorporation and legal fees and $3,673 for various office expenses and working capital. The amount owed to Mr. Scheving is non-interest bearing, unsecured and due on demand. Further the agreement with Mr. Scheving is oral and there is no written document evidencing the agreement.

         As of June 30, 2006, our total assets were $43,936 and our total liabilities were $31,033

    ITEM 3. CONTROLS AND PROCEDURES

    Disclosure Controls and Procedures

         Douglas W. Scheving, our Chief Executive Officer and Jack BesMargian, our Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this quarterly report (the Evaluation Date). Based on such evaluation, they have concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective in alerting us on a timely basis to material information required to be included in our reports filed or submitted under the Exchange Act.

    Changes in Internal Controls

         There were no significant changes in our internal controls or, to the Company's knowledge, in other factors that could significantly affect the Company's disclosure controls and procedures subsequent to the date the Company carried out this evaluation.

    PART II - OTHER INFORMATION

    ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

         On January 24, 2006, our public offering was declared effective by the SEC (SEC file no. 333-130696). On June 22, 2006 the sale of the minimum offering of 2,500,000 common shares at $0.02 per share was completed and the offering was closed. There is no underwriter involved in our public offering. As of July 31, 2006, we have allotted for issuance 3,100,000 shares for cash proceeds of $62,000. The Company retained Island Stock Transfer of St. Petersburg Florida to act as the Company transfer agent. No shares have been issued as of August 08, 2006.

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



    (a)

    The following Exhibits are attached hereto:

      


      Exhibit No. Document Description
         
      31.1

    Certification of Principal Executive Officer pursuant to Rule 13a-15(a) and Rule 15d-15(a), promulgated under the Securities Exchange Act of 1934, as amended.

         
      31.2

    Certification of Principal Financial Officer pursuant to Rule 13a-15(a) and Rule 15d-15(a), promulgated under the Securities Exchange Act of 1934, as amended.

         
      32.1

    Certification of Chief Executive Officer Pursuant To 18 U.S.C. Section 1350, as adopted pursuant to Section 302 Of The Sarbanes-Oxley Act of 2002.

         
      32.2

    Certification of Chief Financial Officer Pursuant To 18 U.S.C. Section 1350, as adopted pursuant to Section 302 Of The Sarbanes-Oxley Act of 2002.


    (b)

    Reports on Form 8-K

      

    The Company has not filed any reports on Form 8-K during the nine-month period ending June 30, 2006.

    SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 14th day of August, 2006.

      TOUCHSTONE MINING LIMITED
      (Registrant)
         
      BY: /s/ Douglas W. Scheving
         
        Douglas W. Scheving
        President, Chief Executive Officer, and
        member of the Board of Directors

    BY: /s/ Jack N. BesMargian
       
      Jack N. BesMargian
    Secretary, Treasurer, Principal Financial Officer,
    Principal Accounting Officer, and
    member of the Board of Directors