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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended October 31, 2008

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________
to________________

Commission file number 000-52499

CANDEV RESOURCE EXPLORATION,
INC.(Exact name of registrant as specified in its
charter)

|Nevada                                                               | 98-0515290                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|Suite 2200  1177 West Hastings Street, Vancouver,                   |                                     
|British Columbia, Canada                                             | V6E 2K3                             
|(Address of principal executive offices)                             | (Zip Code)                          

Registrants telephone number, including area code
604.688.7526

Securities registered under Section 12(b) of the Act:

|None                | N/A                                      
|------------------- | -----------------------------------------
|Title of each class | Name of each exchange on which registered

Securities registered under Section 12(g) of the Act:

Common Stock, $0.001 par value(Title
of class)

Indicate by checkmark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes [ 
 ]    No [X]

Indicate by checkmark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Act. Yes [ 
 ]    No [X]

Indicate by checkmark whether the registrant has (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 registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes
[X]    No [   ]

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Indicate by checkmark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not
contained herein, and will not 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-K or any amendment to this Form 10-K. [X]

Indicate by checkmark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

Large accelerated filer  [   ]
    (Do not check if a smaller
      reporting
    Accelerated
      filer                
       [   ]Non-accelerated filer   [   ]
    company)
    Smaller reporting company [X]


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

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 last sold, or the average bid and asked price of
such common equity, as of the last business day of the registrants most
recently completed second fiscal quarter: $665,600 based on a price of
$0.20 per share, being the average bid and asked price of such common equity as
of April 30, 2008.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PAST FIVE YEARS:

Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court. Yes [   ]    No
[   ] N/A

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

Indicate the number of shares outstanding of each of the
registrants classes of common stock, as of the latest practicable date.
8,780,000 shares of common stock as of January 20, 2009.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by
reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed
pursuant to Rule 424(b) or (c) of the Securities Act of 1933. The listed
documents should be clearly described for identification purposes (e.g.,
annual report to security holders for fiscal year ended December 24, 1980).
Not Applicable

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PART I

Forward Looking Statements.

This annual report contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These statements
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as may, should,
expects, plans, anticipates, believes, estimates, predicts,
potential or continue or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks in the section
entitled Risk Factors and the risks set out below, any of which may cause our
or our industrys actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. These risks include, by way of example and not in
limitation:

- the uncertainty that we will not be able to successfully identify and
  evaluation a suitable business opportunity;
- risks related to the large number of established and well-financed entities
  that are actively seeking suitable business opportunities;
- risks related to the failure to successfully management or achieve growth
  of a new business opportunity; and
- other risks and uncertainties related to our business strategy.

This list is not an exhaustive list of the factors that may
affect any of our forward-looking statements. These and other factors should be
considered carefully and readers should not place undue reliance on our
forward-looking statements.

Forward looking statements are made based on managements
beliefs, estimates and opinions on the date the statements are made and we
undertake no obligation to update forward-looking statements if these beliefs,
estimates and opinions or other circumstances should change. Although we believe
that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.

Our financial statements are stated in United States dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States dollars and all references to common
stock refer to the common shares in our capital stock.

As used in this annual report, the terms we, us, our, and
Candev mean Candev Resource Exploration, Inc., unless the context clearly
requires otherwise.

ITEM 1. BUSINESS

General

We were incorporated under the laws of the state of Nevada on
January 9, 2006. We are an exploration stage company. To date, our activities
have been limited to organizational matters, obtaining a geology report on the
King claims and the preparation and filing of a registration statement. Our
company is quoted for trading on the OTC

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Bulletin Board under the stock symbol CVRX. We are defined as
a shell company under Rule 12b-2 of the Exchange Act.

We acquired our mining property from Carl von Einsiedel under a
Property Option Agreement dated August 25, 2006 pursuant to which we received a
right and option to acquire a 100% interest in and to the King claims. On
January 15, 2008 Candev amended the Property Option Agreement. The Amended
Property Option Agreement was entered into for the purpose of increasing the
number of claims covered by the option agreement including two (2) additional
mining claims located in the Iskut River region in northwestern British
Columbia: tenure numbers 552025 and 552026. We entered into a termination
agreement dated December 3, 2008 with Carl von Einsiedel (the Termination
Agreement) and effective as of October 31, 2008. Pursuant to the terms of the
Termination Agreement the parties agreed to terminate the Option Agreement and
any amendments thereto. Both parties have released each other from any and all
obligations and liabilities pursuant to the Agreement. We are currently seeking
other business opportunities in the mining industry.

We have no revenues, have achieved losses since inception, have
been issued a going concern opinion by our auditors and rely upon the sale of
our securities to fund operations. Accordingly, we will be dependent on future
additional financing in order to seek other business opportunities in the mining
industry or new business opportunities.

Our Current Business

We are an exploration stage company. On December 3, 2008 and
effective as of October 31, 2008, we entered into a termination agreement with
Carl von Einsiedel whereby we terminated the property agreements to acquire a
100% interest in the King North and South claims located in British Columbia. We
are currently seeking other opportunities in the mining industry.
Simultaneously, we are seeking business opportunities with established business
entities for the merger of a target business with our company. In certain
instances, a target business may wish to become a subsidiary of us or may wish
to contribute assets to us rather than merge. We are currently in negotiations
with several parties to enter into a business opportunity but we have not
entered into any definitive agreements to date and there can be no assurance
that we will be able to enter into any definitive agreements. We anticipate that
any new acquisition or business opportunities by our company will require
additional financing. There can be no assurance, however, that we will be able
to acquire the financing necessary to enable us to pursue our plan of operation.
If our company requires additional financing and we are unable to acquire such
funds, our business may fail.

Management of our company believes that there are perceived
benefits to being a reporting company with a class of publicly-traded
securities. These are commonly thought to include: (i) the ability to use
registered securities to acquire assets or businesses; (ii) increased visibility
in the financial community; (iii) the facilitation of borrowing from financial
institutions; (iv) improved trading efficiency; (v) stockholder liquidity; (vi)
greater ease in subsequently raising capital; (vii) compensation of key
employees through stock options; (viii) enhanced corporate image; and (ix) a
presence in the United States capital market.

We may seek a business opportunity with entities who have
recently commenced operations, or entities who wish to utilize the public
marketplace in order to raise additional capital in order to expand business
development activities, to develop a new product or service, or for other
corporate purposes. We may acquire assets and establish wholly-owned
subsidiaries in various businesses or acquire existing businesses as
subsidiaries.

In implementing a structure for a particular business
acquisition or opportunity, we may become a party to a merger, consolidation,
reorganization, joint venture, or licensing agreement with another corporation
or entity. We may also acquire stock or assets of an existing business. Upon the
consummation of a transaction, it is likely that our present management will no
longer be in control of our company. In addition, it is likely that our officer
and director will, as part of the terms of the acquisition transaction, resign
and be replaced by one or more new officers and directors.

As of the date hereof, management has not entered into any
formal written agreements for a business combination or opportunity. When any
such agreement is reached, we intend to disclose such an agreement by filing a
current report on Form 8-K with the Securities and Exchange Commission.

We anticipate that the selection of a business opportunity in
which to participate will be complex and without certainty of success.
Management believes that there are numerous firms in various industries seeking
the perceived

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benefits of being a publicly registered corporation. Business
opportunities may be available in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex. We can provide no assurance that we will be able to locate
compatible business opportunities.

As an exploration stage company, we are not able to fund our
cash requirements through our current operations. Historically, we have been
able to raise a limited amount of capital through private placements of our
equity stock, but we are uncertain about our continued ability to raise funds
privately. Further, we believe that our company may have difficulties raising
capital until we locate a prospective property through which we can pursue our
plan of operation. If we are unable to secure adequate capital to continue our
acquisition efforts, our shareholders may lose some or all of their investment
and our business may fail.

Competition

We are an exploration stage company engaged in the acquisition
of other business opportunities in the mining industry. As we currently do not
own an interest in a mineral or oil and gas property, we compete with other
companies for both the acquisition of prospective properties and the financing
necessary to develop such properties.

We conduct our business in an environment that is highly
competitive and unpredictable. In seeking out prospective properties, we have
encountered intense competition in all aspects of our proposed business as we
compete directly with other exploration stage companies as well as established
international companies. Many of our competitors are national or international
companies with far greater resources, capital and access to information than us.
Accordingly, these competitors may be able to spend greater amounts on the
acquisition of prospective properties and on the exploration and development of
such properties. In addition, they may be able to afford greater geological
expertise in the exploration and exploitation of mineral and oil and gas
properties. This competition could result in our competitors having resource
properties of greater quality and attracting prospective investors to finance
the development of such properties on more favorable terms. As a result of this
competition, we may become involved in an acquisition with more risk or obtain
financing on less favorable terms

Compliance with Government Regulation

We will not know the government regulations and the cost of
compliance with such regulations with which we must comply until such time as we
acquire an interest in a particular mineral or oil and gas property. If we are
successful in acquiring a property interest, we will be required to comply with
the regulations of governmental authorities and agencies applicable to the
federal, state or provincial and local jurisdictions where the property is
located. Exploitation and development of mineral and oil and gas properties may
require prior approval from applicable governmental regulatory agencies. There
can be no assurance that such approvals will be obtained.

If our activities should advance to the point where we engage
in mining or oil and gas operations, we could become subject to environmental
regulations promulgated by federal, state or provincial, and local government
agencies as applicable. Environmental legislation provides for restrictions and
prohibitions on spills, releases or emissions of various substances produced in
association with the mining and oil and gas industries which could result in
environmental liability. A breach or violation of such legislation may result in
the imposition of fines and penalties. In addition, certain types of operations
require the submission and approval of environmental impact assessments.
Environmental assessments are increasingly imposing higher standards, greater
enforcement, fines and penalties for non-compliance. Environmental assessments
of proposed projects carry a heightened degree of responsibility for companies,
directors, officers and employees. The cost of compliance in respect of
environmental regulation has the potential to reduce the profitability of any
future revenues that our company may generate.

Employees

Currently our only employee is our sole director and officer.
We do not expect any material changes in the number of employees over the next
12 month period. We anticipate that we will be conducting most of our business
through agreements with consultants and third parties. Our sole officer does not
have an employment agreement with us.

Subsidiaries

We do not have any subsidiaries.

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Intellectual Property

We do not own, either legally or beneficially, any patent or
trademark.

ITEM 1A. RISK FACTORS

Our common shares are considered speculative. Prospective
investors should consider carefully the risk factors set out below.

RISKS RELATING TO OUR BUSINESS AND FINANCIAL CONDITION

We are an exploration stage company with a limited operating
history that makes it impossible to reliably predict future growth and operating
results.

We have not been able to achieve profitable operations and
there are no assurances that we will be able to do so in the future. Potential
investors should be aware of the difficulties normally encountered by a new
enterprise and the high rate of failure of such enterprises. The potential for
future success must be considered in light of the problems, expenses,
difficulties, complications and delays encountered in connection with the
development of a business in general. There is no history upon which to base any
assumption as to the likelihood that we will prove successful, and there can be
no assurance that we will generate significant operating revenues in the future
or ever achieve profitable operations.

We have no formal written agreement for a business
combination or other transaction and there can be no assurance that we will be
able to successfully identify and evaluate a suitable business opportunity.

As at the date of this report, we have no formal written
agreement with respect to acquiring a business opportunity or engaging in a
business combination with any private entity. The success of our company
following an entry into any business opportunity or business combination will
depend to a great extent on the operations, financial condition and management
of any identified business opportunity. While management intends to seek
business opportunities and/or business combinations with entities with
established operating histories, there is no assurance that we will successfully
locate business opportunities meeting such criteria. In the event that we
complete a business combination or otherwise acquire a business opportunity, the
success of our operations may be dependent upon management of the successor firm
or venture partner firm, together with a number of other factors beyond our
control.

As there are a large number of established and well-financed
entities actively seeking suitable business opportunities and business
combinations, we are at a competitive disadvantage in identifying and completing
such opportunities.

We are, and will continue to be, an insignificant participant
seeking a suitable business opportunity or business combination. A large number
of established and well-financed entities, including venture capital firms, are
active in seeking suitable business opportunities or business combinations which
may also be desirable target candidates for our company. Virtually all such
entities have significantly greater financial resources, technical expertise and
managerial capabilities than our company. Consequently, we are at a competitive
disadvantage in identifying possible business opportunities and completing a
business combination. In addition, we will also compete with numerous other
small public companies seeking suitable business opportunities or business
combinations.

Upon completion of a business opportunity or combination,
there can be no assurance that we will be able to successfully manage or achieve
growth of that business opportunity or combination.

Our ability to achieve growth upon the acquisition of a
suitable business opportunity or business combination will be dependent upon a
number of factors including our ability to hire and train management and other
employees and the adequacy of our financial resources. There can be no assurance
that we will be able to successfully manage any business opportunity or business
combination. Failure to manage anticipated growth effectively and efficiently
could have a material adverse effect on our company.

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If we complete a business opportunity or combination,
management of our company may be required to sell or transfer common shares and
resign as members of our board of directors.

A business combination or acquisition of a business opportunity
involving the issuance of our common shares may result in new shareholders
obtaining a controlling interest in our company. Any such business combination
or acquisition of a business opportunity may require management of our company
to sell or transfer all or a portion of the shares they hold in our company and
require such individuals to resign as members of our board. The resulting change
in control of our company could result in the removal of one or more of our
present officers and directors and a corresponding reduction in or elimination
of their participation in the future affairs of our company.

If we complete a business opportunity or combination, we may
be required to issue a substantial number of common shares which would dilute
the shareholdings of our current shareholders and result in a change of control
of our company.

We may pursue the acquisition of a business opportunity or a
business combination with a private company. The likely result of such a
transaction would result in our company issuing common shares to shareholders of
such private company. Issuing previously authorized and unissued common shares
in the capital of our company will reduce the percentage of common shares owned
by existing shareholders and may result in a change in the control of our
company and our management.

We have identified a number of material weaknesses related
to our internal control over financial reporting and concluded that our internal
control over financial reporting and disclosure controls and procedures were
ineffective as of October 31, 2008. These material weaknesses remain unremedied,
which could continue to impact our ability to report results of operations and
financial condition accurately and in a timely manner.

We have identified a number of material weaknesses in our
internal control over financial reporting. Our management assessed the
effectiveness of our internal control over financial reporting and disclosure
controls and procedures as at October 31, 2008 pursuant to Section 404 of the
Sarbanes-Oxley Act of 2002 and the related SEC rules and concluded that our
internal control over financial reporting and disclosure controls and procedures
were not effective as at October 31, 2008. Specifically, they concluded that
four material weaknesses existed as at October 31, 2008 which are set out in
Item 9A under the heading Managements Report on Internal Control Over
Financial Reporting. Although we intend to remediate such material weaknesses
as set out in Item 9A, we have not yet been able to address these material
weaknesses and they may continue to remain unremedied for some time, which could
adversely impact the accuracy and timeliness of future reports and filings we
make to the SEC and could have a material adverse effect on our business,
results of operations, financial condition and liquidity.

Our common stock is illiquid and shareholders may be unable
to sell their shares.

There is currently a limited market for our common stock and we
can provide no assurance to investors that a market will develop. If a market
for our common stock does not develop, our shareholders may not be able to
re-sell the shares of our common stock that they have purchased and they may
lose all of their investment. Public announcements regarding our company,
changes in government regulations, conditions in our market segment or changes
in earnings estimates by analysts may cause the price of our common shares to
fluctuate substantially. These fluctuations may adversely affect the trading
price of our common shares.

We may be unsuccessful at identifying, acquiring and
operating suitable business opportunities and if we are unable to find, acquire
or operate a suitable opportunity for our company, we may never achieve
profitable operations.

We may not be able to find the right business opportunity for
our company to become engaged in or we may not succeed in becoming engaged in
the business opportunity we choose because we may not act fast enough or have
enough money or other attributes to attract the new business opportunity. Before
we begin to have any significant operations, we will have to become involved in
a viable business opportunity. In addition, in order to be profitable, we will
have to, among other things, hire consultants and employees, develop products
and/or services, market our products/services, ensure supply and develop a
customer base. There is no assurance that we will be able to identify,
negotiate, acquire and develop a business opportunity and we may never be
profitable.

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RISKS RELATING TO OUR COMMON STOCK

We have not paid any dividends and do not foresee paying
dividends in the future.

Payment of dividends on our common stock is within the
discretion of the board of directors and will depend upon our future earnings,
our capital requirements, financial condition and other relevant factors. We
have no plan to declare any dividends in the foreseeable future.

Our stock is a penny stock. Trading of our stock may be
restricted by the SECs penny stock regulations and the FINRAs sales practice
requirements, which may limit a stockholders ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customers
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in, and limit
the marketability of, our common stock.

In addition to the penny stock rules promulgated by the
Securities and Exchange Commission, the Financial Industry Regulatory Authority
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, the National Association of Securities Dealers believes that
there is a high probability that speculative low-priced securities will not be
suitable for at least some customers. The National Association of Securities
Dealers requirements make it more difficult for broker-dealers to recommend
that their customers buy our common stock, which may limit your ability to buy
and sell our stock.

ITEM 2. PROPERTIES.

Executive Offices

Our executive offices are located at 2200  1177 West Hastings
Street, Vancouver, British Columbia V6E 2K3, Canada. Mr. Mark McLeary, our sole
director and officer, currently provides this space to us free of charge. This
space may not be available to us free of charge in the future. We do not own any
real property.

ITEM 3. LEGAL PROCEEDINGS.

We know of no material, active or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.

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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

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PART II

ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market for Securities

Our companys common stock is traded on the FINRAs OTC
Bulletin Board under the symbol CVRX. Set forth below are the range of high
and low bid quotations for the periods indicated as reported by the NASD. The
market quotations reflect inter-dealer prices, without retail mark-up, mark-down
or commissions and may not necessarily represent actual transactions. Our
companys common stock began trading on July 12, 2007. The following table
reports high and low closing prices, on a quarterly basis, for our companys
common stock:

|Quarter Ending   | High  | Low  
|---------------- | ----- | -----
|                 |       |      
|October 31, 2008 | $0.30 | $0.05
|                 |       |      
|July 31, 2008    | $0.16 | $0.08
|                 |       |      
|April 30, 2008   | $0.35 | $0.05
|                 |       |      
|January 31, 2008 | $0.66 | $0.20
|                 |       |      
|October 31, 2007 | $0.30 | $0   

Our transfer agent is Wall Street Transfer Agents Inc., of
12492 Harris Road, Pitt Meadows, BC, Canada V3Y 2J4; telephone number:
604-465-7475; facsimile: 604-465-7485.

Holders of our Common Stock

As of January 20, 2009, there were 11 registered stockholders
holding 8,780,000 shares of our issued and outstanding common stock.

Dividend Policy

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:

| | 1. | We would not be able to pay our debts as they become due
      in the usual course of business; or                                                                                                                                          
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                             
| | 2. | 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.

We have not declared any dividends and we do not plan to
declare any dividends in the foreseeable future.

Recent Sales of Unregistered Securities

Other than as described below, we have not sold any equity
securities that were not registered under the Securities Act during the fiscal
year ended October 31, 2008.

On January 16, 2008, we issued 20,000 shares to Carl von
Einsiedel pursuant to the Amended Property Option Agreement. We issued the
securities to a non-US person, as defined in Regulation S, and that his
intention to acquire the securities was for investment only and not with a view
toward distribution. We did not engage in a distribution of this offering in the
United States and no general solicitation was made to the public and no
advertising was conducted for the offering.

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Purchases of Equity Securities by the Issuer and Affiliated
Purchasers

We did not purchase any of our shares of common stock or other
securities during our fiscal year ended October 31, 2008.

Securities Authorized for Issuance Under Equity Compensation
Plans

We do not have any equity compensation plans.

ITEM 6. SELECTED FINANCIAL DATA.

Not Applicable.

ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION

The following discussion should be read in conjunction with our
audited financial statements and the related notes that appear elsewhere in this
annual report. The following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward looking statements. Factors that
could cause or contribute to such differences include those discussed below and
elsewhere in this annual report.

Our audited consolidated financial statements are stated in
United States dollars and are prepared in accordance with United States
generally accepted accounting principles.

Plan of Operation

We are an exploration stage company that has not yet generated
or realized any revenues from our business operations. We terminated our
property option agreement with Carl von Einsiedel effective October 31, 2008.

We are currently seeking opportunities to acquire prospective
or existing mineral properties, prospective or producing oil and gas properties
or other oil and gas resource related projects. Simultaneously, we are seeking
business opportunities with established business entities for the merger of a
target business with our company. In certain instances, a target business may
wish to become a subsidiary of us or may wish to contribute assets to us rather
than merge. We are currently in negotiations with several parties to enter into
a business opportunity but we have not entered into any definitive agreements to
date and there can be no assurance that we will be able to enter into any
definitive agreements. We anticipate that any new acquisition or business
opportunities by our company will require additional financing. There can be no
assurance, however, that we will be able to acquire the financing necessary to
enable us to pursue our plan of operation. If our company requires additional
financing and we are unable to acquire such funds, our business may fail.

Even if we are able to acquire an interest in a mineral or oil
and gas property or enter into a business opportunity and obtain the necessary
funding, there is no assurance that any revenues would be generated by us or
that revenues generated would be sufficient to provide a return to
investors.

Anticipated Cash Requirements

We anticipate that we will incur the following expenses over
the next twelve months:

|1. | $20,000 in connection with our company locating,
      evaluating and negotiating potential mineral or oil and gas properties or
      business opportunities;                                        
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                       
|2. | $36,000 for operating expenses, including professional
      legal and accounting expenses associated with our company being a
      reporting issuer under the Securities Exchange Act of 1934;
  and

We will incur additional expenses if we are successful in
entering into an agreement to acquire an interest in a prospective or existing
mineral property, a prospective or producing oil or gas property or a business
opportunity. If

-11-

---

we acquire any property interests, we will require significant
funds to develop the property in addition to any acquisition costs. It is not
possible to estimate such funding requirements until such time as we enter into
a definitive agreement to acquire an interest in a property or enter into a
business combination.

We require a minimum of approximately $56,000 to proceed with
our plan of operation over the next twelve months, exclusive of any acquisition
or development costs. This amount may also increase if we are required to carry
out due diligence investigations in regards to any prospective property or
business opportunity or if the costs of negotiating the applicable transaction
are greater than anticipated. As we had cash in the amount of $225 and a working
capital deficit in the amount of $46,923 as of October 31, 2008, we do not have
sufficient working capital to enable us to carry out our stated plan of
operation for the next twelve months. We plan to complete private placement
sales of our common stock in order to raise the funds necessary to pursue our
plan of operation and to fund our working capital deficit in order to enable us
to pay our accounts payable and accrued liabilities. We currently do not have
any arrangements in place for the completion of any private placement financings
and there is no assurance that we will be successful in completing any private
placement financings.

Results of Operations

The following summary of our results of operations should be
read in conjunction with our audited financial statements for the year ended
October 31, 2008 which are included herein.

Our operating results for the years ended October 31, 2008 and
2007 are summarized as follows:

Years EndedOctober 31,2008
    
    
    2007Revenue
    $
    -
    
    $
    -Operating Expenses
    
    73,439
    
    
    57,338Mineral Property Acquisition
      Costs
    
    9,760
    
    
    2,200Mineral Property Exploration Costs
    
    3,467
    
    
    10,000Net Loss
    $
    86,666
    
    $
    69,538


Revenues

We recently terminated our property option agreement on our
King claims, have not earned any revenues to date, and do not anticipate earning
revenues until such time as we are able to acquire an interest in a mineral or
oil and gas property or enter into a business opportunity.

Expenses

Our expenses for the years ended October 31, 2008 and 2007 are
outlined in the table below:

Years EndedOctober 31,2008
    
    
    2007General and Administrative
      ExpensesAccounting and Auditing
    $
    28,420
    
    $
    16,232Advertising and Promotion
    
    3,260
    
    
    537Amortization
    
    527
    
    
    -Bank Charges and Interest
    
    142
    
    
    129Consulting Fee
    
    10,000
    
    
    -Foreign Exchange Loss (gain)
    
    (5,164)
    
    
    893Legal
    
    31,199
    
    
    36,471Meals and Entertainment
    
    1,319
    
    
    -Office and Sundry
    
    425
    
    
    816Transfer Agent
    
    1,118
    
    
    2,260Travel and Accommodations
    
    2,193
    
    
    -Total General and
      AdministrativeExpenses
    $
    73,439
    
    $
    57,338Mineral ExpensesMineral Property Acquisition Costs
    
    9,760
    
    
    2,200Mineral Property Exploration
      Costs
    
    3,467
    
    
    10,000Total Mineral Expenses
    $
    13,227
    
    $
    12,200Total Expenses
    $
    86,666
    
    $
    69,538


-12-

---



General and Administrative

The increase in our general and administrative expenses for the
year ended October 31, 2008 compared to October 31, 2007 was primarily due to:
(i) an increase in professional fees; (ii) an increase in advertising and
promotion; (iii) an increase in consulting fees; (iv) an increase in meals and
entertainment; and (v) an increase in acquisition expenses.

Professional Fees

Professional fees include our accounting and auditing expenses
incurred in connection with the preparation and audit of our financial
statements and professional fees that we pay to our legal counsel. Our
accounting and auditing expenses were incurred in connection with the
preparation of our audited financial statements and unaudited interim financial
statements and our preparation and filing of a registration statement with the
SEC. Our legal expenses represent amounts paid to legal counsel in connection
with our corporate organization. Legal and accounting expenses will be ongoing
during fiscal 2009 as we are subject to the reporting obligations of the
Securities Exchange Act of 1934.

Mineral Expenses

Liquidity and Capital Resources

Working Capital

|                             |   |                  |  |   |               |  |  | Percentage | 
|---------------------------- | - | ---------------- |  | - | ------------- |  |  | ---------- | 
|                             |   | As at            |  |   | As at October |  |  | Increase / | 
|                             |   | October 31, 2008 |  |   | 31, 2007      |  |  | (Decrease) | 
|Current Assets               | $ | 3,092            |  | $ | 43,986        |  |  | (92.9%)    | 
|Current Liabilities          | $ | 50,015           |  | $ | 10,000        |  |  | 400.2%     | 
|Working Capital (Deficiency) | $ | (46,923)         |  | $ | 33,896        |  |  | (226.6%)   | 

|Cash Flows                                  |   |                  |  |   |                  |  |  |            | 
|------------------------------------------- | - | ---------------- |  | - | ---------------- |  |  | ---------- | 
|                                            |   |                  |  |   |                  |  |  | Percentage | 
|                                            |   | Year Ended       |  |   | Year Ended       |  |  | Increase / | 
|                                            |   | October 31, 2008 |  |   | October 31, 2007 |  |  | (Decrease) | 
|Cash used in Operating
      Activities     | $ | 37,875           |  | $ | 62,844           |  |  | (39.7%)    | 
|Cash used by Investing Activities           | $ | 4,530            |  | $ | -                |  |  | 100%       | 
|Cash provided by Financing
      Activities | $ | -                |  | $ | -                |  |  | N/A        | 
|Net Increase (Decrease) in Cash             | $ | (42,405)         |  | $ | (62,844)         |  |  | (32.5%)    | 

We anticipate that we will incur approximately $56,000 for
operating expenses, including professional, legal and accounting expenses
associated with our reporting requirements under the Exchange Act during the
next twelve months. Accordingly, we will need to obtain additional financing in
order to complete our business plan.

Cash Used In Operating Activities

We used cash in operating activities in the amount of $37,875
during the year ended October 31, 2008 and $62,844 during the year ended October
31, 2007.

-13-

---

Cash From Investing Activities

We used cash in investing activities in the amount of $4,530
during the year ended October 31, 2008 and $Nil during the year ended October
31, 2007.

Cash from Financing Activities

We did not generate any cash from financing activities during
the years ended October 31, 2008 and October 31, 2007.

Going Concern

The financial statements accompanying this report have been
prepared on a going concern basis, which implies that our company will continue
to realize its assets and discharge its liabilities and commitments in the
normal course of business. Our company has not generated revenues since
inception and has never paid any dividends and is unlikely to pay dividends or
generate earnings in the immediate or foreseeable future. The continuation of
our company as a going concern is dependent upon the continued financial support
from our shareholders, the ability of our company to obtain necessary equity
financing to achieve our operating objectives, and the attainment of profitable
operations. As at October 31, 2008, our company has accumulated losses of
$178,380 since inception. We do not have sufficient working capital to enable us
to carry out our stated plan of operation for the next twelve months.

Due to the uncertainty of our ability to meet our current
operating expenses and the capital expenses noted above in their report on the
financial statements for the year ended October 31, 2008, our independent
auditors included an explanatory paragraph regarding concerns about our ability
to continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
independent auditors.

The continuation of our business is dependent upon us raising
additional financial support. The issuance of additional equity securities by us
could result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.

Future Financings

We anticipate continuing to rely on equity sales of our common
shares in order to continue to fund our business operations. Issuances of
additional shares will result in dilution to our existing stockholders. 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 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 are
material to stockholders.

Critical Accounting Policies

The financial statements of our company have been prepared in
accordance with generally accepted accounting principles in the United States.
Because a precise determination of many assets and liabilities is dependent upon
future events, the preparation of financial statements for a period necessarily
involves the use of estimates which have been made using careful judgment.

The main accounting and valuation policies used by Candev are
outlined in Note 3 to Candevs audited financial statements accompanying this
report. While not all of the significant accounting policies require difficult,
subjective or complex judgments, Candev considers that the following accounting
policies should be considered critical accounting policies:

-14-

---

Mineral Property Exploration and Development

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

Use of Estimates

The process of preparing financial statements requires the use
of estimates and assumptions regarding certain types of assets, liabilities,
revenues, and expenses. Such estimates primarily relate to unsettled
transactions and events as of the date of the financial statements; accordingly,
upon settlement, actual results may differ from estimated amounts.

Foreign Currency Translation

Our companys functional and reporting currency is the U.S.
dollar. All transactions initiated in foreign currencies are translated into
U.S. dollars in accordance with SFAS No. 52 Foreign Currency Translation as
follows:

| | a) | monetary assets and liabilities at the rate of exchange
      in effect at the balance sheet date;
| | -- | --------------------------------------------------------------------------------------------------
| |    |                                                                                                   
| | b) | non-monetary assets at historical exchange rates;
    and                                         
| |    |                                                                                                   
| | c) | revenue and expense items at the average rate of exchange
      prevailing during the period.     

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS 157, Fair Value
Measurements, which defines fair value, establishes a framework for measuring
fair value, and expands fair value disclosures. The standard does not require
any new fair value measurements. This standard is effective for fiscal years
beginning after November 15, 2007. The adoption of this standard is not expected
to have any impact on our companys financial statements.

In February, 2007, the FASB 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. The adoption of this standard
is not expected to have any impact on our companys financial statements.

-15-

---

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

-16-

---







CANDEV RESOURCE EXPLORATION, INC.(An Exploration Stage Company) 
    FINANCIAL STATEMENTSFOR THE YEAR ENDED OCTOBER 31, 2008

(Stated in US Dollars)





------ INDEX ------

| | Report of Independent Registered
      Public Accounting Firm
| | -------------------------------------------------------------
| |                                                              
| | Balance
      Sheets                                         
| |                                                              
| | Statements
      of Operations                               
| |                                                              
| | Statements
      of Cash Flows                               
| |                                                              
| | Statement
      of Stockholders Equity (Deficit)            
| |                                                              
| | Notes
      to the Financial Statements                      

F-1

---

Report of Independent Registered Public Accounting Firm

To the Shareholders of  
Candev Resource Exploration, Inc. 
(an Exploration Stage Company)

We have audited the balance sheets of Candev Resource Exploration, Inc. (an Exploration Stage Company) as at October 31, 2008 and 2007 and the statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended and the period from incorporation on January 10, 2006 to October 31, 2008.  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 audits 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 October 31, 2008 and 2007 and the results of its operations and its cash flows for the years then ended and the period from incorporation on January 10, 2006 to October 31, 2008 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 2 to the 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 2, 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
    January 15, 2009 | “MacKay LLP”
    Chartered Accountants
|-------------------------------------- | --------------------------------------

F-2

---

CANDEV RESOURCE EXPLORATION, INC.(An Exploration Stage Company) 
    BALANCE SHEETSAT OCTOBER 31

(Stated in US Dollars)

|                                                               |   | 2008     |   |   | 2007    |  
|-------------------------------------------------------------- | - | -------- | - | - | ------- | -
|                                                               |   |          |   |   |         |  
|ASSETS                                                         |  
|                                                               |   |          |   |   |         |  
|CURRENT                                                        |   |          |   |   |         |  
|Cash                                                           | $ | 225      |   | $ | 42,630  |  
|Receivables                                                    |   | 2,867    |   |   | 356     |  
|Prepaid expenses and deposits                                  |   | -        |   |   | 1,000   |  
|Equipment (Note 4)                                             |   | 4,003    |   |   | -       |  
|                                                               |   |          |   |   |         |  
|Total Assets                                                   | $ | 7,095    |   | $ | 43,986  |  
|                                                               |   |          |   |   |         |  
|                                                               |   |          |   |   |         |  
|LIABILITIES AND STOCKHOLDERS' EQUITY
      (DEFICIT)           |  
|                                                               |   |          |   |   |         |  
|CURRENT LIABILITIES                                            |   |          |   |   |         |  
|Accounts payable
      and accrued liabilities                 | $ | 18,781   |   | $ | 10,000  |  
|Due to director (Note 6)                                       |   | 31,234   |   |   | -       |  
|                                                               |   |          |   |   |         |  
|Total Liabilities                                              |   | 50,015   |   |   | 10,000  |  
|                                                               |   |          |   |   |         |  
|STOCKHOLDERS' EQUITY (DEFICIT)                                 |   |          |   |   |         |  
|Authorized:                                                    |   |          |   |   |         |  
|100,000,000
      preferred shares, par value $0.001 per share |   |          |   |   |         |  
|100,000,000 common shares, par value $0.001 per share          |   |          |   |   |         |  
|Issued and outstanding:                                        |   |          |   |   |         |  
|8,780,000 (2007 - 8,760,000) common shares (Note 5)            |   | 8,780    |   |   | 8,760   |  
|Additional paid in capital                                     |   | 126,680  |   |   | 116,940 |  
|Deficit -
      Accumulated during exploration stage           |   | (178,380 | ) |   | (91,714 | )
|                                                               |   |          |   |   |         |  
|Total
      Stockholders' Equity (deficit)                     |   | (42,920  | ) |   | 33,986  |  
|                                                               |   |          |   |   |         |  
|Total
      Liabilities and Stockholders' Equity (deficit)     | $ | 7,095    |   | $ | 43,986  |  
|                                                               |   |          |   |   |         |  
|Going concern (Note 2)                                         |   |          |   |   |         |  
|                                                               |   |          |   |   |         |  
|Commitments (Note 7)                                           |   |          |   |   |         |  

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

F-3

---

CANDEV RESOURCE EXPLORATION, INC.(An Exploration Stage Company) 
    STATEMENTS OF OPERATIONS

(Stated in US Dollars)

|                                            |   | Cumulative       |   |   |                  |   |   |                  |  
|------------------------------------------- | - | ---------------- | - | - | ---------------- | - | - | ---------------- | -
|                                            |   | Amounts from     |   |   |                  |   |   |                  |  
|                                            |   | Inception to     |   |   | Year Ended       |   |   | Year Ended       |  
|                                            |   | October 31, 2008 |   |   | October 31, 2008 |   |   | October 31, 2007 |  
|                                            |   |                  |   |   |                  |   |   |                  |  
|                                            |   |                  |   |   |                  |   |   |                  |  
|GENERAL AND ADMINISTRATIVE
      EXPENSES   |   |                  |   |   |                  |   |   |                  |  
|Accounting and
      auditing               | $ | 53,152           |   | $ | 28,420           |   | $ | 16,232           |  
|Advertising and promotion                   |   | 5,118            |   |   | 3,260            |   |   | 537              |  
|Amortization                                |   | 527              |   |   | 527              |   |   | -                |  
|Bank charges and interest                   |   | 306              |   |   | 142              |   |   | 129              |  
|Consulting fee                              |   | 10,000           |   |   | 10,000           |   |   | -                |  
|Foreign exchange loss (gain)                |   | (4,271           | ) |   | (5,164           | ) |   | 893              |  
|Legal                                       |   | 70,564           |   |   | 31,199           |   |   | 36,471           |  
|Meals and entertainment                     |   | 1,319            |   |   | 1,319            |   |   | -                |  
|Office and sundry                           |   | 1,241            |   |   | 425              |   |   | 816              |  
|Transfer agent                              |   | 3,378            |   |   | 1,118            |   |   | 2,260            |  
|Travel and
      accommodations             |   | 2,193            |   |   | 2,193            |   |   | -                |  
|                                            |   |                  |   |   |                  |   |   |                  |  
|                                            |   | 143,527          |   |   | 73,439           |   |   | 57,338           |  
|                                            |   |                  |   |   |                  |   |   |                  |  
|MINERAL PROPERTY EXPENSES (Note 7)          |   |                  |   |   |                  |   |   |                  |  
|Acquisition costs                           |   | 14,260           |   |   | 9,760            |   |   | 2,200            |  
|Exploration costs                           |   | 20,593           |   |   | 3,467            |   |   | 10,000           |  
|                                            |   |                  |   |   |                  |   |   |                  |  
|                                            |   | 34,853           |   |   | 13,227           |   |   | 12,200           |  
|                                            |   |                  |   |   |                  |   |   |                  |  
|NET AND COMPREHENSIVE LOSS                  | $ | (178,380         | ) | $ | (86,666          | ) | $ | (69,538          | )
|                                            |   |                  |   |   |                  |   |   |                  |  
|                                            |   |                  |   |   |                  |   |   |                  |  
|BASIC AND DILUTED NET LOSS PER COMMON SHARE |   |                  |   | $ | (0.01            | ) | $ | (0.01            | )
|                                            |   |                  |   |   |                  |   |   |                  |  
|                                            |   |                  |   |   |                  |   |   |                  |  
|WEIGHTED AVERAGE NUMBER OF BASIC AND        |   |                  |   |   |                  |   |   |                  |  
|DILUTED
      COMMON SHARES OUTSTANDING     |   |                  |   |   | 8,775,792        |   |   | 8,751,479        |  

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

F-4

---

CANDEV RESOURCE EXPLORATION, INC.(An Exploration Stage Company) 
    STATEMENTS OF CASH FLOWS

(Stated in US Dollars)

|                                                |   | Cumulative       |   |   |                  |   |   |                  |  
|----------------------------------------------- | - | ---------------- | - | - | ---------------- | - | - | ---------------- | -
|                                                |   | Amounts from     |   |   |                  |   |   |                  |  
|                                                |   | Inception to     |   |   | Year Ended       |   |   | Year Ended       |  
|                                                |   | October 31, 2008 |   |   | October 31, 2008 |   |   | October 31, 2007 |  
|                                                |   |                  |   |   |                  |   |   |                  |  
|                                                |   |                  |   |   |                  |   |   |                  |  
|OPERATING ACTIVITIES                            |   |                  |   |   |                  |   |   |                  |  
|Net loss for the
      period                   | $ | (178,380         | ) | $ | (86,666          | ) | $ | (69,538          | )
|Items not affecting cash                        |   |                  |   |   |                  |   |   |                  |  
|Shares issued for mineral property              |   | 11,960           |   |   | 9,760            |   |   | 2,200            |  
|Amortization                                    |   | 527              |   |   | 527              |   |   | -                |  
|Changes in
      non-cash working capital items |   |                  |   |   |                  |   |   |                  |  
|Receivables                                     |   | (2,867           | ) |   | (2,511           | ) |   | (356             | )
|Prepaid expenses and deposits                   |   | -                |   |   | 1,000            |   |   | 4,201            |  
|Accounts payable and accrued liabilities        |   | 9,430            |   |   | 8,781            |   |   | 649              |  
|Due to director                                 |   | 40,585           |   |   | 31,234           |   |   | -                |  
|                                                |   |                  |   |   |                  |   |   |                  |  
|Cash used in
      operating activities         |   | (118,745         | ) |   | (37,875          | ) |   | (62,844          | )
|                                                |   |                  |   |   |                  |   |   |                  |  
|                                                |   |                  |   |   |                  |   |   |                  |  
|INVESTING ACTIVITY                              |   |                  |   |   |                  |   |   |                  |  
|Equipment
      acquired                        |   | (4,530           | ) |   | (4,530           | ) |   | -                |  
|                                                |   |                  |   |   |                  |   |   |                  |  
|                                                |   |                  |   |   |                  |   |   |                  |  
|FINANCING ACTIVITY                              |   |                  |   |   |                  |   |   |                  |  
|Common stock
      issued for cash              |   | 123,500          |   |   | -                |   |   | -                |  
|                                                |   |                  |   |   |                  |   |   |                  |  
|                                                |   |                  |   |   |                  |   |   |                  |  
|NET INCREASE (DECREASE) IN CASH                 |   | 225              |   |   | (42,405          | ) |   | (62,844          | )
|                                                |   |                  |   |   |                  |   |   |                  |  
|CASH, BEGINNING OF PERIOD                       |   | -                |   |   | 42,630           |   |   | 105,474          |  
|                                                |   |                  |   |   |                  |   |   |                  |  
|CASH, END OF PERIOD                             | $ | 225              |   | $ | 225              |   | $ | 42,630           |  
|                                                |   |                  |   |   |                  |   |   |                  |  
|                                                |   |                  |   |   |                  |   |   |                  |  
|SUPPLEMENTAL DISCLOSURE                         |   |                  |   |   |                  |   |   |                  |  
|Interest paid                                   | $ | -                |   | $ | -                |   | $ | -                |  
|Income taxes
      paid                         | $ | -                |   | $ | -                |   | $ | -                |  

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

F-5

---

CANDEV RESOURCE EXPLORATION, INC.(An Exploration Stage Company) 
    STOCKHOLDERS’ EQUITY (DEFICIT)FROM INCEPTION ON JANUARY 9, 2006 TO OCTOBER 31, 2008

(Stated in US Dollars)

Deficit(Note 5)
      
      
      
      
      
      AccumulatedCommon
        Shares
      
      
      Additional
      
      
      During
      
      
      TotalNumber
      
      
      
      
      
      Paid In
      
      
      Exploration
      
      
      Stockholders'of Shares
      
      
      Amount
      
      
      Capital
      
      
      Stage
      
      
      Equity (Deficit)Shares issued for cash @ $0.001on January 13, 2006
      
      5,500,000
      
      $
      5,500
      
      $
      -
      
      $
      -
      
      $
      5,500Shares issued
        for cash @ $0.01on
        August 24, 2006
      
      2,300,000
      
      
      2,300
      
      
      20,700
      
      
      -
      
      
      23,000Shares issued for cash @ $0.10on October 31, 2006
      
      950,000
      
      
      950
      
      
      94,050
      
      
      -
      
      
      95,000Net loss for
        the period
      
      -
      
      
      -
      
      
      -
      
      
      (22,176
      )
      
      (22,176
      )Balance, October 31, 2006
      
      8,750,000
      
      
      8,750
      
      
      114,750
      
      
      (22,176
      )
      
      101,324Shares issued
        for mineral property
      
      10,000
      
      
      10
      
      
      2,190
      
      
      -
      
      
      2,200@
        $0.22 on September 7, 2007Net loss for the year
      
      -
      
      
      -
      
      
      -
      
      
      (69,538
      )
      
      (69,538
      )Balance, October 31, 2007
      
      8,760,000
      
      
      8,760
      
      
      116,940
      
      
      (91,714
      )
      
      33,986Shares issued for mineral property@ $0.488 on January 16, 2008
      
      20,000
      
      
      20
      
      
      9,740
      
      
      -
      
      
      9,760Net loss for
        the year
      
      -
      
      
      -
      
      
      -
      
      
      (86,666
      )
      
      (86,666
      )Balance, October 31, 2008
      
      8,780,000
      
      $
      8,780
      
      $
      126,680
      
      $
      (178,380
      )
      $
      (42,920
      )


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

F-6

---

CANDEV RESOURCE EXPLORATION, INC.(An Exploration Stage Company) 
    NOTES TO THE FINANCIAL
    STATEMENTSOCTOBER 31, 2008 AND 2007

(Stated in US Dollars)

|1. | ORGANIZATIONS AND DESCRIPTION OF THE
      BUSINESS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Candev Resource Exploration, Inc. (the Company) was
      incorporated on January 9, 2006 under the laws of the State of Nevada and
      extraprovincially registered under the laws of the Province of British
      Columbia on August 15, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company is an exploration stage company engaged in
      the acquisition, exploration and development of mineral
      properties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2. | GOING CONCERN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The accompanying financial statements have been prepared
      assuming that the Company will continue as a going concern, which
      contemplates, among other things, the realization of assets and
      satisfaction of liabilities in the normal course of business. As shown in
      the accompanying financial statements, the Company incurred a net loss of
      $86,666 for the year ended October 31, 2008, and has an accumulated
      deficit of $178,380. The Company intends to fund operations through equity
      financing arrangements, which may be insufficient to fund its capital
      expenditures, working capital, and other cash requirements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The ability of the Company to emerge from the exploration
      stage is dependent upon, among other things, obtaining additional
      financing to continue operations, explore and develop mineral properties,
      and the discovery, development and sale of ore reserves.                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | These factors, among others, raise substantial doubt
      about the Companys ability to continue as a going concern. In response to
      these problems, management intends to raise additional funds through
      public or private placement offerings. The accompanying financial
      statements do not include any adjustments that might result from the
      outcome of this uncertainty.                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|3. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

F-7

---

CANDEV RESOURCE EXPLORATION, INC.(An Exploration Stage Company) 
    NOTES TO THE FINANCIAL STATEMENTSOCTOBER 31, 2008 AND 2007

(Stated in US Dollars)

|3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)
|-- | -----------------------------------------------------
|   |                                                      
|   | d)                                                   
|   |                                                      
|   |                                                      

Furniture and equipment
      20%Computer equipment
      30%


| | e) | Earnings per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | Basic earnings (loss) per share is computed by dividing
      the net income by the weighted average number of shares outstanding during
      the period. The computation of diluted earnings per share assumes the
      conversion, exercise or contingent issuance of securities only when such
      conversion, exercise or issuance would have a dilutive effect on earnings
      per share. The dilutive effect of convertible securities is reflected in
      diluted earnings per share by application of the "if converted" method. In
      years in which a loss is incurred, the effect of potential issuances of
      shares under options and warrants would be anti- dilutive, and therefore
      basic and diluted loss per share are the same.                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | f) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | Deferred income taxes are reported for timing differences
      between items of income or expense reported in the financial statements
      and those reported for income tax purposes in accordance with SFAS Number
      109, Accounting for Income Taxes, which requires the use of the
      asset/liability method of accounting for income taxes. Deferred income
      taxes and tax benefits are recognized for the future tax consequences
      attributable to differences between the financial statement carrying
      amounts of existing assets and liabilities and their respective tax bases,
      and for tax loss and credit carry-forwards. Deferred tax assets and
      liabilities are measured using enacted tax rates expected to apply to
      taxable income in the years in which those temporary differences are
      expected to be recovered or settled. The Company provides for deferred
      taxes for the estimated future tax effects attributable to temporary
      differences and carry-forwards when realization is more likely than
      not.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | Effective November 1, 2007, the Company adopted the
      Financial Accounting Standards Board Interpretation No. 48, Accounting
      for Uncertainty in Income Taxes (FIN 48), an interpretation of FASB
      Statement No. 109, which requires that the Company recognize in the
      financial statements, the impact of a tax position if that position is
      more likely than not of being sustained on examination by taxation
      authorities, based on the technical merits of the position. The adoption
      of FIN 48 had no impact on the Companys financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | g) | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | The process of preparing financial statements requires
      the use of estimates and assumptions regarding certain types of assets,
      liabilities, revenues, and expenses. Such estimates primarily relate to
      unsettled transactions and events as of the date of the financial
      statements; accordingly, upon settlement, actual results may differ from
      estimated amounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | h) | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | The Company considers all highly liquid investments with
      maturity of three months or less at the date of acquisition to be cash
      equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

F-8

---

CANDEV RESOURCE EXPLORATION, INC.(An Exploration Stage Company) 
    NOTES TO THE FINANCIAL STATEMENTSOCTOBER 31, 2008 AND 2007

(Stated in US Dollars)

|3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)
|-- | -----------------------------------------------------
|   |                                                      
|   | i)                                                   
|   |                                                      
|   |                                                      
|   |                                                      
|   | j)                                                   
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   | k)                                                   
|   |                                                      
|   |                                                      
|   |                                                      
|   | l)                                                   
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      

F-9

---

CANDEV RESOURCE EXPLORATION, INC.(An Exploration Stage Company) 
    NOTES TO THE FINANCIAL STATEMENTSOCTOBER 31, 2008 AND 2007

(Stated in US Dollars)

|3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)
|-- | -----------------------------------------------------
|   |                                                      
|   | m)                                                   
|   |                                                      
|   |                                                      
|   |                                                      
|   | n)                                                   
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   | o)                                                   
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      

F-10

---

CANDEV RESOURCE EXPLORATION, INC.(An Exploration Stage Company) 
    NOTES TO THE FINANCIAL STATEMENTSOCTOBER 31, 2008 AND 2007

(Stated in US Dollars)

|4. | EQUIPMENT
|-- | ---------

| |                         |   |       |  |   | Accumulated  |  |   | Net Book |  |   | Net Book | 
| | ----------------------- | - | ----- |  | - | ------------ |  | - | -------- |  | - | -------- | 
| |                         |   | Cost  |  |   | Amortization |  |   | Value    |  |   | Value    | 
| |                         |   | 2008  |  |   | 2008         |  |   | 2008     |  |   | 2007     | 
| |                         |   |       |  |   |              |  |   |          |  |   |          | 
| | Computer equipment      | $ | 1,477 |  | $ | 222          |  | $ | 1,255    |  | $ | -        | 
| | Furniture and equipment |   | 3,053 |  |   | 305          |  |   | 2,748    |  |   | -        | 
| |                         | $ | 4,530 |  | $ | 527          |  | $ | 4,003    |  | $ | -        | 

|5. | COMMON SHARES                                                                                                                                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                         
|   | On January 13, 2006, the Company issued 5,500,000 common
      shares valued at $0.001 per share, for total gross proceeds of $5,500 to
      the President of the Company.                                                                             
|   |                                                                                                                                                                                                                                                         
|   | On August 24, 2006, the Company issued 2,300,000 common
      shares valued at $0.01 per share, for total gross proceeds of
      $23,000.                                                                                                              
|   |                                                                                                                                                                                                                                                         
|   | On October 31, 2006, the Company issued 950,000 common
      shares valued at $0.10 per share, for total gross proceeds of
      $95,000.                                                                                                               
|   |                                                                                                                                                                                                                                                         
|   | On September 7, 2007, the Company issued 10,000 common
      shares valued at $0.22 per share, pursuant to the terms of the King
      Property agreement (Note 7).                                                                                     
|   |                                                                                                                                                                                                                                                         
|   | On January 16, 2008 the Company issued 20,000 common
      shares valued at $9,760, pursuant to the terms of the King Property
      agreement (Note 7).                                                                                                
|   |                                                                                                                                                                                                                                                         
|6. | DUE TO DIRECTOR                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                         
|   | The President and sole Director of the Company has
      advanced CDN $37,621 (US$31,234) as at October 31, 2008. This amount is
      due on demand, unsecured and does not bear interest, accordingly fair
      value can not be reliably determined.

F-11

---

CANDEV RESOURCE EXPLORATION, INC.(An Exploration Stage Company) 
NOTES TO THEFINANCIAL STATEMENTSOCTOBER 31, 2008 AND 2007

(Stated in US Dollars)

|7. | MINERAL PROPERTY EXPLORATION EXPENSES                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                    
|   | On August 25, 2006 (and as amended on January 15, 2008)
      the Company entered into an agreement to acquire a 100% interest in
      certain mineral claims that make up the King Property located in the Iskut
      River region in northwestern British Columbia. The costs incurred to date
      are summarized as follows:

Acquisition costs
      $
      14,260Exploration costs
      
      20,593Balance, October 31, 2008
      $
      34,853


In order to earn this 100% interest, subject to a 2% Net
  Smelter Return royalty, the Company was required to make cash payments totalling
  $254,894 (Cdn$305,000) and issue 10,000 common shares as follows:

| | (a) | $2,300 (Cdn$2,500) cash payment within ten business days
      of signing the agreement (paid);                                                                      
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | $2,076 (Cdn$2,500) cash payment and issuance of 10,000
      common shares (issued) within ten business days of the Company becoming
      free trading on the OTCBB;
| | (c) | $9,760 (Cdn$10,000) cash payment on October 31, 2007
      (20,000 common shares in lieu of cash issued);                                                            
| | (d) | $33,208 (Cdn$40,000) cash payment on October 31,
      2008;                                                                                                         
| | (e) | $41,510 (Cdn$50,000) cash payment on October 31,
      2009;                                                                                                         
| | (f) | $83,020 (Cdn$100,000) cash payment on October 31, 2010;
      and                                                                                                    
| | (g) | $83,020 (Cdn$100,000) cash payment on October 31,
      2011.                                                                                                        

|   | During the year ended October 31, 2008, the Company
      decided to cancel its option agreement relating to the King
      Property.                                                                                                                                                                                                                                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|8. | FINANCIAL INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Companys financial instruments consist of cash,
      receivables, accounts payable and accrued liabilities and due to director.
      It is managements opinion that the Company is not exposed to significant
      interest, currency, or credit risks arising from these financial
      instruments. The fair values of these financial instruments approximate
      their carrying values due to their short term-maturity or capacity of
      prompt liquidation.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | At October 31, 2008 the Company had the following
      financial assets and liabilities denominated in Canadian
      dollars:                                                                                                                                                                                                                                                                                                                                                 

CDN DollarsReceivables
      $
      3,453Accounts payable and accrued liabilities
      $
      4,373Due to Director
      $
      37,621


|   | At October 31, 2008 CDN dollar amounts were converted at
    a rate of $1.20  Canadian dollars to $1.00 US dollar.                                                                      
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                         
|9. | INCOME TAXES                                                                                                                                                                            
|   |                                                                                                                                                                                         
|   | The Company has available unclaimed start up costs of
      approximately $178,000 for income tax purposes, which may be carried
      forward to reduce taxable income in future years.
|   |                                                                                                                                                                                         
|   | Deferred tax assets related to the above have not been
      recorded due to uncertainty regarding their
      utilization.                                                             

F-12

---

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

As required by paragraph (b) of Rules 13a-15 or 15d-15 under
the Exchange Act, our principal executive officer and principal financial
officer evaluated our companys disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the
period covered by this annual report on Form 10-K. Based on this evaluation,
these officers concluded that as of the end of the period covered by this Annual
Report on Form 10-K, these disclosure controls and procedures were not effective
to ensure that the information required to be disclosed by our company in
reports it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the Securities Exchange Commission and include controls and procedures
designed to ensure that such information is accumulated and communicated to our
companys management, including our companys principal executive officer and
principal financial officer, to allow timely decisions regarding required
disclosure. The conclusion that our disclosure controls and procedures were not
effective was due to the presence of material weaknesses in internal control
over financial reporting as identified below under the heading Managements
Report on Internal Control Over Financial Reporting. Management anticipates
that such disclosure controls and procedures will not be effective until the
material weaknesses are remediated. Our company intends to remediate the
material weaknesses as set out below.

Managements Report on Internal Control Over Financial
Reporting

Our companys management is responsible for establishing and
maintaining adequate internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) of the Exchange Act) for our company. Our
companys internal control over financial reporting is designed to provide
reasonable assurance, not absolute assurance, regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles in the
United States of America. Internal control over financial reporting includes
those policies and procedures that: (i) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of our companys assets; (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles in the
United States of America, and that our companys receipts and expenditures are
being made only in accordance with authorizations of our management and
directors; and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of our assets that
could have a material effect on the financial statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. In addition,
projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions
and that the degree of compliance with the policies or procedures may
deteriorate.

Our Management, including our principal executive officer and
principal financial officer, conducted an evaluation of the design and operation
of our internal control over financial reporting as of October 31, 2008 based on
the criteria set forth in Internal Control  Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission. This
evaluation included review of the documentation of controls, evaluation of the
design effectiveness of controls, testing of the operating effectiveness of
controls and a conclusion on this evaluation. Based on this evaluation, our
management concluded our internal control over financial reporting was not
effective as at October 31, 2008 due to the following material weaknesses which
are indicative of many small companies with small staff: (i) inadequate
segregation of duties and effective risk assessment; and (ii) insufficient
written policies and procedures for accounting and financial reporting with
respect to the requirements and application of both US GAAP and SEC
guidelines.

-17-

---

Our company plans to take steps to enhance and improve the
design of our internal controls over financial reporting. During the period
covered by this annual report on Form 10-K, we have not been able to remediate
the material weaknesses identified above. To remediate such weaknesses, we plan
to implement the following changes during our fiscal year ending October 31,
2009: (i) appoint additional qualified personnel to address inadequate
segregation of duties and ineffective risk management; and (ii) adopt sufficient
written policies and procedures for accounting and financial reporting. The
remediation efforts set out in (i) is largely dependent upon our company
securing additional financing to cover the costs of implementing the changes
required. If we are unsuccessful in securing such funds, remediation efforts may
be adversely effected in a material manner.

This annual report does not include an attestation report of
our independent registered public accounting firm regarding internal control
over financial reporting. Our internal control over financial reporting was not
subject to attestation by our independent registered public accounting firm
pursuant to temporary rules of the Securities and Exchange Commission that
permit us to provide only managements report in this annual report.

Because of the inherent limitations in all control systems, no
  evaluation of controls can provide absolute assurance that all control issues,
  if any, within our company have been detected. These inherent limitations include
  the realities that judgments in decision-making can be faulty and that breakdowns
  can occur because of simple error or mistake.

Changes in Internal Control Over Financial Reporting.

There were no changes in our companys internal control over
financial reporting during the quarter ended October 31, 2008 that have
materially affected, or are reasonably likely to materially affect, our
companys internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

None.

-18-

---

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE

Directors and Executive Officers

As at January 20, 2009, our directors and executive officers,
their ages, positions held, and duration of such, are as follows:

Name
    Position Held with the
      Company
    Age
    Date First Elected or
      AppointedMark McLeary
    President, Secretary, Treasurer,
      Chief Executive Officer, Chief Financial Officer and Director
    43
    January 9, 2006


Business Experience

The following is a brief account of the education and business
experience of each director and executive officer during at least the past five
years, indicating each persons principal occupation during the period, and the
name and principal business of the organization by which he was employed.

Mark A. McLeary is our President, Secretary, Treasurer
and our sole director and has served in those capacities since our inception.
Mr. McLeary has been a certified financial planner since 1995 and a chartered
financial planner since 1991. He has worked in the financial planning industry
for over 19 years with an emphasis on investment and tax planning. Mr. McLeary
is a member of the Financial Planners Standards Council of Canada and founded
McLeary Capital Management, Inc. in 1995. McLeary Capital provides retirement,
tax and estate planning advice to individuals and corporations in British
Columbia. Since 1995 Mr. McLeary, as the principal of McLeary Capital, has been
responsible for managing approximately $40 million of clients investments. Mr.
McLeary is currently the President, Chief Executive Officer and a director of
Enviro Energy Capital Corp., a public company listed on the TSX Venture
Exchange. Mr. Mcleary has served in those capacities since the inception of
Enviro Energy.

Term of Office

Our directors are appointed for a one-year term to hold office
until the next annual general meeting of our shareholders or until removed from
office in accordance with our bylaws. Our officers are appointed by our board of
directors and hold office until removed by the board.

Significant Employees

We have no significant employees other than the director and
officer described above.

Family Relationships

There are no family relationships among our directors or
officers.

Involvement in Certain Legal Proceedings

Our directors, executive officers and control persons have not
been involved in any of the following events during the past five years:

| | 1. | any bankruptcy petition filed by or against any business
      of which such person was a general partner or executive officer either at
      the time of the bankruptcy or within two years prior to that
  time;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                    
| | 2. | any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding (excluding                                                                                                         

-19-

---

| |    | traffic violations and other minor offenses);                                                                                                                                                                                                                                                                                  
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                
| | 3. | being subject to any order, judgment, or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities; or
| |    |                                                                                                                                                                                                                                                                                                                                
| | 4. | being found by a court of competent jurisdiction (in a
      civil action), the Securities and Exchange Commission or the Commodity
      Futures Trading Commission to have violated a federal or state securities
      or commodities law, and the judgment has not been reversed, suspended, or
      vacated.             

Audit Committee

The Companys audit committee is composed of its sole director
and officer, Mark McLeary.

Audit Committee Financial Expert

Our board of directors has determined that it does not have an
audit committee member that qualifies as an audit committee financial expert
as defined in Item 407(d)(5)(ii) of Regulation S-K. We believe that the audit
committee members are collectively capable of analyzing and evaluating our
financial statements and understanding internal controls and procedures for
financial reporting. In addition, we believe that retaining an independent
director who would qualify as an audit committee financial expert would be
overly costly and burdensome and is not warranted in our circumstances given the
early stages of our development and the fact that we have not generated revenues
to date.

Nomination Procedures For Appointment of Directors

As of January 20, 2009, we did not effect any material changes
to the procedures by which our stockholders may recommend nominees to our board
of directors.

Code of Ethics

We adopted a Code of Ethics applicable to all of our directors,
officers, employees and consultants, which is a code of ethics as defined by
applicable rules of the SEC. Our Code of Ethics was attached as an exhibit to
our annual report filed on Form 10-KSB with the SEC on September 19, 2007. If we
make any amendments to our Code of Ethics other than technical, administrative,
or other non-substantive amendments, or grant any waivers, including implicit
waivers, from a provision of our Code of Ethics to our chief executive officer,
chief financial officer, or certain other finance executives, we will disclose
the nature of the amendment or waiver, its effective date and to whom it applies
in a Current Report on Form 8-K filed with the SEC.

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Exchange Act requires our executive
officers and directors and persons who own more than 10% of a registered class
of our equity securities to file with the SEC initial statements of beneficial
ownership, reports of changes in ownership and annual reports concerning their
ownership of our common stock and other equity securities, on Forms 3, 4 and 5
respectively. Executive officers, directors and greater than 10% shareholders
are required by the SEC regulations to furnish us with copies of all Section
16(a) reports that they file.

Based solely on our review of the copies of such forms received
by us, or written representations from certain reporting persons, we believe
that all filing requirements applicable to our officers, directors and greater
than ten percent beneficial owners were complied with.

ITEM 11. EXECUTIVE COMPENSATION.

The particulars of compensation paid to the following
persons:

- our principal executive officer;
- each of our two most highly compensated executive officers who were serving
  as executive officers at the end of the year ended October 31, 2008; and

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- up to two additional individuals for whom disclosure would have been
  provided under (b) but for the fact that the individual was not serving as our
  executive officer at the end of the most recently completed financial year,

who we will collectively refer to as the named executive
officers, for our years ended October 31, 2008 and 2007, are set out in the
following summary compensation table:

SUMMARY
        COMPENSATION TABLENameand PrincipalPosition
      Year
      Salary($)
      Bonus($)
      StockAwards($)
      OptionAwards($)(4)
      Non-EquityIncentivePlanCompensa-tion($)
      Change inPensionValue andNonqualifiedDeferred**Compensation**Earnings($)
      AllOther**Compensa**-tion($)
      Total($)Mark McLeary(1)
        President, Secretary, 
        Treasurer, Chief 
        Executive 
        Officer 
        and Chief Financial 
        Officer
      2008 
        2007
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil


|(1) | Mark McLeary has been our president, secretary,
      treasurer, chief executive officer and chief financial officer since
      January 9, 2006.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------

There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. Our
directors and executive officers may receive stock options at the discretion of
our board of directors in the future. We do not have any material bonus or
profit sharing plans pursuant to which cash or non-cash compensation is or may
be paid to our directors or executive officers, except that stock options may be
granted at the discretion of our board of directors from time to time. We have
no plans or arrangements in respect of remuneration received or that may be
received by our executive officers to compensate such officers in the event of
termination of employment (as a result of resignation, retirement, change of
control) or a change of responsibilities following a change of control.

Outstanding Equity Awards at Fiscal Year-End

As at October 31, 2008, we had not adopted any equity
compensation plan and no stock, options, or other equity securities were awarded
to our sole executive officer.

Aggregated Options Exercised in the Year Ended October 31,
2008 and Year End Option Values

There were no stock options exercised during the year ended
October 31, 2008.

Repricing of Options/SARS

We did not reprice any options previously granted during the
year ended October 31, 2008.

Director Compensation

We do not pay our directors any fees or other compensation for
acting as directors. We have not paid any fees or other compensation to any of
our directors for acting as directors to date.

Employment Contracts

We presently do not have any employment agreements or other
compensation arrangements with Mr. McLeary. Generally, Mr. McLeary provides his
services on a part-time basis without compensation. Mr. McLeary has agreed not
to charge any management fee during the current period in which we are seeking
new business opportunities.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

As of January 20, 2009, there were 8,780,000 shares of our
common stock outstanding. The following table sets forth certain information
known to us with respect to the beneficial ownership of our common stock as of
that date by (i) each of our directors, (ii) each of our executive officers, and
(iii) all of our directors and executive officers as a group. Except as set
forth in the table below, there is no person known to us who beneficially owns
more than 5% of our common stock.

|Title of Class Directors and Officers: | Name and Address of Beneficial
      Owner                                                     | Number of Shares Beneficially
      Owned (1) | Percentage of Class (2)
|-------------------------------------- | ---------------------------------------------------------------------------------------------- | --------------------------------------------- | -----------------------
|Common Stock                           | Mark McLeary 
      Suite 2200  1177 West 
      Hastings Street 
      Vancouver, BC V6E 2K3 | 5,300,000                                     | 60.4%                  
|Common Stock                           | Directors and Officers as 
      a group                                                       | 5,300,000                                     | 60.4%                  
|5% Stockholders                       
|Common Stock                           | Mark McLeary 
      Suite 2200  1177 West 
      Hastings Street 
      Vancouver, BC V6E 2K3 | 5,300,000                                     | 60.4%                  
|Common Stock                           | Aaron Ui 
      Suite 2200  1177 West 
      Hastings Street 
      Vancouver, BC V6E 2K3     | 502,000                                       | 5.7%                   

|(1) | Under Rule 13d-3, a beneficial owner of a security
      includes any person who, directly or indirectly, through any contract,
      arrangement, understanding, relationship, or otherwise has or shares: (i)
      voting power, which includes the power to vote, or to direct the voting of
      shares; and (ii) investment power, which includes the power to dispose or
      direct the disposition of shares. Certain shares may be deemed to be
      beneficially owned by more than one person (if, for example, persons share
      the power to vote or the power to dispose of the shares). In addition,
      shares are deemed to be beneficially owned by a person if the person has
      the right to acquire the shares (for example, upon exercise of an option)
      within 60 days of the date as of which the information is provided. In
      computing the percentage ownership of any person, the amount of shares
      outstanding is deemed to include the amount of shares beneficially owned
      by such person (and only such person) by reason of these acquisition
      rights.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(2) | The percentage of class is based on 8,780,000 shares of
      common stock issued and outstanding as of January 20,
  2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

Changes in Control

We are unaware of any contract or other arrangement the
operation of which may at a subsequent date result in a change of control of our
company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE.

None of the following parties has, since commencement of our
fiscal year ended October 31, 2008, 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, in which our company is a participant and
the amount involved exceeds the lesser of $120,000 or 1% of the average of our
companys total assets for the last three completed financial years:

| | (i)   | Any of our directors or officers;                                                                                                                                          
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                            
| | (ii)  | Any person proposed as a nominee for election as a
      director;                                                                                                         
| |       |                                                                                                                                                                            
| | (iii) | Any person who beneficially owns, directly or indirectly,
      shares carrying more than 5% of the voting rights attached to our
      outstanding shares of common stock;

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| | (iv) | Any of our promoters; and                                                                                                                   
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                             
| | (v)  | Any member of the immediate family (including spouse,
      parents, children, siblings and in- laws) of any of the foregoing
      persons.

Director Independence

Our common stock is quoted on the OTC bulletin board
interdealer quotation system, which does not have director independence
requirements. Under NASDAQ rule 4200(a)(15), a director is not considered to be
independent if he or she is also an executive officer or employee of the
corporation. Our sole director, Mark McLeary, is also our chief executive
officer, president and treasurer. As a result, we do not have any independent
directors.

As a result of our limited operating history and limited resources,
  our management believes that we will have difficulty in attracting independent
  directors. In addition, we would be likely be required to obtain directors and
  officers insurance coverage in order to attract and retain independent directors.
  our management believes that the costs associated with maintaining such insurance
  is prohibitive at this time.

Audit Committee

The Companys audit committee is composed of its sole director
and officer, Mark McLeary.

Audit Committee Financial Expert

We are a reporting issuer in the Province of British Columbia.
National Instrument 52-110 of the Canadian Securities Administrators requires
our company, as a venture issuer, to disclose annually in our annual report
certain information concerning the constitution of our audit committee and our
relationship with our independent auditor. Our board of directors has determined
that it does not have an audit committee member that qualifies as an audit
committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K.
Our audit committee is composed of our sole director and officer. We believe
that the audit committee member is capable of analyzing and evaluating our
financial statements and understanding internal controls and procedures for
financial reporting. In addition, we believe that retaining an independent
director who would qualify as an audit committee financial expert would be
overly costly and burdensome and is not warranted in our circumstances given the
early stages of our development and the fact that we have not generated revenues
to date.

Since the commencement of our companys most recently completed
financial year, our company has not relied on the exemptions contained in
sections 2.4 or 8 of National Instrument 52-110. Section 2.4 (De Minimis
Non-audit Services)provides an exemption from the requirement that the
audit committee must pre-approve all non-audit services to be provided by the
auditor, where the total amount of fees related to the non-audit services are
not expected to exceed 5% of the total fees payable to the auditor in the fiscal
year in which the non-audit services were provided. Section 8 (Exemptions)permits a company to apply to a securities regulatory authority for an
exemption from the requirements of National Instrument 52-110 in whole or in
part.

The audit committee has adopted specific policies and
procedures for the engagement of non-audit services as set out in the Audit
Committee Charter of our company. A copy of our companys Audit Committee
Charter is filed as an exhibit to this annual report.

Transactions with Independent Directors

Our sole director, Mark McLeary, is also our chief executive
officer, president and treasurer. As a result, we do not have any independent
directors.

National Instrument 58-101

We are a reporting issuer in the Province of British Columbia.
National Instrument 58-101 of the Canadian Securities Administrators requires
our company, as a venture issuer, to disclose annually in our annual report
certain information concerning corporate governance disclosure.

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Board of Directors

Our board of directors currently acts with one member
consisting of Mark McLeary. We have determined that Mr. McLeary is not
independent as that term is defined in National Instrument 52-110 due to the
fact that he is our sole director and officer.

Our board of directors facilitates its exercise of independent
supervision over management by endorsing the guidelines for responsibilities of
the board as set out by regulatory authorities on corporate governance in Canada
and the United States. Our boards primary responsibilities are to supervise the
management of our company, to establish an appropriate corporate governance
system, and to set a tone of high professional and ethical standards. The board
is also responsible for:

- selecting and assessing members of the Board;
- choosing, assessing and compensating the Chief Executive Officer of our
  company, approving the compensation of all executive officers and ensuring
  that an orderly management succession plan exists;
- reviewing and approving our companys strategic plan, operating plan,
  capital budget and financial goals, and reviewing its performance against
  those plans;
- adopting a code of conduct and a disclosure policy for our company, and
  monitoring performance against those policies;
- ensuring the integrity of our companys internal control and management
  information systems;
- approving any major changes to our companys capital structure, including
  significant investments or financing arrangements; and
- reviewing and approving any other issues which, in the view of the Board
  or management, may require Board scrutiny.

Directorships

The following directors are also directors of other reporting
issuers (or the equivalent in a foreign jurisdiction), as identified next to
their name:

Director
    Reporting Issuers or Equivalent in a
      Foreign JurisdictionMark McLeary
    Enviro Energy Capital Corp.  TSX Venture Exchange


Orientation and Continuing Education

We have an informal process to orient and educate new recruits
to the board regarding their role of the board, our committees and our
directors, as well as the nature and operations of our business. This process
provides for an orientation with key members of the management staff, and
further provides access to materials necessary to inform them of the information
required to carry out their responsibilities as a board member. This information
includes the most recent board approved budget, the most recent annual report,
the audited financial statements and copies of the interim quarterly financial
statements.

The board does not provide continuing education for its
directors. Each director is responsible to maintain the skills and knowledge
necessary to meet his or her obligations as directors.

Nomination of Directors

The board is responsible for identifying new director nominees.
In identifying candidates for membership on the board, the board takes into
account all factors it considers appropriate, which may include strength of
character, mature judgment, career specialization, relevant technical skills,
diversity and the extent to which the candidate would fill a present need on the
board. As part of the process, the board, together with management, is
responsible for conducting background searches, and is empowered to retain
search firms to assist in the nominations process. Once candidates have gone
through a screening process and met with a number of the existing directors,
they are formally put forward as nominees for approval by the board.

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Assessments

The board intends that individual director assessments be
conducted by other directors, taking into account each directors contributions
at board meetings, service on committees, experience base, and their general
ability to contribute to one or more of our companys major needs. However, due
to our stage of development and our need to deal with other urgent priorities,
the board has not yet implemented such a process of assessment.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit fees

The aggregate fees billed for the two most recently completed
fiscal periods ended October 31, 2008 and October 31, 2007 for professional
services rendered by MacKay LLP, Chartered Accountants for the audit of our
annual financial statements, quarterly reviews of our interim financial
statements and services normally provided by the independent accountant in
connection with statutory and regulatory filings or engagements for these fiscal
periods were as follows:

Year Ended October 31,
      2008
    Year Ended October 31,
      2007Audit Fees and Audit Related Fees
    $15,000
    $13,900Tax
      Fees
    $2,000
    $1,700All
      Other Fees
    -
    -Total
    $17,000
    $15,600


In the above table, audit fees are fees billed by our
companys external auditor for services provided in auditing our companys
annual financial statements for the subject year. Audit-related fees are fees
not included in audit fees that are billed by the auditor for assurance and
related services that are reasonably related to the performance of the audit
review of our companys financial statements. Tax fees are fees billed by the
auditor for professional services rendered for tax compliance, tax advice and
tax planning. All other fees are fees billed by the auditor for products and
services not included in the foregoing categories.

Policy on Pre-Approval by Audit Committee of Services
Performed by Independent Auditors

The board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.

The board of directors has considered the nature and amount of
  fees billed by MacKay LLP and believes that the provision of services for activities
  unrelated to the audit is compatible with maintaining MacKay LLP.

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

Exhibit Number
      Description3.1
      Articles of Incorporation (filed as an exhibit
        to our Form SB-2 Registration Statement, filed on January 22, 2007)3.2
      Bylaws and Amendments (filed as an exhibit to
        our Form SB-2 Registration Statement, filed on January 22, 2007)10.1
      Property Option Agreement dated August 25, 2006
        (filed as an exhibit to our Form SB-2 Registration Statement, filed on
        January 22, 2007)10.2
      Amended Property Option Agreement dated January
        15, 2008 (filed as an exhibit to our Current Report on Form 8-K, filed
        on January 16, 2008)10.2
      Termination Agreement and Mutual Release dated
        December 3, 2008 (filed as an exhibit to our Current Report on Form 8-K,
        filed on December 12, 2008)14.1
      Code of Ethics (filed as an exhibit to our Quarterly
        Report on Form 10-QSB filed on September 19, 2007)31.1*
      Certification of Chief
        Executive Officer and Chief Financial Officer pursuant to Section 302
        of the Sarbanes-Oxley Act of 200232.1*
      Certification of Chief
        Executive Officer and Chief Financial Officer pursuant Section 906 Certifications
        under Sarbanes-Oxley Act of 200299.1*
      Audit Committee Charter


* Filed herewith.

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SIGNATURES

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

CANDEV RESOURCE EXPLORATION, INC.

By /s/ Mark
McLeary Mark McLeary President, Secretary, Treasurer, Chief
Executive Officer and Chief Financial Officer (Principal Executive
Officer, Principal Accounting Officer and Principal Financial Officer)

Date: January 28, 2009

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