UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

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

For the quarterly period ended January31,
2009

Commission file number000-51068

YUKON GOLD CORPORATION,
INC.(Exact name of registrant as specified in its charter)

|Delaware                 | 52-2243048                          
|------------------------ | ------------------------------------
|(State of incorporation) | (I.R.S. Employer Identification No.)

55 York Street, Suite 401, Toronto, Ontario M5J 1R7(Address of principal executive offices including zip code)

(416) 865-9790(Registrant's telephone number
including area code)

> 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
Q    No
£

> 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. (Check one):

|Large accelerated filer
    £ | Accelerated filer
    £ | Non-accelerated filer
    £                   | Smaller reporting company Q
|----------------------------- | ----------------------- | --------------------------------------------- | ---------------------------
|                              |                         | (Do not check if a smaller reporting company) |                            

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).

Yes £   
No Q

The number of shares of registrant's common stock outstanding as
of January 31, 2009 was 33,650,629.

---

PART I  FINANCIAL INFORMATION

YUKON GOLD CORPORATION,
INC. (AN EXPLORATION STAGE MINING COMPANY) INTERIM CONSOLIDATED
FINANCIAL STATEMENTS JANUARY 31, 2009
(Amounts expressed in US Dollars) 
(Unaudited-Prepared by Management)

TABLE OF CONTENTS

|                                                                                                                                                                                              | Page No.    
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------
|                                                                                                                                                                                              |             
|Interim Consolidated Balance Sheets as at January 31, 2009
      (unaudited) and April 30, 2008 (audited)                                                                                     | F-2 to F3   
|                                                                                                                                                                                              |             
|Interim Consolidated Statements of Operations for the nine
      months and three months ended January 31, 2009 and January 31, 2008 and
      the period from Inception to January 31, 2009. | F-4         
|                                                                                                                                                                                              |             
|Interim Consolidated Statements of Cash Flows for the nine
      months ended January 31, 2009 and January 31, 2008 and the period from
      Inception to January 31, 2009.                  | F-5         
|                                                                                                                                                                                              |             
|Interim Consolidated Statements of Changes in Stockholders
      Equity (Deficit) from Inception to January 31, 2009                                                                         | F-6 to F9   
|                                                                                                                                                                                              |             
|Condensed Notes to Interim Consolidated Financial
      Statements                                                                                                                            | F-10 to F-25

---

YUKON GOLD CORPORATION, INC.
(An Exploration Stage Mining Company)
InterimConsolidated Balance Sheets As at January 31, 2009 and April 30, 2008 (Amounts expressed in US Dollars) (Unaudited-Prepared by
Management)

|                                                                      |  | January 31, |  |  | April 30, | 
|--------------------------------------------------------------------- |  | ----------- |  |  | --------- | 
|                                                                      |  | 2009        |  |  | 2008      | 
|                                                                      |  | $           |  |  | $         | 
|ASSETS                                                                |  | (unaudited) |  |  | (audited) | 
|CURRENT ASSETS                                                        |  |             |  |  |           | 
|                                                                      |  |             |  |  |           | 
|Cash and cash equivalents                                             |  | 113,819     |  |  | 1,255,620 | 
|Prepaid expenses and other
      (note 5)                             |  | 63,735      |  |  | 282,347   | 
|Short-term investment in available-for-sale
      securities (note 8) |  | -           |  |  | 31,500    | 
|                                                                      |  |             |  |  |           | 
|                                                                      |  | 177,554     |  |  | 1,569,467 | 
|                                                                      |  |             |  |  |           | 
|RESTRICTED CASH (Note 4)                                              |  | -           |  |  | 817,092   | 
|PROPERTY, PLANT AND
      EQUIPMENT                                   |  | 57,641      |  |  | 140,041   | 
|                                                                      |  | 235,195     |  |  | 2,526,600 | 

See condensed notes to the interim consolidated
financial statements.

APPROVED ON BEHALF OF THE BOARD /s/
Robert Van TassellRobert Van Tassell, Director

/s/J. L. Guerra,
Jr. J. L.
Guerra, Jr., President, CEO and Director

F-2

---

YUKON GOLD CORPORATION, INC.
(An Exploration Stage Mining Company)
InterimConsolidated Balance Sheets As at
January 31, 2009 and April 30, 2008 (Amounts
expressed in US Dollars) (Unaudited-Prepared by Management)

|                                                        |  | January 31, |   |  | April 30,   |  
|------------------------------------------------------- |  | ----------- | - |  | ----------- | -
|                                                        |  | 2009        |   |  | 2008        |  
|                                                        |  | $           |   |  | $           |  
|LIABILITIES                                             |  | (unaudited) |   |  | (audited)   |  
|                                                        |  |             |   |  |             |  
|CURRENT
      LIABILITIES                               |  |             |   |  |             |  
|                                                        |  |             |   |  |             |  
|Accounts
      payable and accrued liabilities          |  | 345,092     |   |  | 221,222     |  
|Obligation
      under Capital Leases                   |  | 2,450       |   |  | 3,100       |  
|Total
      Current Liabilities                         |  | 347,542     |   |  | 224,322     |  
|                                                        |  |             |   |  |             |  
|Long -Term
      Portion of:                            |  |             |   |  |             |  
|Obligations under Capital Lease                         |  | 3,228       |   |  | 7,209       |  
|                                                        |  |             |   |  |             |  
|TOTAL
      LIABILITIES                                 |  | 350,770     |   |  | 231,531     |  
|GOING
      CONCERN (Note 2)                            |  |             |   |  |             |  
|COMMITMENTS AND CONTINGENCIES (Note 9)                  |  |             |   |  |             |  
|                                                        |  |             |   |  |             |  
|SHAREHOLDERS EQUITY (DEFICIT)                          |  |             |   |  |             |  
|                                                        |  |             |   |  |             |  
|CAPITAL
      STOCK (Note 6)                            |  | 3,365       |   |  | 2,899       |  
|                                                        |  |             |   |  |             |  
|ADDITIONAL
      PAID-IN CAPITAL                        |  | 14,675,095  |   |  | 13,984,853  |  
|                                                        |  |             |   |  |             |  
|ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)           |  | (34,342     | ) |  | 196,474     |  
|                                                        |  |             |   |  |             |  
|DEFICIT,
      ACCUMULATED DURING THE EXPLORATION STAGE |  | (14,759,693 | ) |  | (11,889,157 | )
|                                                        |  | (115,575    | ) |  | 2,295,069   |  
|                                                        |  | 235,195     |   |  | 2,526,600   |  

See condensed notes to the interim consolidated
financial statements.

F-3

---

YUKON GOLD CORPORATION, INC. (An
Exploration Stage Mining Company) Interim Consolidated
Statements of Operations For the nine months and
three months ended January 31, 2009 and January 31, 2008 and the period from
Inception to January 31, 2009 (Amounts expressed
in US Dollars) (Unaudited-Prepared by Management)

|                                                 |  |             |            |  | For the     |            |  | For the     |            |  | For the      |            |  | For the      |  
|------------------------------------------------ |  | ----------- | ---------- |  | ----------- | ---------- |  | ----------- | ---------- |  | ------------ | ---------- |  | ------------ | -
|                                                 |  |             |            |  | nine months |            |  | nine months |            |  | three months |            |  | three months |  
|                                                 |  | Cumulative  |            |  | ended       |            |  | ended       |            |  | ended        |            |  | ended        |  
|                                                 |  | since       |            |  | January 31, |            |  | January 31, |            |  | January 31,  |            |  | January 31,  |  
|                                                 |  | inception   |            |  | 2009        |            |  | 2008        |            |  | 2009         |            |  | 2008         |  
|                                                 |  | $           |            |  | $           |            |  | $           |            |  | $            |            |  | $            |  
|                                                 |  |             |            |  |             |            |  |             |            |  |              |            |  |              |  
|                                                 |  |             |            |  |             |            |  |             |            |  |              |            |  |              |  
|OPERATING EXPENSES                               |  |             |            |  |             |            |  |             |            |  |              |            |  |              |  
|                                                 |  |             |            |  |             |            |  |             |            |  |              |            |  |              |  
|General and
      administration                 |  | 6,647,530   |            |  | 839,688     |            |  | 1,409,684   |            |  | 150,071      |            |  | 942,711      |  
|Project expenses                                 |  | 9,082,146   |            |  | 1,931,660   |            |  | 3,263,022   |            |  | 208,022      |            |  | 265,211      |  
|Exploration Tax Credit                           |  | (605,716    | )          |  | -           |            |  | -           |            |  | -            |            |  | -            |  
|Amortization and Impairment                      |  | 138,999     |            |  | 99,188      |            |  | 13,098      |            |  | 78,069       |            |  | 6,009        |  
|Loss on sale/disposal of
      capital assets    |  | 5,904       |            |  | -           |            |  | -           |            |  | -            |            |  | -            |  
|                                                 |  |             |            |  |             |            |  |             |            |  |              |            |  |              |  
|TOTAL OPERATING
      EXPENSES                   |  | 15,268,863  |            |  | 2,870,536   |            |  | 4,685,804   |            |  | 436,162      |            |  | 1,213,931    |  
|LOSS BEFORE INCOME TAXES                         |  | (15,268,863 | )          |  | (2,870,536  | )          |  | (4,685,804  | )          |  | (436,162     | )          |  | (1,213,931   | )
|                                                 |  |             |            |  |             |            |  |             |            |  |              |            |  |              |  
|Income taxes recovery                            |  | 509,170     |            |  | -           |            |  | 112,424     |            |  | -            |            |  | 112,424      |  
|NET LOSS                                         |  | (14,759,693 | )          |  | (2,870,536  | )          |  | (4,573,380  | )          |  | (436,162     | )          |  | (1,101,507   | )
|Loss per share  basic and diluted               |  |             |            |  | (0.09       | )          |  | (0.18       | )          |  | (0.01        | )          |  | (0.04        | )
|                                                 |  |             |            |  |             |            |  |             |            |  |              |            |  |              |  
|Weighted average common shares
      outstanding |  |             | 32,278,431 |  |             | 25,472,297 |  |             | 33,650,629 |  |              | 28,418,050 | 

See condensed notes to the interim consolidated
financial statements

F-4

---

YUKON GOLD CORPORATION, INC.
(An Exploration Stage Mining Company)
Interim Consolidated Statements of Cash Flows
For the nine month period ended January 31, 2009 and January
31, 2008 and the period from Inception to January 31, 2009
(Amounts expressed in US Dollars) (Unaudited-Prepared by
Management)

|                                                                               |  |             |   |  | For the nine |   |  | For the nine |  
|------------------------------------------------------------------------------ |  | ----------- | - |  | ------------ | - |  | ------------ | -
|                                                                               |  |             |   |  | month period |   |  | month period |  
|                                                                               |  | Cumulative  |   |  | ended        |   |  | ended        |  
|                                                                               |  | Since       |   |  | January 31,  |   |  | January 31,  |  
|                                                                               |  | Inception   |   |  | 2009         |   |  | 2008         |  
|                                                                               |  | $           |   |  | $            |   |  | $            |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                           |  |             |   |  |              |   |  |              |  
|Net loss for the year                                                          |  | (14,759,693 | ) |  | (2,870,536   | ) |  | (4,573,380   | )
|Items not requiring an outlay of cash:                                         |  |             |   |  |              |   |  |              |  
|Amortization and
      Impairment                                              |  | 138,999     |   |  | 99,188       |   |  | 13,098       |  
|Loss on sale/disposal of property, plant and
      equipment                   |  | 5,904       |   |  | -            |   |  | -            |  
|Registration rights penalty
      expense                                      |  | 188,125     |   |  | -            |   |  | -            |  
|Shares issued for property payment                                             |  | 584,226     |   |  | 58,887       |   |  | 57,252       |  
|Common shares issued for
      settlement of severance liability to ex-officer |  | 113,130     |   |  | -            |   |  | -            |  
|Stock-based compensation                                                       |  | 1,289,246   |   |  | 28,399       |   |  | 469,057      |  
|Compensation expense on issue
      of warrants                                |  | 140,892     |   |  | 17,813       |   |  | 88,228       |  
|Issue of shares for professional
      services                                |  | 860,023     |   |  | 7,500        |   |  | -            |  
|Issue of units against settlement of
      debts                               |  | 20,077      |   |  | -            |   |  | -            |  
|Decrease (Increase) in prepaid
      expenses and other                        |  | (62,578     | ) |  | 178,552      |   |  | 186,225      |  
|Increase (Decrease) in accounts payable and
      accrued liabilities          |  | 344,602     |   |  | 153,359      |   |  | (76,129      | )
|(Increase) Decrease in
      restricted cash                                   |  | -           |   |  | 817,092      |   |  | 2,266,602    |  
|Decrease in restricted deposit                                                 |  | -           |   |  | -            |   |  | 17,889       |  
|                                                                               |  |             |   |  |              |   |  |              |  
|NET CASH USED IN OPERATING
      ACTIVITIES                                    |  | (11,137,047 | ) |  | (1,509,746   | ) |  | (1,551,158   | )
|                                                                               |  |             |   |  |              |   |  |              |  
|CASH FLOWS FROM INVESTING
      ACTIVITIES                                     |  |             |   |  |              |   |  |              |  
|Purchase of property, plant and
      equipment                                |  | (222,309    | ) |  | (38,978      | ) |  | (41,520      | )
|(Investment) sale in available
      for sale securities                       |  | -           |   |  | 31,500       |   |  | (250,000     | )
|Sale of available for sale securities                                          |  | (36,530     | ) |  | (36,530      | ) |  | 210,000      |  
|Investment in restricted
      short-term deposits                             |  | -           |   |  | -            |   |  | (836,820     | )
|                                                                               |  |             |   |  |              |   |  |              |  
|NET CASH USED IN INVESTING
      ACTIVITIES                                    |  | (258,839    | ) |  | (44,008      | ) |  | (918,340     | )
|                                                                               |  |             |   |  |              |   |  |              |  
|CASH FLOWS FROM FINANCING
      ACTIVITIES                                     |  |             |   |  |              |   |  |              |  
|Repayments from a shareholder                                                  |  | 1,180       |   |  | -            |   |  | -            |  
|Proceeds from Demand
      promissory notes                                    |  | 200,000     |   |  | -            |   |  | -            |  
|Proceeds from Convertible promissory notes
      converted                     |  | 200,500     |   |  | -            |   |  | -            |  
|Proceeds from the exercise of
      stock options                              |  | 61,000      |   |  | -            |   |  | -            |  
|Proceeds from exercise of warrants 
      net                                 |  | 450,309     |   |  | -            |   |  | -            |  
|Proceeds from subscription of
      warrants  net                             |  | 525,680     |   |  | -            |   |  | -            |  
|Proceeds from issuance of units/shares 
      net                             |  | 10,038,190  |   |  | 578,109      |   |  | 2,489,203    |  
|Proceeds (Repayments) from
      capital lease obligation                      |  | 5,678       |   |  | (2,788       | ) |  | (1,660       | )

|NET CASH PROVIDED BY FINANCING
      ACTIVITIES       |  | 11,482,537 |  |  | 575,321    |   |  | 2,487,543 | 
|----------------------------------------------------- |  | ---------- |  |  | ---------- | - |  | --------- | 
|                                                      |  |            |  |  |            |   |  |           | 
|EFFECT OF FOREIGN
      CURRENCY                      |  |            |  |  |            |   |  |           | 
|EXCHANGE RATE CHANGES                                 |  | 27,168     |  |  | (163,368   | ) |  | 108,711   | 
|                                                      |  |            |  |  |            |   |  |           | 
|NET INCREASE (DECREASE) IN CASH AND
      CASH        |  |            |  |  |            |   |  |           | 
|EQUIVALENTS FOR THE
      QUARTER                     |  | 113,819    |  |  | (1,141,801 | ) |  | 126,756   | 
|Cash and cash equivalents, beginning of
      quarter |  | -          |  |  | 1,255,620  |   |  | 936,436   | 
|                                                      |  |            |  |  |            |   |  |           | 
|CASH AND CASH EQUIVALENTS, END OF
      QUARTER       |  | 113,819    |  |  | 113,819    |   |  | 1,063,192 | 
|INCOME TAXES PAID                                     |  |            |  |  | -          |   |  | -         | 
|INTEREST PAID                                         |  |            |  |  | -          |   |  | -         | 

See condensed notes to the interim consolidated
financial statements

F-5

---

YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Mining Company)

|                                                                           |  | Number
 of
 Common
    Shares
    # |   |  | Common
    Shares 
    Amount 
    $ |   |  | Additional
    Paid-in 
    Capital 
    $ |  |  | Subscription
    
    for 
    Warrants 
    $ |  |  | Deficit,
    Accumulated
    during the
    Exploration
    Stage 
    $ |   |  | Comprehensive
    Income (loss) 
    $ |   |  | Accumulated
    Other
    Comprehensive
    Income
      (loss) 
    $ |  
|-------------------------------------------------------------------------- |  | ----------------------------------- | - |  | ------------------------------------ | - |  | ------------------------------------------ |  |  | ---------------------------------------------- |  |  | ------------------------------------------------------------------------ | - |  | -------------------------------------- | - |  | ---------------------------------------------------------------------- | -
|Issuance of Common shares                                                  |  | 2,833,377                           |   |  | 154,063                              |   |  | -                                          |  |  | -                                              |  |  | -                                                                        |   |  | -                                      |   |  | -                                                                      |  
|Issuance of warrants                                                       |  | -                                   |   |  | -                                    |   |  | 1,142                                      |  |  | -                                              |  |  | -                                                                        |   |  | -                                      |   |  | -                                                                      |  
|Foreign currency translation                                               |  | -                                   |   |  | -                                    |   |  | -                                          |  |  | -                                              |  |  |                                                                          |   |  | 604                                    |   |  | 604                                                                    |  
|Net loss for the year                                                      |  | -                                   |   |  | -                                    |   |  | -                                          |  |  |                                                |  |  | (124,783                                                                 | ) |  | (124,783                               | ) |  | -                                                                      |  
|                                                                           |  |                                     |   |  |                                      |   |  |                                            |  |  |                                                |  |  |                                                                          |   |  |                                        |   |  |                                                                        |  
|Balance as of April 30, 2003                                               |  | 2,833,377                           |   |  | 154,063                              |   |  | 1,142                                      |  |  | -                                              |  |  | (124,783                                                                 | ) |  | (124,179                               | ) |  | 604                                                                    |  
|                                                                           |  |                                     |   |  |                                      |   |  |                                            |  |  |                                                |  |  |                                                                          |   |  |                                        |   |  |                                                                        |  
|Issuance of Common shares                                                  |  | 1,435,410                           |   |  | 256,657                              |   |  | -                                          |  |  | -                                              |  |  | -                                                                        |   |  | -                                      |   |  |                                                                        |  
|Issuance of warrants                                                       |  | -                                   |   |  | -                                    |   |  | 2,855                                      |  |  | -                                              |  |  | -                                                                        |   |  | -                                      |   |  |                                                                        |  
|Shares repurchased                                                         |  | (240,855                            | ) |  | (5,778                               | ) |  | -                                          |  |  | -                                              |  |  | -                                                                        |   |  | -                                      |   |  |                                                                        |  
|Recapitalization pursuant to
      reverse acquisition                     |  | 2,737,576                           |   |  | (404,265                             | ) |  | 404,265                                    |  |  | -                                              |  |  | -                                                                        |   |  | -                                      |   |  |                                                                        |  
|Issuance of Common shares                                                  |  | 1,750,000                           |   |  | 175                                  |   |  | 174,825                                    |  |  | -                                              |  |  | -                                                                        |   |  | -                                      |   |  |                                                                        |  
|Issuance of Common shares for
      Property Payment                       |  | 300,000                             |   |  | 30                                   |   |  | 114,212                                    |  |  | -                                              |  |  | -                                                                        |   |  | -                                      |   |  |                                                                        |  
|Foreign currency translation                                               |  | -                                   |   |  | -                                    |   |  | -                                          |  |  | -                                              |  |  | -                                                                        |   |  | (12,796                                | ) |  | (12,796                                                                | )
|Net loss for the year                                                      |  | -                                   |   |  | -                                    |   |  | -                                          |  |  | -                                              |  |  | (442,906                                                                 | ) |  | (442,906                               | ) |  | -                                                                      |  
|                                                                           |  |                                     |   |  |                                      |   |  |                                            |  |  |                                                |  |  |                                                                          |   |  |                                        |   |  |                                                                        |  
|Balance as of April 30, 2004                                               |  | 8,815,508                           |   |  | 882                                  |   |  | 697,299                                    |  |  | -                                              |  |  | (567,689                                                                 | ) |  | (455,702                               | ) |  | (12,192                                                                | )
|                                                                           |  |                                     |   |  |                                      |   |  |                                            |  |  |                                                |  |  |                                                                          |   |  |                                        |   |  |                                                                        |  
|Issuance of Common shares for
      Property Payment                       |  | 133,333                             |   |  | 13                                   |   |  | 99,987                                     |  |  | -                                              |  |  | -                                                                        |   |  | -                                      |   |  | -                                                                      |  
|Issuance of common shares on Conversion of Convertible
    Promissory Note |  | 76,204                              |   |  | 8                                    |   |  | 57,144                                     |  |  | -                                              |  |  | -                                                                        |   |  | -                                      |   |  | -                                                                      |  

F-6

---

YUKON GOLD
CORPORATION, INC. 
(An Exploration Stage Mining Company)Interim
Consolidated Statements of Changes in Stockholders' Equity (Deficit)From Inception to January 31, 2009 
(Amounts expressed in US Dollars)(Unaudited-Prepared by
Management)

|Foreign currency translation                                                      |  | -         |  |  | -   |  |  | -       |  |  |  |  |  | -          |   |  | 9,717    |   |  | 9,717  |  
|--------------------------------------------------------------------------------- |  | --------- |  |  | --- |  |  | ------- |  |  |  |  |  | ---------- | - |  | -------- | - |  | ------ | -
|Net loss for the year                                                             |  | -         |  |  | -   |  |  | -       |  |  |  |  |  | (808,146   | ) |  | (808,146 | ) |  | -      |  
|                                                                                  |  |           |  |  |     |  |  |         |  |  |  |  |  |            |   |  |          |   |  |        |  
|Balance as of April 30, 2005                                                      |  | 9,025,045 |  |  | 903 |  |  | 854,430 |  |  |  |  |  | (1,375,835 | ) |  | (798,429 | ) |  | (2,475 | )
|                                                                                  |  |           |  |  |     |  |  |         |  |  |  |  |  |            |   |  |          |   |  |        |  
|Stock based compensation -
      Directors and officers                           |  |           |  |  |     |  |  | 216,416 |  |  |  |  |  |            |   |  |          |   |  |        |  
|Stock based compensation -
      Consultants                                      |  |           |  |  |     |  |  | 8,830   |  |  |  |  |  |            |   |  |          |   |  |        |  
|Issue of common shares and
      Warrants on retirement of Demand Promissory note |  | 369,215   |  |  | 37  |  |  | 203,031 |  |  |  |  |  |            |   |  |          |   |  |        |  
|Units issued to an outside
      company for professional services settlement     |  | 24,336    |  |  | 2   |  |  | 13,384  |  |  |  |  |  |            |   |  |          |   |  |        |  
|Units issued to an officer for
      professional services settlement             |  | 12,168    |  |  | 1   |  |  | 6,690   |  |  |  |  |  |            |   |  |          |   |  |        |  
|Issuance of common shares for
      professional services                         |  | 150,000   |  |  | 15  |  |  | 130,485 |  |  |  |  |  |            |   |  |          |   |  |        |  
|Units issued to shareholder                                                       |  | 490,909   |  |  | 49  |  |  | 269,951 |  |  |  |  |  |            |   |  |          |   |  |        |  
|Units issued to a director                                                        |  | 149,867   |  |  | 15  |  |  | 82,412  |  |  |  |  |  |            |   |  |          |   |  |        |  
|Units issued to outside
      subscribers                                         |  | 200,000   |  |  | 20  |  |  | 109,980 |  |  |  |  |  |            |   |  |          |   |  |        |  
|Issuance of common shares on
      Conversion of Convertible Promissory notes     |  | 59,547    |  |  | 6   |  |  | 44,654  |  |  |  |  |  |            |   |  |          |   |  |        |  
|Issuance of common shares on
      Exercise of warrants                           |  | 14,000    |  |  | 2   |  |  | 11,998  |  |  |  |  |  |            |   |  |          |   |  |        |  
|Issuance of common shares on
      Conversion of Convertible                      |  |           |  |  |     |  |  |         |  |  |  |  |  |            |   |  |          |   |  |        |  
|Promissory notes                                                                  |  | 76,525    |  |  | 8   |  |  | 57,386  |  |  |  |  |  |            |   |  |          |   |  |        |  
|Private placement of shares                                                       |  | 150,000   |  |  | 15  |  |  | 151,485 |  |  |  |  |  |            |   |  |          |   |  |        |  
|Issuance of Common shares for
      property payment                              |  | 133,333   |  |  | 13  |  |  | 99,987  |  |  |  |  |  |            |   |  |          |   |  |        |  
|Issuance of common shares on
      Conversion of Convertible Promissory notes     |  | 34,306    |  |  | 4   |  |  | 25,905  |  |  |  |  |  |            |   |  |          |   |  |        |  
|Issuance of common shares on
      Exercise of warrants                           |  | 10,000    |  |  | 1   |  |  | 8,771   |  |  |  |  |  |            |   |  |          |   |  |        |  
|Issuance of common shares on
      Conversion of Convertible Promissory Notes     |  | 101,150   |  |  | 10  |  |  | 76,523  |  |  |  |  |  |            |   |  |          |   |  |        |  

F-7

---

YUKON GOLD
CORPORATION, INC. 
(An Exploration Stage Mining Company)Interim
Consolidated Statements of Changes in Stockholders' Equity (Deficit)From Inception to January 31, 2009 
(Amounts expressed in US Dollars)(Unaudited-Prepared by
Management)

|Issue of 400,000 Special Warrants net                                    |  |            |  |  |       |  |  |           |  |  | 371,680 |  |  |            |   |  |            |   |  |        |  
|------------------------------------------------------------------------ |  | ---------- |  |  | ----- |  |  | --------- |  |  | ------- |  |  | ---------- | - |  | ---------- | - |  | ------ | -
|Issue of 200,000 flow through
      warrants                             |  |            |  |  |       |  |  |           |  |  | 154,000 |  |  |            |   |  |            |   |  |        |  
|Brokered private placement of shares- net                                |  | 5,331,327  |  |  | 533   |  |  | 2,910,375 |  |  |         |  |  |            |   |  |            |   |  |        |  
|Brokered Private placement of
      flow through Shares- net             |  | 25,000     |  |  | 2     |  |  | 13,310    |  |  |         |  |  |            |   |  |            |   |  |        |  
|Exercise of stock options                                                |  | 10,000     |  |  | 1     |  |  | 5,499     |  |  |         |  |  |            |   |  |            |   |  |        |  
|Foreign currency translation                                             |  | -          |  |  | -     |  |  | -         |  |  |         |  |  |            |   |  | (2,687     | ) |  | (2,687 | )
|Net loss for the year                                                    |  | -          |  |  | -     |  |  | -         |  |  |         |  |  | (1,855,957 | ) |  | (1,855,957 | ) |  | -      |  
|                                                                         |  |            |  |  |       |  |  |           |  |  |         |  |  |            |   |  |            |   |  |        |  
|Balance as of April 30, 2006                                             |  |            |  |  |       |  |  |           |  |  |         |  |  |            |   |  |            |   |  |        |  
|                                                                         |  | 16,366,728 |  |  | 1,637 |  |  | 5,301,502 |  |  | 525,680 |  |  | (3,231,792 | ) |  | (1,858,644 | ) |  | (5,162 | )
|                                                                         |  |            |  |  |       |  |  |           |  |  |         |  |  |            |   |  |            |   |  |        |  
|Exercise of warrants                                                     |  | 10,000     |  |  | 1     |  |  | 8,986     |  |  |         |  |  |            |   |  |            |   |  |        |  
|Exercise of warrants                                                     |  | 45,045     |  |  | 5     |  |  | 40,445    |  |  |         |  |  |            |   |  |            |   |  |        |  
|Exercise of warrants                                                     |  | 16,000     |  |  | 2     |  |  | 14,278    |  |  |         |  |  |            |   |  |            |   |  |        |  
|Common shares issued for settlement of severance liability to ex-officer |  | 141,599    |  |  | 14    |  |  | 113,116   |  |  |         |  |  |            |   |  |            |   |  |        |  
|Exercise of warrants                                                     |  | 43,667     |  |  | 4     |  |  | 39,364    |  |  |         |  |  |            |   |  |            |   |  |        |  
|Exercise of warrants                                                     |  | 17,971     |  |  | 2     |  |  | 15,937    |  |  |         |  |  |            |   |  |            |   |  |        |  
|Exercise of warrants                                                     |  | 43,667     |  |  | 4     |  |  | 38,891    |  |  |         |  |  |            |   |  |            |   |  |        |  
|Exercise of warrants                                                     |  | 16,000     |  |  | 2     |  |  | 14,251    |  |  |         |  |  |            |   |  |            |   |  |        |  
|Exercise of warrants                                                     |  | 158,090    |  |  | 16    |  |  | 141,616   |  |  |         |  |  |            |   |  |            |   |  |        |  
|Issue of common shares for property payment                              |  | 43,166     |  |  | 4     |  |  | 53,841    |  |  |         |  |  |            |   |  |            |   |  |        |  
|Exercise of warrants                                                     |  | 64,120     |  |  | 6     |  |  | 57,863    |  |  |         |  |  |            |   |  |            |   |  |        |  
|Exercise of warrants                                                     |  | 61,171     |  |  | 6     |  |  | 53,818    |  |  |         |  |  |            |   |  |            |   |  |        |  
|Exercise of stock options                                                |  | 24,000     |  |  | 2     |  |  | 17,998    |  |  |         |  |  |            |   |  |            |   |  |        |  
|Issuance of common shares for professional services                      |  | 342,780    |  |  | 34    |  |  | 438,725   |  |  |         |  |  |            |   |  |            |   |  |        |  
|Brokered private placement of
      units-net                            |  | 400,000    |  |  | 40    |  |  | 363,960   |  |  |         |  |  |            |   |  |            |   |  |        |  
|Brokered private placement of units- net                                 |  | 550,000    |  |  | 55    |  |  | 498,923   |  |  |         |  |  |            |   |  |            |   |  |        |  
|Stock based
      compensation-Directors and Officers                    |  |            |  |  |       |  |  | 451,273   |  |  |         |  |  |            |   |  |            |   |  |        |  
|Exercise of stock options                                                |  | 50,000     |  |  | 5     |  |  | 37,495    |  |  |         |  |  |            |   |  |            |   |  |        |  

F-8

---

YUKON GOLD
CORPORATION, INC. 
(An Exploration Stage Mining Company)Interim
Consolidated Statements of Changes in Stockholders' Equity (Deficit)From Inception to January 31, 2009 
(Amounts expressed in US Dollars)(Unaudited-Prepared by
Management)

|Issuance of common shares for
      property payment                                                    |  | 133,334    |  |  | 13    |  |  | 99,987     |   |  |            |   |  |             |   |  |            |   |  |          |  
|------------------------------------------------------------------------------------------------------- |  | ---------- |  |  | ----- |  |  | ---------- | - |  | ---------- | - |  | ----------- | - |  | ---------- | - |  | -------- | -
|Issuance of common shares for
      professional services                                               |  | 160,000    |  |  | 16    |  |  | 131,184    |   |  |            |   |  |             |   |  |            |   |  |          |  
|Issuance of common shares for
      professional services                                               |  | 118,800    |  |  | 12    |  |  | 152,052    |   |  |            |   |  |             |   |  |            |   |  |          |  
|Issue of shares for
      flow-through warrants                                                         |  | 200,000    |  |  | 20    |  |  | 153,980    |   |  | (154,000   | ) |  |             |   |  |            |   |  |          |  
|Issue of shares for special
      warrants                                                              |  | 404,000    |  |  | 41    |  |  | 375,679    |   |  | (371,680   | ) |  |             |   |  |            |   |  |          |  
|Issue of 2,823,049 flow-
      through warrants -net                                                    |  |            |  |  |       |  |  |            |   |  | 1,916,374  |   |  |             |   |  |            |   |  |          |  
|Issue of 334,218 unit special
      warrants-net                                                        |  |            |  |  |       |  |  |            |   |  | 230,410    |   |  |             |   |  |            |   |  |          |  
|Issue of 3,105,358 common
      shares for 2,823,049 flow through warrants                              |  | 3,105,358  |  |  | 310   |  |  | 1,916,064  |   |  | (1,916,374 | ) |  |             |   |  |            |   |  |          |  
|Issue of 367,641 common shares
      for 334,218 unit special warrants                                  |  | 367,641    |  |  | 37    |  |  | 230,373    |   |  | (230,410   | ) |  |             |   |  |            |   |  |          |  
|Registration rights penalty
      expense                                                               |  |            |  |  |       |  |  | 188,125    |   |  |            |   |  |             |   |  |            |   |  |          |  
|Foreign currency translation                                                                            |  |            |  |  |       |  |  |            |   |  |            |   |  |             |   |  | (58,446    | ) |  | (58,446  | )
|Net loss for the year                                                                                   |  |            |  |  |       |  |  |            |   |  |            |   |  | (3,703,590  | ) |  | (3,703,590 | ) |  |          |  
|                                                                                                        |  |            |  |  |       |  |  |            |   |  |            |   |  |             |   |  |            |   |  |          |  
|Balance April 30, 2007                                                                                  |  | 22,883,137 |  |  | 2,288 |  |  | 10,949,726 |   |  | 0          |   |  | (6,935,382  | ) |  | (3,762,036 | ) |  | (63,608  | )
|                                                                                                        |  |            |  |  |       |  |  |            |   |  |            |   |  |             |   |  |            |   |  |          |  
|Shares for property payment                                                                             |  | 136,364    |  |  | 13    |  |  | 57,239     |   |  |            |   |  |             |   |  |            |   |  |          |  
|Stock based compensation                                                                                |  |            |  |  |       |  |  | 584,328    |   |  |            |   |  |             |   |  |            |   |  |          |  
|Unrealized gain on
      available-for-sale securities net of deferred taxes 543,615 flow through units |  | 543,615    |  |  | 54    |  |  | 227,450    |   |  |            |   |  |             |   |  | 9,000      |   |  | 9,000    |  
|1,916,666 units-net                                                                                     |  | 1,916,666  |  |  | 192   |  |  | 698,110    |   |  |            |   |  |             |   |  |            |   |  |          |  
|1,071,770 flow through units                                                                            |  | 1,071,770  |  |  | 108   |  |  | 449,379    |   |  |            |   |  |             |   |  |            |   |  |          |  
|2,438,888 units-net                                                                                     |  | 2,438,888  |  |  | 244   |  |  | 1,036,622  |   |  |            |   |  |             |   |  |            |   |  |          |  
|Expenses relating to issue of
      units                                                               |  |            |  |  |       |  |  | (141,080   | ) |  |            |   |  |             |   |  |            |   |  |          |  
|Compensation expense on issue
      of warrants                                                         |  |            |  |  |       |  |  | 123,079    |   |  |            |   |  |             |   |  |            |   |  |          |  
|Foreign currency translation                                                                            |  |            |  |  |       |  |  |            |   |  |            |   |  |             |   |  | 251,082    |   |  | 251,082  |  
|Net loss for the year                                                                                   |  |            |  |  |       |  |  |            |   |  |            |   |  | (4,953,775  | ) |  | (4,953,775 | ) |  |          |  
|                                                                                                        |  |            |  |  |       |  |  |            |   |  |            |   |  |             |   |  |            |   |  |          |  
|Balance as of April 30, 2008                                                                            |  | 28,990,440 |  |  | 2,899 |  |  | 13,984,853 |   |  |            |   |  | (11,889,157 | ) |  | (4,693,693 | ) |  | 196,474  |  
|                                                                                                        |  |            |  |  |       |  |  |            |   |  |            |   |  |             |   |  |            |   |  |          |  
|Shares for property payment                                                                             |  | 476,189    |  |  | 48    |  |  | 58,839     |   |  |            |   |  |             |   |  |            |   |  |          |  
|Stock based compensation                                                                                |  |            |  |  |       |  |  | 28,399     |   |  |            |   |  |             |   |  |            |   |  |          |  
|Compensation expense on issue of warrants                                                               |  |            |  |  |       |  |  | 17,813     |   |  |            |   |  |             |   |  |            |   |  |          |  
|4,134,000 flow through shares                                                                           |  | 4,134,000  |  |  | 413   |  |  | 577,696    |   |  |            |   |  |             |   |  |            |   |  |          |  
|Issuance of common shares for professional services                                                     |  | 50,000     |  |  | 5     |  |  | 7,495      |   |  |            |   |  |             |   |  |            |   |  |          |  
|Realized gain on available-for-sales securities                                                         |  |            |  |  |       |  |  |            |   |  |            |   |  |             |   |  | (9,000     | ) |  | (9,000   | )
|Foreign currency translation                                                                            |  |            |  |  |       |  |  |            |   |  |            |   |  |             |   |  | (221,816   | ) |  | (221,816 | )
|Net loss for the period                                                                                 |  |            |  |  |       |  |  |            |   |  |            |   |  | (2,870,536  | ) |  | (2,870,536 | ) |  | -        |  
|                                                                                                        |  |            |  |  |       |  |  |            |   |  |            |   |  |             |   |  |            |   |  |          |  
|Balance as of January 31, 2009                                                                          |  | 33,650,629 |  |  | 3,365 |  |  | 14,675,095 |   |  |            |   |  | (14,759,693 | ) |  | (3,101,352 | ) |  | (34,342  | )

See condensed notes to the interim consolidated
financial statements

F-9

---

YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Mining Company) Condensed Notes to Interim Consolidated Financial Statements 
January 31, 2009 
(Amounts expressed in US Dollars) 
(Unaudited  Prepared by Management)

1. BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all
adjustments (consisting of all recurring accruals) considered necessary for fair presentation have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the year ended April
30, 2009. Interim financial statements should be read in conjunction with the Companys annual audited financial statements.

The interim consolidated financial statements include the accounts of Yukon Gold Corporation, Inc. (the Company) and its wholly owned subsidiary Yukon Gold Corp. (YGC). All material inter-company accounts and transactions
have been eliminated.

2. GOING CONCERN

The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has no source for operating revenue and expects to
incur significant expenses before establishing operating revenue. Because of continuing operating losses, negative working capital, shareholders deficiency and cash outflows from operations, the Companys continuance as a going concern is
dependent upon its ability to obtain adequate financing and to reach profitable levels of operation. In the event that the Company is unable to raise additional capital, as to which there is no assurance, the Company will not be able to continue
doing business. In addition, the Companys auditors included a going concern qualification in their report included with the Companys annual financial statement for the year ended April 30, 2008. This qualification may make it
more difficult to obtain additional financing. The Companys future success is dependent upon its continued ability to raise sufficient capital, not only to maintain its operating expenses, but to explore for reserves. There is no guarantee
that such capital will be available on acceptable terms, if at all or if the Company will attain profitable levels of operation.

The Company is actively pursuing equity and short-term bridge loan financing, which may include financing backed by a pledge of some or all of the Companys exploration property assets. The Company also is simultaneously exploring opportunities
to effect business combinations or joint ventures involving additional mining assets that may provide opportunities for greater long-term financing.

F-10

---

YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Mining Company) Condensed Notes to Interim Consolidated Financial Statements 
January 31, 2009 
(Amounts expressed in US Dollars) 
(Unaudited  Prepared by Management)

3.  NATURE OF OPERATIONS

The Company is an exploration stage mining company and has not yet realized any revenue from its operations. It is primarily engaged in acquisition and exploration of its two mining properties, both located in the Yukon
Territory in Canada. The
Company has not yet determined whether these properties contain mineral reserves that are economically recoverable. The business of mining and exploring for minerals involves a high degree of risk and there can be no assurances that current
exploration programs will result in profitable mining operations.

4. RESTRICTED CASH

Under Canadian income tax regulations, a company is permitted to issue flow-through shares whereby the company agrees to incur qualifying expenditures and renounce the related income tax deductions to the investors. Notwithstanding that, there is
no specific requirement to segregate the funds. The flow-through funds, which are unexpended at the consolidated balance sheet date are considered to be restricted and are not considered to be short-term deposits or cash or cash equivalents. As of
January 31, 2009 and April 30, 2008 unexpended flow-through funds were $nil (as
 of April 30, 2008 unexpended flow-through funds were $817,092).

5. PREPAID EXPENSES AND OTHER

Included in prepaid expenses and other as of January 31, 2009, is an amount of $11,670 (CDN$14,314) being Goods & Services tax receivable from the Federal Government of Canada.

6. CAPITAL STOCK

a) Authorized

150,000,000 of Common shares, $0.0001 par value.

b) Issued

33,650,629 Common shares.

F-11

---

YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Mining Company)
Condensed
Notes to Interim Consolidated Financial Statements 
January 31, 2009 
(Amounts expressed in US Dollars) 
(Unaudited  Prepared by Management)

6. CAPITAL STOCK-Contd

c)  Changes to Issued Share Capital

Year ended April 30, 2008

On July 7, 2007 the Company issued 136,364 common shares in settlement of a property payment on the Mount Hinton Property.  The shares represent $57,252 (CDN$60,000), which is 40% of the contracted payment, and were valued at $0.42
(CDN$0.44) each. The balance 60% payment was paid in cash.

On August 16, 2007 the Company completed a private placement (the Financing) with Northern Securities Inc. (Northern), acting as agent. The Financing was comprised of the sale of 1,916,666 units (the Units) at
$0.42 (CDN$0.45) per Unit (the Unit Issue Price) for gross proceeds of $802,101 (CDN$862,500) and the sale of 543,615 flow-through units (the Flow-Through Units which qualify as flow-through shares for the
purposes of the Canadian Income Tax Act) at $0.49 (CDN$0.52) per Flow-Through Unit (the Flow-Through Unit Issue Price) for gross proceeds of $262,884 (CDN$282,680). The proceeds raised were allocated between the offering
of shares and the sale of tax benefits. A liability of $35,381 was recognized for the sale of taxable benefits, which was reversed and credited to income when the Company renounced resource expenditure deduction to the investor. Each Unit
consisted of one non-flow through common share (Common Share) and one half of one Common Share purchase warrant (each whole warrant, a Warrant). Each Warrant is exercisable into one Common Share until August 16, 2009 at an
exercise price of $0.60 (CDN$0.60) per share. Each Flow-Through Unit consisted of one flow-through common share and one half of one Common Share purchase warrant (each whole warrant, an FT Warrant). Each FT Warrant is exercisable
into one Common Share until August 16, 2009 at an exercise price of $0.70 (CDN$0.70) per share.  The Company paid Northern a commission equal to 8% of the aggregate gross proceeds which amounted to $85,199 (CDN$91,614) and issued
153,333 Unit Compensation Warrants and 43,489 FT Unit Compensation Warrants.  Each Unit Compensation Warrant is exercisable into one Unit at the Unit Issue Price until August 16, 2009.  Each FT Unit Compensation Warrant is
exercisable into one Common Share and one half of one FT Warrant at the Flow-Through Unit Issue Price until August 16, 2009. Yukon Gold also granted Northern an option (the Over-Allotment Option) exercisable until October 15, 2007 to
offer for sale up to an additional $468,691 (CDN$500,000) of Units and/or Flow-Through Units on the same terms and conditions. The Company paid a $70,304 (CDN$75,000) due diligence fee to Northern at closing.  The Company reimbursed
Northern expenses of $18,600 (CDN$20,000) and legal fees of $18,600 (CDN$20,000).

F-12

---

YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Mining Company) Condensed Notes to Interim Consolidated Financial Statements 
January 31, 2009 
(Amounts expressed in US Dollars) 
(Unaudited  Prepared by Management)

6. CAPITAL STOCK-Contd

On November 16, 2007 the Company completed the second part of a private placement (the Second Financing) with Northern acting as agent. The Second Financing was comprised of the sale of 2,438,888 units (the Units) at
$0.46 (CDN$0.45) per Unit (the Unit Issue Price) for gross proceeds of $1,127,028 (CDN$1,097,500) and the sale of 1,071,770 flow through units (the Flow-Through Units) at $0.53 (CDN$0.52) per
Flow-Through Unit (the Flow-Through Unit Issue Price) for gross proceeds of $572,315 (CDN$557,320). The proceeds raised were allocated between the offering of shares and the sale of tax benefits. A liability of $77,043 was
recognized for the sale of taxable benefits, which was reversed and credited to income when the Company renounced resource expenditure deduction to the investor.  The closing represented the final tranche of a $2,816,673 (CDN$2.8 million)
private placement with Northern announced on July 24, 2007.  Each Unit consists of one non-flow through common share (Common Share) and one half of one Common Share purchase warrant (each whole warrant, a Warrant). Each
Warrant is exercisable into one Common Share until November 16, 2009 at an exercise price of $0.60 (CDN$0.60) per share. Each Flow-Through Unit consisted of one flow-through common share and one half of one Common Share purchase warrant
(each whole warrant, an FT Warrant). Each FT Warrant is exercisable into one Common Share until November 16, 2009 at an exercise price of $0.70 (CDN$0.70) per share. Yukon Gold paid Northern a commission equal to 8% of the
aggregate gross proceeds and issued 195,111 Unit Compensation Warrants and 85,741 FT Unit Compensation Warrants.  Each Unit Compensation Warrant is exercisable into one Common Share and one half of one Common Share purchase
warrant at the Unit Issue Price until November 16, 2009.  Each full Common share purchase warrant is exercisable at $0.60 (CDN$0.60) . Each FT Unit Compensation Warrant is exercisable into one Common Share and one half of one Common Share
purchase warrant at the Flow-Through Unit Issue Price. Each full Common Share purchase warrant is exercisable at $0.70 (CDN$0.70) .

The foregoing private placements were undertaken pursuant to an exemption offered by Regulation S (Regulation S) promulgated under the Securities Act of 1933, as amended (the Securities Act).

Six months ended October 31, 2008

On July 7, 2008, the Company issued 476,189 common shares in settlement of a property payment on the Mount Hinton property. These shares represent $58,887 (CDN$60,000), which is 40% of the contracted payment, and were valued at $0.123
(CDN$0.126) each.  The balance of the property payment in the amount of $88,330 (CDN$90,000) was paid in cash.

F-13

---

YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Mining Company)
Condensed
Notes to Interim Consolidated Financial Statements 
January 31, 2009 
(Amounts expressed in US Dollars) 
(Unaudited  Prepared by Management)

6. CAPITAL STOCK-Contd

On May 16, 2008, the Company entered into a consulting agreement with Clarke Capital Group Inc. (Clarke) pursuant to which Clarke was retained to provide the Company with investor relations and business communications services for an
initial term of 6 months, renewable thereafter for an additional 6-month term. Upon execution of the Clarke Agreement the Company paid Clarke $14,648 (CDN$15,000). Pursuant to the Clarke Agreement, the Company issued Clarke 50,000 shares of
common stock on July 14, 2008.

On July 23, 2008, the Company closed a non-brokered private placement to $976,563 (CDN$1,000,000). The Company completed the sale of 4,134,000 common shares on a flow-through basis at a price of $0.15 (CDN$0.15) per share for gross
proceeds of $613,778 (CDN$620,100). The Company paid a 5% finders fee on this private placement. The private placement was exempt from registration under the Securities Act of 1933, pursuant to an exemption afforded by Regulation S.  The
flow through shares were issued at market without any additional price charged for sale of taxable benefits.

Three months ended January 31, 2009

The Company did not issue any capital stock during the quarter ended January 31, 2009.

7. STOCK BASED COMPENSATION

Per SEC Staff Accounting Bulletin 107, Topic 14.F, Classification of Compensation Expense Associated with Share-Based Payment Arrangements stock based compensation expense is being presented in the same lines as cash compensation paid.

The Company adopted a new Stock Option Plan at its shareholders meeting on January 19, 2007 (the 2006 Stock Option Plan). The 2006 Stock Option Plan will be administered by the board of directors of the Company or, in the board of
directors discretion, by a committee appointed by the board of directors for that purpose. The TSX approved the 2006 Stock Option plan on March 9, 2007.

On March 18, 2008 at the Annual and Special Meeting of Shareholders the shareholders of the Company approved an amendment to the 2006 Stock Option Plan increasing the number of Shares reserved for issuance thereunder from 2,000,000 to 2,899,044.

Subject to the provisions of the 2006 Stock Option Plan, the aggregate number of shares which may be issued under the 2006 Stock Option Plan shall not exceed 2,000,000 shares ("Total Shares"). Any Stock Option granted under the 2006 Stock Option
Plan which has been exercised shall again be available for subsequent grant under the 2006 Stock Option Plan, effectively resulting in a re-loading of the number of shares available for grant under the 2006 Stock Option Plan. Any shares subject to
an option granted under the 2006 Stock Option Plan which for any reason is surrendered, cancelled or terminated or expires without having been exercised shall again be available for subsequent grant under the 2006 Stock Option Plan.

Under the 2006 Stock Option Plan, at no time shall: (i) the number of shares reserved for issuance pursuant to Stock Options granted to any one optionee exceed 10% of the Total Shares; (ii) the number of shares, together with all security based
compensation arrangements of the Company in effect, reserved for issuance pursuant to Stock Options granted to any "insiders" (as that term is defined under the Securities Act(Ontario)) exceed 10% of the total number of issued and
outstanding shares. In addition, the number of shares issued to insiders pursuant to the exercise of Stock Options, within any one year period, together with all security based compensation arrangements of the Company in effect, shall not exceed 10%
of the total number of issued and outstanding shares.

F-14

---

YUKON GOLD CORPORATION, INC. 
(An Exploration Stage
Mining Company) Condensed
Notes to Interim Consolidated Financial Statements 
January
31, 2009 
(Amounts expressed in US Dollars) 
(Unaudited  Prepared by
Management)

7. STOCK BASED COMPENSATION-Contd

The purchase price (the Price) per share under each Stock
Option shall be determined by the board of directors or a committee, as
applicable. The Price shall not be lower than the closing market price on the
TSX, or another stock exchange where the majority of the trading volume and
value of the Shares occurs, on the trading day immediately preceding the date of
grant, or if not so traded, the average between the closing bid and asked prices
thereof as reported for the trading day immediately preceding the date of the
grant; provided that if the shares have not traded on the TSX or another stock
exchange for an extended period of time, the market price will be the fair
market value of the shares at the time of grant, as determined by the board of
directors or committee. The board of directors or committee may determine that
the Price may escalate at a specified rate dependent upon the date on which an
option may be exercised by the Eligible Participant.

Options shall not be granted for a term exceeding tenyears (or such shorter or longer period as is permitted by the TSX) (the
Option Period).

During the nine month period ended January 31, 2009, the
following stock options were granted under the 2006 stock option plan:

On July 28, 2008 the board of directors granted options to a
consultant to acquire 250,000 shares, to vest 50,000 immediately and the balance
of 50,000 each at three-month intervals. These options can be exercised over a
period of five (5) years. The exercise price was set at $0.15 (CDN$0.15) per
share. These options were granted under the Companys 2006 stock option plan. On
December 12, 2008, the Company and the consultant mutually agreed to terminate
the agreement effective October 31, 2008 and cancelled the 250,000 options on
January 31, 2009.

For this nine month period ended January 31, 2009, the Company
has recognized in the financial statements, stock-based compensation costs as
per the following details. The fair value of each option used for the purpose of
estimating the stock compensation is based on the grant date using the
Black-Scholes option pricing model with the following weighted average
assumptions:

|                                                                                                 | 19-    | 20-    | 28-    | 15-    | 28-     | 18-     | 14-    | 21-    | 25-    | 8-     | 28-    |        
|------------------------------------------------------------------------------------------------ | ------ | ------ | ------ | ------ | ------- | ------- | ------ | ------ | ------ | ------ | ------ | -------
|                                                                                                 | Jan    | Mar    | Mar    | Aug    | Sept    | Dec     | Jan    | Feb    | Mar    | Apr    | July   |        
|                                                                                                 | 2007   | 2007   | 2007   | 2007   | 2007    | 2007    | 2008   | 2008   | 2008   | 2008   | 2008   | TOTAL  
|                                                                                                 |        |        |        |        |         |         |        |        |        |        |        |        
|                                                                                                 |        |        |        |        |         |         |        |        |        |        |        |        
|                                                                                                 |        |        |        |        |         |         |        |        |        |        |        |        
|Risk free rate                                                                                   | 4.5%   | 4.5%   | 4.5%   | 5%     | 4.5%    | 5.0%    | 5.0%   | 5.0%   | 5.0%   | 5.0%   | 5.0%   |        
|                                                                                                 |        |        |        |        |         |         |        |        |        |        |        |        
|Volatility factor                                                                                | 94.49% | 57.48% | 98.67% | 91.68% | 92.20%  | 101.61% | 45.19% | 95.77% | 94.92% | 94.49% | 97.44% |        
|                                                                                                 |        |        |        |        |         |         |        |        |        |        |        |        
|                                                                                                 |        |        |        |        |         |         |        |        |        |        |        |        
|Stock-based
      compensation cost expensed during the nine month period ended January 31, 2009 | -      | -      | -      | -      | $17,127 | -       | -      | -      | -      | -      | 11,272 | $28,399
|                                                                                                 |        |        |        |        |         |         |        |        |        |        |        |        
|                                                                                                 |        |        |        |        |         |         |        |        |        |        |        |        
|Unexpended Stock based compensation cost deferred over the vesting period                        | -      | -      | -      | -      | $9,328  | -       | -      | -      | -      |        | -      | $9,328 

F-15

---

YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Mining Company)
Condensed
Notes to Interim Consolidated Financial Statements 
January 31, 2009 
(Amounts expressed in US Dollars) 
(Unaudited  Prepared by Management)

7. STOCK BASED COMPENSATION-Contd

As of January 31, 2009, there was $9,328 of unrecognized expenses related to non-vested stock-based compensation arrangements granted. The stock-based compensation expense for the nine-month period ended January 31, 2009 was $28,399.

On June 11, 2008, the Company cancelled 200,000 stock options held by a former officer.

On December 12, 2008, the Company and a consultant mutually agreed to terminate the consulting agreement effective October 31, 2008 which resulted in the cancellation of 250,000 stock options on January 31, 2009.

Subsequent to the quarter ended January 31, 2009, on March 11, 2009 the Company cancelled 150,000 stock options held by a former director.

8. SHORT-TERM INVESTMENT IN AVAILABLE- FOR- SALE SECURITIES

During the nine month period ended January 31, 2009, the Company sold the balance of 450,000 shares of Industrial Minerals, Inc. at an average selling price of $.0655 for a total consideration of $29,460 in the open market.

9. COMMITMENTS AND CONTINGENCIES

a) Mount Hinton Property Mining Claims

The Mount Hinton Property is adjacent to the Keno Hill Mining Camp in central Yukon Territory. It consists of 186 staked claims under the Yukon Quartz Mining Act, covering approximately 9300 acres.

On July 7, 2002 YGC, the Companys wholly-owned subsidiary, entered into an option agreement with the Hinton Syndicate to acquire a 75% interest in the 273 unpatented mineral claims covering approximately 14,000
acres in the Mayo Mining District of Yukon, Canada. This agreement was replaced with a revised and amended agreement (the Hinton Option Agreement) dated July 7, 2005 which superseded the original agreement and amendments thereto. The new
agreement is between the Company, its wholly-owned subsidiary YGC and the Hinton Syndicate.

YGC must make scheduled cash payments and perform certain work commitments to earn up to a 75% interest in the mineral claims, subject to a 2% net smelter return royalty in favor of the Hinton Syndicate, as further described below.

F-16

---

YUKON GOLD CORPORATION, INC. 
(An Exploration Stage
Mining Company) Condensed Notes to Interim Consolidated Financial Statements 
January
31, 2009 
(Amounts expressed in US Dollars) 
(Unaudited  Prepared by
Management)

9. COMMITMENTS AND CONTINGENCIES-Contd

The schedule of Property Payments and Work Programs are as
follows:

PROPERTY PAYMENTS

|On execution of the July 7, 2002 Agreement | $ 19,693 (CDN$ 25,000) Paid      
|------------------------------------------ | ---------------------------------
|On July 7, 2003                            | $
      59,078 (CDN$ 75,000) Paid
|On July 7, 2004                            | $118,157 (CDN$ 150,000) Paid     
|On January 2, 2006                         | $125,313 (CDN$ 150,000) Paid     
|On July 7, 2006                            | $134,512 (CDN$ 150,000) Paid     
|On July 7, 2007                            | $141,979 (CDN$ 150,000) Paid     
|On July 7, 2008                            | $146,484 (CDN$ 150,000) Paid     
|TOTAL                                      | $745,216 (CDN$850,000)           

WORK PROGRAM-expenditures to be incurred in the following
periods;

|July 7/02 to July 6/03        | $ 118,157 (CDN$ 150,000)
      Incurred  
|----------------------------- | -----------------------------------------
|July 7/03 to July
      6/04  | $
      196,928 (CDN$ 250,000) Incurred  
|July 7/04 to July 6/05        | $ 256,006 (CDN$ 325,000)
      Incurred  
|July 7/05 to Dec.
      31/06 | $
      667,795 (CDN$ 750,000) Incurred  
|Jan. 1/07 to Dec. 31/07       | $ 937,383 (CDN$ 1,000,000)
      Incurred
|Jan. 1/08 to Dec.
      31/08 | $1,019,160 (CDN$ 1,250,000)**Deferred    
|Jan. 1/09 to Dec. 31/09       | $1,222,992 (CDN$ 1,500,000)              
|TOTAL                         | $4,418,421 (CDN$5,225,000)               

By letter agreement dated August 17, 2006, the Hinton Syndicate
agreed to allow the Company to defer a portion of the Work Program expenditure
scheduled to be incurred by December 31, 2006. The agreement to defer such Work
Program expenditures was due to the mechanical break-down of drilling equipment
and the unavailability of replacement drilling equipment at the Mount Hinton
site. As a result, the Company was allowed to defer the expenditure of
approximately $220,681 (CDN$235,423) until December 31, 2007. The Company had
incurred that expenditure in addition to the expenditure for January 1 to
December 31, 2007 as at October 31, 2007. All other Property Payments and Work
Program expenditures due have been made and incurred.

F-17

---

YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Mining Company)
Condensed
Notes to Interim Consolidated Financial Statements 
January 31, 2009 
(Amounts expressed in US Dollars) 
(Unaudited  Prepared by Management)

9. COMMITMENTS AND CONTINGENCIES-Contd

**By letter agreement dated February 29, 2008, the Company gave notice to the Hinton Syndicate that all of the Work Program expenditures scheduled to be incurred by December 31, 2008 would be deferred until December 31, 2009. Subsection 2.2(f) of
the Hinton Option Agreement provides that if Yukon Gold has earned at least 25% of the right, title and interest in the Property as provided for in Subsection 2.2(e) of the Hinton Option Agreement and is unable to meet its next year's Work Program
expenditures as set out in Section 2.2 of the Hinton Option Agreement, it shall be entitled to extend the time required to incur the Work Program expenditures from year to year by giving notice to the Hinton Syndicate to such effect; provided that
the full amount of the Work Program expenditures has been incurred by December 31, 2009.

Provided all Property Payments have been made that are due prior to the Work Program expenditure levels being attained, YGC shall have earned a:

> 25% interest upon completion of Work Program expenditures of $1,222,992
> (CDN$1,500,000)
> 50% interest upon completion of Work Program expenditures of $2,038,320
> (CDN$2,500,000)
> 75% interest upon completion of Work Program expenditures of $4,418,421
> (CDN$5,225,000)

YGC earned a 50% interest in the claims covered by the Hinton Option Agreement as at October 31, 2007. In some cases, payments made to service providers include amounts advanced to cover the cost of future work. These advances are not loans but are
considered incurred exploration expenses under the terms of the Hinton Option Agreement. Section 2.2(a) of the Hinton Option Agreement defines the term, incurred as follows:  Costs shall be deemed to have been
incurred when YGC has contractually obligated itself to pay for such costs or such costs have been paid, whichever should first occur. Consequently, the term, incurred includes amounts actually paid and amounts that YGC
has obligated itself to pay.

The Hinton Option Agreement contemplates that upon the earlier of: (i) a production decision or (ii) investment of $4,418,421 (CDN$5,225,000) or (iii) YGC has a minority interest and decides not to spend any more money on the project, YGC's
relationship with the Hinton Syndicate will become a joint venture for the further development of the property. Under the terms of the Hinton Option Agreement, the party with the majority interest would control the joint venture. Although YGC had
earned a 50% interest as at October 31, 2007, if the relationship is converted to a joint venture currently, YGC's interest would automatically be reduced to a 45% interest in the joint venture (by the terms of the Hinton Option Agreement) and the
Hinton Syndicate would control the joint venture. Once the 75% interest is earned, as described above, YGC has a further option to acquire the remaining 25% interest in the mineral claims for a further payment of $4,076,641 (CDN$5,000,000).

F-18

---

YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Mining Company)
Condensed
Notes to Interim Consolidated Financial Statements 
January 31, 2009 
(Amounts expressed in US Dollars) 
(Unaudited  Prepared by Management)

9. COMMITMENTS AND CONTINGENCIES-Contd

The Hinton Option Agreement provides that the Hinton Syndicate receives a 2% net smelter return royalty. In the event that the Company exercises its option to buy-out the remaining 25% interest of the Hinton Syndicate (which is only
possible if the Company has reached a 75% interest, as described above) then the net smelter return royalty would become 3% and the Hinton Syndicate would retain this royalty interest only. The net smelter return royalty is a
percentage of the gross revenue received from the sale of the ore produced from the mine less certain permitted expenses.

The Hinton Option Agreement entitles the Hinton Syndicate to recommend for appointment one member to the board of directors of the Company.

The Hinton Option Agreement provides both parties (YGC and the Hinton Syndicate) with rights of first refusal in the event that either party desires to sell or transfer its interest.

The Hinton Syndicate members each have the option to receive their share of property payments in stock of the Company at a 10% discount to the market. YGC and the Company have a further option to pay 40% of any property payment due after the payment
on January 2, 2006 with common stock of the Company. On July 7, 2007 the Company issued 136,364 common shares, with the approval of the TSX, in settlement of 40% of the property payment due on July 7, 2007. The shares represent $57,252
(CDN$60,000) which is 40% of the contracted payment and were valued at $0.42 (CDN$0.44) each. The $84,727 (CDN$90,000) balance was paid in cash to the members of the Hinton Syndicate on July 7, 2007. This entire issuance of
shares and cash payment was expensed as project expense. On July 7, 2008, the Company issued 476,189 common shares in settlement of a property payment on the Mount Hinton property. These shares represent $58,887 (CDN$60,000) which is 40% of
the contracted payment and were valued at $0.126 (CDN$0.126) each. The balance of the property payment in the amount of $88,331 (CDN$90,000) was paid in cash.

The Hinton Option Agreement pertains to an area of interest which includes the area within ten kilometres of the outermost boundaries of the 273 mineral claims, which constitute our mineral properties. Either party to the Hinton Option
Agreement may stake claims outside the 273 mineral claims, but each must notify the other party if such new claims are within the area of interest. The non-staking party may then elect to have the new claims included within the Hinton
Option Agreement. As of December 11, 2006, there were an additional 24 claims staked, known as the Gram Claims which became subject to the Hinton Option Agreement. On June 16, 2008 an additional 18 claims were staked (#25-#42), known as
the Gram Claims, at a cost of $8,679 (CDN$8,887), which became subject to the Hinton Option Agreement. On April 2, 2007 the Company accepted a proposed work program, budget and cash call schedule for the Mount Hinton project
which was revised on May 15, 2007. The Company paid cash calls in the amount of $2,152,317 (CDN$2,105,200) for the 2007 Work Program. The Company had approximately $70,304 (CDN$75,000) on deposit left over from the 2006 cash call
schedule.

F-19

---

YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Mining Company)
Condensed
Notes to Interim Consolidated Financial Statements 
January 31, 2009 
(Amounts expressed in US Dollars) 
(Unaudited  Prepared by Management)

9. COMMITMENTS AND CONTINGENCIES-Contd

On May 15, 2007 the Company paid $180,164 (CDN$200,000), on June 15, 2007 the Company paid $202,684 (CDN$225,000), being two of the four cash call payments. Due to delays in the drilling program the third payment of $635,123
(CDN$600,000), which was due on July 31, 2007 was changed to August 31, 2007. On August 15, 2007 the Company paid $97,259 (CDN$91,880) towards the third cash call payment for the Mount Hinton 2007 Work Program.  On August 31, 2007 the
Company re-allocated $537,864 (CDN$508,120) being the balance of the third cash call payment from cash call funds previously allocated to the Marg Project. These re-allocated funds were not needed for the Marg Project. The fourth payment of
$428,919 (CDN$405,200) which was originally due on August 15, 2007 was changed to and paid on September 15, 2007.

b) The Marg Property

In March 2005, the Company acquired rights to purchase 100% of the Marg Property, which consists of 402 contiguous mineral claims covering approximately 20,000 acres located in the Mayo Mining District of the Yukon Territory of Canada. Title to the
claims is registered in the name of YGC.

The Company assumed the rights to acquire the Marg Property under a Property Purchase Agreement (Agreement) with Atna Resources Ltd. (Atna). Under the terms of the Agreement the Company paid $119,189 (CDN$150,000)
cash and 133,333 common shares as a down payment. The Company made payments under the Agreement for $43,406 (CDN$50,000) cash and an additional 133,333 common shares of the Company on December 12, 2005; $86,805 (CDN$100,000) cash and
an additional 133,334 common shares of the Company on December 12, 2006.  On December 12, 2007 the Company paid $98,697 (CDN$100,000) being the next payment then due.

The Company has agreed to make subsequent payments under the Agreement of: $163,066 (CDN$200,000) in cash and/or common shares of the Company (or some combination thereof to be determined) on or before December 12, 2008. On December 4, 2008
the Company and Atna Resources Ltd. (Atna) entered into a letter agreement (the Amendment Agreement) amending the purchase agreement by which the Company acquired its Marg Property (the Marg Acquisition
Agreement). Under the terms of the Marg Acquisition Agreement the Company was required to pay to Atna $163,066 (CDN$200,000) (in cash or shares of the Companys common stock) on December 12, 2008.  In lieu of making such payment,
the Amendment Agreement permits the Company to pay Atna $19,980 (CDN$25,000) in cash on December 12, 2008 (paid) and $183,449 (CDN$225,000) (payable in cash or shares of the Companys common stock) on April 30, 2009.  Upon the
commencement of commercial production at the Marg Property, the Company will pay to Atna $815,328 (CDN$1,000,000) in cash and/or common shares of the Company, or some combination thereof to be determined.

On April 2, 2007 the Company accepted a proposed work program, budget and cash call schedule for the Marg project. The Company has paid cash calls in the amount of $2,100,528 (CDN$2,281,880) for the 2007 Work Program. The Company had
approximately $515,561 (CDN$550,000) on deposit left over from the 2006 cash call schedule. On May 15, 2007 the Company paid $703,037 (CDN$750,000), on June 15, 2007 the Company paid $703,037 (CDN$750,000), and on July 15,
2007 the Company paid $703,037 (CDN$750,000) being three of the four cash call payments.

F-20

---

YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Mining Company)
Condensed
Notes to Interim Consolidated Financial Statements 
January 31, 2009 
(Amounts expressed in US Dollars)
(Unaudited  Prepared by Management)

9. COMMITMENTS AND CONTINGENCIES-Contd

The fourth and final payment of $402,244 (CDN$380,000) was paid on August 15, 2007. On August 31, 2007 the Company re-allocated $537,864 (CDN$508,120) being the balance of the third cash call payment for the Mount Hinton 2007 Work
Program from cash call funds previously allocated to the Marg Project. These re-allocated funds were not needed for the Marg Project. On January 23, 2008 the Company was refunded $388,524 (CDN$390,000) as these funds were not needed for the
Marg Project.

c) On August 15, 2007 the Company entered into an investor relations marketing agreement with a consultant for a one year term, with the option to renew for an additional 12 months. In return for services rendered, the Company will pay the
consultant $1,992 (CDN$2,000) per month. On August 31, 2007 the Company paid $3,787 (CDN$4,000) being the first and last payments of the contract. On September 15, 2007 the Company paid $1,941 (CDN$2,000) and on October 15,
2007 the Company paid $2,048 (CDN$2,000), being the second and third payments respectively. On November 15, 2007 the Company paid $2,030 (CDN$2,000) being the fourth payment of the contract. On December 14, 2007 the Company paid
$1,967 (CDN$2,000) and on January 15, 2008 the Company paid $1,967 (CDN$2,000), being the fifth and sixth payments of the contract respectively. In addition, the consultant has been granted an option to purchase 125,000 shares of the
Company at $0.45 (CDN$0.45) per share, with the option vesting in equal quarterly amounts of 31,250 shares on November 15, 2007, February 15, 2008, May 15, 2008 and August 15, 2008, and the first exercise date being August 15, 2008 and an
expiry date of August 15, 2010. On February 12, 2008 the Company terminated the contract and the Company received a refund on March 11, 2008 of $1,295(CDN$1,300) previously paid on August 31, 2007 to cover the last payment of the one year
term. The 31,250 options granted under the contract to vest on each of May 15, 2008 and August 15, 2008 respectively were also cancelled.

d) On December 5, 2007 the Company entered into an agreement with a consultant to create investor awareness for a period of six months, commencing on December 5, 2007 for a fee of $20,000 and 300,000 restricted common shares to be issued in
equal tranches of 50,000 shares at the end of each month during the term of the agreement. On December 6, 2007 the Company received conditional approval from the TSX to issue the 300,000 restricted shares as per the terms of the agreement. The
consulting fee of $20,000 was paid on December 11, 2007. The Company had accrued the expense of $22,000 for 100,000 shares to be issued to January 31, 2008. Due to non-performance of the agreement by the consultant, the Company has obtained
legal opinion that it is not obligated to issue any of the restricted 300,000 common shares. The consulting expense accrual for $22,000 set up during the quarter ended January 31, 2008 was reversed and credited back to income in the quarter
ended April 30, 2008. The Company has also paid the requisite fee to the TSX for cancellation of all of these shares.

F-21

---

YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Mining Company)
Condensed
Notes to Interim Consolidated Financial Statements 
January 31, 2009 
(Amounts expressed in US Dollars) 
(Unaudited  Prepared by Management)

9. COMMITMENTS AND CONTINGENCIES-Contd

e) Effective as of December 15, 2007 the Company entered into a consulting agreement with Ronald Mann (the Mann Agreement), pursuant to which Mr. Mann was retained as the Company's President and Chief Executive Officer. The board of
directors of the Company appointed Mr. Mann to fill a vacancy on the board of directors, also effective as of December 15, 2007.  The Mann Agreement has a one-year term commencing on December 15, 2007, and is automatically renewable thereafter,
unless terminated pursuant to the terms of the Mann Agreement. Pursuant to the Mann Agreement, the parties agreed that Mr. Mann and the Company shall indicate their respective intentions to renew the term after the passage of eight (8) months from
the date of the Mann Agreement. Pursuant to the Mann Agreement, Mr. Mann will receive an annual consulting fee of $122,299 (CDN$150,000). In addition, Mr. Mann received 500,000 warrants to purchase shares of the Company's common stock (the
Mann Warrants). The Mann Warrants shall have a term of 5 years and an exercise price of $0.20 (CDN$0.24) . 250,000 of the Mann Warrants were fully vested upon issuance, and the remaining 250,000 vested 6 months from the date of
issuance, on June 15, 2008.  On December 12, 2008 the Company accepted Ronald Manns resignation as Chief Executive Officer and President and as a Director, and as an Officer and Director of YGC, the Companys wholly-owned subsidiary.
There were no disagreements between the Company and Mr. Mann with regards to the Companys operations
or public disclosures. The Company agreed to pay Mr. Mann severance of $20,384 (CDN$25,000), payable in two installments. $10,192
(CDN$12,500) was paid on December 12, 2008 and the balance of $10,192 (CDN$12,500) is due on April 15, 2009.

f)  As of December 18, 2007 the Company entered into a consulting agreement with Cletus Ryan (the Ryan Agreement) pursuant to which Mr. Ryan was retained as the Company's Vice President, Corporate Development. The Ryan Agreement has a
six-month term commencing on December 18, 2007 and is automatically renewable thereafter, unless terminated pursuant to the terms of the Ryan Agreement.  Pursuant to the Ryan Agreement, Mr. Ryan will receive an annual consulting fee of $97,839
(CDN$120,000).  In addition, Mr. Ryan received 200,000 options to purchase shares of the Company's common stock (the Ryan Options). The Ryan Options were fully vested upon the date of issuance and have an exercise price of $0.20
(CDN $0.24) . On March 7, 2008 the Company renewed the Ryan Agreement for an additional six months. On December 18, 2008 the Company advised Mr. Ryan by letter agreement that they would not be renewing the original consulting agreement however
agreed to compensate him for his services on a month-to-month basis for a fee of $6,523 (CDN$8,000) per month. The letter agreement further states that either party may terminate the agreement with 15 days notice.

g)  On February 11, 2008 by letter engagement agreement the Company contracted the services of a Corporate Secretarial company to fill the role of Mrs. Lisa Rose during her maternity leave for a monthly fee of $1,101 (CDN$1,350) plus
eligible expenses.

h) On February 18, 2008 the Company and YGC, its wholly-owned subsidiary, signed a surface drilling contract with a diamond drilling company for the Marg Project to commence on or about June 18, 2008. On February 18, 2008 the Company paid
$148,928 (CDN$150,000) as a deposit per the terms of the contract.  During the quarter ended July 31, 2008 the Company paid $281,581 (CDN$288,339) to the contractor. During the quarter ended October 31, 2008 the Company paid
$224,283 (CDN$270,149) to the contractor and on August 30, 2008 the drilling program was demobilized. The balance of the deposit in the amount of $8,362 (CDN$10,256) is being held by the diamond drilling company as a deposit on the
2009 drilling program.

F-22

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YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Mining Company)
Condensed
Notes to Interim Consolidated Financial Statements 
January 31, 2009 
(Amounts expressed in US Dollars) 
(Unaudited  Prepared by Management)

9. COMMITMENTS AND CONTINGENCIES-Contd

i) On March 10, 2008 the Company entered into a contract with a global mining consultancy business for a scoping study and to prepare a report pursuant to the terms of Canadian National Instrument 43-101, regarding the Marg Deposit at an estimated
cost of $76,675 (CDN$81,300). The Company paid $18,579 (CDN$18,713) at April 30, 2008. During the quarter ended July 31, 2008 the Company paid an additional $41,042 (CDN$42,027). During the quarter ended October 31, 2008 the
Company paid a further $17,054 (CDN$20,542) to the consultant. During the quarter ended January 31, 2009, the Company paid a final $28,698 (CDN$35,198) to the consultant and advised the consultant that the Company wished to cease
work on the project at this time.

j) On March 25, 2008 the Company entered into a consulting agreement with Gary Cohoon (the Cohoon Agreement) pursuant to which Mr. Cohoon was retained as Vice-President, Exploration, of the Company.  The Cohoon Agreement has a one-year
term commencing on March 25, 2008 and is automatically renewable thereafter, unless terminated pursuant to its terms. Pursuant to the Cohoon Agreement, Mr. Cohoon will receive an annual consulting fee of $114,146 (CDN$140,000).
Additionally, Mr. Cohoon received 200,000 options to purchase shares of the Company's common stock (the Cohoon Options). The Cohoon Options fully vested upon issuance and have an exercise price of $0.18 (CDN$0.22) . Effective
January 1, 2009 Mr. Cohoon has been billing the Company at an hourly rate only for time spent.

k) On April 10, 2008 by letter agreement the Company procured the services of Galina Morozova through a contract position as a Geologist with YGC, the Companys wholly-owned subsidiary commencing April 15, 2008 until August 31, 2008. Ms.
Morozova received $6,454 (CDN$6,500) per month until the project began at the Marg Property on approximately June 15, 2008, whereupon Ms. Morozova received $405 (CDN$500) per day plus expenses for the duration of the term of the
letter agreement.  The contract position ended on August 28, 2008.

l) On April 29, 2008 the Company entered into a letter agreement with R. Andrew Hureau for a contract position as Senior Geologist with YGC, the Companys wholly-owned subsidiary. Mr. Hureaus position commenced on May 1, 2008 at a rate of
$623 (CDN$750) per day plus expenses. The letter agreement states that the term is on commencement and for the duration of drilling on the Marg Project, approximately mid June, 2008 to the end of August, 2008, on a regular schedule. The
contract position ended on September 3, 2008.

m) On May 5, 2008 the Company entered into an investor relations agreement (the Equicom Agreement) with Equicom Group Inc. (Equicom) pursuant to which Equicom was retained to provide the Company with general marketing and
business consulting services for an initial term of one year, then renewable thereafter. Equicom will receive an annual work fee of $49,813 (CDN$60,000), payable in monthly installments of $4,151 (CDN$5,000). The initial prorated
retainer in the amount of $4,248 (CDN$4,350) and the June 1-30, 2008 installment of $4,883 (CDN$5,000) were made on May 30, 2008. On July 1, 2008 the installment covering July 1-31, 2008 of $4,883 (CDN$5,000) was paid. By
letter on July 23, 2008 the Company terminated the Equicom Agreement with such termination taking effect September 18, 2008. Payments were made on August 1, 2008 of $4,151 (CDN$5,000) and on September 1, 2008 of $2,491 (CDN$3,000)
representing the balance due on the contract.

F-23

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YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Mining Company)
Condensed
Notes to Interim Consolidated Financial Statements 
January 31, 2009 
(Amounts expressed in US Dollars) 
(Unaudited  Prepared by Management)

9. COMMITMENTS AND CONTINGENCIES-Contd

n) On May 16, 2008 the Company entered into a consulting agreement (the Clarke Agreement) with Clarke Capital Group Inc. (Clarke) pursuant to which Clarke was retained to provide the Company with investor relations and
business communications services for an initial term of 6 months, renewable thereafter for an additional 6 month term. Upon execution of the Clarke Agreement the Company paid Clarke $14,648 (CDN$15,000). Clarke will also receive a monthly
work fee of $2,854 (CDN$3,500) during the term of the agreement.  Upon renewal, Clarke will receive an additional payment of $8,153 (CDN$10,000). Pursuant to the Clarke Agreement, the Company issued Clarke 50,000 shares of common
stock on July 14, 2008, with an additional 50,000 shares issuable upon renewal. The Company paid the June and July installments on their respective due dates. The Company paid the August, September and October installments on their respective due
dates. On December 20, 2008 the Company and the consultant mutually agreed to terminate the consulting agreement entered into on May 16, 2008, effective November 30, 2008. The Company paid Clarke a final work fee of $1,631 (CDN$2,000) on
December 31, 2008.

o) On May 20, 2008 YGC, the Companys wholly-owned subsidiary entered into a service provision agreement with a company to provide cooking and first aid services on the Marg Property from June 15, 2008 to September 30, 2008. On June 4, 2008 the
Company paid a $9,766 (CDN$10,000) advance to the service provider as per the terms of the agreement. During the quarter ended July 31, 2008 the Company also paid $15,178 (CDN$15,543) to the service provider. During the quarter ended
October 31, 2008 the Company paid an additional $24,233 (CDN$29,189) and the contractor refunded the balance of the advance in the amount of $382 (CDN$460) to the Company.

p) On July 28, 2008 the Company entered into a consulting agreement with First Canadian Capital (First Canadian) pursuant to which First Canadian will provide general marketing and business consulting services for an initial term of one
year, renewable thereafter. The Company will pay First Canadian $4,892 (CDN$6,000) per month. The Company paid the first three months of such fees in advance. In addition on July 28, 2008 the Company issued 250,000 stock options to buy the
Companys shares at a purchase price of $0.12 (CDN$0.15) per share. The stock options shall vest over the initial term of the agreement. During the quarter ended January 31, 2009, on December 12, 2008 the Company and First Canadian
mutually agreed to terminate the agreement effective October 31, 2008 and all stock options were cancelled effective January 31, 2009.

10. RELATED PARTY TRANSACTIONS

Nine Months ended January 31, 2009

The Company and its subsidiary expensed a total of $116,094 in consulting fees & wages to five Company Directors, and $238,491 to five of its officers.

No director or officer exercised stock options during the nine month period ended January 31, 2009.

F-24

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YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Mining Company)
Condensed
Notes to Interim Consolidated Financial Statements 
January 31, 2009 
(Amounts expressed in US Dollars) 
(Unaudited  Prepared by Management)

11. CHANGES IN OFFICERS AND DIRECTORS

On August 1, 2008 the board of directors appointed Kathy Chapman Chief Administrative Officer of the Company.

On December 11, 2008 the Company accepted G.E. Ted Crebers resignation as a Director.

On December 12, 2008 the Company accepted Ronald Manns resignation as Chief Executive Officer and President and as a Director, and as an Officer and Director of YGC, the Companys wholly-owned subsidiary. There were no disagreements
between the Company and Mr. Mann with regards to the Companys operations or public disclosures. The Company agreed to pay Mr. Mann severance of $20,384 (CDN$25,000), payable in two installments. $10,192 (CDN$12,500) was paid on
December 12, 2008 and the balance of $10,192 (CDN$12500) is due on April 15, 2009.

On December 12, 2008 the Company appointed J.L. Guerra, Jr. President and Chief Executive Officer of both the Company and YGC. Mr. Guerra, Jr. is also the Chairman of the Companys Board of Directors.

12. EXPIRY OF WARRANTS

On August 22, 2008, 245,455 warrants held by J.L. Guerra, Jr., Chairman of the Board, expired.

On December 28, 2008, 643,652 warrants held by shareholders expired.

13. NORMAL COURSE ISSUER BID

On November 12, 2008 the Company filed a Form 8-K to disclose that the Company has commenced a normal course issuer bid to purchase up to 1,682,531 shares of its common stock, representing approximately 5% of the Companys outstanding shares.
Blackmont Capital Corporation, based in Vancouver, British Columbia, was engaged to conduct the bid. While the Company has not rescinded the issuer bid, the Company is reconsidering its position with respect to the bid. As of the date of this
report, the Company has no intention or ability to make any normal course issuer bids. If the Company effectuates the bid, the Company will pay prevailing market prices for the shares. Purchases pursuant to the bid will be made through the
facilities of the Toronto Stock Exchange, subject to the rules of the Toronto Stock Exchange and applicable rules promulgated under the Securities Exchange Act of 1934, as amended. The bid will terminate on the earlier of November 13, 2009, or the
date on which all of the shares to be acquired under the bid have been purchased. During the quarter ended January 31, 2009 the Company has not made any normal course issuer bids.

14. ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

On November 7, 2008 the Company received written permission from the TSX to extend the meeting date of their Annual and Special Meeting of Shareholders to January 31, 2009.  During the quarter ended January 31, 2009 the Company did not hold its
Annual and Special Meeting of Shareholders, in order to conserve cash. As a result, the Company remains in default under this TSX requirement.

15. SUBSEQUENT EVENTS

On February 2, 2009 the Toronto Stock Exchange (the "TSX") issued a letter to the Company stating that it is reviewing the eligibility of our common shares for continued listing on the TSX. As of the date of this report, the Company is not in compliance
with certain of the listing standards of the TSX. The Company
has been granted 210 days from the date of the letter to regain compliance with these requirements. In the event the Company is unable to meet the TSX standards its shares will likely cease to be listed for trading on the TSX.

On February 18, 2009 the Company entered into an engagement letter with PricewaterhouseCoopers LLP to provide tax consulting services and paid a retainer of $20,383 (CDN$25,000).

On March 11, 2009 the Company cancelled 150,000 stock options held by a former director.

On November 7, 2008 the Company received written permission from the TSX to extend the meeting date of their Annual and Special Meeting of Shareholders to January 31, 2009. As of the date of this report the Company has yet to hold its Annual and
Special Meeting of Shareholders.

F-25

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
FINANCIAL CONDITION AND RESULTS OF OPERATION
FOR THE THREE AND NINE MONTH PERIODS 
ENDED JANUARY 31, 2009

Discussion of Operations & Financial Condition

Yukon Gold has no source of revenue, operates at a loss and expects operating losses to continue as long as it remains in an exploration stage and perhaps thereafter. As at January 31, 2009, we had accumulated losses of $14,759,693. These losses
raise substantial doubt about our ability to continue as a going concern.  Our ability to emerge from the exploration stage and conduct mining operations is dependent, in large part, upon our raising additional equity financing.

As of the date of the filing of this report, the Company has very limited cash on hand. Management has undertaken initiatives to obtain short term financing, which may include financing backed by a pledge of some or all of our exploration property
assets. The Company also is simultaneously exploring opportunities to effect business combinations or joint ventures involving additional mining assets that may provide opportunities for greater long-term financing. Management also has taken steps
to reduce operating costs, including reductions in staff, cancellation of consulting contracts, deferral of payments under renegotiated agreements, deferred all exploration activity and deferral of the annual and special meeting of shareholders.

The Companys current obligations exceed its cash on hand. In particular, the Company was obligated to pay Revenue Canada approximately $98,740 (CDN$121,105) as flow-through interest and penalty in connection with flow
through funds accepted by the Company from investors in prior periods. Subsequent to the period covered by this report, on February 27, 2009 the Company paid $8,153(CDN$10,000) towards this amount. The Company also owes Atna Resources
Ltd. $183,449 (CDN$225,000) payable on or before April 30, 2009 in order to maintain the Companys interest in the Marg Property.  The Company has certain payment obligations coming due in the near future, as more particularly described
in Note 9 Commitments and contingencies to the quarterly financial statements for the period ended January 31, 2009 and under the heading Contractual Obligations and Commercial Commitments, below.

Due to current difficult economic conditions and increased competition among small mineral exploration stage companies for available sources of capital, it has become relatively more difficult to raise financing than in the previous operating years
of the Company.  The continued depletion of current cash and cash equivalents to meet ongoing administrative expenses and other continuing obligations is a material concern of management. The continued operation of the Company is dependent on
raising additional financing to meet commitments and obligations and there can be no assurance that such financing can be obtained on a timely basis or on favorable terms or at all. The Company was not able to raise additional capital during the
quarter ended January 31, 2009 or subsequently to date.

As a result of current general economic conditions, the Companys ability to attract investment and/or obtain financing is extremely limited. If we fail to obtain financing, the Company may be forced to cease doing business.

- 1 -

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Caution Regarding Forward-Looking Statements

Certain statements contained in this MD&A constitute
forward-looking statements. The use of any of the words anticipate, believe,
continue, could, estimate, expect, forecast, intend, likely,
may, plan, potential, predict, project, pursue, seek, should,
will, would and similar expressions identify forward-looking statements. The
foregoing is not an exhaustive list and other statements which are not limited
to reciting historical fact may include forward-looking statements without being
specifically identified by such words. Examples of forward-looking statements in
this MD&A include but are not limited to discussion of ability to raise
capital, to reduce costs, of regulatory compliance matters and plans for
continued operations. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause actual results or events
to differ materially from those anticipated in such forward-looking statements.

Forward-looking statements are based on the Companys
assumptions, expectations, estimates and projections regarding its prospects,
business and the economic environment in which it operates as of the date of the
MD&A. The Company believes the expectations reflected in those
forward-looking statements are reasonable but no assurance can be given that
these expectations will prove to be correct and such forward-looking statements
should not be unduly relied upon. These statements are current only as of the
date of this MD&A. Except as specifically required by applicable law, the
Company does not intend or undertake to update or revise any forward-looking
statements to reflect subsequent information, events, results or
circumstances.

Actual results could differ materially from those anticipated
in these forward-looking statements as a result of the risk factors set forth
below and under the section entitled Risk Factors:

- low cash and cash equivalents on hand;
- the Companys ability to raise capital;
- liabilities inherent in the Companys operations;
- competition for, among other things, limited sources of capital;
- fluctuations in foreign exchange or interest rates and stock market
  volatility; and
- the other factors discussed under Risk Factors.

The above list of factors should not be construed as
exhaustive.

**SELECTED INFORMATION**

|                                 |   | Three months     |   |   | Three months    |  
|-------------------------------- | - | ---------------- | - | - | --------------- | -
|                                 |   | ended            |   |   | ended           |  
|                                 |   | January 31,2009  |   |   | January 31,2008 |  
|                                 |   |                  |   |   |                 |  
|Revenues                         |   | Nil              |   |   | Nil             |  
|Net Loss                         | $ | 436,162          |   | $ | 1,101,507       |  
|Loss per share-basic and diluted | $ | (0.01            | ) | $ | (0.04           | )
|                                 |   |                  |   |   |                 |  
|                                 |   |                  |   |   |                 |  
|                                 |   | Nine months      |   |   | Nine months     |  
|                                 |   | ended            |   |   | ended           |  
|                                 |   | January 31, 2009 |   |   | January 31,2008 |  
|                                 |   |                  |   |   |                 |  
|Revenues                         |   | Nil              |   |   | Nil             |  

|Net Loss                          | $ | 2,870,536        |   | $ | 4,573,380      |  
|--------------------------------- | - | ---------------- | - | - | -------------- | -
|Loss per share-basic and diluted  | $ | (0.09            | ) | $ | (0.18          | )
|                                  |   |                  |   |   |                |  
|                                  |   |                  |   |   |                |  
|                                  |   | As at            |   |   | As at          |  
|                                  |   | January 31, 2009 |   |   | April 30, 2008 |  
|                                  |   |                  |   |   |                |  
|Total Assets                      | $ | 235,195          |   | $ | 2,526,600      |  
|Total Liabilities                 | $ | 350,770          |   | $ | 231,531        |  
|Cash dividends declared per share |   | Nil              |   |   | Nil            |  

- 2 -

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Revenues

No revenue was generated by the Company's operations during the
nine month and three month period ended January 31, 2009 and January 31, 2008
respectively.

Net Loss

The Company's expenses are reflected in the Consolidated
Statements of Operations under the category of Operating Expenses. To meet the
criteria of United States generally accepted accounting principles (GAAP), all
exploration and general and administrative costs related to projects are charged
to operations in the year incurred.

The significant components of expense that have contributed to
the total operating expense are discussed as follows:

(a) General and Administrative Expense

Included in operating expenses for the three months ended
January 31, 2009 is general and administrative expense of $150,071 as compared
to $942,711 for the three months ended January 31, 2008. General and
administrative expense for the nine month period ended January 31, 2009 was
$839,688 as compared with $1,409,684 for the nine month period ended January 31,
2008. General and administrative expense represents approximately 34.41% of the
total operating expense for the three months ended January 31, 2009 and
approximately 77.66% of the total operating expense for the three months ended
January 31, 2008. The reduction in general and administration expense during the
three months ended January 31, 2009 is due to management effort to reduce costs
in light of the difficult current economic conditions.

(b) Project Expense

Included in operating expenses for the three months ended
January 31, 2009 is project expenses of $208,022 as compared with $265,211 for
the three months ended January 31, 2008. Project expenses for the nine month
period ended January 31, 2009 was $1,931,660 as compared with $3,263,022 for the
nine month period ended January 31, 2008. Project expense is a significant
expense and it represents approximately 47.69% of the total operating expense
for the three months ended January 31, 2009 and approximately 21.85% of the
total operating expense for the three months ended January 31, 2008. Due to
lower cash availability, project expenses during the current nine month period
were significantly less than the prior similar period.

- 3 -

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Exploration Expenditures at the Company's
Properties

Mount Hinton

The Mount Hinton Property is adjacent to the Keno Hill Mining Camp in central Yukon Territory. It consists of 186 staked claims under the Yukon Quartz Mining Act, covering approximately 9300 acres.

On April 2, 2007 the Company accepted a proposed work program, budget and cash call schedule for the Mount Hinton project which was revised on May 15, 2007, totaling $2,152,317 (CDN$2,105,200) for the 2007 Work Program. The Company had
approximately $70,304 (CDN$75,000) on deposit left over from the 2006 cash call schedule. On May 15, 2007 the Company paid $180,164 (CDN$200,000), on June 15, 2007 the Company paid $202,684 (CDN$225,000), being two of the
four cash call payments. Due to delays in the drilling program the third payment of $635,123 (CDN$600,000) which was due on July 31, 2007 was changed to August 31, 2007. On August 15, 2007 the Company paid $97,259 (CDN$91,880)
towards the third cash call payment for the Mount Hinton 2007 Work Program. On August 31, 2007 the Company reallocated $537,864 (CDN$508,120) being the balance of the third cash call payment from cash call funds previously allocated to the
Marg Project. These re-allocated funds were not needed for the Marg Project. The fourth payment of $428,919 (CDN$405,200) which was originally due on August 15, 2007 was changed to and paid on September 15, 2007.

By letter agreement dated August 17, 2006, the Hinton Syndicate agreed to allow the Company to defer a portion of the Work Program expenditure scheduled to be incurred by December 31, 2006. The agreement to defer such Work program expenditures was
due to the mechanical break-down of drilling equipment and the unavailability of replacement drilling equipment at the Mount Hinton site. As a result, the Company was allowed to defer the expenditure of approximately $220,681 (CDN$235,423)
until December 31, 2007. The Company had incurred that expenditure in addition to the expenditure for January 1 to December 31, 2007 as at October 31, 2007. All other Property Payments and Work Program expenditures due have been made and
incurred.

By letter agreement dated February 29, 2008, the Company gave notice to the Hinton Syndicate that all of the Work Program expenditures scheduled to be incurred by December 31, 2008 would be deferred until December 31, 2009. Subsection 2.2(f) of the
Hinton Option Agreement provides that if Yukon Gold has earned at least 25% of the right, title and interest in the Property as provided for in Subsection 2.2(e) of the Hinton Option Agreement and is unable to meet its next year's Work Program
expenditures as set out in Section 2.2 of the Hinton Option Agreement, it shall be entitled to extend the time required to incur the Work Program expenditures from year to year by giving notice to the Hinton Syndicate to such effect; provided that
the full amount of the Work Program expenditures has been incurred by December 31, 2009.

Provided all Property Payments have been made that are due prior to the Work Program expenditure levels being attained, YGC shall have earned a:

25% interest upon completion of Work Program expenditures of $1,222,992
(CDN$1,500,000)

50% interest upon completion of Work Program expenditures of $2,038,320
(CDN$2,500,000)

75% interest upon completion of Work Program expenditures of $4,418,421
(CDN$5,225,000)

YGC earned a 50% interest in the claims covered by the Hinton Option Agreement as at October 31, 2007. In some cases, payments made to service providers include amounts advanced to cover the cost of future work. These advances are not loans but are
considered "incurred" exploration expenses under the terms of the Hinton Option Agreement. Section 2.2(a) of the Hinton Option Agreement defines the term, incurred as follows: Costs shall be deemed to have been
incurred when YGC has contractually obligated itself to pay for such costs or such costs have been paid, whichever should first occur.  Consequently, the term, incurred includes amounts actually paid and amounts that
YGC has obligated itself to pay.  Under the
Hinton Option Agreement there is also a provision that YGC must have raised and have available the Work Program funds for the period from July 7, 2005 to December 31, 2006, by May 15 of 2006. This provision was met on May 15, 2006.

- 4 -

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All Property Payments and Work Program expenditures have been made and incurred.

The Hinton Option Agreement contemplates that upon the earlier of: (i) a production decision or (ii) investment of $4,418,421 (CDN$5,225,000) or (iii) YGC has a minority interest and decides not to spend any more money on the project, YGC's
relationship with the Hinton Syndicate will become a joint venture for the further development of the property. Under the terms of the Hinton Option Agreement, the party with the majority interest would control the joint venture. Although YGC had
earned a 50% interest as at October 31, 2007, if the relationship is converted to a joint venture currently, YGC's interest would automatically be reduced to a 45% interest in the joint venture (by the terms of the Hinton Option Agreement) and the
Hinton Syndicate would control the joint venture. Once the 75% interest is earned, as described above, YGC has a further option to acquire the remaining 25% interest in the mineral claims for a further payment of $4,076,641 (CDN$5,000,000).

The Hinton Option Agreement provides that the Hinton Syndicate receive a 2% net smelter returns royalty.  In the event that we exercise our option to buy the entire interest of the Hinton Syndicate (which is only possible if we have
reached a 75% interest, as described above) then the "net smelter returns royalty" would become 3% and the Hinton Syndicate would retain this royalty interest only.  The net smelter returns royalty is a percentage of the gross revenue
received from the sale of the ore produced from our mine less certain permitted expenses.

The Hinton Option Agreement entitles the Hinton Syndicate to recommend for appointment (but not nominate) one member to the board of directors of Yukon Gold.

The Hinton Syndicate members each have the option to receive their share of property payments in stock of Yukon Gold at a 10% discount to the market. YGC and Yukon Gold also have the option to pay 40% of any property payment due after the payment on
January 2, 2006 with common stock of Yukon Gold. As of July 7, 2006, Yukon Gold issued to the Hinton Syndicate 43,166 shares of its common stock, based upon a valuation adopted by the board of Yukon Gold of $1.24 (CDN$1.39) per share, as
partial payment of the July 7, 2006 Property Payment. On July 7, 2006 the Company issued 43,166 common shares and paid $80,501 (CDN$90,000) in cash in settlement of the property payment due on July 7, 2006 on the Mount Hinton Property. The
shares represented 40% of the total $134,168 (CDN$150,000) payment and were valued at $1.24 (CDN$1.39) each. On July 7, 2007 the Company issued 136,364 common shares in settlement of a property payment on the Mount Hinton property.
The shares represent $57,252 (CDN$60,000) which is 40% of the contracted payment and were valued at $0.42 (CDN$0.44) each. On July 7, 2008, the Company issued 476,189 common shares in settlement of a property payment on the Mount
Hinton property. These shares represent $58,887 (CDN$60,000) which is 40% of the contracted payment and were valued at $0.126 (CDN$0.126) each. The balance of the property payment in the amount of $88,331 (CDN$90,000) was
paid in cash.

The Hinton Option Agreement pertains to an area of interest which includes the area within ten kilometers of the outermost boundaries of the 273 mineral claims, which constitute our mineral properties. Either party to the Hinton Option
Agreement may stake claims outside the 273 mineral claims, but each must notify the other party if such new claims are within the area of interest. The non-staking party may then elect to have the new claims included within the Hinton
Option Agreement. As of December 11, 2006, there were an additional 24 claims staked, known as the Gram Claims which became subject to the Hinton Option Agreement. On June 16, 2008 an additional 18 claims were staked (#25-#42), known as
the Gram Claims, at a cost of $8,679 (CDN$8,887), which became subject to the Hinton Option Agreement.

- 5 -

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The Hinton Option Agreement provides both parties (YGC and the Hinton Syndicate) with rights of first refusal in the event that either party desires to sell or transfer its interest.

Under the Hinton Option Agreement, the Hinton Syndicate is responsible for any environmental liability claims arising from the status of the property prior to the effective date of the Hinton Option Agreement.

Under the terms of the Hinton Option Agreement three of the syndicate members are entitled to bid on work we propose to carry out and if their price is competitive they are entitled to do the work.  There is no requirement in the Hinton Option
Agreement that these parties perform exploration work.

Marg Property

In March 2005, the Company acquired rights to purchase 100% of the Marg Property, which consists of 402 contiguous mineral claims covering approximately 20,000 acres located in the Mayo Mining District of the Yukon Territory of Canada. Title to the
claims is registered in the name of YGC.

The Company assumed the rights to acquire the Marg Property under a Property Purchase Agreement (Agreement) with Atna Resources Ltd. (Atna). Under the terms of the Agreement the Company paid $119,189 (CDN$150,000)
cash and 133,333 common shares as a down payment. The Company made payments under the Agreement for $43,406 (CDN$50,000) cash and an additional 133,333 common shares of the Company on December 12, 2005; $86,805 (CDN$100,000) cash and
an additional 133,334 common shares of the Company on December 12, 2006.  On December 12, 2007 the Company paid $98,697 (CDN$100,000) being the next payment due.

The Company has agreed to make subsequent payments under the Agreement of: $163,066 (CDN$200,000) in cash and/or common shares of the Company (or some combination thereof to be determined) on or before December 12, 2008. On December 4, 2008
the Company and Atna Resources Ltd. (Atna) entered into a letter agreement (the Amendment Agreement) amending the purchase agreement by which the Company acquired its Marg Property (the Marg Acquisition
Agreement). Under the terms of the Marg Acquisition Agreement the Company was required to pay to Atna $163,066 (CDN$200,000) (in cash or shares of the Companys common stock) on December 12, 2008.  In lieu of making such payment,
the Amendment Agreement permits the Company to pay Atna $19,980 (CDN$25,000) in cash on December 12, 2008 (paid) and $183,449 (CDN$225,000) (payable in cash or shares of the Companys common stock) on April 30, 2009. Upon the
commencement of commercial production at the Marg Property, the Company will pay to Atna $815,328 (CDN$1,000,000) in cash and/or common shares of the Company, or some combination thereof to be determined.

On April 2, 2007 the Company accepted a proposed work program, budget and cash call schedule for the Marg project. The Company has paid cash calls in the amount of $2,100,528 (CDN$2,281,880) for the 2007 Work Program. The Company had
approximately $515,561(CDN $550,000) on deposit left over from the 2006 cash call schedule. On May 15, 2007 the Company paid $703,037 (CDN$750,000), on June 15, 2007 the Company paid $703,037 (CDN$750,000), and on July 15,
2007 the Company paid $703,037 (CDN$750,000) being three of the four cash call payments. The fourth and final payment of $402,244 (CDN$380,000) was paid on August 15, 2007. On August 31, 2007 the Company re-allocated $537,864
(CDN$508,120) being the balance of the third cash call payment for the Mount Hinton 2007 Work Program from cash call funds previously allocated to the Marg Project. These re-allocated funds were not needed for the Marg Project. On January 23,
2008 the Company was refunded $388,524 (CDN$390,000) as these funds were not needed for the Marg Project.

Liquidity and Capital Resources

The following table summarizes the Company's cash flows and cash in hand:

- 6 -

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|                                        |   | January 31, 2009 |   |   | January 31, 2008 |  
|--------------------------------------- | - | ---------------- | - | - | ---------------- | -
|                                        |   |                  |   |   |                  |  
|Cash and cash equivalent                | $ | 113,819          |   | $ | 1,063,192        |  
|Working capital
      (deficit)         | $ | (169,988         | ) | $ | 1,777,983        |  
|Cash used in operating activities       | $ | (1,509,746       | ) | $ | (1,551,158       | )
|Cash used in
      investing activities | $ | (44,008          | ) | $ | (918,340         | )
|Cash provided in financing activities   | $ | 575,321          |   | $ | 2,487,543        |  

Off-Balance Sheet Arrangement

The Company has no Off-Balance Sheet Arrangement as of January
31, 2009.

Contractual Obligations and Commercial Commitments

In addition to the contractual obligations and commitments of
the Company to acquire its mineral properties as described in Note 9 to our
Financial Statements included with this report, the Company has additional
commitments for its office lease and to pay minimum lease payments under its
capital lease. Refer to our annual financial statements for April 30, 2008 for
future obligation payments.

Flow-Through and Unit Share Subscriptions

2007-2008

On August 16, 2007 the Company completed a private placement
(the Financing) with Northern Securities Inc. (Northern), acting as agent.
The Financing was comprised of the sale of 1,916,666 units (the Units) at
$0.42 (CDN$0.45) per Unit (the Unit Issue Price) for gross proceeds of
$802,101 (CDN$862,500) and the sale of 543,615 flow-through units (the
Flow-Through Units which qualify as flow-through shares for the purposes of
the Canadian Income Tax Act) at $0.49 (CDN$0.52) per Flow-Through Unit (the
Flow-Through Unit Issue Price) for gross proceeds of $262,884 (CDN$282,680).
The proceeds raised were allocated between the offering of shares and the sale
of tax benefits. A liability of $35,381 was recognized for the sale of taxable
benefits, which was reversed and credited to income when the Company renounced
resource expenditure deduction to the investor. Each Unit consisted of one
non-flow through common share (Common Share) and one half of one Common Share
purchase warrant (each whole warrant, a Warrant). Each Warrant is exercisable
into one Common Share until August 16, 2009 at an exercise price of $0.60
(CDN$0.60) per share. Each Flow-Through Unit consisted of one flow-through
common share and one half of one Common Share purchase warrant (each whole
warrant, an FT Warrant). Each FT Warrant is exercisable into one Common Share
until August 16, 2009 at an exercise price of $0.70 (CDN$0.70) per share. The
Company paid Northern a commission equal to 8% of the aggregate gross proceeds
which amounted to $85,199 (CDN$91,614) and issued 153,333 Unit Compensation
Options and 43,489 FT Unit Compensation Options. Each Unit Compensation
Option is exercisable into one Unit at the Unit Issue Price until August 16,
2009. Each FT Unit Compensation Option is exercisable into one Common Share and
one half of one FT Warrant at the Flow-Through Unit Issue Price until August 16,
2009. The Company reimbursed Northern expenses of $18,600 (CDN $20,000).

On November 16, 2007 the Company completed the second tranche
of the Financing with Northern acting as agent. The second tranche of the
Financing was comprised of the sale of 2,438,888 units (the Units) at $0.46
(CDN$0.45) per Unit (the Unit Issue Price) for gross proceeds of $1,127,028
(CDN$1,097,500) and the sale of 1,071,770 flow through units (the Flow-Through
Units) at $0.53 (CDN$0.52) per Flow-Through Unit (the Flow-Through Unit Issue
Price) for gross proceeds of $572,315 (CDN$557,320) . The proceeds raised were
allocated between the offering of shares and the sale of tax benefits. A
liability of $77,043 was recognized for the sale of taxable benefits, which was
reversed and credited to income when the Company renounced resource expenditure
deduction to the investor. The closing represented the final tranche of a
$2,816,673 (CDN$2.8 million) private placement with Northern announced on July 24, 2007. Each Unit consists of one non-flow through common share (Common Share) and one half of one Common Share purchase warrant (each whole
warrant, a Warrant). Each Warrant is exercisable into one Common Share until November 16, 2009 at an exercise price of $0.60 (CDN$0.60) per share. Each Flow-Through Unit consists of one flow-through common share and one half of
one Common Share purchase warrant (each whole warrant, an FT Warrant). Each FT Warrant is exercisable into one Common Share until November 16, 2009 at an exercise price of $0.70 (CDN$0.70) per share. Yukon Gold paid Northern a
commission equal to 8% of the aggregate gross proceeds and issued 195,111 Unit Compensation Options and 85,741 FT Unit Compensation Options. Each Unit Compensation Option is exercisable into one Common Share and one half of
one Common Share purchase warrant at the Unit Issue Price until November 16, 2009. Each full Common share purchase warrant is exercisable at $0.60 (CDN$0.60) . Each FT Unit Compensation Option is exercisable into one Common share and one
half of one Common share purchase warrant at the Flow-Through Unit Issue Price. Each full Common share purchase warrant is exercisable at $0.70 (CDN$0.70) .

- 7 -

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2008-2009

On July 23, 2008 the Company closed a non-brokered private placement of up to $976,563 (CDN$1,000,000). The Company completed the sale of 4,134,000 common shares on a flow-through basis at a price of $0.15 (CDN$0.15) per share for
gross proceeds of $613,778 (CDN$620,100). The Company paid a 5% finders fee on this private placement. The private placement was exempt from registration under the Securities Act of 1933, pursuant to an exemption afforded by Regulation S.
The flow through shares were issued at market without any additional price charged for sale of taxable benefits. The proceeds of the Financing are being used for the exploration and development of Yukon Gold's properties.

Consulting Agreements

On August 15, 2007 the Company entered into an investor relations marketing agreement with a consultant for a one year term, with the option to renew for an additional 12 months. In return for services rendered, the Company will pay the consultant
$1,992 (CDN$2,000) per month. On August 31, 2007 the Company paid $3,787 (CDN$4,000) being the first and last payments of the contract. On September 15, 2007 the Company paid $1,941 (CDN$2,000) and on October 15, 2007 the
Company paid $2,048 (CDN$2,000), being the second and third payments respectively. On November 15, 2007 the Company paid $2,030 (CDN$2,000) being the fourth payment of the contract. On December 14, 2007 the Company paid $1,967
(CDN$2,000) and on January 15, 2008 the  Company paid $1,967 (CDN$2,000), being the fifth and sixth payments of the contract respectively. In addition, the consultant has been granted an option to purchase 125,000 shares of the Company
at $0.45 (CDN$0.45) per share, with the option vesting in equal quarterly amounts of 31,250 shares on November 15, 2007, February 15, 2008, May 15, 2008 and August 15, 2008, and the first exercise date being August 15, 2008 and an expiry
date of August 15, 2010. On February 12, 2008 the Company terminated the contract and the Company received a refund on March 11, 2008 of $1,295(CDN$1,300) previously paid on August 31, 2007 to cover the last payment of the one year term.
The 31,250 options granted under the contract to vest on each of May 15, 2008 and August 15, 2008 respectively were also cancelled.

On December 5, 2007 the Company entered into an agreement with a consultant to create investor awareness for a period of six months, commencing on December 5, 2007 for a fee of $20,000 and 300,000 restricted common shares to be issued in equal
tranches of 50,000 shares at the end of each month during the term of the agreement. On December 6, 2007 the Company received conditional approval from the TSX to issue the 300,000 restricted shares as per the terms of the agreement. The consulting
fee of $20,000 was paid on December 11, 2007. The Company had accrued the expense of $22,000 for 100,000 shares to be issued to January 31, 2008. Due to non-performance of the agreement by the consultant, the Company has obtained legal
opinion that it is not obligated to issue any of the restricted 300,000 common shares. The consulting expense accrual for $22,000 set up during the quarter ended January 31, 2008 was reversed and credited back
to income during the quarter ended April 30, 2008. The Company has also paid the requisite fee to the TSX for cancellation of all of these shares.

- 8 -

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Effective as of December 15, 2007 the Company entered into a consulting agreement with Ronald Mann (the Mann Agreement), pursuant to which Mr. Mann was retained as the Company's President and Chief Executive Officer. The board of
directors of the Company appointed Mr. Mann to fill a vacancy on the board of directors, also effective as of December 15, 2007. The Mann Agreement has a one-year term commencing on December 15, 2007, and is automatically renewable thereafter,
unless terminated pursuant to the terms of the Mann Agreement. Pursuant to the Mann Agreement, the parties agreed that Mr. Mann and the Company shall indicate their respective intentions to renew the term after the passage of eight (8) months from
the date of the Mann Agreement. Pursuant to the Mann Agreement, Mr. Mann will receive an annual consulting fee of $122,299 (CDN$150,000). In addition, Mr. Mann received 500,000 warrants to purchase shares of the Company's common stock (the
Mann Warrants). The Mann Warrants shall have a term of 5 years and an exercise price of $0.20 (CDN$0.24) . 250,000 of the Mann Warrants were fully vested upon issuance, and the remaining 250,000 vested 6 months from the date of
issuance, on June 15, 2008. On December 12, 2008 the Company accepted Ronald Manns resignation as Chief Executive Officer and President and as a Director, and as an Officer and Director of YGC, the Companys wholly-owned subsidiary. There
were no disagreements between the Company and Mr. Mann with regards to the Companys operations or public disclosures. The Company agreed to pay Mr. Mann severance of $20,384 (CDN$25,000), payable in two installments. $10,192
(CDN$12,500) was paid on December 12, 2008 and the balance of $10,192 (CDN$12,500) is due on April 15, 2009.

As of December 18, 2007 the Company entered into a consulting agreement with Cletus Ryan (the Ryan Agreement) pursuant to which Mr. Ryan was retained as the Company's Vice President, Corporate Development. The Ryan Agreement has a
six-month term commencing on December 18, 2007 and is automatically renewable thereafter, unless terminated pursuant to the terms of the Ryan Agreement. Pursuant to the Ryan Agreement, Mr. Ryan will receive an annual consulting fee of $97,839
(CDN$120,000).  In addition, Mr. Ryan received 200,000 options to purchase shares of the Company's common stock (the Ryan Options). The Ryan Options were fully vested upon the date of issuance and have an exercise price of $0.20
(CDN $0.24) . On March 7, 2008 the Company renewed the Ryan Agreement for an additional six months. On December 18, 2008 the Company advised Mr. Ryan by letter agreement that they would not be renewing the original consulting agreement however
agreed to compensate him for his services on a month-to-month basis for a fee of $6,523 (CDN$8,000) per month. The letter agreement further states that either party may terminate the agreement with 15 days notice.

On February 11, 2008 by letter engagement agreement the Company contracted the services of a Corporate Secretarial company to fill the role of Mrs. Lisa Rose during her maternity leave for a monthly fee of $1,101 (CDN$1,350) plus eligible
expenses.

On February 18, 2008 the Company and YGC, its wholly-owned subsidiary, signed a surface drilling contract with a diamond drilling company for the Marg Project to commence on or about June 18, 2008. On February 18, 2008 the Company paid $148,928
(CDN$150,000) as a deposit per the terms of the contract. During the quarter ended July 31, 2008 the Company paid $281,581 (CDN$288,339) to the contractor.  During the quarter ended October 31, 2008 the Company paid $224,283
(CDN$270,149) to the contractor and on August 30, 2008 the drilling program was demobilized.  The balance of the deposit in the amount of $8,362 (CDN$10,256) is being held by the diamond drilling company as a deposit on the 2009 drilling
program.

On March 10, 2008 the Company entered into a contract with a global mining consultancy business for a scoping study and to prepare a report pursuant to the terms of Canadian National Instrument 43-101, regarding the Marg Deposit at an estimated cost
of $76,675 (CDN$81,300).  The Company paid $18,579 (CDN$18,713) at April 30, 2008. During the quarter ended July 31, 2008 the Company paid an additional $41,042 (CDN$42,027). During the quarter ended October 31, 2008 the
Company paid a further $17,054 (CDN$20,542) to the consultant.  During the quarter ended January 31, 2009, the Company paid a final
$28,698 (CDN$35,198) to the consultant and advised the consultant that the Company wished to cease work on the project at this time.

- 9 -

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On March 25, 2008 the Company entered into a consulting agreement with Gary Cohoon (the Cohoon Agreement) pursuant to which Mr. Cohoon was retained as Vice-President, Exploration, of the Company.  The Cohoon Agreement has a one-year term
commencing on March 25, 2008 and is automatically renewable thereafter, unless terminated pursuant to its terms. Pursuant to the Cohoon Agreement, Mr. Cohoon will receive an annual consulting fee of $114,146 (CDN$140,000). Additionally, Mr.
Cohoon received 200,000 options to purchase shares of the Company's common stock (the Cohoon Options). The Cohoon Options fully vested upon issuance and have an exercise price of $0.18 (CDN$0.22) . Effective January 1, 2009 Mr.
Cohoon has been billing the Company at an hourly rate only for time spent.

On April 10, 2008 by letter agreement the Company procured the services of Galina Morozova through a contract position as a Geologist with YGC, the Companys wholly-owned subsidiary commencing April 15, 2008 until August 31, 2008. Ms. Morozova
received $6,454 (CDN$6,500) per month until the project began at the Marg Property on approximately June 15, 2008, whereupon Ms. Morozova received $405 (CDN$500) per day plus expenses for the duration of the term of the letter
agreement. The contract position ended on August 28, 2008.

On April 29, 2008 the Company entered into a letter agreement with R. Andrew Hureau for a contract position as Senior Geologist with YGC, the Companys wholly-owned subsidiary. Mr. Hureaus position commenced on May 1, 2008 at a rate of
$623 (CDN$750) per day plus expenses. The letter agreement states that the term is on commencement and for the duration of drilling on the Marg Project, approximately mid June, 2008 to the end of August, 2008, on a regular schedule. The
contract position ended on September 3, 2008.

On May 5, 2008 the Company entered into an investor relations agreement (the Equicom Agreement) with Equicom Group Inc. (Equicom) pursuant to which Equicom was retained to provide the Company with general marketing and
business consulting services for an initial term of one year, then renewable thereafter. Equicom will receive an annual work fee of $49,813 (CDN$60,000), payable in monthly installments of $4,151 (CDN$5,000). The initial prorated
retainer in the amount of $4,248 (CDN$4,350) and the June 1-30, 2008 installment of $4,883 (CDN$5,000) were made on May 30, 2008.  On July 1, 2008 the installment covering July 1-31, 2008 of $4,883 (CDN$5,000) was paid. By
letter on July 23, 2008 the Company terminated the Equicom Agreement with such termination taking effect September 18, 2008. During the quarter ended October 31, 2008, the Company paid on August 1, 2008 $4,151 (CDN$5,000) and on September 1,
2008 $2,491 (CDN$3,000) being the balance payments on the contract.

On May 16, 2008 the Company entered into a consulting agreement (the Clarke Agreement) with Clarke Capital Group Inc. (Clarke) pursuant to which Clarke was retained to provide the Company with investor relations and business
communications services for an initial term of 6 months, renewable thereafter for an additional 6 month term. Upon execution of the Clarke Agreement the Company paid Clarke $14,648 (CDN$15,000). Clarke will also receive a monthly work fee of
$2,906 (CDN$3,500) during the term of the agreement. Upon renewal, Clarke will receive an additional payment of $8,302 (CDN$10,000). Pursuant to the Clarke Agreement, the Company issued Clarke 50,000 shares of common stock on July
14, 2008, with an additional 50,000 shares issuable upon renewal. The Company paid the June and July installments on their respective due dates. During the quarter ended October 31, 2008 the Company paid the August, September and October
installments on their due dates.  On December 20, 2008 the Company and the consultant mutually agreed to terminate the consulting agreement entered into on May 16, 2008, effective November 30, 2008. The Company paid Clarke a final work fee of
$1,631 (CDN$2,000) on December 31, 2008.

On May 20, 2008 YGC, the Companys wholly-owned subsidiary entered into a service provision agreement with a company to provide cooking and first aid services on the Marg Property from June 15, 2008 to September 30, 2008. On June 4, 2008 the
Company paid a $9,766 (CDN$10,000) advance to the service
provider as per the terms of the agreement. During the quarter ended July 31, 2008 the Company also paid $15,178 (CDN$15,543) to the service provider. During the quarter ended October 31, 2008 the Company paid an additional $24,233
(CDN$29,189) and the contractor refunded the balance of the advance in the amount of $382 (CDN$460) to the Company.

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On July 28, 2008 the Company entered into a consulting agreement with First Canadian Capital (First Canadian) pursuant to which First Canadian will provide general marketing and business consulting services for an initial term of one
year, renewable thereafter.  The Company will pay First Canadian $4,892 (CDN$6,000) per month. The Company paid the first three months of such fees in advance. In addition on July 28, 2008 the Company issued 250,000 stock options to buy the
Companys shares at a purchase price of $0.12 (CDN$0.15) per share. The stock options shall vest over the initial term of the agreement. During the quarter ended January 31, 2009, on December 12, 2008 the Company and First Canadian
mutually agreed to terminate the agreement effective October 31, 2008 and all stock options were cancelled effective January 31, 2009.

Changes in Officers and Directors

On December 11, 2008 the Company accepted the resignation of G.E. Ted Creber as a Director.

On December 12, 2008 the Company accepted Ronald Manns resignation as Chief Executive Officer and President and as a Director, and as an Officer and Director of YGC, the Companys wholly-owned subsidiary. There were no disagreements
between the Company and Mr. Mann with regards to the Companys operations or public disclosures. The Company agreed to pay Mr. Mann severance of $20,384 (CDN$25,000), payable in two installments. $10,192 (CDN$12,500) was paid
on December 12, 2008 and the balance of $10,192 (CDN$12500) is due on April 15, 2009.

On December 12, 2008 the Company appointed J.L. Guerra, Jr. President and Chief Executive Officer of both the Company and YGC. Mr. Guerra, Jr. is also the Chairman of the Companys Board of Directors.

Normal Course Issuer Bid

On November 12, 2008 the Company filed a Form 8-K to disclose that the Company has commenced a normal course issuer bid to purchase up to 1,682,531 shares of its common stock, representing approximately 5% of the Companys outstanding shares.
Blackmont Capital Corporation, based in Vancouver, British Columbia, was engaged to conduct the bid. While the Company has not rescinded the issuer bid, the Company is reconsidering its position with respect to the bid. As of the date of this
report, the Company has no intention or ability to make any normal course issuer bids.  If the Company effectuates the bid, the Company will pay prevailing market prices for the shares. Purchases pursuant to the bid will be made through the
facilities of the Toronto Stock Exchange, subject to the rules of the Toronto Stock Exchange and applicable rules promulgated under the Securities Exchange Act of 1934, as amended. The bid will terminate on the earlier of November 13, 2009, or the
date on which all of the shares to be acquired under the bid have been purchased. During the quarter ended January 31, 2009 the Company has not made any normal course issuer bids.

Annual and Special Meeting of Shareholders

On November 7, 2008 the Company received written permission from the TSX to extend the meeting date of their Annual and Special Meeting of Shareholders to January 31, 2009. During the quarter ended January 31, 2009 the Company did not hold its
Annual and Special Meeting of Shareholders.

Subsequent Events

On February 2, 2009 the Toronto Stock Exchange (the "TSX") issued a letter to the Company stating that it is reviewing the eligibility of our common shares for continued listing on the TSX. As of the date of this report,
the Company is not in compliance with certain of the listing standards of the TSX. The Company has been granted 210 days from the date of the letter to regain compliance with these requirements. In the event the Company is unable to meet TSX
standards, its shares will likely cease to be listed.

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On February 18, 2009 the Company entered into an engagement letter with PricewaterhouseCoopers LLP to provide tax consulting services and paid a retainer of $20,383 (CDN$25,000).

On March 11, 2009 the Company cancelled 150,000 stock options held by a former director.

On November 7, 2008 the Company received written permission from the TSX to extend the meeting date of their Annual and Special Meeting of Shareholders to January 31, 2009. As of the date of this report, the Company has not held its Annual and
Special Meeting of Shareholders.

Critical Accounting Policies

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of
the financial statements, the reported amount of revenues and expenses during the reporting period and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, particularly those related
to the determination of the estimated Canadian exploration tax credit receivable and accrued liabilities. To the extent actual results differ from those estimates, our future results of operations may be affected. Besides this critical accounting
policy on use of estimates, we believe the following critical accounting policy affects the preparation of our consolidated financial statements.

Acquisition, Exploration and Evaluation Expenditures

The Company is an exploration stage mining company and has not yet realized any revenue from its operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as
incurred. Mineral property payments are capitalized only if the Company is able to allocate any economic value beyond proven and probable reserves. When it has been determined that a mineral property can be economically developed as a result of
establishing proven and probable reserves, the costs incurred to develop such property will be capitalized. For the purpose of preparing financial information, the Company is unable to allocate any economic value beyond proven and probable reserves
and hence all property payments are considered to be impaired and accordingly written off to project expense. All costs associated with a property that has the potential to add to the Companys proven and probable reserves are expensed until a
final feasibility study demonstrating the existence of proven and probable reserves is completed. No costs have been capitalized in the periods covered by these financial statements. Once capitalized, such costs will be amortized using the
units-of-production method over the estimated life of the probable reserve.

Mineral property acquisition costs will also be capitalized in accordance with the FASB Emerging Issues Task Force (EITF) Issue 04-2 when management has determined that probable future benefits consisting of a contribution to future cash
inflows have been identified and that adequate financial resources are available or are expected to be available as required to meet the terms of property acquisition and budgeted exploration and development expenditures. Mineral property payments
are expensed as incurred if the criteria for capitalization is not met.

To date, mineral property exploration costs have been expensed as incurred. As of the date of these financial statements, the Company has incurred only property payments and exploration costs, which have been expensed. To date the Company has not
established any proven or probable reserves on its mineral properties

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CONTROLS AND PROCEDURES

|(a) | Disclosure Controls and Procedures. The Company's management, with the participation of the principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Company's disclosure
controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act) as at January 31, 2009. Based on such evaluation, the principal executive officer
and principal financial officer of the Company, respectively, have concluded that, as of the end of the current quarter, the Company's disclosure controls and procedures are effective.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(b) | Internal Control Over Financial Reporting. There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
quarter ended January 31, 2009 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(c) | Limitations on the Effectiveness of Controls. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of
controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.                                                                                                                                                                                                                                                                                                  

DISCLOSURE AND FINANCIAL CONTROLS AND PROCEDURES

In connection with the Company's compliance with securities laws and rules, its board of directors evaluated the Company's disclosure controls and procedures. The board of directors has concluded that the Company's disclosure controls and procedures
are effective. There have been no significant changes in these controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

Internal financial controls and procedures have been designed under the supervision of the Company's board of directors. The internal financial controls provide reasonable assurance regarding the reliability of the Company's financial reporting and
preparation of financial statements in accordance with generally accepted accounting principals. There have been no significant changes in these controls or in other factors that could significantly affect these controls since they were instituted,
including any corrective actions with regard to significant deficiencies and material weaknesses.

PART II-OTHER INFORMATION

Item 1.

LEGAL PROCEEDINGS

None.

Item 1A.

RISK FACTORS

|1. | WE DO NOT HAVE AN OPERATING BUSINESS.                                                                                                                                                                                                                                                                     
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                           
|   | The Company has rights in certain mineral claims located in Yukon, Canada. To date we have done limited exploration of the property covered by our mineral claims. We do not have a mine or a mining business of any kind. There is no
assurance that we will develop an operating business in the future.
|   |                                                                                                                                                                                                                                                                                                           

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|2. | WE DO NOT HAVE ADEQUATE CASH ON HAND TO MEET CURRENT OBLIGATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | As of the date of the filing of this report, the Company has very little cash. The Companys current obligations exceed its cash on hand. In particular, as at January 31, 2009 the Company was obligated to pay Revenue Canada
approximately $98,740 (CDN$121,105) as flow-through interest and penalty in connection with flow through funds accepted by the Company from investors in prior periods. Subsequent to the period covered by this report, on February
27, 2009 the Company paid $8,153 (CDN$10,000) towards this amount. The Company also owes Atna Resources Ltd. $183,449(CDN$225,000) payable on or before April 30, 2009 in order to maintain the Companys interest in the Marg
Property.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | As a result of current general economic conditions, the Companys ability to attract investment and/or obtain financing is extremely limited. If we fail to obtain financing, the Company will be forced to cease doing
business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|3. | WE HAVE NO SOURCE OF OPERATING REVENUE AND EXPECT TO INCUR SIGNIFICANT EXPENSES BEFORE ESTABLISHING AN OPERATING COMPANY, IF WE ARE ABLE TO ESTABLISH AN OPERATING COMPANY AT ALL.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Currently, we have no source of revenue, we do not have sufficient working capital to complete our exploration programs (including feasibility studies) and we do not have any commitments to obtain additional financing. Further, we
do not have enough working capital to meet all of our contractual commitments to acquire our mineral properties. We have no operating history upon which an evaluation of our future success or failure can be made. Our ability to achieve and maintain
profitability and positive cash flow is dependent upon:                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Because we have no operating revenue, we expect to incur operating losses in future periods as we continue to expend funds to explore and develop the Mount Hinton and Marg Properties. Failure to raise the necessary capital to
continue exploration and development could cause us to go out of business.                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|4. | OUR SHARES MAY CEASE TO BE LISTED ON THE TSX                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | On February 2, 2009 the Toronto Stock Exchange (TSX) issued a letter to the Company stating that it is reviewing the eligibility of our common shares for continued listing on the TSX. As of the date of this report, the Company is
not in compliance with certain of the listing standards of the TSX. The Company has been granted 210 days from the date of the letter to regain compliance with these requirements. If the Company is unable to meet TSX standards, its shares will
cease to be listed for trading on the TSX.                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|5. | SHELL COMPANY STATUS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | As a result of our financial deterioration the Company may be considered a shell company under applicable SEC rules. If the Company is considered a shell company, the exemption from registration under SEC
Rule 144 for the resale of our stock by our shareholders would not be available. As a result, investors purchasing newly issued restricted stock of the Company may not be able to obtain liquidity for their shares as readily or as
predictably as would be the case if Rule 144 applies. Consequently, it may be more difficult for the Company to obtain new equity investment.                                                                                                         

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|6.  | GOING CONCERN QUALIFICATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Company has included a going concern qualification in the Consolidated Interim Financial Statements to the effect that we are an exploration stage company and have no established sources of revenue. In the event
that we are unable to raise additional capital and/or locate mineral resources, as to which in each case there can be no assurance, we may not be able to continue our operations. In addition, the existence of the going concern
qualification in our auditor's report may make it more difficult for us to obtain additional financing. If we are unable to obtain additional financing, you may lose all or part of your investment.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|7.  | THERE ARE PENNY STOCK SECURITIES LAW CONSIDERATIONS THAT COULD LIMIT YOUR ABILITY TO SELL YOUR SHARES.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Our common stock is considered a penny stock and the sale of our stock by you will be subject to the penny stock rules of the Securities and Exchange Commission. The penny stock rules require broker-dealers
to take steps before making any penny stock trades in customer accounts. As a result, our shares could be illiquid and there could be delays in the trading of our stock, which would negatively affect your ability to sell your shares and could
negatively affect the trading price of your shares.                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|8.  | OUR BUSINESS IS AFFECTED BY CHANGES IN COMMODITY PRICES.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Our ability to develop our mineral properties and the future profitability of the Company is directly related to the market price of certain minerals. The Company would be negatively affected if commodity prices were to fall.                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|9.  | OUR BUSINESS IS SUBJECT TO CURRENCY RISKS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Company conducts the majority of its business activities in Canadian dollars. Consequently, the Company is subject to gains or losses due to fluctuations in Canadian currency relative to the U.S. dollar.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10. | CURRENT LEVELS OF MARKET VOLATILITY COULD HAVE ADVERSE IMPACTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The capital and credit markets have been experiencing volatility and disruption. If the current levels of market disruption and volatility continue or worsen, there can be no assurance that the Company will not experience adverse
effects, which may be material. These effects may include, but are not limited to, difficulties in raising additional capital or debt and a smaller pool of investors and funding sources. There is thus no assurance the Company will have access to the
equity capital markets to obtain financing when necessary or desirable.                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|11. | A GENERAL DETERIORATION IN ECONOMIC CONDITIONS MAY HAVE ADVERSE IMPACTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The current economic environment is challenging and uncertain. The consequences of a prolonged recession may include a lower level of economic activity and uncertain regarding commodity markets. Further, the risks associated with
industries in which the Company operates become more acute in periods of a slowing economy or slow growth.                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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|12. | WE MUST MAKE REGULAR ONGOING INVESTMENTS IN ORDER TO MAINTAIN OUR MINERAL CLAIMS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | We have an option agreement with a private syndicate,
      known as the Hinton Syndicate, to acquire an interest in the mineral
      claims described in this report as the Mount Hinton Property. Our
      agreement with the Hinton Syndicate requires us to make regular ongoing
      investments. If we fail to make these investments, we will not earn an
      interest in these mineral claims and we may lose all of our rights in the
      Mount Hinton Property. The Marg Acquisition Agreement, as amended, also
      requires the requires the Company to make a material payment on April 30,
      2009. If we are unable to raise sufficient capital to make this payment we
      may lose all of our rights in the Marg Property.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|13. | WEATHER INTERRUPTIONS IN YUKON MAY DELAY OUR PROPOSED
      EXPLORATION OPERATIONS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Weather factors will significantly affect our exploration
      efforts. Currently, we can only work above ground at the Mount Hinton and
      Marg Properties from late May until early October of each year, depending
      upon how early snowfall occurs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|14. | WE COULD ENCOUNTER REGULATORY AND PERMITTING
    DELAYS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | We could face delays in obtaining permits to operate on
      the Mount Hinton and Marg Properties. Such delays could jeopardize
      financing, if any is available, in which case we would have to delay or
      abandon work on one or both of the properties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        



|Item 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND
      USE OF PROCEEDS
|------- | -----------------------------------------------------------------
|        |                                                                  
|None.   |                                                                  
|        |                                                                  
|Item 3. | DEFAULTS UPON SENIOR SECURITIES                                  
|        |                                                                  
|None.   |                                                                  
|        |                                                                  
|Item 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY
      HOLDERS        
|        |                                                                  
|None.   |                                                                  
|        |                                                                  
|Item 5. | OTHER INFORMATION                                                

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Item 6.

EXHIBITS & REPORTS ON FORM 8-K

Exhibits

|(a) | 31.1                                                              | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.                                                                                                         
|--- | ----------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                   |                                                                                                                                                                            
|    | 31.2                                                              | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.                                                                                                         
|    |                                                                   |                                                                                                                                                                            
|    | 32.1                                                              | Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|(b) | In addition, the following reports are incorporated by reference:

Current Report on Form 8-K Item 5.01 -Departure of Directors or Certain Officers dated December 11, 2008

Current Report on Form 8-K Item 8.01 -Other Events dated November 12, 2008

Current Report on Form 8-K Item 1.01 -Entry into an Amendment of a Material Definitive Agreement, dated December 4, 2008

SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|Dated: March 16, 2009 | By: | /s/ Kathy Chapman           
|--------------------- | --- | ----------------------------
|                      |     | Kathy Chapman               
|                      |     | Chief Administrative Officer

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