---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended August 31, 2010

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

For the transition period from _____to _____

COMMISSION FILE NUMBER 000-53556

YATERRA VENTURES CORP.(Exact name of registrant as specified in its charter)

|NEVADA                                                               | 73-3249571                                     
|-------------------------------------------------------------------- | -----------------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification
      No.)     
|                                                                     |                                                
|240 Martin Street, #3                                                |                                                
|Blaine, WA                                                           | 98230                                          
|(Address of principal executive offices)                             | (Zip Code)                                     
|                                                                     |                                                
|(360) 510-8998                                                       |                                                
|Issuer's telephone number                                            |                                                
|                                                                     |                                                
|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.

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

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

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]No [   ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Date File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files.
Yes [   ]     No [   ]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K.
[   ]

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

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

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

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was sold, or the average bid and asked price of such common
equity, as of the last business day of the registrants most recently completed
second fiscal quarter: $365,000 as of February 26, 2010, based on a price
of $0.50, being the last price at which the registrant sold shares of its common
stock prior to that date.

Indicate the number of shares outstanding of each of the
registrants classes of common stock, as of the latest practicable date.
As of December 14, 2010, the Registrant had 1,630,000 shares of common
stock outstanding.

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YATERRA VENTURES CORP.

ANNUAL REPORT ON FORM 10-KFOR THE YEAR ENDED
AUGUST 31, 2010

TABLE OF CONTENTS

|           |           |                                                                                                                    | PAGE
|---------- | --------- | ------------------------------------------------------------------------------------------------------------------ | ----
|           |           |                                                                                                                    |     
|PART I     | 3        
|           |           |                                                                                                                    |     
|           | ITEM 1.   | BUSINESS                                                                                                           | 3   
|           |           |                                                                                                                    |     
|           | ITEM 1A.  | RISK FACTORS                                                                                                       | 5   
|           |           |                                                                                                                    |     
|           | ITEM 2.   | PROPERTIES                                                                                                         | 9   
|           |           |                                                                                                                    |     
|           | ITEM 3.   | LEGAL PROCEEDINGS                                                                                                  | 16  
|           |           |                                                                                                                    |     
|           | ITEM 4.   | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                | 16  
|           |           |                                                                                                                    |     
|PART II    | 17       
|           |           |                                                                                                                    |     
|           | ITEM 5.   | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
      MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES | 17  
|           |           |                                                                                                                    |     
|           | ITEM 7.   | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
      AND RESULTS OF OPERATIONS.                       | 18  
|           |           |                                                                                                                    |     
|           | ITEM 8.   | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.                                                                       | 23  
|           |           |                                                                                                                    |     
|           | ITEM 9.   | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND FINANCIAL DISCLOSURE                         | 24  
|           |           |                                                                                                                    |     
|           | ITEM 9AT. | CONTROLS AND PROCEDURES.                                                                                           | 24  
|           |           |                                                                                                                    |     
|           | ITEM 9B.  | OTHER INFORMATION                                                                                                  | 26  
|           |           |                                                                                                                    |     
|PART III   | 27       
|           |           |                                                                                                                    |     
|           | ITEM 10.  | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.                                                            | 27  
|           |           |                                                                                                                    |     
|           | ITEM 11.  | EXECUTIVE COMPENSATION.                                                                                            | 29  
|           |           |                                                                                                                    |     
|           | ITEM 12.  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
      AND RELATED STOCKHOLDER MATTERS               | 29  
|           |           |                                                                                                                    |     
|           | ITEM 13.  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE.                                   | 31  
|           |           |                                                                                                                    |     
|           | ITEM 14.  | PRINCIPAL ACCOUNTING FEES AND SERVICES.                                                                            | 32  
|           |           |                                                                                                                    |     
|           | ITEM 15.  | EXHIBITS, FINANCIAL STATEMENT SCHEDULES.                                                                           | 33  
|           |           |                                                                                                                    |     
|SIGNATURES | 34       

2

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PART I

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Annual Report constitute
"forward-looking statements. These statements, identified by words such as
plan, "anticipate, "believe, "estimate, "should, "expect" and similar
expressions include our expectations and objectives regarding our future
financial position, operating results and business strategy. These statements
reflect the current views of management with respect to future events and are
subject to risks, uncertainties and other factors that may cause our actual
results, performance or achievements, or industry results, to be materially
different from those described in the forward-looking statements. Such risks and
uncertainties include those set forth under the caption, "Part I -Item 1A. Risk
Factors, and elsewhere in this Annual Report.

Forward looking statements are based on the reasonable
assumptions, estimates, analysis and opinions of management made in light of its
experience and perception of trends, current conditions and expected
developments, as well as other factors that management believes to be relevant
and reasonable at the date the such statement are made.

We intend to discuss in our Quarterly Reports and Annual
Reports any events or circumstances that occurred during the period to which
such documents relate that are reasonably likely to cause actual events or
circumstances to differ materially from those disclosed in this Annual Report.
New factors emerge from time to time, and it is not possible for management to
predict all of such factors and to assess in advance the impact of each such
factor on the Companys business or the extent to which any factor, or
combination of such factors, may cause actual results to differ materially from
those contained in any forwarding looking statement.

We advise you to carefully review the reports and documents we
file from time to time with the United States Securities and Exchange Commission
(the SEC), particularly our periodic reports filed with the SEC pursuant to
the Securities Exchange Act of 1934 (the "Exchange Act").

ITEM
1.            
BUSINESS.

General

We were incorporated on November 20, 2006 pursuant to the laws
of the State of Nevada.

We are an exploration stage company engaged in the acquisition
and exploration of mineral properties. Currently, we hold a 100% interest in two
mineral properties that we call the Blue Jack Property and the Minnie Claim.
The Blue Jack Property is comprised of 10 mineral claims coveringapproximately 206 acres located in Humboldt County, Nevada. The Minnie Claim
covers an area of 20 acres, located in the Leecher Creek Mining Division,
Washington State. We plan to focus our resources on the Blue Jack Property in
order to assess whether it possesses mineral deposits of lead, zinc, copper,
silver, gold or uranium capable of commercial extraction. Due to the potential
of the Blue Jack Property, we have suspended our exploration program on the
Minnie Claim.

In addition to the Blue Jack Property and the Minnie Claim, we
also have an option to acquire a 60% interest (the Option) in a property
referred to as the Frances Property. The Frances Property consists of 206
hectares and is located in the Vancouver Mining District, British Columbia.
Under the terms of an option agreement dated July 14, 2009, as amended on
October 27, 2009 (the First Amendment Agreement), December 10, 2009 (the
Second Amendment Agreement), February 11, 2010 (the Third Amendment
Agreement), June 1, 2010 (the Fourth Amendment Agreement) and September 1,
2010 (the Fifth Amendment Agreement) between the Company and Geoffrey Goodall
(the Optionor), in order to exercise and maintain the Option, we are required
to do the following:

|(a) | pay $500 CDN to the Optionor on execution of the option
      agreement (which amount has been paid);
|--- | -----------------------------------------------------------------------------------------------------

3

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|(b) | pay $500 CDN to the Optionor on execution of the First
      Amendment Agreement (which amount has been paid); 
|--- | ---------------------------------------------------------------------------------------------------------------
|    |                                                                                                                
|(c) | pay $500 CDN to the Optionor on execution of the Second
      Amendment Agreement (which amount has been paid);
|    |                                                                                                                
|(d) | pay $500 CDN to the Optionor on execution of the Third
      Amendment Agreement (which amount has been paid); 
|    |                                                                                                                
|(e) | pay $500 CDN to the Optionor on execution of the Fourth
      Amendment Agreement (which amount has been paid);
|    |                                                                                                                
|(f) | pay $500 CDN to the Optionor on execution of the Fifth
      Amendment Agreement (which amount has been paid); 
|    |                                                                                                                
|(g) | pay an aggregate of $12,500 CDN to the Optionor as
      follows:                                              
|    |                                                                                                                
|    | (i)                                                                                                            
|    | (ii)                                                                                                           
|    |                                                                                                                
|(h) | issue an aggregate of 15,000 shares of our common stock
      to the Optionor as follows:                      
|    |                                                                                                                
|    | (i)                                                                                                            
|    | (ii)                                                                                                           
|    | (iii)                                                                                                          
|    |                                                                                                                
|(i) | incur exploration expenditures of $160,000 CDN on the
      Frances Property as follows:                       
|    |                                                                                                                
|    | (i)                                                                                                            
|    | (ii)                                                                                                           

Our ability to exercise the Option will be subject to our
obtaining additional financing. There is no assurance that we will be able to
exercise the Option in order to acquire a 60% undivided interest in the Frances
Property.

We have not earned any revenues to date. We do not anticipate
earning revenues until such time as we enter into commercial production of our
mineral properties. We are presently in the exploration stage of our business
and we can provide no assurance that we will discover commercially exploitable
levels of mineral resources on our properties, or if such deposits are
discovered, that we will enter into further substantial exploration programs

Compliance with Regulation

There are several governmental regulations that materially
restrict mineral exploration. We may be required to obtain work permits, post
bonds and perform remediation work for any physical disturbance to the land in
order to comply with these laws. If we enter the production phase, the cost of
complying with permit and regulatory environment laws will be greater because
the impact on the project area is greater. Permits and regulations will control
all aspects of the production program if the project continues to that stage.
Examples of regulatory requirements include:

| | (i)   | Water discharge will have to meet drinking water
      standards;                                                                  
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | Dust generation will have to be minimal or otherwise
      re-mediated;                                                            
| | (iii) | Dumping of material on the surface will have to be
      re-contoured and re-vegetated with natural vegetation;                    
| | (iv)  | An assessment of all material to be left on the surface
      will need to be environmentally benign;                              
| | (v)   | Ground water will have to be monitored for any potential
      contaminants;                                                       
| | (vi)  | The socio-economic impact of the project will have to be
      evaluated and if deemed negative, will have to be re-mediated;
  and

4

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| | (vii) | There will have to be an impact report of the work on the
      local fauna and flora including a study of potentially endangered
      species.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------

Competition

We are an exploration stage company. We compete with other
mineral resource exploration and development companies for financing and for the
acquisition of new mineral properties. Many of the mineral resource exploration
and development companies with whom we compete have greater financial and
technical resources than we do. Accordingly, these competitors may be able to
spend greater amounts on acquisitions of mineral properties of merit, on
exploration of their mineral properties and on development of their mineral
properties. In addition, they may be able to afford greater geological expertise
in the targeting and exploration of mineral properties. This competition could
result in competitors having mineral properties of greater quality and interest
to prospective investors who may finance additional exploration and development.
This competition could adversely impact our ability to finance further
exploration and to achieve the financing necessary for us to develop our mineral
properties.

Research and Development Expenditures

We have not incurred any research expenditures since our
incorporation.

Patents and Trademarks

We do not own, either legally or beneficially, any patents or
trademarks.

Employees

We have no employees other than our sole executive officer and
directors. We conduct our business largely through consultants.

ITEM
1A.           RISK
FACTORS.

The following are some of the important factors that could
affect our financial performance or could cause actual results to differ
materially from estimates contained in our forward-looking statements. We may
encounter risks in addition to those described below. Additional risks and
uncertainties not currently known to us, or that we currently deem to be
immaterial, may also impair or adversely affect our business, financial
condition or results of operation.

If we do not obtain additional financing, our business will
fail.

As at August 31, 2010, we had $51 cash on hand. Our ability to
implement Phases 1a, 1b and 1c of our exploration program on the Blue Jack
Property will be subject to our obtaining additional financing. We will also
require additional financing in order to meet our obligations under the option
agreement to acquire a 60% undivided interest in the Frances Property. Our
ability to obtain additional financing could be subject to a number of factors
outside of our control, including the results from our exploration program, and
any unanticipated problems relating to our mineral exploration activities,
including environmental assessments and additional costs and expenses that may
exceed our current estimates. If we are unable to obtain additional financing in
the amounts and when needed, our business could fail.

Because of the unique difficulties and uncertainties
inherent in mineral exploration ventures, we face a high risk of business
failure.

Investors should be aware of the difficulties normally
encountered by new mineral exploration companies and the high rate of failure of
such enterprises. The likelihood of success must be considered in light of the
problems, expenses, difficulties, complications and delays encountered in
connection with the exploration of the mineral properties that we plan to
undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates. Our mineral properties do not
contain a known body of commercial ore and, therefore, any

5

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program conducted on our mineral properties would be an
exploratory search of ore. There is no certainty that any expenditures made in
the exploration of our mineral properties will result in discoveries of
commercial quantities of ore. Most exploration projects do not result in the
discovery of commercially mineable deposits of ore. Problems such as unusual or
unexpected formations and other conditions are involved in mineral exploration
and often result in unsuccessful exploration efforts. If the results of our
exploration program do not reveal viable commercial mineralization, we may
decide to abandon our claim and acquire new claims for new exploration. The
acquisition of additional claims will be dependent upon our possessing
sufficient capital resources to purchase such claims. If we do not have
sufficient capital resources and are unable to obtain sufficient financing, we
may be forced to abandon our operations.

We have no known mineral reserves and if we cannot find any,
we may have to cease operations.

We are in the initial phases of our exploration program for the
Blue Jack Property. It is unknown whether this property contains viable mineral
reserves. If we do not find a viable mineral reserve, or if we cannot exploit
the mineral reserve, either because we do not have the money to do it or because
it will not be economically feasible to do it, we may have to cease operations
and investors may lose their investment. Mineral exploration is a highly
speculative endeavor. It involves many risks and is often non-productive. Even
if mineral reserves are discovered on our properties our production capabilities
will be subject to further risks and uncertainties including:

| | (i)   | Costs of bringing the property into production including
      exploration work, preparation of production feasibility studies, and
      construction of production facilities, all of which we have not budgeted
      for;
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | Availability and costs of financing;                                                                                                                                                                                         
| | (iii) | Ongoing costs of production; and                                                                                                                                                                                             
| | (iv)  | Environmental compliance regulations and
    restraints.                                                                                                                                                                     

The marketability of any minerals acquired or discovered may be
affected by numerous factors which are beyond our control and which cannot be
accurately predicted, such as market fluctuations, the lack of milling
facilities and processing equipment near the Blue Jack Property, and such other
factors as government regulations, including regulations relating to allowable
production, importing and exporting of minerals, and environmental
protection.

We face significant competition in the mineral exploration
industry.

We compete with other mining and exploration companies
possessing greater financial resources and technical facilities than we do. Due
to our weaker competitive position, we may have greater difficulty in hiring and
retaining qualified personnel to conduct our planned exploration activities,
which could cause delays in our exploration programs. In addition, there is
significant competition for a limited number of mineral properties. Due to our
weaker financial position, we may be unable to acquire rights to new mineral
properties on a continuing basis.

Because of the inherent dangers involved in mineral
exploration, there is a risk that we may incur liability or damages as we
conduct our business.

The search for valuable minerals involves numerous hazards. As
a result, we may become subject to liability for such hazards, including
pollution, cave-ins and other hazards against which we cannot insure or against
which we may elect not to insure. At the present time we have no coverage to
insure against these hazards. The payment of such liabilities may result in our
inability to complete our planned exploration program and/or obtain additional
financing to fund our exploration program.

As we undertake exploration of our mineral properties, we
will be subject to compliance with government regulations that may increase the
anticipated cost of our exploration program.

There are several governmental regulations that materially
restrict mineral exploration. We may be required to obtain work permits, post
bonds and perform remediation work for any physical disturbance to the land in
order to comply with these laws. If we enter the production phase, the cost of
complying with permit and regulatory environment laws will be greater because
the impact on the project area is greater. Permits and

6

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regulations will control all aspects of the production program
if the project continues to that stage. Examples of regulatory requirements
include:

| | (i)   | Water discharge will have to meet drinking water
      standards;                                                                               
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | Dust generation will have to be minimal or otherwise
      re-mediated;                                                                         
| | (iii) | Dumping of material on the surface will have to be
      re-contoured and re-vegetated with natural vegetation;                                 
| | (iv)  | An assessment of all material to be left on the surface
      will need to be environmentally benign;                                           
| | (v)   | Ground water will have to be monitored for any potential
      contaminants;                                                                    
| | (vi)  | The socio-economic impact of the project will have to be
      evaluated and if deemed negative, will have to be re-mediated;
  and             
| | (vii) | There will have to be an impact report of the work on the
      local fauna and flora including a study of potentially endangered
      species.

At this stage of our development, the annual cost of complying
with regulatory requirements in the State of Nevada is expected to be minimal.
There is a risk that new regulations could increase our costs of doing business
and prevent us from carrying out our exploration program. We will also have to
sustain the cost of reclamation and environmental remediation for all
exploration work undertaken. Both reclamation and environmental remediation
refer to putting disturbed ground back as close to its original state as
possible. Other potential pollution or damage must be cleaned-up and renewed
along standard guidelines outlined in the usual permits. Reclamation is the
process of bringing the land back to its natural state after completion of
exploration activities. Environmental remediation refers to the physical
activity of taking steps to remediate, or remedy, any environmental damage
caused. The amount of these costs is not known at this time as we do not know
the extent of the exploration program that will be undertaken beyond completion
of the recommended work program. If remediation costs exceed our cash reserves
we may be unable to complete our exploration program and have to abandon our
operations.

Because our executive officers and directors do not have
formal training specific to the technicalities of mineral exploration, there is
a higher risk that our business will fail.

None of our executive officers and directors has any formal
training as a geologist. With the exception of Mr. Gorrill, our executive
officers and directors have only limited training in the technical aspects of
managing a mineral exploration company. With very limited direct training or
experience in these areas, our management may not be fully aware of the specific
requirements related to working within this industry. Our management's decisions
and choices may not take into account standard engineering or managerial
approaches mineral exploration companies commonly use. Consequently, our
operations, earnings, and ultimate financial success could suffer irreparable
harm due to management's lack of experience in this industry.

If we are unable to hire and retain key personnel, we may
not be able to implement our business plan and our business will fail

Our success will largely depend on our ability to hire highly
qualified personnel with experience in geological exploration. These individuals
may be in high demand and we may not be able to attract the staff we need. In
addition, we may not be able to afford the high salaries and fees demanded by
qualified personnel, or may lose such employees after they are hired. Currently,
we have not hired any key personnel. Our failure to hire key personnel when
needed could have a significant negative effect on our business.

Because the prices of metals fluctuate, if the price of
metals for which we are exploring decreases below a specified level, it may no
longer be profitable to explore for those metals and we will cease operations.

Metal prices are determined by such factors as expectations for
inflation, the strength of the United States dollar, global and regional supply
and demand, and political and economic conditions and production costs in metals
producing regions of the world. The aggregate effect of these factors on metal
prices is impossible for us to predict. In addition, the prices of metals such
as lead, zinc, copper, silver, gold or uranium are sometimes subject to rapid
short-term and/or prolonged changes because of speculative activities. The
current demand for and supply of these metals affect the metal prices, but not
necessarily in the same manner as current supply and demand affect the prices of
other commodities. The supply of these metals

7

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primarily consists of new production from mining. If the prices
of the metals are, for a substantial period, below our foreseeable cost of
production, it may not be economical for us to continue operations and investors
could lose their entire investment.

Because our President, Secretary, Treasurer and Director,
Jarrett F. Bousquet, owns 55.2% of our outstanding common stock, investors may
find that corporate decisions controlled by Mr. Bousquet are inconsistent with
the interests of other stockholders.

Jarrett F. Bousquet, our President, Secretary, Treasurer, and
Director, controls 55.2% of our issued and outstanding shares of common stock.
Accordingly, in accordance with our Articles of Incorporation and Bylaws, Mr.
Bousquet is able to control who is elected to our board of directors and thus
could act, or could have the power to act, as our management. Since Mr. Bousquet
is not simply a passive investor, but is also our principal executive officer,
his interests as an executive officer may, at times, be adverse to those of
passive investors. Where those conflicts exist, our shareholders will be
dependent upon Mr. Bousquet exercising, in a manner fair to all of our
shareholders, his fiduciary duties as an officer or as a member of our board of
directors. Also, due to his stock ownership position, Mr. Bousquet will have:
(i) the ability to control the outcome of most corporate actions requiring
stockholder approval, including amendments to our Articles of Incorporation;
(ii) the ability to control corporate combinations or similar transactions that
might benefit minority stockholders which may be rejected by Mr. Bousquet to
their detriment, and (iii) control over transactions between him and Yaterra.

We will likely conduct further offerings of our equity
securities in the future, in which case our stockholders interest may become
diluted.

Since our inception, we have relied on such sales of our common
stock to fund our operations. We will likely be required to conduct additional
equity offerings in the future to finance our current projects or to finance
subsequent projects that we decide to undertake. If common stock is issued in
return for additional funds, the price per share could be lower than that paid
by our current stockholders. We anticipate continuing to rely on equity sales of
our common stock in order to fund our business operations. If we issue
additional stock, stockholders' percentage interest in us could become diluted.

The quotation price of our common stock may be volatile,
with the result that an investor may not be able to sell any shares acquired at
a price equal to or greater than the price paid by the investor.

Our stock is quoted on the OTC Bulletin Board under the symbol
"YTRV. Companies quoted on the OTC Bulletin Board have traditionally
experienced extreme price and volume fluctuations. In addition, our stock price
may be adversely affected by factors that are unrelated or disproportionate to
our operating performance. Market fluctuations, as well as general economic,
political and market conditions such as recessions, interest rates or
international currency fluctuations may adversely affect the market price of our
common stock. As a result of this potential volatility and potential lack of a
trading market, an investor may not be able to sell any of our common stock that
they acquire that a price equal or greater than the price paid by the investor.

Because our stock is a penny stock, shareholders will be
more limited in their ability to sell their stock.

The SEC has adopted rules that regulate broker-dealer practices
in connection with transactions in penny stocks. Penny stocks are generally
equity securities with a price of less than $5.00, other than securities
registered on certain national securities exchanges or quoted on the Nasdaq
system, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or quotation system.
Because our securities constitute penny stocks within the meaning of the
rules, the rules apply to us and to our securities. The rules may further affect
the ability of owners of shares to sell our securities in any market that might
develop for them. As long as the trading price of our common stock is less than
$5.00 per share, the common stock will be subject to Rule 15g-9 under the
Exchange Act. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock, to deliver a standardized risk disclosure document
prepared by the SEC, that:

8

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|1. | contains a description of the nature and level of risk in
      the market for penny stocks in both public offerings and secondary
      trading;                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                          
|2. | contains a description of the brokers or dealers duties
      to the customer and of the rights and remedies available to the customer
      with respect to a violation to such duties or other requirements of
      securities laws;
|   |                                                                                                                                                                                                                                          
|3. | contains a brief, clear, narrative description of a
      dealer market, including bid and ask prices for penny stocks and the
      significance of the spread between the bid and ask price;                                           
|   |                                                                                                                                                                                                                                          
|4. | contains a toll-free telephone number for inquiries on
      disciplinary actions;                                                                                                                                                       
|   |                                                                                                                                                                                                                                          
|5. | defines significant terms in the disclosure document or
      in the conduct of trading in penny stocks; and                                                                                                                             
|   |                                                                                                                                                                                                                                          
|6. | contains such other information and is in such form,
      including language, type, size and format, as the SEC shall require by
      rule or regulation.                                                                              

The broker-dealer also must provide, prior to effecting any
transaction in a penny stock, the customer with: (a) bid and offer quotations
for the penny stock; (b) the compensation of the broker-dealer and its
salesperson in the transaction; (c) the number of shares to which such bid and
ask prices apply, or other comparable information relating to the depth and
liquidity of the market for such stock; and (d) a monthly account statements
showing the market value of each penny stock held in the customers account. In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchasers written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitably statement. These
disclosure requirements may have the effect of reducing the trading activity in
the secondary market for our stock.

ITEM
2.            
PROPERTIES.

We rent office space located at 240 Martin Street, #3, Blaine,
Washington, 98230. The office space consists of 80 square feet.

We currently do not own any physical property or any real
property. We own a 100% interest in two mineral properties called the Blue Jack
Property and the Minnie Claim. We also have an option to acquire a 60% interest
in the Frances Property.

The Blue Jack Property

Our main mineral property is the Blue Jack Property. We
acquired the Blue Jack Property in September 2008 for $16,000. The Blue Jack
Property is comprised of 10 mineral claims, located in Humboldt County, Nevada.
Each claim covers 20.67 acres for an aggregate 206.66 acres.

Description of Property

The Blue Jack Property is recorded with the Bureau of Land
Management in the State of Nevada under the following name and record numbers:

9

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Name of Mineral Claims
      Nevada NMC Number
      Expiry DatePT 10
    984039
    September 1, 2011PT 11
    984040
    September 1, 2011PT 12
    984041
    September 1, 2011PT 13
    984041
    September 1, 2011PT 14
    984041
    September 1, 2011PT 15
    984041
    September 1, 2011PT 16
    984041
    September 1, 2011PT 17
    984041
    September 1, 2011PT 18
    984041
    September 1, 2011PT 19
    984041
    September 1, 2011


Federal regulations require a yearly maintenance fee to keep
the claims in good standing. In accordance with Federal regulations, the Blue
Jack Property is in good standing to September 1, 2011. A yearly maintenance fee
of $140 per claim is required to be paid to the Bureau of Land Management prior
to the expiry date to keep the claims in good standing for an additional year.
If we fail to pay the required amount of fee of this exploration work, then our
Blue Jack Property will lapse on September 1, 2011 and we will lose all interest
that we have in the Blue Jack Property.

10

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Figure 1Location of the Blue Jack Property



Location and Access

The Blue Jack Property is located in Humboldt County in
northwestern Nevada. The property is located 102 miles northwest of Winnemucca,
Nevada. Winnemucca is located 166 miles northeast of Reno, Nevada.

The property is easily accessible from Winnemucca by paved
highway for 76 miles, then by a gravel road for 24 miles and then by a desert
trail for 3 miles.

11

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Climate and Physiography

Average temperatures in the area range from 18°F in December to
95°F in July. The region is extremely dry, receiving only 7.9 inches of
precipitation annually. An average of 1.1 inches of precipitation falls during
the month of May. July is the driest month with a total average of 0.3 inches of
precipitation.

The Blue Jack Property is located at the northern margin of the
Black Rock Valley Desert along the eastern flanks of the transition between the
Black Rock Range to the south and Pine Forest Range to the north. The valley
floor is located at an elevation of approximately 4200 feet. Elevations on the
property are moderate, ranging from 4600 to 5300 feet, and quickly rise to above
8650 feet in the mountains to the east of the property. The main showing and
historic workings are located in the centre of the property at an elevation of
4875 feet.

The area consists of sagebrush and desert grass covered flats
and hills typical of the Nevada desert. The region is well populated with desert
jack rabbits and antelope.

History

The Blue Jack Property is located within the Varyville mining
district of Humboldt County. This area is centered around Bartlett Peak between
the Black Rock Range to the south and the Pine Forest Range to the north. The
district and subsequent townsite were named after a lode discovery in the
1870s. The Varyville district has been referred to in various publications over
the years as the Columbia, the Leonard Creek and the Bartlett district.

Gold mining in the district was the dominant production with
small amounts of copper, lead and silver reported. In 1953, Tungsten ore was
produced on the Lincoln Greenhorn claims, which is approximately a half mile
south of Bartlett peak.

Other properties throughout the district have extensive
workings, but no recorded production of ore.

Records indicate that geologists conducted a sampling of a
trench located on the Blue Jack Property in order to determine whether uranium
mineralization existed on the property. Previous reports also indicated that the
Resource Investigation Division of the US Atomic Energy Commission (AEC)
located and investigated radioactive localities in the 1950s. AEC geologists
compiled detailed data on select uranium deposits, one of which was a showing on
the Blue Jack Property.

Regional Geology

The region in which the Blue Jack Property is found consists
mainly of Tertiary volcanic rocks. The region also contains some metamorphosed
fine clastic sedimentary formations mainly from the Triassic and Jurassic
Periods. Sediments in the region are also overlain by basalts, tuffs and
gravels. Older rocks have been intruded by several different bodies of
granodiorites, quartz-monzonites and diorites from the Cretaceous and Tertiary
Periods.

In the Pine Forest Range, several intrusive stocks are exposed,
which indicates that the deposits in the region have a deep-seated source. The
host rock for most of the deposits in the region is a metasedimentary and
metavolcanic complex in fault contact with the core plutonic complex underlying
the range. The deposits are virtually all structurally controlled. Faulting
provided a conduit for the hydrothermal fluids to migrate, resulting in
mineralization along the trend.

Property Geology

The Blue Jack Property is defined by diorites and granodiorites
in fault contact with highly foliated and fractured shaley silicified limestones
and metasediments. A strong shear zone defines the faulted contact, which
strikes at 320 degrees and dips steeply to the northeast. The ground to the
south of the property is overlain by Quaternary alluvium and boulders of
basaltic and andesitic composition. Based on regional geological mapping, these
are likely from the Triassic Period as well.

12

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On the Blue Jack Property, there is mineralization exposed in a
historic trench, being approximately 248 feet long by 33 feet wide, located
along a strike with the fault contact. The fault is marked by intensely
fractured limestones and metasediments in the foot wall and fractured
granodiorites in the hanging wall to the west. Fault gouge is significantly
abundant in many areas along the trench.

Faulting appears to be the controlling factor in
mineralization. Copper mineralization appears to be consistent throughout the
exposed fractured rocks. Jasper veining and chalcedony are present in the
northern exposures of the trench, indicating a possibility that gold
mineralization may exist on the property.

Exploration Program

Our exploration program for the Blue Jack Property is expected
to include the following:

Phase
      Recommended Exploration Program
      Estimated Cost
      StatusPhase Ia
    Detailed geological mapping and radiometric
      surveys.
    $15,150
    To be implemented in Spring 2011, subject to
      obtaining additional financing.Phase Ib
    Grid set up and soil sampling along grid.
    $28,250
    Planned for Fall 2011.Phase Ic
    Magnetometer survey and IP Survey (can be
      conducted concurrently with Phase Ib).
    $42,600
    Planned for Fall 2011.Phase II
    Conducting trenching along the fault zones.
    $40,500
    To be determined based on the Results of Phase
      1a, 1b and 1c.Phase III
    Reverse circular drill testing of the property.
    $206,000
    To be determined based on the Results of Phase
      1a, 1b and 1c.Total Estimated Cost
    $332,500


Our ability to implement Phase Ia of our exploration program is
subject to our obtaining financing. In late 2009, we engaged a consulting
geologist to prepare an updated geological report on the Blue Jack Property in
order to identify additional mineralized targets on the Blue Jack Property. Our
plan is to use the updated geological report to assist us in carrying out Phase
1a of our exploration program on the Blue Jack Property.

13

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The Minnie Claim

We acquired a 100% interest in the Minnie Claim in March 28,
2007 for $6,000 in cash. We have suspended our exploration program on the Minnie
Claim in order to focus our resources on the Blue Jack Property.

Description of Property

The Minnie Claim is recorded with the Bureau of Land Management
in the State of Washington under number 3115896. The Minnie Claim is in good
standing until September 1, 2011. In order to maintain the Minnie Claim in good
standing we will need to pay $140 to the Bureau of Land Management on September
1, 2011.

Figure 2Location of the Minnie Claim



Location and Access

The Minnie Mining Claim is located between the towns of Twisp
and Carlton in Okanogan County, Washington. The center of the property is
approximately 2.8 miles northeast of Carlton, within what is referred to as
Leecher Canyon.

14

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The property is accessible by a paved highway within 2.7 miles
of the claim. A well maintained gravel road provides access to the Minnie Claim.

History of Exploration

Mining history in the Cascades dates back to 1853 when placer
gold was discovered in the Yakima Valley. This led to a brief gold rush in the
area, and gold occurrences were reported throughout the Cascades. Placer gold
was discovered in Okanogan River in 1860, which possibly led to the discovery of
gold at nearby Gold Ridge and Leecher Canyon.

The area covered by the Minnie Claim has a recorded history of
work dating back to 1949, when it was owned by Franklin Blocksom. Historical
records indicate the property contains gold, silver, and zinc in a leached and
honeycombed quartz vein located in metamorphic rocks. The vein is up to 3 feet
wide, and was developed and explored by several open cuts including a 160 foot
adit with a 55 foot winze, a 25 foot drift and a 30 foot stope.

Geology

Regional Geology

The Minnie Claim is located within the North Cascade Range, and
consists of an active volcanic arc superimposed upon a Tertiary-age bedrock.
Recent uplift has created high topographic relief. The North Cascades are
composed of faulted and folded Mesozoic and Paleozoic crystalline and
metamorphic rocks and tertiary intrusive, volcanic and sedimentary rocks.

Regionally, the center of gold mining is found in the Republic
Graben, located in the Republic District of Washington. As of 1989, records
indicate that the district produced over 2.5 million ounces of gold and 14
million ounces of silver, mainly in epithermal systems related to the final
stages of Eocene calc-alkaline volcanism. In the Okanogan County, gold
mineralization occurs in a skarn on Buckhorn property which also contains
bismuth and cobalt mineralization. Porphyry copper-molybdenum deposits have been
drilled at Oroville and Keller. The Mount Tolman deposit at Keller is the third
or fourth largest molybdenum reserve in the United States.

Property Geology

The Minnie Claim is underlain by Pre-Tertiary metamorphic
rocks. Mineralization of the claim consists of gold, silver, and zinc minerals
within epithermal quartz veins up to a meter in width.

Records indicate the leached and honeycomb quartz veins contain
pyrite, chalcopyrite, sheelite and marcasite. The open structure of the quartz
veins are entirely filled with sulfide mineralization.

Three rock samples were collected earlier in the year,
indicating a potential for economic mineralization may exist on the property
with elevated gold, silver, copper and zinc values.

Current State of Exploration Activities

We have suspended our exploration program on the Minnie Claim
in order to focus our resources on the Blue Jack Property.

Prior to our suspension of the exploration program on the
Minnie Claim, our consulting geologist had commenced Phase I of our exploration
program. He collected nine rock samples from the Minnie Claim. The samples
consisted of outcrop grabs across strike as well as float samples of mineralized
veins near historical workings. These samples were sent to an independent
laboratory for testing. In January 2009, we received the fire assay results on
the rock samples and they indicated the occurrence of gold mineralization on the
Minnie Claim. The fire assay results on the rock samples are summarized as
follows:

15

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Sample No.
      Au Results (oz/t)
      Ag Results (oz/t)
      Cu Results (%)
      Zn Results (%)ML001
    n/a (13 ppb)
    n/a (<0.5 ppm)
    0.08 (792 ppm)
    0.38 (3810 ppm)ML002
    n/a (10 ppb)
    n/a (<0.5 ppm)
    0.01 (134 ppm)
    0.40 (3950 ppm)ML003
    0.112 (3850 ppb)
    1.823 (62.5 ppm)
    0.02 (173 ppm)
    0.04 (441 ppm)ML004
    0.037 (1265 ppb)
    3.208 (110 ppm)
    0.28 (2800 ppm)
    0.44 (4350 ppm)ML005
    0.057 (1965 ppb)
    0.645 (22.1 ppm)
    0.06 (605 ppm)
    0.05 (512 ppm)ML006
    0.098 (3360 ppb)
    15.779 (541 ppm)
    0.65 (6480 ppm)
    3.70ML007
    0.063 (2170 ppb)
    9.188 (315 ppm)
    0.65 (6480 ppm)
    0.77 (7720 ppm)ML008
    0.010 (359 ppb)
    0.505 (17.3 ppm)
    0.11 (1080 ppm)
    0.07 (716 ppm)ML009
    0.028 (972 ppb)
    1.350 (46.3 ppm)
    0.15 (1450 ppm)
    0.03 (347 ppm)


Note: Conversions to ounces per ton (oz/ton) on the tables
above employ a factor of 34285.7 ppb equaling 1 troy ounce per short ton and
34.2857 ppm equaling 1 troy ounce per short ton.

The Frances Property

On July 14, 2009, we entered into an option agreement as
amended, with Geoffrey Goodall (the Optionor) to acquire a 60% undivided
interest (the Option) in a property referred to as the Frances Property. The
Frances Property consists of 206 hectares and is located in the Vancouver Mining
District, British Columbia. In Spring 2011, we plan to retain a consulting
geologist to conduct a review of the Frances Property. Once our consulting
geologist has provided us with their findings, we will determine whether to
proceed with an exploration program on this property.

ITEM
3.             LEGAL
PROCEEDINGS.

We are not a party to any other legal proceedings and, to our
knowledge, no other legal proceedings are pending, threatened or
contemplated.

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

None.

16

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PART II

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

MARKET INFORMATION

The principal market for our common stock is the OTC Bulletin
Board. Our shares commenced quotation on the OTC Bulletin Board on May 19, 2009
under the symbol YTRV. The following is the high and low bid information for
our common stock during each fiscal quarter of our last two fiscal years.

QUARTER
    HIGH ($)
    LOW ($)1stQuarter 2009
    n/a
    n/a2ndQuarter 2009
    n/a
    n/a3rdQuarter 2009
    n/a
    n/a4thQuarter 2009
    n/a
    n/a1stQuarter 2010
    1.00
    1.002ndQuarter 2010
    n/a
    n/a3rdQuarter 2010
    n/a
    n/a4thQuarter 2010
    1.00
    0.99


REGISTERED HOLDERS OF OUR COMMON STOCK

As of December 14, 2010, there were 9 registered holders of our
common stock. We believe that a number of stockholders hold stock on deposit
with their brokers or investment bankers registered in the name of stock
depositories.

DIVIDENDS

We have not declared any dividends on our common stock since
our inception. There are no dividend restrictions that limit our ability to pay
dividends on our common stock in our Articles of Incorporation or Bylaws.
Chapter 78 of the Nevada Revised Statutes (the NRS), does provide certain
limitations on our ability to declare dividends. Section 78.288 of Chapter 78 of
the NRS prohibits us from declaring dividends where, after giving effect to the
distribution of the dividend:

|(a) | we would not be able to pay our debts as they become due
      in the usual course of business; or                                                                                                                                                                                                                                                                                                                                                        
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(b) | except as may be allowed by our Articles of
      Incorporation, our total assets would be less than the sum of our total
      liabilities plus the amount that would be needed, if we were to be
      dissolved at the time of the distribution, to satisfy the preferential
      rights upon dissolution of stockholders who may have preferential rights
      and whose preferential rights are superior to those receiving the
      distribution.

We have neither declared nor paid any cash dividends on our
capital stock and do not anticipate paying cash dividends in the foreseeable
future. Our current policy is to retain any earnings in order to finance the
expansion of our operations. Our board of directors will determine future
declaration and payment of dividends, if any, in light of the then-current
conditions they deem relevant and in accordance with the NRS.

RECENT SALES OF UNREGISTERED SECURITIES

None.

17

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ITEM 7.
    MANAGEMENT'S DISCUSSION AND ANALYSIS
      OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS.


PLAN OF OPERATION

During the next twelve months and subject to our ability to
obtain additional financing, we intend to conduct mineral exploration activities
on the Blue Jack Property in order to assess whether it possesses mineral
reserves capable of commercial extraction. We have decided to suspend our
operations on the Minnie Claim in order to focus our resources on the Blue Jack
Property.

Our exploration program on the Blue Jack Property is designed
to explore for commercially viable deposits of lead, zinc, copper, silver, gold
or uranium mineralization. We have not, nor has any predecessor, identified any
commercially exploitable reserves of these minerals on our mineral
properties.

Blue Jack Property

Our plan is to conduct Phase Ia of our exploration program on
the Blue Jack Property in Spring 2010. However, we will require additional
financing in order to implement Phase Ia of our exploration program on the Blue
Jack Property. If we are able to raise additional financing, of which there is
no assurance, our plan for the Blue Jack Property is as follows.

Phase
      Recommended Exploration Program
      Estimated Cost
      StatusPhase Ia
    Detailed geological mapping and radiometric
      surveys.
    $15,150
    To be implemented in Spring 2011, subject to
      obtaining additional financing.Phase Ib
    Grid set up and soil sampling along grid.
    $28,250
    Planned for Fall 2011.Phase Ic
    Magnetometer survey and IP Survey (can be
      conducted concurrently with Phase Ib).
    $42,600
    Planned for Fall 2011.


Our ability to implement Phase Ia of our exploration program is
subject to our obtaining financing. In late 2009, we engaged a consulting
geologist to prepare an updated geological report on the Blue Jack Property in
order to identify additional mineralized targets on the Blue Jack Property. Our
plan is to use the updated geological report to assist us in carrying out Phase
1a of our exploration program on the Blue Jack Property.

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

Category
      Planned Expenditures Over The
      Next 12 Months (US$)Legal and Accounting Fees
    $30,000Office Expenses
    6,000Consulting Fees
    48,000Mineral Property Exploration Expenses
    86,000Mineral Property Option Payments
    12,500TOTAL
    $182,500


To date, we have not earned any revenues and we do not
anticipate earning revenues in the near future. As at August 31, 2010, we had
$51 cash on hand. As such, we do not have sufficient financial resources to meet
the anticipated costs of completing our exploration program for the Blue Jack
Property and the option payments for the Frances Property. Accordingly, we will
need to obtain additional financing in order to complete our plan of operation
and meet our current obligations as they come due. We currently do not have any
arrangements for financing and we may not be able to obtain financing. Obtaining
additional financing would be subject to a number of factors outside of our
control, including the results from our exploration program, and any
unanticipated problems relating to our mineral exploration activities, such as
environmental assessments and additional costs and expenses that may exceed our
current estimates. These factors may

18

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make the timing, amount, terms or conditions of additional
financing unavailable to us in which case our business will fail.

RESULTS OF OPERATIONS

Summary of Year End Results

|         |   | Year Ended
      August 31, |   |   | Percentage |  
|-------- | - | --------------------------- | - | - | ---------- | -
|         |   | 2010                        |   |   | 2009       |  
|Revenue  | $ | --                          |   | $ | --         |  
|Expenses |   | (150,984                    | ) |   | (187,754   | )
|Net Loss | $ | (150,984                    | ) | $ | (187,754   | )

Revenues

We have not earned any revenues to date. We do not anticipate
earning revenues until such time as we enter into commercial production of our
mineral properties. We are presently in the exploration stage of our business
and we can provide no assurance that we will discover commercially exploitable
levels of mineral resources on our properties, or if such deposits are
discovered, that we will enter into further substantial exploration
programs.

Expenses

The major components of our expenses for the year ended August
31, 2010 and 2009 are outlined in the table below:

|                          |   | Year Ended      |  |   | Year Ended      |  |  | Percentage Increase | 
|------------------------- | - | --------------- |  | - | --------------- |  |  | ------------------- | 
|                          |   | August 31, 2010 |  |   | August 31, 2009 |  |  | / (Decrease)        | 
|Accounting and Audit      | $ | 37,757          |  | $ | 40,591          |  |  | (7.0)%              | 
|Bank Charges and Interest |   | 13,481          |  |   | 3,392           |  |  | 297.4%              | 
|Consulting Fees           |   | 600             |  |   | 600             |  |  | 0.0%                | 
|Depreciation              |   | 395             |  |   | 395             |  |  | 0.0%                | 
|Management Fees           |   | 48,000          |  |   | 48,000          |  |  | 0.0%                | 
|Mineral Property          |   | 7,300           |  |   | 19,501          |  |  | (62.6)%             | 
|Exploration Costs         |   |                 |  |   |                 |  |  |                     | 
|Office and Administrative |   | 17,842          |  |   | 15,300          |  |  | 16.6%               | 
|Professional Fees         |   | 19,655          |  |   | 47,820          |  |  | (58.9)%             | 
|Transfer Agent and Filing |   | 4,242           |  |   | 9,398           |  |  | (54.9)%             | 
|Fees                      |   |                 |  |   |                 |  |  |                     | 
|Travel and Promotion      |   | 1,712           |  |   | 2,757           |  |  | (37.9)%             | 
|Total Expenses            | $ | 150,984         |  | $ | 187,754         |  |  | (19.6)%             | 

Our operating expenses decreased from $187,754, during the year
ended August 31, 2009, to $150,984, during the year ended August 31, 2010. The
decrease was primarily due to decreases in accounting and audit expenses,
professional fees, mineral property exploration costs, transfer agent and filing
fees and travel and promotion expenses. This was partially offset by increases
in bank charges and interest and office and administrative expenses.

Audit and accounting expenses and professional expenses
primarily relate to expenses incurred in connection with meeting our ongoing
reporting requirements under the Exchange Act.

Management fees consists of fees incurred to our executive
directors and officers.

19

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The mineral property costs for the year ended August 31, 2010
relate to expenses incurred with maintaining the Blue Jack Property, the Minnie
Claim and the Frances Property in good standing.

If we are able to obtain sufficient financing to proceed with
our plan of operation, of which there is no assurance, we expect that our
expenses will increase significantly as we engage in mining and exploration
activities.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

|                                              |   | Year Ended August 31 |  
|--------------------------------------------- | - | -------------------- | -
|                                              |   | 2010                 |  
|Net Cash used in Operating Activities         | $ | (85,188              | )
|Net Cash used in Investing Activities         |   | (1,919               | )
|Net Cash from Financing Activities            |   | 85,217               |  
|Net Increase (Decrease) in Cash During Period | $ | (1,890               | )

|Working Capital         |   |                          |   |   |                          |   |  |                       | 
|----------------------- | - | ------------------------ | - | - | ------------------------ | - |  | --------------------- | 
|                        |   |                          |   |   |                          |   |  | Percentage            | 
|                        |   | At
      August 31, 2010 |   |   | At
      August 31, 2009 |   |  | Increase / (Decrease) | 
|Current Assets          | $ | 51                       |   | $ | 1,941                    |   |  | (97.4)%               | 
|Current Liabilities     |   | 308,330                  |   |   | 157,712                  |   |  | 95.5%                 | 
|Working Capital Deficit | $ | (308,279                 | ) | $ | (155,771                 | ) |  | 97.9%                 | 

As of August 31, 2010, we had $51 cash on hand and a working
capital deficit of $308,279. The increase in our working capital deficit is
primarily a result of: (i) an increase in accounts payable due to a lack of
capital to meet our ongoing expenditures; and (ii) the fact that we received
$85,217 in short term loans from arms length parties. The loans bear interest at 10% to 12%, are unsecured and due on demand. We have incurred a cumulative net
loss of $474,819 for the period from the date of our inception on November 20,
2006 to August 31, 2010 and have not attained profitable operations to date.

Since our inception, we have used our common stock to raise
money for our operations and to fund our property acquisitions. We have not
obtained profitable operations and are dependent upon obtaining additional
financing to pursue our plan of operation.

Future Financings

We currently do not have sufficient financial resources to
implement Phase Ia of our exploration program on the Blue Jack Property.
Therefore, we will need to obtain additional financing in order to implement our
exploration program on the Blue Jack Property.

We anticipate relying on equity sales of our common stock or
loans in order to continue to fund our business operations. Issuance of
additional securities will result in dilution to shareholders. There is no
assurance that we will achieve any additional sales of our equity securities or
arrange for debt or other financing to fund our planned business activities.
Currently, we do not have any arrangements for additional financing.

Our plan of operation calls for us to spend significantly more
than our current capital resources or the amount of financing that we have been
able to obtain to date. As such, there is a substantial doubt that we will be
able to raise significant financing to complete our stated plan of operation.
Any substantial financing that we are able to obtain is expected to be in the
form of equity financing.

20

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OFF-BALANCE SHEET ARRANGEMENTS

We have no significant off-balance sheet arrangements that have
  or are reasonably likely to have a current or future effect on our financial
  condition, changes in financial condition, revenues or expenses, results of
  operations, liquidity, capital expenditures or capital resources that is material
  to stockholders.

CRITICAL ACCOUNTING POLICIES

Our significant accounting policies are disclosed in Note 2 of
our audited financial statements for the year ended August 31, 2010 included in
this Annual Report on Form 10-K. We have identified certain accounting policies,
described below, that are most important to the portrayal of our current
financial condition and results of operations.

Use of Estimates

The preparation of financial statements, in conformity with
generally accepted accounting principles, requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying disclosures. Actual results may differ from the estimates.

Exploration Stage Enterprise

Our financial statements are prepared using the accrual method
of accounting. Until such properties are acquired and developed, we will
continue to prepare our financial statements and related disclosures in
accordance with entities in the exploration stage.

Mineral Property Interests

We are an exploration stage mining company and have not yet
realized any revenue from our operations. We are primarily engaged in the
acquisition, exploration and development of mining properties. Exploration costs
are expensed as incurred regardless of the stage of development or existence of
reserves. Costs of acquisition are capitalized subject to impairment testing.

We regularly perform evaluations of any investment in mineral
properties to assess the recoverability and/or the residual value of our
investments in these assets. All long-lived assets are reviewed for impairment
whenever events or circumstances change which indicate the carrying amount of an
asset may not be recoverable.

Our management periodically reviews the carrying value of our
investments in mineral leases and claims with internal and external mining
related professionals. A decision to abandon, reduce or expand a specific
project is based upon many factors including general and specific assessments of
mineral deposits, anticipated future mineral prices, anticipated future costs of
exploring, developing and operating a production mine, the expiration term and
ongoing expenses of maintaining mineral properties and the general likelihood
that we will continue exploration on such project. We do not set a
pre-determined holding period for properties with unproven deposits; however,
properties which have not demonstrated suitable metal concentrations at the
conclusion of each phase of an exploration program are re-evaluated to determine
if future exploration is warranted, whether there has been any impairment in
value and that their carrying values are appropriate.

If an area of interest is abandoned or it is determined that
its carrying value cannot be supported by future production or sale, the related
costs are charged against operations in the year of abandonment or determination
of value. The amounts recorded as mineral leases and claims represent costs to
date and do not necessarily reflect present or future values.

Our exploration activities and proposed mine development are
subject to various laws and regulations governing the protection of the
environment. These laws are continually changing, generally becoming more
restrictive. We have made, and expect to make in the future, expenditures to
comply with such laws and regulations.

21

---

The accumulated costs of properties that are developed on the
stage of commercial production will be amortized to operations through
unit-of-production depletion.

22

---

ITEM
8.            
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Audited financial statements for the years ended August 31,
2010 and 2009, including:

|1. | Report of Independent Registered Accounting Firm
  (Davidson & Company, Chartered Accountants);                                                         
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                         
|2. | Balance Sheets as of August 31, 2010 and
  2009;                                                                                                        
|   |                                                                                                                                                         
|3. | Statements of Operations for the years ended August 31,
      2010 and 2009 and cumulative from inception on November 20, 2006 to August
      31, 2010;
|   |                                                                                                                                                         
|4. | Statements of Cash Flows for the years ended August 31,
      2010 and 2009 and cumulative from inception on November 20, 2006 to August
      31, 2010;
|   |                                                                                                                                                         
|5. | Statement of Stockholders Deficiency from inception on
      November 20, 2006 to August 31, 2010;and                                                  
|   |                                                                                                                                                         
|6. | Notes to the Financial
Statements.                                                                                                                      

23

---

December 10, 2010







YATERRA VENTURES CORP.(An Exploration Stage Company)

FINANCIAL STATEMENTS

AUGUST 31, 2010 AND
        2009(Stated in U.S. Dollars)

---

|DAVIDSON & COMPANY LLP |                       |  | A Partnership of Incorporated Professionals
|---------------------- | --------------------- |  | -------------------------------------------
|                       | Chartered Accountants | 

REPORT OF INDEPENDENT  REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and  Stockholders of
Yaterra Ventures Corp.

We have audited the accompanying balance sheets of Yaterra  Ventures Corp. as of August 31, 2010 and 2009, and the related statements of operations,  cash flows and stockholders’ deficiency for the years ended August 31, 2010 and  2009 and for the period from November 20, 2006 (date of inception) to August  31, 2010. The Company’s management is responsible for these financial statements.  Our responsibility is to express an opinion on these financial statements based on our  audits.

We  conducted our audits in accordance with the standards of the Public Company  Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable  assurance about whether the financial statements are free of material  misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal  control over financial reporting. Our audit included consideration of internal control over financial reporting as a  basis for designing audit procedures that are appropriate in the circumstances,  but not for the purpose of expressing an opinion on the effectiveness of the  company's internal control over financial  reporting. Accordingly, we express no such opinion. An audit also includes  examining, on a test basis, evidence  supporting the amounts and disclosures in the financial statements, assessing  the accounting principles used and  significant estimates made by management, as well as evaluating the overall  financial statement presentation. We  believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to  above present fairly, in all material respects, the financial position of Yaterra Ventures  Corp. as of August 31, 2010 and 2009, and the results of its operations and its cash flows for the years  ended August 31, 2010 and 2009 and for the period from November 20, 2006 (date  of inception) to August 31, 2010 in conformity with accounting principles generally accepted  in the United States of America.

The accompanying financial statements have been prepared  assuming the Company will continue as a going concern.  As discussed in Note 1 to the financial  statements, the Company has experienced recurring losses from operations since  inception, has a working capital deficit, and has a deficit accumulated during  the exploration stage.  These conditions  raise substantial doubt about the Company’s ability to continue as a going  concern.  Management’s plans regarding  these matters are also discussed in Note 1.   The financial statements do not include any adjustments that might  result from the outcome of this uncertainty.

“DAVIDSON &  COMPANY LLP”

|Vancouver, Canada | Chartered Accountants
|----------------- | ---------------------
|                  |                      
|December 14, 2010 |                      



---

YATERRA VENTURES CORP.(An Exploration Stage Company)

BALANCE SHEETS(Stated in U.S. Dollars)

|                                                                                     |   | AUGUST
      31 |  
|------------------------------------------------------------------------------------ | - | --------------- | -
|                                                                                     |   | 2010            |  
|                                                                                     |   |                 |  
|ASSETS                                                                               |   |                 |  
|                                                                                     |   |                 |  
|Current                                                                              |   |                 |  
|Cash                                                                                 | $ | 51              |  
|                                                                                     |   |                 |  
|Computer Equipment(Note 4)                                                           |   | 98              |  
|Mineral Property Acquisition Costs(Note
      5)                                     |   | 24,362          |  
|                                                                                     |   |                 |  
|Total Assets                                                                         | $ | 24,511          |  
|                                                                                     |   |                 |  
|LIABILITIES                                                                          |   |                 |  
|                                                                                     |   |                 |  
|Current                                                                              |   |                 |  
|Accounts payable and accrued
      liabilities                                       | $ | 116,739         |  
|Amounts payable
      to related parties (Note 8)                                    |   | 30,500          |  
|Promissory notes (Note 6)                                                            |   | 161,091         |  
|Total Current Liabilities                                                            |   | 308,330         |  
|                                                                                     |   |                 |  
|STOCKHOLDERS DEFICIENCY                                                             |   |                 |  
|                                                                                     |   |                 |  
|Capital Stock(Note 7)                                                                |   |                 |  
|Authorized:                                                                          |   |                 |  
|100,000,000
      common voting stock with a par value of $0.001 per share           |   |                 |  
|100,000,000
      preferred stock with a par value of $0.001 per share  none issued |   |                 |  
|                                                                                     |   |                 |  
|Issued:                                                                              |   |                 |  
|1,630,000
      common shares as at August 31, 2010 and 2009                         |   | 1,630           |  
|                                                                                     |   |                 |  
|Additional Paid-In Capital                                                           |   | 189,370         |  
|Deficit Accumulated During The Exploration Stage                                     |   | (474,819        | )
|Total Stockholders Deficiency                                                       |   | (283,819        | )
|                                                                                     |   |                 |  
|Total Liabilities and Stockholders Deficiency                                       | $ | 24,511          |  

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

---

YATERRA VENTURES CORP.(An Exploration Stage Company)

STATEMENTS OF OPERATIONS(Stated in U.S. Dollars)

|                                                    |   |           |   |   |           |   |   | CUMULATIVE  |  
|--------------------------------------------------- | - | --------- | - | - | --------- | - | - | ----------- | -
|                                                    |   |           |   |   |           |   |   | PERIOD FROM |  
|                                                    |   |           |   |   |           |   |   | INCEPTION   |  
|                                                    |   | YEAR      |   |   | YEAR      |   |   | NOVEMBER 20 |  
|                                                    |   | ENDED     |   |   | ENDED     |   |   | 2006 TO     |  
|                                                    |   | AUGUST 31 |   |   | AUGUST 31 |   |   | AUGUST 31   |  
|                                                    |   | 2010      |   |   | 2009      |   |   | 2010        |  
|                                                    |   |           |   |   |           |   |   |             |  
|Expenses                                            |   |           |   |   |           |   |   |             |  
|Accounting and audit                                | $ | 37,757    |   | $ | 40,591    |   | $ | 108,677     |  
|Bank
      charges and interest                     |   | 13,481    |   |   | 3,392     |   |   | 17,425      |  
|Consulting fees                                     |   | 600       |   |   | 600       |   |   | 2,150       |  
|Depreciation                                        |   | 395       |   |   | 395       |   |   | 1,086       |  
|Management fees                                     |   | 48,000    |   |   | 48,000    |   |   | 147,500     |  
|Mineral
      property exploration costs            |   | 7,300     |   |   | 19,501    |   |   | 38,238      |  
|Office and administrative                           |   | 17,842    |   |   | 15,300    |   |   | 43,355      |  
|Professional fees                                   |   | 19,655    |   |   | 47,820    |   |   | 85,658      |  
|Transfer agent and filing
      fees                |   | 4,242     |   |   | 9,398     |   |   | 15,395      |  
|Travel
      and promotion                          |   | 1,712     |   |   | 2,757     |   |   | 15,335      |  
|                                                    |   |           |   |   |           |   |   |             |  
|Net Loss For The Period                             | $ | (150,984  | ) | $ | (187,754  | ) | $ | (474,819    | )
|                                                    |   |           |   |   |           |   |   |             |  
|                                                    |   |           |   |   |           |   |   |             |  
|Basic And
      Diluted Loss Per Share              | $ | (0.09     | ) | $ | (0.12     | ) |   |             |  
|                                                    |   |           |   |   |           |   |   |             |  
|                                                    |   |           |   |   |           |   |   |             |  
|Weighted Average Number Of Common SharesOutstanding |   | 1,630,000 |   |   | 1,605,671 |   |   |             |  

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

---

YATERRA VENTURES CORP.(An Exploration Stage Company)

STATEMENTS OF CASH FLOWS(Stated in U.S. Dollars)

|                                                           |   |           |   |   |           |   |   | CUMULATIVE  |  
|---------------------------------------------------------- | - | --------- | - | - | --------- | - | - | ----------- | -
|                                                           |   |           |   |   |           |   |   | PERIOD FROM |  
|                                                           |   |           |   |   |           |   |   | INCEPTION   |  
|                                                           |   | YEAR      |   |   | YEAR      |   |   | NOVEMBER 20 |  
|                                                           |   | ENDED     |   |   | ENDED     |   |   | 2006 TO     |  
|                                                           |   | AUGUST 31 |   |   | AUGUST 31 |   |   | AUGUST 31   |  
|                                                           |   | 2010      |   |   | 2009      |   |   | 2010        |  
|                                                           |   |           |   |   |           |   |   |             |  
|Cash Provided by (Used In) OperatingActivities             |   |           |   |   |           |   |   |             |  
|Net loss for the period                                    | $ | (150,984  | ) | $ | (187,754  | ) | $ | (474,819    | )
|Depreciation                                               |   | 395       |   |   | 395       |   |   | 1,086       |  
|Interest accrued on promissory notes                       |   | 11,535    |   |   | 2,209     |   |   | 13,744      |  
|                                                           |   |           |   |   |           |   |   |             |  
|Changes
      in non-cash operating working capital items: |   |           |   |   |           |   |   |             |  
|Deposits                                                   |   | -         |   |   | 2,323     |   |   | -           |  
|Accounts payable and accrued liabilities                   |   | 42,406    |   |   | 60,321    |   |   | 116,739     |  
|Amounts due to related parties                             |   | 11,460    |   |   | 17,040    |   |   | 30,500      |  
|                                                           |   | (85,188   | ) |   | (105,466  | ) |   | (312,750    | )
|Cash Used In Investing Activities                          |   |           |   |   |           |   |   |             |  
|Mineral property
      acquisition costs                   |   | (1,919    | ) |   | (16,443   | ) |   | (24,362     | )
|Computer
      equipment                                   |   | -         |   |   | -         |   |   | (1,184      | )
|                                                           |   | (1,919    | ) |   | (16,443   | ) |   | (25,546     | )
|Cash Provided By Financing Activities                      |   |           |   |   |           |   |   |             |  
|Issue of share capital                                     |   | -         |   |   | 60,000    |   |   | 191,000     |  
|Promissory notes                                           |   | 85,217    |   |   | 62,130    |   |   | 147,347     |  
|                                                           |   | 85,217    |   |   | 122,130   |   |   | 338,347     |  
|                                                           |   |           |   |   |           |   |   |             |  
|Increase (Decrease) In Cash                                |   | (1,890    | ) |   | 221       |   |   | 51          |  
|                                                           |   |           |   |   |           |   |   |             |  
|Cash, Beginning Of Year                                    |   | 1,941     |   |   | 1,720     |   |   | -           |  
|                                                           |   |           |   |   |           |   |   |             |  
|Cash, End Of
      Year                                    | $ | 51        |   | $ | 1,941     |   | $ | 51          |  
|                                                           |   |           |   |   |           |   |   |             |  
|Supplemental Disclosure Of Cash FlowInformation            |   |           |   |   |           |   |   |             |  
|Cash paid
      during the year for:                       |   |           |   |   |           |   |   |             |  
|Interest                                                   | $ | -         |   | $ | -         |   | $ | -           |  
|Income taxes                                               | $ | -         |   | $ | -         |   | $ | -           |  

There were no material non-cash financing or investing
  activities during the years presented.

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

---

YATERRA VENTURES CORP.(An Exploration Stage Company)

STATEMENT OF STOCKHOLDERS DEFICIENCY

PERIOD FROM INCEPTION, NOVEMBER 20, 2006, TO
  AUGUST 31, 2010(Stated in U.S. Dollars)

|                                |  |                    |  |   |             |  |   |            |  |   | DEFICIT     |   |   |          |  
|------------------------------- |  | ------------------ |  | - | ----------- |  | - | ---------- |  | - | ----------- | - | - | -------- | -
|                                |  | COMMON
      STOCK |  |   | ACCUMULATED |  |   |            | 
|                                |  |                    |  |   |             |  |   | ADDITIONAL |  |   | DURING THE  |   |   |          |  
|                                |  |                    |  |   |             |  |   | PAID-IN    |  |   | EXPLORATION |   |   |          |  
|                                |  | SHARES             |  |   | AMOUNT      |  |   | CAPITAL    |  |   | STAGE       |   |   | TOTAL    |  
|                                |  |                    |  |   |             |  |   |            |  |   |             |   |   |          |  
|Shares issued for cash at $0.01 |  | 900,000            |  | $ | 900         |  | $ | 8,100      |  | $ | -           |   | $ | 9,000    |  
|Shares issued for cash at $0.20 |  | 610,000            |  |   | 610         |  |   | 121,390    |  |   | -           |   |   | 122,000  |  
|Net loss for the period         |  | -                  |  |   | -           |  |   | -          |  |   | (30,468     | ) |   | (30,468  | )
|Balance, August 31, 2007        |  | 1,510,000          |  |   | 1,510       |  |   | 129,490    |  |   | (30,468     | ) |   | 100,532  |  
|                                |  |                    |  |   |             |  |   |            |  |   |             |   |   |          |  
|Net loss for the year           |  | -                  |  |   | -           |  |   | -          |  |   | (105,613    | ) |   | (105,613 | )
|                                |  |                    |  |   |             |  |   |            |  |   |             |   |   |          |  
|Balance, August 31, 2008        |  | 1,510,000          |  |   | 1,510       |  |   | 129,490    |  |   | (136,081    | ) |   | (5,081   | )
|                                |  |                    |  |   |             |  |   |            |  |   |             |   |   |          |  
|Shares issued for cash at $0.50 |  | 120,000            |  |   | 120         |  |   | 59,880     |  |   | -           |   |   | 60,000   |  
|Net loss for the year           |  | -                  |  |   | -           |  |   | -          |  |   | (187,754    | ) |   | (187,754 | )
|                                |  |                    |  |   |             |  |   |            |  |   |             |   |   |          |  
|Balance, August 31, 2009        |  | 1,630,000          |  |   | 1,630       |  |   | 189,370    |  |   | (323,835    | ) |   | (132,835 | )
|                                |  |                    |  |   |             |  |   |            |  |   |             |   |   |          |  
|Net loss for the year           |  | -                  |  |   | -           |  |   | -          |  |   | (150,984    | ) |   | (150,984 | )
|                                |  |                    |  |   |             |  |   |            |  |   |             |   |   |          |  
|Balance, August 31, 2010        |  | 1,630,000          |  | $ | 1,630       |  | $ | 189,370    |  | $ | (474,819    | ) | $ | (283,819 | )

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

---

YATERRA VENTURES CORP.(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

AUGUST 31, 2010 AND 2009(Stated in U.S. Dollars)

|1. | BASIS OF PRESENTATION AND NATURE OF
      OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Organization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Yaterra Ventures Corp. (the Company) was incorporated
      in the State of Nevada, U.S.A., on November 20, 2006. The Companys
      principal executive offices are in Bellingham, Washington,
      U.S.A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Reverse Stock Split                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | During the year ended August 31, 2008, the Companys
      shareholders approved a decrease in the number of issued and outstanding
      shares on a one for ten (1:10) basis, such that each shareholder will hold
      one share for every ten shares held. Share and per share data (except par
      value) for the periods presented reflect the effects of this reverse stock
      split.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Exploration Stage Activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company has been in the exploration stage since its
      formation and has not yet realized any revenues from its planned
      operations. The Company was formed for the purpose of acquiring
      exploration and development stage natural resource properties. The Company
      has not commenced business operations. The Company is an exploration stage
      company as defined in the Securities and Exchange Commission (S.E.C.)
      Industry Guide No. 7.                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The accompanying financial statements have been prepared
      assuming the Company will continue as a going concern.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | As shown in the accompanying financial statements, the
      Company has incurred a net loss of $(474,819) for the period from November
      20, 2006 (inception) to August 31, 2010, and has no sales. These factors
      raise substantial doubt about the Companys ability to continue as a going
      concern. The future of the Company is dependent upon its ability to obtain
      financing and upon future profitable operations from the development of
      its natural resource properties. Management has plans to seek additional
      capital through a private placement and public offering of its common
      stock. The financial statements do not include any adjustments relating to
      the recoverability and classification of recorded assets, or the amounts
      of and classification of liabilities that might be necessary in the event
      the Company cannot continue in existence.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The financial statements of the Company have been
      prepared in accordance with generally accepted accounting principles in
      the United States. Because a precise determination of many assets and
      liabilities is dependent upon future events, the preparation of financial
      statements for a period necessarily involves the use of
      estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

---

YATERRA VENTURES CORP.(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

AUGUST 31, 2010 AND 2009(Stated in U.S. Dollars)

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                                                        
|-- | ----------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                   
|   | The financial statements have been properly prepared within the framework of the significant accounting policies summarized below:
|   |                                                                                                                                   
|   | a)                                                                                                                                
|   |                                                                                                                                   
|   |                                                                                                                                   
|   |                                                                                                                                   
|   | b)                                                                                                                                
|   |                                                                                                                                   
|   |                                                                                                                                   
|   |                                                                                                                                   
|   | c)                                                                                                                                
|   |                                                                                                                                   
|   |                                                                                                                                   
|   |                                                                                                                                   
|   |                                                                                                                                   
|   |                                                                                                                                   
|   |                                                                                                                                   

---

YATERRA VENTURES CORP.(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

AUGUST 31, 2010 AND 2009(Stated in U.S. Dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | c)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   | d)                                        
|   |                                           
|   |                                           
|   |                                           
|   | e)                                        
|   |                                           
|   |                                           
|   |                                           
|   | f)                                        
|   |                                           
|   |                                           
|   |                                           
|   | g)                                        
|   |                                           
|   |                                           

---

YATERRA VENTURES CORP.(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

AUGUST 31, 2010 AND 2009(Stated in U.S. Dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | h)                                        
|   |                                           
|   |                                           
|   |                                           
|   | i)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   | j)                                        
|   |                                           
|   |                                           
|   |                                           
|   | k)                                        
|   |                                           
|   |                                           

---

YATERRA VENTURES CORP.(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

AUGUST 31, 2010 AND 2009(Stated in U.S. Dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | l)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   | m)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           

---

YATERRA VENTURES CORP.(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

AUGUST 31, 2010 AND 2009(Stated in U.S. Dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | n)                                        
|   |                                           
|   |                                           

| | Level 1: | Observable inputs such as quoted
      prices in active markets;                                                                              
| | -------- | ----------------------------------------------------------------------------------------------------------------------------------------------
| |          |                                                                                                                                               
| | Level 2: | Inputs, other than the quoted
      prices in active markets, that are observable either directly or
      indirectly; and                    
| |          |                                                                                                                                               
| | Level 3: | Unobservable inputs in which
      there is little or no market data, which require the reporting entity to
      develop its own assumptions.

The following table presents
  information about the Companys financial assets and liabilities that have been
  measured at fair value as of August 31, 2010, and indicates the fair value
  hierarchy of the valuation inputs utilized to determine such fair values:

| |                                                          |   |            |  |   | QUOTED    |  |   | SIGNIFICANT |  |   |              | 
| | -------------------------------------------------------- | - | ---------- |  | - | --------- |  | - | ----------- |  | - | ------------ | 
| |                                                          |   | FAIR VALUE |  |   | PRICES    |  |   | OTHER       |  |   |              | 
| |                                                          |   | AT         |  |   | IN ACTIVE |  |   | OBSERVABLE  |  |   | UNOBSERVABLE | 
| |                                                          |   | AUGUST 31  |  |   | MARKETS   |  |   | INPUTS      |  |   | INPUTS       | 
| | DESCRIPTION                                              |   | 2010       |  |   | (LEVEL 1) |  |   | (LEVEL 2)   |  |   | (LEVEL 3)    | 
| |                                                          |   |            |  |   |           |  |   |             |  |   |              | 
| | Assets:                                                  |   |            |  |   |           |  |   |             |  |   |              | 
| | Cash                                                     | $ | 51         |  | $ | 51        |  | $ | -           |  | $ | -            | 
| | Assets measured at fair value 
       at August 31, 2010 | $ | 51         |  | $ | 51        |  | $ | -           |  | $ | -            | 

|3. | RECENT ACCOUNTING PRONOUNCEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | In February 2010, FASB issued Accounting Standards Update
      (ASU) 2010-09 Subsequent Events (Topic 855) Amendments to Certain
      Recognition and Disclosure Requirements. ASU 2010-09 removes the
      requirement for an SEC filer to disclose a date in both issued and revised
      financial statements. Revised financial statements include financial
      statements revised as a result of either correction of an error or
      retrospective application of GAAP. All of the amendments in ASU 2010-09
      are effective upon issuance of the final ASU, except for the use of the
      issued date for conduit debt obligors. That amendment is effective for
      interim or annual periods ending after June 15, 2010. The Company adopted
      ASU 2010-09 in February 2010 and it did not have a material impact on the
      Companys financial statements.

---

YATERRA VENTURES CORP.(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

AUGUST 31, 2010 AND 2009(Stated in U.S. Dollars)

|3. | RECENT ACCOUNTING PRONOUNCEMENTS(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | In January 2010, the FASB issued ASU 2010-06, Fair
      Value Measurements and Disclosures (Topic 820), Improving Disclosures
      about Fair Value Measurements,amending ASC 820. ASU 2010-06 requires
      entities to provide new disclosures and clarify existing disclosures
      relating to fair value measurements. The new disclosures and
      clarifications of existing disclosures are effective for interim and
      annual reporting periods beginning after December 15, 2009, except for the
      disclosures about purchases, sales, issuances, and settlements in Level 3
      fair value measurements, which are effective for fiscal years beginning
      after December 15, 2010 and for interim periods within those fiscal years.
      The Company is currently evaluating the impact of ASU 2010-06, but does
      not expect its adoption to have a material impact on the Companys
      financial position or results of operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | In October 2009, the FASB issued ASU 2009-13, Revenue
      Recognition (Topic 605), Multiple-Deliverable Revenue Arrangementsamending ASC 605. ASU 2009-13 requires entities to allocate revenue in
      an arrangement using estimated selling prices of the delivered goods and
      services based on a selling price hierarchy. ASU 2009-13 eliminates the
      residual method of revenue allocation and requires revenue to be allocated
      using the relative selling price method. ASU 2009-13 is effective
      prospectively for revenue arrangements entered into or materially modified
      in fiscal years beginning on or after June 15, 2010. The Company is
      currently evaluating the impact of ASU 2009-13, but does not expect its
      adoption to have a material impact on the Companys financial position or
      results of operations.                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4. | COMPUTER EQUIPMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| |                    |   |       |  |   | AUGUST 31    |  |   |          |  |   | AUGUST 31 | 
| | ------------------ | - | ----- |  | - | ------------ |  | - | -------- |  | - | --------- | 
| |                    |   |       |  |   | 2010         |  |   |          |  |   | 2009      | 
| |                    |   |       |  |   | ACCUMULATED  |  |   | NET BOOK |  |   | NET BOOK  | 
| |                    |   | COST  |  |   | AMORTIZATION |  |   | VALUE    |  |   | VALUE     | 
| |                    |   |       |  |   |              |  |   |          |  |   |           | 
| | Computer equipment | $ | 1,184 |  | $ | 1,086        |  | $ | 98       |  | $ | 493       | 

|5. | MINERAL PROPERTIES
|-- | ------------------

| |                    |   | AUGUST 31 |  |   |           |  |   | ABANDONED, |  |   | AUGUST 31 | 
| | ------------------ | - | --------- |  | - | --------- |  | - | ---------- |  | - | --------- | 
| |                    |   | 2009      |  |   | ADDITIONS |  |   | IMPAIRED   |  |   | 2010      | 
| | Mineral Property   |   |           |  |   |           |  |   |            |  |   |           | 
| |                    |   |           |  |   |           |  |   |            |  |   |           | 
| | Blue Jack claims   | $ | 16,000    |  | $ | -         |  | $ | -          |  | $ | 16,000    | 
| | Frances claims     |   | 443       |  |   | 1,919     |  |   | -          |  |   | 2,362     | 
| | Minnie Lode claims |   | 6,000     |  |   | -         |  |   | -          |  |   | 6,000     | 
| |                    |   |           |  |   |           |  |   |            |  |   |           | 
| |                    | $ | 22,443    |  | $ | 1,919     |  | $ | -          |  | $ | 24,362    | 

---

YATERRA VENTURES CORP.(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

AUGUST 31, 2010 AND 2009(Stated in U.S. Dollars)

|5. | MINERAL PROPERTIES(Continued)
|-- | -----------------------------

| |                    |   | NOVEMBER 30 |  |   |           |  |   | ABANDONED, |  |   | AUGUST 31 | 
| | ------------------ | - | ----------- |  | - | --------- |  | - | ---------- |  | - | --------- | 
| |                    |   | 2009        |  |   | ADDITIONS |  |   | IMPAIRED   |  |   | 2009      | 
| | Mineral Property   |   |             |  |   |           |  |   |            |  |   |           | 
| |                    |   |             |  |   |           |  |   |            |  |   |           | 
| | Blue Jack claims   | $ | -           |  | $ | 16,000    |  | $ | -          |  | $ | 16,000    | 
| | Frances claims     |   | -           |  |   | 443       |  |   | -          |  |   | 443       | 
| | Minnie Lode claims |   | -           |  |   | 6,000     |  |   | -          |  |   | 6,000     | 
| |                    |   |             |  |   |           |  |   |            |  |   |           | 
| |                    | $ | -           |  | $ | 22,443    |  | $ | -          |  | $ | 22,443    | 

During the period ended August 31,
  2007, the Company entered into a purchase agreement to acquire an undivided 100%
  interest in a mineral claim (known as the Minnie Claim) located in the Leecher
  Creek Mining District, Okanogan County, Washington. The consideration was $6,000
  cash (paid) on execution of the agreement.

During the year ended August 31, 2009,
  the Company entered into a purchase agreement to acquire an undivided interest
  in a series of ten mineral claims (collectively referred to as the Blue Jack
  Claims) located in Humboldt County, Nevada. The consideration was $16,000
  (paid) on execution of the agreement.

On July 14, 2009, the Company entered
  into an assignment agreement to acquire an undivided 60% interest in a mineral
  claim (known as the Frances claim) situated in the Vancouver Mining District,
  British Columbia, Canada. The Company paid $500 CDN on execution of the
  agreement.

The assignment agreement was amended on October 27, 2009 (the “First Amendment Agreement”), December 10, 2009 (the “Second Amendment Agreement”), February 11, 2010 (the “Third Amendment Agreement”), June 1, 2010 (the “Fourth Amendment Agreement”) and  September 1, 2010 (the “Fifth Amendment Agreement”) and consideration for the claim is as follows:

| | 1. | $500 CDN on execution of the First Amendment Agreement
      (paid); 
      $500 CDN on execution of the Second Amendment Agreement
      (paid); 
      $500 CDN on execution of the Third Amendment Agreement (paid); 
      $500 CDN on execution of the Fourth Amendment Agreement
      (paid);
    $500 CDN on execution of the Fifth Amendment Agreement (paid);
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | 2,000 common shares due on or before March 15, 2011                                                                                                                                                                                                                                                                                                                    
| | 3. | incurring $10,000 CDN in exploration expenditures by March 15, 2011;                                                                                                                                                                                                                                                                                                   
| | 4. | an additional $2,500 CDN due on or before April 15, 2011;                                                                                                                                                                                                                                                                                                              
| | 5. | an additional 3,000 common shares due on or before April 15, 2011;                                                                                                                                                                                                                                                                                                     

---

YATERRA VENTURES CORP.(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

AUGUST 31, 2010 AND 2009(Stated in U.S. Dollars)

|5. | MINERAL PROPERTIES(Continued)
|-- | -----------------------------

| | 6. | an additional $10,000 CDN due on or before July 14, 2011;                         
| | -- | ----------------------------------------------------------------------------------
| | 7. | An additional 10,000 common shares due on or before July 14, 2011;                
| | 8. | incurring an additional $150,000 CDN in exploration expenditures by July 14, 2012.

|   | All other terms of the agreement remain
      unchanged.                                                                                                                                                                                                                                                                                                                                                                                    
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|6. | PROMISSORY NOTES                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | During the year ended August 31, 2010, the Company
      entered into various promissory note agreements, whereby it borrowed an
      additional $85,217 (2009 -$62,130) from arms length parties. These notes
      bear interest at 10% to 12% per annum, are unsecured and are repayable on
      demand. As at August 31, 2010, a total of $13,744 (2009  $2,209) has been
      accrued as interest on all of the outstanding notes.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|7. | CAPITAL STOCK                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | During the year ended August 31, 2009, the Company
      completed an offering of 120,000 shares of common stock at a price of
      $0.50 per share for gross proceeds of $60,000.                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | On August 12, 2008, the Company reduced the number of
      issued and outstanding shares of the Companys common stock on a one for
      ten basis (1:10). All references to the number of shares of common stock
      and per share amounts (other than par value) have been adjusted to reflect
      the split for all periods presented.                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Included in issued share capital are 900,000 restricted
      common shares of the Company (2009  900,000).                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|8. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | During the year ended August 31, 2010, the Company paid
      or accrued management fees for services performed in the amount of $42,000
      (2009 - $42,000) to directors and also paid or accrued during the period,
      $6,000 to two members of management (2009 - $6,000).                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | As at August 31, 2010, a total of $30,500 (August 31,
      2009 - $19,040) is owing to a director and two members of management.
      These amounts are unsecured, do not bear interest and are due on
      demand.                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company carried out a number of transactions with
      related parties in the normal course of business. These transactions were
      recorded at their exchange amount, which is the amount of consideration
      established and agreed to by the related
      parties.                                                                                                                                                           

---

YATERRA VENTURES CORP.(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

AUGUST 31, 2010 AND 2009(Stated in U.S. Dollars)

|9.  | COMMITMENTS AND CONTRACTUAL OBLIGATIONS                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                       
|    | The Company has no significant commitments or contractual
      obligations with any parties respecting executive compensation, consulting
      arrangements or other matters. Rental of premises is on a month-to-month
      basis.
|    |                                                                                                                                                                                                                                       
|10. | SEGMENT INFORMATION                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                       
|    | The Company has one reportable operating segment, being
      the acquisition and exploration of mineral properties. Details of
      identifiable assets by geographic segments are as
      follows:                                

| |                 |   | CAPITAL |  |   | PROPERTY  | 
| | --------------- | - | ------- |  | - | --------- | 
| |                 |   | ASSETS  |  |   | INTERESTS | 
| |                 |   |         |  |   |           | 
| | August 31, 2010 |   |         |  |   |           | 
| | USA             | $ | -       |  | $ | 22,000    | 
| | Canada          |   | 98      |  |   | 2,362     | 
| |                 |   |         |  |   |           | 
| |                 | $ | 98      |  | $ | 24,362    | 
| |                 |   |         |  |   |           | 
| | August 31, 2009 |   |         |  |   |           | 
| | USA             | $ | -       |  | $ | 22,000    | 
| | Canada          |   | 493     |  |   | 443       | 
| |                 |   |         |  |   |           | 
| |                 | $ | 493     |  | $ | 22,443    | 

|11. | INCOME TAX
|--- | ----------
|    |           
|    | a)        
|    |           
|    |           

| |                                             |   | 2010     |   |   | 2009     |  
| | ------------------------------------------- | - | -------- | - | - | -------- | -
| |                                             |   |          |   |   |          |  
| | Loss for the period                         | $ | (150,984 | ) | $ | (187,754 | )
| |                                             |   |          |   |   |          |  
| | Computed expected (benefit of) income taxes |   | (51,335  | ) |   | (63,836  | )
| | Non-deductible item                         |   | 2,482    |   |   | 6,630    |  
| | Increase in valuation allowance             |   | 48,853   |   |   | 57,206   |  
| |                                             |   |          |   |   |          |  
| | Income tax provision                        | $ | -        |   | $ | -        |  

---

YATERRA VENTURES CORP.(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

AUGUST 31, 2010 AND 2009(Stated in U.S. Dollars)

|11. | INCOME TAX(Continued)
|--- | ---------------------

| | b) | Significant components of the Companys deferred income
      tax assets are as follows:
| | -- | ----------------------------------------------------------------------------------------

| |                                                     |   | 2010     |   |   | 2009     |  
| | --------------------------------------------------- | - | -------- | - | - | -------- | -
| |                                                     |   |          |   |   |          |  
| | Deferred income tax assets:                         |   |          |   |   |          |  
| | Non-capital loss
      carryforward                 | $ | 148,500  |   | $ | 110,100  |  
| | Mineral
      property and exploration expenditures |   | 12,500   |   |   | 7,600    |  
| |                                                     |   | 161,000  |   |   | 117,700  |  
| | Valuation allowance                                 |   | (161,000 | ) |   | (117,700 | )
| |                                                     |   |          |   |   |          |  
| | Net deferred income tax assets                      | $ | -        |   | $ | -        |  

| | c) | The Company has incurred operating losses of
      approximately $437,000 which, if unutilized, will begin to expire in 2027.
      Subject to certain restrictions, the Company has mineral property and
      exploration expenditures of $60,861 available to reduce future taxable
      income. Future tax benefits, which may arise as a result of these losses,
      have not been recognized in these financial statements, and have been
      offset by a valuation allowance. As at August 31, 2010, the valuation
      allowance has increased by $43,300 from the balance as at August 31,
      2009.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12. | SUBSEQUENT EVENTS
|--- | -----------------

| |    |                                                                                                                                                                                                                                                
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | The Company entered into promissory notes whereby it borrowed a total of $40,618 from arms’ length parties. The notes bear interest at 10% per annum, are unsecured and are repayable on demand                                                
| |    |                                                                                                                                                                                                                                                
| | b) | The Company entered into a letter of intent with Healthcare of Today and Organ Transport Systems Inc. with respect to entering into a proposed business combination. The parties decided not to proceed with the proposed business combination.

---

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

On June 22, 2009, we dismissed Williams & Webster, P.S.
(Williams & Webster) (now known as BehlerMick, P.S.), as our independent
public accountants. Our Board of Directors approved the dismissal of Williams
& Webster. On the same date, we appointed Davidson & Company LLP,
Chartered Accountants, ("Davidson") as our new independent registered public
accounting firm. Our Board of Directors approved the engagement of Davidson.

Williams & Websters reports on our financial statements
for the year ended August 31, 2008 and the period from November 20, 2006 to
August 31, 2007 did not contain an adverse opinion or disclaimer of opinion, nor
were they modified or qualified as to uncertainty, audit scope or accounting
principles with the exception of a statement regarding the uncertainty of our
ability to continue as a going concern.

There have been no disagreements during the fiscal year ended
August 31, 2008 and the period from November 20, 2006 to August 31, 2007 and the
subsequent interim period up to and including the date of dismissal between us
and Williams & Webster on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which, if not
resolved to the satisfaction of Williams & Webster, would have caused them
to make reference to the subject matter of the disagreement in connection with
Williams & Websters report for the financial statements for the past year
and any subsequent interim period up to and including to the date of Williams
& Websters dismissal.

ITEM 9AT.         CONTROLS
  AND PROCEDURES.

Under the supervision and with the participation of our
management, including our Principal Executive Officer and Principal Accounting
Officer, we have evaluated the effectiveness of our disclosure controls and
procedures as required by Exchange Act Rules 13a-15(e) and 15(d)-15(e) as of
August 31, 2010 (the Evaluation Date). Based upon that evaluation, our
Principal Executive Officer and Principal Accounting Officer concluded that our
disclosure controls and procedures were not effective as of the Evaluation Date
as a result of the material weaknesses in internal control over financial
reporting discussed below.

The framework used to evaluate the effectiveness of our
internal controls over financial reporting is based upon guiding principles
advocated by The Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in 1992. This guidance provides a set of twenty basic
principles representing the fundamental concepts associated with, and drawn
directly from, the five components of the framework i.e. control environment,
risk assessment, control activities, information and communication and
monitoring.

Internal controls over financial reporting is defined in the
SEC's rules as those controls designed by the company's principal executive and
financial officers to provide reasonable assurance regarding the reliability of
the company's financial reporting and the preparation of financial statements in
accordance with GAAP.

Notwithstanding the assessment that our internal control over
financial reporting was not effective and that there were material weaknesses as
identified in this report, we believe that our financial statements contained in
our Annual Report on Form 10-K for the year ended August 31, 2010 fairly present
our financial condition, results of operations and cash flows in all material
respects.

Managements Assessment on Internal Control over Financial
Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting, as such term is defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.

Internal controls over financial reporting include those
policies and procedures that:

|1. | Pertain to the maintenance of records that in reasonable
      detail accurately and fairly reflect the transactions and dispositions of
      the assets of the Company;
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

24

---

|2. | Provide reasonable assurance that transactions are
      recorded as necessary to permit preparation of financial statements in
      accordance with GAAP, and that receipts and expenditures of the issuer are
      being made only in accordance with authorizations of management and
      directors of the Company; and
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                               
|3. | Provide reasonable assurance regarding prevention or
      timely detection of unauthorized acquisition, use or disposition of the
      Company's assets that could have a material effect on the financial
      statements.                                                                                                

Management recognizes that there are inherent limitations in
the effectiveness of any system of internal control, and accordingly, even
effective internal control can provide only reasonable assurance with respect to
financial statement preparation and may not prevent or detect material
misstatements. In addition, effective internal control at a point in time may
become ineffective in future periods because of changes in conditions or due to
deterioration in the degree of compliance with our established policies and
procedures.

A material weakness is a significant deficiency, or combination
of significant deficiencies, that results in there being a more than remote
likelihood that a material misstatement of the annual or interim financial
statements will not be prevented or detected.

Under the supervision and with the participation of our
Principal Executive Officer and Principal Accounting Officer, management
conducted an evaluation of the effectiveness of our internal control over
financial reporting, as of the Evaluation Date, based on the framework set forth
in Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on its evaluation under
this framework, management concluded that our internal control over financial
reporting was not effective as of the Evaluation Date and identified the
following material weaknesses:

Insufficient Resources:We have an inadequate number of
personnel with requisite expertise in the key functional areas of finance and
accounting.

Inadequate Segregation of Duties: We have an inadequate
number of personnel to properly implement control procedures.

Insufficient Written Policies & Procedures:We have
insufficient written policies and procedures for accounting and financial
reporting.

Inadequate Financial Statement Closing Process:We have
an inadequate financial statement closing process.

Lack of Outside Directors on the Companys Board of
Directors:We have a lack of outside directors on the Companys Board of
Directors, resulting in ineffective oversight in the establishment and
monitoring of required internal controls and procedures.

Management is committed to improving its internal controls and
will (1) continue to use third party specialists to address shortfalls in
staffing and to assist the Company with accounting and finance responsibilities,
(2) increase the frequency of independent reconciliations of significant
accounts which will mitigate the lack of segregation of duties until there are
sufficient personnel and (3) prepare and implement sufficient written policies
and checklists for financial reporting and closing processes and (4) may
consider appointing outside directors and audit committee members in the
future.

Management, including our Principal Executive Officer and the
Principal Accounting Officer, has discussed the material weakness noted above
with our third party consulting accountant. Due to the nature of this material
weakness, there is a more than remote likelihood that misstatements which could
be material to the annual or interim financial statements could occur that would
not be prevented or detected.

This Annual Report does not include an attestation report of
our registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by our registered
public accounting firm pursuant to the rules of the SEC that permit us to
provide only management's report in this annual report.

25

---

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial
reporting that occurred during the fiscal year ended August 31, 2010 that have
materially affected, or that are reasonably likely to materially affect, our
internal control over financial reporting.

Limitations on the Effectiveness of Controls and
Procedures

Our management, including our Principal Executive Officer and
the Principal Accounting Officer, do not expect that the our controls and
procedures will prevent all potential errors or fraud. A control system, no
matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met.

ITEM
9B.           OTHER
INFORMATION.

On December 10, 2010, we entered into a fifth amendment
agreement dated for reference September 1, 2010 (the "Fifth Amendment
Agreement") with Geoffrey Goodall whereby Mr. Goodall agreed to extend the due
date of certain payments, expenses and share issuances under the Frances Option
Agreement.

26

---

PART III

ITEM
10.           DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Our executive officers and directors and their age and titles
are as follows:

Name of Director
      Age
      PositionJarrett F. Bousquet
    35
    President, Secretary, Treasurer
      and DirectorDavid K. Ryan
    43
    Vice-President, FinanceShane Epp
    38
    Executive Vice-PresidentLindsay E. Gorrill
    48
    Director


Mr. Jarrett F. Bousquetis our President, Secretary,
Treasurer and Director. Mr. Bousquet was appointed as director and officer on
November 20, 2006. Mr. Bousquet is currently employed as a sports agent and
Vice-President of Titan Sports Management Inc and has held the position since
1999. In 1999, Mr. Bousquet received a Bachelor of Science in Kinesiology from
the University of Calgary (Alberta, Canada).

Mr. David K. Ryanis our Vice President, Finance. Mr,
  Ryan was appointed an officer on April 4, 2007. From 1989 to 1995, Mr. Ryan
  was an account executive at Georgia Pacific Securities in Vancouver. From 1995
  to present, Mr. Ryan has worked as an independent investor relations consultant
  and has participated in raising venture capital through private placements.
  Mr. Ryan is a former director or officer of DRC Resources and Universal Domains
  Incorporated. Mr. Ryan completed the Canadian Securities Course in 1988. From
  2005 to October 2009, Mr. Ryan served as an executed officer and director of
  Cignus Ventures Inc., a company quoted on the OTC Bulletin Board and engaged
  in the acquisition and exploration of mineral properties at the time Mr. Ryan
  was a director and officer.

Mr. Shane Eppis our Executive Vice President. Mr. Epp
was appointed an officer on April 4, 2007. Mr. Epp, (B. Comm.) has been employed
by CB Richard Ellis Limited, one of the largest full service real estate
brokerage companies in the world, since January 2007. Currently an Associate
Vice President of the CBRE Retail Properties Group, he spent the 5 years
previous with another large international real estate brokerage firm, Colliers
International. Mr. Epp graduated from the University of British Columbia in 1993
with a Bachelor of Commerce, majoring in Urban Land Economics, with a minor in
Finance. In addition to his work in the real estate industry, Mr. Epp has been
an active investor in public markets for close to 20 years, and has participated
in raising venture capital for both public and private companies through limited
partnerships, private placements and debt financing.

Mr. Lindsay E. Gorrillis a member of our Board of
Directors. Mr. Gorrill was appointed as a member of the Board of Directors on
August 28, 2008. Mr. Gorrill has twenty years of senior management experience
and has a diverse background with publicly listed companies. Mr. Gorrill serves
as President of Star Gold Corp. a mining exploration company, quoted on the OTC
Bulletin Board. Since July 9, 2007, Mr. Gorrill has acted as Chief Executive
Officer and as a direcctor of Jayhawk Energy, Inc., a company quoted on the OTC
Bulletin Board. From August 2007 to July 2008, Mr. Gorrill served as Chief
Financial Officer of Quinto Mining Corp., a company listed on the TSX Venture
Exchange. Mr. Gorrill has also held management positions Berkley Resources Inc.,
a company listed on the TSX Venture Exchange. Until April 2005, Mr. Gorrill
acted as President and Chief Executive Officer of WGI Heavy Minerals Inc., a
company listed on the Toronto Stock Exchange and engaged in the exploration,
production and marketing of industrial metals. Mr. Gorrill is a Chartered
Accountant and graduated from Simon Fraser University with a BBA in Finance and
Marketing.

None of our executive officers or directors has any formal
training as geologists. With the exception of Mr. Gorrill, our executive
officers and directors have very limited training on the technical and
managerial aspects of managing a mineral exploration company. None of their
prior managerial and consulting positions have been in the mineral exploration
industry. Accordingly, we will have to rely on the technical services of others
to advise us on the managerial aspects specifically associated with a mineral
exploration company. We do not have any employees who have professional training
or experience in the mining industry. We rely on independent geological
consultants to make recommendations to us on work programs on our property,
to

27

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hire appropriately skilled persons on a contract basis to
complete work programs and to supervise, review, and report on such programs to
us.

Term of Office

Members of our board of directors are appointed to hold office
until the next annual meeting of our stockholders or until his or her successor
is elected and qualified, or until they resign or are removed in accordance with
the provisions of the Nevada Revised Statutes. Our officers are appointed by our
board of directors and hold office until removed by the board.

Significant Employees

We have no significant employees other than our executive
officers and directors.

We conduct our business through agreements with consultants and
arms-length third parties. Currently, we have no formal consulting agreements in
place. We have a verbal arrangement with the consulting geologist currently
conducting the exploratory work on the Blue Jack Property. We pay to this
geologist the usual and customary rates received by geologists performing
similar consulting services.

Committees of the Board of Directors

Audit Committee

We have a separately designated audit committee and it consists
of the following directors and officers: Jarrett Bousquet, Lindsay Gorrill and
David K. Ryan. Mr. Bousquet is not an independent director as he currently acts
as President, Secretary and Treasurer. Mr. Gorrill is an independent member of
our Board of Directors.

Our board of directors has adopted an Audit Committee Charter
which provides appropriate guidance to Audit Committee members as to their
duties

Audit Committee Financial Expert

Our Board of Directors has determined that we do not presently
have a director who meets the definition of an audit committee financial
expert. We believe that the cost related to appointing a financial expert to
our Board of Directors at this time is prohibitive.

Code of Ethics

We adopted a Code of Ethics applicable to our officers and
directors which is a code of ethics as defined by applicable rules of the SEC.
Our code of ethics is attached as an exhibit to our Annual Report for the year
ended August 31, 2009 filed with the SEC on December 15, 2009. If we make any
amendments to our Code of Ethics other than technical, administrative, or other
non-substantive amendments, or grant any waivers, including implicit waivers,
from a provision of our Code of Ethics to our President, Treasurer, or certain
other finance executives, we will disclose the nature of the amendment or
waiver, its effective date and to whom it applies in a current report on Form
8-K filed with the SEC.

Compliance with Section 16(a) of the Securities Exchange Act

Section 16(a) of the Exchange Act requires our executive
officers and directors, and persons who own more than 10% of a registered class
of our securities (Reporting Persons), to file reports of ownership and
changes in ownership with the SEC. Reporting Persons are required by SEC
regulations to furnish us with copies of all forms they file pursuant to Section
16(a). Based solely on our review of such reports received by the Company, we
believe that, during the year ended August 31, 2010, all Reporting Persons
complied with all Section 16(a) filing requirements applicable to them.

28

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ITEM
11.           EXECUTIVE
COMPENSATION.

Summary Compensation Table

The following table sets forth the total compensation paid to
or earned by our named executive officers, as that term is defined in Item
402(m)(2) of Regulation S-K as of our fiscal years ended August 31, 2010 and
2009.

Name &
      Principal Position
      Year
      Salary($)
      **Bonus**($)
      Stock
      **Awards** ($)
      Option
      Awards ($)
      Non- Equity
      Incentive Plan Compen- sation
      ($)
      Non- qualified
      Deferred Compen- sation
      Earnings ($)
      All Other
      Compen- sation ($)
      Total
      ($)Jarrett F. Bousquet(1)President, Secretary, Treasurer and Director
    2010 2009
    30,000 30,000
    - -
    - -
    - -
    - -
    - -
    - -
    30,000 30,000David K. Ryan(2)Vice-President, Finance
    2010 2009
    3,000 3,000
    - -
    - -
    - -
    - -
    - -
    - -
    3,000 3,000Shane Epp(3)Executive Vice-
      President
    2010 2009
    3,000 3,000
    - -
    - -
    - -
    - -
    - -
    - -
    3,000 3,000


Notes:

|(1) | Under the terms of a verbal agreement, Mr. Bousquet is
      paid $2,500 per month for his services.
|--- | ----------------------------------------------------------------------------------------------------
|(2) | We have accrued $250 per month for Mr. Ryan acting as
      Vice-President, Finance.                
|(3) | We have accrued $250 per month for Mr. Epp acting as
      Executive Vice-President.                

Outstanding Equity Awards At Fiscal Year End

As at August 31, 2010, we did not have any outstanding equity
awards.

Director Compensation

The following table sets forth the compensation paid to our
directors for the fiscal year ended August 31, 2010.

Name
    Fees Earned or Paid
      in Cash ($)
    Stock
      Awards($)
    Option
      **Awards**($)
    Non-Equity Incentive
      Plan Compensation ($)
    Nonqualified Deferred
      Compensation Earnings ($)
    All Other
      Compensation ($)
    Total ($)Lindsay E. Gorrill(1)
    12,000
    -
    -
    -
    -
    -
    12,000


Note:

|(1) | Under the terms of a verbal agreement, Mr. Gorrill is
      paid $1,000 per month for his services.
|--- | ---------------------------------------------------------------------------------------------------

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


EQUITY COMPENSATION PLANS

We have no equity compensation plans (including individual
compensation arrangements) under which our equity securities are authorized for
issuance.

29

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The following table sets forth certain information concerning
the number of shares of our common stock owned beneficially as of December 14,
2010 by: (i) each person (including any group) known to us to own more than five
percent (5%) of any class of our voting securities of our shares of common
stock, (ii) our executive officers and directors, and (iii) our named executive
officers as defined in Item 402(m)(2) of Regulation S-K. Unless otherwise
indicated, the stockholders listed possess sole voting and investment power with
respect to the shares shown.

Title of Class
      Name and Address of Beneficial
        Owner
      Amount and Nature of Beneficial
        Ownership
      Percentage of Common Stock(1)Security Ownership of ManagementCommon Stock
      Jarrett F. Bousquet 
        President, Secretary, Treasurer 
        and Director
      900,000 
        (Direct)
      55.2%Common Stock
      David K. Ryan 
        Vice-President, Finance
      Nil
      NilCommon Stock
      Shane Epp 
        Executive Vice-President
      Nil
      NilCommon Stock
      Lindsay E. Gorrill 
        Director
      Nil
      NilCommon Stock
      All Officers and Directors as a Group 
        (4 persons)
      900,000 
        (Direct)
      55.2%Security Ownership of Certain Beneficial OwnersCommon Stock
      Jarrett F. Bousquet 
        President, Secretary, Treasurer and Director 
        554 Chararral Drive SE 
        Calgary, AB T2X 3V9
      900,000 
        (Direct)
      55.2%


Note:

|(1) | A beneficial owner of a security includes any person who,
      directly or indirectly, through any contract, arrangement, understanding,
      relationship, or otherwise has or shares: (i) voting power, which includes
      the power to vote, or to direct the voting of shares; and (ii) investment
      power, which includes the power to dispose or direct the disposition of
      shares. Certain shares may be deemed to be beneficially owned by more than
      one person (if, for example, persons share the power to vote or the power
      to dispose of the shares). In addition, shares are deemed to be
      beneficially owned by a person if the person has the right to acquire the
      shares (for example, upon exercise of an option) within 60 days of the
      date as of which the information is provided. In computing the percentage
      ownership of any person, the amount of shares outstanding is deemed to
      include the amount of shares beneficially owned by such person (and only
      such person) by reason of these acquisition rights. As a result, the
      percentage of outstanding shares of any person as shown in this table does
      not necessarily reflect the persons actual ownership or voting power with
      respect to the number of shares of common stock actually outstanding on
      December 14, 2010. As of December 14, 2010, there were 1,630,000 shares of
      our common stock issued and outstanding.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Changes in Control

We are not aware of any arrangement which may result in a
change in control in the future.

30

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


RELATED TRANSACTIONS

None of the following parties has, during our last two fiscal
years, had any material interest, direct or indirect, in any transaction with us
or in any presently proposed transaction that has or will materially affect
us:

| | (i)   | Any of our directors or officers;                                                                                                                                           
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | Any person proposed as a nominee for election as a
      director;                                                                                                          
| | (iii) | Any person who beneficially owns, directly or indirectly,
      shares carrying more than 10% of the voting rights attached to our
      outstanding shares of common stock;
| | (iv)  | Any of our promoters; and                                                                                                                                                   
| | (v)   | Any relative or spouse of any of the foregoing persons
      who has the same house as such person.                                                                         

DIRECTOR INDEPENDENCE

Our common stock is quoted on the OTC Bulletin Board
inter-dealer quotation system, which does not have director independence
requirements. Under NASDAQ Rule 5605(a)(2), a director is not considered to be
independent if he or she is also an executive officer or employee of the
corporation. Lindsay Gorrill is our sole independent director.

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

CANADIAN NATIONAL INSTRUMENT 58-101

We are a reporting issuer in the Province of British Columbia.
National Instrument 58-101 of the Canadian Securities Administrators requires
our company to disclose annually on our Annual Report certain information
concerning corporate governance.

Board of Directors

Our Board of Directors is currently comprised of two members,
Mr. Bousquet and Mr. Gorrill. Mr Bousquet is not independent, as that term is
defined in Nation Instrument 52-110, due to the fact that he is our President,
Secretary and Treasurer.

Directorships

Other than Mr. Gorrill, none of our directors and officers are
current directors or officers of any other reporting issuer (or the equivalent
in a foreign jurisdiction). Mr. Gorrill currently acts as a director or officer
for the following reporting issuers (or equivalent):

Reporting Issuer
    Position
    Reporting JurisdictionJayhawk Energy Inc.
    Chief Executive Officer and Director
    United StatesStar Gold Corp.
    President
    United States


Orientation and Continuing Education

Mr. Bousquet and Mr. Gorrill provided an overview of the our
business activities, systems and business plan to all new directors. New
director candidates have free access to any of our records, employees or senior
management in order to conduct their own due diligence and will be briefed on
the strategic plans, short, medium and long term corporate objectives, business
risks and mitigation strategies, corporate governance

31

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guidelines and existing policies of the Company. Directors are
encouraged to update their skills and knowledge by taking courses and attending
professional seminars.

Ethical Business Conduct

Our directors believe good corporate governance is an integral
component to the success of the Company and to meet responsibilities to
shareholders. Generally, our directors have found that the fiduciary duties
placed on individual directors by the Companys governing corporate legislation
and the common law and the restrictions placed by applicable corporate
legislation on an individual directors participation in decisions of the Board
of Directors in which the director has an interest have been sufficient to
ensure that the Board of Directors operates independently of management and in
the best interests of the Company.

Our directors are also responsible for applying governance
principles and practices, and tracking development in corporate governance, and
adapting best practices to suit the needs of the Company. The directors may
also be directors and officers of other companies, and conflicts of interest may
arise between their duties. Such conflicts must be disclosed in accordance with,
and are subject to such other procedures and remedies as applicable under the
Nevada Revised Statutes.

Nomination of Directors

Our directors have not formed a nominating committee or similar
committee to assist them with the nomination of directors for the Company. Our
directors consider the size of the Board of Directors to be too small to warrant
creation of such a committee; and our directors have contacts they can draw upon
to identify new members of the Board of Directors as needed from time to time.

Our directors will continually assess the size, structure and
composition of the Board of Directors, taking into consideration its current
strengths, skills and experience, proposed retirements and the requirements and
strategic direction of the Company. As required, directors will recommend
suitable candidates for consideration as members of the Board of Directors.

Assessments

Our directors have not implemented a process for assessing his
effectiveness. As a result of our small size and stage of development, our
directors consider a formal assessment process to be inappropriate at this time.
Our directors plan to continue evaluating their own effectiveness on an ad hoc
basis.

ITEM
14.           PRINCIPAL
ACCOUNTING FEES AND SERVICES.

The aggregate fees billed for the two most recently completed
fiscal years for professional services rendered by the principal accountant for
the audit of our annual financial statements and review of the financial
statements included in our Quarterly Reports on Form 10-Q and services that are
normally provided by the accountant in connection with statutory and regulatory
filings or engagements for those fiscal periods were as follows:

|                   |   | Year Ended August 31, 2010 |  |   | Year Ended August 31, 2009 | 
|------------------ | - | -------------------------- |  | - | -------------------------- | 
|                   |   |                            |  |   |                            | 
|Audit Fees         | $ | 14,397                     |  | $ | 30,098                     | 
|Audit-Related Fees |   | 11,460                     |  |   | NIL                        | 
|Tax Fees           |   | NIL                        |  |   | NIL                        | 
|All Other Fees     |   | NIL                        |  |   | NIL                        | 
|Total              | $ | 25,857                     |  | $ | 30,098                     | 

32

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ITEM 15.         
 EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

The following exhibits are either provided with this Annual
Report or are incorporated herein by reference:

|Exhibit |                                                                                                                                         
|------- | ----------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibits                                                                                                                 
|        |                                                                                                                                         
|3.1     | Articles of Incorporation.(1)                                                                                                           
|        |                                                                                                                                         
|3.2     | Bylaws, as amended.(1)                                                                                                                  
|        |                                                                                                                                         
|10.1    | Purchase Agreement
        (Minnie Claim) dated March 28, 2007 between Yaterra and Multi Metal Mining
        Corp.(1)                  
|        |                                                                                                                                         
|10.2    | Purchase Agreement
        (Blue Jack Property) dated August 29, 2008 between Yaterra and Howard
        V. Metzler. (1)                
|        |                                                                                                                                         
|10.3    | Option Agreement
        (Frances Property) dated July 14, 2009 between Yaterra and Geoffrey Goodall.(2)                                
|        |                                                                                                                                         
|10.4    | Amendment Agreement
        (Frances Property) dated October 27, 2009 between Yaterra and Geoffrey
        Goodall.(3)                  
|        |                                                                                                                                         
|10.5    | Second Amendment
        Agreement (Frances Property) dated December 10, 2009 between Yaterra and
        Geoffrey Goodall.(3)          
|        |                                                                                                                                         
|10.6    | Third Amendment
        Agreement (Frances Property) dated February 11, 2010 between Yaterra and
        Geoffrey Goodall.(4)           
|        |                                                                                                                                         
|10.7    | Fourth Amendment
        Agreement (Frances Property) dated June 1, 2010 between Yaterra and Geoffrey
        Goodall. (5)              
|        |                                                                                                                                         
|10.8    | Fifth
        Amendment Agreement (Frances Property) dated for reference September 1,
        2010 between Yaterra and Geoffrey Goodall.
|        |                                                                                                                                         
|14.1    | Code of Ethics.(3)                                                                                                                      
|        |                                                                                                                                         
|31.1    | Certification
        of Principal Executive Officer as adopted pursuant to Section 302 of the
        Sarbanes-Oxley Act of 2002.      
|        |                                                                                                                                         
|31.2    | Certification
        of Principal Accounting Officer as adopted pursuant to Section 302 of
        the Sarbanes-Oxley Act of 2002.     
|        |                                                                                                                                         
|32.1    | Certification
        of Principal Executive Officer as adopted pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002.      
|        |                                                                                                                                         
|32.2    | Certification
        of Principal Accounting Officer as adopted pursuant to Section 906 of
        the Sarbanes-Oxley Act of 2002.     
|        |                                                                                                                                         
|99.1    | Audit Committee
        Charter.(3)                                                                                                     
|        |                                                                                                                                         
|99.2    | Letter of Intent
        between the Company and Healthcare of Today, Inc. (6)                                                          

Notes:

|(1) | Previously filed as an exhibit to our Registration
      Statement on Form S-1 originally filed with the SEC on December 8, 2008,
      as amended January 8, 2009 and declared effective January 13,
  2009.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Previously filed as an exhibit to our Quarterly Report on
      Form 10-Q filed with the SEC on July 16, 2009.                                                                                               
|(3) | Previously filed as an exhibit to our Annual Report on
      Form 10-K filed with the SEC on December 15, 2009.                                                                                              
|(4) | Previously filed as an exhibit to our Quarterly Report on
      Form 10-Q filed with the SEC on April 19, 2010.                                                                                              
|(5) | Previously filed as an exhibit to our Quarterly Report on
      Form 10-Q filed with the SEC on July 15, 2010.                                                                                               
|(6) | Previously filed as an exhibit to our Current Report on
      Form 8-K filed with the SEC on November 10, 2010.                                                                                              

33

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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.

|      |                   |  |     | YATERRA VENTURES CORP.                             
|----- | ----------------- |  | --- | ---------------------------------------------------
|      |                   |  |     |                                                    
|      |                   |  |     |                                                    
|      |                   |  |     |                                                    
|Date: | December 14, 2010 |  | By: | /s/ Jarrett F. Bousquet                            
|      |                   |  |     | JARRETT F. BOUSQUET                                
|      |                   |  |     | President, Secretary, Treasurer,
      and Director
|      |                   |  |     | (Principal Executive Officer)                      

|Date: | December 14, 2010 |  | By: | /s/ David K. Ryan             
|----- | ----------------- |  | --- | ------------------------------
|      |                   |  |     | DAVID K. RYAN                 
|      |                   |  |     | Vice-President, Finance       
|      |                   |  |     | (Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

|Date: | December 14, 2010 |  | By: | /s/ Jarrett F. Bousquet                            
|----- | ----------------- |  | --- | ---------------------------------------------------
|      |                   |  |     | JARRETT F. BOUSQUET                                
|      |                   |  |     | President, Secretary, Treasurer,
      and Director
|      |                   |  |     | (Principal Executive Officer)                      

|Date: | December 14, 2010 |  | By: | /s/ David K. Ryan             
|----- | ----------------- |  | --- | ------------------------------
|      |                   |  |     | DAVID K. RYAN                 
|      |                   |  |     | Vice-President, Finance       
|      |                   |  |     | (Principal Accounting Officer)

|Date: | December 14, 2010 |  | By: | /s/ Lindsay E. Gorrill
|----- | ----------------- |  | --- | ----------------------
|      |                   |  |     | LINDSAY E. GORRILL    
|      |                   |  |     | Director              

---