U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549







FORM 10-QSB







(Mark One)

|  |                                                                                                                                         
|- | ----------------------------------------------------------------------------------------------------------------------------------------
|X | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2005





OR



| |                                                                                         
| | ----------------------------------------------------------------------------------------
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



Commission file number333-118980





Yukon Resources Corp.

(Name of small business issuer in its charter)





|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Nevada                                                         |  | 20-0803515                          
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)





206-475 Howe Street, Vancouver, British Columbia, Canada, V6C 2B3(Address of principal executive offices)



(604) 629-1075(Issuers telephone number)

_______________________

(Former name or former address, if changed since last report)







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

None



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

Common Stock, $0.001 par value per share

(Title of Class)



Check whether the issuer: (i) 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 (ii) has been subject to such filing requirements for the past 90 days.    Yes  X    No   ̈



Indicate by check mark whether the registrant is a shall company (as defined in rule 12b-2 of the Exchange Act).   Yes   ̈    No   X



As of January 31, 2006, there were 19,650,000 shares of the registrant's common stock outstanding.



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Yukon Resources Corp.





Part I.  Financial Information

Page





Item 1.

Financial Statements and Notes to Financial Statements



Balance Sheets

F-1



Statements of Operations

F-2



Statements of Cash Flows

F-3



Notes to the Financial Statements

F-4

Item 2.    Management's  Discussion  and  Analysis  of  Financial  Condition  and Results  of
 Operations

11



Item 3.    Controls and Procedures

15





Part II.  Other Information



Item 1.  Legal Proceedings



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





Item 3.  Defaults Upon Senior Securities



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



Item 5.  Other Information



Item 6.  Exhibits



Signatures

18



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



F-1





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PART I FINANCIAL INFORMATION



General



The accompanying reviewed financial statements have been prepared in accordance with the instructions to Form 10-QSB. Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flow, and stockholders equity in conformity with generally accepted accounting principles. Except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Companys annual report on Form 10-KSB for the year ended June 30, 2005. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the quarter ended December 31, 2005 are not necessarily indicative of the results that can be expected for the year ended June 30, 2006.







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



F-2





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Yukon Resources Corp.

(An Exploration Stage Company)

Balance Sheets

(Expressed in US dollars)



December 31,
2005
$June 30,
2005
$(unaudited)(audited)ASSETSCurrent AssetsCash446,98531,199Prepaid expenses5351,271Total Current Assets447,52032,470Property & Equipment (Note 3)1,890Total Assets449,41032,470LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesAccounts payable22,6111,011Accrued liabilities4,2504,500Total Liabilities26,8615,511Contingencies and Commitments (Notes 1 and 5)Stockholders EquityCommon Stock, 75,000,000 shares authorized, $0.001 par value
19,650,000 and 17,085,000 shares issued and outstanding, respectively19,65017,085Additional Paid in Capital552,30044,365Donated Capital (Note 4)18,50014,000Deficit Accumulated During the Exploration Stage(167,901)(48,491)Total Stockholders Equity422,54926,959Total Liabilities and Stockholders Equity449,41032,470








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



F-3





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Yukon Resources Corp.

(An Exploration Stage Company)

Statements of Operations

(Expressed in US dollars)

(unaudited)



|                                         |                     |              |              |              |             
|---------------------------------------- | ------------------- | ------------ | ------------ | ------------ | ------------
|                                         | Accumulated from    |              |              |              |             
|                                         | March 1, 2004       | Three Months | Three Months | Six Months   | Six Months  
|                                         | (Date of Inception) | Ended        | Ended        | Ended        | Ended       
|                                         | to December 31,     | December 31, | December 31, | December 31, | December 31,
|                                         | 2005                | 2005         | 2004         | 2005         | 2004        
|                                         | $                   | $            | $            | $            | $           
|                                         |                     |              |              |              |             
|Revenue                                  |                    |             |             |             |            
|                                         |                     |              |              |              |             
|                                         |                     |              |              |              |             
|Expenses                                 |                     |              |              |              |             
|                                         |                     |              |              |              |             
|Amortization                             | 111                 | 111          |             | 111          |            
|Donated rent (Note 4)                    | 5,500               | 750          | 750          | 1,500        | 1,500       
|Donated services (Note 4)                | 11,000              | 1,500        | 1,500        | 3,000        | 3,000       
|Foreign currency translation (gain) loss | (6,415)             | 95           | (2,418)      | (1,207)      | (4,897)     
|General and administrative               | 18,563              | 8,029        | 1,477        | 10,276       | 2,868       
|Mineral property costs (Note 5)          | 93,171              | 22,480       |             | 86,480       | 3,545       
|Professional fees                        | 45,971              | 11,250       | 4,000        | 19,250       | 9,150       
|                                         |                     |              |              |              |             
|Total Expenses                           | 167,901             | 44,215       | 5,309        | 119,410      | 15,166      
|                                         |                     |              |              |              |             
|Net Loss For the Period                  | (167,901)           | (44,215)     | (5,309)      | (119,410)    | (15,166)    
|                                         |                     |              |              |              |             
|                                         |                     |              |              |              |             
|Net Loss Per Share  Basic and Diluted   |                    |             |             | (0.01)       |            
|                                         |                     |              |              |              |             
|                                         |                     |              |              |              |             
|Weighted Average Shares Outstanding      |                     | 19,650,000   | 17,085,000   | 18,816,000   | 17,085,000  
|                                         |                     |              |              |              |             

`







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



F-4





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Yukon Resources Corp.

(An Exploration Stage Company)

Statements of Cash Flows

(Expressed in US dollars)

(unaudited)





Accumulated FromMarch 1, 2004For the SixFor the Six(Date of Inception)Months EndedMonths EndedTo December 31,December 31,December 31,200520052004$$$Operating ActivitiesNet loss for the period(167,901)(119,410)(15,166)Adjustments to reconcile net loss to cashAmortization111111Donated services and expenses18,5004,5004,500Foreign currency translation gain(6,527)(1,550)(4,897)Mineral property cost61,70060,000Change in operating assets and liabilitiesIncrease accounts payable and accrued liabilities26,86121,350511(Increase) decrease prepaid expenses(535)736Net Cash Flows Used In Operating Activities(67,791)(34,263)(15,052)Investing ActivitiesPurchase of property & equipment(2,001)(2,001)Net Cash Flows Used In Investing Activities(2,001)(2,001)Financing ActivitiesProceeds from issuance of common stock, net510,250450,500Net Cash Flows Provided By Financing Activities510,250450,500Effect of Exchange Rate Changes on Cash6,5271,5504,897Increase (Decrease) in Cash446,985415,786(10,155)Cash - Beginning of Period31,19960,459Cash - End of Period446,985446,98550,304Non-cash Financing ActivitiesIssuance of common stock for mineral property61,70060,000Supplemental DisclosuresInterest paidIncome taxes paid






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



F-5





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Yukon Resources Corp.

(An Exploration Stage Company)

Notes to Financial Statements



Note 1.        Exploration Stage Company

The Company was incorporated in the State of Nevada on March 1, 2004. The Company is an Exploration Stage Company, as defined by Statement of Financial Accounting Standard (SFAS) No.7 Accounting and Reporting by Development Stage Enterprises. The Companys principal business is the acquisition and exploration of mineral resources. The Company has not presently determined whether its properties contain mineral reserves that are economically recoverable.

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, confirmation of the Companys interests in the underlying properties, and the attainment of profitable operations. As at December 31, 2005, the Company has never generated any revenue and has accumulated losses of $167,901 since inception. These factors raise substantial doubt regarding the Companys ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company filed an SB-2 Registration Statement with the United States Securities and Exchange Commission that was declared effective February 7, 2005, to register 3,195,000 shares of common stock for resale by existing shareholders of the Company. The Company did not receive any proceeds from the resale of shares of common stock by the selling stockholders.





Note 2.     Summary of Significant Accounting Policies

a)

Basis of Presentation

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars.  The Companys fiscal year-end is June 30.

b)

Use of Estimates

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

c)

Basic and Diluted Net Income (Loss) Per Share

The Company computes net income (loss) per share in accordance with SFAS No. 128, "Earnings per Share". SFAS No. 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.

d)

Comprehensive Loss

SFAS No. 130, Reporting Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at December 31, 2005 and 2004, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

e)

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.



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



F-6





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Yukon Resources Corp.

(An Exploration Stage Company)

Notes to Financial Statements



Note 2.   Summary of Significant Accounting Policies (continued)

f)

Property and Equipment

Property and equipment is stated at cost, less accumulated amortization, and consists of computer hardware. Amortization of computer hardware is computed using the straight-line method over three years.

g)

Mineral Property Costs

The Company has been in the exploration stage since its formation on March 1, 2004 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property acquisition and exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

h)

Long-lived Assets

In accordance with the Financial Accounting Standards Board (FASB) SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes an impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.

i)

Financial Instruments

Financial instruments, which include cash, prepaid expenses, accounts payable and accrued liabilities were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. The Companys operations are in Canada which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Companys operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.

j)

Interim Financial Statements

These interim unaudited financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Companys financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.

k)

Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted SFAS No. 109 Accounting for Income Taxes as of its inception. Pursuant to SFAS No. 109 the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

l)

Foreign Currency Translation

The Companys functional and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated in accordance with SFAS No. 52 Foreign Currency Translation, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. The Company has not, to the date of these financials statements, entered into derivative instruments to offset the impact of foreign currency fluctuations



7





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Yukon Resources Corp.

(An Exploration Stage Company)

Notes to Financial Statements

Note 2.

Summary of Significant Accounting Policies (continued)

m)

Recent Accounting Pronouncements

In May 2005, the Financial Accounting Standards Board (FASB) issued SFAS No. 154, Accounting Changes and Error Corrections  A Replacement of APB Opinion No. 20 and SFAS No. 3. SFAS 154 changes the requirements for the accounting for and reporting of a change in accounting principle and applies to all voluntary changes in accounting principle. It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. SFAS 154 requires retrospective application to prior periods financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. The provisions of SFAS No. 154 are effective for accounting changes and correction of errors made in fiscal years beginning after December 15, 2005. The adoption of this standard is not expected to have a material effect on the Companys results of operations or financial position.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets - An Amendment of APB Opinion No. 29. The guidance in APB Opinion No. 29, Accounting for Nonmonetary Transactions, is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. The guidance in that Opinion, however, included certain exceptions to that principle.  SFAS No. 153 amends Opinion No. 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange.  The provisions of SFAS No. 153 are effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of this standard did not have a material effect on the Companys results of operations or financial position.

In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 123R, Share Based Payment. SFAS 123R is a revision of SFAS No. 123 Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees and its related implementation guidance. SFAS 123R establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entitys equity instruments or that may be settled by the issuance of those equity instruments. SFAS 123R focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions.  SFAS 123R requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award  the requisite service period (usually the vesting period). SFAS 123R requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. Public entities that file as small business issuers will be required to apply SFAS 123R in the first interim or annual reporting period that begins after December 15, 2005. The adoption of this standard is not expected to have a material effect on the Companys results of operations or financial position.

In March 2005, the SEC staff issued Staff Accounting Bulletin No. 107 (SAB 107) to give guidance on the implementation of SFAS 123R. The Company will consider SAB 107 during implementation of SFAS 123R.





Note 3.

Property and Equipment

Cost
$Accumulated
Amortization
$December 31,2005
Net carrying value
$June 30, 2005
Net carrying value
$Computer hardware2,0011111,890








8





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Yukon Resources Corp.

(An Exploration Stage Company)

Notes to Financial Statements



Note 4.    Related Party Balances/Transactions

a)

During the six month period ended December 31, 2005, the Company recognized a total of $3,000 (December 31, 2004  $3,000) for donated services at $500 per month and $1,500 for donated rent (December 31, 2004  $1,500) at $250 per month provided by the President of the Company.

b)

The Company entered into a mineral property agreement and several trust agreements with the President of the Company.  Refer to Note 5.





Note 5.   Mineral Properties

a)

The Company entered into an Agreement dated May 14, 2004 with the President of the Company to acquire a 100% interest in seven mineral claims located in the Cariboo Mining Division, British Columbia, Canada, in consideration for the issuance of 7,500,000 split adjusted shares of common stock.  The claims are registered in the name of the President, who has executed several trust agreements whereby the President agreed to hold the claims in trust on behalf of the Company. During the year ended June 30, 2004, the cost of mineral properties charged to operations by the Company of $1,700 represented the original cost of the properties incurred by the President.

b)

The Company exercised an Agreement dated August 1, 2005 to acquire a 100% interest in two mineral claims located in the Cariboo Mining Division, British Columbia, Canada, in consideration for $4,000 (paid) and the issuance of 300,000 split adjusted shares of common stock (issued) with a fair value of $60,000.



Note 6.   Common Stock

a)

On September 26, 2005, the Company completed a forward stock split on the basis of three new shares of common stock in exchange for every one old shares of common stock outstanding. All per share amounts have been retroactively restated to reflect the forward stock split.

b)

On September 1, 2005, the Company completed a private placement offering consisting of 2,265,000 units of the Company at a purchase price of $0.20 per unit for proceeds of $450,500 after issue costs of $2,500. Each unit consisted of one common share of the Company and one share purchase warrant. Each warrant may be exercised on or before September 1, 2007 at a price of $0.27 per share.

c)

On August 5, 2005, the Company issued 300,000 split adjusted shares of common stock with a fair value of $60,000 for the acquisition of mineral claims.  Refer to Note 5(b)

d)

During June, 2004, the Company issued 1,410,000 split adjusted shares of common stock for cash proceeds of $23,500.

e)

During May, 2004, the Company issued 675,000 split adjusted shares of common stock for cash proceeds of $11,250.

f)

On May 14, 2004, the Company issued 7,500,000 split adjusted shares of common stock for the acquisition of mineral claims from a related party recorded at the transferors cost of $1,700 in total. Refer to Note 5.

g)

During March, 2004, the Company issued 7,500,000 split adjusted shares of common stock at a price of $0.003 per share for cash proceeds of $25,000.















9





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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Managements Discussion and Analysis contains various forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding future events or the future financial performance of the Company that involve risks and uncertainties. Certain statements included in this Form 10-QSB, including, without limitation, statements related to anticipated cash flow sources and uses, and words including but not limited to anticipates, believes, plans, expects, future and similar statements or expressions, identify forward looking statements. Any forward-looking statements herein are subject to certain risks and uncertainties in the Companys business, including but not limited to, reliance on key customers and competition in its markets, market demand, product performance, technological developments, maintenance of relationships with key suppliers, difficulties of hiring or retaining key personnel and any changes in current accounting rules, all of which may be beyond the control of the Company. The Companys actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth therein.



Managements Discussion and Analysis of Results of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the financial statements included herein. Further, this quarterly report on Form 10-QSB should be read in conjunction with the Companys Financial Statements and Notes to Financial Statements included in its 2005 Annual Report on Form 10-KSB. In addition, you are urged to read this report in conjunction with the risk factors described herein.



BACKGROUND



This discussion and analysis of financial position and results of operation is prepared as at December 31, 2005 and should be read in conjunction with the audited financial statements for the year ended June 30, 2005. These financial statements have been prepared in accordance with United States generally accepted accounting principles.

Companys Overview

We were incorporated in the State of Nevada on March 1, 2004 and established a fiscal year end of June 30. We are a start-up, exploration stage company engaged in the search for gold and other minerals. We have not had any bankruptcy, receivership or similar proceeding since incorporation. There have been no material reclassifications, mergers, consolidations or purchases or sales of any significant amount of assets not in the ordinary course of business since the date of incorporation. We have no property other than a 100% interest of a group of gold placer properties held in trust for us by our President and additional leases optioned from a private individual.

Property Summary

We have acquired a 100% interest in a group of placer gold properties located on Peter's Creek in the Quesnel-Barkerville area of east-central British Columbia, Canada. Intermittent work has been carried out on various portions of Peter's Creek since the 1870's following the Barkerville gold rush of 1860. Considerable data has been reported over the years from sluicing of surface gravels, excavation and tunneling from two shafts, other hand workings, and testing by drilling



10





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and bulk sampling. The potential economic significance of the property is that the presence of gold-bearing gravels has been reported in and around Peter's Creek and varying estimates of scale and gold grades has been calculated by previous operators. Until we can validate otherwise, the property is without known reserves and we are planning programs that are exploratory in nature. There is no electrical power that can be utilized on the property other than electrical power that can be provided by gas or diesel generators that we would bring on site.

Topography and Climate

Peter's Creek is a large tributary flowing into Lightning Creek, has a drainage basin of about 14 square miles and flows to the northwest with an average gradient of three degrees. Elevations in the area range from 3400 feet to 5500 feet with moderate slopes. The region is forested with fir and spruce. Elevation at the convergence of Peter's creek and Lightning Creek is 2400 feet rising to 4100 feet at Bassford Creek. The average width of the valley is between 200 and 250 feet.

The area receives significant precipitation throughout the year occurring from both rain and snow. Accumulations of snow can reach 10 feet or more during winter months. Temperatures vary from -25°F in winter to +90°F in summer.

Recent Developments

In August and September, 2005 the Company successfully completed Phase 1 of its exploration plan as described in the July 30, 2004 Summary Report of our Geologist William Timmins. The Phase 1 program attained encouraging results and Mr. Timmins is recommending further permitting be applied for to the Ministry of Mines to enable the next stage of exploration.  The complete results of Phase 1 and  recommendations are contained in Mr. Timminss November 28, 2005 Progress Report included  as Exhibit 99.1 herein.



The Company is currently up to date with all obligations required to maintain our property holdings in good standing.





Plan of Operation

Our plan of operations for the remainder of this fiscal year is to complete the following objectives within the time periods specified, subject to our obtaining the permits necessary for the continued exploration of the mineral property:

1.

We have completed the our Phase 1 exploration program on the property consisting of a bulk testing program in the vicinity of newly optioned ground to confirm earlier results and have the Progress Report from William Timmins our Consulting Geologist. As stated in the Report we chose the newly optioned ground instead of near Bulk Sample 2 as stated in our original reports because (i) the geology in the new area was thought to be more favorable and could be also be compared  to previous testing results; and (ii) the road access to the optioned ground was in much better condition, due to recent heavy rainfall in the test area, and therefore needed less rehabilitation. The Phase 1 exploration costs were approximately 10% under our proposed budget.





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2.

Warranted by the results of Phase 1, we intend to commence the permitting  process  necessary for the Phase 2  Exploration Program described in the geological report and estimated to cost $52,800. We have raised additional funding to conduct   the Phase 2 Exploration Program and would expect to commence work in the late spring or early summer depending on the timing of the Work Permits.



3.

We anticipate spending approximately $15,000 in ongoing general and administrative expenses per quarter for the next twelve months. The general and administrative expenses for the year will consist primarily of professional fees for the accounting, audit and legal work relating to our regulatory filings throughout the year, as well as transfer agent fees and general office expenses.

As at December 31, 2005, the Company has working capital of $420,659 prepaid expenses of  and accumulated losses of $167,901 since inception.

We may consider entering into a joint venture partnership to provide additional funding to develop the placer claims. We have not undertaken any efforts to locate a joint venture partner for the placer claims. If we entered into a joint venture arrangement, we would likely have to assign a percentage of our interest in the property to the joint venture partner.

Based on the nature of our business, we anticipate incurring operating losses in the foreseeable future. We base this expectation, in part, on the fact that very few mineral properties in the exploration stage ultimately develop into producing, profitable mines. Our future financial results are also uncertain due to a number of factors, some of which are outside our control. These factors include, but are not limited to:

- our ability to raise additional funding;
- the market price for gold;
- the results of our proposed exploration programs on the mineral property; and
- our ability to find joint venture partners for the development of our property interests

If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our company. In the event we are not successful in raising additional financing, we anticipate that we will not be able to proceed with our business plan. In such a case, we may decide to discontinue our current business plan and seek other business opportunities in the resource sector. Any business opportunity would require our management to perform diligence on possible acquisition of additional resource properties. Such due diligence would likely include purchase investigation costs such as professional fees by consulting geologists, preparation of geological reports on the properties, conducting title searches and travel costs for site visits. It is anticipated that such costs will not be sufficient to acquire any resource property and additional funds will be required to close any possible acquisition. During this period, we will need to maintain our periodic filings with the appropriate regulatory authorities and will incur legal and accounting costs. In the event no other such opportunities are available and we cannot raise additional capital to sustain operations, we may be forced to discontinue business. We do not have any specific alternative business opportunities in mind and have not planned for any such contingency.



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Due to our lack of operating history and present inability to generate revenues, our auditors have stated their opinion that there currently exists substantial doubt about our ability to continue as a going concern.
If we find sufficient evidence that confirms the occurrence of substantive gold values in a consistent and continuous channel upstream from the Ventures shaft in Phase 2, a program for the extraction of placer gold along with the permitting application can be prepared. If we decide to conduct such an extraction program on the placer claims, we will require additional funding. The cost of such a program cannot be determined until results from the first two phases of exploration are completed.
During March, 2004, the Company issued 7,500,000( 3:1 split adjusted) shares of common stock at a price of $0.0033(adjusted) per share for cash proceeds of $25,000.  The offer and sale of such shares of our common stock were effected in reliance on the exemptions for sales of securities not involving a public offering, either through Regulation S for non-United States citizens or entities or as set forth in Rule 506 promulgated under the Securities Act of 1933, as amended (the Securities Act) and in Section 4(2) and Section 4(6) of the Securities Act and/or Rule 506 of Regulation D, based on the following: (a) the investors confirmed to us that they were accredited investors, as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to the offering; (c) the investors were provided with certain disclosure materials and all other information requested with respect to our company; (d) the investors acknowledged that all securities being purchased were restricted securities for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequently registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.
During May, 2004, the Company issued 675,000 (split adjusted) shares of common stock at a price of $0.0167 (split adjusted) per share for cash proceeds of $11,250. The offer and sale of such shares of our common stock were effected in reliance on the exemptions for sales of securities not involving a public offering, either through Regulation S for non-United States citizens or entities or as set forth in Rule 506 promulgated under the Securities Act of 1933, as amended (the Securities Act) and in Section 4(2) and Section 4(6) of the Securities Act and/or Rule 506 of Regulation D, based on the following: (a) the investors confirmed to us that they were accredited investors, as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to the offering; (c) the investors were provided with certain disclosure materials and all other information requested with respect to our company; (d) the investors acknowledged that all securities being purchased were restricted securities for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequently registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.







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During June, 2004, the Company issued 1,410,000 (split adjusted) shares of common stock at a price of $0.0167 (split adjusted) per share for cash proceeds of $23,500. The offer and sale of such shares of our common stock were effected in reliance on the exemptions for sales of securities not involving a public offering, either through Regulation S for non-United States citizens or entities or as set forth in Rule 506 promulgated under the Securities Act of 1933, as amended (the Securities Act) and in Section 4(2) and Section 4(6) of the Securities Act and/or Rule 506 of Regulation D, based on the following: (a) the investors confirmed to us that they were accredited investors, as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to the offering; (c) the investors were provided with certain disclosure materials and all other information requested with respect to our company; (d) the investors acknowledged that all securities being purchased were restricted securities for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequently registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.
On September 1, 2005, we closed on a financing transaction with a group of private investors of $453,000. The financing consisted of the sale of two components: (a) an aggregate 2,265,000

(split adjusted shares) of the  Companys common stock at a purchase price of $0.20(split adjusted); and (b) Warrants registered in the name of each Investor to receive an aggregate of 2,265,000 (split adjusted) shares of the Companys common stock, with an exercise price of $0.267 (split adjusted) and an expiration date of September 1, 2007. The offer and sale of such shares of our common stock were effected in reliance on the exemptions for sales of securities not involving a public offering, either through Regulation S for non-United States citizens or entities or as set forth in Rule 506 promulgated under the Securities Act of 1933, as amended (the Securities Act) and in Section 4(2) and Section 4(6) of the Securities Act and/or Rule 506 of Regulation D, based on the following: (a) the investors confirmed to us that they were accredited investors, as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to the offering; (c) the investors were provided with certain disclosure materials and all other information requested with respect to our company; (d) the investors acknowledged that all securities being purchased were restricted securities for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequently registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.
On September 26, 2005, the Company completed a forward stock split on the basis of three new shares of common stock in exchange for every one old shares of common stock outstanding.
We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock for additional phases of exploration. We believe that debt financing will not be an alternative for funding additional phases of exploration. We do not have any arrangements in place for any future equity financing.



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Results of OperationsWe have had no operating revenues since our inception on March 1, 2004 through to the quarter ended December 31, 2005. Our activities have been financed from the proceeds of share subscriptions. On September 1, 2005, we closed on a financing transaction with a group of private investors of $453,000.
For the period from inception, March 1, 2004, to December 31, 2005, we incurred total expenses of $167,901. These expenses included $93,171 in mineral property costs represented by the cost charged to operations for the acquisition of the placer claims, costs to prepare the geological report and property transfer fees. We also incurred $45,971 in professional fees during the period. We also expensed a total of $11,000 for donated services and $5,500 for donated rent both provided by our President. We had general and administrative expenses of $18,563 and we experienced a foreign exchange translation gain of $6,415.Liquidity and Capital ResourcesAt December 31, 2005, we had cash on hand of $446,985.
We have funded our business to date from sales of our common stock.
We hold a significant portion of our cash reserves in Canadian dollars. Due to foreign exchange rate fluctuations, the value of these Canadian dollar reserves can result in both translation gains or losses in US dollar terms. If there was to be a significant decline in the Canadian dollar versus the US Dollar our US dollar cash position would also significantly decline. We have not entered into derivative instruments to offset the impact of foreign exchange fluctuations. Such foreign exchange declines could cause us to experience losses.
There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our exploration of the placer claims and our venture will fail.Off-balance sheet arrangementsWe have no off-balance sheet arrangements including arrangements that would effect our liquidity, capital resources, market risk support and credit risk support or other benefits.ITEM 3. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and ProceduresWe carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures as of December 31, 2005 were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms.



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Changes in Internal ControlsThere have been no material changes in our internal controls over financial reporting or in other factors that could materially affect, or are reasonably likely to affect, our internal controls over financial reporting during the quarter ended December 31, 2005.













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PART II   OTHER INFORMATION





Item 1.  Legal Proceedings



Not applicable



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



None.



Item 3.  Defaults Upon Senior Securities



Not applicable



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



None.



Item 5.  Other Information



Not applicable



Item 6.  Exhibits



A. Exhibits:



31.1

Certification of Chief Executive Officer Pursuant to Section 302 of the

Sarbanes-Oxley Act.



31.2

Certification of Principal Financial and Accounting Officer Pursuant

to Section 302 of the Sarbanes-Oxley Act.



32.1

Certification of Chief Executive Officer Pursuant to Section 906 of the

Sarbanes-Oxley Act.



32.2

Certification of Principal Financial and Accounting Officer Pursuant

to Section 906 of the Sarbanes-Oxley Act.



99.1

Progress Report Peters Creek Placer Gold Property



99.2

Peters Creek  Placer Property Ouyline











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SIGNATURES



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

YUKON RESOURCES CORP.





Dated:  January
31, 2006



By: /s/ Thornton J. Donaldson

___________________

Thornton J. Donaldson,

President, Principal Accounting Officer and Director







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EXHIBIT 31.1



CERTIFICATION OF CEO PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT



CERTIFICATIONS

I, Thornton J. Donaldson, certify that:



1. I have reviewed this quarterly report on Form 10-QSB of Yukon Resources Corp.;



2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;



4. The Registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:





(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;





(c) Evaluated the effectiveness of the Issuers disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and





(d) Disclosed in this report any change in the Issuers internal control over financial reporting that occurred during the Registrants fiscal quarter ending December 31, 2005 that has materially affected, or is reasonably likely to materially affect, the Issuers internal control over financial reporting.



5. The Registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrants auditor and the audit committee of the Registrants board of directors (or persons performing the equivalent functions):



(a)

All deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and



(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.





By/s/Thornton J. Donaldson

Thornton J. Donaldson

Chief Executive Officer





Date:  January  31, 2006



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EXHIBIT 31.2



CERTIFICATION OF CFO PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT



CERTIFICATIONS



I, Thornton J. Donaldson, certify that:



1. I have reviewed this quarterly report on Form 10-QSB of Yukon Resources Corp.;



2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;



4. The Registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:





(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;





(c) Evaluated the effectiveness of the Issuers disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and





(d) Disclosed in this report any change in the Issuers internal control over financial reporting that occurred during the Registrants fiscal quarter ending December 31, 2005 that has materially affected, or is reasonably likely to materially affect, the Issuers internal control over financial reporting.



5. The Registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrants auditor and the audit committee of the Registrants board of directors (or persons performing the equivalent functions):



(a)

All deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and



(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.



By/s/ Thornton J. Donaldson

Thornton J. Donaldson

Principal Accounting Officer



Date:  January
31, 2006



20





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Exhibit 32.1





CERTIFICATIONS PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)







In connection with the Quarterly Report of Yukon Resources Corp. (the "Company") on Form 10-QSB for the period ending December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Thornton J. Donaldson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:



(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.



By/s/Thornton J. Donaldson

Thornton J. Donaldson

President, Chief Executive Officer





Date:  January
31, 2006











21





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Exhibit 32.2





CERTIFICATIONS PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)







In connection with the Quarterly Report of Yukon Resources Corp. (the "Company") on Form 10-QSB for the period ending December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Thornton J. Donaldson, Principal Accounting Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:



(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.



By/s/ Thornton J. Donaldson

Thornton J. Donaldson

Principal Accounting Officer



Date:  January
31, 2006



















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