---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

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

For the quarterly period endedOctober 31,
2010

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.)

1226 White Oaks Blvd., Suite 10AOakville,
Ontario L6H 2B9 Canada(Address of principal executive offices
including zip code)

905-845-1073(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 [X]      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 [X]
|---------------------------- | ---------------------- | --------------------------------------------- | -----------------------------
|                             |                        | (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 [X]

The number of shares of registrants common stock outstanding
as of December 13, 2010 was 141,159,935.

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PART I  FINANCIAL INFORMATION

YUKON GOLD CORPORATION, INC. (AN EXPLORATION STAGE
MINING COMPANY) INTERIM CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2010 (Amounts expressed in US Dollars)(Unaudited-Prepared by Management)

TABLE OF CONTENTS

|                                                                                                                                                                                                   | Page No.    
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------
|                                                                                                                                                                                                   |             
|Interim Consolidated Balance
      Sheets as at October 31, 2010 (unaudited) and April 30, 2010 (audited).                                                                                         | F-2 to F3   
|                                                                                                                                                                                                   |             
|Interim Consolidated
      Statements of Operations for the six months and three months ended October
      31, 2010 and October 31, 2009 and the period from Inception to October 31,
      2010. | F-4         
|                                                                                                                                                                                                   |             
|Interim Consolidated
      Statements of Cash Flows for the six months ended October 31, 2010 and
      October 31, 2009 and the period from Inception to October 31, 2010.                        | F-5         
|                                                                                                                                                                                                   |             
|Interim Consolidated
      Statements of Changes in Stockholders Equity (Deficiency) from Inception
      to October 31, 2010.                                                                    | F-6 to F9   
|                                                                                                                                                                                                   |             
|Condensed Notes to Interim
      Consolidated Financial Statements.                                                                                                                                | F-10 to F-23

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YUKON GOLD CORPORATION, INC.(An Exploration
Stage Mining Company) Interim Consolidated Balance Sheets
As at October 31, 2010 (unaudited) and April 30, 2010 (audited)
(Amounts expressed in US Dollars) (Unaudited-Prepared by
Management)

|                                          |  | October 31, |  |  | April 30, | 
|----------------------------------------- |  | ----------- |  |  | --------- | 
|                                          |  | 2010        |  |  | 2010      | 
|                                          |  | $           |  |  | $         | 
|ASSETS                                    |  | (unaudited) |  |  | (audited) | 
|CURRENT ASSETS                            |  |             |  |  |           | 
|                                          |  |             |  |  |           | 
|Cash                                      |  | 182,410     |  |  | 1,533     | 
|Prepaid expenses and other
      (Note 4) |  | 13,470      |  |  | 12,748    | 
|                                          |  |             |  |  |           | 
|                                          |  |             |  |  |           | 
|                                          |  | 195,880     |  |  | 14,281    | 
|                                          |  |             |  |  |           | 
|                                          |  |             |  |  |           | 
|PROPERTYAND EQUIPMENT                     |  | 23,586      |  |  | 27,868    | 
|                                          |  | 219,466     |  |  | 42,149    | 

See condensed notes to the interim consolidated financial
statements.

APPROVED ON BEHALF OF THE BOARD

|/s/ J. L. Guerra, Jr.                    | 
|---------------------------------------- | 
|J. L. Guerra, Jr., Director and Chairman | 
|                                         | 
|/s/ Douglas Oliver                       | 
|Douglas Oliver, CEO and Director         | 

F-2

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YUKON GOLD CORPORATION, INC.(An Exploration
Stage Mining Company) Interim Consolidated Balance Sheets
As at October 31, 2010 (unaudited) and April 30, 2010 (audited)(Amounts expressed in US Dollars)(Unaudited-Prepared by
Management)

|                                                        |  | October 31, |   |  | April 30,   |  
|------------------------------------------------------- |  | ----------- | - |  | ----------- | -
|                                                        |  | 2010        |   |  | 2010        |  
|                                                        |  |             |   |  |             |  
|LIABILITIES                                             |  | $           |   |  | $           |  
|                                                        |  | (unaudited) |   |  | (audited)   |  
|                                                        |  |             |   |  |             |  
|CURRENT LIABILITIES                                     |  |             |   |  |             |  
|Loan from director (Note 10)                            |  | -           |   |  | 102,000     |  
|Secured promissory note (Note 11)                       |  | 375,000     |   |  | -           |  
|Accounts payable and accrued
      liabilities          |  | 371,333     |   |  | 556,212     |  
|Obligation under capital lease-                         |  | 1,567       |   |  | 2,454       |  
|Total Current Liabilities                               |  | 747,900     |   |  | 660,666     |  
|                                                        |  |             |   |  |             |  
|GOING CONCERN (Note 2)                                  |  |             |   |  |             |  
|COMMITMENTS AND CONTINGENCIES (Note 8)                  |  |             |   |  |             |  
|RELATED PARTY TRANSACTIONS
      (Note 9)               |  |             |   |  |             |  
|SUBSEQUENT EVENTS (Note 14)                             |  |             |   |  |             |  
|                                                        |  |             |   |  |             |  
|                                                        |  |             |   |  |             |  
|SHAREHOLDERS
      DEFICIENCY                          |  |             |   |  |             |  
|                                                        |  |             |   |  |             |  
|CAPITAL STOCK (Note 5)                                  |  | 4,184       |   |  | 4,184       |  
|                                                        |  |             |   |  |             |  
|ADDITIONAL PAID-IN CAPITAL                              |  | 15,149,504  |   |  | 14,931,204  |  
|                                                        |  |             |   |  |             |  
|ACCUMULATED OTHER
      COMPREHENSIVE LOSS              |  | (110,686    | ) |  | (111,871    | )
|                                                        |  |             |   |  |             |  
|DEFICIT, ACCUMULATED DURING
      THE EXPLORATION STAGE |  | (15,571,436 | ) |  | (15,442,034 | )
|                                                        |  | (528,434    | ) |  | (618,517    | )
|                                                        |  | 219,466     |   |  | 42,149      |  

See condensed notes to the interim consolidated financial
statements.

F-3

---

YUKON GOLD CORPORATION, INC.(An Exploration
Stage Mining Company) For the six months and three months ended
October 31, 2010 and October 31, 2009 andthe period from Inception to
October 31, 2010 (Amounts expressed in US Dollars)(Unaudited-Prepared by Management)

|                                              |  |             |   |  |             |   |  |             |   |  | For the     |   |  | For the     |  
|--------------------------------------------- |  | ----------- | - |  | ----------- | - |  | ----------- | - |  | ----------- | - |  | ----------- | -
|                                              |  |             |   |  | For the     |   |  | For the     |   |  | three       |   |  | three       |  
|                                              |  |             |   |  | six months  |   |  | six months  |   |  | months      |   |  | months      |  
|                                              |  | Cumulative  |   |  | ended       |   |  | ended       |   |  | ended       |   |  | ended       |  
|                                              |  | since       |   |  | October 31, |   |  | October 31, |   |  | October 31, |   |  | October 31, |  
|                                              |  | inception   |   |  | 2010        |   |  | 2009        |   |  | 2010        |   |  | 2009        |  
|                                              |  |             |   |  |             |   |  |             |   |  |             |   |  |             |  
|OPERATING EXPENSES                            |  | $           |   |  | $           |   |  | $           |   |  | $           |   |  | $           |  
|                                              |  |             |   |  |             |   |  |             |   |  |             |   |  |             |  
|General and administration                    |  | 7,536,630   |   |  | 125,301     |   |  | 330,360     |   |  | 60,034      |   |  | 216,229     |  
|Project expenses                              |  | 9,077,029   |   |  | -           |   |  | 12,104      |   |  | -           |   |  | 6,650       |  
|Exploration Tax Credit                        |  | (605,716    | ) |  | -           |   |  | -           |   |  | -           |   |  | -           |  
|Amortization                                  |  | 177,065     |   |  | 4,101       |   |  | 5,494       |   |  | 2,060       |   |  | 2,818       |  
|Loss on sale/disposal of
      capital assets |  | 5,904       |   |  | -           |   |  | -           |   |  | -           |   |  | -           |  
|Gain on sale of mining property (Note7)       |  | (110,306    | ) |  | -           |   |  | (110,306    | ) |  | -           |   |  | -           |  
|                                              |  |             |   |  |             |   |  |             |   |  |             |   |  |             |  
|TOTAL OPERATING EXPENSES                      |  | 16,080,606  |   |  | 129,402     |   |  | 237,652     |   |  | 62,094      |   |  | 225,697     |  
|                                              |  |             |   |  |             |   |  |             |   |  |             |   |  |             |  
|LOSS BEFORE INCOME TAXES                      |  | (16,080,606 | ) |  | (129,402    | ) |  | (237,652    | ) |  | (62,094     | ) |  | (225,697    | )
|                                              |  |             |   |  |             |   |  |             |   |  |             |   |  |             |  
|Income taxes recovery                         |  | 509,170     |   |  | -           |   |  | -           |   |  | -           |   |  | -           |  
|                                              |  |             |   |  |             |   |  |             |   |  |             |   |  |             |  
|NET LOSS                                      |  | (15,571,436 | ) |  | (129,402    | ) |  | (237,652    | ) |  | (62,094     | ) |  | (225,697    | )
|                                              |  |             |   |  |             |   |  |             |   |  |             |   |  |             |  
|                                              |  |             |   |  |             |   |  |             |   |  |             |   |  |             |  
|Loss per share  basic and
      diluted      |  |             |   |  | (0.00       | ) |  | (0.01       | ) |  | (0.00       | ) |  | (0.01       | )
|                                              |  |             |   |  |             |   |  |             |   |  |             |   |  |             |  
|                                              |  |             |   |  |             |   |  |             |   |  |             |   |  |             |  
|Weighted average common shares outstanding    |  |             |   |  | 41,839,535  |   |  | 40,489,532  |   |  | 41,839,535  |   |  | 40,489,535  |  
|                                              |  |             |   |  |             |   |  |             |   |  |             |   |  |             |  

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 six month period ended October 31, 2010 and October 31,
2009 andthe period from Inception to October 31, 2010
(Amounts expressed in US Dollars)(Unaudited-Prepared by
Management)

|                                                                               |  |             |   |  | For the six  |   |  | For the six  |  
|------------------------------------------------------------------------------ |  | ----------- | - |  | ------------ | - |  | ------------ | -
|                                                                               |  |             |   |  | month period |   |  | month period |  
|                                                                               |  | Cumulative  |   |  | ended        |   |  | ended        |  
|                                                                               |  | Since       |   |  | October 31,  |   |  | October 31,  |  
|                                                                               |  | Inception   |   |  | 2010         |   |  | 2009         |  
|                                                                               |  | $           |   |  | $            |   |  | $            |  
|CASH FLOWS FROM
      OPERATING ACTIVITIES                                     |  |             |   |  |              |   |  |              |  
|Net loss for the period                                                        |  | (15,571,436 | ) |  | (129,402     | ) |  | (237,652     | )
|Items not requiring an
      outlay of cash:                                   |  |             |   |  |              |   |  |              |  
|Amortization and impairment                                                    |  | 177,065     |   |  | 4,101        |   |  | 5,494        |  
|Loss on sale/disposal
      of capital assets                                  |  | 5,904       |   |  | -            |   |  | -            |  
|Registration rights penalty expense                                            |  | 188,125     |   |  | -            |   |  | -            |  
|Shares issued for
      property payment                                       |  | 772,826     |   |  | -            |   |  | -            |  
|                                                                               |  |             |   |  |              |   |  |              |  
|Common shares issued for settlement of severance liability to
      ex-officer |  | 113,130     |   |  | -            |   |  | -            |  
|Stock-based compensation                                                       |  | 1,298,574   |   |  | -            |   |  | 5,869        |  
|Compensation expense on
      issue of warrants                                |  | 140,892     |   |  | -            |   |  | -            |  
|Issue of shares for professional
      services                                |  | 875,023     |   |  | -            |   |  | -            |  
|Gain on sale of mining
      property                                          |  | (110,306    | ) |  | -            |   |  | (110,306     | )
|Issue of units against settlement of
      debts                               |  | 20,077      |   |  | -            |   |  | -            |  
|Decrease (Increase) in
      prepaid expenses and other                        |  | (1,055      | ) |  | (777         | ) |  | 52,168       |  
|Increase (Decrease) in accounts payable
      and accrued liabilities          |  | 344,160     |   |  | (183,532     | ) |  | 57,475       |  
|                                                                               |  |             |   |  |              |   |  |              |  
|                                                                               |  |             |   |  |              |   |  |              |  
|NET CASH USED IN OPERATING
      ACTIVITIES                                    |  | (11,747,021 | ) |  | (309,610     | ) |  | (226,952     | )
|                                                                               |  |             |   |  |              |   |  |              |  
|CASH FLOWS FROM INVESTING
      ACTIVITIES                                     |  |             |   |  |              |   |  |              |  
|Purchase of property, plant and equipment                                      |  | (222,309    | ) |  | -            |   |  | -            |  
|Investment in available for
      sale securities                              |  | (36,530     | ) |  | -            |   |  | -            |  
|Proceeds from sale of mining property                                          |  | 110,306     |   |  | -            |   |  | 110,306      |  
|                                                                               |  |             |   |  |              |   |  |              |  
|                                                                               |  |             |   |  |              |   |  |              |  
|                                                                               |  |             |   |  |              |   |  |              |  
|NET CASH PROVIDED BY (USED IN) INVESTING
      ACTIVITIES                      |  | (148,533    | ) |  | -            |   |  | 110,306      |  
|                                                                               |  |             |   |  |              |   |  |              |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                           |  |             |   |  |              |   |  |              |  
|Repayments from a
      shareholder                                            |  | 1,180       |   |  | -            |   |  | -            |  
|Proceeds (Repayments) from demand
      promissory notes                       |  | 200,000     |   |  | (102,000     | ) |  | 102,000      |  
|Proceeds from secured
      promissory note                                    |  | 375,000     |   |  | 375,000      |   |  | -            |  
|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 subscription
      /issuance of units/shares  net |  | 10,300,490 |   |  | 218,300 |   |  | 44,000  | 
|Proceeds from
      capital lease obligation                     |  | 2,454      |   |  | -       |   |  | -       | 
|                                                                 |  |            |   |  |         |   |  |         | 
|NET CASH
      PROVIDED BY FINANCING ACTIVITIES                  |  | 12,116,613 |   |  | 491,300 |   |  | 146,000 | 
|                                                                 |  |            |   |  |         |   |  |         | 
|EFFECT OF
      FOREIGN CURRENCY EXCHANGE RATE CHANGES           |  | (38,649    | ) |  | (813    | ) |  | 699     | 
|                                                                 |  |            |   |  |         |   |  |         | 
|NET INCREASE
      (DECREASE) IN CASH FOR THE QUARTER            |  | 182,410    |   |  | 180,877 |   |  | 30,053  | 
|Cash, beginning
      of period                                  |  | -          |   |  | 1,533   |   |  | 9,349   | 
|                                                                 |  |            |   |  |         |   |  |         | 
|CASH, END OF
      PERIOD                                        |  | 182,410    |   |  | 182,410 |   |  | 39,402  | 
|INCOME TAXES
      PAID                                          |  |            |   |  | -       |   |  | -       | 
|INTEREST PAID                                                    |  |            |   |  | -       |   |  | -       | 

See condensed notes to the interim consolidated financial
statements.

F-5

---

YUKONGOLDCORPORATION,INC.(AnExplorationStageMiningCompany) InterimConsolidatedStatementsofChangesinStockholdersDeficiency FromInceptiontoOctober31, 2010(Amountsexpressedin USDollars) (Unaudited-PreparedbyManagement)

|                                                                             |  |           |   |  |          |   |  |            |  |  |              |  |  | Deficit,    |   |  |               |   |  |               |  
|---------------------------------------------------------------------------- |  | --------- | - |  | -------- | - |  | ---------- |  |  | ------------ |  |  | ----------- | - |  | ------------- | - |  | ------------- | -
|                                                                             |  | Number    |   |  |          |   |  |            |  |  |              |  |  | Accumulated |   |  |               |   |  | Accumulated   |  
|                                                                             |  | of        |   |  | Common   |   |  | Additional |  |  |              |  |  | during the  |   |  |               |   |  | Other         |  
|                                                                             |  | Common    |   |  | Shares   |   |  | Paid-in    |  |  | Subscription |  |  | Exploration |   |  | Comprehensive |   |  | Comprehensive |  
|                                                                             |  | Shares    |   |  | Amount   |   |  | Capital    |  |  | for Warrants |  |  | Stage       |   |  | Income (loss) |   |  | 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

---

YUKONGOLDCORPORATION,INC.(AnExplorationStageMiningCompany) InterimConsolidatedStatementsofChangesinStockholdersDeficiencyFromInceptiontoOctober31, 2010 (Amountsexpressedin USDollars)

|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

---

YUKONGOLDCORPORATION,INC.(AnExplorationStageMiningCompany) InterimConsolidatedStatementsofChangesinStockholdersDeficiencyFromInceptiontoOctober31, 2010 (Amountsexpressedin USDollars)

|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 at 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    |  |  |           |   |  |            |   |  |            |   |  |        |  
|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 |   |  |            |   |  |            |   |  |        |  

F-8

---

YUKONGOLDCORPORATION,INC.(AnExplorationStageMiningCompany) InterimConsolidatedStatementsofChangesinStockholdersDeficiencyFromInceptiontoOctober31, 2010 (Amountsexpressedin USDollars)

|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 |  |            |  |  |       |  |  |            |   |  |            |   |  |             |   |  | 9,000      |   |  | 9,000    |  
|543,615 flow through units                                                   |  | 543,615    |  |  | 54    |  |  | 227,450    |   |  |            |   |  |             |   |  |            |   |  |          |  
|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     |   |  |            |   |  |             |   |  |            |   |  |          |  
|Shares for property payment                                                  |  | 6,838,906  |  |  | 684   |  |  | 187,916    |   |  |            |   |  |             |   |  |            |   |  |          |  
|Stock based compensation                                                     |  |            |  |  |       |  |  | 31,858     |   |  |            |   |  |             |   |  |            |   |  |          |  
|Compensation expense on issue
      of warrants                              |  |            |  |  |       |  |  | 17,813     |   |  |            |   |  |             |   |  |            |   |  |          |  
|4,134,000 flow through shares                                                |  | 4,134,000  |  |  | 413   |  |  | 577,696    |   |  |            |   |  |             |   |  |            |   |  |          |  
|Issuance of shares for
      professional services                           |  | 50,000     |  |  | 5     |  |  | 7,495      |   |  |            |   |  |             |   |  |            |   |  |          |  
|Realized gain on available-for-sale
      securities                         |  |            |  |  |       |  |  |            |   |  |            |   |  |             |   |  | (9,000     | ) |  | ( 9,000  | )
|Foreign currency translation                                                 |  |            |  |  |       |  |  |            |   |  |            |   |  |             |   |  | (282,694   | ) |  | (282,694 | )
|Net loss for the year                                                        |  |            |  |  |       |  |  |            |   |  |            |   |  | (3,017,265  | ) |  | (3,017,265 | ) |  | -        |  
|Balance as of April 30, 2009                                                 |  | 40,489,535 |  |  | 4,049 |  |  | 14,866,470 |   |  | -          |   |  | (14,906,422 | ) |  | (3,308,959 | ) |  | (95,220  | )
|Stock based compensation                                                     |  |            |  |  |       |  |  | 5,869      |   |  |            |   |  |             |   |  |            |   |  |          |  
|Issuance of 1,100,000 shares
      for cash                                  |  | 1,100,000  |  |  | 110   |  |  | 43,890     |   |  |            |   |  |             |   |  |            |   |  |          |  
|Issuance of common shares for                                                |  |            |  |  |       |  |  |            |   |  |            |   |  |             |   |  |            |   |  |          |  
|professional services                                                        |  | 250,000    |  |  | 25    |  |  | 14,975     |   |  |            |   |  |             |   |  |            |   |  |          |  
|Foreign currency translation                                                 |  |            |  |  |       |  |  |            |   |  |            |   |  |             |   |  | (16,651    | ) |  | (16,651  | )
|Net loss for the year                                                        |  |            |  |  |       |  |  |            |   |  |            |   |  | (535,612    | ) |  | (535,612   | ) |  | -        |  
|                                                                             |  |            |  |  |       |  |  |            |   |  |            |   |  |             |   |  |            |   |  |          |  
|Balance as of April 30, 2010                                                 |  | 41,839,535 |  |  | 4,184 |  |  | 14,931,204 |   |  | -          |   |  | (15,442,034 | ) |  | (552,263   | ) |  | (111,871 | )
|Foreign currency translation                                                 |  |            |  |  |       |  |  |            |   |  |            |   |  |             |   |  | 1,185      |   |  | 1,185    |  
|Stock subscriptions received                                                 |  |            |  |  |       |  |  | 218,300    |   |  |            |   |  |             |   |  |            |   |  |          |  
|Net loss for the period                                                      |  |            |  |  |       |  |  |            |   |  |            |   |  | (129,402    | ) |  | (129,402   | ) |  |          |  
|Balance as of October 31,
      2010                                         |  | 41,839,535 |  |  | 4,184 |  |  | 15,149,504 |   |  | -          |   |  | (15,571,436 | ) |  | (128,217   | ) |  | (110,686 | )
|                                                                             | 

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 StatementsOctober 31, 2010(Amounts expressed in
US Dollars) (Unaudited  Prepared by Management)

1.   BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial
statements have been prepared in accordance with the instructions to Form 10-Q
and therefore do not include all information and footnotes necessary for a fair
presentation of financial position, results of operations and cash flows in
conformity with U.S. generally accepted accounting principles (GAAP); however,
such information reflects all adjustments (consisting solely of normal recurring
adjustments), which are, in the opinion of management, necessary for a fair
statement of the results for the interim periods. The interim consolidated
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto together with managements discussion and
analysis of financial condition and results of operations contained in the
Companys annual report on Form 10-K for the year ended April 30, 2010. In the
opinion of management, the accompanying interim consolidated financial
statements reflect all adjustments of a normal recurring nature considered
necessary to fairly state the financial position of the Company at October 31,
2010 and April 30, 2010, the results of its operations for the six-month periods
ended October 31, 2010 and October 31, 2009, and its cash flows for the
six-month periods ended October 31, 2010 and October 31, 2009. In addition, some
of the Companys statements in this quarterly report on Form 10-Q may be
considered forward-looking and involve risks and uncertainties that could
significantly impact expected results. The results of operations for the
six-month period ended October 31, 2010 are not necessarily indicative of
results to be expected for the full year.

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 interim consolidated 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, stockholders 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. 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.

On August 31, 2010, the Company entered into an Agreement with
Lance Capital Ltd. (Lance), an Ontario, Canada corporation, pursuant to which,
among other things, Lance is assisting the Company in the settlement of certain
debts of the Company and providing bridge financing. The efforts of Lance to
settle or acquire all of the debts of Yukon Gold Corp. (YGC), the Companys
wholly owned Canadian subsidiary have not been successful and YGC has material
obligations with creditors who have strongly indicated an unwillingness to
settle. As neither YGC nor the Company has an ability to satisfy these material
obligations, on October 6, 2010, the Companys board of directors resolved to
cause YGC to seek relief in a bankruptcy proceeding in Ontario, Canada where YGC
is domiciled and instructed Lance to employ a trustee to proceed with the
bankruptcy of YGC. Subsequent to the quarter ended October 31, 2010, on November
15, 2010 the Companys wholly owned subsidiary, YGC declared bankruptcy with the
Office of the Superintendent of Bankruptcy Canada.

F-10

---

YUKON GOLD CORPORATION, INC. (An Exploration
Stage Mining Company) Condensed Notes to Interim Consolidated
Financial Statements October 31, 2010(Amounts expressed in
US Dollars)(Unaudited  Prepared by Management)

2.   GOING CONCERN-Contd

These interim consolidated financial statements have been
prepared in accordance with United States generally acceptable accounting
principles applicable to a going concern. Accordingly, they do not give effect
to adjustments that would be necessary should the Company be unable to continue
as a going concern and therefore be required to realize its assets and liquidate
its liabilities and commitments in other than the normal course of business and
at amounts different from those in the accompanying interim consolidated
financial statements.

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 the
acquisition and exploration of mining properties. Mineral property exploration
costs are expensed as incurred. Mineral property payments are initially
capitalized in accordance with the ASC 805-20-55-37, previously referenced as
EITF 04-2 when incurred. The Company assesses the carrying costs for impairment
under Accounting Standards 930 Extractive Activities  Mining (AS 930) at each
fiscal quarter end. Impairment is recognized when the sum of the expected
undiscounted future cash flows is less than the carrying amount of the mineral
property. Impairment losses, if any, are measured as the excess of the carrying
amount of the mineral property over its estimated fair value. 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. Once capitalized, such costs will be amortized
using the units-of-production method over the estimated life of the probable
reserves. If mineral properties are subsequently abandoned or impaired, any
capitalized costs will be charged to operations. The Company assesses the
carrying costs for impairment at each fiscal quarter end. The Company has
determined that all property payments are impaired and accordingly has written
off the acquisition costs to project expense.

4.   PREPAID EXPENSES AND OTHER

Included in prepaid expenses and other is an amount of $11,743
(CDN$11,981) being Goods & Services tax receivable from the Federal
Government of Canada.

5.   CAPITAL STOCK

|a) | Authorized
|-- | ----------

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

|b) | Issued
|-- | ------

41,839,535 Common shares (41,839,535 at April 30, 2010).

F-11

---

YUKON GOLD CORPORATION, INC.(An Exploration
Stage Mining Company) Condensed Notes to Interim Consolidated
Financial Statements October 31, 2010(Amounts expressed in
US Dollars)(Unaudited  Prepared by Management)

5.   CAPITAL STOCK-Contd

|c) | Changes to Issued Share Capital
|-- | -------------------------------

Year ended April 30, 2010

The Company received subscriptions for 1,100,000 common shares
at $0.04 per share for a total consideration of $44,000 through a non-brokered
private placement. The Company issued 1,100,000 common shares.

On September 28, 2009 the Company entered into an employment
agreement (Agreement) with Douglas Oliver (the Employee) to serve as its
President and Chief Executive Officer. As per the terms of the said agreement,
the Company issued to the Employee 250,000 common shares of the Companys common
stock, The Employee acknowledges that such shares will be restricted shares
subject to limitations on re-sale. The Employee further acknowledges that he
will be considered as affiliate for purposes of Rule 144.

Six months ended October 31, 2010

On September 23, 2010 the Company accepted nine (9)
subscriptions for a total of 87,320,400 shares at $.0025 per share for a total
consideration of $218,300 through a non-brokered private placement. The proceeds
of the private placement were being held in escrow pending the Companys receipt
of a certificate of Good Standing from the Delaware Secretary of State. On
October 28, 2010 the Company was issued a certificate of Good Standing.
Subsequent to the quarter ended October 31, 2010, on November 1, 2010 the
balance of the proceeds of the private placement were released from escrow and
transferred to the Company and on November 5, 2010 the shares were certificated
and issued as directed by the subscription holders (see subsequent events note
14).

6.   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.

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"). 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 there under from 2,000,000 to 2,899,044. 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.

F-12

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YUKON GOLD CORPORATION, INC.(An Exploration
Stage Mining Company) Condensed Notes to Interim Consolidated
Financial Statements October 31, 2010(Amounts expressed in
US Dollars)(Unaudited  Prepared by Management)

6.   STOCK-BASED COMPENSATION-Contd

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.

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.

Year ended April 30, 2010

The company did not issue any stock options during the year
ended April 30, 2010.

Six month period ended October 31, 2010

The company did not issue any stock options during the six
month period ended October 31, 2010.

As of October 31, 2010 and April 30, 2010, there was $nil of
unrecognized expenses related to non-vested stock-based compensation
arrangements granted. The stock-based compensation expense for the six month
period ended October 31, 2010 was $nil.

Cancellation/Expiration/Forfeiture of Stock Options:

Year ended April 30, 2010

On June 24, 2009, 200,000 stock options held by a former
officer were forfeited.

On August 4, 2009, 340,000 stock options held by a former
director were forfeited.

On October 24, 2009, the Company cancelled 200,000 stock
options held by a former officer.

F-13

---

YUKON GOLD CORPORATION, INC.(An Exploration
Stage Mining Company) Condensed Notes to Interim Consolidated
Financial Statements October 31, 2010(Amounts expressed in
US Dollars)(Unaudited  Prepared by Management)

6.   STOCK-BASED COMPENSATION-Contd

On December 15, 2009, 250,000 stock options held by a former
director expired.

On January 5, 2010, 12,000 stock options held by an officer
expired.

On January 19, 2010, 350,000 stock options held by a former
director were forfeited.

On January 29, 2010, 400,000 stock options held by a former
director were forfeited.



Cancellation/Expiration/Forfeiture of Stock Options:

For the six months ended October 31, 2010

On August 15, 2010, 62,500 stock options held by a consultant
expired.

F-14

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YUKON GOLD CORPORATION, INC.(An Exploration
Stage Mining Company) Condensed Notes to Interim Consolidated
Financial Statements October 31, 2010(Amounts expressed in
US Dollars)(Unaudited  Prepared by Management)

7.  SALE OF MOUNT HINTON MINING PROPERTY CLAIMS

On May 21, 2009, the Company, through its wholly owned
subsidiary, YGC, sold its interest in the Mount Hinton Property to the Hinton
Syndicate. All of the claims comprising the Mount Hinton Property were conveyed
by the Companys subsidiary to a member of the Hinton Syndicate. The Hinton
Syndicate paid the Company (i) $110,306 (CDN$125,000) on May 21, 2009 and (ii)
granted to the Companys subsidiary a 2% Net Smelter Royalty (an NSR) on the
Mount Hinton Property claims. Such 2% NSR may be terminated at any time by
payment to YGC of the following:

|If the payment is made to YGC within the
      12-month anniversary of the Closing:                                                                                                                                      | $ | 112,723       | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | ------------- | 
|                                                                                                                                                                                                                         |   | (CDN$115,000) | 
|(This payment was not made within the
      12-month anniversary of the Closing.)                                                                                                                                        |   |               | 
|                                                                                                                                                                                                                         |   |               | 
|                                                                                                                                                                                                                         |   |               | 
|If the payment is made to YGC after the 12-month                                                                                                                                                                         | $ | 137,228       | 
|anniversary of the Closing but before the
      24-month anniversary of the Closing:                                                                                                                                     |   | (CDN$140,000) | 
|                                                                                                                                                                                                                         |   |               | 
|                                                                                                                                                                                                                         |   |               | 
|If the payment is made to YGC after the 24-month                                                                                                                                                                         | $ | 161,733       | 
|anniversary of the Closing but before the
      36-month anniversary of the Closing:                                                                                                                                     |   | (CDN$165,000) | 
|                                                                                                                                                                                                                         |   |               | 
|                                                                                                                                                                                                                         |   |               | 
|If the payment is made to YGC after the 36-month                                                                                                                                                                         | $ | 186,238       | 
|anniversary of the Closing but before the
      48-month anniversary of the Closing:                                                                                                                                     |   | (CDN$190,000) | 
|                                                                                                                                                                                                                         |   |               | 
|If the payment is made to YGC after the 48-month
      anniversary of the Closing, it shall be increased by $24,505 (CDN$25,000)
      for each 12-month period following the 49-month anniversary of the
      Closing. |   |               | 

F-15

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YUKON GOLD CORPORATION, INC.(An Exploration
Stage Mining Company) Condensed Notes to Interim Consolidated
Financial Statements October 31, 2010(Amounts expressed in
US Dollars)(Unaudited  Prepared by Management)

8.   COMMITMENTS AND CONTINGENCIES

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 as amended 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 agreed to make subsequent payments under the
Agreement of: $167,645 (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 $167,645 (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 permitted the Company to pay Atna $19,980 (CDN$25,000) in cash on
December 12, 2008 (paid) and $188,600 (CDN$225,000) (payable in cash or shares
of the Companys common stock) on April 30, 2009. On April 30, 2009, the Company
issued to Atna 6,838,906 common shares which represent $188,600 (CDN $225,000),
whereby the common shares were valued at $0.0276 (CDN$0.0329) each. Upon the
commencement of commercial production at the Marg Property, the Company will pay
to Atna $972,479 (CDN$1,000,000) in cash and/or common shares of the Company, or
some combination thereof to be determined.

On October 15, 2010, Lance Capital Ltd. (Lance) registered a
lien against the Marg Property to secure a promissory note of the Company in the
amount of $375,000 that was issued to Lance. The amount of the promissory note
corresponds to the amount committed by Lance to fund expenses of the Company.
Subsequent to the quarter ended October 31, 2010, on November 23, 2010, Lance
issued a Notice of Default to the Company in accordance with the provisions of
Article 5 of the Note Purchase and Security Agreement dated August 31, 2010
between Lance, the Company and YGC and further, in accordance with the provision
of Article 6, demanded payment in full of the entire amount of the $375,000 note
plus accrued interest.

On August 10, 2010, the following agreement was terminated by
mutual consent of the parties and the consultant and the Company signed an
unconditional and absolute general release which terminated the Agreement dated
August 28, 2009:

F-16

---

YUKON GOLD CORPORATION, INC.(An Exploration
Stage Mining Company) Condensed Notes to Interim Consolidated
Financial Statements October 31, 2010(Amounts expressed in
US Dollars)(Unaudited  Prepared by Management)

8.    COMMITMENTS AND CONTINGENCIES  Contd

On October 1, 2009 the Companys board of directors ratified a
retainer agreement (the Agreement) dated August 28, 2009 with a
Panamanian
corporation (the Consultant) to provide certain exclusive advisory services
for financing, acquisition, collaboration, product or services sales
transactions and strategies, for a period of twelve (12) months (the Term)
from the date of execution. If at any time during the Term the Company wished to
terminate the exclusivity of the Consultant, the Company could give the
Consultant ten (10) days prior written notice and pay the Consultant $200,000.
The Agreement stated that a monthly cash fee of $50,000 and the Consultants
out-of-pocket expenses would accrue and be payable only at such time as the
Company secures a minimum of $5,000,000 in financing during the Term of the
Agreement, at which time the total amount accrued would be due and payable in
full without interest. In the event that the Company failed to timely pay any of
the compensation, as defined in the Agreement, each shall bear interest at the
rate of six percent (6%) until paid in full.

The Consultant had the right upon written notice to the Company
of its election to receive gold or other minerals in lieu of cash prior to or
concurrent with the closing of any financing transactions (Financing
Transactions). Compensation payable in kind shall not bear any interest. If an
acquisition or divestiture had been consummated during the Term of the Agreement
or for a period of one (1) year thereafter, the Company was obligated to pay a
transaction fee (TF) to the Consultant based on the following transaction
values (TVs): (i) 5% TF up to and including $1,000,000 TVs, plus (ii) 4% TF on
all TVs from $1,000,000 to $1,999,999, plus (iii) 3% TF on all TVs from
$2,000,000 to $2,999,999, plus (iv) 2% on all TVs from $3,000,000 to $3,999,999,
plus (v) 1% on all TVs from $4,000,000 to $4,999,999, plus (vi) 1% on all TVs
equal to and exceeding $5,000,000. During the Term of the Agreement or for a
period of one (1) year after termination, the Company would have paid the
Consultant a finders fee equal to two percent (2%) of the total amount of each
and every Financing Transaction successfully undertaken by the Company. In
addition the Company was to have granted to the Consultant options to purchase
that number of shares of the Companys common stock determined by multiplying
two percent (2%) equal to the total number of equity shares placed and/or
issued, or if convertible debt, two percent (2%) of the number of common equity
shares as if the convertible debt was converted at its earliest possible date.
Such options were to be exercisable for a period of five (5) years at an
exercise price equal to the five-day weighted average trading price (WATP) for
the five (5) consecutive trading days immediately prior to the granting of the
Companys stock options. In addition to the foregoing fees, the Company shall
grant to the Consultant a fully-vested option (Equity Fee) to acquire a number
of shares equal to eight and one-half percent (8.5%) of the total common shares
issued and outstanding at the time of the execution of the Agreement. Such
options shall be exercisable for a period of five (5) years at an exercise price
equal to the five-day WATP for the five (5) consecutive trading days immediately
prior to the granting of the Companys stock options. The number of stock
options shall be subject to any and all adjustments of the common shares during
the five-year exercise period. Upon the Company entering into any definitive
agreement, during the Term, to acquire any properties/projects, as defined in
the Agreement, an additional fully-vested performance option was to be granted
to the Consultant to acquire a number of shares equal to eight and one-half
percent (8.5%) of the then issued and outstanding common shares of the Company.
Such options shall be exercisable for a period of five (5) years at an exercise
price equal to the five-day WATP for the five (5) consecutive trading days
immediately prior to the execution of the definitive agreement. The number of
performance options was to be subject to any and all adjustments of the common
shares during the five-year exercise period. If any acquisition transaction was
contemplated by the Company during the Term or for a period of one (1) year
after the Company would grant to the Consultant the absolute right to
participate, on a pro rata basis, in up to a ten percent (10%) interest in the
Companys acquisition.

F-17

---

YUKON GOLD CORPORATION, INC. (An Exploration Stage
Mining Company) Condensed Notes to Interim Consolidated Financial
Statements October 31, 2010(Amounts expressed in US
Dollars) (Unaudited  Prepared by Management)

8. COMMITMENTS AND CONTINGENCIESContd

The Consultant would also be responsible for all pro rata
future development and operating costs of said acquisition when paid by the
parties owning the other 90% interests. Notwithstanding anything within the
Agreement to the contrary, any stock or equity-based compensation must be
pre-cleared by the Toronto Stock Exchange (TSX). If any Financing Transaction(s)
described in paragraphs 2 A and B of Schedule A to this Agreement are concluded
during the Term, or for a period of one (1) year thereafter, provided such
Financing Transaction(s) results from parties identified in writing by the
Consultant in performing the Services, the Company will pay to the Consultant,
or a designee of the Consultant, the following: (i) with respect to any equity
financing, a cash fee equal to seven percent (7%) of the total amount of the
Financing Transaction (gross proceeds, without offset for costs or fees), (ii)
with respect to any debt financing, a cash fee equal to four percent (4%) of the
total amount of such Financing Transaction (gross proceeds, without offset for
costs or fees), and (iii) in addition, upon the completion of any Financing
Transaction of the Company or its, parents, subsidiaries or affiliates, the
Company shall grant to the Consultant the right and option to purchase that
number of shares, units or interests in the Company determined by dividing five
percent (5%) of the amount of the Financing Transaction by an amount equal to
equal to the five-day WATP for the five (5) consecutive trading days immediately
prior to the payment of Yukon Gold Corporation stock options. Such rights shall
be exercisable, for a period of five (5) years, from date of issue and shall
possess most favored nation registration rights, i.e., registration rights
equal to the best/most favorable rights/treatment of any issued/outstanding
registration rights provisions applicable to any securities of the Company,
specifically including, but not limited to demand and piggy back registration
rights, including the right to include such shares in any offering undertaken by
the Company, i.e., tag-along rights. Such Fee shall be paid by the Company to
the Consultant within ten (10) calendar days after the closing of each Financing
Transaction, or, if such Financing Transaction closes in several tranches,
within ten (10) calendar days after the closing of each tranche, until paid in
full.

Subsequent to the period covered by this report, on November
18, 2010 the Company and the consultant signed an unconditional and absolute
general release which terminated the following Agreement:

On October 1, 2009 the Companys board of directors ratified a
consulting agreement (the Agreement), dated September 20, 2009, with an
individual to provide services as a special advisor (the Consultant). The
Agreement stated that the Consultant would receive 450,000 restricted common
shares no later than ten (10) business days from the date of signing the
Agreement. The Consultant was entitled to receive a cash fee of two and one-half
percent (2.5%) on the aggregate value of a financing(s) or transaction(s)
entered into by the Company during the term of the Agreement or within the
twelve (12) months following the term of the Agreement if the discussions
regarding the financial transaction(s) were initiated by the Consultant during
the term of the Agreement. Further it was agreed that the Consultant would
receive a bonus of up to 1,000,000 restricted common shares of the Company of
any financing or transaction, such bonus to be awarded on transactions values
(TV) as follows: (i) up to a $1,000,000 TV, 200,000 shares (ii) between a
$1,000,000 up to a $6,000,000 TV, an additional 300,000 shares and (iii) over a
$6,000,000 TV, an additional 500,000 shares. Upon receipt of an itemized invoice
the Consultant would be reimbursed for all traveling and other actual legitimate
expenses. The Agreement was for a three month minimum term and could be extended
by the mutual agreement of both parties in writing. On December 20, 2009 the
agreement terminated and the Consultant was not successful in raising any
financing. No services were provided under this agreement. The Company
considered the agreement not consummated and did not issue the shares for that
reason but the Company did expense the cost at fair value. The Company reversed
the expense of the cost of the 450,000 shares at fair value during the period
ended October 31, 2010.

F-18

---

YUKON GOLD CORPORATION, INC.(An Exploration
Stage Mining Company) Condensed Notes to Interim Consolidated
Financial Statements October 31, 2010(Amounts expressed
in US Dollars) (Unaudited  Prepared by Management)

8. COMMITMENTS AND CONTINGENCIES-Contd

On September 28, 2009 the Company entered into an employment
agreement (Agreement) with Douglas Oliver (the Employee) to serve as its
President and Chief Executive Officer. During the employment term, the Company
was to pay the Employee a base salary at the annual rate of one hundred and
eighty thousand ($180,000) dollars per year ("Base Salary"). Half of the
Employees Base Salary was to be deferred and was to accrue interest at the
LIBOR rate plus five percent (5%). Deferred Base Salary was to be payable to the
Employee with interest no sooner than the Cerro Quema gold project entering
production but could be further deferred at the Employees discretion. In the
event that this Agreement was terminated for any reason, the Employee would be
entitled to all deferred Base Salary, with interest, to be paid within three (3)
months of such termination. The Agreement further stated that the Employee
immediately was to be awarded 250,000 shares of the Companys common stock,
which were issued in the last quarter of the year ended April 30, 2010. The
Employee acknowledged that such shares would be restricted shares subject to
limitations on re-sale. The Employee further acknowledged that he would be
considered as affiliate for purposes of Rule 144. The Company agreed to register
such shares as part of any registration statement it files under the Securities
Act of 1933. Additional stock options could be awarded to the Employee based
upon the Companys achieving certain production goals and in accordance with the
Companys 2006 Stock Option Plan. Employee and the Company were to agree upon
the goals and option amounts within two (2) months of the execution of this
Agreement. As of the date of these statements, the option amounts were not
agreed upon. The Employee couldterminate employment at any time after
providing forty-five (45) days prior written notice to the Company. The Company
could terminate the Employee's employment without cause at any time after
providing written notice to Employee and paying all unpaid salaries and
benefits.

In addition, an amount equal to twelve (12) months of Base
Salary (at the rate in effect as of the date of the Employees termination
without cause) would be paid to the Employee if this Agreement was terminated by
the Company at any time prior to the second anniversary of the date of this
Agreement. On August 9, 2010 the Employee and the Company mutually agreed to
terminate their Agreement without notice. The Employee permitted the assignment
of all amounts owed to the Employee by the Company to Lance Capital Ltd. Due to
limited activity in the Company Mr. Douglas Oliver further agreed to stay on as
a director and Chief Executive Officer without compensation.

F-19

---

YUKON GOLD CORPORATION, INC.(An Exploration
Stage Mining Company) Condensed Notes to Interim Consolidated
Financial Statements October 31, 2010(Amounts expressed
in US Dollars) (Unaudited  Prepared by Management)

8. COMMITMENTS AND CONTINGENCIES-Contd

On October 26, 2009, the Company entered into a letter
agreement (the Agreement) with a former officer to act as a consultant
providing accounting and administration services for $1,960 (CDN$2,000) per
month and to warehouse the Company records for $490 (CDN$500) per month. The
Company further agreed to reimburse the consultant for any out of pocket
expenses and that either party may give 30 days notice in writing of their
intention to terminate the Agreement. On August 31, 2010, the consultant agreed
to termination of the Agreement without notice and further agreed to accept
$8,822 (CDN$9,000) as full payment for services rendered under the Agreement to
be paid within 30 days. Lance Capital Ltd. agreed to advance the funds to the
Company to cover this payment. The Company paid $8,822 (CDN$9,000) to the
consultant on October 14, 2010.

The Companys subsidiary YGC has been served an Ontario Court
order to pay a penalty for $117,759 (CDN $120,138) for early termination of its
office lease. The Companys former landlord had made the said claim in the
Ontario Superior Court of Justice. On June 17, 2010, the subsidiarys financial
institution remitted $1,271 (CDN$1,307) to the Ontario Superior Court of Justice
being the balance of funds in YGCs bank account.

On October 1, 2010, the Company entered into a consulting
agreement (the Agreement) with Lance Capital Ltd. (the Consultant) to
provide administrative and other services for $7,500 per month. The Company
further agreed to reimburse the Consultant for all expenses incurred with
respect to the operation of the administration of the Company provided that
these expenses are incurred in substantial accordance with monthly and annual
budgets to be prepared by the Consultant and approved by the Board of Directors
of the Company from time to time. The term of this Agreement is one (1) year and
automatically renews from year to year unless terminated upon 30 days prior
written notice by either party.

9. RELATED PARTY TRANSACTIONS

Six month period ended October 31, 2010

The Company and its subsidiary expensed a total of $nil in
consulting fees and wages to three Company Directors, and $69,569 to two of its
officers.

No director or officer exercised stock options during the six
month period ended October 31, 2010.

Six month period ended October 31, 2009

The Company and its subsidiary expensed a total of $nil in
consulting fees and wages to three Company Directors, and $4,593 to two of its
officers.

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

F-20

---

YUKON GOLD CORPORATION, INC.(An Exploration
Stage Mining Company) Condensed Notes to Interim Consolidated
Financial Statements October 31, 2010(Amounts expressed
in US Dollars) (Unaudited  Prepared by Management)

10. DEMAND LOAN FROM DIRECTOR

The Company received loans for $64,500 on September 21, 2009,
$37,500 on October 5, 2009, $8,000 on June 28, 2010, and $7,798 on July 20, 2010
for a total of $117,798 from a director of the Company. The Company issued
Promissory Notes to the director which carried simple interest at the rate of
seven percent (7%) of the outstanding principal balance per annum. The entire
principal balance outstanding and any interest thereon was payable on demand by
the holder of the Promissory Notes, but no later than three years from the date
of the loan. On August 6, 2010 the Company received a loan for $9,900 from this
same director of the Company. The Company issued a Promissory Note to the
director which carried simple interest at the rate of seven percent (7%) of the
outstanding principal balance per annum. The entire principal balance
outstanding and any interest thereon was payable on demand by the holder of the
Promissory Note, but no later than three years from the date of the loan. On
August 10, 2010, the director assigned all of the demand loans including
interest and expenses owed to the director to Lance Capital Ltd.

11. SECURED CONVERTIBLE PROMISSORY NOTE

On August 31, 2010, Yukon Gold Corporation, Inc. (the
Company) and Lance Capital Ltd. (Lance), an Ontario, Canada company entered
into a Note Purchase and Security Agreement (the Agreement) pursuant to which
the Company issued to Lance a Secured Convertible Promissory Note (the Note)
with a face amount of $375,000, bearing interest at 5% per annum and convertible
into common shares of the Company at a conversion rate of $0.0025 per share. The
Note matures on December 31, 2011. The Note is secured by a first lien and
security interest in the Marg Property, a group of mineral claims located in the
Mayo Mining District of the Yukon Territory, Canada (the Marg Property). The
Agreement was completed October 15, 2010 upon registration of the lien. The Marg
Property is owned by the Companys wholly-owned Canadian subsidiary Yukon Gold
Corp. (YGC).

The Note was issued by the Company to Lance as consideration
for: (i) the assumption by Lance of certain of the Companys obligations to
three creditors which amounts were settled with Lance for $356,835 plus (ii) a
loan from Lance to the Company of $18,165 to cover certain ongoing expenses of
the Company. This Note totaling $375,000 replaces the payables assumed by Lance
and the loan of $18,165.

During the quarter ended October 31, 2010 the Company accrued
interest on the note in the amount of $3,185.

Subsequent to the quarter ended October 31, 2010, on November
15, 2010, the Companys wholly owned subsidiary, Yukon Gold Corp., declared
bankruptcy with the Office of the Superintendent of Bankruptcy Canada and
appointed Schwartz Levitsky Feldman Inc. as trustee under the Bankruptcy and
Insolvency Act. A Certificate of Appointment, under Section 49 of the Act; Rule
85, was filed in the Office of the Superintendent of Bankruptcy Canada, in the
District of Ontario, Hamilton Division. On November 23, 2010, Lance Capital Ltd.
issued a Notice of Default to the Company in accordance with the provisions of
Article 5 of the Note Purchase and Security Agreement dated August 31, 2010
between Lance Capital Ltd., the Company and YGC and further, in accordance with
the provision of Article 6, demanded payment in full of the entire amount of the
$375,000 note plus accrued interest.

12. BANKRUPTCY OF YUKON GOLD CORP.

During the quarter ended October 31, 2010 the efforts of Lance
Capital Ltd. (Lance) to settle or acquire all of the debts of Yukon Gold Corp.
(YGC), the Companys wholly owned Canadian subsidiary have not been successful
and YGC has material obligations with creditors who have strongly indicated an
unwillingness to settle. As neither YGC nor the Company has an ability to
satisfy these material obligations, on October 6, 2010, the Companys board of
directors resolved to cause YGC to seek relief in a bankruptcy proceeding in
Ontario, Canada where YGC is domiciled and instructed Lance to employ a trustee
to proceed with the bankruptcy of YGC.

F-21

---

YUKON GOLD CORPORATION, INC.(An Exploration
Stage Mining Company) Condensed Notes to Interim Consolidated
Financial Statements October 31, 2010(Amounts expressed
in US Dollars) (Unaudited  Prepared by Management)

12. BANKRUPTCY OF YUKON GOLD CORP.-Contd.

Subsequent to the quarter ended October 31, 2010, on November
15, 2010, the Companys wholly owned subsidiary, Yukon Gold Corp., declared
bankruptcy with the Office of the Superintendent of Bankruptcy Canada and
appointed a trustee under the Bankruptcy and Insolvency Act. A Certificate of
Appointment, under Section 49 of the Act; Rule 85, was filed in the Office of
the Superintendent of Bankruptcy Canada, in the District of Ontario, Hamilton
Division.

13. CHANGES IN OFFICERS

On September 2, 2010, the Companys board of directors accepted
the resignation of Rakesh Malhotra as Chief Financial Officer effective
September 1, 2010. There were no material disagreements between Mr. Malhotra,
the Company or its board with respect to the Companys operations or public
disclosures.

On September 2, 2010, the Companys board of directors
appointed Mrs. Kathy Chapman, Chief Financial Officer and Corporate Secretary of
the Company. Mrs. Chapman is also the Corporate Secretary of YGC.

On September 15, 2010, the Companys board of directors
appointed Ms. Joanne Hughes, Vice President, Operations of the Company.

14. SUBSEQUENT EVENTS

On November 1, 2010 the Companys board of directors passed a
resolution to acquire equipment from a third party for a total consideration of
$30,000. The Company paid the $30,000 on November 2, 2010.

On November 3, 2010 the Company accepted one (1) subscription
for 12,000,000 shares at $.0025 per share for a total consideration of $30,000
through a non-brokered private placement and the shares were certificated on
November 5, 2010.

On November 5, 2010 the Company issued 87,320,400 shares
against subscriptions received during the quarter ended October 31, 2010 for
$218,300.

F-22

---

YUKON GOLD CORPORATION, INC.(An Exploration
Stage Mining Company) Condensed Notes to Interim Consolidated
Financial Statements October 31, 2010(Amounts expressed
in US Dollars) (Unaudited  Prepared by Management)

14. SUBSEQUENT EVENTS-Contd

On November 15, 2010, the Companys wholly owned subsidiary,
Yukon Gold Corp., declared bankruptcy with the Office of the Superintendent of
Bankruptcy Canada and appointed Schwartz Levitsky Feldman Inc. as trustee under
the Bankruptcy and Insolvency Act. A Certificate of Appointment, under Section
49 of the Act; Rule 85, was filed in the Office of the Superintendent of
Bankruptcy Canada, in the District of Ontario, Hamilton Division.

On November 18, 2010, the Company and a consultant signed an
unconditional and absolute general release which terminated the agreement dated
September 20, 2009.

On November 23, 2010, Lance Capital Ltd. issued a Notice of
Default to the Company in accordance with the provisions of Article 5 of the
Note Purchase and Security Agreement dated August 31, 2010 between Lance Capital
Ltd., the Company and the Companys wholly-owned subsidiary, Yukon Gold Corp.,
and further, in accordance with the provision of Article 6, demanded payment in
full of the entire amount of the $375,000 note plus accrued interest.

On December 1, 2010, 325,000 stock options held by a former
officer expired.

On December 2, 2010, a meeting of the creditors of the
Companys wholly-owned subsidiary, Yukon Gold Corp., was held in Toronto,
Ontario, Canada.

On December 13, 2010, 250,000 stock options held by a director
expired.

On December 13, 2010, 76,000 stock options held by a former
officer expired.

On December 13, 2010, 88,000 stock options held by an officer
expired.

F-23

---

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONFOR THE SIX MONTH PERIOD ENDED
OCTOBER 31, 2010

Discussion of Operations & Financial Condition

Yukon Gold has no source of revenue and we continue to operate
at a loss. We expect our operating losses to continue for so long as we remain
in an exploration stage and perhaps thereafter. As at October 31, 2010, we had
accumulated losses of $15,571,436. 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 described in greater detail below, the Companys major
endeavor over the year has been its effort to re-structure its obligations,
settle debt and raise additional capital to meet its administrative expenses and
pursue its exploration activities. We are working urgently to obtain additional
financing, which may entail the acquisition of additional properties in order to
attract such financing.

As of August 31, 2010, the Company engaged Lance Capital Ltd.
(Lance), an Ontario company, to assist it with the re-structuring of its
obligations and to assist in securing additional equity financing. The Companys
contractual arrangement with Lance Capital Ltd. (Lance) is described below in
Contractual Obligations and Commercial Commitments. As part of that agreement,
Lance agreed to advance funds to creditors of the Company in exchange for a
Convertible Promissory Note of the Company in the amount of $375,000 which is
secured by a lien on the Marg Property, which is owned by the Companys
wholly-owned subsidiary, Yukon Gold Corp (YGC). In its sole discretion, Lance
may continue to fund operating expenses of the Company for a limited period of
time while it explores the feasibility of private placement or other financing
for the Company. In the event that Lance exercises its option to convert the
Convertible Promissory Note issued by the Company into Shares, Lance would
become the principal shareholder of the Company and would effectively control
the Company.

Shortly after YGC filed for bankruptcy protection in Ontario,
and subsequent to the quarter ended October 31, 2010, Lance issued a Notice of
Default to the Company in accordance with the provisions the Note Purchase and
Security Agreement dated August 31, 2010 among Lance, the Company and YGC. Lance
demanded full payment of the $375,000 note plus accrued interest. As of the date
of this report, Lance has taken no further action and continues to pursue
resolution of the Companys obligations with its creditors and private placement
financing.

SELECTED INFORMATION

|                                 |   | Three months     |   |   | Three months    |  
|-------------------------------- | - | ---------------- | - | - | --------------- | -
|                                 |   | ended            |   |   | ended           |  
|                                 |   | October 31,2010  |   |   | October 31,2009 |  
|                                 |   |                  |   |   |                 |  
|Revenues                         |   | Nil              |   |   | Nil             |  
|Net Loss                         | $ | 62,094           |   | $ | 225,697         |  
|Loss per share-basic and diluted | $ | (0.00            | ) | $ | (0.01           | )
|                                 |   |                  |   |   |                 |  
|                                 |   |                  |   |   |                 |  
|                                 |   | Six months       |   |   | Six months      |  
|                                 |   | ended            |   |   | ended           |  
|                                 |   | October 31, 2010 |   |   | October 31,2009 |  
|                                 |   |                  |   |   |                 |  
|Revenues                         |   | Nil              |   |   | Nil             |  
|Net Loss                         | $ | 129,402          |   | $ | 237,652         |  
|Loss per share-basic and diluted | $ | (0.00            | ) | $ | (0.01           | )

---

|                                  |   | As at            |  |   | As at          | 
|--------------------------------- | - | ---------------- |  | - | -------------- | 
|                                  |   | October 31, 2010 |  |   | April 30, 2010 | 
|                                  |   |                  |  |   |                | 
|Total Assets                      | $ | 219,466          |  | $ | 42,149         | 
|Total Liabilities                 | $ | 747,900          |  | $ | 660,666        | 
|Cash dividends declared per share |   | Nil              |  |   | Nil            | 

The Company's expenses are reflected in the Interim
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 six months ended October
31, 2010 is general and administrative expense of $125,301 as compared to
$330,360 for the six months ended October 31, 2009. General and administrative
expenses have decreased substantially during the period ended October 31, 2010
as compared to the period ended October 31, 2009 due to efforts by management to
reduce costs.

(b) Project Expense

Included in operating expenses for the six months ended October
31, 2010 is project expenses of $nil as compared with $12,104 for the six months
ended October 31, 2009. The Company has incurred little or no project expenses
during these periods due to lack of funding.

Agreement with Hinton Syndicate Concerning our Former
Mount Hinton Property

The following disclosure relates to our former property known
as the Mount Hinton property. Our interest in the Mount Hinton property was
sold on May 21, 2009.

On May 21, 2009, the Company, through its wholly owned
subsidiary, YGC, sold its interest in the Mount Hinton Property to the Hinton
Syndicate. YGC retained a 2% NSR on the property sold with the following
provisions and rights. Such 2% NSR may be terminated at any time by payment to
YGC of the following:

|                                                                                                                                                                                                                  |                       
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------
|If the payment is made to YGC within the
      12-month anniversary of the Closing: (This payment was not made within the
      12-month anniversary of the Closing.)                                             | $112,723 (CDN$115,000)
|                                                                                                                                                                                                                  |                       
|If the payment is made to YGC after the
      12-month anniversary of the Closing but before the 24-month anniversary of
      the Closing:                                                                       | $137,228 (CDN$140,000)
|                                                                                                                                                                                                                  |                       
|If the payment is made to YGC after the
      24-month anniversary of the Closing but before the 36-month anniversary of
      the Closing:                                                                       | $161,733 (CDN$165,000)
|                                                                                                                                                                                                                  |                       
|If the payment is made to YGC after the
      36-month anniversary of the Closing but before the 48-month anniversary of
      the Closing:                                                                       | $186,238 (CDN$190,000)
|                                                                                                                                                                                                                  |                       
|If the payment is made to YGC after the
      48-month anniversary of the Closing, it shall be increased by $24,505
      (CDN$25,000) for each 12-month period following the 49-month anniversary of the Closing |                       

---

Calculation and payment of the NSR are as follows:

1. The NSR which may be payable to a
party (the Payee) by a party (the Payor) shall be calculated and paid to the
Payee in accordance with the terms of this Schedule.

2. The NSR shall be calculated on a
calendar quarterly basis.

3. The following words shall have the
following meanings:

3.1 Gross Revenue shall mean the
aggregate of the following amounts received in each quarterly period:

(a) (i) all revenue received by the
Payor in such quarter from arms length purchasers of mineral products, or

(ii) the fair
market value of all mineral products sold by the Payor in such quarter to
persons not dealing at arms length with the Payor; and

(b) any proceeds of insurance received
in such quarter due to losses or damages in respect to mineral products.

3.2 Permissible Deductions shall mean
the aggregate of the following charges (to the extent not previously deducted or
accrued in computing Gross Revenue) that are paid in each quarterly period:

(a) sales charges levied by any sales
agent in respect to the sale of mineral products;

(b) all costs, expenses and charges of
any nature whatsoever which are either paid or incurred by the Payor in
connection with the refinement or beneficiation of mineral products after
leaving the Property, including all weighing, sampling, assaying and
representation costs, metal losses, any umpire charges and any penalties charged
by the processor, refinery or smelter, and;

(c) all other insurance costs in
respect of mineral products;

(d) provided: (i) that where a cost or
expense otherwise constituting a Permissible Deduction is incurred by the Payor
in a transaction with a party with whom it is not dealing at arms length (as
that term is defined in the Income Tax Act (Canada)), such costs or expenses may
be deducted, but only as to the lesser of the actual cost incurred by the Payor
and the fair market value thereof considering the time of such transaction and
under all the circumstances thereof; and (ii) transportation costs and milling
costs at another site, prior to the smelting and refining shall not be included
in the definition of Permissible Deductions.

3.3 Net Smelter Returns shall mean
Gross Revenue less Permissible Deductions in respect to such quarter.

3.4 NSR shall mean Net Smelter
Returns.

4. The NSR shall be calculated and paid
within 30 days after the end of each calendar quarter ending March 31, June 30,
September 30 and December 31 of each year. Smelter settlement sheets, if any,
and a statement setting forth calculations in
sufficient detail to show how the payment was derived (the Statement) shall be
submitted with the payment.

---

5. In the event that final amounts
required for the calculation of the NSR are not available within the time period
referred to in paragraph 4 of this Schedule, then provisional amounts shall be
established, the NSR shall be paid on the basis of such provisional amounts and
positive or negative adjustments shall be made to the payment in the succeeding
quarter, as necessary.

6. All NSR payments shall be considered
final and in full satisfaction of all obligations of the Payor with respect
thereto, unless the Payee delivers to the Payor a written notice (the Objection
Notice) describing and setting forth a specific objection to the calculation
thereof within 60 days after receipt by the Payee of the Statement. If the Payee
objects to a particular Statement as herein provided, the Payee shall, for a
period of 60 days after the Payors receipt of such Objection Notice, have the
right, upon reasonable notice and at a reasonable time, to have the Payors
accounts and records relating to the calculation of the NSR in question audited
by the auditors of the Payor. If such audit determines that there has been a
deficiency or an excess in the payment made to the Payee, such deficiency or
excess will be resolved by adjusting the next monthly NSR payment due hereunder.
The Payee shall pay all the costs and expenses of such audit unless a deficiency
of 2 1/2% or more of the amount due is determined to exist. The Payor shall pay
the costs and expenses of such audit if a deficiency of 2 1/2% or more of the
amount due is determined to exist. All books and records used and kept by the
Payor to calculate the NSR due hereunder shall be kept in accordance with
Canadian generally accepted accounting principles. Failure on the part of the
Payee to make claim against the Payor for adjustment in such 60 day period by
delivery of an Objection Notice shall conclusively establish the correctness and
sufficiency of the Statement and NSR payment in respect of the applicable
quarter.

7. All profits and losses resulting
from the Payor engaging in any commodity futures trading, option trading, metals
trading, gold loans or any combination thereof, and any other hedging
transactions with respect to mineral products (collectively, Hedging
Transactions) are specifically excluded from calculations of the NSR pursuant
to this Schedule, it being understood by the parties that both the Payor and
Payee may engage in speculative hedging trading activities for their own
account. All Hedging Transactions by the Payor and all profits or losses
associated therewith, if any, shall be solely for the Payors account,
irrespective of whether or not mineral products are delivered in fulfilment of
such obligations. When necessary to give effect to the provisions of this
paragraph 7, Gross Revenue from mineral products subject to Hedging Transactions
by the Payor shall be determined pursuant to subclause 3.1(a)(ii), rather than
3.1(a)(i) hereof.

8. Fair market value shall be
determined by using, for gold, the quarterly average price of gold which shall
be calculated by dividing the sum of all London Bullion Market Association P.M.
Gold Fix prices reported for the calendar quarter in question by the number of
days for which such prices were quoted and, for silver and other metals, the
quarterly average price which shall be calculated by dividing the sum of all New
York Commodity Exchange (COMEX) prices reported for silver and the other metal
quoted by and at the closing of COMEX for the calendar quarter in question by a
number of days for which such prices were quoted, less, in each case, an amount
reasonably equivalent to the deductions permitted by clause 3.2 hereof.

Exploration

During the year ended April 30, 2009, the Company completed its
acquisition of the Marg Property and currently owns it outright. The Marg
Property consists of 402 contiguous mineral claims covering approximately 20,000
acres. Access to the claim group is possible either by helicopter, based in
Mayo, Yukon Territory, Canada, located approximately 80 km to the southwest or
by small aircraft to a small airstrip located near the Marg deposit. A 50
kilometer winter road from Keno City to the property boundary was completed in
1997. The camp site on the property provides accommodation for up to 12 people.
Presently the hydroelectric power grid terminates at Keno City some 50km to the
southwest and water is available from the Keno Ladue River, which flows through
the property. The Company on August 31, 2010 granted Lance Capital Ltd. a
security interest of $375,000 registered against the Marg Property on October
15, 2010. The Company also credited the Companys wholly-owned subsidiary, Yukon
Gold Corp., (YGC) with an equal amount of the amount owed to the Company.
Subsequent to the quarter ended October 31, 2010, on November 15, 2010 the
Companys wholly owned subsidiary Yukon Gold Corp. declared bankruptcy. On November 23, 2010 Lance Capital
Ltd. issued a Notice of Default to the Company in accordance with the provisions
of Article 5 of the Note Purchase and Security Agreement dated August 31, 2010
between Lance Capital Ltd., the Company and YGC and further, in accordance with
the provision of Article 6, demanded payment in full of the entire amount of the
$375,000 note plus accrued interest.

---

Liquidity and Capital Resources

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

|                                             |   | October 31, 2010 |   |   | October 31, 2009 |  
|-------------------------------------------- | - | ---------------- | - | - | ---------------- | -
|                                             |   |                  |   |   |                  |  
|Cash and cash equivalent                     | $ | 182,410          |   | $ | 39,402           |  
|Working capital deficit                      | $ | (552,020         | ) | $ | (354,043         | )
|Cash used in operating activities            | $ | (309,610         | ) | $ | (226,952         | )
|Cash provided (used) in investing activities | $ | Nil              |   | $ | 110,306          |  
|Cash provided in financing
      activities  | $ | 491,300          |   | $ | 146,000          |  

As at October 31, 2010 the Company had working capital deficit
of $552,020 as compared to a working capital deficit of $354,043 in the previous
period. During the current period the Company received a demand loan of $9,900
carrying interest of 7% per annum from a director of the Company.

Off-Balance Sheet Arrangement

The Company has no Off-Balance Sheet Arrangement as of October
31, 2010 and April 30, 2010.

Contractual Obligations and Commercial Commitments

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 as amended 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 agreed to make subsequent payments under the
Agreement of: $167,645 (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 $167,645 (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 permitted the Company to pay Atna $19,980 (CDN$25,000) in cash on
December 12, 2008 (paid) and $188,600 (CDN$225,000) (payable in cash or shares
of the Companys common stock) on April 30, 2009. On April 30, 2009, the Company
issued to Atna 6,838,906 common shares which represent $188,600 (CDN $225,000),
whereby the common shares were valued at $0.0276 (CDN$0.0329) each. Upon the
commencement of commercial production at the Marg Property, the Company will pay
to Atna $972,479 (CDN$1,000,000) in cash and/or common shares of the Company, or
some combination thereof to be determined.

---

On October 15, 2010 Lance Capital Ltd. (“Lance”) registered a lien against the Marg Property to secure a promissory note of the Company in the amount of $375,000 that was issued to Lance.  The amount of the promissory note
corresponds to the amount committed by Lance to fund expenses of the Company. Subsequent to the quarter ended October 31, 2010, on November 23, 2010 Lance Capital Ltd. issued a Notice of Default to the Company in accordance with the provisions of
Article 5 of the Note Purchase and Security Agreement dated August 31, 2010 between Lance Capital Ltd., the Company and the Company’s wholly-owned subsidiary, Yukon Gold Corp., and further, in accordance with the provision of Article 6,
demanded payment in full of the entire amount of the $375,000 note plus accrued interest.

On August 10, 2010, the following agreement was terminated by mutual consent of
the parties and the consultant and the Company signed an unconditional and
absolute general release which terminated the Agreement dated August 28, 2009;

On October 1, 2009 the Company’s board of directors ratified a retainer agreement (the “Agreement”) dated August 28, 2009 with a
 Panamanian corporation (the “Consultant”) to provide certain exclusive advisory services
for financing, acquisition, collaboration, product or services sales transactions and strategies, for a period of twelve (12) months (the “Term”) from the date of execution. If at any time during the Term the Company wishes to terminate
the exclusivity of the Consultant, the Company will give the Consultant ten (10) days prior written notice and pay the Consultant $200,000. The Agreement stated that a monthly cash fee of $50,000 and the Consultant’s out-of-pocket
expenses would accrue and be payable only at such time as the Company secures a minimum of $5,000,000 in financing during the Term of this agreement at which time the total amount accrued shall be due and payable in full without interest. In the
event that the Company fails to timely pay any of the compensation, as defined in the Agreement, each shall bear interest at the rate of six percent (6%) until paid in full. The Consultant has the right upon written notice to the Company of its
election to receive gold or other minerals in lieu of cash prior to or concurrent with the closing of any financing transactions (“Financing Transactions”). Compensation payable in kind shall not bear any interest. If an acquisition or
divestiture has been consummated during the Term of the Agreement or for a period of one (1) year thereafter, the Company was obligated to pay a transaction fee (“TF”) to the Consultant based on the following transaction values
(“TVs”): (i) 5% TF up to and including $1,000,000 TVs, plus (ii) 4% TF on all TVs from $1,000,000 to $1,999,999, plus (iii) 3% TF on all TVs from $2,000,000 to $2,999,999, plus (iv) 2% on all TVs from $3,000,000
to $3,999,999, plus (v) 1% on all TVs from $4,000,000 to $4,999,999, plus (vi) 1% on all TVs equal to and exceeding $5,000,000. During the Term of the Agreement or for a period of one (1) year after termination, the Company would
have paid the Consultant a finder’s fee equal to two percent (2%) of the total amount of each and every Financing Transaction successfully undertaken by the Company. In addition the Company was to  have granted to the Consultant options to
purchase that number of shares of the Company’s common stock determined by multiplying two percent (2%) equal to the total number of equity shares placed and/or issued, or if convertible debt, two percent (2%) of the number of common equity
shares as if the convertible debt was converted at its earliest possible date. Such options were to be exercisable for a period of five (5) years at an exercise price equal to the five-day weighted average trading price (WATP) for the five (5)
consecutive trading days immediately prior to the granting of the Company’s stock options. In addition to the foregoing fees, the Company shall grant to the Consultant a fully-vested option (“Equity Fee”) to acquire a number of
shares equal to eight and one-half percent (8.5%) of the total common shares issued and outstanding at the time of the execution of the Agreement. Such options shall be exercisable for a period of five (5) years at an exercise price equal to the
five-day WATP for the five (5) consecutive trading days immediately prior to the granting of the Company’s stock options. The number of stock options shall be subject to any and all adjustments of the common shares during the five-year
exercise period.  Upon the Company entering into any definitive agreement, during the Term, to acquire any properties/projects, as defined in the Agreement, an additional fully-vested performance option was to be granted to the Consultant to acquire
a number of shares equal to eight and one-half percent (8.5%) of the then issued and outstanding common shares of the Company. Such options shall be exercisable for a period of five (5) years at an exercise price equal to the five-day WATP for the
five (5) consecutive trading days immediately prior to the execution of the definitive agreement.  The number of performance options was to be subject to any and all adjustments of the common shares during the five-year exercise period.  If any
acquisition transaction was contemplated by the Company during the Term or for a period of one (1) year after the Company would grant to the Consultant the absolute right to participate, on a pro rata basis, in up to a ten percent (10%) interest in
the Company’s acquisition. The Consultant would also be responsible for all pro rata future development and operating costs of said acquisition when paid by the parties owning the other 90% interests. Notwithstanding anything within the
Agreement to the contrary, any stock or equity-based compensation must be pre-cleared by the Toronto Stock Exchange (TSX). If any Financing Transaction(s) described in paragraphs 2 A and B of Schedule A to this Agreement are concluded during the Term, or for a period of one (1) year thereafter, provided such Financing
Transaction(s) results from parties identified in writing by the Consultant in performing the Services, the Company will pay to the Consultant, or a designee of the Consultant,
the following: (i) with respect to any equity financing, a cash fee equal to
seven percent (7%) of the total amount of the Financing Transaction (gross
proceeds, without offset for costs or fees), (ii) with respect to any debt
financing, a cash fee equal to four percent (4%) of the total amount of such
Financing Transaction (gross proceeds, without offset for costs or fees), and
(iii) in addition, upon the completion of any Financing Transaction of the
Company or its, parents, subsidiaries or affiliates, the Company shall grant to
the Consultant the right and option to purchase that number of shares, units or
interests in the Company determined by dividing five percent (5%) of the amount
of the Financing Transaction by an amount equal to equal to the five-day WATP
for the five (5) consecutive trading days immediately prior to the payment of
Yukon Gold Corporation stock options. Such rights shall be exercisable, for a
period of five (5) years, from date of issue and shall possess most favored
nation registration rights, i.e., registration rights equal to the best/most
favorable rights/treatment of any issued/outstanding registration rights
provisions applicable to any securities of the Company, specifically including,
but not limited to demand and piggy back registration rights, including the
right to include such shares in any offering undertaken by the Company, i.e.,
tag-along rights. Such Fee shall be paid by the Company to the Consultant
within ten (10) calendar days after the closing of each Financing Transaction,
or, if such Financing Transaction closes in several tranches, within ten (10)
calendar days after the closing of each tranche, until paid in full.

---

Subsequent to the period covered by this report, on November
18, 2010 the Company and the consultant signed an unconditional and absolute
general release which terminated the following Agreement:

On October 1, 2009, the Companys board of directors ratified a
consulting agreement (the Agreement), dated September 20, 2009, with an
individual to provide services as a special advisor (the Consultant). The
Agreement states that the Consultant will receive 450,000 restricted common
shares no later than ten (10) business days from the date of signing the
Agreement The Consultant is entitled to receive a cash fee of two and one-half
percent (2.5%) on the aggregate value of a financing(s) or transaction(s)
entered into by the Company during the term of the Agreement or within the
twelve (12) months following the term of this Agreement if the discussions
regarding the financial transaction(s) were initiated by the Consultant during
the term of this Agreement. Further it was agreed that the Consultant would
receive a bonus of up to 1,000,000 restricted common shares of the Company of
any financing or transaction, such bonus to be awarded on transactions values
(TV) as follows: (i) up to a $1,000,000 TV, 200,000 shares (ii) between a
$1,000,000 up to a $6,000,000 TV, an additional 300,000 shares and (iii) over a
$6,000,000 TV, an additional 500,000 shares. Upon receipt of an itemized invoice
the Consultant will be reimbursed for all traveling and other actual legitimate
expenses. The Agreement is for a three month minimum term and may be extended by
the mutual agreement of both parties in writing. On December 20, 2009 the
agreement terminated and the Consultant was not successful in raising any
financing. No services were provided under this agreement. The Company
considered the agreement not consummated and did not issue the shares for that
reason but the Company did expense the cost at fair value. The Company reversed
the expense of the cost of the 450,000 shares at fair value during the period
ended October 31, 2010.

On September 28, 2009, the Company entered into an employment
agreement (Agreement) with Douglas Oliver (the Employee) to serve as its
President and Chief Executive Officer. During the employment term, the Company
was to pay the Employee a base salary at the annual rate of one hundred and
eighty thousand ($180,000) dollars per year ("Base Salary"). Half of the
Employees Base Salary was to be deferred and was to accrue interest at the
LIBOR rate plus five percent (5%). Deferred Base Salary was to be payable to the
Employee with interest no sooner than the Cerro Quema gold project entering
production but could be further deferred at the Employees discretion. In the
event that this Agreement was terminated for any reason, the Employee would be
entitled to all deferred Base Salary, with interest, to be paid within three (3)
months of such termination. The Agreement further stated that the Employee
immediately was to be awarded 250,000 shares of the Companys common stock,
which were issued in the last quarter of the year ended April 30, 2010. The
Employee acknowledged that such shares would be restricted shares subject to
limitations on re-sale. The Employee further acknowledged that he would be
considered as affiliate for purposes of Rule 144. The Company agreed to register
such shares as part of any registration statement it files under the Securities
Act of 1933. Additional stock options could be awarded to the Employee based
upon the Companys achieving certain production goals and in accordance with the
Companys 2006 Stock Option Plan. Employee and the Company were to agree upon
the goals and option amounts within two (2) months of the execution of this
Agreement. As of the date of these statements, the option amounts were not
agreed upon. The Employee could terminate employment at any time after
providing forty-five (45) days prior written notice to the Company. The Company
could terminate the Employee's employment without cause at any time after
providing written notice to Employee and paying all unpaid salaries and
benefits.

---

In addition, an amount equal to twelve (12) months of Base Salary (at the rate in effect as of the date of the Employee’s termination without cause) would be paid to the Employee if this Agreement was terminated by the Company at any time
prior to the second anniversary of the date of this Agreement.  On August 9, 2010 the Employee and the Company mutually agreed to terminate their Agreement without notice. The Employee permitted the assignment of all amounts owed to the Employee by
the Company to Lance Capital Ltd. Due to limited activity in the Company Mr. Douglas Oliver further agreed to stay on as a director and Chief Executive Officer without compensation.

On October 26, 2009, the Company entered into a letter agreement (the “Agreement”) with a former officer to act as a consultant providing accounting and administration services for $1,945 (CDN$2,000) per month and to warehouse
the Company records for $486 (CDN$500) per month. The Company further agreed to reimburse the consultant for any out of pocket expenses and that either party may give 30 days notice in writing of their intention to terminate the Agreement.
On August 31, 2010, the consultant agreed to termination of the Agreement without notice and further agreed to accept $8,822 (CDN$9,000) as full payment for services rendered under the Agreement to be paid within 30 days. Lance Capital Ltd.
agreed to advance the funds to the Company to cover this payment. The Company paid $8,822 (CDN$9,000) to the consultant on October 14, 2010.

The Company’s subsidiary YGC has been served an Ontario Court order to pay a penalty for $117,759 (CDN $120,138) for early termination for its office lease. The prior landlord had made the said claim in the Ontario Superior Court of
Justice.  On June 17, 2010 the Company’s subsidiary’s financial institution remitted $1,271 (CDN$1,307) to the Ontario Superior Court of Justice being the balance of funds in YGC’s bank account.

On October 1, 2010, the Company entered into a consulting agreement (the “Agreement”) with Lance Capital Ltd. (the “Consultant”) to provide administrative and other services for $7,500 per month. The Company further
agreed to reimburse the Consultant for all expenses incurred with respect to the operation of the administration of the Company provided that these expenses are incurred in substantial accordance with monthly and annual budgets to be prepared by the
Consultant and approved by the Board of Directors of the Company from time to time. The term of this Agreement is one (1) year and automatically renews from year to year unless terminated upon 30 days prior written notice by either party.

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 initially capitalized in accordance with the ASC 805-20-55-37, previously referenced as EITF 04-2 when incurred. The Company assesses the carrying costs for impairment under Accounting Standards 930 Extractive
Activities – Mining (AS 930) at each fiscal quarter end. An impairment is recognized when the sum of the expected undiscounted future cash flows is less than the carrying amount of the mineral property. Impairment losses, if any, are measured
as the excess of the carrying amount of the mineral property over its estimated fair value. 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. Once capitalized, such costs will be amortized using the units-of-production method over the estimated life of the probable reserves.  If mineral properties are subsequently abandoned or
impaired, any capitalized costs will be charged to operations. The Company assesses the carrying costs for impairment at each fiscal quarter end. The Company has determined that all property payments are impaired and accordingly has written off the
acquisition costs to project expense.

---

Change in Corporate Office

On August 23, 2010 the Company moved its corporate offices to
1226 White Oaks Blvd, Suite 10A, Oakville, Ontario L6H 2B9 Canada.

Change in Transfer Agent

On September 2, 2010, the Companys board of directors
appointed Olde Monmouth Stock Transfer Co., Inc. to replace Equity Transfer
& Trust Company as the Companys transfer agent. The Company had no
disagreements with the services provided by Equity Transfer & Trust Company.
The transfer of records was completed on September 15, 2010. Our new transfer
agents address is:

Olde Monmouth Stock Transfer Co., Inc.
200 Memorial Parkway Atlantic Highlands, NY 07716

Tel: 732-872-2727

Changes in Officers

On September 2, 2010 the Companys board of directors accepted
the resignation of Rakesh Malhotra as Chief Financial Officer effective
September 1, 2010. There were no material disagreements between Mr. Malhotra,
the Company or its board with respect to the Companys operations or public
disclosures.

On September 2, 2010, the Companys board of directors
appointed Mrs. Kathy Chapman, Chief Financial Officer and Corporate Secretary of
the Company. Mrs. Chapman is also the Corporate Secretary of YGC. Mrs. Chapman
has over 30 years of experience in internal accounting and administration and 13
years of experience in public company disclosure in the United States and
Canada. Mrs. Chapman also is employed by Lance Capital Ltd. Lance does not have
any relationship with the Company, except as described above. Mrs. Chapman also
owns and operates an award winning bed and breakfast establishment in Paris,
Ontario, which she has managed since July, 2000. Since 2008 she has been the
Co-Chair of Women in Mining Toronto Branch, based in Toronto, Canada. The focus
of this group is to assist women in pursuing careers in the mining sector
through mentorship, job opportunities and networking venues. On November 4, 2010
Mrs. Chapman was elected to the board of directors of Women In Mining Canada.

On September 15, 2010, Joanne Hughes of Burlington, Ontario,
was appointed Vice President, Operations of the Company. Ms. Hughes has over 20
years of experience in the areas of corporate administration and regulatory
compliance. Ms. Hughes also served as an officer of another exploration stage
mining company in the United States. Ms. Hughes is employed by Lance Capital
Ltd. and provides legal and administrative support to the Company and its
clients. Prior to joining the team at Lance Capital Ltd. in 2006, Ms. Hughes
spent 10 years as an executive assistant to the CEO, CFO and internal counsel of
a publicly held Canadian corporation.

---

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 October 31, 2010. 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 October 31, 2010 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

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

On June 17, 2010 the Companys bank received a Notice of
Garnishment from the Ontario Superior Court of Justice, Canada, dated June 15,
2010, in the amount of $117,759 (CDN$120,138) with the Companys former landlord
named as the creditor, the Companys wholly owned Canadian subsidiary (YGC)
named as the debtor, and the Companys bank as the garnishee. On June 17, 2010
our subsidiarys bank remitted $1,271 (CDN$1,307) to the Ontario Superior Court
of Justice, being the balance of funds in YGCs bank account. YGC did not have
the funds to fully settle the Notice of Garnishment. It is possible that one or
more other creditors of YGC will bring an action to enforce a debt.

---

Item 1A. RISK FACTORS

|1. | THE COMPANY IS RELYING ON A THIRD PARTY TO SETTLE OUTSTANDING DEBTS
      AND RETURN THE COMPANYS BUSINESS TO ECONOMIC VIABILITY.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | As of August 31, 2010, the Company and Lance Capital Ltd,
      an Ontario company (Lance), entered into an agreement pursuant to which
      Lance is engaged in efforts to resolve outstanding obligations of the
      Company and raise working capital for the Company. In its sole discretion,
      Lance may continue to fund operating expenses of the Company for a limited
      period of time while it explores the feasibility of private placement or
      other financing for the Company. Under the terms of the Agreement Lance
      was issued a Convertible Promissory Note in the amount of $375,000 secured
      by the Marg Property owned by Yukon Gold Corp., the Companys wholly-owned
      subsidiary. In the event that Lance exercises its option to convert the
      Convertible Promissory Note issued by the Company into Shares, Lance would
      become the principal shareholder of the Company and would effectively
      control the Company. There is no assurance that Lance will be successful
      in its efforts to reorganize the Companys affairs.      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|2. | WE HAVE NO WORKING CAPITAL AND MAY NOT BE ABLE TO
      CONTINUE TO COMPLY WITH APPLICABLE REGULATORY REQUIREMENTS AND THE
      REQUIREMENTS OF THE EXCHANGES ON WHICH OUR SHARES TRADE.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Yukon Gold has no working capital to maintain its ongoing
      operations, to prepare and file regular reports required to meet the
      disclosure requirements of the Securities and Exchange Commission or the
      Ontario Securities Commission or to meet the requirements of the exchanges
      on which our stock trades. On August 26, 2009, the Toronto Stock Exchange
      ("TSX"), announced the de-listing of the Companys common shares,
      effective at the close of the market on September 25, 2009. The decision
      was based upon the Companys failure to meet multiple listing requirements
      of TSX. On November 2, 2009 the Companys common shares began trading on
      the NEX exchange. Effective at the close of business on April 7, 2010, and
      in accordance with NEX Policy, section 15, the common shares of Yukon Gold
      were delisted from NEX, for failure to pay their NEX Listing Maintenance
      Fee. The Company continues to trade on OTCBB. We run the risk of being de-
      listed on all exchanges in which our stock currently trades.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|3. | WE MAY HAVE TO PURCHASE ADDITIONAL MINERAL PROPERTIES TO
      SECURE FINANCNG AND REMAIN VIABLE.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Yukon Gold must immediately secure additional financing
      to remain viable. Management of Yukon Gold believes that we must identify
      and purchase new mineral properties in order to obtain such financing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|4. | WE DO NOT HAVE REVENUE PRODUCING BUSINESS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Yukon Gold has rights in certain mineral claims located
      in the Yukon Territory, 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. As of the date of this report, our principal
      mining claims, known as the Marg Property, have been pledged to secure a
      debt of the Company. Unless the Company raises additional equity capital,
      it is likely that we will lose our primary claim asset.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|5. | 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
      working capital to complete our exploration programs (including
      feasibility studies) and we do not have any commitments to obtain
      additional financing. 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:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

- our ability to raise the capital necessary to conduct this exploration and
  preserve our interest in these mineral claims;

---

- our ability to raise capital to develop the Marg Property, establish a
  mining operation, and operate this mine in a profitable manner; and.
- our ability to raise capital to purchase additional properties that may
  make our business more attractive to investors in exploration stage mining
  companies.

Failure to raise the necessary capital to continue exploration
and development could cause us to go out of business.

|6. | GOING CONCERN QUALIFICATION.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company has included a going concern qualification
      in the Interim Consolidated 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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | On August 31, 2010 the Company entered into an Agreement
      with Lance Capital Ltd. (Lance) an Ontario, Canada corporation regarding
      the settlement of certain debts of the Company. Lance is continuing to
      assist the Company with financing going forward as more particularly
      described in Item 5 Other Information.                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|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 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
      US dollar.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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

On November 1, 2010, the Companys board of directors passed a
resolution to acquire equipment from a third party for a total consideration of
$30,000. The Company paid the $30,000 on November 2, 2010.

On November 3, 2010, the Company accepted one (1) subscription
for 12,000,000 shares at $.0025 per share for a total consideration of $30,000
through a non-brokered private placement and the shares were certificated on
November 5, 2010.

On November 5, 2010, the Company issued 87,320,400 shares
against subscriptions received during the quarter ended October 31, 2010 for
$218,300.

On November 15, 2010, the Companys wholly owned subsidiary,
Yukon Gold Corp., declared bankruptcy with the Office of the Superintendent of
Bankruptcy Canada and appointed Schwartz Levitsky Feldman Inc. as trustee under
the Bankruptcy and Insolvency Act. A Certificate of Appointment, under Section
49 of the Act; Rule 85, was filed in the Office of the Superintendent of
Bankruptcy Canada, in the District of Ontario, Hamilton Division.

On November 18, 2010, the Company and a consultant signed an
unconditional and absolute general release which terminated the agreement dated
September 20, 2009.

On November 23, 2010, Lance Capital Ltd. issued a Notice of
Default to the Company in accordance with the provisions of Article 5 of the
Note Purchase and Security Agreement dated August 31, 2010 between Lance Capital
Ltd., the Company and Yukon Gold Corp. the Companys wholly owned subsidiary,
and further in accordance with the provision of Article 6 demanded payment in
full of the entire amount of the $375,000 note plus interest.

On December 1, 2010, 325,000 stock options held by a former
officer expired.

On December 2, 2010, a meeting of the creditors of the
Companys wholly-owned subsidiary, Yukon Gold Corp., was held in Toronto,
Ontario, Canada.

On December 13, 2010, 250,000 stock options held by a director
expired.

On December 13, 2010, 76,000 stock options held by a former
officer expired.

On December 13, 2010, 88,000 stock options held by an officer
expired.

Item 6. EXHIBITS & REPORTS ON FORM 8-K

(a) Exhibits

|     |                                                                                                                                                                                        
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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

---

|Current Report on Form 8-K, Item 1.01: Entry into a
      Material Definitive Agreement dated August 31, 2010.                                                                                                                
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                
|Current Report on Form 8-K, Item 5.02: Departure of
      Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory
      Arrangements of Certain Officers dated September 15, 2010.
|                                                                                                                                                                                                                                
|Current Report on Form 8-K, Item 3.02: Unregistered
      Sales of Equity Securities dated November 3, 2010.                                                                                                                  
|                                                                                                                                                                                                                                
|Current Report on Form 8-K, Item 8.01: Other
      Events dated November 15, 2010.                                                                                                                                            

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.

|                         | By: /s/ Douglas Oliver 
|------------------------ | -----------------------
|Dated: December 14, 2010 | Douglas Oliver         
|                         | Chief Executive Officer
|                         |                        
|                         | By: /s/ Kathy Chapman  
|                         | Kathy Chapman          
|                         | Chief Financial Officer

---