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 SEPTEMBER 30, 2006



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.)



1224 Washington Avenue Miami Beach, Florida  33139(Address of principal executive offices)



(866) 985-6696(Issuers telephone number)

_______________________

901  141 Adelaide Street West, Toronto, Ontario M5H 3L5



(416) 364-4986

_______________________



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 shell company (as defined in rule 12b-2 of the Exchange Act).   Yes  [  
]    No   x



As of November 7, 2006, there were 28,605,000 shares of the registrant's common stock issued and outstanding.



Transitional Small Business Disclosure Format Yes [  
]    No   x



---





Yukon Resources Corp.





Part I.  Financial Information

Page





Item 1.

Financial Statements and Notes to Financial Statements

1







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

2



Item 3

Controls and Procedures

13





Part II.  Other Information



Item 1.

Legal Proceedings

14



Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

14



Item 3.

Defaults Upon Senior Securities

15



Item 4.

Submission of Matters to a Vote of Security Holders

15



Item 5.

Other Information

16



Item 6.

Exhibits

16



Signatures

17







---







PART 1 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 flows, 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, 2006. 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 September 30, 2006 are not necessarily indicative of the results that can be expected for the year ending June 30, 2007.











---





Yukon Resources Corp.

(An Exploration Stage Company)



September 30, 2006



Index





Balance Sheets

F-1



Statements of Operations

F-2



Statements of Cash Flows

F-3



Notes to the Financial Statements

F-4











---





Yukon Resources Corp.

(An Exploration Stage Company)

Balance Sheets

(Expressed in US dollars)

(unaudited)



|                                                                             | September 30, |   | June 30,   |  
|---------------------------------------------------------------------------- | ------------- | - | ---------- | -
|                                                                             | 2006          |   | 2006       |  
|                                                                             | $             |   | $          |  
|ASSETS                                                                       |               |   |            |  
|Current Assets                                                               |               |   |            |  
|Cash and cash equivalents                                                    | 337,478       |   | 555,817    |  
|Taxes recoverable                                                            | 25,832        |   | -          |  
|Prepaid expenses                                                             | -             |   | 7,060      |  
|Total Current Assets                                                         | 363,310       |   | 562,877    |  
|Property and equipment (Note 3)                                              | 1,390         |   | 1,557      |  
|Total Assets                                                                 | 364,700       |   | 564,434    |  
|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                               |               |   |            |  
|Current Liabilities                                                          |               |   |            |  
|Accounts payable                                                             | 459,628       |   | 77,640     |  
|Accrued liabilities                                                          | 138,461       |   | -          |  
|Promissory note payable (Note 4)                                             | 179,580       |   | -          |  
|Due to related parties (Note 5(c))                                           | 11,369        |   | 14,109     |  
|Total Liabilities                                                            | 789,038       |   | 91,749     |  
|Commitments (Notes 1 and 9)                                                  |               |   |            |  
|Subsequent events (Note 10)                                                  |               |   |            |  
|Stockholders' Equity (Deficit)                                               |               |   |            |  
|Common Stock, 75,000,000 shares authorized, $0.001 par value                 |               |   |            |  
|27,955,000 shares issued and outstanding (June 30, 2006  27,455,000 shares) | 27,955        |   | 27,455     |  
|Additional Paid-in Capital                                                   | 10,842,643    |   | 9,813,288  |  
|Common stock subscribed (Notes 7(a) and (d))                                 | 305,000       |   | 255,000    |  
|Donated Capital (Note 5(a))                                                  | 20,750        |   | 20,750     |  
|Deficit Accumulated During the Exploration Stage                             | (11,620,686   | ) | (9,643,808 | )
|Total Stockholders' Equity (Deficit)                                         | (424,338      | ) | 472,685    |  
|Total Liabilities and Stockholders' Equity (Deficit)                         | 364,700       |   | 564,434    |  





The accompanying notes are an integral part of these financial statements

F - 1



---





Yukon Resources Corp.

(An Exploration Stage Company)

Statements of Operations

(Expressed in US dollars)

(unaudited)

|                                       | Accumulated From    |   | For the       |   | For the       |  
|-------------------------------------- | ------------------- | - | ------------- | - | ------------- | -
|                                       | March 1, 2004       |   | Three months  |   | Three months  |  
|                                       | (Date of Inception) |   | Ended         |   | Ended         |  
|                                       | To September 30,    |   | September 30, |   | September 30, |  
|                                       | 2006                |   | 2006          |   | 2005          |  
|                                       | $                   |   | $             |   | $             |  
|Revenue                                | -                   |   | -             |   | -             |  
|Expenses                               |                     |   |               |   |               |  
|Advertising                            | 8,720               |   | -             |   | -             |  
|Amortization                           | 612                 |   | 167           |   | -             |  
|Donated services and expenses (Note 5) | 18,750              |   | -             |   | 2,250         |  
|Foreign currency transaction gain      | (1,322              | ) | 4,218         |   | (1,302        | )
|General and administrative             | 6,371,773           |   | 670,905       |   | 2,247         |  
|Impairment loss on mineral properties  | 4,264,963           |   | 553,846       |   | -             |  
|Mineral exploration                    | 757,383             |   | 668,524       |   | 64,000        |  
|Professional fees                      | 199,807             |   | 79,218        |   | 8,000         |  
|Total Expenses                         | 11,620,686          |   | 1,976,878     |   | 75,195        |  
|Net Loss                               | (11,620,686         | ) | (1,976,878    | ) | (75,195       | )
|Net Loss Per Share - Basic and Diluted |                     |   | (0.07         | ) |              |  
|Weighted Average Shares Outstanding    |                     |   | 27,651,000    |   | 17,982,000    |  





The accompanying notes are an integral part of these financial statements

F - 2



---





Yukon Resources Corp.

(An Exploration Stage Company)

Statements of Cash Flows

(Expressed in US dollars)

(unaudited)

|                                                        | For the      |   | For the      |  
|------------------------------------------------------- | ------------ | - | ------------ | -
|                                                        | Three months |   | Three months |  
|                                                        | Ended        |   | Ended        |  
|                                                        | September 30 |   | September 30 |  
|                                                        | 2006         |   | 2005         |  
|                                                        | $            |   | $            |  
|Operating Activities                                    |              |   |              |  
|Net loss                                                | (1,976,878   | ) | (75,195      | )
|Adjustments to reconcile net loss to net cash           |              |   |              |  
|used in operating activities                            |              |   |              |  
|Amortization                                            | 167          |   | -            |  
|Donated services and expenses                           | -            |   | 2,250        |  
|Impairment loss on mineral properties                   | 553,846      |   | 60,000       |  
|Stock-based compensation                                | 619,855      |   | -            |  
|Change in operating assets and liabilities              |              |   |              |  
|Taxes recoverable                                       | (25,832      | ) | -            |  
|Prepaid expenses                                        | 7,060        |   | 338          |  
|Accounts payable and accrued liabilities                | 381,988      |   | 3,000        |  
|Due to related parties                                  | (2,740       | ) | -            |  
|Net Cash Used In Operating Activities                   | (442,534     | ) | (9,607       | )
|Investing Activities                                    |              |   |              |  
|Mineral property acquisition costs                      | (5,385       | ) | -            |  
|Purchase of property and equipment                      | -            |   | -            |  
|Net Cash Used In Investing Activities                   | (5,385       | ) | -            |  
|Financing Activities                                    |              |   |              |  
|Proceeds from promissory note payable                   | 179,580      |   | -            |  
|Proceeds from share subscriptions received              | 50,000       |   | -            |  
|Proceeds from issuance of common stock, net             | -            |   | 450,500      |  
|Net Cash Provided By Financing Activities               | 229,580      |   | 450,500      |  
|Increase (Decrease) in Cash and cash equivalents        | (218,339     | ) | 440,893      |  
|Cash and cash equivalents - Beginning of Period         | 555,817      |   | 31,199       |  
|Cash and cash equivalents - End of Period               | 337,478      |   | 472,092      |  
|Non-cash Investing and Financing Activities             |              |   |              |  
|Amount owing for acquisition of Quebec mineral property | 138,461      |   | -            |  
|Issuance of common stock for Finnish mineral property   | 410,000      |   | 60,000       |  
|Issuance of common stock for services                   | -            |   | -            |  
|Supplemental Disclosures                                |              |   |              |  
|Interest paid                                           | -            |   | -            |  
|Income taxes paid                                       | -            |   | -            |  



The accompanying notes are an integral part of these financial statements

F - 3



---

Yukon Resources Corp.

(An Exploration Stage Company

Notes to the Financial Statements

September 30, 2006

(Unaudited)





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 September 30, 2006, the Company has never generated any revenue and has accumulated losses of $11,620,686 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.





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. Basic and diluted loss per share is computed using the weighted average number of common shares outstanding.  Diluted EPS and the weighted average number of common shares exclude all dilutive potential shares since their effect is anti dilutive. Shares underlying these securities totaled approximately 7,385,250 as of September 30, 2006.



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 September 30, 2006, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.



F - 4



---

Yukon Resources Corp.

(An Exploration Stage Company

Notes to the Financial Statements

September 30, 2006

(Unaudited)







2.

Summary of Significant Accounting Policies (continued)



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.



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 inception 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 exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred using the guidance in EITF 04-02, "Whether Mineral Rights Are Tangible or Intangible Assets". The Company assesses the carrying costs for impairment under SFAS 144, "Accounting for Impairment or Disposal of Long Lived Assets" at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then 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 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, taxes recoverable, prepaid expenses, accounts payable, accrued liabilities and amounts due to related parties 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.



F - 5



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Yukon Resources Corp.

(An Exploration Stage Company

Notes to the Financial Statements

September 30, 2006

(Unaudited)





2.

Summary of Significant Accounting Policies (continued)



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 financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations



m)

Stock-based Compensation

Prior to January 1, 2006, the Company accounted for stock-based awards under the recognition and measurement provisions of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees using the intrinsic value method of accounting, under which compensation expense was only recognized if the exercise price of the Companys employee stock options was less than the market price of the underlying common stock on the date of grant. Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123R Share Based Payments, using the modified retrospective transition method. The Company had not issued any stock options or share based payments prior to January 1, 2006. Accordingly, there was no effect on the Companys reported loss from operations, cash flows or loss per share as a result of adopting SFAS No 123R.



n)

Recent Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statements No. 109. FIN 48 clarifies the accounting for uncertainty in income taxes by prescribing a two-step method of first evaluating whether a tax position has met a more likely than not recognition threshold and second, measuring that tax position to determine the amount of benefit to be recognized in the financial statements. FIN 48 provides guidance on the presentation of such positions within a classified statement of financial position as well as on derecognition, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.

In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments-an amendment of FASB Statements No. 133 and 140", to simplify and make more consistent the accounting for certain financial instruments. SFAS No. 155 amends SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", to permit fair value re-measurement for any hybrid financial instrument with an embedded derivative that otherwise would require bifurcation, provided that the whole instrument is accounted for on a fair value basis. SFAS No. 155 amends SFAS No. 140, "Accounting for the Impairment or Disposal of Long-Lived Assets", to allow a qualifying special-purpose entity to hold a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. SFAS No. 155 applies to all financial instruments acquired or issued after the beginning of an entity's first fiscal year that begins after September 15, 2006, with earlier application allowed. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.

In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities". This statement requires all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable, and permits for subsequent measurement using either fair value measurement with changes in fair value reflected in earnings or the amortization and impairment requirements of Statement No. 140. The subsequent measurement of separately recognized servicing assets and servicing liabilities at fair value eliminates the necessity for entities that manage the risks inherent in servicing assets and servicing liabilities with derivatives to qualify for hedge accounting treatment and eliminates the characterization of declines in fair value as impairments or direct write-downs. SFAS No. 156 is effective for an entity's first fiscal year beginning after September 15, 2006. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.





F - 6



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Yukon Resources Corp.

(An Exploration Stage Company

Notes to the Financial Statements

September 30, 2006

(Unaudited)





2.

Summary of Significant Accounting Policies (continued)



n)

Recent Accounting Pronouncements (continued)

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. The objective of SFAS 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements.  SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.

In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106, and 132(R). This statement requires employers to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization.  This statement also requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. The provisions of SFAS No. 158 are effective for employers with publicly traded equity securities as of the end of the fiscal year ending after December 15, 2006. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.





3.

Property and Equipment



|                  |        |                            |                                         |                                   
|----------------- | ------ | -------------------------- | --------------------------------------- | ----------------------------------
|                  | Cost
$ | Accumulated
Amortization
$ | September 30, 2006
Net carrying value
$ | June 30,
2006
Net carrying value
$
|                  |        |                            |                                         |                                   
|                  |        |                            |                                         |                                   
|Computer hardware | 2,002  | 612                        | 1,390                                   | 1,557                             





4.

Promissory Note Payable



During the three month period ended September 30, 2006, the Company received $179,580 (CAD$200,000) in promissory note proceeds.  The funds were received from the note-holder in order to participate in a future flow-through financing.  In consideration for the funds, the Company agreed to issue 360,000 flow-through units on or before October 30, 2006 (to be extended by mutual consent), with each flow-through unit being comprised of one flow-through common share of the Company and one warrant.  Each flow-through warrant will entitle the holder to acquire one common share of the Company at an exercise price of CAD$0.84 per share for a period 24 months from date of issuance.  In connection with the financing, the Company agreed to pay a finders fee equal to 7% of the gross proceeds raised, payable in common shares of the Company at a price of CAD$0.56 per share.  The Company will also issue a broker warrant, exercisable to acquire common shares of the Company equal in number to 7% of the total number of flow-through common shares at a price of CAD$0.56 per share for a period of 24 months after the date of the closing of the financing.





5.

Related Party Balances/Transactions



a)

For the three months ended September 30, 2006, the Company recognized a total of $Nil (September 30, 2005 - $1,500) for donated services and $Nil for donated rent (September 30, 2005 - $750).  The Company incurs $1,500 per month to a related company for office administration and rent expense, on a month to month basis. Total rent expense for the three months ended September 30, 2006 year was $4,500 (September 30, 2005 - $Nil).

b)

For the three months ended September 30, 2006, the Company incurred a total of $17,545 (September 30, 2005 - $NIL) in consulting fees to directors, officers and a relative of a director.



F - 7



---

Yukon Resources Corp.

(An Exploration Stage Company

Notes to the Financial Statements

September 30, 2006

(Unaudited)





5.

Related Party Balances/Transactions (continued)

c)

As at September 30, 2006, the Company owed management or companies controlled by management $11,369 for payment of expenditures and rent expense incurred on behalf of the Company.  All amounts are unsecured, non-interest bearing and due on demand.





6.

Mineral Properties



a)

The Company entered into an agreement dated May 14, 2004 with the former 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 shares of common stock.  The claims are registered in the name of the former President, who has executed several trust agreements whereby the former President agreed to hold the claims in trust on behalf of the Company.



b)

The Company entered into 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 shares of common stock (issued) with a fair value of $60,000.



c)

The Company entered into a letter of intent dated March 10, 2006, for an option to acquire a 100% interest in 20 mineral claims located in Finland. The letter of intent is to be replaced by a formal agreement.  The Company paid $50,000 and upon the exercise of the option on August 25, 2006 issued 500,000 shares of common stock pursuant to the Finnish mineral property agreement.  The cost of the mineral property was initially capitalized.  For the three months ended September 30, 2006, the Company recognized an impairment loss of $410,000, as it has not yet been determined whether there are proven or probable reserves on the property.  As at September 30, 2006, the cumulative impairment loss recognized was $460,000.



d)

The Company entered into a binding letter of intent dated May 2, 2006, for an option to acquire a 75% interest in 200 claims located in northern Quebec, Canada.  The vendor has the right and option to sell an additional 25% undivided interest in the property.  This agreement is subject to a royalty agreement dated May 27, 1992, as amended November 3, 1993.  The vendor had acquired a 100% interest in the property, subject to a 1% NSR on certain claims, and a 0.5% NSR on other claims.  The vendor has the right to buy back half of the 1% NSR for $200,000 and half of the 0.5% NSR for $100,000.  In order to exercise its option, the Company must issue 2,000,000 shares of common stock  and 2,000,000 warrants, exercisable at $1.00 per share on or before June 1, 2009; and incur aggregate exploration expenditures in the amount of $2,000,000 on the property on or before August 31, 2008 (the "Earn-In" period).  As at September 30, 2006, the Company has issued the 2,000,000 shares of common stock and warrants relating to the agreement, and incurred aggregate exploration expenditures of $677,669.  During the Earn-In period, the vendor will have the additional option to sell its remaining 25% for 1,000,000 common shares and 1,000,000 warrants of the Company.  On August 15, 2006, the Company acquired an additional nineteen mineral claims contiguous to the property in consideration for a payment of $5,385 (CAD$6,000) as an acquisition fee, 150,000 common shares and 75,000 warrants. These shares and warrants were issued on October 4, 2006.  For the three months ended September 30, 2006, the Company recognized an impairment loss of $143,846, as it has not yet been determined whether there are proven or probable reserves on the property.   Refer to Note 7(c).

e)

On August 9, 2006, the Company acquired sixty-nine mineral claims located within the Workman Creek Uranium District of central Arizona, and paid $52,244 in property and staking costs.



7.

Common Stock



a)

On September 20, 2006, the Company entered into an agreement for a completion of a private placement involving the issuance of 500,000 units at $0.50 per unit.  Each unit consists of one common share and one warrant. Each warrant will entitle the holder to purchase one common share at a price of $0.75 for a period of 3 years from the date of closing. As at September 30, 2006, the Company received $75,000 towards the private placement. On October 18, 2006, the Company completed the closing of the private placement.  Refer to Note 10.

b)

On August 25, 2006 the Company issued 500,000 shares of common stock pursuant to the Finnish mineral property agreement as referred to in Note 6(d).



F - 8



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Yukon Resources Corp.

(An Exploration Stage Company

Notes to the Financial Statements

September 30, 2006

(Unaudited)





7.

Common Stock (continued)

c)

On October 4, 2006, the Company issued 150,000 common shares with a fair value of $103,500 and 75,000 warrants in connection with the acquisition of nineteen claims contiguous to its mineral property in northern Quebec as described in Notes 6(e) and 10(a).  The warrants are exercisable at $1.00 per share for a period of three years from the date of issuance and have been valued using the Black Scholes option pricing model with an expected dividend yield of 0%, risk-free rate of 4.50%, expected volatility of 108%, and expected life of 3 years.  The recorded fair value of $138,461 was initially capitalized as mineral property acquisition costs.  At September 30, 2006, the Company recognized an impairment loss of $138,461.

d)

Between May 17 and June 2, 2006, the Company entered into various share subscription agreements for 255,000 units at a price of $1.00 per unit for proceeds of $255,000.  Each unit consists of one share of common stock and one share purchase warrant. Each warrant will be exercisable at a price of $1.25 per share for a period of 2 years from the date of issuance.  On August 21, 2006, the Company cancelled 25,000 common shares and refunded $25,000 to a shareholder pursuant to the private placement.  As at September 30, 2006, these shares and warrants have not been issued.



8.

Stock Options and Warrants



(i) Stock Options

Effective March 8, 2006, the Company filed a Form S 8 Registration Statement in connection with its newly adopted 2006 Stock Option Plan ("the "2006 Plan") allowing for the direct award of shares or granting of stock options to acquire up to a total of 2,000,000 common shares.  During the three months ended September 30, 2006, the Company granted stock options to acquire 755,000 common shares at an exercise price of $0.80 per share exercisable to July 30, 2011.  The fair value for options granted was estimated at the date of grant using the Black-Scholes option-pricing model and the weighted average fair value of stock options granted during the period, was $0.82.  For the three months ended September 30, 2006, the Company recorded stock-based compensation of $619,855 as general and administrative expense.

The following table summarizes the continuity of the Company's stock options:



|                                |           |   | Weight        
|------------------------------- | --------- | - | --------------
|                                | Number of |   | average       
|                                | Shares    |   | exercise price
|Outstanding, June 30, 2005      | -         |   | -             
|Granted                         | 1,235,250 |   | 0.45          
|Exercised                       | (255,000  | ) | 0.45          
|Outstanding, June 30, 2006      | 980,250   |   | 0.45          
|Granted                         | 755,000   |   | 0.80          
|Outstanding, September 30, 2006 | 1,735,250 |   | 0.60          



Additional information regarding options outstanding as at September, 2006 is as follows:



|  |                 |           | Outstanding  |          |           |            
|- | --------------- | --------- | ------------ | -------- | --------- | -----------
|  |                 |           | Weighted     |          |           | Exercisable
|  |                 |           | average      | Weighted |           | Weighted   
|  |                 |           | remaining    | average  |           | average    
|  |                 | Number of | contractual  | Exercise | Number of | exercise   
|  | Exercise prices | shares    | life (years) | price    | shares    | price      
|$ | 0.45            | 980,250   | 1.26         | 0.45     | 980,250   | 0.45       
|$ | 0.80            | 755,000   | 4.83         | 0.80     | 755,000   | 0.80       
|  |                 | 1,735,250 | 2.81         | 0.60     | 1,735,250 | 0.60       





F - 9



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Yukon Resources Corp.

(An Exploration Stage Company

Notes to the Financial Statements

September 30, 2006

(Unaudited)







8.

Stock Options and Warrants (continued)



(i) Stock Options (continued)



The weighted average assumptions used are as follows:



|                                | September 30, |   | June 30, |  
|------------------------------- | ------------- | - | -------- | -
|                                | 2006          |   | 2006     |  
|Expected dividend yield         | 0             | % | 0        | %
|Risk-free interest rate         | 4.29          | % | 4.29     | %
|Expected volatility             | 111           | % | 123      | %
|Expected option life (in years) | 5.00          |   | 2.00     |  



(ii) Warrants



The following table summarizes the continuity of the Company's warrants:



|                                            |           | Weighted      
|------------------------------------------- | --------- | --------------
|                                            | Number of | average       
|                                            | Warrants  | exercise price
|Outstanding, June 30, 2005                  | -         | -             
|Issued                                      | 5,650,000 | 1.00          
|Outstanding, June 30 and September 30, 2006 | 5,650,000 | 1.00          



At September 30, 2006, the following share purchase warrants were outstanding:



|Number of Warrants |   | Exercise Price | Expiry Date   
|------------------ | - | -------------- | --------------
|3,650,000          | $ | 1.00           | April 26, 2009
|2,000,000          | $ | 1.00           | June 1, 2009  
|5,650,000          |   |                |               



9.

Commitments



a)

On March 10, 2006, the Company entered into an option agreement to earn a 75% interest in 200 mineral claims described in Note
6(d) located in northern Quebec, Canada.   To earn the rights for this 75%, the Company must expend $2,000,000 on the property by August 31, 2008.  During the Earn-In period, the vendor will have the additional option to sell its remaining 25% for 1,000,000 common shares and 1,000,000 warrants of the Company.

b)

On March 10, 2006, the Company entered into a letter of intent to earn a 100% interest in 20 mineral claims described in Note
6(c) located in Finland. The letter of intent is to be replaced by a formal agreement. To earn the rights for this 100%, the Company will make the following payments: a non-refundable cash payment $10,000 on or before March 31, 2006 (paid); and a further cash payment of $40,000 upon the exercise the option (paid). The Company also agreed to issue 100,000 common shares plus an additional 2,000 common shares per kilometre of claim acquired, as a finders fee.  On August 25, 2006, the Company issued 500,000 shares of common stock in connection with this property.



10.

Subsequent Events



a)

On October 4, 2006, the Company issued 150,000 common shares and 75,000 warrants in connection with the acquisition of nineteen claims contiguous to its mineral property in Northern Quebec.



F-10



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b)

On October 18, 2006, the Company issued 500,000 common shares for proceeds of $250,000.  The Company received $75,000 of proceeds prior to September 30, 2006.





F-11





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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. Examples of forward-looking statements include, but are not limited to:  (a) projections of our revenues, capital expenditures, growth, prospects, dividends, capital structure and other financial matters; (b) statements of our plans and objectives; (c) statements of our future economic performance; (d) statements of assumptions underlying other statements and statements about us and our business relating to the future; and (e) any statements using the words "believes," "budget," "target," "goal," "anticipate," "expect," "plan," "outlook," "objective," "may," "project," "intend," "estimate," or similar expressions. 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 2006 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 September 30, 2006 and should be read in conjunction with the audited  financial statements for the year ended June 30, 2006. 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, uranium 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.

Business Development

UNTIL WE CAN VALIDATE OTHERWISE, THE PROPERTIES OUTLINED BELOW HAVE NO KNOWN MINERAL RESERVES OF ANY KIND AND WE ARE PLANNING PROGRAMS THAT ARE EXPLORATORY IN NATURE.  Further details regarding the Corporations properties, although not incorporated by reference, including the comprehensive
geological report prepared in compliance with Canadas National Instrument 43-101



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on the Companys Sagar property in Northern Quebec, can be found on the Companys website:  www.yukr.com

Sagar Property:  Romanet Horst, Labrador Trough, Québec, Canada

Effective May 4, 2006, we entered into a binding letter of intent with Virginia Mines Inc., a Quebec, Canada Corporation.  Virginias shares are listed on the Toronto Stock Exchange under the symbol VGQ.  A formal letter agreement was executed as of May 12, 2006 regarding the terms upon which we have an option over certain claims held by Virginia.

Pursuant to our letter agreement with Virginia, we have the option to acquire, in joint venture, an undivided 75% participating interest in 200 claims located in the Labrador Trough in Northern Quebec.  We refer to these claims as the Sagar property.  Virginia has the right and option, but not the obligation, to sell us an additional 25% undivided interest in the Sagar property.  Our letter agreement with Virginia is subject to a royalty agreement dated May 27, 1992 between Virginia Gold Mines Inc.  (predecessor to Virginia Mines Inc.) and Pierre Poisson and Joanne Jones, and its amendments of May 10, 1993 and November 3, 1993.  Pursuant to the royalty agreement and amendments with Ms. Jones and Mr. Poisson, Virginia has acquired a 100% interest in the Sagar property, subject to a 1% net smelter return royalty on certain claims, and a 0.5% net smelter return royalty on other claims, owned by Ms. Jones and Mr. Poisson.  Virginia has the right to buy back half of the 1% net smelter return royalty (0.5%) for $200,000 and half of the 0.5% net smelter return royalty (0.25%) for $100,000.

The letter agreement for the Sagar property required the following consideration to be paid by us:

1.

upon Yukon receiving the final written approval of applicable regulatory authorities to the acquisition of an undivided 75% joint venture interest in the Sagar property, the issuance of 2,000,000 common shares of Yukon on or before May 15,
2006 (issued);

2.

the issuance on or before May 15, 2006 of warrants to purchase an aggregate of 2,000,000 shares of our common stock, exercisable at $1.00 per share for a 3-year period from the date of
issuance (issued); and

3.

the incurrence of aggregate exploration expenditures in the amount of $2,000,000 on the Sagar property on or before August 31, 2008.

We issued the above shares and warrants to Virginia on June 2, 2006 and as at September 30, 2006, the Company has exploration expenditures aggregating $677,669.

As long as Virginia still owns a 25% participating interest in the property, Virginia will have the additional option, at its sole discretion, to sell its remaining 25% joint venture interest in the Sagar property to Yukon, subject to a royalty (as defined in the letter agreement with Virginia).  The payment required from Yukon for this option is the issuance of 1,000,000 common shares and 1,000,000 warrants to purchase shares of Yukon within 10 days of an exercise notice from Virginia.  The common share purchase warrants will be exercisable at a price equal to the weighted average closing price for Yukon's common shares for the 20 trading days preceding the date of grant.  They will be valid for a 2-year period from the date of issuance.  Upon the exercise in full of the warrants, Yukon will hold a 100% interest in the Sagar property, subject to the net smelter royal return previously discussed and a 1.5% royalty to Virginia.

Should Yukon or the joint venture entity with Virginia discover a potentially exploitable gold deposit with an indicated resource outlined of at least 500,000 ounces of contained gold equivalent (for all precious metals), Virginia shall have, within 90 days of notice from Yukon of the discovery, a one-time



3





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right to re-acquire a 51% interest in the discovery by issuing a cash payment, or Virginia common shares equivalent to that amount, equal to two and a half times the current expenditures (as defined in our letter agreement with Virginia) incurred by Yukon on the discovery prior to Virginias election.  Upon receipt of the cash payment or its equivalent value in Virginias shares, a joint venture entity will immediately be formed between the parties with Virginia having a joint venture interest equal to 51% and Yukon having a joint venture interest equal to 49%.  Upon exercising its back-in right, Virginia would then become the operator of this property.

We are currently up to date with all obligations required to maintain our option in good standing.

On June 2, 2006, we announced that we have retained Hadyn Butler, P.Geo. and Craig Scherba, P.Geo as independent qualified persons to author a report with respect to the Sagar property in compliance with Canada's National Instrument 43-101.

Ferderber Claims

Yukon has been granted the right to acquire a 100% undivided right, title and interest in and to 19 mining claims (0036315, 0036316, 0036317, 0036318, 0036319, 0036320, 0036321, 0036322, 0036323, 0036324, 0036325, 0036326, 0036327, 0030649, 0030650, 0030640, 0030638, 0030612, 0030613) held by Mr. Peter Ferderber, covering an area of approximately 64 hectares located in the Central Labrador Trough Region of Quebec, 13 of which are contiguous to Yukons Sagar property.  Yukon may acquire Mr. Ferderber's claims free and clear of all encumbrances, subject to any net smelter return royalties, by delivering the following by the dates indicated, subject to obtaining regulatory and board approvals:

1.

Issue a cash payment of $6,000 upon the signing of the agreement with Mr. Ferderber.

2.

Issue 150,000 Yukons common shares on or before September 30, 2006.

3.

Issue warrants exercisable for 75,000 of Yukons common shares on or before September 30, 2006, exercisable at $1.00 for a 3 year period from date of issuance.

We have made the required cash payment to Mr. Ferderber, and have also issued the common shares and warrants described above on
October 4, 2006.  Therefore, we are currently up to date with all obligations required to maintain these property holdings in good standing.

Underlying Royalty (NSR)

Mr. Ferderber retains a 1% net smelter return royalty on this property and agreed that Yukon shall have a first right of refusal to purchase the 1% net smelter return royalty should Mr. Ferderber, at his sole discretion, elect to sell the royalty.

Ownership

Yukon having satisfied the Option agreement requirements (Items 1, 2 and 3 above) owns a 100% undivided right, title and interest in the Property.

Workman Creek Claims

On August 9, 2006, Yukon acquired 69 mineral claims within the Workman Creek Uranium District of Central Arizona.  These claims are contiguous to the north and northwest of claims held by Rodinia Minerals Inc.  They cover the strike extension of the northerly trending, uranium mineralized structures that crosscut the Dripping Spring Quartzite Formation.  (Rodinias shares are listed on the Toronto Stock Exchange under the symbol RM.)



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The significant potential for uranium mineralization within this area is well demonstrated, as evidenced by a resource estimate completed by Rodinia that is compliant with Canada's National Instrument 43-101 wherein it was estimated that Rodinia's properties at Workman Creek contain an inferred resource of 3.22 million tons of Uranium at an average grade of 0.086% U3O8, or 5.54 million pounds of U3O8.

We are currently up to date with all obligations required to maintain our property holdings in good standing.

Finland

We entered into a letter of intent dated March 10, 2006 with Apofas Ltd., for an option to acquire a 100% interest in 20 mineral claims located in Finland covering an area of about 150 square kilometers.  Seventeen of these claim reservations occur within the Paleo-Proterozoic Kusamo Schist Belt of northeastern Finland.  Recent drillings in this area by Agricola Resources has intersected 0.33% U3O8 over 0.90 metres.  The remaining reservations occur within the Koli geographic province of eastern Finland, which contains the past producing Paukkajanvaara unconformity style uranium deposit.

In the normal course, this letter of intent will be replaced by a formal agreement.  The vendor has filed claim reservation applications for certain areas, subject to the approval of necessary Finnish authorities.  Pursuant to the letter of intent, we will acquire the exclusive right to stake claims on the reserved areas by making the following payments:

·

a non-refundable cash payment of $10,000 on or before March 31, 2006; and

·

a further cash payment of $40,000 upon the exercise of the option.

The option expires within 15 business days of notification of approval by Finnish authorities of the claim reservation properties.  Upon the exercise of the option, we agreed to issue 100,000 common shares to Apofas, plus an additional 2,000 common shares per kilometre of claim acquired.  These share issuances constitute a finders fee.  We also have the option of issuing Apofas an additional 100,000 shares, which gives us exclusivity on any Uranium claim reservations for a further one year period.  Apofas will file these claim reservations with the Finnish Government on our behalf.

Of the 20 claim reservations identified in our letter of intent with Apofas, we were granted 19.5 by the Finnish government on April 19, 2006 totaling an area of approximately 150 square kilometers.  After the claim reservations have been granted by the Government, we than have a one year period from that date to evaluate the properties covered under the claim reservations prior to having to formally stake the claim reservation areas we intend to keep.

Having exercised the option, we have issued the cash payments totaling $50,000 and 500,000 shares to Apofas Ltd and now have one year to evaluate.

The cost of the mineral property and the fair value ascribed to the 500,000 common shares issued was initially capitalized.

As at September 30, 2006, we recognized a cumulative impairment loss of $460,000, as it has not yet been determined whether there are proven or probable reserves on the property.

We are currently up to date with all obligations required to maintain our property holdings in good standing.



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Peters Creek

We entered into an agreement dated May 14, 2004 with Thornton Donaldson to acquire a 100% interest in seven placer claims for the issuance of 2,500,000 shares of our common stock to him.  The placer claims are located in the Cariboo Mining Division in east central British Columbia, Canada.  The claims are registered in the name of Thornton Donaldson, who has executed several trust agreements with us, whereby he has agreed to hold the claims in trust on our behalf.  The total cost of the placer claims charged to operations by us on our financial statements is $1,700 and this figure represents the original cost incurred by Thornton Donaldson.

On August 1, 2005, the Company entered into an agreement with Michael McCullagh to option two claims, tenure numbers 403736 and 403737 for a cash payment of $4,000 and issuance of 100,000 common shares.  This agreement has a term of two years maturing August 1, 2007.  For administrative purposes, the above nine claims have been converted to three placer claims, one placer lease and one placer cell.

The placer claims are unencumbered and in good standing and there are no competitive conditions which affect the claims.  Further, there is no insurance covering the claims.  We believe that no insurance is necessary since the claims are unimproved and contain no buildings or improvements.

There is no assurance that a commercially viable mineral deposit exists on the claims.  Further exploration will be required before an evaluation as to the economic feasibility of the claims is determined.  It is our intention to incorporate a British Columbia subsidiary company and record the deed of ownership in the name of our subsidiary if gold is discovered on the claim and it appears that it would be economically viable to commercially mine the claim.

Between August 22, 2006 and September 1, 2005, a preliminary bulk testing program was carried out on the property, at a cost of approximately $23,000 with the results documented in the Progress Report by W.G. Timmins dated November 28, 2005.

We are 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 period until December 31, 2007 is to complete the following objectives within the time periods specified, subject to our obtaining the necessary funding and/or permits for continued exploration of the mineral properties.

The following table summarizes the anticipated exploration expenditures on our current properties over the next twelve to eighteen months.

|                                          |           |           |          
|----------------------------------------- | --------- | --------- | ---------
|ESTIMATED EXPLORATION BUDGET             
|US $ 4 Million                            | 2006      | 2007      | Totals   
|Sagar Project (includes Ferderber Claims) | 800,000   | 1,700,000 | 2,500,000
|Arizona                                   | 300,000   | 700,000   | 1,000,000
|Finland                                   | 300,000   | 800,000   | 1,100,000
|Totals                                    | 1,400,000 | 3,200,000 | 4,600,000



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Sagar Property

The Sagar property is the Companys primary exploration target as it shows signs of possessing spectacular grades for both gold and Uranium.  Identifying the source of these minerals could provide the Company with a very significant asset.

Given the encouraging results of the first phase of exploration, Yukon has commenced the following geophysical program.  The exploration program is being designed and implemented by GeoVector Management Inc. (GeoVector), of Ottawa, Ontario.

Exploration Program Summary

1.

OBJECTIVES

Eight target areas were identified for further investigation during the summer exploration program.  The main objectives were to "complete the process of project familiarization, to obtain a property-wide layer of chemical information, and to evaluate and prioritize the existing targets, in order to intelligently recommend further work (geophysics/drilling)".  The fieldwork consisted of a water survey (to delineate concealed U-Au-Cu targets), quaternary investigations, and prospecting/reconnaissance geology.  In conjunction with this, a significant amount of time was spent updating the GIS database.  The Sagar camp was refurbished and improved to provide a fully functional base camp, which can accommodate up to 16 field personnel.  The cost of the Summer (July/August 2006) exploration program is in the order of $600,000.

2.

GEOCHEMICAL SAMPLING

Yukons geochemical consultant who was on site from July 25 to August 9.  He conducted a comprehensive water-sampling program during which a total of 599 samples were collected from narrow streams and small ponds and these have been sent to Activation Laboratories for analysis.

3.

QUATERNARY INVESTIGATIONS

Yukons quaternary specialist was on site from July 25 to August 11, during which time he undertook a general overview of the quaternary geology of the horst and environs, including obtaining 136 measurements of ice flow direction.  Particular attention was paid to the Mistamisk boulder field, where he carefully examined the various boulders, and collected eight site till samples as well as nine regional till samples.  These samples have been sent to Overburden Drilling Management in Ottawa for processing (gold grain count, assessment of the heavy metal concentrate, etc.), and the fine fraction has been sent to Activation Laboratories for analysis.

4.

GEOLOGY AND PROSPECTING

Reconnaissance geology and prospecting was conducted over the nine identified targets.  This work enabled GeoVector to become familiar with the geology and mineral showings of the northwestern Romanet Horst, which resulted in the discovery of several new showings and aided in the ongoing development of geological ideas and exploration strategy for the Sagar project.

Approximately 140 rock samples were collected during prospecting and geological reconnaissance.  Samples were collected from both previously known and from newly discovered mineralized showings and boulders.  These samples have similarly been sent to Activation Laboratories, and are being analyzed for a package of over 48 elements, including Au, Cu, Ag and U.



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5.

PRIORITY TARGETS

Based on the summer work program a number of the initial targets were prioritized and these are summarized below.

A.

Royal Montreal Target

This target encompasses the Mistamisk boulder field, consisting of in the order of 150 boulders with an average grade of 50 g/t Au and 0.3% U (see press release of July 13, 2006).  A Yukon assay of a sample from a newly discovered boulder assayed 43.4 g/t Au and 1.45% U, confirming the high tenor previously reported from the boulder field.  Investigations into the quaternary geology in and adjacent to the boulder field suggest that the boulders were transported a relatively short distance (less than 5 km) in a north to north-northeast direction.  Gold was panned from the till underlying the boulder field, implying that the mineralized boulders are an integral part of the till, which in turn suggests that the source of the boulders could be determined by persistent examination of the till in three dimensions by utilizing overburden drilling.

B.

Capilano Target

A second priority target is an interpreted northwest-trending structure parallel to the margins of the Romanet Horst, located in the north-central part of the horst and controlling at least two Au-U showings-Eagle and Kish.  One possibility is that the mineralization seen on surface represents leakage from an underlying, larger deposit, likely associated with the Archean unconformity at the base of the horst.  Deep drilling would be necessary to test this theory.

C.

Crowbush Target

A major east-northeast trending geophysical discontinuity transects the Romanet Horst in the southern part of the Yukon claims.  This structure has not received much previous exploration attention.  New uranium occurrences were discovered along the structure, and new Cu occurrences were found close to two previously known small copper showings, one in the western part of the structure and one in the eastern part.  Assays of three Yukon grab samples from the eastern part (Paintbrush showing area) produced results ranging from 0.98 to 5.53% Cu and 0.12 to 0.21 g/t Au.  Assays from the other occurrences within this structure are pending.

D.

St. Georges Target

The eastern margin of the horst contains a number of polymetallic showings which include i) Osprey (GM) with previous reported grab samples of up to 4.88% U3O8and 5.3 g/t Au (different samples); ii) Le Geant (Chibtown), with previous grab samples of up to 2.25% Cu (see Press Release of August 15, 2006); iii) Delhi Pacific, where previous drilling intersected 4.2% Cu over 7.6 m; iv) Greywolf (Taché Lake), where previous drilling is reported to have intersected 3.5 g/t Au over 1m; v) Redtail (Simon), where highly radioactive felsic dikes cut fine-grained mafic rocks; and several other less significant Cu-Au showings.  These showings have all been visited and sampled; assays are pending.

6.

KEY NEW BOULDER FIELD DISCOVERIES

GeoVectors work also resulted in the discovery of new radioactive boulder fields to the southwest of the Eagle showing and north of the original Mistamisk boulder field.  These will be followed up during the September field program.



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7.

SEPTEMBER EXPLORATION PROGRAM

The September work will consist of 94 Km of line cutting on the Osprey and Redtail showings and over new occurrences on the Crowbrush Target.  Radiometrics, magnetics, prospecting and mapping will take place over the cut grid areas.  The cut lines will also be used for the planned winter 2007 IP survey.

The cost of the Phase 2 program is estimated at $175,000.

EXPLORATION PROGRAM HIGHLIGHTS.

The spectacular mineralization found in the Mistamisk Boulder Field has fueled an ongoing drive to discover its source.  The Mistamisk Boulder field is approximately 500 X 200 meters in size and contains which contains more than150 boulders.  In reports obtained by Virginia Mines, 70 tested boulders averaged 64.9g/t Au and 1.3% U, with values of up to 640 g/t Au and 4.11% U.  Yukon is the direct beneficiary of the extensive exploration efforts incurred by Hemlo, Inmet, Virginia Mines and LaForge, among others.  These efforts have provided very extensive insights through studies and exploration relating to the location of the Mistamisk Boulder field as well as Sagar property is characterized by an impressive amount of uranium, gold, copper and lead/zinc mineralization of different styles and potential deposit models.  Armed with this historical data, Yukon in the summer of 2006 conducted an extensive field exploration program.  The results of this program have provided 600 water samples, with some samples returning high levels of Uranium, quaternary work that has confirmed the direction of the ice flow, and the discovery of new highly mineralized Uranium Boulders to the North and South of the Mistamisk Boulder field.  Yukon now believes that the source area of the boulder field has been identified and is now planning a Winter Program to quantify this conclusion.

Future Programs

Based on the positive and encouraging results from the recent exploration programs, Yukon intends to aggressively explore the Sagar property.  A 1st stage drill program is now being developed based on all historical results and data for early spring with a 2nd stage program to follow in the Summer of 2007.  The 1st stage drill program will be finalized upon receiving the final geological report from the programs conducted in the Summer and Fall of 2006.  The 2nd stage drill program will be based on all historical results and data as well as the 1st stage drilling results.  The Corporation intends to spend another
$5,200,000 on the Sagar and Ferderber Properties over the next 12 months bringing the cumulative total
spent by Yukon to $6,000,000.  Actual exploration programs and expenditures will be continually reviewed and approved by the Board of Directors in consultation with the Corporations Geologists.

Workman Creek Uranium District Assets - Gila County, Arizona

Based on the initial property assessment and available historical data, the following exploration program is planned for the next 12 to 18 months.

·

Compilation of existing historical data.

·

Apply for and obtain required exploration/mining permits from all applicable regulatory bodies.

·

Conduct environmental baseline study if required.

·

Conduct comprehensive soil, vegetation and water sampling program.

·

Generate geological report summarizing results and outlining next phase of exploration.



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An exploration budget of up to $1,000,000 is allocated for this project over the next 12 to 18 months.  Actual exploration programs and expenditures will be continually reviewed and approved by the Board of Directors in consultation with the Corporations Geologists.

Finland

Based on the initial property assessment and available historical data, the following exploration program is planned for the next 12 to 18 months.

·

Compilation of existing historical data.

·

Apply for and obtain required exploration/mining permits from all applicable regulatory bodies.

·

Conduct environmental baseline study if required.

·

Conduct comprehensive soil, vegetation and water sampling program.

·

Generate geological report summarizing results and outlining next phase of exploration.

·

Hire a Local or Europe based Geological Consulting Group to assist in:  geological assessment work, obtaining required permitting, secure drilling contracts, logistical support and to conduct exploration programs under the direction of GeoVector Management, the Corporations Consulting Geologists.

An exploration budget of up to $1,100,000 is allocated for this project over the next 12 to 18 months.  Actual exploration programs and expenditures will be continually reviewed and approved by the Board of Directors in consultation with the Corporations Geologists.

Peters Creek

Currently, we do not plan to conduct any significant exploration work on this property.  The Corporation will perform any required work or permitting to ensure the property is kept in good standing.  Actual exploration programs and expenditures will be continually reviewed and approved by the Board of Directors in consultation with the Corporations Geologists.

_______________

We anticipate spending approximately $60,000 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.  However, the overall general and administration expenses will vary in direct proportion with the level of activity relating to future acquisitions and exploration programs.

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 market price for uranium

·

the results of our proposed exploration programs on our mineral properties; and



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·

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.

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.



During the three months ended September 30, 2006

On September 20, 2006, the Company entered into an agreement for a completion of a private placement involving the issuance of 500,000 units at $0.50 per unit.  Each unit consists of one common share and one warrant. As at September 30, 2006, the Company received $75,000 towards the private placement. On October 18, 2006, the Company completed the closing of the private placement. We completed the offering in reliance upon the exemption provided by Section 4(2) under the Securities Act for a transaction not involving a public offering and Regulation D promulgated thereunder and pursuant to Regulation S of the Securities Act. All of the persons purchasing common shares pursuant to Rule 903(a) and (b)(3) of Regulation S represented to us that they resided outside of and were not citizens of the United States. We did not engage in a distribution of this offering in the United States. Each purchaser represented their intention to acquire the securities for investment only and not with a view towards distribution. Appropriate legends have been affixed to the stock certificate issued to each purchaser in accordance with Regulation S. Each investor was given adequate access to sufficient information about us to make and informed investment decision. None of the securities were sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved. No registration rights were granted to any of the purchasers.





On September 25, 2006, the Company received $179,580 (CAD$200,000) in promissory note proceeds.  The funds were received from the note-holder in order to participate in a future
financing.  In consideration for the funds, the Company agreed to issue 360,000 flow-through units on or before October 30, 2006 (to be extended by mutual consent), with each flow-through unit being comprised of one flow-through common share of the Company and one warrant.  Each flow-through warrant will entitle the holder to acquire one common share of the Company at an exercise price of CAD$0.84 per share for a period 24 months from date of issuance.  In connection with the financing, the Company agreed to pay a finders fee equal to 7% of the gross proceeds raised, payable in common shares of the Company at a price of CAD$0.56 per share.  The Company will also issue a broker warrant, exercisable to acquire common shares of the Company equal in number to 7% of the total number of flow-through common shares at a price of CAD$0.56 per share for a period of 24 months after the date of the closing of the financing. We completed the offering

 in reliance upon the exemption provided by Section 4(2) under the Securities Act for a transaction not involving a public offering and Regulation D promulgated thereunder and pursuant to Regulation S of the Securities Act

..All of the persons



11





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purchasing common shares pursuant to Rule 903(a) and (b)(3) of Regulation S represented to us that they resided outside of and were not citizens of the United States. We did not engage in a distribution of this offering in the United States. Each purchaser represented their intention to acquire the securities for investment only and not with a view towards distribution. Appropriate legends have been affixed to the stock certificate issued to each purchaser in accordance with Regulation S. Each investor was given adequate access to sufficient information about us to make and informed investment decision. None of the securities were sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved. No registration rights were granted to any of the purchasers.

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.

Results of Operations

We have had no operating revenues since our inception on March 1, 2004 through to the quarter ended September 30, 2006. Our activities have been financed from the proceeds of share subscriptions.

For the period from inception, March 1, 2004, to September 30, 2006, we incurred total expenses of $11,620,686. These expenses included $4,264,963 in impairment losses on mineral properties, $199,807 in professional fees , a foreign exchange translation gain of $1,322 and general and administrative expenses of $6,371,773. We also expensed a total of $12,500 for donated services and $6,250 for donated rent both provided by our President.

Liquidity and Capital Resources

As at September 30, 2006, the Company has working capital deficiency of $425,728 and accumulated losses of $11,620,686 since inception.

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 and our venture will fail.

Off-balance sheet arrangements

We 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.



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ITEM 3. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report,  we carried out an evaluation, under the supervision and with the participation of our management, including our Interim Chief Executive Officer and Chief 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 Interim Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of September 30, 2006 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.



Changes in Internal Controls

There 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 September 30, 2006. There have not been any significant changes in the Companys critical accounting policies identified since the Company filed its Form 10-KSB as of June 30, 2006.





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PART II   OTHER INFORMATION

Item 1.  Legal Proceedings

There are no material currently pending legal proceedings to which the Company is a party and, to the Company's knowledge, no proceedings are contemplated against the Company.

Item 2.  Changes in Securities and Small Business Issuer Purchases of Equity Securities



On August 15, 2006, the Company issued 500,000 common shares in consideration for of 20 mineral claims located in Finland.

On August 21, 2006, the Company cancelled 25,000 common shares pursuant to a share subscription placement and refunded $25,000 to a shareholder.

On September 20, 2006, the Company entered into an agreement for a completion of a private placement involving the issuance of 500,000 units at $0.50 per unit.  Each unit consists of one common share and one warrant. Each warrant will entitle the holder to purchase one common share at a price of $0.75 for a period of 3 years from the date of closing. As at September 30, 2006, the Company received $75,000 towards the private placement. On October 18, 2006, the Company completed the closing of the private placement. We completed the offering

 in reliance upon the exemption provided by Section 4(2) under the Securities Act of 1933, as amended (the Securities Act)  for a transaction not involving a public offering and Regulation D promulgated thereunder and pursuant to Regulation S of the Securities Act

..All of the persons purchasing common shares pursuant to Rule 903(a) and (b)(3) of Regulation S represented to us that they resided outside of and were not citizens of the United States. We did not engage in a distribution of this offering in the United States. Each purchaser represented their intention to acquire the securities for investment only and not with a view towards distribution. Appropriate legends have been affixed to the stock certificate issued to each purchaser in accordance with Regulation S. Each investor was given adequate access to sufficient information about us to make and informed investment decision. None of the securities were sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved. No registration rights were granted to any of the purchasers.



On September 25, 2006, the Company received $179,580 (CAD$200,000) in promissory note proceeds.  The funds were received from the note-holder in order to participate in a future flow-through financing.  In consideration for the funds, the Company agreed to issue 360,000 flow-through units on or before October 30, 2006 (to be extended by mutual consent), with each flow-through unit being comprised of one flow-through common share of the Company and one warrant.  Each flow-through warrant will entitle the holder to acquire one common share of the Company at an exercise price of CAD$0.84 per share for a period 24 months from date of issuance.  In connection with the financing, the Company agreed to pay a finders fee equal to 7% of the gross proceeds raised, payable in common shares of the Company at a price of CAD$0.56 per share.  The Company will also issue a broker warrant, exercisable to acquire common shares of the Company equal in number to 7% of the total number of flow-through common shares at a price of CAD$0.56 per share for a period of 24 months after the date of the closing of the financing. We completed the offering

 in reliance upon the exemption provided by Section 4(2) under the Securities Act for a transaction not involving a public offering and Regulation D promulgated thereunder and pursuant to Regulation S of the Securities Act

..All of the persons purchasing common shares pursuant to Rule 903(a) and (b)(3) of Regulation S represented to us



14





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that they resided outside of and were not citizens of the United States. We did not engage in a distribution of this offering in the United States. Each purchaser represented their intention to acquire the securities for investment only and not with a view towards distribution. Appropriate legends have been affixed to the stock certificate issued to each purchaser in accordance with Regulation S. Each investor was given adequate access to sufficient information about us to make and informed investment decision. None of the securities were sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved. No registration rights were granted to any of the purchasers.



Item 3.  Defaults upon Senior Securities



There were no defaults upon senior securities during the period ended September 30, 2006.



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



There were no matters submitted to the vote of securities holders during the period ended September 30, 2006.



Item 5.  Other Information

There is no information with respect to which information is not otherwise called for by this form.



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Item 6.  Exhibits

|               |                                                                                            
|-------------- | -------------------------------------------------------------------------------------------
|Exhibit Number | Description                                                                                
|3.1            | Articles of Incorporation(1)                                                               
|3.2            | By-Laws(1)                                                                                 
|4.1            | 2006 Stock Option Plan(2)                                                                  
|10.1           | Property Agreement(1)                                                                      
|10.2           | Trust Agreement 1(1)                                                                       
|10.3           | Trust Agreement 2(1)                                                                       
|10.4           | Trust Agreement 3(1)                                                                       
|10.5           | Trust Agreement 4(1)                                                                       
|10.6           | Letter of Intent effective March 10, 2006 with Apofas Ltd.(3)                              
|10.7           | Letter agreement effective May 12, 2006 with Virginia Mines Inc.(4)                        
|14.1           | Code of Ethics(5)                                                                          
|31.1           | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act 
|31.2           | Certification of Chief Financial 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 Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
|99.1           | Summary Report on the Peter's Creek Placer Gold Property(6)                                
|99.2           | Progress Report on the Peter's Creek Gold Property(6)                                      
|99.3           | Peter's Creek Gold Property Outline(7)                                                     

(1)

Incorporated by referenced from the corresponding Exhibit to the registrant's registration statement on Form SB-2 filed with the SEC on September 14, 2005.

(2)

Incorporated by referenced from the corresponding Exhibit to the registrant's registration statement on Form S-8 filed with the SEC on March 9, 2006.

(3)

Incorporated by referenced from the Exhibit to the registrant's current report on Form 8-K filed with the SEC on March 13, 2006.

(4)

Incorporated by referenced from the Exhibit to the registrant's current report on Form 8-K filed with the SEC on May 9, 2006.

(5)

Incorporated by referenced from the Exhibits to the registrant's annual report on Form 10-KSB filed with the SEC on October 12, 2006.

(6)

Incorporated by referenced from the Exhibits to the registrant's registration statement on Form SB-2 filed with the SEC on November 5, 2005.

(7)

Incorporated by referenced from the Exhibits to the quarterly report on Form 10-QSB filed with the SEC on January 31, 2006.



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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.

Date: November 20, 2006



By: /s/ J. A. Kirk McKinnon

J. A. Kirk McKinnon
Chief Executive Officer





/s/ Richard E. Schler

Richard E. Schler

Chief Financial Officer



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Exhibit 31.1



Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and pursuant to Rule 13a-14(a) and Rule15d-14under the Securities Exchange Act of 1934

--------------------------------------------------------------------

In connection  with the Quarterly Report Pursuant to Section 13 or 15(d) of the Securities  Exchange  Act of 1934 on Form 10-QSB of Yukon Resources Corp.(the "Company") for the period ended September 30, 2006, as filed with the Securities and Exchange  Commission on the date hereof (the "Report"), I, J. A. Kirk McKinnon, CEO of the Company, certify, pursuant to 18 U.S.C. Sec.1350, as  adopted  pursuant  to  Section  302 and 906 of the Sarbanes-Oxley Act of 2002, and pursuant to Rule 13a-14 under the Securities Exchange Act of 1934, that:



1.

I , J. A. Kirk McKinnon, have reviewed the Report being filed;



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 small business issuer as of, and for, the periods presented in this report;



4.

The small business issuer'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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer 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 small business 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;



18





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c.

Evaluated the effectiveness of the small business 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 small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and

5.

The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer'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 small business issuer's internal control over financial reporting.

Dated:  November 20, 2006



By: /s/ J. A. Kirk McKinnon

J. A. Kirk McKinnon
           Chief Executive Officer



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Exhibit 31.2

Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002 and pursuant to Rule 13a-14b) and Rule 15d-14(b)(17 CFR  240.15d-14(b))  under the Securities Exchange Act of 1934and Section  1350 of Chapter 63 of Title 18 of the United States Code

--------------------------------------------------------------------

In  connection  with the Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 on Form 10-QSB of Yukon Resources Corp.(the "Company") for the period ended September 30, 2006, as filed with the Securities and Exchange  Commission on the date hereof (the "Report"), I,    Richard E. Schler, the Companys Chief Financial Officer, certify, pursuant to 18 U.S.C. Sec.1350, as  adopted  pursuant  to  Section  302 and 906 of the Sarbanes-Oxley Act of 2002, and pursuant to Rule 13a-14 under the Securities Exchange Act of 1934, that:

1.

I , Richard E. Schler, have reviewed the Report being filed;



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 small business issuer as of, and for, the periods presented in this report;



4.

The small business issuer'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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer 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 small business 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 small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the



20



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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 small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and

5.

The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer'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 small business issuer's internal control over financial reporting.

Dated:  November 20, 2006

/s/ Richard E. Schler

Richard E. Schler

Chief Financial Officer





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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 September 30, 2006 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, J. A. Kirk McKinnon, 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/ J. A. Kirk McKinnon

J. A. Kirk McKinnon

Chief Executive Officer



Date:  November 20, 2006







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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 September 30, 2006 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I,  Richard E. Schler, Chief Financial 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/ Richard E. Schler

Richard E. Schler

Chief Financial Officer



Date:  November 20, 2006





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