STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-QSB

x

[] Transition Report pursuant to  or 15(d) of the Securities Exchange Act of 1934
For the transition period to _________ to _________

Commission File Number 000-30965

KLONDIKE STAR MINERAL CORPORATION

(Exact name of small Business Issuer as specified in its

charter)

|**Delaware**                             | **91-1980708**                   
|---------------------------------------- | ---------------------------------
|(State or other jurisdiction of          | (IRS Employer Identification No.)
|incorporation or organization)           |                                  
|                                         |                                  
|P.O. Box 20116,
1031- 10 Mile Road       |                                  
|**Whitehorse, Yukon, Canada**            | **Y1A 7A2**                      
|(Address of principal executive offices) | (Postal or Zip Code)             



Issuer's telephone number, including area code:

None

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

Check whether the issuer (1) filed all reports required to be filed by

Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such

reports), and (2) has been subject to such filing requirements for the past days [x] Yes [ ]No

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

State the number of shares outstanding of each of the issuer's classes of

common stock, as of the latest practicable date: 2,000,000 shares of Series

A, convertible, and 26,192,800 shares of common stock, both $0.0001 par value

outstanding as of May 31, 2006

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

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

The accompanying unaudited financial statements have been prepared in

accordance with the instructions to Form 10-QSB and Item 310 (b) of Regulation

S-B, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash

flows, and stockholders' equity in conformity with generally accepted accounting

principles. In the opinion of management, all adjustments considered necessary

for a fair presentation of the results of operations and financial position have

been included and all such adjustments are of a normal recurring nature.

Operating results for the three months ended May 31, 2006 are not necessarily

indicative of the results that can be expected for the year ending February 28,

2007.

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KLONDIKE STAR MINERAL CORPORATION FINANCIAL STATEMENTS
 
May 31, 2006




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KLONDIKE STAR MINERAL CORPORATION

May 31, 2006

TABLE OF CONTENTS



FINANCIAL STATEMENTS

> BALANCE SHEETS . . . . . . . . .
> .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         . . . . . . . . . . . . . . . . . . . . . . . . . . 1
> STATEMENTs OF OPERATIONS . . . . . .
> .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         . . . . . . . . . . . . . . . . . . . . 2
> Statement of Stockholders' Equity 
> .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         . . . . . . . . . . . . . . . . . . . . . . . . . . 3
> StatementS of Cash Flows. . . . . . .
> .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         . . . . . . . . . . . . . . . . . . . . . . . . . . .
> ..4

NOTES TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . .
.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.. . 5



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KLONDIKE STAR MINERAL CORPORATION(An Exploration Stage Company)
BALANCE SHEET






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

1

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KLONDIKE STAR MINERAL CORPORATION(An Exploration Stage Company)
STATEMENT OF OPERATIONS




The accompanying condensed notes are an integral part of these

financial statements.

2

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KLONDIKE STAR MINERAL CORPORATION(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY




The accompanying condensed notes are an integral part of these

financial statements.

3

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KLONDIKE STAR MINERAL CORPORATION(An Exploration Stage Company)
STATEMENT OF CASHFLOWS




The accompanying condensed notes are an integral part of these

financial statements.

4

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KLONDIKE STAR MINERAL CORPORATION

(An Exploration Stage Company)

Condensed Notes to the Financial     Statements

May 31, 2006


NOTE 1 -DESCRIPTION OF BUSINESS

Klondike Star Mineral Corporation (hereinafter "the Company")

is engaged in mineral exploration in the Yukon Territory, Canada. The Company

was originally incorporated in 1999 under the laws of the State of Delaware. The

Company was also registered in the Yukon Territory, Canada effective June 22,

2004. The Company maintains offices in Bellevue, Washington and Whitehorse,

Yukon Territory.

The Company was originally incorporated as Cyberbiz, Inc.,

later changed its name to Urbanfind, Inc. and again in 2004 changed its name to

Klondike Star Mineral Corporation. The Company's fiscal year-end is the last

calendar day of February.

Historically, the Company has been principally engaged in an

internet-based business. Upon its acquisition of certain mining claims in

December 2003, the Company began a new exploration stage as a minerals

exploration company.

As the Company is in the exploration stage, it has not

realized any revenues from its planned operations.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The foregoing unaudited interim financial statements have

been prepared in accordance with generally accepted accounting principles for

interim financial information and with the instructions to Form 10-QSB and

Regulation S-B as promulgated by the Securities and Exchange Commission ("SEC").

Accordingly, these financial statements do not include all of the disclosures

required by generally accepted accounting principles in the United States of

America for complete financial statements. These unaudited financial statements

should be read in conjunction with the audited financial statements for the year

ended February 28, 2006. In the opinion of management, the unaudited interim

financial statements furnished herein include all adjustments, all of which are

of a normal recurring nature, necessary for a fair statement of the results for

the interim period presented. Operating results for the three-month period ended

May 31, 2006 are not necessarily indicative of the results that may be expected

for the year ending February 28, 2007.

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 Methods

The Company's financial statements are prepared using the

accrual basis of accounting in accordance with accounting principles generally

accepted in the United States of America.

Mineral Exploration and Development Costs

All exploration expenditures are expensed as incurred.

Significant property acquisition payments for active exploration properties are

capitalized. If no minable ore body is discovered, previously capitalized costs

are expensed in the period the property is abandoned. Expenditures to develop

new mines, to define further mineralization in existing ore bodies, and to

expand the capacity of operating mines, are capitalized and amortized on a units

of production basis over proven and probable reserves.

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 sold based on the proportion of claims sold to the

claims remaining within the project area.

Mineral Properties

Costs of acquiring mineral properties are capitalized by

project area upon purchase 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 unamortized 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.

Use of Estimates

The preparation of financial statements in accordance with

generally accepted accounting principles requires the use of estimates and

assumptions that affect the reported amounts of assets and liabilities,

disclosure of contingent assets and liabilities known to exist as of the date

the financial statements are published, and the reported amounts of revenues and

expenses during the reporting period. Uncertainties with respect to such

estimates and assumptions are inherent in the preparation of the Company's

financial statements; accordingly, it is possible that the actual results could

differ from these estimates and assumptions which could have a material effect

on the reported amounts of the Company's financial position and results of

operations.

Going Concern

As shown in the financial statements, the Company incurred a

net loss of approximately $1,859,000 for the three months ended May 31, 2006 and

has an accumulated deficit of approximately $43,334,000 since inception of the

Company's exploration stage (December 8, 2003). The Company currently has no

revenues and no operating mining properties.

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. Management's plans include actively

seeking additional capital and management believes that new properties can

ultimately be 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 its endeavors.

The Company's management believes that it will be able to

generate sufficient cash from public or private debt or equity financing for the

Company to continue to operate based on current expense projections of

$11,000,000 for fiscal year ending in 2007. The Company has approximately

$4,530,000 in cash at May 31, 2006.

NOTE 3 - PROPERTY AND EQUIPMENT

Capital assets are recorded at cost. Depreciation is

calculated using the straight-line method over three to five years. The

following is a summary of property, equipment, and accumulated depreciation:

|                                 | Cost        | Accumulated Depreciation | :         | Net Book Value

May 31, 2006 |             | Net Book Value February 28, 2006
|-------------------------------- | ----------- | ------------------------ | --------- | ---------------------------- | ----------- | --------------------------------
|                                 |             |                          |           |                              |             |                                 
|Depreciable Capital Assets:      |             |                          |           |                              |             |                                 
|Movable structures               | $ 666,276   |                          | $ 115,069 |                              | $ 551,207   |                                 
|Leasehold improvements           | 289,086     |                          | 90,453    |                              | 198,633     |                                 
|Vehicles                         | 231,569     |                          | 70,585    |                              | 160,984     |                                 
|Equipment                        | 189,093     |                          | 54,192    |                              | 134,901     |                                 
|All-terrain vehicles             | 107,016     |                          | 46,256    |                              | 60,760      |                                 
|Trailers                         | 76,860      |                          | 20,036    |                              | 56,824      |                                 
|Computer equipment               | 33,308      |                          | 14,763    |                              | 18,545      |                                 
|Computer software                | 18,580      |                          | 6,636     |                              | 11,944      |                                 
|Furniture and fixtures           | 13,642      |                          | 3,467     |                              | 10,175      |                                 
|Pack horses                      | 18,057      |                          | 4,717     |                              | 13,340      |                                 
|Total Depreciable Assets         |             |                          |           |                              |             |                                 
|                                 |             |                          |           |                              |             |                                 
|Non Depreciable

Capital Assets: |             |                          |           |                              |             |                                 
|Gold samples                     | 56,010      |                          | -         |                              | 56,010      |                                 
|Total Capital Assets             | $ 1,699,497 |                          | $ 426,174 |                              | $ 1,273,323 |                                 

Total depreciation expense for the three months ending May

31, 2006 and May 31, 2005 is $101,489 and 25,878 respectively.

NOTE 4 - RELATED PARTY TRANSACTIONS

On occasion, the Company's shareholders pay corporate

expenses and/or provide services to the Company. These related party payables,

which are unsecured and non-interest bearing, are due on demand and totaled

$54,590 and $14,465 at May 31, 2006 and February 28, 2006, respectively.

Effective June, 2004, the Company signed an agreement for the

right of occupancy of a barn and property from one of the directors of the

Company and his spouse ("the Owner"), for the shelter of pack horses and an

office. The right of occupancy term is five years, renewable yearly thereafter.

Rent is $1 per month. Prior to the expiration of the right of occupancy, the

Owner may require the Company at the Company's sole cost and expense, to remove

any alterations, installations, additions or improvements made by the Company.

At the expiration of the lease, the Owner is obligated to pay to the occupier

the fair market value of the buildings less 75 % and shall be entitled to pay

such sum over a 20 year period in equal monthly installments without interest.

Leaseholds improvements, which total approximately $289,000

as of May 31, 2006, have been made to the barn and office.

NOTE 5 - PREFERRED STOCK

The Company is authorized to issue 20,000,000 shares of

$0.0001 par value preferred stock. Each preferred share is convertible to 10

common shares of common stock, non-cumulative and non-dividend bearing. The

Company's board of directors will determine the specific features of each

additional issuance of preferred shares. At May 31, 2006 and February 28, 2006,

the Company had 2,000,000 shares of preferred convertible stock issued and

outstanding.

NOTE 6 - COMMON STOCK

The Company is authorized to issue 80,000,000 shares of

$0.0001 par value common stock. Each holder of common stock has one,

non-cumulative vote per share on all matters voted upon by the shareholders. At

May 31, 2006 and February 28, 2006, the Company had 26,192,800 and 25,202,800

shares of common stock outstanding, respectively.

During the year ended February 29, 2004, the Company issued

3,800,000 shares at $1.25 per share of its common stock in connection with the

acquisition of certain mining claims in the Dawson Mining District of Yukon

Territory in Canada. Also, during the year ended February 29, 2004, the Company

sold in a private placement 1,040,000 shares of its common stock at $2.50 per

share for cash and subscriptions receivable of approximately $2,600,000.

During the year ended February 29, 2004, certain Company

shareholders elected to forgive $31,500 of unsecured, long-term debt bearing

interest at 10% per annum. The shareholders also elected to forgive $5,756 of

accrued interest on the debt and $16,156 of accounts payable owed them. The

aggregate amount of $53,412 for shareholder forgiveness has been recorded as a

contribution of capital on the Company's statement of stockholders' equity.

During the year ended February 28, 2005, the Company sold
through private placements 1,090,000 shares of its common stock at $2.50 per

share for total net cash proceeds of $2,371,607.

During the year ended February 28, 2005, the Company issued

200,000 shares of common stock having an intrinsic value of $2.50 per share for

a total value of $500,000 as part of a mineral rights acquisition agreement.

During the year ended February 28, 2006, the Company sold

through private placements 50,000 common shares at $1.25 per share for total

cash proceeds of $62,500; 2,073,000 common shares at $2.50 per share for total

net cash proceeds of $4,574,600; and 1,300,000 common shares at $2.75 per share

for total net cash proceeds of $3,391,700.

During the three months ended May 31, 2006, the Company sold

through private placements 990,000 common shares at $2.75 per share for total

net cash proceeds of $2,231,121

From inception as an exploration stage company, the Company

has paid commissions on sale of stock in the amount of $1,271500.

Warrants

During the year ended February 28, 2006, the Company executed

a private placement memorandum to issue 4,000,000 shares of common stock at

$2.75 per share with one warrant attached to each share to purchase an

additional share at a minimum conversion price of $3.50. Each warrant must be

exercised within one year from date of the original investment. The following

assumptions were made to value the warrants for the three months ended May 31,

2006; risk-free interest rate of 4.5%; volatility of 31%; life of one year; no

dividends.

|                                               | Number of Warrants | Weighted Average Remaining Life | Average Exercise Price
|---------------------------------------------- | ------------------ | ------------------------------- | ----------------------
|Outstanding and exercisable, February 28, 2006 | 1,300,000          | 0.9 years                       | $3.50                 
|Issued                                         | 990,000            | 0.9 years                       | 3.50                  
|Exercised                                      | -                  |                                 | -                     
|Rescinded or expired                           | -                  |                                 | -                     
|Outstanding and exercisable, May 31, 2006      | 2,290,000          | 0.8 years                       | $3.50                 

NOTE 7 - STOCK-BASED COMPENSATION AND STOCK OPTIONS

During the year ended February 29, 2004, the Company's board

of directors approved the Stock Compensation Plan, subsequently renamed the

"2003 Stock Incentive Plan for Employees" ("the 2003 plan") to allow up to
2,800,000 shares of company stock to be issued. This plan enables the Company to

grant stock options to directors, officers, employees and eligible consultants

of the Company. With a duration of 10 years, the plan may be modified without

shareholders' approval. During the period ended November 30, 2005, the Company
amended the 2003 Stock Incentive Plan for Employees, and authorized a

post-effective amendment to the Statement of Form S-8 Securities.

During the year ended February 28, 2006, the Company's board      of directors approved the 2005 Stock Incentive Plan for Consultants and Advisors

("the 2005 Stock Incentive Plan") to allow up to 2,800,000 shares of company

stock to be issued. This plan enables the Company to grant stock options to

eligible consultants and advisors of the Company. The 2005 plan has a duration
of 10 years and may be modified without shareholders' approval.

During the year ended February 28, 2005, the Company granted

options, under the 2003 plan, to purchase a total of 1,200,000 shares of common

stock to its employees and directors at $1.00 per share. During the year ended

February 28, 2006, the Company amended the terms of the stock options granted to

employees and directors to allow the options to fully vest upon award. During

the year ended February 28, 2006, the Company granted options to purchase a

total of 30,000 shares of common stock to an employee at $2.50 per share. These

shares are fully vested and exercisable over a five year term. The Company

recognized employee compensation expense of $2,793,010 during the year ended

February 28, 2006 for all vested options.

During the quarter ended May 31, 2006, the Company granted

options to employees to purchase a total of 150,000 shares of common stock at

$2.50 per share. These shares are fully vested and exercisable over a five year

term. The Company recognized employee compensation expense of $437,500. The

Company also granted options to consultants to purchase a total of 100,000

shares of common stock at $2.50 per share and recognized $175,000 compensation

expense during the quarter.

In accordance with Statement of Financial Accounting

Standards No. 123, the fair value of the options granted was estimated using the

Black-Scholes Option Price Calculation. The following assumptions were made to

value the stock options:

|Risk-free Interest Rate | 4.5%   
|----------------------- | -------
|Expected Life           | 5 years
|Expected Volatility     | 30.8%  
|Dividends to be paid    | Nil    

The Black-Scholes option valuation model was developed for

use in estimating the fair value of traded options, which are fully

transferable.

In addition, option valuation models require the input of

subjective assumptions including the expected stock price volatility. Because

the Company's employee stock options have characteristics significantly

different from those of traded options and because changes in the subjective

input assumptions can materially affect the fair value estimate, in management's

opinion, the existing models do not necessarily provide a reliable single

measure of the fair value of its employee stock options.

Following is a summary of the status of the stock options

during the three months ended May 31, 2006:

|                                                                                           | 2003 Stock Incentive Plan     | 2005 Stock Incentive Plan      
|------------------------------------------------------------------------------------------ | ----------------------------- | -------------------------------
|                                                                                           | Number of Shares Under Option | Weighted Average Exercise Price
|Outstanding

February 28, 2005                                                             | 1,200,000                     | $ 1.00                         
|Granted                                                                                    | 30,000                        | 2.50                           
|Exercised                                                                                  | -                             | -                              
|Rescinded or expired                                                                       | -                             | -                              
|Outstanding

February 28, 2006                                                             | 1,230,000                     | 1.04                           
|Granted                                                                                    | 250,000                       | 2.50                           
|Exercised                                                                                  | -                             | -                              
|Rescinded or expired                                                                       | -                             | -                              
|Outstanding at

May 31, 2006                                                               | 1,450,000                     | $ 1.28                         
|Exercisable at

May 31, 2006                                                               | 1,450,000                     | $ 1.28                         
|Weighted average

fair value of options granted during the three months ended May 31, 2006 |                               | $ 1.75                         

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Consulting Agreements

On January 4, 2005, the Company entered into a consulting

agreement with Image Point Design ("IPD") to provide project management for     media and investor relation services. Under the terms of the agreement, the

Company will pay IPD up to a maximum of $81,000. Termination of the contract is

at the Company's sole discretion. In addition, the Company agreed to issue

100,000 shares at $2.50 per share as follows: 50,000 shares issued upon

signature of contract and 50,000 shares to be issued no earlier than June 1,

2005. During the year ended February 28, 2006, the Company amended the share

option offer to comply with the Company's 2005 Stock Incentive Plan. At February
28, 2006, no shares had been issued on account of this agreement. During the      period ended May 31, 2006, the Company modified the agreement to grant stock

options in lieu of shares.

During the year ended February 28, 2006, the Company approved      the granting of 300,000 share options at $2.50 per share for future investor

relations services.

During the year ended February 28, 2006, the Company issued a
private placement memorandum to issue 4,000,000 shares of common stock at $2.75      per share with one warrant attached to each share to purchase an additional

share at a minimum conversion price of $3.50. Each warrant must be exercised

within one year from date of the original investment.

During the year ended February 28, 2006, the Company acquired      a 100% interest in placer leases in the Indian River and Montana Creek area,

along the southern edge of the Klondike gold fields. The agreement is subject to

a one-time payment of $28,300 for staking costs and a 10% royalty on future

production.

During the year ended February 28, 2006, the Company amended

an agreement originating in October 2004, with a privately held company, which

received the first right of refusal to purchase the majority of gold produced by

Klondike Star from the Klondike Mining District at a 2% discount from the LME spot price. The right of first refusal is subject to Klondike Star proceeding

through exploration, pre-feasibility, final feasibility and building of a

producing mine on mineral claims in the Klondike Mining District. In

consideration for such rights, the privately held company agreed to purchase

1,000,000 shares of the Company's common stock at $2.50 per share before
February 28, 2006. Klondike Star granted an extension to the privately held     company to purchase the 1,000,000 common shares. Further, subject to the
execution of agreements giving effect to the transactions contemplated in the     agreement, the privately held company shall receive the option to make further
subscriptions for shares, subject to the same terms and conditions, following      completion of the subscription of the first 1,000,000 shares, as follows:

1,000,000 shares at $3.50 by January 25, 2007 
1,000,000 shares at $4.50 by January 25, 2008
1,000,000 shares at $5.50 by January 25, 2009 
1,000,000 shares at $6.50 by January 25, 2010

The shares are subscribed for pursuant to the provisions of

Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D

promulgated by the Securities and Exchange Commission. The offered shares are

restricted shares under the Securities Act of 1933 and the Exchange Act of 1934

and Rule 144 under the Securities Act of 1933. As of May 31, 2006, the Company

has not received any of the expected consideration related to this agreement.

Therefore the Company has deemed this agreement to be closed. Although this

agreement has a history of modification, the Company would expect probable

future negotiations but has no expectations that consideration and proceeds from

such modified agreement will be immediately forthcoming.

During the year ended February 28, 2006, the Company entered

into an agreement to acquire up to 75% interest in claims covering gold bearing

quartz pebble conglomerate in the Indian River area, along the southern edge of

the Klondike gold fields. The agreement requires cash payments totaling $145,000

over 5 years and certain work commitments to acquire a 55% interest. Producing a

bankable feasibility study and arranging project financing can earn a further

20% interest in the project.

During the year ended February 28, 2006, the Company entered

into an agreement to acquire up to 75% interest in certain claims covering an

epithermal gold target in the Tintina Gold Belt, Yukon, Canada. The agreement

requires cash payments to Klondike Gold Corp. (TSXV:KG) totaling $200,000 over 4

years and work commitments totaling $500,000 to acquire a 55% interest.

Producing a bankable feasibility study and arranging project financing can earn

a further 20% interest in the project.

During the year ended February 28, 2006, the Company entered

into an agreement to acquire up to 75% interest in certain claims covering

several copper-zinc and nickel-platinum group targets in the Kluane Mineral

Belt, Yukon, Canada. The agreement requires cash payments to Klondike Gold Corp.
(TSXV:KG) totaling $265,000 over 5 years and work commitments totaling

$2,225,000 to acquire a 55% interest. Producing a bankable feasibility study and

arranging project financing can earn a further 20% interest in the project.

During the quarter ended May 31, 2006, the Company acquired

from Klondike Source Limited (NSX: KSL) subsidiary, KSL Exploration (Yukon)

Limited, the exclusive right to purchase an undivided 100% interest in one or

more claims in the DOM block located at Hunker Dome block located at Hunker Dome

in the eastern part of the Klondike goldfield. The purchase price for the entire

group of 56 claims is $500,000 CDN. Purchase of any claim or claims will entitle

KSL to a royalty of 2.5% of net smelter returns. At the headwaters of Dominion

Creek, these claims, along with 168 adjacent claims previously staked or held by

Klondike Star Mineral Corporation have been consolidated to establish a new exploration project known as, the Dominion Project. Exploration is expected to

commence on these properties during the coming 2006 field season.

During the quarter ended May 31, 2006, the Board of Directors

modified the terms of the stock awards to certain consultants to granting of

stock options, fully vesting upon award. The Company has previously recognized

$250,000 expense against these stock awards.

During the quarter ended May 31, 2006, the Board of Directors

approved the granting of stock options to certain consultants, subject to filing

certain documentation with the Securities and Exchange Commission.

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.

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Item 2. Management Discussion and Analysis.

Klondike Star Mineral Corporation is an established exploration and

development company actively working on six major properties in the Yukon,

Canada. The company is developing extensive surface and subsurface mineralized

zones on a 346 square kilometer (or 134 square mile) land position underlying

the site of the world-renowned Klondike gold producing region, and 93 square

kilometers (or 36 square miles) of select high potential targets in other parts

of the Yukon. During the upcoming year, the company expects to increase its land

holdings, projects and planned exploration.

Description of the Business

The company is engaged in mineral exploration and mine development

activities, requiring studies and research, conventional prospecting,

excavation, diamond and auger drilling and analysis of mineral samples, bulk

sampling including test milling, and scoping studies for potential mine

development.

Klondike Star Mineral Corporation is a mineral exploration company with

majority ownership in the largest mineral rights holding in the Dawson Mining

District of the Yukon, a territory of Canada. These holdings include, but are

not limited to, the areas referred to as the Lone Star Project and the Indian

River Placer Project. In addition to these principal assets, the company holds

other strategic interests in gold and base and precious metal properties in the

Yukon. These include the Spice Property in the Watson Lake Mining District and

the Ultra Property in the Whitehorse Mining District.

Klondike Star Mineral Corporation is listed on the NASD:OTCBB trading under

the symbol "KDSM".

First Quarter Performance

Highlights of the quarter-ended May 31, 2006 include:

- 



|Financial indicators                                                    
|------------------------------------------------------------------------
|                                                                        
|Total expenses                                                          
|Net loss from

continuing operations                                    
|Cash flows from

financing activities                                   
|Cash flows used

in operations                                          
|Cash and cash

equivalents on hand                                      
|Net loss per

common share: Basic and diluted                           
|Weighted average

number of common shares outstanding: Basic and diluted
|Cash dividends

declared per common share                               
|Property, plant

and equipment, net                                     
|Long-term debt                                                          
|Shareholders'

equity                                                   

|Investor relations indicators                                        
|---------------------------------------------------------------------
|                                                                     
|Common shares

issued and outstanding                                
|Restricted shares                                                    
|Free trading

shares                                                 
|Warrants

outstanding                                                
|Share price range                                                    
|Share volume

monthly high                                           
|Shareholders                                                         
|Share options

authorized and unexercised (total in reporting period)

Share price over 2.5 years

(Source: Bell Globemedia Publishing Inc. 2006)



|Ownership
of mineral rights and resources
|-----------------------------------------
|                                         
|Lone Star Project                        
|Eldorado Placer Project                  
|Indian River Placer Project              
|Indian River Quartz Project              
|Spice Project                            
|Ultra Project                            
|Dominion Project                         
|Bonanza Project                          

Future financial condition

Management expects to sustain continued growth in exploration by private
placement equity financing, as well new property acquisitions, including an      increase in the mineral rights and resources owned by Klondike Star Mineral Corporation.

At year-end, the company owned the right to explore 394 square kilometers

(156.1 square miles) of mineral claims and leases. At the first quarter ending May 31, 2006, the company owns the right to explore 439 square kilometers (169.2 square miles) of mineral claims and leases.

The mineral exploration industry is cyclical, based upon the price of

commodities and the demand for certain metals. The company considers that it has
entered this business at a time that is favorable within a long term commodity inflation cycle, and that it can sustain an enterprise in the field of mineral

exploration and mining production.

The company has forged strong relationships with financial professionals in

order to provide adequate capital investment for its projects with the goal of bringing new mining production on-stream in the future.

Industry and economic factors affecting performance

The outlook for resource industries is becoming positive, as

higher commodity prices result in a return to profitability for corporations, particularly in the mines and metals sector.

The outlook for gold is currently favorable, due to the present supply/demand
deficit. Management is of the current opinion that the condition of declining
world gold mine output may not find relief until approximately 2010, when enough
new mines can come on-stream to overcome the depletion of existing mines.



The increasing price of gold and precious metals may result in a new
area of economics in the metals sector.  At a time when gold was averaging
$390,     management previously regarded 1 gram of gold per tonne of ore was sufficient to

achieve profitability provided sufficient scale.  If future price ranges of

gold continue to maintain their current higher levels, it could mean a new understanding of gold mining economics, including the possibility that 1/2 gram per tonne may be the threshold of economics on large scale mining operations.

The normal cyclical nature of a metals cycle is a boom/bust scenario, often

with a 5 year average.   Characteristically, major mining companies do not make capital investment at the top of these cycles, rather at the bottom.  World leaders like BHP Billiton and Rio Tinto are investing heavily as if this

is going to be an extended long-term cycle. And majors are taking over intermediate producers. This may signal an outlook for continued growth in China and India over the next decade, as well as global expansion. Recent record high prices for a tonne of copper or zinc reflect the surging demand for base metals

in Asia.

This suggests long-term demand for copper, zinc and particularly gold.

Potential base metal ore bodies, such as the Ultra Property in the Whitehorse

Mining District, may have strong economic potential due to the close proximity to a major highway and a deep-water port in Haines, Alaska.

During the last half of fiscal 2006, the strength of the Canadian dollar
relative to the U.S. dollar reduced the exchange gain on the value of the total     expenditures made on Company properties in Canada over previous years.

Risk factors including operational, environmental and regulatory requirements

The Company began active operations in 2004 as a mineral exploration company.
Although the mineral properties acquired already have had substantial funds
spent on research, exploration and development, including infrastructure such as
roads, hard-camp, core shack and test mill, the Company expects to
incursignificant additional development, exploration and communication expenses
in     connection with the business. To date, the Company has generated no revenue. It

is expected the Company will continue to incur operating losses for the foreseeable future, and the Company may never achieve or sustain profitability.

Mineral exploration and development involves a high degree of risk, and few

properties which are explored are ultimately developed into producing mines. Company properties are still in the developmental and testing stages, and may
never reach a production stage. The Company's revenue model is dependent upon      identifying and accessing viable ore bodies that can prove feasible for production.

A practical operational risk factor relates to the timely availability of
necessary skills and resources through recruitment, contracting or joint
ventures. Although Klondike Star has and continues to invest proactively in     solutions to these risks, one risk that is pervasive in the mineral exploration

industry relates to the shortage of experienced diamond and RC drillers in North America.

Health and safety for employees and contractors is a known risk factor for

any mineral exploration and development business. The Company has established policy, guidelines, implementation plans and best practices to address this risk effectively and efficiently. Klondike Star Mineral Corporation has an

uncompromising commitment to superior safety performance and a healthy work place.

The Company also relies upon various mining land use permits and water

licenses to operate and grow the business. It may incur difficulties in acquiring such permits and licenses in the future, which could adversely affect future development of the Company's properties.

Klondike Star Mineral Corporation is a prudent and responsible operator

guided by the policies and guidelines adopted during the year. This includes the

Health and Safety Policy and guidelines, including industry best practices such as the Safety Guidelines (2006) published by the Association of Mineral Exploration BC, the Environment and Sustainable Development Policy and guidelines, an the Environmental Excellence in Exploration (2006) published
by the Prospectors and Developers Association of Canada.

Company policy is based on the view that solid environmental performance
within a sustainable development approach is a leading indicator of a
well-managed, efficient and competitive corporation acting in the best interests     of its business, its shareholders, its employees and the communities in which it operates.

Management and corporate governance matters

Since February 28, 2005, the Board of Directors and management have

strengthened corporate governance through the establishment of charters and

guidelines for the Board of Directors, a new Audit Committee and a new Environment, Health and Safety Committee. The Company developed and adopted new bylaws, new policies and introduced rigorous management practices. New policies include the Code of Business Conduct and Ethics, an Authorization Policy and signing authority guidelines, a Health and Safety Policy, an Environment and Sustainable Development Policy, a revised 2003 Stock Incentive Plan for

Employees and a new 2005 Stock Incentive Plan for Consultants and Advisors.

The Code of Business Conduct and Ethics states, in keeping with Klondike Star
Mineral Corporation's commitment to excellence in all aspects of corporate
governance, the business of the Company shall be conducted with honesty and
integrity and in accordance with the highest ethical and legal standards and     corporate social responsibility. The Code of Business Conduct and Ethics is intended to promote prudent business practices, to deter wrongdoing and to document and promote the principles of conduct and ethics to be followed by Klondike Star Mineral Corporation and affiliated companies and joint ventures

worldwide, including all directors, officers, employees, agents and contractors.

The Audit Committee and the Environment, Health and Safety Committee met

during the first quarter to address the year-end audit, regulatory filings,

mineral disclosure standards, shareholder reporting, health and safety action plan, and the environment and sustainable development action plan.

Exploration and development projects overview

During the quarter ended May 31, 2006, Klondike Star established two new

exploration projects following mineral claim acquisitions, known as the Dominion

and Bonanza projects.

The Company has mobilized to implement announced exploration and development

plans on seven projects. It will also expand the camp and operations support

complex at Eldorado Creek serving Klondike operations.

Klondike Star is continuing to work towards industry-standard mineral

resource assessments and scoping studies for the Lone Star and Indian River Placer projects.

|Mineral rights indicators                    
|---------------------------------------------
|                                             
|Exploration

projects                        
|                                             
|Quartz mining

claims                        
|                                             
|Total area of

quartz claims and crown grants
|                                             
|Placer mining

claims                        
|                                             
|Total area of

placer claims and leases      
|                                             
|Mineral

resources and reserves              
|Lone Star                                    
|Indian River Placer                          
|Dominion                                     
|Bonanza                                      
|Spice                                        
|Ultra                                        
|Indian River Quartz                          
|Eldorado Placer                              

|Operational indicators                                    
|----------------------------------------------------------
|                                                          
|Exploration

and development stage by project (Footnote 1)
|Lone Star                                                 
|Indian River

Placer                                      
|Dominion                                                  
|Bonanza                                                   
|Spice                                                     
|Ultra                                                     
|Indian River                                              
|Eldorado Placer                                           
|Drilling                                                  
|Diamond drill holes and total meters (yards)              
|Auger drill holes and total meters (yards)                
|Surface

trenching and sampling                           
|                                                          
|Assay analysis                                            
|                                                          
|Health and

safety incidents                              
|                                                          
|Environmental

incidents                                  
|                                                          



Footnote 1: Definitions of exploration stage

Where a project fits on the spectrum of exploration and development is in
part a matter of judgment exercised by management. Klondike Star is proceeding      on parallel tracks in an integrated fashion rather than in a sequential, lock-step manner.

Early stage exploration - grass roots prospecting, mapping, analysis of

regional/site geology, trenching and chip sampling, staking of claims possibly

with a few holes drilled with encouraging results or other significant indicators

Intermediate stage exploration - exploration continues including bulk

sampling, soil chemistry, geophysical surveys and analysis as appropriate with

more holes drilled with encouraging results

Advanced, late stage exploration - full-scale bulk sampling, mineral

assessment establishes resource development potential, scoping or pre-feasibility study completed or nearing completion with positive results,

environmental baseline research and assessment in progress

Early development - bulk sampling/test mining, on-site testing of

processing technology for throughput and mineral recovery; decision made to proceed with pre- or feasibility study in progress or completed, scoping of environmental assessment and permitting completed and necessary steps initiated

Development - environmental assessment completed, permits obtained,

financing lined up, construction to begin in the next 6 - 12 months; or mine

under construction through commissioning

Production - operating mine with gold sales and revenue

LONE STAR PROJECT

Mineral target

Gold

Overview

The Lone Star Project is an advanced, late stage exploration property that is

being studied for mine development. The Project consists of 1056 mineral claims

and crown grants totaling 152 square kilometers (58.7 square miles). Lone Star is the largest project of six in the gold producing Klondike region of Yukon, Canada.

Location

The Lone Star Project is located 20 kilometers from Dawson City and is

accessible by summer maintained, graded gravel roads linking with the Klondike

Highway. The property is situated in the Tintina Gold Belt spanning Alaska and

the Yukon that includes producing mines and major deposits.

History and geology of the property

First assembled by Canadian mine-finder Richard Hughes, the initial 500

mineral claims in the Klondike (now called the Lone Star Project) were optioned to Klondike Star Mineral Corporation in 2004. It is the site of the former producing Lone Star Mine (1912-14) and decades of previous exploration.

Company progress and year-over-year comparison

Since acquiring the property in 2004, Klondike Star Mineral Corporation has
become the majority owner and operator, increased the size of the project from
500 to 1056 mineral claims and crown grants, constructed a 45-person camp     complex and milling infrastructure on site, and completed extensive soil, chip

and bulk sampling, drilling, milling and assay analysis.

On-site exploration infrastructure includes a hard camp, kitchen and dining

facility, a test mill plant, core shack and ancillary buildings and tent frames.

A gravel airstrip exists on the claim block at Eldorado Creek.

|                                                        | Quarter 1 ending May 31, 2006 | Year-end February 28, 2006                                                                                                                  | Year-end February 28, 2005                                                       | Change from 2006 year-end to Q 1 to May 31, 2006
|------------------------------------------------------- | ----------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | ------------------------------------------------
|Total claims and crown grants                           | No change                     | 1056                                                                                                                                        | 500                                                                              | None                                            
|Total area                                              | No change                     | 151.7 square kilometers (58.7 square miles)                                                                                                 | 100 square kilometers (estimate) (38.6 square miles)                             | None                                            
|Drilling - no. of diamond drill holes and

total meters | No change                     | 32 holes totaling 4830 meters                                                                                                               | 0                                                                                | None                                            
|Surface trenching and sampling                          | No change                     | 14 trenches totaling 2858 cubic meters, 421 soil samples,

551 trench samples, 23 rock samples and 57 bulk chip samples                     | 17 trenches totaling 1,300 cubic meters, 1,024 rock

samples, 1,165 soil samples | None                                            
|Assay analysis                                          | No change                     | 5095 core samples from drilling and core fire assays (1st round) at 1250 samples, trench ICP totaled 551 samples and 92 trench fire

assays | 1165 soil samples by ICP; also refer to the 2004 assessment

report              | None                                            
|Ownership                                               | No change                     | 55% with exclusive option up to 75%                                                                                                         | 55% with exclusive option up to 75%                                              | None                                            



Exploration results and mineral resource assessment

Exploration results and professional analysis to date indicates the Lone Star

Project represents an extensive mineralized area with a large tonnage, low grade

gold resource augmented by higher grade zones that warrants an expanded exploration effort and intensive evaluation for potential mine feasibility and development.

Assay results from the 2005 exploration season were released sequentially

October 6, 2005 - January 24, 2006.

During the year-ended February 28, 2006, the stage of exploration moved to

advanced exploration including diamond drilling, bulk sampling and on-site

processing, and the initiation of a scoping study. The company is working towards a mineral resource assessment consistent with industry and international standards and best practices.

Plan for year-ended February 28, 2007

The 2006 summer work plan will run from late May through October. Expanded

diamond drilling, milling and bulk sampling is proceeding alongside a scoping

study to determine the economic viability of the mineral deposit and facilitate expedited planning and decision-making.

The work plan includes a drilling program of 11,000 meters, more than double

the 4830 meters drilled in 2005. This will further delineate the extent of the

known gold bearing ore body in the primary zones of interest, including the Lone Star and extensions, the Buckland between Gay Gulch and 27 Pup and the Nugget

zone above Oro Grande Gulch. Deep drill holes are planned to extend resource analysis to depths beyond 500 meters.

New facilities, including a mechanical shop and camp annex are being

constructed in the vicinity of the Eldorado Camp (which was installed in May

2005). This infrastructure will increase productivity and provide cost-efficiencies while supporting a larger exploration effort.

INDIAN RIVER PLACER PROJECT

Mineral target

Gold

Overview

The Indian River Placer Project is an advanced stage exploration property. It
is located 40 kilometers from Dawson City in the heart of the Klondike gold
producing region of the Yuko, Canada. During 2006, bulk sampling and testing of
processing technologies will proceed alongside the initiation of a scoping study
to determine the economic viability of the mineral deposit and facilitate      expedited planning and decision-making.

History and geology of the property

The Indian River Placer Project consists of 185 mineral claims plus
17 leases totaling 35 square kilometers. The Indian River is emerging as one of
the most active areas of new investment and productive placer mining in the
Klondike region. Klondike Star Mineral Corporation holds 100% ownership of the
project.

Company progress and year-over-year comparison

|                                                      | Quarter 1 ending May 31, 2006 | Year-end February 28, 2006                                        | Year-end February 28, 2005                                   | Change from 2006 year-end to Q 1 to May 31, 2006
|----------------------------------------------------- | ----------------------------- | ----------------------------------------------------------------- | ------------------------------------------------------------ | ------------------------------------------------
|Total claims                                          | No change                     | 185 claims and 17 leases                                          |                                                              | None                                            
|Total area                                            | No change                     | 35 square kilometers (13.5 square miles)                          |                                                              | None                                            
|Drilling - no. of auger drill holes and

total meters | No change                     | 184 holes totaling 2,426 meters (winter season

December - April) | 90 holes totaling 811 meters(winter season
December - April) | None                                            
|Ownership                                             | No change                     | 100%                                                              |                                                              | New acquisition in 2006                         

Exploration results and mineral resource assessment

The Indian River Placer Project is an advanced stage exploration property.

During the recent winter drilling program, the company completed 184 holes

(double the 2005 drilling) for a cumulative total of 274 holes or 2,426 meters. Two winter drilling programs have been completed and the plan is to shift from

winter exploration to bulk sampling, test mining and pre-production business planning.

The winter drilling recovered gold from 90% of the holes, with gold recovered

from 100% of the holes drilled in the main target area along the Indian River.

In 2005, drilling resulted in gold recovery from 87% of the holes drilled.

Plan for year-ended February 28, 2007

Klondike Star Mineral Corporation intends to move ahead with test mining and

business planning on its placer gold property on the Indian River. Exploration

efforts are shifting to a new phase, with new expenditures on a summer exploration, bulk sampling and test processing program building on winter

drilling and exploration activities. The objective is to develop a large-scale     placer mine.

2006 summer bulk sampling and test processing will be conducted on three or

more high potential sites that are already prepared for this purpose through

stripping, clearing and permitting. Test mining will be supervised by an established Canadian firm specializing in mine engineering and processing

technology. After careful evaluation, the company plans to deploy two processing technologies to help refine the best approach for possible production. One is a

dry separation technology used in mining operations elsewhere in the world in similar conditions; the other is a conventional sluicing system used extensively in the Klondike that is particularly suited to conditions along the Indian River. This will allow comparative analysis of throughput and gold recovery.

SPICE PROJECT

Mineral target

Gold

Overview

The Spice Project has moved to a drill ready stage of exploration. As of

February 28, 2006, the Spice Project consists of 32 mineral claims totaling 6.7

square kilometers (2.6 square miles).

History and geology of the property

The property is located 28 kilometers east of Ross River and 8 kilometers

south of the North Canol Road in the Watson Lake mining district, Yukon, Canada.

The Spice Project falls within the Tintina Gold Belt that hosts numerous gold

deposits, producing mines, notably the Fort Knox, Pogo and (former) Brewery

Creek, as well as active exploration projects.

The property has only been explored since 2000, when a regional geochemical

survey conducted by the Yukon Geological Survey, Yukon Government, identified strong, coincident gold, silver and epithermal pathfinder elements. Follow-up geochemical sampling identified an open-ended anomalous zone and samples assayed

up to 13.9 grams/tonne gold. An IP chargeability high and resistively low

coincides with the highest geochem values.

Company progress and year-over-year comparison

|                                                        | Quarter1 ending May 31, 2006               | Year-end February 28, 2006                | Year-end February 28, 2005 | Change for 2006 year-end to May 31, 2006
|------------------------------------------------------- | ------------------------------------------ | ----------------------------------------- | -------------------------- | ----------------------------------------
|Total claims                                            | 51                                         | 32                                        | 0                          | 19 additional claims or 59.4%           
|Total area                                              | 10.9 square kilometers or 4.2 square miles | 6.7 square kilometers (2.6 square miles)  | 0                          | Increase in area of 62.7%               
|Drilling - no. of diamond drill holes and

total meters | No change                                  | 0                                         | 0                          | 0                                       
|Ownership                                               | No change                                  | Exclusive option for up to 75% ownership. | 0                          | New acquisition in 2006                 



Plan for year-ended February 28, 2007

A 2006 staking initiative on the Spice Project will increase the land base.

The property is drill ready and a diamond drilling program of identified targets

will proceed in the Fall.

The target is a low-sulphidation epithermal style gold deposit hosted by

rhyolite, similar to the Grew Creek property 60 kilometers to the west. The Grew

Creek property is currently being explored by another exploration company with an ongoing drilling program.

ULTRA PROPERTY

Mineral target

The two targets include base and precious metals. This includes VMS

zinc-copper-silver-gold and polymetallic nickel-copper-platinum-palladium-gold.

Overview

The Ultra Project has moved to a drill ready stage in exploration. Following

additional staking in the Fall of 2005, the Ultra Project consists of 404 mineral claims totaling 82 square kilometers (31.7 square miles).

History and geology of the property

The property is located in the Kluane Mountains, 42 kilometers northwest of

Haines Junction, Yukon Territory, Canada, only 140 kilometers from a deepwater port. Only 10 kilometers west of the Alaska Highway, it is accessible by rough gravel road. It is near the former nickel - platinum operating Wellgreen Mine

and an area optioned recently by Falconbridge Limited (a leading producer of copper and nickel with investments in zinc). Ultra is also in the same geological zone as the world-class zinc-copper-gold Windy Craggy deposit in northern British Columbia.

Company progress and year-over-year comparison

|                               | Quarter 1 ending May 31, 2006 | Year-end February 28, 2006               | Year-end February 28, 2005 | Change from 2006 year-end to Q 1 to May 31, 2006
|------------------------------ | ----------------------------- | ---------------------------------------- | -------------------------- | ------------------------------------------------
|Total claims                   | No change                     | 404 claims                               | 0                          | None                                            
|Total area                     | No change                     | 82 square kilometers                     | 0                          | None                                            
|Drilling                       | No change                     | 0                                        | 0                          | None                                            
|Surface trenching and sampling | No change                     | 86 rock and soil samples                 | 0                          | None                                            
|Ownership                      | No change                     | exclusive option for up to 75% ownership | 0                          | None                                            

Exploration results and mineral resource assessment

The property is drill ready based on a multi-year investment in prospecting,

mapping, sampling, airborne and ground geophysical surveys and geochemistry analysis.

The first drilling target is key VMS-style copper-zinc-silver-gold anomalies

that will help to identify the source, distribution and scope of massive

sulphide boulders that are up to 19 tons with assays of 2.1% copper, 5.1% zinc

and 25 grams/tonne silver.

The second drilling target is for polymetallic magmatic nickel-copper-platinum-palladium-gold. The Frohberg showing assayed up to 5.5

grams/tonne platinum, 13.5 grams/tonne palladium, 4.1% copper and 1.7% nickel.

Recent outcrop samples assayed at 4.4% nickel and 2.3 grams/tonne of platinum

group elements.

Plan for year-ended February 28, 2007

During summer and fall of 2006, a strategic diamond drilling program is

planned to assess two base and precious metal targets at three sites, along with

additional sampling and further assessments of the underlying regional geology.

INDIAN RIVER QUARTZ PROJECT

Mineral target

Gold

Overview

The Indian River Quartz Project is an early stage exploration property for

the company.

History and geology of the property

The property is located 40 kilometers from Dawson City in the heart of the

Klondike gold producing region of the Yukon, Canada. It is situated in the

Tintina Gold Belt spanning Alaska and the Yukon. Access to the region is by good

gravel road.

Company progress and year-over-year comparison

|                                    | Q1 to May 31, 2006 | Year-end February 28, 2006                                                              | Year-end February 28, 2005 | Change from 2006 year-end to Q 1 to May 31, 2006
|----------------------------------- | ------------------ | --------------------------------------------------------------------------------------- | -------------------------- | ------------------------------------------------
|Total claims                        | No change          | 205 claims                                                                              | 0                          | None                                            
|Total area                          | No change          | 67.3 square kilometers                                                                  | 0                          | None                                            
|Drilling - no. of auger drill holes | No change          | 49 holes (winter season January - April)                                                | 0                          | None                                            
|Surface trenching and sampling      | No change          | 8 trenches totaling 1128 cubic meters, 12 test pits, 52

rock samples, 333 soil samples | 0                          | None                                            
|Assay analysis                      | No change          | 36 rock samples, 333 soil samples                                                       | 0                          | None                                            
|Ownership                           | No change          | Exclusive option for up to 75%                                                          | 0                          | None                                            

Exploration results and mineral resource assessment

Additional geological mapping, rock and soil sampling and geochemistry

analysis, trenching and a magnetometer survey were completed May - September 2005. Auger drilling provided bedrock samples in January - April 2005. This work builds on extensive reconnaissance and geological mapping, bulk sampling,

diamond drilling and core analysis, geochemical surveys completed by previous exploration companies.

Plan for year-ended February 28, 2007

Auger drilling into the bedrock is planned as part of forward planning for

further assessment of the property. Additional baseline work will be undertaken

to consolidate and ground-truth previous exploration results.

ELDORADO PLACER PROJECT

Mineral target

Gold

Overview

Located 20 kilometers from Dawson City, Yukon, Canada, the Eldorado Placer

Project is located within the boundaries of the Lone Star Project. The placer

mineral claims (surface) overlap some of Lone Star's quartz mineral claims (subsurface).

History and geology of the property

The property is in the heart of a longstanding gold producing area. There are
many placer mines operating in the general vicinity. The claims were originally
assembled by Canadian mine-finder Richard Hughes and optioned to Klondike Star     Mineral Corporation in 2004.

Company progress and year-over-year comparison

|             | Q1 to May 31, 2006 | Year-end February 28, 2006                    | Year-end February 28, 2005                    | Change from 2006 year-end to Q 1 to May 31, 2006
|------------ | ------------------ | --------------------------------------------- | --------------------------------------------- | ------------------------------------------------
|Total claims | No change          | 115 claims                                    | 114 claims                                    | None                                            
|Total area   | No change          | 6.9 square kilometers                         | 6.5 square kilometers (estimate)              | None                                            
|Ownership    | No change          | 55% and exclusive option to acquire up to 75% | 55% and exclusive option to acquire up to 75% | None                                            

Exploration results and mineral resource assessment

The property has known placer gold potential. However, the company has not

itself conducted substantive exploration work to date.

Plan for year-ended February 28, 2007

The right to conduct placer mining on the property has been optioned to an

experienced Klondike placer miner and this arrangement is expected to continue.

Item 3. Control and Procedures

(a) Evaluation of Disclosure Controls and Procedures.

An evaluation made at the end of the period covered by this report was

performed under the supervision and with the participation of the Company's

president, chief executive officer ("CEO") and the chief financial officer ("CFO"), or persons performing similar functions, of the effectiveness of the design and operation of the Company's disclosure controls and procedures to insure that the Company records, processes, summarizes and reports in a timely

and effective manner the information required to be disclosed in reports filed with or submitted to the Securities and Exchange Commission. Based on that evaluation, the Company's management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective in timely

bringing to their attention material information related to the Company required to be included in the Company's periodic Securities and Exchange Commission

filings. Since the date of this evaluation, there have been no significant changes in the Company's internal controls or in other factors that could

significantly affect those controls.

(b) Changes in Internal Controls Over Financial Reporting.

There have been no significant changes in internal control over financial
reporting that occurred during the fiscal period covered by this report that
have materially affected or are reasonably likely to materially affect the

Company's internal control over financial reporting.

PART 2 - OTHER INFORMATION

Item 1. Legal Proceedings

None

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

Item 3. Defaults upon Senior Securities

None

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

None.

Item 5. Other Information

None

Item 6. Exhibits and Reports on Form 8-K

Exhibits:

| | 31 | Certifications of Chief Executive Officer and

Chief Financial Officer under Rule 13a-14(a)/15d-14(a) | Included
| | -- | ----------------------------------------------------------------------------------------------------- | --------
| | 32 | Certifications under Section 1350                                                                     | Included

Reports on Form 8-K: No current reports were filed during the quarter

ended May 31, 2006:

SIGNATURES

In accordance with the requirements of the Securities and Exchange Act of

1934, the Registrant has duly caused this report to be signed on its behalf by

the undersigned, thereunto duly authorized.

KLONDIKE STAR MINERAL CORPORATION

Date  July 14, 2006

By:**

Hans Boge, President