**UNITED STATES					SECURITIES AND EXCHANGE COMMISSION					WASHINGTON, D.C. 20549					FORM 10-KSB**

[X]   Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934				For the fiscal period ended: September 30, 2007				[  ]   Transition Report under Section 13 or 15(d) of the Exchange Act of 1934				For the transition period from ________ to _________

Commission File Number: 0 - 52280**SCOUT EXPLORATION, INC.**(Exact name of registrant as specified in its charter)

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| Nevada                                                         |  | 98-0504670                              |
|----------------------------------------------------------------|--|-----------------------------------------|
| (State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number) |
| 32 Executive Park, Suite 105, Irvine, California 92614 |
|--------------------------------------------------------|
| (Address of principal executive offices)               |
| (949) 265-7717                    |
|-----------------------------------|
| (Issuer’s telephone number) |

Securities registered pursuant to Section 12(b) of the Exchange Act: None				Securities registered pursuant to Section 12(g) of the Exchange Act: Common Stock, par value $.001 per share				Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes [  ]   No [X]				Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB: [  ]				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 issuer’s revenues for its most recent fiscal year: $0				State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days: $2,437,450 based on the last sale price of our common stock of $0.41 on December 18, 2007.				The Issuer had 7,300,000 shares of Common Stock, par value $.001, outstanding as of December 19, 2007.				Transitional Small Business Disclosure format (Check one):   Yes [  ]   No [X]

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|             Claim Name |             Grant Numbers  |             Current Expiry Date |
|-------------------------------------------------------------------------------|-----------------------------------------------------------------------------------|----------------------------------------------------------------------------------------|
|             AAV 1-9    |             YC 19166 - 174 |             August 19, 2008     |

We paid the claims fees associated with the Wheaton River claims due August 19, 2006 and 2007.**4  History of Exploration**The Wheaton River/Lake Bennett district was first explored by prospectors traveling along the major lakes and rivers of southwestern Yukon in the early 1890's.  The original claims recorded in the district were those of prospectors Corwin and Rickman who, in 1893, located antimony showings on Carbon Hill and gold-silver bearing quartz veins at an undisclosed site.				The Klondike Gold Rush brought a great influx of people to the Yukon, many of whom crossed Lake Bennett en route to Dawson City.  Some of these individuals strayed into the Wheaton Valley, locating claims in the Schnabel Creek drainage in 1903.

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the Yukon Territory
- An impact report on the local flora and fauna;			 Any water discharged will have to meet water standards;Monitoring of ground water to ensure no/minimal contamination;
- All material to be left on the surface will need to be environmentally benign; and   The socio-economic impact will have to be evaluated and re-mediated if deemed negative.		
Before we can commence the production phase we would need to submit an application to commence mining operations. This application would then be reviewed by a project committee. This committee will ultimately advise the government as to whether our application should be approved or rejected. This process may involve steps such as consulting public and other interested parties for comments or the request of additional information from us. The length of time and cost of this process is dependant upon the size of the proposed mining operation, among other factors.

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***Employees***We have no employees, other than our executive officers, as of the time of this report. We intend to retain geologists and consultants on a contract basis to conduct the work programs on our property to carry out our plan of operations.***Research and Development Expenditures***Since the time of our incorporation we have not incurred any research or development expenditures.***Subsidiaries***We do not have any subsidiaries.***Patents and Trademarks***We do not own, either legally or beneficially, any patents or trademarks.**Item 2. Description of Property**Our executive offices are located at 32 Executive Park, Suite 105, Irvine, California 92614. We also have 9 mineral claims in the Yukon Territory, as described above under Description of Business.**Item 3. Legal Proceedings**We are not, and have not been during the period covered by this report, a party to any legal proceedings.**Item 4. Submission of Matters to a Vote of Security Holders**In the quarter ended September 30, 2007, no matters were submitted to the Company’s security holders, other than the following:		The following actions were approved by the written consent of a majority of the Company’s shareholders on July 23, 2007 and became effective on or about August 31, 2007:		1.     The election of Kathleen Scalzo and Shane Ivancoe as directors of the Company until the next annual meeting of the Company’s shareholders or until their successors have been elected and qualified;		2.     The appointment of MacKay LLP, Chartered Accountants, to audit the Company’s financial statements for the fiscal year ending September 30, 2007; and		3.     The adoption of the 2007 Stock Option and Incentive Plan for key personnel of the Company.		In the July 23, 2007 written consent, each action (including the election of each director) was approved by shareholders holding 4,185,000 of the 7,300,000 shares of the Company’s common stock outstanding at that time, or 57.3% of the outstanding shares.  Additionally, actions (2) and
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		(3) above were approved by the unanimous written consent of the Company’s Board of Directors on July 23, 2007.		Notice of the approval of the actions by written consent of shareholders was given pursuant to an information statement, which was filed with the Securities and Exchange Commission on August 7, 2007.
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**PART IIItem 5. Market for Common Equity and related Stockholder Matters*****Market Information***We are a reporting company with the SEC. We participate in the Over-the-Counter Bulletin Board Quotation Service maintained by National Association of Securities Dealers, Inc. (“OTCBB”). The OTCBB is an electronic quotation medium for securities traded outside of the Nasdaq Stock Market and prices for our common stock are published on the OTC Bulletin Board under the trading symbol “SCXN.OB.” The OTCBB market is extremely limited and the prices quoted are not a reliable indication of the value of our common stock.		The first trade of our Common Stock on the Bulletin Board occurred on December 6, 2006.  The following table sets forth the quarterly high and low closing sale prices for the Common Stock for the periods indicated below, based upon quotations between dealers, without adjustments for stock splits, dividends, retail mark-ups, mark-downs or commissions, and therefore, may not represent actual transactions:
**Date**

**High**

**Low**
  
**December 6, 2006 to December 31, 2006**

$0.25

 $0.02

**January 1, 2007 to March 31, 2007**

$0.91

$0.11

**April 1, 2007 to June 30, 2007**

$0.72

$0.35

**July 1, 2007 to September 30, 2007**

$0.58

$0.23

**October 1, 2007 to December 19, 2007**

$0.51

$0.31
***Holders of Our Common Stock***As of the date of this report, we have approximately 47 registered shareholders.***Dividends***There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:- We would not be able to pay our debts as they become due in the usual course of business; or   Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.		
As of the date of this report, we have not declared any dividends and we do not plan to declare any dividends in the foreseeable future.***Securities Authorized for Issuance Under Equity Compensation Plans***			Our 2007 Stock Option and Incentive Plan was approved by the unanimous written consent of the our Board of Directors and by the written consent of a majority of our shareholders 

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		on July 23, 2007.  One million (1,000,000) shares of our common stock are reserved for issuance pursuant to that plan.  No options have been issued under the plan as of the date of this Annual Report.***Recent Sales of Unregistered Securities***		In the quarter ended September 30, 2007, we sold no securities that were not registered under the Securities Act.**Item 6. Management’s Discussion and Analysis or Plan of OperationGeneral**The following discussion and analysis should be read in conjunction with our financial statements (and notes related thereto) appearing elsewhere in this report.***Plan of Operations***Over the next year our plan of operations is to complete the following objectives within the specified time periods, subject to our obtaining the necessary funding for the continued exploration of our property:- We plan to conduct phase one of our recommended exploration program on our property. As previously outlined in the ‘Description of Business’ section, phase one will consist of geological boulder trend Sampling. This phase will commence in the next three months, but the exact time is dependant on the availability of personnel and equipment. This phase is expected to cost about $10,000.   If the results of phase one should warrant it, we intend to continue with phase two of our recommended exploration program, geological mapping and geophysical surveying. This phase is expected to cost about $15,000. We may need to raise additional funding in order to conduct this phase. If we do obtain the funding necessary, we anticipate that this phase would begin in early 2008.If further exploration should be warranted upon completion of phase two, we will continue along this path. This third phase is expected to cost over $100,000. This phase could be commenced as early as spring 2008 but it is not known how long it would continue. This would be based exclusively on how lucrative the mineral findings are in phase two.
- We anticipate spending approximately $5,000 monthly in ongoing general and administrative expenses over the next year. These expenses will consist primarily of the professional fees for the audit and legal work relating to our regulatory filings throughout the year, as well as general transfer agent fees, annual mineral claim fees and general office expenses.   We owe Iscis Holdings Ltd. an additional $20,000 on or before September 30, 2008.		
As of September 30, 2007, we had cash reserves of $45,649 and as of December 19, 2007, we had cash reserves of approximately $90,000. We anticipate this to be enough to cover the costs of phase one of exploration as well as general and administrative expenses over the next year. However, our ability to pay Iscis Holdings and complete phase two of the recommended work program and to pay for any additional exploration work or other expenses will be subject to us 

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		obtaining additional financing as these expenditures will exceed our available cash reserves.  During the year, we anticipate that we will not generate any revenue. Accordingly, we will be required to obtain additional financing in order to continue our plan of operations. We believe that debt financing will not be a feasible alternative as we do not have enough tangible assets to secure any debt financing. We anticipate that additional financing will be equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund phase two of our exploration program or any of our other expenses. In the absence of such financing, we will not be able to continue exploration of our mineral claims and our business plan will fail. Even if we are successful in obtaining equity financing to fund phase two of our exploration program, there is no assurance that we will obtain the funding necessary to pursue any advanced exploration of our mineral claims. If we do not continue to obtain additional financing, we will be forced to abandon our mineral claims and our plan of operations.		Should such a situation arise, we may consider entering into a joint venture arrangement to provide the required funding to continue our development of our mineral claims. We have not undertaken any efforts to locate a joint venture partner for the mineral claims. Even if we elected to pursue a joint venture partner, there is no assurance that any other party would want to enter into a joint venture agreement with us. If we entered into a joint venture agreement, we would likely have to assign a percentage of our interest in our mineral claims to our joint venture partner.*Going Concern*We have not attained profitable operations and are dependant upon obtaining financing to pursue any extensive exploration activities. For these reasons our auditors stated in their report that they are concerned that we will not be able to continue as a going concern.*Future Financing*We anticipate continuing to rely on equity sales of our common stock to finance our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned exploration activities.**Off-Balance Sheet Arrangements.**  We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
**FORWARD LOOKING STATEMENTS**

This report contains forward-looking statements that involve risks and uncertainties, including statements regarding our capital needs, business plans and expectations. Such forward-looking statements involve risks and uncertainties regarding the market price of gold, silver and lead, availability of funds, government regulations, operating costs, exploration costs, outcomes of exploration programs and other factors. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. You can identify forward-looking 

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			statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. Our actual results may differ materially. In evaluating these statements, you should consider various factors. These factors may cause our actual results to differ materially from any forward-looking statement. While these forward-looking statements are made in good faith and reflect our current judgment regarding our business plans, our actual results will almost always vary, sometimes materially, from any future performance suggested herein.**Item 7. Financial Statements**See Index to Financial Statements immediately following the signature page of this Annual Report.**Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure**There have been no disagreements with our accountants since our formation required to be disclosed pursuant to Item 304(b) of Regulation S-B.**Item 8A. Controls and Procedures**It is the responsibility of John Roozendaal and Jason Walsh (who serve, respectively, as Chief Executive Officer and Chief Financial Officer) to ensure that the Company maintains disclosure controls and procedures designed to provide reasonable assurance that material information, both financial and non-financial, and other information required under the securities laws to be disclosed is identified and communicated to senior management on a timely basis. The Company’s disclosure controls and procedures include mandatory communication of material events, automated accounting processing and reporting, management review of monthly results and an established system of internal controls.			As of September 30, 2007, management conducted an evaluation of the Company’s disclosure controls and procedures pursuant to the Exchange Act. Based upon that evaluation, management has concluded that our current disclosure controls and procedures are effective as of September 30, 2007. The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events.				There have been no significant changes in our internal controls over financial reporting during the fiscal quarter ended September 30, 2007 or subsequent to that date that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.**Item 8B. Other Information**None.
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**PART III****Item 9. Directors, Executive Officers, promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act**The following table sets forth certain information regarding our executive officers and directors as of December 19, 2007:
**NAME OF							DIRECTOR**

**AGE**

**TERM SERVED**

**POSITIONS WITH COMPANY**

John Roozendaal

41

Since December 13, 2007

President and Director

Jason Walsh

35

Since March 3, 2006

Secretary, Treasurer and Director

Shane Ivancoe

52

Since March 3, 2006

Director
		On December 13, 2007, our Board of Directors increased the size of our Board to three persons.  On that same date, Kathleen Scalzo resigned as our President and Treasurer and as a Director.  Our remaining director Shane Ivancoe appointed Jason Walsh and John Roozendaal as Directors to fill the vacancies on the Board of Directors and also appointed John Roozendaal as our President and Jason Walsh as our Treasurer.		All our directors hold office until the next annual meeting of our stockholders or until their successors are elected and qualified.  Executive officers hold offices until their successors are elected and qualified, subject to earlier removal by the Board of Directors.		Set forth below is a biographical description of each director and executive officer based upon information supplied by them: ***Biographical Information***John Roozendaal has served as our President and as a Director since December 13, 2007.  Mr. Roozendaal has been involved with the mineral exploration industry for over 15 years focusing on precious, base and specialty metal exploration projects in North America. Mr. Roozendaal is the President and a Director of VMS Ventures Inc. and Harvest Gold Corp., and a director of Thelon Ventures Ltd., which are all publicly traded companies on the TSX Venture exchange.  Mr. Roozendaal helped found VMS Ventures in 1996 and Harvest Gold was spun off from VMS Ventures in 2005.  He became a director of Thelon Ventures in October 2005.  Mr. Roozendaal holds a Bachelor of Science degree in Geology.		Jason Walsh has served as our Secretary since March 3, 2006.  He has served as our Treasurer and as a Director since December 13, 2007.  Since April 15, 2003, he has also served as the President and a Director of Thelon Ventures Ltd (TSX Venture: THV).  He has also served as an officer of International Ranger Corp. (Pink Sheets: IRNG) since February 19, 2006.  From October 1997 to April 2003, he served as a registered representative with Global Securities in Vancouver, B.C.		Shane Ivancoe has served as our Director since March 3, 2006.  For over the past five years, he has also served as a self-employed corporate consultant.  From 1976 to 1995, he served as the president of Galway Holdings, a food importer and exporter based in Vancouver, B.C.
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***Significant Employees***We have no significant employees other than the officers and directors described above.***Committees of the Board of Directors***  We presently do not have an audit committee, compensation committee, nominating committee, an executive committee of our Board of Directors, stock plan committee or any other committees. ***Audit Committee Financial Expert***  We have no financial expert on our Board of Directors. We believe the cost related to retaining a financial expert at this time is prohibitive.***Section 16(a) Compliance.***  Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors, executive officers and holders of more than 10% of the Common stock to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of the Common Stock.  It appears that Kathleen Scalzo, Shane Ivancoe, Jason Walsh, Kassel Enterprises and Iscis Holdings filed Form 3s during the year ended September 30, 2007 that were properly filed during the year ended September 30, 2006.  It also appears that Shane Ivancoe’s Form 4 filing made on February 13, 2007 was not timely filed. 		The Company has not yet adopted a written Code of Ethics, but management intends to do so in the next year.**Item 10. Executive Compensation**We paid our secretary, Jason Walsh, $6,000 in the year ended September 30, 2006 and $20,000 in the year ended September 30, 2007 as a directors fee.  We also paid Jason Walsh office and administration fees of $25,986 in the in the year ended September 30, 2007.  Other than those payments, for our last three fiscal years ended September 30, 2007, 2006 and 2005, our officers and directors have received no form of compensation for their work. ***Stock Option Grants***We have not granted any stock options to our executive officers since our inception.***Consulting Agreements***We are a party to a contract for services with Bua Group Holdings Ltd. dated October 1, 2006.  Pursuant to this agreement, we are obligated to pay Bua Group Holdings Cdn$1,000 per month for services and Cdn$1,400 per month for expenses.  The principals of Bua Group Holdings are Jason Walsh, our secretary, and Ralf Hillebrand.**Item 11. Security Ownership of Certain Beneficial Owners and Management and****Related Stockholder Matters**The following table provides the names and addresses of each person known to us to own more than 5% of our outstanding stock as of December 19, 2007, and by the officers and directors, individually or as a group. Except as otherwise indicated, all shares are owned directly.
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******

******

**Title of Class**

**Name and Address of							Beneficial Owner**

**Amount and Nature							of Beneficial Ownership**

**Percent of Class**

 

 

 

 

$0.001 Par Value Common Stock

Shane Ivancoe*Director*						c/o Scout Exploration						32 Executive Park, Suite 105						Irvine, California 92614

800,000

11.0%

$0.001 Par Value Common Stock

Jason Walsh*Secretary, Treasurer and Director*						c/o Scout Exploration						32 Executive Park, Suite 105						Irvine, California 92614

185,000

2.5%

$0.001 Par Value Common Stock

John Roozendaal*President and Director*						c/o Scout Exploration						32 Executive Park, Suite 105						Irvine, California 92614

200,000 (1)

2.8%

**$0.001 Par Value Common Stock**

**All officers and directors as a group**

**1,185,000**

**16.2%**

$0.001 Par Value Common Stock****

Kathleen Scalzo3550 Quesnel Drive						Vancouver, B.C.						Canada V6L 2W6 (2)****

370,000****

5.1%****

$0.001 Par Value Common Stock

Kassel Enterprises Inc.						876 Fredrick Dr						North Vancouver, B.C.						Canada V7K 2Y3

800,000

11.1%

$0.001 Par Value Common Stock

Iscis Holdings Ltd.102-9323 Gallant Ave.						North Vancouver, B.C.						Canada V7G 2C1 (3)

680,000

9.3%
1.  These shares are held by 667981 BC Ltd., a company controlled by Mr. Roozendaal.2.  Ms. Scalzo is our former President, Treasurer and Director.3.  Iscis Holdings Ltd. is owned by Ivan Walsh, the brother of our secretary and treasurer, Jason Walsh.  Of the 680,000 shares, 500,000 are owned by Iscis Holdings Ltd. and 180,000 are owned by Ivan Walsh in his individual capacity.
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		The percentage of class is based upon 7,300,000 shares of common stock and no shares of preferred stock issued and outstanding as of the date of this report.		Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. In accordance with Securities and Exchange Commission rules, shares of our common stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days of the date of the table are deemed beneficially owned by the optionees. Subject to community property laws, where applicable, the persons or entities named in the table above have sole voting and investment power with respect to all shares of our common stock indicated as beneficially owned by them.**Item 12. Certain Relationships and Related Transactions**Except as described below, none of the following parties has, in the last two years, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:- Any of our directors or officers;   Any person proposed as a nominee for election as a director;Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock; or
- Any member of the immediate family of any of the above person.		  ***Office Space Arrangement***We paid Jason Walsh office and administration fees of $25,986 in the in the year ended September 30, 2007.***Agreement with Iscis Holdings Ltd.***On March 4, 2006, we entered into a mineral property purchase agreement with Iscis Holdings Ltd., whereby they sold to us 100% right, title and interest in the mineral title “AAV 1-9 Claims” in the Whitehorse Mining District of the Yukon Territory.******Iscis Holdings Ltd. is owned by Ivan Walsh, who is one of our shareholders and the brother of our secretary, Jason Walsh.  Iscis also beneficially owns over 10% of our common stock.			As a part of our purchase agreement with Iscis Holdings Ltd. we entered into a net smelter return royalty agreement. The terms of this agreement outline that Iscis Holdings Ltd. is entitled to a royalty payment equal to 3% of the net smelter returns.***Agreement with Bua Group Holdings Ltd.***We are a party to a contract for services with Bua Group Holdings Ltd. dated October 1, 2006.  Pursuant to this agreement, we are obligated to pay Bua Group Holdings Cdn$1,000 per month for services and Cdn$1,400 per month for expenses.  The principals of Bua Group Holdings are Jason Walsh, our secretary, and Ralf Hillebrand.  
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            **Private Placement Transaction** We completed an offering for 1,700,000 units in March 2006, to 8 shareholders. Each “unit” consisted of one share of our common stock and one warrant to purchase an additional share of our common stock for $0.15 prior to March 31, 2007. The units were issued at a price of $0.05 per unit and the total amount received was $85,000.    		Shane Ivancoe, one of our Directors, purchased 400,000 units in this offering and is a selling shareholder hereunder.  See the section entitled “Selling Security Holders” above.  During the year ended September 30, 2007, Mr. Ivancoe also exercised his warrants and purchased 400,000 shares of our common stock for $60,000.     *Director Independence* We participate in the Over-the-Counter Bulletin Board Quotation Service maintained by National Association of Securities Dealers, Inc.  As such, we are not currently subject to corporate governance standards of listed companies, which require, among other things, that the majority of the board of directors be independent.    		Since we are not currently subject to corporate governance standards relating to the independence of our directors, we choose to define an “independent” director in accord with the NASDAQ Global Market’s requirements for independent directors (NASDAQ Marketplace Rule 4200). The NASDAQ independence definition includes a series of objective tests, such as that the director is not an employee of the company and has not engaged in various types of business dealings with the company.    		Shane Ivancoe is considered an independent director under the above definition.  We do not list that definition on our Internet website.    		We presently do not have an audit committee, compensation committee, nominating committee, an executive committee of our Board of Directors, stock plan committee or any other committees.     Item 13. Exhibits The following documents have been filed as a part of this annual report:     Exhibit No.  
3.1

* Articles of Incorporation (Charter Document)

3.2

* Certificate of Amendment

3.3

* Bylaws

10.1

* Iscis Holdings Ltd. Mineral Property Purchase Agreement

10.2

** Contract for services with Bua Group Holdings Ltd. dated October 1, 2006.

31.0

Rule 13A-14(A) Certification

32.0     

Certification Pursuant to 18 U.S.C. SECTION 1350, as adopted pursuant to SECTION 906 of the Sarbanes-Oxley Act of 2002
        
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           		* Previously filed with the Securities and Exchange Commission on August 10, 2006 as exhibits to our Registration Statement on Form SB-2.    		** Previously filed with the Securities and Exchange Commission on February 13, 2007 as an exhibit to our Registration Statement on Form 10-QSB.     Item 14. Principal Accountant Fees and Services The following is a summary of the aggregate fees billed to us by our principal accountant, MacKay LLP, for professional services rendered for the fiscal years ended September 30, 2007 and 2006.    		1.    Audit Fees. Consists of fees billed for professional services rendered for the audits of our financial statements for the fiscal years ended September 30, 2007 and 2006, and for review of the financial statements included in Registrant's Quarterly Reports on Form 10-QSB for those fiscal years. Fees billed in 2006 were $9,552. Fees billed to date for 2007 are $5,521.    		2.    Audit-Related Fees. Consists of fees billed for services rendered to us for audit-related services, which generally include fees for audit and review services in connection with a proposed spin-off transaction, separate audits of employee benefit and pension plans, and ad hoc fees for consultation on financial accounting and reporting standards.  Fees billed: None.    		3.    Tax Fees. Consists of fees billed for services rendered to us for tax services, which generally include fees for corporate tax planning, consultation and compliance. Fees billed: $5,005.    		4.    All Other Fees. Consists of fees billed for all other services rendered to us, which generally include fees for consultation regarding computer system controls and human capital consultations. Fees Billed: None.    		None of the "audit-related," "tax" and "all other" services in 2006, as defined above, were approved by the Audit Committee in reliance on the de minimis exception to the preapproval requirements under federal securities laws and regulations.    		Pre-Approval of Services of Principal Accounting Firm    		We do not have an Audit Committee, and the tasks generally undertaken by an Audit Committee are undertaken by our Board of Directors.  Our board’s policy is to pre-approve all audit and permissible non-audit services provided by our principal accounting firm.  These services may include audit services, audit-related services, tax services and other permissible non-audit services. Any service incorporated within the independent auditor's engagement letter, which is approved by the board, is deemed pre-approved. Any service identified as to type and estimated fee in the independent auditor's written annual service plan, which is approved by the board, is deemed pre-approved up to the dollar amount provided in such annual service plan.    		During the year, the principal accounting firm may also provide additional accounting research and consultation services required by, and incident to, the audit of our financial statements and related reporting compliance. These additional audit-related services are pre-approved up to the amount approved in the annual service plan approved by the board. The board may also pre-approve services on a case-by-case basis during the year.         
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           		The board's approval of proposed services and fees are noted in the meeting minutes of the board and/or by signature of the board on the engagement letter. Our principal accounting firm and management are periodically requested to summarize the principal accounting firm services and fees paid to date, and management is required to report whether the principal accounting firm's services and fees have been pre-approved in accordance with the required pre-approval process of the board.                                                   
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SIGNATURES
  
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.				SCOUT EXPLORATION, INC.				Dated: December 19, 2007				By: __/s/ John Roozendaal_______________				Name:  John Roozendaal				Title: President and Chief Executive Officer				By: _/s/ Jason Walsh___________________				Name:  Jason Walsh				Treasurer and Principal Accounting Officer				In accordance with the Exchange Act, this report has been signed below by the following person on behalf of the registrant and in the capacity and on the date indicated.Dated: December 19, 2007				By: _/s/ John Roozendaal________________				Name:  John Roozendaal				Title: President and Chief Executive Officer				Director				By: _/s/ Jason Walsh____________________				Name:  Jason Walsh				Title: Secretary, Treasurer and Principal Accounting Officer				Director				By: _/s/ Shane Ivancoe__________________				Name:  Shane Ivancoe				Title: Director
  
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**Scout Exploration, Inc.**(an Exploration Stage Enterprise)**Financial Statements**				(presented in US dollars)**September 30, 2007**
  
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F-1
              Scout Exploration, Inc. (an Exploration Stage Enterprise)     Financial Statements (presented in US dollars)		     September 30, 2007     Report of Independent Registered Public Accounting Firm                                                         F-3    		Statements of Operations and Deficit                                                                                         F-4    		Balance Sheets                                                                                                                          F-5    		Statement of Stockholders’ Equity (Deficit)                                                                       F-6 - F-7    		Statements of Cash Flows                                                                                                          F-8    		Notes to the Financial Statements                                                                                    F-9 - F-12                               
F-2
  
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****

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**CHARTERED							ACCOUNTANTS**1100 – 1177 West Hastings Street							Vancouver, BC   V6E 4T5							Tel:  604-687-4511							Fax: 604-687-5805							Toll Free: 1-800-351-0426							www.MacKayLLP.ca**Report of Independent Registered Public Accounting Firm				To the Shareholders of 				Scout Exploration, Inc.**(an Exploration Stage Enterprise)			We have audited the balance sheets of Scout Exploration, Inc. (an Exploration Stage Enterprise) as at September 30, 2007 and 2006, and the statement of operations and deficit, stockholders’ equity (deficit), and cash flows for the years then ended, and for the period from incorporation on February 1, 1999 to September 30, 2007.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.			We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatements.  The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.			In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at September 30, 2007 and 2006, and the results of its operations and its cash flows for the years then ended, and for the period from incorporation on February 1, 1999 to September 30, 2007 in conformity with U.S. generally accepted accounting principles.			The accompanying financial statements referred to above have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to financial statements, the Company is in the exploration stage, and has no permanently established source of revenue and is dependent on its ability to raise capital from shareholders or other sources to sustain operations.  These factors, along with other matters as set forth in Note 1, raise substantial doubt that the Company will be able to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.**Vancouver, Canada.                                                                                                                         				November 21, 2007 except as to Note 7(c)                                                            *\s\ MacKay LLP*     which is as of December 4, 2007                                                           Chartered Accountants**  
F-3

****

****
  **Scout Exploration, Inc.**(an Exploration Stage Enterprise)**Statements of Operations and Deficit**			(presented in US dollars)			
****

****

****
**Cumulative, from								Inception on								February 1, 1999 to								September 30,****For the Year ended								September 30,****2007****2007****2006**  **Administrative expenses**
****
    Accounting and audit							$                49,641							$         25,671							$         13,995    Bank charges and interest							2,252							1,097							               260    Consulting fees							1,285							-							              1,285    Director’s fees							26,000							20,000							             6,000    Dues and fees							6,414							3,001							             2,623    Legal							57,362							26,961							            23,426    Magazine rights							5,100							-							-    Management fees							35,575							-							2,250    Office and administration							40,019							40,019							-    Promotion and travel							12,345							12,345							-    Transfer agent							10,041							2,775							4,502  
****

****

****
**246,034****131,869****54,341**  
****

****

****
**Mineral property expenses**
****

****

****
    Acquisition costs							30,000							-							30,000    Exploration costs							860							-							860  
****

****

****
**30,860****-****30,860**  
****

****

****
**Loss and comprehensive loss for the							   period**
****
**(276,894)**
****
**(131,869)**
****
**(85,201)**  
****

****

****
**Deficit, beginning of period****-****(145,025)****(59,824)****  ****Deficit, accumulated during the							   exploration stage**
****
**$             (276,894)**
****
**$       (276,894)**
****
**$       (145,025)****  **
****

****

****
**Basic and diluted loss per share**
****
**$            (0.02)****$            (0.02)****  **
****

****

****
**Basic and diluted weighted average							   shares outstanding**
****

****
**6,570,833**
****
**4,066,667**  
The accompanying notes are an integral part of the financial statements.					F-4
  **Scout Exploration, Inc.**(an Exploration Stage Enterprise)**Balance Sheets**(presented in US dollars)				
****

****

****
**September 30,****2007****2006**  **Assets****Current**    Cash**$       45,649****$        31,481**    Prepaid expenses**4,280**
****
  
****

****
**$       49,929****$        31,481**  **Liabilities**  **Current**    Accounts payable and accrued liabilities   **$       44,723****$        29,406**  
****

****
**Stockholders’ Equity (Deficit)**
****

****
  
****

****
**Preferred stock** $0.01 par value
****

****
   1,000,000 shares authorized
****

****
                   No shares issued**-****-**  						
****

****

****
**Common stock,**$0.001 par value
****

****
  50,000,000 shares authorized
****

****
    7,300,000 (2006 – 5,900,000) shares issued and outstanding**7,300****5,900**  
****

****
**Subscriptions received in advance (note 3)****100****100**  						
****

****

****
**Subscriptions receivable (note 7)****(75,000)****-**  
****

****
**Additional paid in capital****349,700****141,100**  
****

****
**Deficit accumulated during the exploration stage****(276,894)****(145,025)**  **5,206****2,075**  **$       49,929****$         31,481****Approved by the Directors:				_____________________________ Director				_____________________________ Director**  
The accompanying notes are an integral part of the financial statements.				F-5
  **Scout Exploration, Inc.**(an Exploration Stage Enterprise)**Statements of Stockholders’ Equity (Deficit)**(presented in US dollars)			**For the period from incorporation on February 1, 1999 through September 30, 2007******  
****

****

****

Number								of shares

Par value

Additional								Paid in								Capital

Subscriptions								received								in advance

Subscriptions								receivable

Deficit								Accumulated								During the								Exploration Stage

Total

Balance February 1, 1999

-

$           -

 $                -

  $               -

  $               -

$                  -

$                -

Subscriptions received in advance

-

             -

                   -

         37,100

        -

-

         37,100

Net loss for the period

-

             -

                   -

                   -

                   -

(32,002)

       (32,002)

Balance September 30, 1999

-

             -

                  -

37,100

-

(32,002)

         5,098

Net loss for the year

-

             -

                  -

                   -

                   -

                 (3,829)

          (3,829)

Balance September 30, 2000

-

             -

 -

37,100

-

(35,831)

         1,269

November 1, 2000 issue common shares								  for subscriptions received in advance

3,700,000

3,700

33,300

(37,000)

-

-

-

Net loss for the year

-

-

                   -

           -

           -

(3,754)

          (3,754)

Balance September 30, 2001

3,700,000

     3,700

         33,300

              100

              -

(39,585)

        (2,485)

Net loss for the year

-

             -

                   -

           -

           -

(3,216)

          (3,216)

Balance September 30, 2002

3,700,000

     3,700

         33,300

              100

              -

(42,801)

          (5,701)

Net loss for the year

-

             -

                   -

           -

           -

(3,120)

          (3,120)

Balance September 30, 2003

3,700,000

     3,700

         33,300

              100

              -

               (45,921)

          (8,821)

Net loss for the year

-

             -

                   -

           -

           -

(3,127)

          (3,127)

Balance September 30, 2004

3,700,000

     3,700

         33,300

              100

              -

              (49,048)

        (11,948)

Net loss for the year

-

             -

                   -

           -

           -

(10,776)

        (10,776)

Balance September 30, 2005

3,700,000

     3,700

         33,300

              100

              -

              (59,824)

      (22,724)

August 1, 2006  issue common shares for								   cash

1,700,000

1,700

83,300

-

-

-

85,000

August 1, 2006  issue common shares for								   mineral Property

500,000

500

24,500

-

-

-

25,000

Net loss for the year

-

-

-

-

-

(85,201)

(85,201)

Balance September 30, 2006

5,900,000

$     5,900

$     141,100

$           100

$               -

    $       (145,025)

$        2,075
  
F-6
  **Scout Exploration, Inc.**(an Exploration Stage Enterprise)**Statements of Stockholders’ Equity (Deficit)**(presented in US dollars)			**For the period from incorporation on February 1, 1999 through September 30, 2007******
****

****

January 25, 2007 issue common shares for								   cash

400,000

$     400

$     59,600

$                 -

$                -

$                       -

$        60,000

February 28, 2007 issue common shares for								   cash

200,000

200

29,800

-

-

-

30,000

March 19, 2007 issue common shares for								   cash

100,000

100

14,900

-

-

-

15,000

Subscriptions received in advance

-

-

-

15,000

-

-

15,000

May 14, 2007 issue common shares								   for subscription received in advance

100,000

100

14,900

(15,000)

-

-

-

June 4, 2007 issue common shares for cash								   and subscription receivable

600,000

600

	89,400

-

(75,000)

-

15,000

Net loss for the period

-

-

-

-

-

(131,869)

(131,869)
  
****

****

****

****

****

****

****

****

**Balance September 30, 2007**

**7,300,000**

**$   7,300**

**$    349,700**

**$           100**

**$     (75,000)**

**$        (276,894)**

**$          5,206**
  
The accompanying notes are an integral part of the financial statements.				F-7
  **Scout Exploration, Inc.**(an Exploration Stage Enterprise)**Statements of Cash Flows**(presented in US dollars)			  
****
**Cumulative, from								Inception on								February 1, 1999 to								September 30,****For the Year ended								September 30,****2007****2007****2006**  **Cash provided by (used for)**
****
**  ****Operating activities**
****
    Loss for the period							$           (276,894)							$       (131,869)							$         (85,201)    Expenses settled by shares							25,100							-							25,000      Change in non-cash working capital items:						          Prepaid expenses							                (4,280)							             (4,280)							-          Accounts payable and accrued liabilities							44,723							15,317							4,906  
****

****

****
**(211,351)****(120,832)****(55,295)**  **Financing activity**   Issuance of shares for cash**257,000****135,000****85,000**  
****

****

****
**Increase in cash during the exploration							     stage**
****
**45,649**
****
**14,168**
****
**29,705**  **Cash, beginning of period****-****31,481****1,776****  **
****

****
**Cash, end of period****$              45,649****$          45,649****$         31,481**  **Supplemental cash flow information**       Interest paid**$                    -****$                 -****$                  -**     Income taxes paid**$                    -****$                 -****$                  -**  
****

****

****
Non-cash transactions
****

****

****
  Financing
****

****

****
       Issuance of shares for property							$          25,000							$                 -							$         25,000       Issuance of shares for subscription						          receivable							75,000							75,000							-       Shares to be issued for magazine rights							100							-							-  
The accompanying notes are an integral part of the financial statements.				F-8

****

****

****

****

****

****

****

****

****

****

****

****
            Scout Exploration, Inc. (an Exploration Stage Enterprise)     Notes to the Financial Statements (presented in US dollars)		     September 30, 2007     1.       Nature of Operations  
The company was incorporated in the State of Nevada on February 1, 1999.  The company was engaged in the business of designing, developing and marketing educational products for children, adults, business people, as well as new language learners.  On April 10, 2006 the Company changed its name to Scout Exploration, Inc.  The Company is now in the business of the exploration, development and exploitation of resources properties, under the agreement disclosed in note 4.				The accompanying financial statements have been prepared on the basis of accounting principles applicable to a going concern.  Accordingly, they do not give effect to adjustment that would be necessary should the company be unable to continue as a going concern and therefore be required to realize its assets and retire its liabilities in other than the normal course of business and at amounts different from those in the accompanying financial statements. The company’s ability to continue as a going concern is dependent upon achieving profitable operations and/or upon obtaining additional financing. The outcome of these matters can not be predicted at this time.
  
****

**2.       Significant Accounting Policies**

**a)      Exploration stage company**

The company is considered to be in the exploration stage.

**b)      Natural resource properties**

Natural resource properties consist of exploration and mining concessions, options and contracts.  Acquisitions, leasehold costs and exploration costs are expensed as incurred until an independent feasibility study has determined that the property is capable of economic commercial production.

**c)       Foreign currency translation**

Monetary assets and liabilities are translated at year-end exchange rates; other assets and liabilities have been translated at the rates prevailing at the date of transaction. Revenue and expense items, except for amortization, are translated at the average rate of exchange for the year.  Amortization is converted using rates prevailing at dates of acquisition. Gains and losses from foreign currency translation are included in the statements of operations.

**d)      Loss per share**

Basic loss per share is calculated using the weighted average number of shares outstanding during the period.						The company uses the treasury stock method of calculating fully diluted per share amounts whereby any proceeds from the exercise of stock options or other dilutive instruments are assumed to be used to purchase common shares at the average market price during the period.  

****

****

****

****

****

****
  
F-9
  **Scout Exploration, Inc.**(an Exploration Stage Enterprise)**Notes to the Financial Statements**(presented in US dollars)			**September 30, 2007********2.       Significant Accounting Policies****(continued)**  
**e)       Financial instruments**

All significant financial assets, financial liabilities and equity instruments of the company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk.  Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.

**f)        Estimates**

The preparation of financial statements in conformity with US generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those reported.

**g)      Income taxes**

Income taxes are provided for using the liability method of accounting in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes”.  A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.

**h)**      **Recent accounting pronouncements**

In February, 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of FASB Statement No. 115” (hereinafter “SFAS No. 159”). This statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments. This statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007, although earlier adoption is permitted. Management has not determined the effect that adopting this statement would have on the Company’s financial condition or results of operation.
  
****

****

****
  
F-10
  **Scout Exploration, Inc.**(an Exploration Stage Enterprise)**Notes to the Financial Statements**(presented in US dollars)			**September 30, 2007********3.        Subscriptions received in advance**  
The issuance of 100,000 common shares for $100 as part of the consideration for the acquisition of US business rights to a magazine remains outstanding.
  ****  **4.       Resource Property**  
On March 4, 2006 the company signed a letter of agreement with a non-arms length private Canadian Corporation for a 100% interest in and to the AAV 1-9 Mineral Claims situated in the Whitehorse Mining District of the Yukon Territory, Canada.  Consideration for the acquisition will be cash payment of $5,000 by March 31, 2006 (paid) and $20,000 on or before September 30, 2006 (subsequently deferred to September 30, 2008), and the issuance of 500,000 common shares of the company (issued at fair value of $0.05 per common share).  The Vendor will retain 3% net smelter royalty, up to 2% of which can be re-purchased for $2,000,000.
    **5.      Income Tax**  
The Company has available unclaimed start up costs $276,894 for US Income tax purposes, which may be carried forward to reduce taxable income in future years.				Future tax benefits related to the above have not been recorded due to uncertainty regarding their utilization**.**
  ****  **6.       Related Party Transactions**  ****            **a)       **During fiscal 2006, a Director of the Company purchased 400,000 common shares from treasury for cash of $20,000.  **b)**During the current year, a Director of the Company exercised warrants to purchase 400,000 common shares from treasury for cash of $60,000.  **c)**During the current year, director’s fees of $20,000 (2006 - $6,000) were paid to a Director and an officer of the Company.  **d)**During the current year, office and administration expenses of $25,986 (2006 - $Nil) was incurred with a corporation controlled by an officer of the Company.  **e)**At September 30, 2007, $21,260 (2006 - $Nil) was owed to an officer and corporations controlled by the officer of the Company. The balance due is on demand, has no specific terms of repayment, is non-interest bearing and is unsecured, accordingly fair value can not be reliably determined.          
F-11
            Scout Exploration, Inc. (an Exploration Stage Enterprise)     Notes to the Financial Statements (presented in US dollars)		     September 30, 2007    			7.      Equity Transactions            **a)       **During the year ended September 30, 2006, the Company issued 1,700,000 units at a price of $0.05 per unit totalling $85,000.  Each unit is comprised of one common share and one non-transferable share purchase warrant for the purchase of an additional common share for a period of one year at an exercise price of $0.15.  **b)**During the year ended September 30, 2006, the Company issued 500,000 common shares for mineral property at an estimated fair value of $0.05 per share (note 4).  **c)**During the current year, the Company issued 1,400,000 common shares for exercise of warrants at a price of $0.15 per share for gross proceeds of $210,000, of which $75,000 remained receivable as of September 30, 2007 (subsequently received $60,000 after year end).    8.      Warrants   
There are no warrants outstanding at the end of the year.
  ****                                        
F-12
            
**EXHIBIT INDEX**
  
**Exhibit No.**
  
3.1

* Articles of Incorporation (Charter Document)

3.2

* Certificate of Amendment

3.3

* Bylaws

10.1

* Iscis Holdings Ltd. Mineral Property Purchase Agreement

10.2

** Contract for services with Bua Group Holdings Ltd. dated October 1, 2006.

31.0

Rule 13A-14(A) Certifications

32.0               

Certifications Pursuant to 18 U.S.C. SECTION 1350, as adopted pursuant to SECTION 906 of the Sarbanes-Oxley Act of 2002
   		* Previously filed with the Securities and Exchange Commission on August 10, 2006 as exhibits to our Registration Statement on Form SB-2.    		** Previously filed with the Securities and Exchange Commission on February 13, 2007 as an exhibit to our Registration Statement on Form 10-QSB.