---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

Form 10-QSB

(Mark One)

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

For the quarterly period endedSeptember 30,
2007

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

For the transition period from __________to __________

Commission file number000-50146

TORNADO GOLD INTERNATIONAL
CORPORATION(Exact name of small business issuer as
specified in its charter)

|Delaware                                                             | 94-3409645                       
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)

8600 Technology Way, Suite 118, Reno, Nevada
89521(Address of principal executive offices)

(775) 852-3770(Issuers telephone
number)

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

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date:

30,111,526 common shares issued and outstanding as of
November 19, 2007

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

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PART I - FINANCIAL INFORMATION

|Item 1. Financial Statements.
|-----------------------------

These financial statements have been prepared by Tornado Gold
International Corporation (the Company) without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission (SEC).
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted in accordance with such SEC rules and regulations. In the
opinion of management, the accompanying statements contain all adjustments
necessary to present fairly the financial position of the Company as of
September 30, 2007, and its results of operations, stockholders equity, and its
cash flows for the nine month period ended September 30, 2007 and for the period
from inception (March 19, 2004) to September 30, 2007. The results for these
interim periods are not necessarily indicative of the results for the entire
year. The accompanying financial statements should be read in conjunction with
the financial statements and the notes thereto filed as a part of the Companys
annual report on Form 10-KSB filed on April 17, 2007.

---

|Tornado Gold International Corp.
|--------------------------------
|(An Exploratory Stage Company)  
|BALANCE SHEET                   

|                                                           |   | September 30, |  
|---------------------------------------------------------- | - | ------------- | -
|                                                           |   | 2007          |  
|                                                           |   | (Unaudited)   |  
|ASSETS                                                     |   |               |  
|CURRENT ASSETS                                             |   |               |  
|Cash and cash equivalents                                  | $ | 5,715         |  
|Prepaid Expenses                                           |   | 39,692        |  
|                                                           |   |               |  
|TOTAL CURRENT ASSETS                                       |   | 45,407        |  
|                                                           |   |               |  
|PROPERTY AND EQUIPMENT,                                    |   |               |  
|Mining claims                                              |   | 2,188,398     |  
|Computer
      equipment, net                              |   | 2,380         |  
|                                                           |   |               |  
|OTHER ASSETS                                               |   |               |  
|Deferred offering costs                                    |   | 2,500         |  
|Intangible assets                                          |   | 5,151         |  
|                                                           |   |               |  
|TOTAL ASSETS                                               | $ | 2,243,836     |  
|                                                           |   |               |  
|LIABILITIES AND STOCKHOLDERS' DEFICIT                      |   |               |  
|                                                           |   |               |  
|CURRENT LIABILITIES                                        |   |               |  
|Accounts payable - related party                           | $ | 51,464        |  
|Accounts payable -
      others                            |   | 112,997       |  
|Accrued expense                                            |   | 234,739       |  
|Loan Payable -
      related party                         |   | 730,000       |  
|Notes payable (including accrued interest of $158,684)     |   | 1,239,499     |  
|TOTAL CURRENT LIABILITIES                                  |   | 2,368,699     |  
|                                                           |   |               |  
|COMMITMENTS AND CONTINGENCIES                              |   | -             |  
|                                                           |   |               |  
|STOCKHOLDERS' DEFICIT                                      |   |               |  
|Common stock; $0.001 par value; 100,000,000 shares         |   |               |  
|authorized; 30,111,526 shares issued and
      outstanding |   | 30,112        |  
|Additional paid in capital                                 |   | 1,978,707     |  
|Accumulated
      deficit                                  |   | (704,993      | )
|Deficit accumulated during the exploratory stage           |   | (2,928,270    | )
|Subscribed
      warrants                                  |   | 1,500,000     |  
|Stock subscription receivable                              |   | (419          | )
|TOTAL STOCKHOLDERS' DEFICIT                                |   | (124,863      | )
|                                                           |   |               |  
|TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                | $ | 2,243,836     |  

The accompanying notes are an integral part of these financial
statements

---

|Tornado Gold International Corp.
|--------------------------------
|(An Exploratory Stage Company)  
|STATEMENTS OF OPERATIONS        

|                                                      |   |                            |   |   |                           |   |   |              |   |   |             |   |   | From        |  
|----------------------------------------------------- | - | -------------------------- | - | - | ------------------------- | - | - | ------------ | - | - | ----------- | - | - | ----------- | -
|                                                      |   |                            |   |   |                           |   |   |              |   |   |             |   |   | March 19    |  
|                                                      |   | For the Three months ended |   |   | For the Nine Months ended |   |   | 2004         |  
|                                                      |   |                            |   |   |                           |   |   |              |   |   |             |   |   | through     |  
|                                                      |   | September 30               |   |   | September 30              |   |   | September 30 |  
|                                                      |   | 2007                       |   |   | 2006                      |   |   | 2007         |   |   | 2006        |   |   | 2007        |  
|                                                      |   | (Unaudited)                |   |   | (Unaudited)               |   |   | (Unaudited)  |   |   | (Unaudited) |   |   | (Unaudited) |  
|                                                      |   |                            |   |   |                           |   |   |              |   |   |             |   |   |             |  
|                                                      |   |                            |   |   |                           |   |   |              |   |   |             |   |   |             |  
|NET REVENUE                                           | $ | -                          |   | $ | -                         |   | $ |              |   | $ |             |   | $ | -           |  
|                                                      |   |                            |   |   |                           |   |   |              |   |   |             |   |   |             |  
|OPERATING EXPENSES                                    |   |                            |   |   |                           |   |   |              |   |   |             |   |   |             |  
|Compensation expense on option
      grants           |   | -                          |   |   | 11,589                    |   |   | -            |   |   | 46,356      |   |   | 68,765      |  
|Mining
      exploration expenses                     |   | 21,354                     |   |   | 522,978                   |   |   | 141,312      |   |   | 604,245     |   |   | 1,302,530   |  
|General and administrative
      expenses             |   | 69,904                     |   |   | 148,074                   |   |   | 263,358      |   |   | 357,392     |   |   | 1,082,441   |  
|                                                      |   | 91,258                     |   |   | 682,641                   |   |   | 404,670      |   |   | 1,007,993   |   |   | 2,435,736   |  
|                                                      |   |                            |   |   |                           |   |   |              |   |   |             |   |   |             |  
|LOSS FROM OPERATIONS                                  |   | (91,258                    | ) |   | (682,641                  | ) |   | (404,670     | ) |   | (1,007,993  | ) |   | (2,453,736  | )
|                                                      |   |                            |   |   |                           |   |   |              |   |   |             |   |   |             |  
|OTHER INCOME (EXPENSE)                                |   |                            |   |   |                           |   |   |              |   |   |             |   |   |             |  
|Accrued potential damages on
      breach of contract |   | (56,534                    | ) |   | -                         |   |   | (234,739     | ) |   | -           |   |   | (234,739    | )
|Interest expense                                      |   | (21,794                    | ) |   | (21,793                   | ) |   | (64,671      | ) |   | (59,531     | ) |   | (239,795    | )
|TOTAL OTHER INCOME (EXPENSE)                          |   | (78,328                    | ) |   | (21,793                   | ) |   | (299,410     | ) |   | (59,531     | ) |   | (474,534    | )
|                                                      |   |                            |   |   |                           |   |   |              |   |   |             |   |   |             |  
|LOSS BEFORE PROVISION FOR INCOME TAXES                |   | (169,586                   | ) |   | (704,434                  | ) |   | (704,080     | ) |   | (1,067,524  | ) |   | (2,928,270  | )
|                                                      |   |                            |   |   |                           |   |   |              |   |   |             |   |   |             |  
|PROVISION FOR INCOME TAXES                            |   | -                          |   |   | -                         |   |   |              |   |   |             |   |   | -           |  
|                                                      |   |                            |   |   |                           |   |   |              |   |   |             |   |   |             |  
|NET LOSS                                              | $ | (169,586                   | ) | $ | (704,434                  | ) | $ | (704,080     | ) | $ | (1,067,524  | ) | $ | (2,928,270  | )
|                                                      |   |                            |   |   |                           |   |   |              |   |   |             |   |   |             |  
|NET LOSS PER SHARE - BASIC AND DILUTED                | $ | (0.01                      | ) | $ | (0.02                     | ) | $ | (0.02        | ) | $ | (0.04       | ) |   |             |  
|                                                      |   |                            |   |   |                           |   |   |              |   |   |             |   |   |             |  
|WEIGHTED AVERAGE COMMON EQUIVALENT                    |   |                            |   |   |                           |   |   |              |   |   |             |   |   |             |  
|SHARES
      OUTSTANDING                              |   |                            |   |   |                           |   |   |              |   |   |             |   |   |             |  
|- BASIC AND DILUTED                                   |   | 30,111,526                 |   |   | 29,799,733                |   |   | 30,111,526   |   |   | 29,133,601  |   |   |             |  

The accompanying notes are an integral part of these financial
statements

---

|Tornado Gold International Corp.
|--------------------------------
|(An Exploratory Stage Company)  
|STATEMENTS OF CASH FLOWS        

|                                                         |   |                     |   |   |             |   |   | From          |  
|-------------------------------------------------------- | - | ------------------- | - | - | ----------- | - | - | ------------- | -
|                                                         |   |                     |   |   |             |   |   | March 19,     |  
|                                                         |   | For the Nine Months |   |   | 2004        |  
|                                                         |   | September 30        |   |   | through     |  
|                                                         |   |                     |   |   |             |   |   | September 30, |  
|                                                         |   | 2007                |   |   | 2006        |   |   | 2007          |  
|                                                         |   | (Unaudited)         |   |   | (Unaudited) |   |   | (Unaudited)   |  
|                                                         |   |                     |   |   |             |   |   |               |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                    |   |                     |   |   |             |   |   |               |  
|Net loss                                                 | $ | (704,080            | ) | $ | (1,067,524  | ) | $ | (2,928,270    | )
|Adjustment to reconcile
      net loss to net cash       |   |                     |   |   |             |   |   |               |  
|used in
      operating activities:                      |   |                     |   |   |             |   |   |               |  
|Value of options and warrants granted for
      services |   | -                   |   |   | 46,356      |   |   | 68,765        |  
|Amortization                                             |   | 1,717               |   |   | -           |   |   | 1,717         |  
|Depreciation                                             |   | 831                 |   |   | -           |   |   | 942           |  
|Changes in operating assets and
      liabilities        |   |                     |   |   |             |   |   |               |  
|Prepaid expenses and other current assets                |   | (39,692             | ) |   | 3,115       |   |   | (34,692       | )
|Deferred
      offering costs                            |   | (2,500              | ) |   | -           |   |   | (2,500        | )
|Accounts payable                                         |   | 84,153              |   |   | 176,068     |   |   | 239,562       |  
|Accrued
      expenses                                   |   | 234,739             |   |   | -           |   |   | 234,739       |  
|Accrued interest                                         |   | 64,671              |   |   | -           |   |   | 158,684       |  
|Net cash used in operating activities                    |   | (360,161            | ) |   | (841,985    | ) |   | (2,261,053    | )
|                                                         |   |                     |   |   |             |   |   |               |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                    |   |                     |   |   |             |   |   |               |  
|Purchase of mining claims                                |   | (506,250            | ) |   | (1,041,266  | ) |   | (2,121,848    | )
|Purchase of
      equipment                              |   | (1,980              | ) |   | -           |   |   | (3,323        | )
|Website design costs                                     |   | -                   |   |   | -           |   |   | (6,868        | )
|Net cash used in investing activities                    |   | (508,230            | ) |   | (1,041,266  | ) |   | (2,132,039    | )
|                                                         |   |                     |   |   |             |   |   |               |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                    |   |                     |   |   |             |   |   |               |  
|Proceeds from loan payable                               |   | 730,000             |   |   | 649,839     |   |   | 2,835,816     |  
|Proceeds
      from issuance of common stock             |   | -                   |   |   | 347,220     |   |   | 856,802       |  
|Proceeds from subscribed warrants                        |   | -                   |   |   | 1,500,000   |   |   | 1,500,000     |  
|Payment on
      note payable                            |   | -                   |   |   | -           |   |   | (42,500       | )
|Repurchase of shares on common stock                     |   | -                   |   |   | -           |   |   | (577,906      | )
|Offering
      costs                                     |   | -                   |   |   | (173,405    | ) |   | (173,405      | )
|                                                         |   |                     |   |   |             |   |   |               |  
|Net cash provided by financing activities                |   | 730,000             |   |   | 2,323,654   |   |   | 4,398,807     |  
|                                                         |   |                     |   |   |             |   |   |               |  
|NET CASH PROVIDED BY CONTINUING OPERATIONS               |   | (138,391            | ) |   | 440,403     |   |   | 5,715         |  
|                                                         |   |                     |   |   |             |   |   |               |  
|CASH AND CASH EQUIVALENTS, Beginning of year             |   | 144,106             |   |   | 64,333      |   |   | -             |  
|                                                         |   |                     |   |   |             |   |   |               |  
|CASH AND CASH EQUIVALENTS, End of year                   | $ | 5,715               |   | $ | 504,736     |   | $ | 5,715         |  
|                                                         |   |                     |   |   |             |   |   |               |  
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW                    |   |                     |   |   |             |   |   |               |  
|INFORMATION:                                             |   |                     |   |   |             |   |   |               |  
|Interest
      paid                                      | $ | -                   |   | $ | -           |   | $ | -             |  
|Income taxes paid                                        | $ | -                   |   | $ | -           |   | $ | -             |  

The accompanying notes are an integral part of these financial
statements

---

|TORNADO GOLD INTERNATIONAL CORP.
|--------------------------------
|(An Exploratory Stage Company)  
|NOTES TO FINANCIAL STATEMENTS   

NOTE 1  ORGANIZATION AND BASIS OF PRESENTATION

Organization

Tornado Gold International Corp. (formerly Nucotec, Inc.) was
incorporated in the state of Nevada on October 8, 2001. On July 7, 2004, the
name of the company was officially changed to Tornado Gold International Corp.
(the "Company"). The Company is currently in the exploratory stage as defined in
Financial Accounting Standards Board (FASB) Statement of Financial Accounting
Standards (SFAS) No. 7 and has been March 19, 2004, when it changed its
principal activity to the exploration of mining properties for future commercial
development and production (See Note 3). On February 14, 2007, the Company
changed its domicile from Nevada to Delaware.

Basis of Presentation

The accompanying interim financial statements have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission (the SEC) for interim financial reporting. These
interim financial statements are unaudited and, in the opinion of management,
include all adjustments (consisting of normal recurring adjustments and
accruals) necessary to present fairly the balance sheet, operating results and
cash flows for the periods presented in accordance with accounting principles
generally accepted in the United States of America (GAAP). Operating results
for the nine months ended September 30, 2007 are not necessarily indicative of
the results that may be expected for the year ending December 31, 2007 or for
any other interim period during such year. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with GAAP have been omitted in accordance with the rules and regulations of the
SEC. These interim financial statements should be read in conjunction with the
audited financial statements and notes thereto contained in the Companys Form
10-KSB for the year ended December 31, 2006.

Going Concern

The accompanying financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America, which contemplate continuation of the Company as a going concern. The
Company has no established source of material revenue, has incurred a net loss
for the nine months ended September 30, 2007 of $704,080, as of September 30,
2007 had a negative working capital of $2,323,292, and had an accumulated
deficit since its inception of $3,633,263. These conditions raise substantial
doubt as to the Company's ability to continue as a going concern. These
financial statements do not include any adjustments that might result from the
outcome of this uncertainty. These financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts, or amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern.

Management recognizes that the Company must generate additional
resources to enable it to continue operations. Management intends to raise
additional funds through debt and/or equity financing or through other means
that it deems necessary. However, no assurance can be given that the Company
will be successful in raising additional capital. Further, even if the company
raises additional capital, there can be no assurance that the Company will
achieve profitability or positive cash flow. If management is unable to raise
additional capital and expected significant revenues do not result in positive
cash flow, the Company will not be able to meet its obligations and may have to
cease operations.

Stock Split

On April 19, 2004, the Company authorized a 50-for-1 stock
split. On August 18, 2004, the Company authorized a 6.82 -for-1 stock split. On
May 16, 2005, the Company authorized a 1.20 -for-1 stock split. All references
in the accompanying financial statements to the number of shares outstanding and
per-share amounts have been restated to reflect the various indicated stock
splits.

---

|TORNADO GOLD INTERNATIONAL CORP.
|--------------------------------
|(An Exploratory Stage Company)  
|NOTES TO FINANCIAL STATEMENTS   

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Stock Based Compensation

The Company accounts for stock-based compensation under SFAS
No. 123R, "Share- based Payment " and SFAS No. 148, "Accounting for Stock-Based
Compensation--Transition and Disclosure--An amendment to SFAS No. 123. These
standards define a fair value based method of accounting for stock-based
compensation. In accordance with SFAS Nos. 123R and 148, the cost of stock-based
employee compensation is measured at the grant date based on the value of the
award and is recognized over the vesting period. The value of the stock-based
award is determined using the Black-Scholes option-pricing model, whereby
compensation cost is the excess of the fair value of the award as determined by
the pricing model at the grant date or other measurement date over the amount an
employee must pay to acquire the stock. The resulting amount is charged to
expense on the straight-line basis over the period in which the Company expects
to receive the benefit, which is generally the vesting period. During 2006, the
Company recognized no compensation expense under SFAS No. 123R as no options
were issued to employees during these two periods (See Note 6).

As of April 15, 2005, the Company adopted its 2005 stock option
plan to compensate its directors. As of September 30, 2007, no options have been
granted to the directors.

Use of Estimates

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting periods. Actual results could differ
from these estimates.

Fair Value of Financial Instruments

The Companys financial instruments consist of cash and cash
equivalents, accounts payable, accrued expenses and notes payable, Pursuant to
SFAS No. 107, Disclosures About Fair Value of Financial Instruments,
the Company is required to estimate the fair value of all financial instruments
at the balance sheet date. The Company considers the carrying values of its
financial instruments in the financial statements to approximate their fair
values.

Cash and Cash Equivalents

For purposes of the statements of cash flows, the Company
defines cash equivalents as all highly liquid debt instruments purchased with a
maturity of three months or less, plus all certificates of deposit.

Property and Equipment

Property and equipment are stated at cost less accumulated
depreciation and amortization. Depreciation and amortization are calculated
using the straight-line method and with useful lives used in computing
depreciation of 3 years. When property and equipment are retired or otherwise
disposed of, the related cost and accumulated depreciation are removed from the
respective accounts, and any gain or loss is included in operations.
Expenditures for maintenance and repairs are charged to operations as incurred;
additions, renewals and betterments are capitalized.

---

|TORNADO GOLD INTERNATIONAL CORP.
|--------------------------------
|(An Exploratory Stage Company)  
|NOTES TO FINANCIAL STATEMENTS   

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Long- Lived Assets

The Company accounts for its long-lived assets in accordance
with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets." SFAS No. 144 requires that long-lived assets be reviewed for impairment
whenever events or changes in circumstances indicate that the historical cost
carrying value of an asset may no longer be appropriate. The Company assesses
recoverability of the carrying value of an asset by estimating the future net
cash flows expected to result from the asset, including eventual disposition. If
the future net cash flows are less than the carrying value of the asset, an
impairment loss is recorded equal to the difference between the asset's carrying
value and fair value or disposable value. As of September 30, 2007, the Company
did not deem any of its long-term assets to be impaired.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to
concentrations of credit risk, consist of cash. The Company places its cash with
high quality financial institutions and at times may exceed the FDIC $100,000
insurance limit. The Company extends credit based on an evaluation of the
customer's financial condition, generally without collateral. The Company
monitors its exposure for credit losses and maintains allowances for anticipated
losses, as required.

Revenue Recognition

The Company has not generated any revenue from its mining
operations.

Mining Costs

Costs incurred to purchase, lease or otherwise acquire property
are capitalized when incurred. General exploration costs and costs to maintain
rights and leases are expensed as incurred. Management periodically reviews the
recoverability of the capitalized mineral properties and mining equipment.
Management takes into consideration various information including, but not
limited to, historical production records taken from previous mining operations,
results of exploration activities conducted to date, estimated future prices and
reports and opinions of outside consultants. When it is determined that a
project or property will be abandoned or its carrying value has been impaired, a
provision is made for any expected loss on the project or property.

Website Development Costs

Under FASB Emerging Issues Task Force Statement 00-2,
Accounting for Web Site Development Costs ("EITF 00-2"), costs and expenses
incurred during the planning and operating stages of the Company's web site
development are expensed as incurred. Under EITF 00-2, costs incurred in the web
site application and infrastructure development stages are capitalized by the
Company and amortized to expense over the web site's estimated useful life or
period of benefit. As of September 30, 2007, the Company had net capitalized
costs of $5,151 related to its web site development, which are being depreciated
on a straight-line basis over an estimated useful life of 3 years. Amortization
expense for the nine months ended September 30, 2007 and 2006 amounted to $1,717
and $0, respectively.

A schedule of amortization expense for the three years ending
September 30, 2010 is as follows:

| | September 30, 2008 | $ | 2,289 | 
| | ------------------ | - | ----- | 
| | September 30, 2009 |   | 2,289 | 
| | September 30, 2010 |   | 573   | 
| |                    | $ | 5,151 | 

---

|TORNADO GOLD INTERNATIONAL CORP.
|--------------------------------
|(An Exploratory Stage Company)  
|NOTES TO FINANCIAL STATEMENTS   

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Cont.)

Income Taxes

The Company accounts for income taxes in accordance with SFAS
No. 109, "Accounting for Income Taxes." Deferred taxes are provided on the
liability method whereby deferred tax assets are recognized for deductible
temporary differences, and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will be realized. Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment.

Loss Per Share

The Company reports earnings (loss) per share in accordance
with SFAS No. 128, "Earnings per Share." Basic earnings (loss) per share is
computed by dividing income (loss) available to common shareholders by the
weighted average number of common shares available. Diluted earnings (loss) per
share is computed similar to basic earnings (loss) per share except that the
denominator is increased to include the number of additional common shares that
would have been outstanding if the potential common shares had been issued and
if the additional common shares were dilutive. Diluted earnings (loss) per share
has not been presented since the effect of the assumed conversion of options to
purchase common shares would have an anti-dilutive effect. The only potential
common shares as of September 30, 2007 were 160,200 options, 11,795,000
warrants, and $649,838 of debt convertible into 1,477,283 shares of the
Companys common stock that have been excluded from the computation of diluted
net loss per share because the effect would have been anti-dilutive. If such
shares were included in diluted EPS, they would have resulted in
weighted-average common shares of 44,518,766 and 33,041,673 for the three months
ended September 30, 2007 and 2006, respectively, and 44,518,766 and 31,082,727
for the nine months ended September 30, 2007 and 2006, respectively.

Recent Accounting Pronouncement

SFAS No. 159 - In February 2007, the FASB issued
Statement No. 159, The Fair Value Option for Financial Assets and Financial
LiabilitiesIncluding an amendment of FASB Statement No. 115.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 applies to all entities, including not-for-profit
organizations. Most of the provisions of this Statement apply only to entities
that elect the fair value option. However, the amendment to FASB Statement No.
115, Accounting for Certain Investments in Debt and Equity Securities,
applies to all entities with available-for-sale and trading securities. Some
requirements apply differently to entities that do not report net income. This
Statement is effective as of the beginning of an entitys first fiscal year that
begins after November 15, 2007. Early adoption is permitted as of the beginning
of a fiscal year that begins on or before November 15, 2007, provided the entity
also elects to apply the provisions of FASB Statement No. 157, Fair Value
Measurements.No entity is permitted to apply this Statement retrospectively
to fiscal years preceding the effective date unless the entity chooses early
adoption. The choice to adopt early should be made after issuance of this
Statement but within 120 days of the beginning of the fiscal year of adoption,
provided the entity has not yet issued financial statements, including required
notes to those financial statements, for any interim period of the fiscal year
of adoption. This Statement permits application to eligible items existing at
the effective date (or early adoption date). The Company has evaluated the
impact of the implementation of SFAS No. 159 and does not believe the impact
will be significant to the Company's overall results of operations or financial
position.

---

|TORNADO GOLD INTERNATIONAL CORP.
|--------------------------------
|(An Exploratory Stage Company)  
|NOTES TO FINANCIAL STATEMENTS   

NOTE 3  COMPUTER EQUIPMENT

A summary of computer equipment at September 30, 2007 is as
follows:

| | Computer equipment       | $ | 3,323 |  
| | ------------------------ | - | ----- | -
| | Accumulated depreciation |   | (943  | )
| |                          | $ | 2,380 |  

Depreciation expense for the three months ended September
30,2007 and 2006 amounted to $277 and $0, respectively. Depreciation expense for
the nine months ended September 30, 2007 and 2006 amounted to $943 and $0,
respectively.

NOTE 4 - MINING CLAIMS

NT Green Property, HMD Gold Property, Goodwin Hill Gold
Property, and Wilson Peak Property

On May 31, 2004, the Company entered into four agreements with
a company wholly owned by Mr. Carl Pescio ("Pescio"), a Director of the Company,
to lease four mining properties. The terms of the four leases are substantially
identical and are as follows.

A schedule of the advanced lease payments for each of the four
properties is as follows:

| | Due Date                                                                   |   | Amount  | 
| | -------------------------------------------------------------------------- | - | ------- | 
| |                                                                            |   |         | 
| | June 5, 2004                                                               | $ | 15,000  | 
| | May 15, 2005                                                               | $ | 22,500  | 
| | February 5, 2006                                                           | $ | 30,000  | 
| | February 5, 2007                                                           | $ | 37,500  | 
| | February 5, 2008                                                           | $ | 50,000  | 
| | February 5, 2009                                                           | $ | 62,500  | 
| | February 5, 2010                                                           | $ | 75,000  | 
| | February 5, 2011 and each year thereafter until production
      commences | $ | 100,000 | 

Upon completion of a bankable feasibility study and payments
totaling $105,000, the Company will own 100% of the property subject to a
continuing production royalty of 4%. Once the $105,000 is paid, all subsequent
payments will convert into advance minimum royalty payments that are credited
against the 4% production royalty due. A 1% royalty is also due Pescio on
production on property consisting of a 2 mile circumference surrounding the
leased property.

The Company will pay additional land acquisition and filling
fees on the property. The Company is committed to drill 5,000 feet on the
property in each year commencing on or before September 1, 2006 and continuing
until the completion of the feasibility study. Drilling on the subject
properties has commenced. Excess footage drilled in any year will be carried
forward to subsequent years. The Company has the option to pay Pescio $10 per
foot committed to and not drilled.

Prior to the completion of the feasibility study, the Company
has the right to purchase 2% of the 4% production royalty for $1,500,000 for
each percentage point. The Company also has the option to purchase 50% of the 1%
royalty for $500,000.

The Company shall be responsible for all environmental
liabilities and reclamation costs it creates and indemnifies Pescio against any
such claims or obligations. The Company can terminate the lease at any time by
giving 30 days notice provided that there are no outstanding environmental or
reclamation liabilities and that all lease and production royalty payments are
current.

---

|TORNADO GOLD INTERNATIONAL CORP.
|--------------------------------
|(An Exploratory Stage Company)  
|NOTES TO FINANCIAL STATEMENTS   

NOTE 4 - MINING CLAIMS (Cont.)

Jack Creek Property

On October 3, 2005, the Company paid the Bureau of Land
Management $30,875 as consideration on the Exploration License and Option to
Lease Agreement entered into between the Company and Mr. Earl Abbott, and
Stanley Keith ("the owners"), to explore 247 claims (nearly 5,000 acres) known
as the Jack Creek Property. Mr. Abbott is the Company's President and Mr. Keith
was a Company Director through 2006.

The Company entered into a definitive Exploration License and
Option to Lease Agreement for the above claims for a period of twenty years.
Under this agreement, the Company is responsible to make minimum lease payments
to the owners as follows:

| | Due Date                                        |   | Amount  | 
| | ----------------------------------------------- | - | ------- | 
| |                                                 |   |         | 
| | Upon signing                                    | $ | 22,500  | 
| | 1st anniversary                                 | $ | 30,000  | 
| | 2nd anniversary                                 | $ | 37,500  | 
| | 3rd anniversary                                 | $ | 50,000  | 
| | 4th anniversary                                 | $ | 62,500  | 
| | 5th anniversary and each anniversary thereafter | $ | 100,000 | 

If any payments due by the Company to the owners are not paid
within 30 days of its due date, interest will begin to accrue on the late
payment at a rate of 2% over the prime rate established by the Department of
Business and Industry of the State of Nevada.

Upon completion of a bankable feasibility study and payments
totaling $140,000, all subsequent payments will convert into advance minimum
royalty payments that are credited against the 4% production royalty due.

The Company shall have the option to purchase one-half (1/2) of
the royalty applicable to the property representing two percent (2%) of the Net
Smelter Returns. The Company shall have the right to elect to purchase such part
of the royalty in increments representing one percent (1%) of the Net Smelter
Returns and the purchase price for each such increment shall be $1,500,000. The
Company shall have the option to purchase one-half (1/2) of the area-of-interest
royalty applicable to mineral rights, mining claims and properties which the
Company acquires from third parties representing one-half percent (.5%) of the
Net Smelter Returns. The purchase price for such part of the area-of-interest
royalty shall be $500,000 for the one-half percent (.5%) of the area-of-interest
royalty applicable to mineral rights, mining claims and properties which the
Company acquires from any third party.

The Company shall be responsible for all environmental
liabilities and reclamation costs it creates and indemnifies the owners against
any such claims or obligations. The Company can terminate the lease at any time
by giving 30 days notice provided that there are no outstanding environmental or
reclamation liabilities and that all lease and production royalty payments are
current.

In addition, on August 7, 2006, the Company acquired an option
for 53 additional claims (approx 1,000 acres) at the Jack Creek Property. The
option was acquired from Gateway Gold (USA) Corp. through two of the Companys
directors, Earl Abbott and Stanley Keith, and is subject to the Area of Interest
clause in the original Jack Creek agreement between the Company and those
directors that the Company announced in its October 3, 2005, news release. The
Company has the option to earn a 50% undivided interest in the 53 claims through
its expenditure on the claims of a total of $500,000 in various stages by March
1, 2007, 2008, and 2009. Thereafter, the Company and Gateway Gold could form a
joint venture; but, if Gateway declines to participate at its 50% level, the
Company could exercise its option to earn an additional 20% in the claims
through its expenditure on the claims of an additional $500,000 in two equal
stages on or before March 1, 2010, and 2011. Mr. Abbott is also an officer of
the Company.

---

|TORNADO GOLD INTERNATIONAL CORP.
|--------------------------------
|(An Exploratory Stage Company)  
|NOTES TO FINANCIAL STATEMENTS   

NOTE 4 - MINING CLAIMS (Cont.)

Additional Properties

On October 6, 2005, the Company entered into a preliminary
agreement with Mr. Carl Pescio, a Director of the Company, to lease 10 mineral
properties (about 1,300 claims) in Nevada. Under the term of the preliminary
agreement, the Company is to make advance lease payments to Mr. Pescio on each
property based upon the following schedule:

| | Due Date                                              |   | Amount  | 
| | ----------------------------------------------------- | - | ------- | 
| |                                                       |   |         | 
| | Upon signing                                          | $ | 35,000  | 
| | 1st anniversary                                       | $ | 55,000  | 
| | 2nd anniversary                                       | $ | 75,000  | 
| | 3rd anniversary                                       | $ | 100,000 | 
| | 4th anniversary                                       | $ | 125,000 | 
| | 5th anniversary                                       | $ | 150,000 | 
| | 6th anniversary and each anniversary
      thereafter | $ | 200,000 | 

On August 23, 2006, the Company entered into an agreement to
acquire the Illipah gold prospect consisting of 191 unpatented mining claims
located in White Pine County, Nevada in consideration for $100,000 and 300,000
shares of its common stock. Under the terms of the purchase agreement, $50,000
was paid and 50,000 shares of the Companys common stock were issued upon
signing with an additional $50,000 paid and 100,000 shares of restricted common
stock issued on November 21, 2006. An additional 200,000 shares of restricted
common stock is to be issued on or before August 23, 2007. Further, the Company
assumed the sellers obligations in an underlying exploration and mining lease
agreement on the claims, and granted to the seller a production royalty of two
percent of net smelter returns on all rents and mineral production from the
property. The Company also agreed to pay $48,007 to the United States Department
of the Interior Bureau of Land Management for mining claim maintenance fees, and
be responsible for future annual maintenance and filing fees on the acquired
claims and any advanced minimum royalty payments due to Carl Pescio, a Company
director, and Janet Pescio under an August 31, 2001, agreement between the
Pescios and the seller. The Company agreed to register all of such shares for
re-sale within 60 days of the closing date but not later than 150 days after
August 23, 2006. The Company also agreed to use its best efforts to cause the
registration of the shares to be declared effective as soon as practicable
thereafter, but within 120 days after the closing date and no later than 210
days after August 23, 2006.

The Company has the option, exercisable at any time prior to
commercial production on any of the Illipah claims, to reduce production
royalties due Seller from two percent to one percent by paying it $1,000,000 or
its equivalent in gold bullion priced as of the August 24, 2006 closing price of
gold on the New York Commodity Exchange. The Company also agreed to undertake an
exploration program on the Illipah property and related area of interest, and
incur exploration and development expenditures of at least $750,000 within two
years, of which $250,000 is to be expended during the first year of the
agreement.

Based upon the actual and preliminary terms of the above
leases, the Company's obligation as of September 30, 2007 for the payment of
minimum lease payments on these 16 properties is as follows:

| | 2007                                       | $ | 424,985   | 
| | ------------------------------------------ | - | --------- | 
| | 2008                                       | $ | 1,237,500 | 
| | 2009                                       | $ | 1,550,000 | 
| | 2010                                       | $ | 1,862,500 | 
| | Minimum lease payments in Subsequent years | $ | 2,500,000 | 

On September 24, 2007, the Company entered into a joint venture agreement with
  Allied Nevada Gold Corp., a company created by Carl Pescio and others to which
  Carl Pescio assigned all of his interests in 15 separate properties, relating
  to our joint venture with Allied Nevada Gold Corp. The 15 properties include
  Brock, Dry Hills, Golconda, Goodwin Hill, HMD, Horseshoe Basin, Illipah, Marr,
  North Battle Mountain, NT Green, South Lone Mountain, Stargo, Walti, West Whistler
  and Wilson Peak. Under this joint venture agreement, the Company are obligated
  to pay Allied Nevada Gold Corp. $975,000 on or before February 5, 2008. The
  Company also agreed to pay $375,000 on or before June 30 of each year for annual
  property payment on these 15 properties. The Company also agreed to incur certain
  minimum amounts on field geologic activities during the earn in period. This
  agreement also provides that once the Company expended a total of $1,500,000
  on any property, the Company will have earned a 60% interest in that property.

---

|TORNADO GOLD INTERNATIONAL CORP.
|--------------------------------
|(An Exploratory Stage Company)  
|NOTES TO FINANCIAL STATEMENTS   

NOTE 4 - MINING CLAIMS (Cont.)

A description of the mining properties leased by the Company is
as follows:

NT Green Property is located in central Lander County, Nevada
about 40 miles southwest of the town of Battle Mountain. The property is within
the Battle Mountain/Eureka (Cortez) Trend at the northern end of the Toiyabe
Range.

HMD Gold Property is located in Eureka County, Nevada along the
west side of the Cortez Range, about 30 miles southwest of the town of Carlin,
and about 10 miles north of the Buckhorn deposit. Access to the property is
gained by driving 41 miles west of Elko on I-80, then 20 miles south on SH-306
to the town of Crescent Valley. A well-maintained gravel road leads
east-southeast past the Hot Springs Point to the vicinity of the Dean Ranch. A
two-track road leads to the southeast and the property position is reached in
about one-half mile.

Goodwin Hill Gold Property is located in east central Lander
County, Nevada about 60 miles south of the town of Battle Mountain and about 25
miles northeast of the town of Austin. It is positioned in grass Valley between
the Simpson Park Range to the east and the Toiyabe Range to the west.

Wilson Peak property is located in Elko County, Nevada about 70
miles north of the town of Elko and about 20 miles north of the town of
Tuscarora. The property area is west of the Independence Gold Trend and is part
of a north-south line of gold-silver occurrences in Tertiary volcanic rocks.

Jack Creek Property is located in the northern Independence
Range about 50 miles north of Elko, Elko County, Nevada. It is comprised of 247
lode mining claims (nearly 5,000 acres) adjacent to Gateway Gold Corp.'s (TSX
Venture:GTQ) Big Springs and Dorsey Creek Properties.

Stargo Property is located in the Monitor Range about 45 miles
southwest of the town of Eureka and about 20 miles west of the Northumberland
Mine and comprises of a total of 257 lode claims (about 5,140 acres) in Nye
County, Nevada.

West Whistler Property is located on the west flank of Whistler
Mountain, about 10 miles northwest of the town of Eureka and comprises of a
total of 103 lode claims (about 2,060 acres) in Eureka County, Nevada.

Brock Property is located in the Monitor Range about 36 miles
southwest of the town of Eureka and about 24 miles northeast of the
Northumberland Mine and comprises a total of 222 lode claims (about 4,440 acres)
in Eureka County, Nevada.

Horseshoe Basin Property is located in the Fish Creek Mountains
about 30 miles south of the town of Battle Mountain and about 4 miles south of
the McCoy and Cove deposits.

South Lone Mountain Property is located on the west flank of
the Mountain Boy Range in Antelope Valley about 15 miles southwest of the town
of Eureka and consists of a total of 140 lode claims (about 2,800 acres) in
Eureka County, Nevada.

Golconda Property is located in Rock Creek Valley about 12
miles east of the town of Winnemucca and near the intersection of the Getchell
Trend and the north end of the Battle Mountain-Eureka Trend and comprises of a
total of 108 lode claims (about 2,160 acres) in Humboldt County, Nevada.

North Battle Mountain Property is located in the Sheep Creek
Range about 4 miles northeast of the town of Battle Mountain near the northern
extension of the Battle Mountain-Eureka (Cortez) Trend and comprises a total of
73 lode claims (about 1,460 acres) in Lander County, Nevada.

---

|TORNADO GOLD INTERNATIONAL CORP.
|--------------------------------
|(An Exploratory Stage Company)  
|NOTES TO FINANCIAL STATEMENTS   

NOTE 4 - MINING CLAIMS (Cont.)

Dry Hills Property is located in the Dry Hills about 20 miles
southwest of the town of Carlin and comprises of a total of 96 lode claims
(about 1,920 acres) in Eureka County, Nevada.

Walti Property is located in Grass Valley about 62 miles south
of the town of Carlin and consists of a total of 402 lode claims (about 8,040
acres) in Eureka and Lander Counties, Nevada.

Marr Property is located between the Fish Creek Mountains and
the Ravenswood Mountains about 50 miles southwest of the town of Battle
Mountain. The property is along the Western Nevada Rift and consists of a total
of 93 lode claims (about 1,840 acres) in Lander County, Nevada.

The Illipah gold prospect is situated in eastern Nevada at the
southern extension of the Carlin Trend (T 18N, R 58E). The property consists of
one hundred ninety one unpatented federal Bureau of Land Management lode mining
claims, approximately 3,820 acres.

As of September 30, 2007, the Company incurred a total of $2,188,398
  in acquisition costs. The Company has recently commenced exploration of its
  properties and has yet to determine whether any of its properties are commercially
  feasible. In order for the Company to complete its analysis, additional funding
  is required.

NOTE 5  NOTES PAYABLE

On July 1, 2005, the Company borrowed $100,000 from Gatinara
Holdings, Inc., an unrelated third party. The loan is evidenced by an unsecured
promissory note. The note accrues interest at 8% per annum and matures on
December 31, 2006. Accrued interest related to this note as of September 30,
2007 amounted to $17,994. The principal and accrued interest was not paid as of
December 31, 2006 and is now in default.

From August 9, 2005 to October 5, 2005, the Company borrowed a
total of $330,978 from Greenshoe Investment, Inc., an unrelated third party. The
loans are evidenced by unsecured promissory notes. The notes accrue interest at
8% per annum and matured on December 31, 2006. Accrued interest related to these
notes as of September 30, 2007 amounted to $54,959. The principal and accrued
interest was not paid on December 31, 2006 and on January 1, 2007, the Company
and Greenshoe agreed to extend the maturity date to December 31, 2007 and to
make the principal balance due convertible into common shares of the Companys
common stock at a conversion price of $.40 per share.

During the nine months ended September 30, 2006, the Company
borrowed a total of $649,838 from Greenshoe Investment, Inc. The loans are
evidenced by unsecured promissory notes. The notes accrue interest at 8% per
annum and matured on December 31, 2006. Prior to maturity, the notes may be
converted at the sole discretion of the Company into shares of the Companys
common stock at a rate of $1.00 per share. Accrued interest related to these
notes as of September 30, 2007 amounted to $85,731. The principal and accrued
interest was not paid on December 31, 2006 and on January 1, 2007, the Company
and Greenshoe agreed to extend the maturity date to December 31, 2007 and to
make the principal balance due convertible into common shares of the Companys
common stock at a conversion price of $.40 per share.

---

|TORNADO GOLD INTERNATIONAL CORP.
|--------------------------------
|(An Exploratory Stage Company)  
|NOTES TO FINANCIAL STATEMENTS   

NOTE 6  STOCKHOLDERS EQUITY (DEFICIT)

Common Stock

On April 19, 2004, the Company authorized a 50-for-1 stock
split. On August 18, 2004, the Company authorized a 6.82 -for-1 stock split. On
May 16, 2005, the Company authorized a 1.20 -for-1 stock split. In addition, the
Company increased it authorized shares to 100,000,000. The accompanying
financial statements have been retroactively restated to present the effect of
these three stock splits.

On April 15, 2005, the Company's officers and directors agreed
to redeem an aggregate of 27,172,800 of their shares for $7,906 or $.0002909 per
share. The shares include 13,586,400 shares from Dr. Abbott, and 6,793,200
shares from each of Messrs. Pescio and Keith. Dr. Abbott's shares were redeemed
for $3,954, and Messrs. Pescio and Keith each received $1,976 for their shares.
These amounts are the equivalent to the pre-split prices they paid for their
shares when they joined the Company in March 2004. The $7,906 was paid during
the three months ended September 30, 2005.

In April 15, 2005, the holders of the notes payable converted
the principal amount of the notes totaling $1,025,000 and accrued interest of
$79,271 into 1,325,126 shares of the Company's common stock.

In the fourth quarter of 2005, the Company sold 625,000 shares
of common stock to an investor for total cash proceeds of $500,000. In
connection with this transaction, the Company also issued to this investor a
warrant to purchase 625,000 shares of common stock for $0.85 per shares. As of
December 31, 2005, the Company received $499,582. The remaining $418 has been
charged to equity and included in subscription receivable.

In the second quarter of 2006, the Companys former management
exercised some of their options to purchase a total of 24,800 shares of the
Companys common stock at a price of $.15 per share.

In the third quarter of 2006, the Company sold 1,145,000 units
through a private Reg S offering for $343,500. Each unit consisted of one share
of the Companys common stock and one warrant to purchase one share of the
Companys common stock at $.60 per share. The warrant expires three years from
date of issuance. The warrants and underlying common shares are anti-dilutive.

In the fourth quarter of 2006, the Company issued 100,000
shares of its common stock in connection with the purchase of its Illipah mining
claims. The shares were valued at $33,000 which represents the shares market
value on date of issuance. The $33,000 was capitalized and included in the costs
mining claims.

Options and Warrants

1) In March 2004, the Company issued
60,000 options to former employees of the Company. In June 2006, former
management exercised some of their options to purchase a total of 24,800 shares
of the Companys common stock for $3,720.

2) In accordance with a consulting
agreement with Access Capital Management Corp., the Company issued Access
Capital, 25,000 options in September 2005 to purchase shares of the Companys
common stock for $0.75 per shares. In December 2005, the Company extended the
term of the agreement and granted Access an additional 125,000 options to
purchase shares of the Companys common stock at a price of $0.75 per shares.
The 150,000 options granted expire on September 28, 2010 unless Access Capital
no longer provides services for the Company whereby the options expire one year
from the date of termination.

---

|TORNADO GOLD INTERNATIONAL CORP.
|--------------------------------
|(An Exploratory Stage Company)  
|NOTES TO FINANCIAL STATEMENTS   

NOTE 6  STOCKHOLDERS EQUITY (DEFICIT) (Cont.)

Options and Warrants (Cont.)

3) As discussed above, in connection
with the issuance of the 625,000 shares of the Companys common stock, the
Company granted 625,000 warrants to purchase shares of the Companys common
stock at $.85 per share.

4) In connection with the Companys
July 2006 private offering, the Company issued 1,145,000 warrants to purchase
shares of the Companys common stock at $.60 per share. The warrants expire
three years from the date of issuance.

The warrant holders have the right to
convert the warrants granted into shares of the Companys common stock for no
further consideration based upon a formula indicated in the warrant
agreement.

5) Also in July 2006, the Company
received $1,500,000 in exchange for the issuance of 5,000,000 warrants which can
be converted into 5,000,000 shares of the Companys common stock at any time by
the warrant holder for no further consideration through July 14, 2016 on which
date the Company will issue the 5,000,000 shares. The warrant holder was also
granted an additional 5,000,000 warrants to purchase shares of the Companys
common stock at a price of $.60 per share. These additional warrants expire
three years from the date of issuance.

The warrant holders have the right to
convert the additional warrants granted into shares of the Companys common
stock for no further consideration based upon a formula indicated in the warrant
agreement.

In connection with the July 2006 common
stock offering and granting of warrants, the Company agreed to register all
common shares relating to the offering with the Securities and Exchange
Commission within 180 days of receiving the proceeds from the offering. Under
the terms of the Registration Rights Agreement, the investors are entitled to
liquidating damages in an amount equal to 1% of the aggregate amount invested
for each 30-day period or pro rata for any portion thereof, in which a
registration statement was not declared effective by the Securities Exchange
Commission. The Company has accrued $269,766 relating to this breach, which it
charged to operations. Certain warrant holders have made demand for payment
under the Registration Rights Agreement and the Company is currently in
discussions with the investors relating to this matter.

The following table summarizes the
options and warrants outstanding at September 30, 2007:

| |                             |  |             |   |   | Weighed  |  
| | --------------------------- |  | ----------- | - | - | -------- | -
| |                             |  | Options/    |   |   | Average  |  
| |                             |  | Warrants    |   |   | Exercise |  
| |                             |  | Outstanding |   |   | Price    |  
| | Balance - December 31, 2004 |  | 60,000      |   | $ | .1500    |  
| | Granted                     |  | 775,000     |   | $ | .8306    |  
| | Exercised                   |  | -           |   |   |          |  
| | Forfeited                   |  | -           |   |   |          |  
| | Balance - December 31, 2005 |  | 835,000     |   | $ | .7817    |  
| | Granted                     |  | 11,145,000  |   | $ | .4654    |  
| | Exercised                   |  | (24,800     | ) | $ | (.1500   | )
| | Forfeited                   |  | -           |   |   |          |  
| | Balance  December 31, 2006 |  | 11,955,200  |   | $ | .4886    |  

---

|TORNADO GOLD INTERNATIONAL CORP.
|--------------------------------
|(An Exploratory Stage Company)  
|NOTES TO FINANCIAL STATEMENTS   

NOTE 6  STOCKHOLDERS EQUITY (DEFICIT) (Cont.)

Options and Warrants (Cont.)

| |                              |  |             |  |   | Weighed  | 
| | ---------------------------- |  | ----------- |  | - | -------- | 
| |                              |  | Options/    |  |   | Average  | 
| |                              |  | Warrants    |  |   | Exercise | 
| |                              |  | Outstanding |  |   | Price    | 
| | Granted                      |  | -           |  |   | -        | 
| | Exercised                    |  | -           |  |   | -        | 
| | Forfeited                    |  | -           |  |   | -        | 
| | Balance  September 30, 2007 |  | 11,955,200  |  | $ | .4886    | 

All of the above options and warrants
are exercisable at September 30, 2007.

NOTE 7  INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
statement purposes and the amounts used for income tax purposes. Significant
components of the Company's deferred tax liabilities and assets as of September
30, 2007 are as follows:

| | Deferred tax assets:           |   |            |  
| | ------------------------------ | - | ---------- | -
| | Net operating loss             | $ | 1,235,000  |  
| | Less valuation
      allowance |   | (1,235,000 | )
| |                                | $ | -          |  

At September 30, 2007, the Company had federal net operating
loss ("NOL") carryforwards of approximately $3,156,000. Federal NOLs could, if
unused, begin to expire in 2024. The increase in deferred tax assets in 2007 of
$239,000 related to the Companys 2007 net operating loss which was reduced to
$0 due to the Companys 2007 valuation allowance.

Utilization of the net operating loss and tax credit
carryforwards is subject to significant limitations imposed by the change in
control under Internal Revenue Code Section 382, limiting its annual utilization
to the value of the Company at the date of change in control multiplied by the
federal discount rate.

NOTE 8  RELATED PARTY TRANSACTIONS

During the nine months ended September 30, 2007 and 2006, the
Company had the following transactions with related parties:

As discussed in Note 4, the Company entered into agreements with
  a company owned by Mr. Carl Pescio, a Director of the Company, to acquire mining
  claims. During the nine months ended September 30, 2007, the Company paid Mr.
  Pescio $150,000 related to these agreements.

---

|TORNADO GOLD INTERNATIONAL CORP.
|--------------------------------
|(An Exploratory Stage Company)  
|NOTES TO FINANCIAL STATEMENTS   

NOTE 8  RELATED PARTY TRANSACTIONS (Cont.)

As further discussed in Note 4, the Company entered into an agreement
  with Messrs. Abbott and Keith to acquire certain mining properties. During the
  nine months ended September 30, 2007, the Company paid Mr. Abbott $11,700 and
  Mr. Keith $18,300 related to this agreement.

During the nine month ended September 30, 2007 and 2006, the
Company incurred consulting fees for services provided by Mr. Earl Abbott and
related reimbursed costs totaling $93,434.63 and $162,817, respectively. Of the
$93,434.63 incurred in 2007, $67,489.63 related to mining exploration and
$25,945, related to general administrative activities. Of the $162,817 incurred
in 2006, $107,714 related to mining exploration and $55,103 related to general
administrative activities.

During the nine months ended September 30, 2007 and 2006, the
  Company incurred consulting fees of $15,000 and $10,000, respectively to Mr.
  George Drazenovic, its Chief Financial Officer. Mr. Drazenovic was not affiliated
  with the Company until 2006.

During the nine months ended September 30, 2007, Mr. Carl
Pescio advanced $730,000 which is unsecured, non-interest bearing and due on
demand.

NOTE 9  PRIVATE STOCK OFFERING

The Company is offering to the general public 1,250,000 units
at price per unit of $0.20. Each unit consists of one share of the Companys
stock and a warrant to purchase one-half of one share of the Companys common
stock at a price of $.30 per share. Warrants expire 2 years after date of grant.
The Company is deferring all direct costs associated with the offering. Costs
will either be charged against the proceeds received through the offering, if
the offering is successful, or charged to operations, if the offering is
unsuccessful. As of September 30, 2007, deferred offering costs amount to
$2,500. No units have been sold as of September 30, 2007.

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|Item 2. Managements Discussion and Analysis or Plan of
      Operation.
|------------------------------------------------------------------------

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements as
that term is defined in Section 27A of the United States Securities Act of 1933
and section 21E of the United States Securities Exchange Act of 1934. 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, that 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.

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
and are prepared in conformity with generally accepted accounting principles in
the United States of America for interim financial statements. The following
discussion should be read in conjunction with our financial statements and the
related notes that appear elsewhere in this quarterly report.

As used in this quarterly report and unless otherwise
indicated, the terms we, us and our refer to Tornado Gold International
Corporation, unless otherwise indicated. Unless otherwise specified, all dollar
amounts are expressed in United States dollars and all references to common
shares refer to the common shares in our capital stock.

Corporate History

We were incorporated in Nevada as Nucotec, Inc. on October 8,
2001, in order to serve as a holding company for Saltys Warehouse, Inc. We
disposed of that asset in March 2004 as described herein and changed our name to
Tornado Gold International Corp. in July 2004. Prior to March 2004, we operated
through Saltys Warehouse; Since July 2004, we have been an exploration stage
company that acquired properties for potential gold exploration in Nevada. Using
the evaluation technique described herein, we hope to acquire properties that
will offer new economically viable gold mining properties for resale to entities
who will undertake to begin mining operations on those properties. We believe
that our technical team, consisting of our current management, will help us
operate successfully. Earl W. Abbott, our officer and director, has extensive
data and program management experience; Carl A. Pescio, also one of our
directors, has on-the-ground prospecting and property knowledge; and George
Drazenovic, our director and chief financial officer, has experience in managing
the financial functions of public reporting companies. There is, however, no
assurance that a commercially viable mineral deposit exists on any of our
properties. Further exploration will be required before a final evaluation as to
the economic and legal feasibility is determined.

Effective February 28, 2007, we changed our domicile from
Nevada to Delaware. The change of domicile was effected by merging Tornado Gold
International Corporation, our wholly-owned subsidiary incorporated for this
purpose, into our company, and with our company carrying on as the surviving
corporation under the name Tornado Gold International Corporation.

One of our former directors, Stanley B. Keith, has developed
what we believe to be a new and unique technological approach for the
exploration of certain types of gold deposits; we had the benefit of using this
approach to identify suitable properties. Mr. Keiths approach has been
developed over a twenty-year period and has been applied to a large, world-wide
database that links specific geochemical signatures of certain types of gold
deposits. Even though Mr. Keith is no longer a director of our company, we
believe we have acquired sufficient knowledge in this technological approach to
identify suitable properties.

---

We now have a total of 15 properties comprised of about 44,840
acres, all located in the North Central Nevada area. We believe that our
acquisitions up to now have provided us with a significant package of claims in
what we believe to be a premier gold producing region.

On May 31, 2004, we entered into four preliminary agreements
with a company wholly owned by Mr. Pescio to lease four mining properties. As of
April 5, 2005, we finalized those agreements, giving us rights to four
properties in Nevada that met our preliminary screening criteria and have begun
to undertake our more detailed evaluation process.

On October 3, 2005, we paid the Bureau of Land Management
$30,875 as consideration on the Exploration License and Option to Lease
Agreement entered into between the Company and Mr. Earl Abbott, and Stanley
Keith to explore 247 claims (nearly 5,000 acres) known as the Jack Creek
Property. Mr. Abbott is our president, chief executive officer and one of our
directors and Mr. Keith was a director of our company at that time. In addition,
on August 7, 2006, we acquired an option for 53 additional claims at the Jack
Creek Property. The option was acquired from Gateway Gold (USA) Corp. through
Messrs. Abbott and Keith.

During October 2005, we entered into ten preliminary agreements
with Mr. Carl A. Pescio, one of our directors, to acquire ten mineral properties
in Nevada. These properties are comprised of approximately 1,600 claims and are
subject to availability and were acquired by us without warranty from Mr. Pescio
as to total availability and/or mineral potential. We acquired these properties
for $35,000 per property, or $350,000, with a down payment of $50,000 and two
payments of $150,000 - one on November 30, 2005, and one on December 30, 2005.
We also agreed to issue 100,000 shares of common stock for each property to Mr.
Pescio in the form of warrants, options, or other, to be mutually agreed upon.

Claims Acquired in 2006

On August 23, 2006, we entered into an agreement to acquire the
Illipah gold prospect consisting of 191 unpatented mining claims located in
White Pine County, Nevada in consideration for $100,000 and 300,000 shares of
our common stock. Under the terms of the purchase agreement, $50,000 was paid
upon signing with an additional $50,000 and 100,000 shares of restricted common
stock paid and issued on November 21, 2006. An additional 200,000 shares of
restricted common stock is to be issued on or before August 23, 2007. We have
issued 100,000 shares of restricted common stock and the issuance of the
remaining 100,000 shares of restricted common stock has been authorized by our
board of directors. Further, we assumed the sellers obligations in an
underlying exploration and mining lease agreement on the claims, and granted to
the seller a production royalty of two percent of net smelter returns on all
rents and mineral production from the property. We also agreed to pay $48,006.50
to the United States Department of the Interior Bureau of Land Management for
mining claim maintenance fees, and be responsible for future annual maintenance
and filing fees on the acquired claims and any advanced minimum royalty payments
due to Carl Pescio, a director of our company, and Janet Pescio under an August
31, 2001, agreement between the Pescios and the seller.

We have the option, exercisable at any time prior to commercial
production on any of the Illipah claims, to reduce production royalties due to
the seller from two percent to one percent by paying it $1,000,000 or its
equivalent in gold bullion priced as of the August 24, 2006 closing price of
gold on the New York Commodity Exchange. We also agreed to undertake an
exploration program on the Illipah property and related area of interest, and
incur exploration and development expenditures of at least $750,000 within two
years, of which $250,000 is to be expended during the first year of the
agreement.

On September 24, 2007, we entered into a joint venture agreement
  with Allied Nevada Gold Corp., a company created by Carl Pescio and others to
  which Carl Pescio assigned all of his interests in 15 separate properties, relating
  to our joint venture with Allied Nevada Gold Corp. The 15 properties include
  Brock, Dry Hills, Golconda, Goodwin Hill, HMD, Horseshoe Basin, Illipah, Marr,
  North Battle Mountain, NT Green, South Lone Mountain, Stargo, Walti, West Whistler
  and Wilson Peak. Under this joint venture agreement, we are obligated to pay
  Allied Nevada Gold Corp. $975,000 on or before February 5, 2008. We also agreed
  to pay $375,000 on or before June 30 of each year for annual property payment
  on these 15 properties. We also agreed to incur certain minimum amounts on field
  geologic activities during the earn in period. This agreement also provides
  that once we expended a total of $1,500,000 on any property, we will have earned
  a 60% interest in that property. .

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Plan of Operations

In July 2006, we closed a financing of US$1,844,000. A
substantial portion of the funds have been devoted to the lease costs of our 15
properties. We used a material portion for administrative overhead and future
acquisition opportunities. Thus, we currently have approximately $5,500
available for exploration on its current properties over the next 12 months,
during which period we will continue to pursue additional financing
opportunities to further its exploration and acquisition program.

We begin our exploration process by attempting to understand
the regional geology of our prospects and by progressing through the
district-wide geologic setting. Eventually, we graduate to the geologic setting
of each individual proposed drill hole. Before drilling, we attempt to predict
our probability of success, and we will drill only sites that we believe have
the best chance of encountering a gold deposit. Typically, we will engage in
integrated surface geological, geochemical, and geophysical analysis before we
begin drilling. Some of the specific methods that we will engage in include
magmatic affinity, pluton vectoring, kinetic structural analysis, and metal
dispersion.

To date, we have acquired leases in several claim blocks in the
North Central Nevada area. In total, the property package represents 15
properties comprised of approximately 44,840 acres. However, in addition to our
initial exploration program, we will need to spend significant funds to complete
further in-depth drilling and engineering studies before we can identify whether
or not we have a commercially viable mineral deposit.

Future funding levels will also determine the extent and number
of properties that we will explore. No certainty can be ascertained on our
overall exploration program until significant funding levels have been
achieved.

While most properties will be examined and sampled, we will
also analyze the results of all previous work that is publicly available for the
properties. If we are able to obtain additional financing, we expect that in
Spring 2008, we will perform a small amount of drilling on the Jack Creek
property. A ranking system will enable us to decide which properties will
undergo detailed work and drill at the earliest opportunity. The remaining
properties will be made available for farm-out or for development at a later
date, or dropped all-together from further work.

The following is a list of projects on which, as of the date of
this quarterly report, we have decided to focus during the next 12 months. The
prioritization of, and the projects themselves, are expected to change depending
on funding levels and preliminary sampling results:

Jack Creek. We intend to undertake geological and
structural analysis, as well as soil sampling and geophysical surveys, on this
property, located in the Independence Mountains mining district about 50 miles
north of Elko, Nevada. If we are able to obtain additional financing, the
intended work in preparation for an intended drill program on the property is
expected to be performed in Spring 2008, and, in aggregate, is expected to cost
up to approximately $100,000.

The Jack Creek property comprises a total of approximately
6,000 acres in Elko County, Nevada, and is located in the northern Independence
Mountains. Management believes that the property is attractive because it
occupies the southwest flank of a prominent gravity high, indicating the
presence of relatively shallow Paleozoic carbonate sedimentary rocks.

We acquired an option for 53 additional claims at the Jack
Creek Property, Elko County, Nevada. The option was acquired from Gateway Gold
(USA) Corp. through a director and former director, Earl Abbott and Stanley
Keith. We have the option to earn a 50% undivided interest in the 53 claims
through our expenditure on the claims of a total of $500,000 in various stages
by March 1, 2007, 2008, and 2009. Currently, however, we do not have such funds
available and will need to raise additional funds in order to exercise the
option.

NT Green. Subject to our ability to obtain
further financing, exploration on this property is anticipated to occur during
the Spring of 2008 and will focus on delineating drill targets. The property
will be prospected by sampling and analysis of mineralized rock. We expect to
perform a kinematic structural analysis of the property and expect to produce a
more realistic geologic map than those made available in the past. A soil
geochemistry program will aid in identifying favorable fault structures and
intersections, as well as the centers of the most active hydrothermal activity.
A pluton vectoring study is expected to be performed by analysis of all
intrusive rocks and their

---

interpretation. In addition, an airborne magnetic survey is
expected to be performed over the property to aid in the discovery of dikes and
sills and to aid in the mapping and structural analysis.

Goodwin Hill. Exploration on this property
may include geologic mapping to identify prospective fault structures that can
be projected under alluvium. Sampling of all mineralized rocks is expected to
provide a vector toward the center of hydrothermal activity. Gravity and
magnetic geophysical studies are expected to be performed to define the buried
shallow basement rocks better.

Work to date in the area has indicated a large Carlin type
system within prospective lower plate carbonate rocks on the flanks of a major
dome and near intrusive bodies.

HMD. Exploration on this property will be directed
toward delineating low-risk drill targets. We currently expect that we will
undertake a kinematic structural analysis of the exposed silicified rocks along
the HMD structure combined with careful rock sampling to locate points along the
fault where hydrothermal activity is most intense. We intend to supplement these
studies with soil sampling, and the resulting drill targets will be sharpened by
detailed IP surveys.

Wilson Peak. A program of kinematic structural analysis,
combined with multi-element rock and soil sampling, has been planned for Wilson
Peak. Potential drill targets will be sharpened by IP geophysical surveys.
Assuming we have raised sufficient funds, permitting and drilling are planned
for Spring 2008. We expect that this program will require up to approximately
$50,000 for the next 12 months.

Other Properties. We hope to undertake additional
exploration studies on the Stargo, West Whistler, Brock, Horseshoe Basin, South
Lone Mountain, Golconda, North Battle Mountain, Dry Hills Property, Walti, and
Marr Properties, but no detailed plans to conduct exploration on these
properties have yet been determined. We believe that it could expect to spend up
to approximately $150,000 on these properties, thus, bringing the total funds
budgeted for the next 12 months to $500,000.

Our forecast for the period for which our financial resources
will be adequate to support our operations involves risks and uncertainties, and
actual results could fail as a result of a number of factors. We will need to
raise additional capital to exploit our properties. In the event that we
experience a shortfall in our capital, we intend to pursue capital through
public or private financing as well as borrowings and other sources. We cannot
guarantee that additional funding will be available on favorable terms, if at
all and if adequate funds are not available. Our ability to continue or expand
our operations may be significantly hindered. We have not contemplated any plan
of liquidation in the event that we do not generate revenues.

As an exploration company, we are not currently conducting any
research and development activities and we do not anticipate conducting such
activities in the near future. In the event that we obtain significant funding
to fully implement our exploration program, we will need to hire additional
employees or independent contractors and possibly purchase or lease additional
equipment. With large current demand for resource exploration equipment and
human capital in the state of Nevada, there is no guarantee that we will be able
to meet our equipment and human capital needs. However, management believes that
the network of relationships developed over the years by our officers and
directors in Nevada will largely mitigate any shortages that similar companies
face.

The projects described above will be managed by Dr. Earl
Abbott. Dr. Abbott holds a Ph.D degree in geology from Rice University where he
studied the tectonics of the western U.S. He has spent 34 years exploring for
mineral deposits, 26 of them for gold in Nevada, and, with Carl Pescio, he
managed an exploration program in Nevada in 1981 resulting in the acquisition of
3 gold orebodies that were mined profitably. Over his career, Dr. Abbott has
consulted to the mining industry and has been an officer and director of several
junior mining companies. Dr. Abbott is a Certified Professional Geologist by the
American Institute of Professional Geologists (AIPG) and past President of the
Nevada Chapter. He is also a member and past President of the Geological Society
of Nevada (GSN), the Nevada Petroleum Society (NPS), and the Denver Region
Exploration Geologists Society (DREGS); and he is a member of the Society of
Economic Geologists (SEG), the Society for Mining, Metallurgy, and Exploration
(SME), the Geological Society of America (GSA), the Northwest Mining Association
(NWMA), the British Columbia & Yukon Chamber of Mines, and the Prospectors
and Developer Association of Canada (PDAC). Dr. Abbott is a Qualified Person
under the rules of National Instrument 43-101.

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We expect to utilize the services of various third-party
geological professionals to assist with the various projects. The number of
consultants will depend on our initial exploratory results and funding levels.
No plans are in place for a significant change in the number of full-time
personnel.

Currently, we have no research and development plans and no
intention to purchase or sell plant or significant equipment.

Result of Operations

For the three month period ended September 30, 2007,
compared to the three month period ended September 30, 2006.

Revenue - We have realized no revenues for the three month
period ended September 30, 2007 and no revenues for the three month period ended
September 30, 2006.

Operating Expenses - For the three month period ended September
30, 2007, our total operating expenses were $91,258 compared to our total
operating expenses of $682,641 in the corresponding prior period. Of the $91,258
incurred in the three month period ended September 30, 2007, $21,354 related to
our mining exploration, $69,904 related to general and administrative
activities, and $Nil related to our compensation expense on option grants. Of
the $682,641 incurred in the three month period ended September 30, 2006,
$522,978 related to mining exploration, $148,074 related to general and
administrative activities, and $11,589 related to our compensation expense on
options grants. During the three month period ended September 30, 2007, we
accrued $21,794 in interest expenses on notes payable, compared to interest
accruing during the three month period ended September 30, 2006, of $21,793. No
interest has been paid on notes payable during either period. In the three month
period ended September 30, 2007, we also accrued $56,534 in potential
liquidating damages relating to our failure to register the underlying shares
issued in our July 2006 private offering. We are currently negotiating with our
investors to resolve the accrued potential damages.

For the nine month period ended September 30, 2007, compared
to the nine month period ended September 30, 2006.

Revenue - We have realized no revenues for the nine month
period ended September 30, 2007 and no revenues for the nine month period ended
September 30, 2006.

Operating Expenses - For the nine month period ended September
30, 2007, our total operating expenses were $404,670, compared to our total
operating expenses of $1,007,993 in the corresponding prior period. Of the
$404,670 incurred in the nine month period ended September 30, 2007, $141,312
related to our mining exploration, $263,358 related to general and
administrative activities, and $Nil related to our compensation expense on
option grants. Of the $1,007,993 incurred in the nine month period ended
September 30, 2006, $604,245 related to mining exploration, $357,392 related to
general and administrative activities, and $46,356 related to our compensation
expense on options grants. During the nine month period ended September 30,
2007, we accrued $64,671 in interest expenses on notes payable, compared to
interest accruing during the nine month period ended September 30, 2006, of
$59,531. No interest has been paid on notes payable during either period. In
addition, during the nine month period ended September 30, 2007, we accrued
$234,739 in potential liquidating damages relating to our failure to register
the underlying shares issued in our July 2006 private offering. We are currently
negotiating with our investors to resolve the accrued potential damages.

Liquidity and Capital Resources

We had cash totalling $5,715 and prepaid expenses totalling
$39,692 as of September 30, 2007, making our total current assets $45,407. We
also had mining claims of $2,188,398, computer equipment of $2,380, deferred
offering costs of $2,500 and intangible assets of $5,151, making our total
assets $2,243,836 as of September 30, 2007. As of that date, our available cash
and cash equivalents were not sufficient to pay our day-to-day expenditures or
to effectuate our business plan. We are committed to continue to seek the
necessary financing needed to continue operating through the sale of equity or
debt financing, though there is no guarantee we will be able to do so.

As of September 30, 2007, we had a net working capital deficit
of $2,323,292.

---

Net cash used in operating activities was $360,161 for the nine
month period ended September 30, 2007 compared to $841,985 for the nine month
period ended September 30, 2006.

Due to numerous economic and competitive risks, any or all of
which may have a material adverse impact upon our operations, there can be no
assurance that we will be able to generate significant revenues or achieve a
level of positive cash flow that would permit us to continue our current
business plan. Our current plans encompass the identification and acquisition of
properties exhibiting the potential for gold mining operations by others.
However, as noted, we must continue to raise additional capital in order to
ensure the availability of resources sufficient to fund all of our general and
administrative expenses for the next twelve months.

No assurances can be given that we will be able to obtain
sufficient operating capital through the sale of our common stock and borrowing
or that the development and implementation of our business plan will generate
sufficient revenues in the future to sustain ongoing operations. These factors
raise substantial doubt with our auditor about our ability to continue as a
going concern.

Off-Balance Sheet Arrangements

There are no 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
investors; except for our commitment to lease certain mining property that
require us to make substantial lease payments in the future as disclosed in
Notes to the financial statements included in our 10-KSB filed on April 17,
2007.

Critical Accounting Policies

Our Managements Discussion and Analysis or Plan of Operation
section discusses our financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of these financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. On an on-going basis,
management evaluates its estimates and judgments, including those related to
revenue recognition, accrued expenses, financing operations, and contingencies
and litigation. Management bases its estimates and judgments on historical
experience and on various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgments
about the carrying value of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under
different assumptions or conditions. The most significant accounting estimates
inherent in the preparation of our financial statements include estimates as to
the appropriate carrying value of certain assets and liabilities, which are not
readily apparent from other sources, accruals for other costs, and the
classification of net operating loss and tax credit carry-forwards between
current and long-term assets.

Mining Costs

Costs incurred to purchase, lease or otherwise acquire property
are capitalized when incurred. General exploration costs and costs to maintain
rights and leases are expensed as incurred. Management periodically reviews the
recoverability of the capitalized mineral properties and mining equipment.
Management takes into consideration various information including, but not
limited to, historical production records taken from previous mine operations,
results of exploration activities conducted to date, estimated future prices and
reports, and opinions of outside consultants. When it is determined that a
project or property will be abandoned or its carrying value has been impaired, a
provision is made for any expected loss on the project or property.

In December 2004, the FASB issued SFAS No. 123R, Share-Based
Payment (SFAS 123R), which revises SFAS No. 123, Accounting for Stock Based
Compensation, and supersedes APB 25. Among other items, SPAS 123R eliminates
the use of APS 25 and the intrinsic value method of accounting, and requires
companies to recognize in the financial statements the cost of employee services
received in exchange for awards of equity instruments, based on the grant date
fair value of those awards. This cost is to be recognized over the period during
which an employee is required to provide service in exchange for the award
(typically the vesting period). SFAS 123R also requires that benefits associated
with tax deductions In excess of recognized compensation cost be reported as a
financing cash inflow, rather than as an operating cash flow as required under
current literature.

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SFAS 123R permits companies to adopt its requirements using
either a modified prospective method, or a modified retrospective method.

Under the modified prospective method, compensation cost is
recognized in the financial statements beginning with the effective date, based
on the requirements of SFAS 123R for all share-based awards granted or modified
after that date, and based on the requirements of SFAS 123 for all unvested
awards granted prior to the effective date of SFAS 1 23R, Under the modified
retrospective method, the requirements are the same as under the modified
prospective method, but this method also permits entities to restate financial
statements of previous periods based on pro forma disclosures made in accordance
with SFAS 123.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes
and Error Corrections (SFAS 154), which changes the requirements for the
accounting for and reporting of a change in accounting principle. The statement
requires retrospective application to prior period financial statements of
changes in accounting principle, unless impracticable to do so. It also requires
that a change in the depreciation, amortization, or depletion method for
long-lived non-financial assets be accounted as a change in accounting estimate,
effected by a change in accounting principle. Accounting for error corrections
and accounting estimate changes will continue under the guidance in APB Opinion
20, Accounting Changes, as carried forward in this pronouncement. The
statement is effective for fiscal years beginning after December 15, 2005.

In November 2005, the FASB issued FSP Nos. FAS 115-1 and 124-1.
The Meaning of Other-Than-Temporary Impairment and Its Application to Certain
Investments. This FSP addresses the determination as to when an investment is
considered impaired, whether the impairment is other-than-temporary, and the
measurement of an impairment loss. The investment is impaired if the fair value
is less than cost. The impairment is other-than-temporary for equity
securities and debt securities that can contractually be prepaid or otherwise
settled in such a way that the investor would not recover substantially all of
its cost. if other-than-temporary, an impairment loss shall be recognized in
earnings equal to the difference between the investments cost and its fair
value. The guidance in this FSP is effective in reporting periods beginning
after December 15, 2005. Our company is reviewing FSP Nos. FAS 115-1 and 124-1,
but does not expect that the adoption of this FSP will have a material effect on
its consolidated financial statements.

We do not anticipate that the adoption of these standards will
have a material impact on our financial statements.

RISK FACTORS

Much of the information included in this current report
includes or is based upon estimates, projections or other forward-looking
statements. Such forward-looking statements include any projections or
estimates made by us and our management in connection with our business
operations. While these forward-looking statements, and any assumptions upon
which they are based, are made in good faith and reflect our current judgment
regarding the direction of our business, actual results will almost always vary,
sometimes materially, from any estimates, predictions, projections, assumptions
or other future performance suggested herein.

Such estimates, projections or other forward-looking
statements involve various risks and uncertainties as outlined below. We
caution the reader that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other forward-looking statements.

Our common shares are considered speculative during the
development of our new business operations. Prospective investors should
consider carefully the risk factors set out below.

Risks Related to Our Business and Our Industry

There is no assurance that we will operate profitably or
will generate positive cash flow in the future.

We have never generated any revenues from operations. We do not
presently have sufficient financial resources or any operating cash flow to
undertake by ourselves all of our planned exploration and development programs.
If we cannot generate positive cash flows in the future, or raise sufficient
financing to continue our normal operations, then we may be forced to scale down
or even close our operations. Furthermore, our ability to meet our business plan
could be adversely affected.

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We will depend almost exclusively on outside capital to pay for
the continued exploration and development of our properties. Such outside
capital may include the sale of additional stock and/or commercial borrowing.
Capital may not be available to meet our continuing exploration and development
costs or, if the capital is available, it may not be on terms acceptable to us.
The issuance of additional equity securities by us would result in a significant
dilution in the equity interests of our then-current stockholders. Obtaining
commercial loans, assuming those loans would be available, will increase our
liabilities and future cash commitments.

If we are unable to obtain financing in the amounts and on
terms deemed acceptable to us, we may be unable to continue our business, and as
a result, we may be required to scale back or cease operations for our business,
the result of which would be that our stockholders would lose some or all of
their investment.

We have a limited operating history, and if we are not
successful in continuing to grow our business, we may have to scale back or even
cease our ongoing business operations.

Our company has a limited operating history and must be
considered in the exploration stage. Our operations will be subject to all the
risks inherent in the establishment of a developing enterprise and the
uncertainties arising from the absence of a significant operating history. We
may be unable to operate on a profitable basis. We are in the exploration stage
and potential investors should be aware of the difficulties normally encountered
by enterprises in the exploration stage. If our business plan is not successful,
and we are not able to operate profitably, investors may lose some or all of
their investment in our company.

There are numerous exploration and development risks
associated with our industry.

There is no assurance given by us that our exploration and
development programs and properties will result in the discovery, development,
or production of a commercially viable ore body.

The business of exploration for minerals and mining involves a
high degree of risk. Few properties that are explored are ultimately developed
into producing mines. There is no assurance that our mineral exploration and
development activities will result in any discoveries of bodies of commercial
ore. The economics of developing gold and other mineral properties are affected
by many factors, including capital and operating costs, variations of the grade
of ore mined, fluctuating mineral markets, costs of processing equipment, and
such other factors as government regulations, including regulations relating to
royalties, allowable production, importing and exporting of minerals, and
environmental protection. Substantial expenditures are required to establish
reserves through drilling, to develop metallurgical processes to extract metal
from ore, and to develop the mining and processing facilities and infrastructure
at any site chosen for mining. No assurance can be given that funds required for
development can be obtained on a timely basis. The marketability of any minerals
acquired or discovered may be affected by numerous factors which are beyond our
control and which cannot be accurately foreseen or predicted, such as market
fluctuations, the global marketing conditions for precious and base metals, the
proximity and capacity of milling facilities, mineral markets, and processing
equipment, and such other factors as government regulations, including
regulations relating to royalties, allowable production, importing and exporting
minerals, and environmental protection.

The price of gold can be volatile.

Gold prices historically have fluctuated widely and are
affected by numerous factors outside of our control, including industrial and
retail demand, central bank lending, sales and purchases of gold, forward sales
of gold by producers and speculators, levels of gold production, short-term
changes in supply and demand because of speculative hedging activities,
confidence in the global monetary system, expectations of the future rate of
inflation, the strength of the US dollar (the currency in which the price of
gold is generally quoted), interest rates, and global or regional political or
economic events.

The potential profitability of our operations is directly
related to the market price of gold. A decline in the market price of gold would
materially and adversely affect our financial position. A decline in the market
price of gold may also require us to write-down any mineral reserves that we
might book, which would have a material and adverse effect on our earnings and
financial position. Further, if the market price of gold declines, we may
experience liquidity difficulties if and when we attempt to sell any gold we
discover. This may reduce our ability to invest in exploration and development,
which would materially and adversely affect future production, earnings, and our
financial position.

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Competition in the gold mining industry is highly
competitive and there is no assurance that we will be successful in acquiring
leases.

The gold mining industry is intensely competitive. We compete
with numerous individuals and companies, including many major gold exploration
and mining companies, that have substantially greater technical, financial, and
operational resources and staffs. Accordingly, there is a high degree of
competition for desirable mining leases, suitable properties for mining
operations, and necessary mining equipment, as well as for access to funds. We
cannot predict if the necessary funds can be raised or that any projected work
will be completed. There are other competitors that have operations in the
Nevada area and the presence of these competitors could adversely affect our
ability to acquire additional leases.

Government regulation and environmental regulatory
requirements may impact our operations.

Failure to comply with applicable environmental laws,
regulations, and permitting requirements may result in enforcement actions
thereunder, including orders issued by regulatory or judicial authorities,
causing operations to cease or be curtailed, and may include corrective measures
requiring capital expenditures, installation of additional equipment, or
remedial actions. Parties engaged in mining operations may be required to
compensate those suffering loss or damage by reason of the mining activities and
may have civil or criminal fines or penalties imposed for violations of
applicable laws or regulations.

Amendments to current laws, regulations, and permits governing
operations and activities of mining companies, or more stringent implementation
thereof, could have a material adverse impact on us and cause increases in
capital expenditures or production costs or reduction in levels of production at
producing properties or require abandonment or delays in development of new
mining properties.

To the best of our knowledge, we are operating in compliance
with all applicable environmental regulations.

Adversarial legal proceedings may adversely affect
us.

We may become party to litigation or other adversary
proceedings, with or without merit, in a number of jurisdictions. The cost of
defending such claims may take away from management time and effort and if
determined adversely to us, may have a material and adverse effect on our cash
flows, results of operation, and financial condition. As at the date of this
quarterly report, we are not a party to any material litigation or other
adversary proceeding.

Our directors and/or officers may have conflicts of
interest.

There is no assurance given by us that our directors and
officers will not have conflicts of interest from time to time.

Our directors and officers have entered into, and may continue
to enter into, numerous mining leases and options with us, which may not have
been, or may not be, at arms-length.

Furthermore, our directors and officers may serve as directors
or officers of other public resource companies or have significant shareholdings
in other public resource companies and, to the extent that such other companies
may participate in ventures in which we may participate, our directors may have
a conflict of interest in negotiating and concluding terms respecting the extent
of such participation. The interests of these companies may differ from time to
time. In the event that such a conflict of interest arises at a meeting of our
directors, a director who has such a conflict will abstain from voting for or
against any resolution involving any such conflict.

We may be subject to uninsured risks.

There is no assurance given by us that we are adequately
insured against all risks.

We may become subject to liability for cave-ins, pollution, or
other hazards against which we cannot insure or against which we have elected
not to insure because of high premium costs or other reasons. The payment of
such liabilities would reduce the funds available for exploration and mining
activities.

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Our Bylaws contain provisions indemnifying our officers
and directors against all costs, charges, and expenses incurred by
them.

Our Bylaws contain provisions with respect to the
indemnification of our officers and directors against all costs, charges, and
expenses, including an amount paid to settle an action or satisfy a judgment,
actually and reasonably incurred by him, in a civil, criminal, or administrative
action or proceeding, to which he is made a party by reason of his being or
having been one of our directors or officers.

Our Bylaws do not contain anti-takeover provisions, which
could result in a change of our management and directors if there is a take-over
of us.

We do not currently have a stockholder rights plan or any
anti-takeover provisions in our Bylaws. Without any anti-takeover provisions,
there is no deterrent for a take-over of us, which may result in a change in our
management and directors.

Risks Related to Owning Our Stock

A decline in the price of our common stock could affect
our ability to raise further working capital and adversely impact our
operations.

A prolonged decline in the price of our common stock could
result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. Because our operations have been primarily
financed through the sale of convertible debt and equity securities, a decline
in the price of our common stock could be especially detrimental to our
liquidity and our continued operations. Any reduction in our ability to raise
equity capital in the future would force us to reallocate funds from other
planned uses and would have a significant negative effect on our business plans
and operations, including our ability to develop new projects and continue our
current operations. If our stock price declines, we may not be able to raise
additional capital or generate funds from operations sufficient to meet our
obligations.

Trading of our stock may be restricted by the SECs
Penny Stock regulations, which may limit a stockholders ability to buy and
sell our stock.

The U.S. Securities and Exchange Commission has adopted
regulations which generally define 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.

FINRA sales practice requirements may also limit a
stockholders ability to buy and sell our stock.

In addition to the penny stock rules described above, FINRA
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,

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tax status, investment objectives, and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA
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 and have an adverse effect on the market for our shares.

Trading in our common shares on the OTC Bulletin Board is limited and sporadic, making it difficult for our stockholders to sell their shares or liquidate their investments.

Our common shares are currently quoted on the OTC Bulletin Board. The trading price of our common shares has been subject to wide fluctuations. The market price of a publicly traded stock, especially a junior resource issuer like us, is affected by
many variables in addition to those directly related to exploration successes or failures. Such factors include the general condition of the market for junior resource stocks, the strength of the economy generally, the availability and
attractiveness of alternative investments, and the breadth of the public market for the stock. The effect of these and other factors on the market price of the common shares on the OTC Bulletin Board suggests that our shares will continue to be
volatile. The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with no current business operation. There can be no assurance
that trading prices and price earnings ratios previously experienced by our common shares will be matched or maintained. These broad market and industry factors may adversely affect the market price of our common shares, regardless of our operating
performance. Therefore, investors could suffer significant losses if our shares are depressed or illiquid when an investor seeks liquidity and needs to sell our shares.

In the past, following periods of volatility in the market price of a companys securities, securities class-action litigation has often been instituted. Such litigation, if instituted, could result in substantial costs for us and a diversion
of managements attention and resources.

Because of the early stage of development and the nature of our business, our securities are considered highly speculative.

Our securities must be considered highly speculative, generally because of the nature of our business and the early stage of its development. We are engaged in the business of mining. Our properties are in the exploration stage only and are without
known gold reserves. Accordingly, we have not generated any revenues nor have we realized a profit from our operations to date and there is little likelihood that we will generate any revenues or realize any profits in the short term. Any
profitability in the future from our business will be dependent upon locating and developing gold, which itself is subject to numerous risk factors as set forth herein. Since we have not generated any revenues, we will have to raise additional
monies through the sale of our equity securities or debt in order to continue our business operations.

Investors interests in our company will be diluted and investors may suffer dilution in their net book value per share if we issue additional shares or raise funds through the sale of equity securities.

In the event that we are required to issue any additional shares or enter into private placements to raise financing through the sale of equity securities, investors interests in us will be diluted and investors may suffer dilution in their
net book value per share, depending on the price at which such securities are sold. If we issue any such additional shares, such issuances also will cause a reduction in the proportionate ownership and voting power of all other stockholders.
Further, any such issuance may result in a change in our control.

Failure to pay mandatory state fees may impact our business prospects.

We must pay annual fees to the State of Nevada in connection with certain of our mining claims. Failure to pay those fees could result in the temporary or permanent loss of our rights to such mining claims. To the best of our knowledge, we are
current on all fees owed to the State of Nevada.

|Item 3. Controls and Procedures.
|--------------------------------

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president and chief executive

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officer and our chief financial officer to allow for timely
decisions regarding required disclosure. In designing and evaluating our
disclosure controls and procedures, our management recognizes that any controls
and procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and our
management is required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.

As of September 30, 2007, the three month period year covered
by this report, we carried out an evaluation, under the supervision and with the
participation of our management, including our president, of the effectiveness
of the design and operation of our disclosure controls and procedures. Based on
the foregoing, our president and chief executive officer and our chief financial
officer concluded that our disclosure controls and procedures were effective as
of the end of the period covered by this quarterly report.

There have been no changes in our internal controls over
financial reporting that occurred during the quarter ended September 30, 2007
that have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

PART II - OTHER INFORMATION

|Item 1. Legal Proceedings.
|--------------------------

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

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

None.

Item 3. Defaults Upon Senior Securities.

None.

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

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibits required by Item 601 of Regulation S-B

|Exhibit | Description of Exhibit                                                                                                                                                                                                                                 
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3(i).1  | Articles of Incorporation filed with the Nevada Secretary
      of State on October 8, 2001 (Incorporated by reference from our
      Registration Statement on Form SB-2, filed on September 11, 2002, as
      amended (Registration No. 333-99443)).
|3(i).2  | Certificate of Amendment to Articles of Incorporation
      filed with the Nevada Secretary of State on July 7, 2004. (Incorporated by
      reference to Exhibit 3.1.1 of our Current Report on Form 8-K filed on July
      13, 2004).               
|3(i).3  | Certificate of Amendment to Articles of Incorporation
      filed with the Nevada Secretary of State on August 25, 2004. (Incorporated
      by reference to Exhibit 3.1 of our Current Report on Form 8-K filed on
      August 31, 2004).            

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|3(ii).1 | Bylaws (Incorporated by reference from our Registration
      Statement on Form SB-2, filed on September 11, 2002, as amended
      (Registration No. 333-99443)).                                                                    
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.1     | 2005 Stock Option Plan. (Incorporated by reference to
      Exhibit 4.1 of our Amended Annual Report for 2005 filed on September 1,
      2005).                                                                                      
|5.1     | Form of Opinion of Bryan Cave LLP regarding the legality
      of common stock (to be filed by amendment).                                                                                                                            
|10.1    | Plan of Reorganization and Acquisition, dated May 10,
      2002 (Incorporated by reference from our Registration Statement on Form
      SB-2, filed on September 11, 2002, as amended (Registration No.
      333-99443)).          
|10.2    | Promissory note between the Company and Gattinara
      Holdings, Inc. (Incorporated by reference to Exhibit 10 of the Companys
      Quarterly Report for the second quarter of 2005 on Form 10-QSB filed on
      August 23, 2005.)
|10.3    | Consulting Agreement with Carl Pescio. (Incorporated by
      reference to Exhibit 10.12 of our Amended Annual Report for 2004 filed on
      September 1, 2005).                                                                     
|10.4    | Consulting Agreement with Earl Abbott. (Incorporated by
      reference to Exhibit 10.13 of our Amended Annual Report for 2004 filed on
      September 1, 2005).                                                                     
|10.5    | Consulting Agreement with Stanley Keith. (Incorporated by
      reference to Exhibit 10.14 of our Amended Annual Report for 2004 filed on
      September 1, 2005).                                                                   
|10.6    | Mining Lease and Option to Purchase Agreement - Goodwin
      Hill. (Incorporated by reference to Exhibit 10.15 of our Amended Annual
      Report for 2004 filed on September 1, 2005).                                              
|10.7    | Mining Lease and Option to Purchase Agreement - NT Green.
      (Incorporated by reference to Exhibit 10.16 of our Amended Annual Report
      for 2004 filed on September 1, 2005).                                                  
|10.8    | Mining Lease and Option to Purchase Agreement - Wilson
      Peak. (Incorporated by reference to Exhibit 10.17 of our Amended Annual
      Report for 2004 filed on September 1, 2005).                                               
|10.9    | Mining Lease and Option to Purchase Agreement - HMD.
      (Incorporated by reference to Exhibit 10.18 of our Amended Annual Report
      for 2004 filed on September 1, 2005).                                                       
|10.10   | Letter Agreement with Carl Pescio dated November 10,
      2005. (Incorporated by reference to Exhibit 10.1 of our Current Report on
      Form 8-K filed on November 14, 2005).                                                      
|10.11   | Promissory note issued to Green Shoe Investment, Inc.
      (Incorporated by reference to our Quarterly Report for the third quarter
      of 2005 filed on November 17, 2005).                                                       
|10.12   | Form of Subscription Agreement. (Incorporated by
      reference to Exhibit 10.1 of our Current Report on Form 8-K filed on July
      24, 2006).                                                                                     
|10.13   | Form of Common Stock Purchase Warrant. (Incorporated by
      reference to Exhibit 10.2 of our Current Report on Form 8-K filed on July
      24, 2006).                                                                              
|10.14   | Form of Registration Rights Agreement. (Incorporated by
      reference to Exhibit 10.3 of our Current Report on Form 8-K filed on July
      24, 2006).                                                                              
|10.15   | Form of Special Warrant. (Incorporated by reference to
      Exhibit 10.4 of our Current Report on Form 8-K filed on July 24, 2006).                                                                                                  

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|10.16  | Exploration License and Option to Lease Agreement,
      effective as of October 1, 2005, including, as Exhibit B thereto, Mining
      Lease and Option to Purchase Agreement, entered on or about April 1, 2006.
      (Incorporated by reference to Exhibit 10.1 of our Current Report on Form
      8-K filed on August 7, 2006).
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.17  | Option and Joint Venture Agreement, made as of May 1,
      2006. (Incorporated by reference to Exhibit 10.2 of our Current Report on
      Form 8-K filed on August 7, 2006).                                                                                                                                                       
|10.18  | Form of Letter Agreement between the registrant and
      Golden Cycle Gold Corporation, entered on or about August 23, 2006.
      (Incorporated by reference to Exhibit 10.1 of our Current Report on Form
      8- K filed on August 29, 2006).                                                                                   
|10.19* | Joint Venture Agreement between
        the registrant and Allied Nevada Gold Corp. made as of September 24, 2007                                                                                                                                                                                                                    
|17.1   | Letter of resignation of Earl Abbott as Chief Financial
      Officer. (Incorporated by reference to our Current Report on Form 8-K
      filed on March 30, 2006).                                                                                                                                                                  
|31.1*  | Certification of Principal Executive
        Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                
|31.2*  | Certification of Principal Financial
        Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                
|32.1*  | Certification of Principal Executive
        Officer and Principal Financial Officer pursuant to 18 U.S.C. Section
        1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
        2002.                                                                                                                       

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SIGNATURES

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

TORNADO GOLD INTERNATIONAL CORPORATION

|By: */s/ Earl W. Abbott*                                            
|--------------------------------------------------------------------
|Earl W. Abbott                                                      
|CEO, President, Secretary, Treasurer                                
|(Principal Executive Officer)                                       
|Date: November 19, 2007                                             
|                                                                    
|By: */s/ George Drazenovic*                                         
|George Drazenovic                                                   
|Chief Financial Officer                                             
|(Principal Financial Officer and Principal Accounting
      Officer)
|Date: November 19, 2007                                             

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