SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

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

                  FOR THE QUARTERLY PERIOD ENDED July 31, 2006

                                       OR

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

              FOR THE TRANSITION PERIOD FROM ________ TO __________

                         REGISTRATION NUMBER 333-101960

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

           Delaware                                              52-2243048
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

               55 York Street, Suite 401, Toronto, Ontario M5J 1R7
               (Address of principal executive offices) (Zip Code)

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

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 12 months (or 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 |_|

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

             Class                Outstanding As of July 31, 2006
-------------------------------   -------------------------------
Common Shares $ .0001 par value              17,027,224

<PAGE>

                          YUKON GOLD CORPORATION, INC.
                         (AN EXPLORATION STAGE COMPANY)
                    INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                  JULY 31, 2006
                        (Amounts expressed in US Dollars)
                                   (Unaudited)

                                TABLE OF CONTENTS

                                                                         Page No
                                                                         -------
Interim Consolidated Balance Sheets as of July 31, 2006 and
  April 30, 2006                                                             1-2
Interim Consolidated Statements of Operations for the three months
  ended July 31, 2006 and July 31, 2005                                        3
Interim Consolidated Statements of Cash Flows for the three months
  ended July 31, 2006 and July 31, 2005                                        4
Interim Consolidated Statements of Changes in Stockholders' Equity
  for the three months ended July 31, 2006 and the year ended
  April 30, 2006                                                               5
Condensed Notes to Interim Consolidated Financial Statements                6-12

<PAGE>

YUKON GOLD CORPORATION, INC.
(An Exploration Stage Company)
Interim Consolidated Balance Sheets
As at July 31, 2006 and April 30, 2006
(Amounts expressed in US Dollars)

(Unaudited)

                                                            July 31,   April 30,
                                                              2006        2006
                                                               $           $
                                                           ---------   ---------
                           ASSETS
CURRENT ASSETS
  Cash and cash equivalents                                  889,565   2,412,126
  Prepaid expenses and other                               1,057,687      77,977
  Exploration tax credit receivable                          153,145     153,145
                                                           ---------   ---------
                                                           2,100,397   2,643,248
RESTRICTED CASH (Note 6)                                          --     118,275
RESTRICTED DEPOSIT (Note 7)                                   17,889      17,889
PROPERTY, PLANT AND EQUIPMENT                                 59,263      63,141
                                                           ---------   ---------
                                                           2,177,549   2,842,553
                                                           =========   =========

      See condensed notes to the Interim consolidated financial statements.

APPROVED ON BEHALF OF THE BOARD

/s/ Howard Barth
-------------------------------
Howard Barth, Director

/s/ Jose L. Guerra
-------------------------------
Jose L. Guerra, Jr., Director


                                        1

<PAGE>

YUKON GOLD CORPORATION, INC.
(An Exploration Stage Company)
Interim Consolidated Balance Sheets
As at July 31, 2006 and April 30, 2006
(Amounts expressed in US Dollars)
(Unaudited)

                                                        July 31,     April 30,
                                                          2006          2006
                                                            $            $
                                                       ----------   -----------
                       LIABILITIES
CURRENT LIABILITIES

  Accounts payable and accrued liabilities                362,943       232,282
  Other Liability                                           3,750         3,750
  Current Portion of:
  Obligation under Capital Leases                           2,772         2,792
                                                       ----------   -----------
Total Current Liabilities                                 369,465       238,824
  Long-Term Portion of:
  Obligation under Capital Lease                           11,086        11,864
                                                       ----------   -----------
  TOTAL LIABILITIES                                       380,551       250,688
                                                       ----------   -----------
                  STOCKHOLDERS' EQUITY

CAPITAL STOCK                                               1,703         1,637
ADDITIONAL PAID-IN CAPITAL                              5,979,231     5,301,502
SUBSCRIPTION FOR WARRANTS (Note 5)                        525,680       525,680
ACCUMULATED OTHER COMPREHENSIVE LOSS                      (49,097)       (5,162)
DEFICIT, ACCUMULATED DURING THE EXPLORATION STAGE      (4,660,519)   (3,231,792)
                                                       ----------   -----------
                                                        1,796,998     2,591,865
                                                       ----------   -----------
                                                        2,177,549     2,842,553
                                                       ==========   ===========

      See condensed notes to the interim consolidated financial statements.


                                        2

<PAGE>

YUKON GOLD CORPORATION, INC.
(An Exploration Stage Company)
Interim Consolidated Statements of Operations
For the three months ended July 31, 2006 and July 31, 2005
(Amounts expressed in US Dollars)
(Unaudited)

                                                            For the     For the
                                                            quarter     quarter
                                              Cumulative     ended       ended
                                                 since     July 31,     July 31,
                                               inception     2006        2005
                                                  $            $           $
                                              ----------  ----------  ----------
REVENUE                                               --          --         --
                                               ---------  ----------  ----------
OPERATING EXPENSES
  Stock-based compensation                       310,569      85,323     95,840
  General and administration                   1,865,037     468,359     92,050
  Project expenses                             2,781,351     871,887      2,594
  Exploration Tax Credit                        (284,703)         --         --
  Amortization                                     8,361       3,158        243
  Loss on sale/disposal of capital assets          5,904          --         --
                                               ---------  ----------  ---------
TOTAL OPERATING EXPENSES                       4,686,519   1,428,727    190,727
                                               ---------  ----------  ---------
LOSS BEFORE INCOME TAXES                      (4,686,519) (1,428,727)  (190,727)
  Income taxes recovery                           26,000          --         --
                                               ---------  ----------  ---------
NET LOSS                                       4,660,519) (1,428,727)  (190,727)
                                               =========  ==========  =========
Loss per share - basic and diluted                             (0.08)     (0.02)
                                                          ==========  =========
Weighted average common shares outstanding                16,656,627  9,025,045
                                                          ==========  =========

      See condensed notes to the interim consolidated financial statements.


                                        3

<PAGE>

YUKON GOLD CORPORATION, INC.
(An Exploration Stage Company)
Interim Consolidated Statements of Cash Flows
For the three months ended July 31, 2006 and July 31, 2005
(Amounts expressed in US Dollars)
(Unaudited)

<TABLE>
<CAPTION>
                                                                          For the     For the
                                                                          quarter     quarter
                                                           Cumulative     ended        ended
                                                              since      July 31,     July 31,
                                                            inception      2006         2005
                                                               $            $            $
                                                           ----------   ----------   ---------
<S>                                                        <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss for the year                                    (4,660,519)  (1,428,727)  (190,727)
  Items not requiring an outlay of cash:
    Amortization                                                8,361        3,158        243
    Loss on sale/disposal of capital assets                     5,904           --         --
    Shares issued for property payment                        368,087       53,845         --
    Common shares issued for
    Settlement of severance liability to ex-officer           113,130      113,130
    Stock-based compensation                                  310,569       85,323     95,840
    Issue of shares for professional services                 130,500           --         --
    Issue of units against settlement of debts                 20,077           --         --
    Decrease (Increase) in prepaid expenses and deposits   (1,056,530)    (979,710)    98,371
    Increase in exploration tax credit receivable            (153,145)          --         --
    Increase (Decrease) in accounts payable and accrued
      liabilities                                             362,453      130,661    (16,825)
    Decrease in restricted cash                                    --      118,275
    Increase in restricted deposit                            (17,889)
    Increase in other liabilities                               3,750           --         --
                                                           ----------   ----------   --------
NET CASH USED IN OPERATING ACTIVITIES                      (4,565,252)  (1,904,045)   (13,098)
                                                           ----------   ----------   --------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property, plant and equipment                   (74,597)          --         --
                                                           ----------   ----------   --------
NET CASH USED IN INVESTING ACTIVITIES                         (74,597)          --         --
                                                           ----------   ----------   --------
CASH FLOWS FROM FINANCING ACTIVITIES
  Repayments from a shareholder                                 1,180           --         --
  Proceeds from exercise of warrants                           20,772           --         --
  Proceeds (Repayments) from demand promissory notes          200,000           --    (47,676)
  Proceeds from Convertible promissory notes converted        200,500           --         --
  Proceeds from exercise of stock options                       5,500           --         --
  Proceeds from subscription of warrants                      525,680           --         --
  Proceeds from issuance of units /shares                   4,604,736      425,497         --
  Proceeds from capital lease obligation                       14,656           --         --
                                                           ----------   ----------   --------
NET CASH PROVIDED/(USED) BY FINANCING ACTIVITIES            5,573,024      425,497    (47,676)
                                                           ----------   ----------   --------
EFFECT OF FOREIGN CURRENCY EXCHANGE
  RATE CHANGES                                                (43,610)     (44,013)    (1,429)
                                                           ----------   ----------   --------
NET INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS FOR THE YEAR                                    889,565   (1,522,561)   (62,203)
  Cash and cash equivalents, beginning of year                     --    2,412,126     79,256
                                                           ----------   ----------   --------
CASH AND CASH EQUIVALENTS, END OF                             889,565      889,565     17,053
  QUARTER
                                                           ==========   ==========   ========
INCOME TAXES PAID                                                               --         --
                                                                        ==========   ========
INTEREST PAID                                                                   --      3,032
                                                                        ==========   ========
</TABLE>

     See condensed notes to the interim consolidated financial statements.


                                        4

<PAGE>

YUKON GOLD CORPORATION, INC.
(An Exploration Stage Company)
Interim Consolidated Financial Statements of Changes in Stockholders' Equity
From Inception to July 31, 2006
(Amounts expressed in US Dollars)
(Unaudited)

<TABLE>
<CAPTION>
                                                                                       Deficit,
                                                                                     accumulated                    Accumulated
                               Number of      Common     Additional   Subscription    during the                       Other
                                 Common       Shares       Paid-in         for       exploration   Comprehensive   Comprehensive
                                 Shares       amount       Capital      warrants        stage      Income (loss)   Income (loss)
                                                $             $                          $               $               $
                               ---------   -----------   ----------   ------------   -----------   -------------   -------------
<S>                            <C>           <C>           <C>         <C>           <C>             <C>              <C>
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           --              --
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)
                                                                                                     ========
</TABLE>


                                        5

<PAGE>

YUKON GOLD CORPORATION, INC.
(An Exploration Stage Company)
Interim Consolidated Financial Statements of Changes in Stockholders' Equity
From Inception to July 31, 2006
(Amounts expressed in US Dollars)
(Unaudited)

<TABLE>
<CAPTION>
                                                                                            Deficit,
                                                                                          accumulated                   Accumulated
                                         Number of   Common   Additional   Subscription    during the                      Other
                                           Common    Shares     Paid-in        for        exploration  Comprehensive   Comprehensive
                                           Shares    amount     Capital       warrants       stage     Income (loss)   Income (loss)
                                                        $          $                           $             $               $
                                         ---------   ------   ----------   ------------   -----------  -------------   -------------
<S>                                       <C>          <C>      <C>        <C>            <C>          <C>             <C>
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
</TABLE>


                                        6

<PAGE>

YUKON GOLD CORPORATION, INC.
(An Exploration Stage Company)
Consolidated Statements of Changes in Stockholders' Equity
From Inception to July 31, 2006
(Amounts expressed in US Dollars)

<TABLE>
<CAPTION>
                                                                                            Deficit,
                                                                                          accumulated
                                             Number of  Common  Additional  Subscription   during the       Other      Accumulated
                                              Common    Shares   Paid-in        for        exploration  Comprehensive  Comprehensive
                                              Shares    amount   Capital      warrants        stage     Income (loss)  Income (loss)
                                                          $        $             $              $             $              $
                                            ----------  ------  ----------  ------------  ------------  -------------  -------------
<S>                                         <C>          <C>    <C>            <C>         <C>           <C>              <C>
Issuance of common shares on
  Conversion of Convertible
  Promissory notes                             101,150      10     76,523
Issue of 400,000 Special Warrants net                                          371,680
Issue of 200,000 flow through warrants                                         154,000
Brokered private placement of shares- net    5,331,327     533  2,910,375
Brokered Private placement of flow through
Shares- net                                     25,000       2     13,310
Exercise of stock options                       10,000       1      5,499
Foreign currency translation                        --      --         --                                    (2,687)       (2,687)
Net loss for the year                               --      --                             (1,855,957)   (1,855,957)           --
                                            ----------   -----  ---------      -------     ----------    ----------        ------
Balance as of April 30, 2006                16,366,728   1,637  5,301,502      525,680     (3,231,792)   (1,858,644)       (5,162)
                                                                                                         ==========
Exercise of warrants                            10,000       1      8,986
Exercise of warrants                            45,045       5     40,445
Exercise of warrants                            16,000       2     14,278
Common shares issued for
Settlement of severance
  liability to ex-officer                      141,599      14    113,116
Exercise of warrants                            43,667       4     39,364
Exercise of warrants                            17,971       2     15,937
Exercise of warrants                            43,667       4     38,891
Exercise of warrants                            16,000       2     14,251
Exercise of warrants                           158,090      16    141,616
Issuance 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
Stock based compensation-
Directors and officers                                             85,323
Foreign currency translation                                                                                (43,935)      (43,935)
Net loss for the quarter                                                                   (1,428,727)   (1,428,727)
                                            ----------   -----   ---------     -------     ----------    ----------       -------
                                            17,027,224   1,703   5,979,231     525,680     (4,660,519)   (1,472,662)      (49,097)
                                            ----------   -----   ---------     -------     ----------    ----------       -------
</TABLE>

      See condensed notes to the interim consolidated financial statements.


                                        7

<PAGE>

YUKON GOLD CORPORATION, INC.
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
July 31, 2006
(Amounts expressed in US Dollars)
(Unaudited)

1.    BASIS OF PRESENTATION

      The accompanying unaudited consolidated financial statements do not
      include all the information and footnotes required by generally accepted
      accounting principles for complete financial statements. In the opinion of
      management, all adjustments (consisting of all recurring accruals)
      considered necessary for fair presentation have been included. Operating
      results for the interim period are not necessarily indicative of the
      results that may be expected for the year ended April 30, 2007. Interim
      financial statements should be read in conjunction with the company's
      annual audited financial statements.

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

2.    GOING CONCERN

      The Company has no source for operating revenue and expects to incur
      significant expenses before establishing operating revenue. The Company
      has a need for equity capital and financing for working capital and
      exploration and development of its properties. Because of continuing
      operating losses, the Company's continuance as a going concern is
      dependent upon its ability to obtain adequate financing and to reach
      profitable levels of operation. 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 ore reserves and
      develop those it has on its mining claims. There is no guarantee that such
      capital will continue to be available on acceptable terms, if at all or if
      the Company will attain profitable levels of operation.

      Management has initiated plans to raise equity funding through the
      issuance of common shares including flow-through shares. The company was
      successful in raising funds (net) of approximately $4 million during the
      year ended April 30, 2006 which is expected to help the company meet its
      commitments and current requirements for project expenses and general and
      administrative expenses. The Company has also raised another $400,000 in
      the subsequent period (refer to note 12 (b)) In addition, the company's
      common shares were approved for listing and commenced trading on the
      Toronto Stock exchange. The listing of company's stock in both United
      States and Canada has expanded its investor base, as the company continues
      to explore sources of funding from both United States and Canada.

3.    NATURE OF OPERATIONS

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


                                        8

<PAGE>

YUKON GOLD CORPORATION, INC.
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
July 31, 2006
(Amounts expressed in US Dollars)
(Unaudited)

4.    EXPLORATION TAX CREDIT RECEIVABLE

      The Company has a claim to the Yukon exploration tax credit, since it
      maintains a permanent establishment in the Yukon and has incurred eligible
      mineral exploration expenses as defined by the federal income tax
      regulations of Canada. The Company's expectation of receiving this credit
      of $153,145 (CDN$171,216) is based on the history of receiving past
      credits. The Company will be filing tax returns to claim this credit.

5.    SUBSCRIPTION FOR WARRANTS

      a)    On December 15, 2005 the Company completed the sale of 400,000
            Special Warrants using the services of an agent at a subscription
            price of $1.01 per Warrant to an accredited investor for $404,000.
            Each Special warrant entitles its holder to acquire one common share
            of the Company and one common share purchase warrant at no
            additional cost. Each share purchase warrant entitles the Subscriber
            to subscribe for one common share in the capital of the company at a
            price of $1.00 per warrant share for a period of one year following
            the closing date.

            Special Warrants may not be exercised until the earlier of: (i) the
            Qualification Time (as defined below), or (ii) the date which is 181
            days from the Closing Date of the sale of the Special Warrants (the
            "Expiry Time"). All special warrants will be automatically exercised
            without any further action on the part of the holder at 4:30 p.m.
            (Toronto Time) on the earlier of: (i) the fifth business day after
            the date upon which a registration statement to be filed by the
            Corporation under the Securities Act of 1933 as amended has been
            declared effective with respect to the distribution of the Common
            Shares and Warrants issuable upon exercise of the Special Warrants
            (the "Qualification Time") or (ii) the Expiry Time. If by 4:30 p.m.
            (Toronto time) on the date which is 180 days from the closing date
            such registration statement has not been declared effective, the
            holders of the Special Warrants shall thereafter be entitled to
            receive, upon the exercise or deemed exercise of the Special
            Warrants, 1.1 common shares and 1.1 warrants for each Special
            Warrant then held by such holder (in lieu of one common share and
            one warrant otherwise receivable) at no additional cost.

            The agent received $32,320 in commission as well as 32,320 warrants.
            Each warrant is exercisable for one common share at $ 1.00 until
            December 15, 2006 with a fair value of $9,995.

      b)    On December 30, 2005 the Company completed the sale of 200,000
            Flow-Through Special Warrants ("Special Warrants") to National Bank
            Trust Inc. for the account of a Canadian accredited investor, for
            $180,000 (CDN$205,020). Each Special Warrant entitles the Holder to
            acquire one flow-through common share of the Company ("Flow-Through
            Shares") at no additional cost.

            The term "Flow-Through Shares" is significant for tax purposes in
            Canada because it enables the issuer to allocate certain exploration
            tax credit to the holders of such shares. As all Canadian
            Exploration expenses are incurred by the Company's 100% owned
            Canadian subsidiary, which conducts mining explorations in the Yukon
            Territory of Canada, for Canadian tax purposes, a similar
            Flow-Through subscription agreement was executed between the Company
            and its 100% Canadian subsidiary. The effective date of renunciation
            for Canadian Exploration expenses is December 31, 2005, which as per
            Canadian tax regulations requires the Canadian subsidiary to incur
            eligible Canadian exploration expenses for the entire subscription
            amount of $180,000 (CDN $205,020) on or before December 31, 2006.
            The company must renounce such eligible expenses to the Canadian
            accredited investors. The company renounced such eligible expenses
            to the investors in March of 2006. These Special Warrants may be
            exercised at any time but will automatically be exercised on the
            earlier of: (i) the Qualification Time (as defined below), or (ii)
            the date which is 181 days from the date of the Special Warrant
            Certificate (December 30, 2005), or such later date as may be agreed
            upon between the Company and holder of the Special Warrants (the
            "Expiry Time"). All Special Warrants will be automatically exercised
            without any further action by the holder at 4:30 p.m. (Toronto time)
            on the earlier of: (i) the fifth business day after the date upon
            which a registration statement to be filed by the Company under the
            Securities Act of 1933, as amended (the "Securities Act"), has been
            declared effective by the Securities and Exchange Commission (the
            "SEC") with respect to the distribution of the Flow-Through Shares
            issuable upon exercise of the Special Warrants (the "Qualification
            Time") or (ii) the Expiry Time.


                                        9

<PAGE>

YUKON GOLD CORPORATION, INC.
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
July 31, 2006
(Amounts expressed in US Dollars)
(Unaudited)

6.    RESTRICTED CASH

      Under Canadian income tax regulations, a company is permitted to issue
      flow-through shares whereby the company agrees to incur qualifying
      expenditures and renounce the related income tax deductions to the
      investors. Notwithstanding that, there is no specific requirement to
      segregate the funds. The flow-through funds which are unexpended at the
      consolidated balance sheet date are considered to be restricted and are
      not considered to be cash or cash equivalents. As of July 31, 2006 and
      April 30, 2006, unexpended flow-through funds were $ Nil and $ 118,275
      (CDN $132,230) respectively.

7.    RESTRICTED DEPOSITS

      The Company has a term deposit of $17,889 (CDN$20,000) with a Canadian
      financial institution which earns interest at 2.5% per annum and matures
      on April 26, 2007. This deposit has been assigned to the financial
      institution to enable the financial institution to issue an Irrevocable
      Letter of Credit to The First Nation of Na Cho Nyak Dun ("NND") which
      exercises certain powers over land use and environment protection within
      the Yukon Territory of Canada. The Company required access to move heavy
      equipment over the land controlled by NND and therefore posted this
      security bond so that if the Company fails to comply with reclamation
      requirements, then the security bond will be available to NND to complete
      the work or may form part of the compensation package.

8.    OTHER LIABILITY

      On March 28, 2006 the Company completed a brokered private placement
      through the issuance of 25,000 flow-through shares at a price of $0.75 per
      share for gross proceeds of $18,750. The proceeds raised were allocated
      between the offering of shares and the sale of tax benefits. A liability
      of $3,750 is recognized for the sale of taxable benefits which will be
      reversed and credited to income when the Company renounces resource
      expenditure deduction to the investor.

9.    STOCK BASED COMPENSATION

      In December 2004, the Financial Accounting Standards Board (FASB) issued
      Statement of Financial Accounting Standards No. 123 (Revised 2004),
      "Share-Based Payment" (SFAS 123 (R)). SFAS 123 (R) requires companies to
      recognize compensation cost for employee services received in exchange for
      an award of equity instruments based on the grant-date fair value of the
      award. The Company adopted the provisions of SFAS 123 (R) on May 1, 2006
      using the "modified prospective" application method of adoption which
      requires the Company to record compensation cost related to unvested stock
      awards as of April 30, 2006 by recognizing the unamortized grant date fair
      value of these awards over the remaining service periods of those awards
      with no change in historical reported earnings. As a result of using this
      method, the consolidated financial statements for the year ended April 30,
      2006 were not restated for the impact of stock-based compensation expense.
      Awards granted after April 30, 2006 are valued at fair value in accordance
      with the provisions of SFAS 123 (R) and recognized on a straight line
      basis over the service periods of each award.

      Had expense for the Company's stock- based compensation plans been
      determined based on the grant-date fair value for 2005, consistent with
      the provisions of SFAS 123 (R), the Company's reported and proforma net
      loss and net loss per share for the three months ended July 31, 2005 would
      be as follows:

                                                         Three Months Ended
                                                            July 31, 2005
                                                         ------------------
Net Loss-as reported                                          $(190,727)
Add: Stock-based compensation as expensed                     $  95,840
Proforma stock-based compensation expense-as
  If grant date fair value had been applied to all
  Stock -based payment awards                                 $ (95,840)
                                                              ---------
Net loss-proforma for stock based compensation expense        $(190,727)
                                                              ---------
Net loss per share-basic, as reported                         $   (0.02)
Net loss per share-basic, proforma for stock- based
  Compensation expense                                        $   (0.02)


                                       10

<PAGE>

YUKON GOLD CORPORATION, INC.
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
July 31, 2006
(Amounts expressed in US Dollars)
(Unaudited)

9.    STOCK BASED COMPENSATION-Cont'd

      As of July 31, 2006 there was $472,122 of unrecognized expense related to
      non-vested stock-based compensation arrangements granted. The financial
      statements for the three months ended July 31, 2006 recognize compensation
      cost for the portion of outstanding awards which have vested during the
      period. The stock-based compensation expense for the quarter ended July
      31, 2006 was $ 85,323.

      No options were granted during the three months ended July 31, 2006 under
      the Company's stock-option plan.

10.   ISSUANCE OF COMMON SHARES AND WARRANTS

      On May 29, 2006 the Company issued 10,000 common shares for the exercise
of 10,000 warrants at $0.89 (CDN$1.00) from a warrant holder in consideration of
$8,987 (CDN$10,000).

      On May 29, 2006 the Company issued 45,045 common shares for the exercise
of 45,045 warrants at $0.89 (CDN$1.00) from a warrant holder in consideration of
$40,450 (CDN$45,045).

      On May 29,2006 the Company issued 16,000 common shares for the exercise of
16,000 warrants at $0.89 (CDN$1.00) from a warrant holder in consideration of
$14,280 (CDN$16,000).

      On May 30, 2006 the Company issued 141,599 common shares for the
settlement of an accrued liability to an ex officer and director. The accrued
severance amount of $113,130 (CDN$128,855) was converted to 141,599 common
shares at $0.80 (CDN$0.91).

      On June 22, 2006 the Company issued 43,667 common shares for the exercise
of 43,667 warrants at $0.90 (CDN$1.00) from a warrant holder in consideration of
$39,368 (CDN$43,667).

      On June 28, 2006 the Company issued 17,971 common shares for the exercise
of 17,971 warrants at $0.89 (CDN$1.00) from a warrant holder in consideration of
$15,939 (CDN$17,971).

      On June 28, 2006 the Company issued 43,667 common shares for the exercise
of 43,667 warrants at $0.89 (CDN$1.00) from a warrant holder in consideration of
$38,895 (CDN$43,667).

      On June 28, 2006 the Company issued 16,000 common shares for the exercise
of 16,000 warrants at $0.89 (CDN$1.00) from a warrant holder in consideration of
$14,253 (CDN$16,000).

      On June 29, 2006 the Company issued 158,090 common shares for the exercise
of 158,090 warrants at $0.89 (CDN$1.00) from a warrant holder in consideration
of $141,632 (CDN$158,090).

      On July 7, 2006 the Company issued 43,166 common shares in settlement of a
property payment on the Mount Hinton property. The shares represent $53,845
(CDN$60,000) payment and were valued $1.25 (CDN$1.39) each.

      On July 7, 2006 the Company issued 64,120 common shares for the exercise
of 64,120 warrants at $0.90 (CDN$1.00) from a warrant holder in consideration of
$57,869 (CDN$64,120).

      On July 17, 2006 the Company issued 61,171 common shares for the exercise
of 61,171 warrants at $0.88 (CDN$1.00) from a warrant holder in consideration of
$53,824 (CDN$61,171).


                                       11

<PAGE>

YUKON GOLD CORPORATION, INC.
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
July 31, 2006
(Amounts expressed in US Dollars)
(Unaudited)

11.   COMMITMENTS AND CONTINGENCIES

      (a)   Mount Hinton Property Mining Claims

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

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

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

PROPERTY PAYMENTS

On execution of the July 7, 2002 Agreement   $ 19,693 (CDN$ 25,000) Paid
On July 7, 2003                              $ 59,078 (CDN$ 75,000) Paid
On July 7, 2004                              $118,157 (CDN$150,000) Paid
On January 2, 2006                           $125,313 (CDN$150,000) Paid
On July 7, 2006                              $134,512 (CDN$150,000) Paid
On July 7, 2007                              $132,556 (CDN$150,000)
On July 7, 2008                              $132,556 (CDN$150,000)
  TOTAL                                      $721,865 (CDN$850,000)

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

July 7/02 to July 6/03                       $  118,157 (CDN$  150,000) Incurred
July 7/03 to July 6/04                       $  196,928 (CDN$  250,000) Incurred
July 7/04 to July 6/05                       $  256,006 (CDN$  325,000) Incurred
July 7/05 to Dec. 31/06                      $  662,778 (CDN$  750,000) *
*Subsequently amended
Jan. 1/07 to Dec. 31/07                      $  883,704 (CDN$1,000,000)
Jan. 1/08 to Dec. 31/08                      $1,104,631 (CDN$1,250,000)
Jan.  1/09 to Dec. 31/09                     $1,325,557 (CDN$1,500,000)
   TOTAL                                     $4,547,761 (CDN$5,225,000)

* By letter agreement dated August 17, 2006, the Hinton Syndicate agreed to
allow the Company to defer a portion of the Work Program expenditure scheduled
to be incurred by December 31, 2006. The agreement to defer such Work program
expenditures was due to the mechanical break-down of drilling equipment and the
unavailability of replacement drilling equipment at the Mount Hinton site. As a
result, the Company is now allowed to defer the expenditure of approximately
$309,000 to $353,000 (CDN $ 350,000 to CDN $400,000) until December 31, 2007.
All other Property Payments and Work Program expenditures due have been made and
incurred.

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

      25% interest upon Work Program expenditures of $1,325,557 (CDN$1,500,000)
      50% interest upon Work Program expenditures of $2,209,261 (CDN$2,500,000)
      75% interest upon Work Program expenditures of $4,547,761 (CDN$5,225,000)


                                       12

<PAGE>

YUKON GOLD CORPORATION, INC.
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
July 31, 2006
(Amounts expressed in US Dollars)
(Unaudited)

11.   COMMITMENTS AND CONTINGENCIES-Cont'd

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

            The Hinton Option Agreement contemplates that upon the earlier of:
            (i) a production decision or (ii) investment of $4,547,761
            (CDN$5,225,000) or (iii) YGC has a minority interest and decides not
            to spend any more money on the project, YGC's relationship with the
            Hinton Syndicate will become a joint venture for the further
            development of the property. Under the terms of the Hinton Option
            Agreement, the party with the majority interest would control the
            joint venture. Once the 75% interest is earned, as described above,
            YGC has a further option to acquire the remaining 25% interest in
            the mineral claims for a further payment of $4,418,522
            (CDN$5,000,000).

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

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

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

            The Hinton Syndicate members each have the option to receive their
            share of property payments in stock of the Company at a 10% discount
            to the market, once the Company has obtained a listing on a Canadian
            stock exchange. YGC and the Company have a further option to pay 40%
            of any property payment due after the payment on January 2, 2006
            with common stock of the Company. The payment due on July 7, 2006
            was made in accordance with this provision.

      b)    The Marg Property

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

            The Company assumed the rights to acquire the Marg Property under a
            Property Purchase Agreement ("Agreement") with Atna Resources Ltd.
            ("Atna"). Under the terms of the Agreement the Company paid $119,189
            (CDN$150,000) cash and 133,333 common shares as a down payment. The
            Company made payments under the Agreement for $43,406 (CDN$50,000)
            cash and an additional 133,333 common shares of the Company on
            December 12, 2005;

            The Company has agreed to make subsequent payments under the
            Agreement of: (i) $88,370 (CDN$100,000) cash and an additional
            133,334 common shares of the Company on or before December 12, 2006;
            (ii) $88,370 (CDN$100,000) cash on or before December 12, 2007; and
            (iii) $176,741 (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. Upon the commencement of commercial production at
            the Marg Property, the Company will pay to Atna $883,704
            (CDN$1,000,000) in cash and/or common shares of the Company, or some
            combination thereof to be determined.


                                       13

<PAGE>

YUKON GOLD CORPORATION, INC.
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
July 31, 2006
(Amounts expressed in US Dollars)
(Unaudited)

11.   COMMITMENTS AND CONTINGENCIES-Cont'd

      c)    The company on June 21, 2006 entered into mutually renewable one
            year agreements with three consultants who will each provide the
            Company services relating to business promotion and development.
            These consultants will assist management in the preparation of
            financial offerings and assist in arranging meetings and making
            presentations to the brokerage community and institutional investors
            in both the United States of America and Canada. Each of these three
            consultants will be compensated with the issue of 272,660 shares of
            restricted common stock, out of which 54,860 shares will be due and
            payable immediately on signing the respective agreements and the
            balance of 217,800 shares will be due and payable in 11equal monthly
            installments of 19,800 shares commencing August 1, 2006 and ending
            June 1, 2007. Either party can terminate the respective agreements
            with or without cause upon thirty (30) days written notice to the
            other party. The Company accrued consulting expenses of $210,663 for
            the quarter ended July 31, 2006 relating to the contractual
            commitment to issue 54,860 shares each to the three consultants. No
            shares were however issued as of July 31, 2006 but issued only
            subsequently (refer to subsequent event note 12)

      d)    The company completed the sale of 400,000 special warrants on
            December 15, 2005. In the absence of a registration statement being
            declared effective within 181 days of the closing, the Company,
            effective June 15, 2006 was obligated to issue 4,000 common shares
            and 4,000 warrants to the accredited investor at no extra cost as a
            penalty. The Company has not yet issued any shares or warrants as of
            the end of the quarter.

      e)    On March 21, 2006 the Company entered into a consulting agreement
            with a consultant (the "Consultant"). As per terms of the agreement,
            the Consultant will provide to the Company market and financial
            advice and expertise as may be necessary relating to the manner of
            offering and pricing of securities. The agreement is for a period of
            twelve months commencing the day of trading of the Company's stock
            on the Toronto Stock Exchange (April 19, 2006). The Consultant will
            be compensated a fee equal to 240,000 restricted common shares of
            the Company with a fair value of $196,800 and will receive these
            shares on a monthly basis. Each party can cancel the agreement on 30
            days notice. The Company has not issued any common shares as yet,
            but is accruing the expense on a monthly basis.

12.   SUBSEQUENT EVENTS

      a.    Amendment to Work Program expenditures relating to Mount Hinton
            Property Mining Claims:

            By letter agreement dated August 17, 2006, the Hinton Syndicate
            agreed to allow the Company to defer a portion of the Work Program
            expenditure scheduled to be incurred by December 31, 2006. The
            agreement to defer such Work program expenditures was due to the
            mechanical break-down of drilling equipment and the unavailability
            of replacement drilling equipment at the Mount Hinton site. As a
            result, the Company is now allowed to defer the expenditure of
            approximately $309,000 to $353,000 (CDN $ 350,000 to CDN $400,000)
            until December 31, 2007. All other Property Payments and Work
            Program expenditures due have been made and incurred.

      b.    Subsequent issue of common shares and warrants:

            On August 22, 2006, the Company completed a private placement of
            400,000 units where each unit consisted of a common share and a
            share purchase warrant. The units were priced at $1.00 per unit for
            a total of $400,000. The Company will pay a finders fee equal to 6%
            of the gross proceeds. The warrants have a two- year term and are
            exercisable at $1.50 per share in the first twelve months of the
            term and $2.00 per share in the remaining twelve months of the term.
            Closing of this placement requires approval from the Toronto Stock
            Exchange. Conditional approval was given by the Toronto Stock
            Exchange on August 29, 2006.

            On August 11, 2006 the company issued 817,980 restrictive shares to
            consultants in accordance with 11 (c) as above. Except 223,980
            common shares which were in total earned by these consultants, the
            balance of 594,000 common shares are held in escrow to be released
            to each consultant in 10 monthly installments of 19,800 common
            shares commencing September 1, 2006.

            On September 7, 2006 the Company issued 24,000 shares to an officer
            upon exercising 24,000 vested stock options at US$.075 for a total
            of US$18,000.00.


                                       14

<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF

                  FINANCIAL CONDITION AND RESULTS OF OPERATION

                 FOR THE THREE MONTH PERIOD ENDED JULY 31, 2006

Discussion of Operations & Financial Condition
Three months ended July 31, 2006

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 July 31, 2006, we had
accumulated losses of $4,660,519. 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
quarter ended July 31, 2006 has been its exploration activities at the Marg
Property and the Mount Hinton Property. As described below, the summer 2006
exploration program at the Mount Hinton Property had to be terminated
prematurely due to the break down of drilling equipment at the site. The 2006
summer exploration program at the Marg property is ongoing and results are not
yet available.

Having obtained material financing, we implemented exploration programs at both
the Mount Hinton and Marg Properties.

SELECTED QUARTER INFORMATION

                                    July 31,    July 31,
                                      2006        2005
                                   ----------   --------
Revenues                                  Nil        Nil
Net Loss                           $1,428,727   $190,727
Loss per share-basic and diluted   $    (0.08)  $  (0.02)

                                     July 31,     April 30,
                                       2006         2006
                                    ----------   ----------
Total Assets                        $2,177,549   $2,842,553
Total Liabilities                   $  380,551   $  250,688
Cash dividends declared per share          Nil          Nil

The total assets for the quarter ended July 31, 2006 includes current assets of
$2,100,397, a restricted deposit in the amount of $17,889 and capital assets in
the amount of $59,263. For the year ended April 30, 2006, total assets included
current assets of $2,643,248, restricted cash in the amount of $118,275, a
restricted deposit of $17,889 and capital assets of $63,141. The significant
decrease in current assets is due to expenditures for the exploration programs
at the Marg Property site and the Mount Hinton Property site and general
operating expenses of the Company.

Revenues

No revenue was generated by the Company's operations during the quarter ended
July 31, 2006 and the quarter ended July 31, 2005.

Net Loss

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

<PAGE>

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

      (a) Stock-based Compensation

      Included in the operating expenses for the quarter ended July 31, 2006 is
stock option compensation expense of $85,323 as compared to $95,840 in the
quarter ended July 31, 2005. Stock-based compensation expense represents
approximately 6 % of the total operating expense for the quarter ended July 31,
2006. The Stock based compensation expense has been calculated in accordance
with generally accepted accounting principles in the United States, whereby the
fair value of the stock options was determined at the time of grant of stock
options to the Company's directors, officers and consultants, and expensed over
the vesting term, in terms of the Black-Scholes option pricing model.

      (b) General and Administrative Expense

      Included in operating expenses for the quarter ended July 31, 2006 is
general and administrative expense of $468,359, as compared with $92,050 for the
quarter ended July 31, 2005. General and administrative expense represents
approximately 33 % of the total operating expense for the quarter ended July 31,
2006 and approximately 48 % of the total operating expense for the quarter ended
July 31, 2005. General and administrative expense increased by $376,309 in the
current quarter, compared to the same quarter last year. The increase in this
expense is mainly due to expensing the consulting fees payable amounting to
$210,663 for the three new consultation contracts entered into during this
quarter for assisting management with business promotion and development. Other
increase relates to additional costs of compliance with the regulatory
requirements of the Toronto Stock Exchange and the Ontario Securities
Commission, and the increase in payroll and consulting fees.

      (c) Project Expense

      Included in operating expenses for the quarter ended July 31, 2006 is
project expenses of $871,887 as compared with $2,594 for the quarter ended July
31, 2005. Project expense is the most significant expense and it represents
approximately 61% of the total operating expense for the quarter ended July 31,
2006. Project expense increased by $869,293 in the current quarter, as compared
to the same quarter of last year. The increase in this expense is mainly due to
the fact that drilling programs in the Yukon Territory of Canada can only be
conducted during the summer months and the Company had cash available to
undertake more extensive exploration programs. During the quarter ended July 31,
2006, the Company also made a property payment of $134,512 (CDN $150,000) to the
Hinton Syndicate, which was paid partly in cash and partly by the issue of
43,166 common shares.

Exploration at Mount Hinton

While high grade gold-silver veins were discovered and sampled by United Keno
Hill Mines (UKHM) mainly during the period between 1965 and 1968, the Mount
Hinton Property has received very little modern exploration and the full
economic potential remains largely untested. Past efforts to fully evaluate the
vein structures were frustrated by the steep terrain and difficult overburden
conditions.

During the summer of 2006, we undertook an exploration program to delineate the
vertical and lateral extent of some of the known vein structures at the site
utilizing a new and improved reverse circulation drill and to carry out the
geochemical surveys, prospecting and trenching that would help identify
additional mineralized targets for future drilling and exploration programs. A
second objective of the summer 2006 exploration program was to determine whether
it would be more effective and feasible to evaluate the deposits by diamond
drilling from an underground adit/ramp and where best to locate this underground
development if feasible.

The 2006 summer program commenced on July 5, 2006 and was terminated on August
20, 2006 due to the mechanical break-down of drilling equipment and the
unavailability of replacement drilling equipment. Prior to termination of the
program, over 3000 soil samples were taken to identify potentially mineralized
targets in unexplored areas of the property but generally in the headwaters of
successful placer mining operations. In addition, at least six new veins were
exposed or partially exposed by road construction during this year's program.
New road construction totaling 3.2 km creates direct access to new surface drill
sites and to a potential portal site from which underground development and
diamond drilling is being considered for next year.

<PAGE>

Following termination of the summer 2006 exploration program, by letter
agreement dated August 17, 2006, the Hinton Syndicate agreed to allow the
Company to defer a portion of the Work Program expenditures scheduled to be
incurred by December 31, 2006. As a result, the Company was allowed to defer the
expenditure of approximately $309,000 to $353,000 (CDN$350,000 to CDN$400,000)
until December 31, 2007. With respect to the Option agreement between Yukon Gold
and the Hinton Syndicate, Yukon Gold will earn a 75% interest in the property by
making property payments of $721,865 (CDN $ 850,000) and spending $4,547,761
(CDN $ 5,225,000) on the property. Having received permission from the Hinton
Syndicate to move the unused portion of the summer 2006 work program commitment
to the 2007 summer work program the Company is up to date with its financial
commitments with respect to the Mount Hinton Property.

The Company plans to resume its drilling program in the summer of 2007.
Depending on the results and success of the 2007 program and Yukon Gold's
ability to raise sufficient funds, a decision will be made in late 2007, as to
which of the following programs are warranted. The options are as follows:

      1.    Continue drilling to further evaluate the known vein systems as well
            as other targets that may have resulted from the 2006 geochemical
            surveys and prospecting program, or

      2.    Develop an underground ramp from which diamond drilling and
            underground testing of some of the vein systems can be carried out,
            or

      3.    Convert to a Joint Venture arrangement with the Hinton Syndicate as
            provided in the Hinton Syndicate Agreement whereby Yukon Gold would
            retain a 25% interest in the property having met the expenditure of
            $1,325,557 (CDN$1,500,000) in work programs on the Mount Hinton
            Property. Yukon Gold must spend $883,704 (CDN$1,000,000) in 2007
            plus the deferred expenditures of approximately $309,000 to $353,000
            (CDN $350,000 to CDN$400,000) as referred to above, in order to meet
            its work obligation under the Mount Hinton Agreement, unless it
            elects to convert to the joint venture arrangement.

Exploration at Marg Property

During the summer of 2006, we also undertook an exploration program at the Marg
Property to extend the currently known resources toward a target of 9 to 10
million tons, which we believe to be the required threshold to proceed with the
next stage of exploration, which includes an extensive feasibility study. This
stage is sometimes referred to as the "Feasibility Stage." If a feasibility
study is warranted, we will engage a consultant to determine whether the
resource is economically able to support a mining operation. Currently there is
an estimated 5.5 million tons of indicated and inferred resources outlined on
the property. Some of the budgeted drilling was to be used to convert some
resources categorized as "inferred" to resources categorized as "indicated"
resources. So called "indicated" resources are better identified and quantified
based upon industry standards of measurement. A total of $1,546,483
(CDN$1,750,000) has been budgeted to meet these objectives in 2006.

The program is made up of the following components and budgeted expenditures:

                                          $US         $CDN
                                      ----------   ----------
o   4400 metres of diamond drilling   $  685,755   $  776,000
o   Geological support services       $  267,762   $  303,000
o   Airborne geophysical survey       $  132,556   $  150,000
o   Helicopter support                $  168,788   $  191,000
o   Field support and management      $  291,622   $  330,000
                                      ----------   -----------
                                      $1,546,483   $1,750,000

On May 16, 2006 the Company accepted a proposed work program, budget and cash
call schedule for the Marg Property totaling $1,674,866 (CDN$1,872,500) for the
2006 Work Program. On May 15, 2006 the Company paid $199,016 (CDN$222,500) to
the contractor, on June 1, 2006 the Company paid $536,673 (CDN$600,000) to the
contractor, and on July 20, 2006 the Company paid $357,782 (CDN$400,000) to the
contractor - the first three of the five cash call payments. The fourth payment
of $357,782 (CDN$400,000) was paid on August 20, 2006 and the fifth payment of
$223,613 (CDN$250,000) is due on September 20, 2006.

<PAGE>

The 2006 summer exploration program at the Marg property is ongoing and results
are not yet available. When results become available, we hope to be able to
determine the near surface lateral extent of the ore zones and, to a lesser
extent, their possible extension to depth. Most of the new resources would be
classified as "inferred" and the next programs will be designed to confirm those
resources into the "indicated" category. If, at this point, sufficient resources
are indicated (9-10 million tons at current resource grades) an underground
program would also be fast tracked to confirm the continuity and grades of the
ore zones, evaluate potential mining methods and collect bulk samples of the ore
for metallurgical and environmental testing. A winter road to mobilize the
underground contractor's mining equipment, plant and camp would be established,
we project in early 2007. If warranted, the underground program would be carried
out during the summer of 2007 followed by a definitive feasibility study to be
completed by the end of the first quarter of 2008.

Should the 2006 summer exploration program not succeed in increasing the
resource to 9 to 10 million tons along strike, we believe there still exists
good potential to expand the Marg Property resources to depth and down plunge to
the west. Additionally, there are other untested showings identified as the Jane
and Leyla on the Marg Property which have high geochemical responses and warrant
follow-up drilling.

We note that the current high exploration activity in the Yukon Territory and
elsewhere has caused a high demand for mining personnel, including diamond
drillers, which may cause a significant delay in the progress of these programs
and their milestones. To date, the programs at the Marg Property have been
delayed by about one month due to the shortage of drillers.

Liquidity And Capital Resources

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

                                                July 31,     July 31,
                                                  2006         2005
                                               ----------   ---------
Cash and cash equivalent                       $  889,565   $  79,256
Working capital (deficiency)                   $1,730,932   $(618,881)
Cash used in operating activities              $1,904,045   $  13,098
Cash used in investing activities              $      nil   $     nil
Cash provided (used) in financing activities   $  425,497   $ (47,676)

Off-Balance Sheet Arrangement

The Company has a term deposit of $17,889 (CDN$20,000) with a Canadian financial
institution which earns interest at 2.5% per annum and matures on April 26,
2007. This deposit has been assigned to the financial institution to enable the
financial institution to issue an Irrevocable Letter of Credit to The First
Nation of Na Cho Nyak Dun ("NND") which exercises certain powers over land use
and environment protection within the Yukon Territory of Canada. The Company
required access to move heavy equipment over the land controlled by NND and
therefore posted this security bond so that if the Company fails to comply with
reclamation requirements, then the security bond will be available to NND to
complete the work or may form part of the compensation package.

Contractual Obligations and Commercial Commitments

In addition to the contractual obligations and commitments of the Company to
acquire its mineral properties as described in Note 11 to our Financial
Statements included with this report, the company has additional commitments for
its office lease and to pay minimum lease payments under its capital lease.
Refer to our annual financial statements for April 30, 2006 for future
obligation payments.

Flow-Through Share Subscription

The Company entered into "flow-through" share subscription agreements during the
year ended April 30, 2006 pursuant to which we committed to incur on or before
December 31, 2006, a total of $198,750 of qualifying Canadian exploration
expenses as described in the Income Tax Act of Canada. The Company has assigned
to the holders of the "flow through" shares tax credits for such exploration
expenses. As of July 31, 2006 the Company had incurred this expenditure.

<PAGE>

Recent Accounting Pronouncements

In March 2005, the FASB issued an interpretation of Statement No. 143,
"Accounting for Asset Retirement Obligations". This interpretation clarifies
that the term "conditional asset retirement obligation" as used in the Statement
No. 143, refers to a legal obligation to perform an asset retirement activity in
which the timing and (or) method of settlement are conditional on a future event
that may or may not be within the control of the entity. The obligation to
perform the asset retirement activity is unconditional even though uncertainty
exists about the timing and (or) method of settlement. Thus, the timing and (or)
method of settlement may be conditional on a future event. Accordingly, an
entity is required to recognize a liability for the fair value of a conditional
asset retirement obligation if the fair value of the liability can be reasonably
estimated.

The fair value of a liability for the conditional asset retirement obligation
should be recognized when incurred - generally upon acquisition, construction,
or development and (or) through the normal operation of the asset. Uncertainty
about the timing and (or) method of settlement of a conditional asset retirement
obligation should be factored into the measurement of the liability when
sufficient information exist.

Statement No. 143 acknowledges that in some cases, sufficient information may
not be available to reasonably estimate the fair value of an asset retirement
obligation. This interpretation also clarifies when an entity would have
sufficient information to reasonable estimate the fair value of an asset
retirement obligation. This interpretation is effective no later than the end of
fiscal years after December 15, 2005. Management does not expect FASB
interpretation to the Statement No. 143 to have an impact to the Company's
consolidated financial position or consolidated results of operations and cash
flows.

In May 2005, the FASB issued Statement No. 154, "Accounting Changes and Error
Corrections", a replacement of APB Opinion 20, "Accounting Changes" and FASB
Statement No. 3, "Reporting Accounting Changes in Interim Financial Statements."
This Statement changes the requirements for the accounting for and reporting of
a change in accounting principle. APB Opinion 20 previously required that most
voluntary changes in accounting principles be recognized by including in net
income of the period of the change the cumulative effect of changing to the new
accounting principle.

FASB Statement No. 154 requires retrospective application to prior periods'
financial statements of changes in accounting principle, unless it is
impracticable to determine either the period specific effects or the cumulative
effect of the change. This statement is effective for accounting changes and
corrections of errors made in fiscal periods that begin after December 15, 2005.
Management does not anticipate this statement will impact the Company's
consolidated financial position or consolidated results of operations and cash
flows.

In February 2006, the FASB issued Statement No. 155, "Accounting for Certain
Hybrid Financial Instruments", an amendment of FASB Statement No.133,
"Accounting for Derivative Instruments and Hedging Activities" and FASB
Statement No. 140, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities." This Statement permits fair value re
measurement for any hybrid financial instrument that contains an embedded
derivative that otherwise would require bifurcation; clarifies which
interest-only strips and principal-only strips are not subject to the
requirements of Statement No. 133, establishes a requirement to evaluate
interests in securitized financial assets to identify interests that are
freestanding derivatives or that are hybrid financial instruments that contain
an embedded derivative requiring bifurcation; clarifies that concentrations of
credit risk in the form of subordination are not embedded derivatives and amends
Statement 140 to eliminate the prohibition on a qualifying special-purpose
entity from holding a derivative financial instrument that pertains to a
beneficial interest other than another derivative financial instrument.
Management does not anticipate this Statement will impact the Company's
consolidated financial position or consolidated results of operations and cash
flows.

In March 2006, the FASB issued Statement No. 156, "Accounting for Servicing of
Financial Assets", an amendment of FASB Statement No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities."
This Statement amends Statement No. 140 with respect to the accounting for
separately recognized servicing assets and servicing liabilities. Management
does not anticipate this Statement will impact the Company's consolidated
financial position or consolidated results of operations and cash flows.

SFAS NO. 123R- In December 2004, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No. 123R,
"Share-Based Payment" ("FAS 123R"), which revised FAS 123 "Accounting for
Stock-Based Compensation". FAS 123R requires measurement and recognition of the
costs of employee services received in exchange for an award of equity
instruments based on the grant-date fair value of the award, recognized over the
period during which an employee is required to provide service in exchange for
such award. Implementation is required as of the first interim or annual
reporting period that begins after December 15, 2005 for public entities that
file as small business issuers. Management has complied with this statement at
the scheduled effective date commencing May 1, 2006.

<PAGE>

The Company believes that the above standards would not have a material impact
on its financial position, results of operations or cash flows.

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. 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,
exploration and development of mining properties. Mineral property acquisition
and exploration costs are expensed as incurred. When it has been determined that
a mineral property can be economically developed as a result of establishing
proven and probable reserves, the costs incurred to develop such property, are
capitalized. For the purpose of preparing financial information, all costs
associated with a property that has the potential to add to the Company's proven
and probable reserves are expensed until a final feasibility study demonstrating
the existence of proven and probable reserves is completed. No costs have been
capitalized in the periods covered by these financial statements. Once
capitalized, such costs will be amortized using the units-of-production method
over the estimated life of the probable reserve.

                             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 of the end of the June 30, 2006. Based on such evaluation,
the principal executive officer and principal financial officer of the Company,
respectively, have concluded that, as of the year end, 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 year
ended April 30, 2006 that have materially affected, or are reasonably likely to
materially affect, the Company's internal control over financial reporting.

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.

                                  RISK FACTORS

1.    WE DO NOT HAVE AN OPERATING 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. There is
no assurance that we will develop an operating business in the future.

<PAGE>

2. WE HAVE NO SOURCE OF OPERATING REVENUE AND EXPECT TO INCUR SIGNIFICANT
EXPENSES BEFORE ESTABLISHING AN OPERATING COMPANY, IF WE ARE ABLE TO ESTABLISH
AN OPERATING COMPANY AT ALL.

Currently, we have no source of revenue, we do not have sufficient working
capital to complete our exploration programs (including feasibility studies) and
we do not have any commitments to obtain additional financing. Further, we do
not have enough working capital to meet all of our contractual commitments to
acquire our mineral properties. We have no operating history upon which an
evaluation of our future success or failure can be made. Our ability to achieve
and maintain profitability and positive cash flow is dependent upon:

      o     further exploration of the Mount Hinton Property and the results of
            that exploration;

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

      o     our ability to raise capital to develop the Marg Property, establish
            a mining operation, and operate this mine in a profitable manner.

Because we have no operating revenue, we expect to incur operating losses in
future periods as we continue to expend funds to explore and develop the Mount
Hinton and Marg Properties. Failure to raise the necessary capital to continue
exploration and development could cause us to go out of business.

3. OUR STOCK PRICE WILL BE HEAVILY INFLUENCED BY THE RESULTS OF DRILLING TESTS
THAT ARE BEING CONDUCTED IN THE YUKON TERRITORY IN THE SUMMER OF 2006.

We cannot predict the results of the drilling tests that are being conducted in
the summer of 2006. The results of these tests will heavily influence our
decisions on further exploration at the Marg Property and the Mount Hinton
Property and are likely to affect the trading price of our stock.

4. IF WE DEVELOP OTHER MINERAL RESOURCES, THERE IS NO GUARANTEE THAT PRODUCTION
WILL BE PROFITABLE.

Even if we find other commercial mineral resources, there is no assurance that
we will be able to mine them or that a mining operation would be profitable on
any of our properties. No feasibility studies have been conducted as of the date
of this report.

5. WE MUST MAKE REGULAR ONGOING INVESTMENTS IN ORDER TO MAINTAIN OUR MINERAL
CLAIMS.

We have an option agreement with a private syndicate, known as the Hinton
Syndicate, to acquire an interest in the mineral claims described in this report
as the "Mount Hinton Property". Our agreement with the Hinton Syndicate requires
us to make regular ongoing investments. If we fail to make these investments, we
will not earn an interest in these mineral claims and we may lose all of our
rights in the Mount Hinton Property. The Marg Acquisition Agreement also
requires the Company to make material deferred payments on December 31 of 2006,
2007 and 2008. If we are unable to raise sufficient capital to make these
payments we may lose all of our rights in the Marg Property.

6. WEATHER INTERRUPTIONS IN THE YUKON TERRITORY MAY DELAY OUR PROPOSED
EXPLORATION OPERATIONS.

Weather factors will significantly affect our exploration efforts. Currently, we
can only work above ground at the Mount Hinton and Marg Properties from late May
until early October of each year, depending upon how early snowfall occurs.

<PAGE>

7. WE COULD ENCOUNTER REGULATORY AND PERMITTING DELAYS.

We could face delays in obtaining permits to operate on the Mount Hinton and
Marg Properties. Such delays could jeopardize financing, if any is available, in
which case we would have to delay or abandon work on one or both of the
properties.

8.    GOING CONCERN QUALIFICATION

The Company has included a "going concern" qualification in the 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 ore 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.

9. 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.

10. OUR BUSINESS IS AFFECTED BY CHANGES IN COMMODITY PRICES

Our ability to develop our mineral properties and the future profitability of
the Company is directly related to the market price of certain minerals. The
sharp rise in commodity prices over the past year has resulted in increased
investor interest in mineral exploration companies. The Company has benefited
from this trend, but like other companies in this sector, the Company would be
negatively affected if commodity prices were to fall.

11. OUR BUSINESS IS SUBJECT TO CURRENCY RISKS

The Company conducts some of its business activities in Canadian dollars.
Consequently, the Company is subject to gains or losses due to fluctuations in
Canadian currency relative to the U.S. dollar.

DISCLOSURE AND FINANCIAL CONTROLS AND PROCEDURES

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

Internal financial controls and procedures have been designed under the
supervision of the Company's board of directors and reviewed by an independent
auditor. 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.

<PAGE>

                           PART II: OTHER INFORMATION

ITEM  1: LEGAL PROCEEDINGS:

The Company is not a party to any pending legal proceeding or litigation and
none of the Company's property is the subject of a pending legal proceeding.

ITEM  2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS:

      ISSUANCE OF COMMON SHARES AND WARRANTS

            On May 29, 2006 the Company issued 10,000 common shares for the
      exercise of 10,000 warrants at $0.89 (CDN$1.00) from a warrant holder in
      consideration of $8,987 (CDN$10,000).

            On May 29, 2006 the Company issued 45,045 common shares for the
      exercise of 45,045 warrants at $0.89 (CDN$1.00) from a warrant holder in
      consideration of $40,450 (CDN$45,045).

            On May 29,2006 the Company issued 16,000 common shares for the
      exercise of 16,000 warrants at $0.89 (CDN$1.00) from a warrant holder in
      consideration of $14,280 (CDN$16,000).

            On May 30, 2006 the Company issued 141,599 common shares for the
      settlement of an accrued liability to an ex officer and director. The
      accrued severance amount of $113,130 (CDN$128,855) was converted to
      141,599 common shares at $0.80 (CDN$0.91).

            On June 22, 2006 the Company issued 43,667 common shares for the
      exercise of 43,667 warrants at $0.90 (CDN$1.00) from a warrant holder in
      consideration of $39,368 (CDN$43,667).

            On June 28, 2006 the Company issued 17,971 common shares for the
      exercise of 17,971 warrants at $0.89 (CDN$1.00) from a warrant holder in
      consideration of $15,939 (CDN$17,971).

            On June 28, 2006 the Company issued 43,667 common shares for the
      exercise of 43,667 warrants at $0.89 (CDN$1.00) from a warrant holder in
      consideration of $38,895 (CDN$43,667).

            On June 28, 2006 the Company issued 16,000 common shares for the
      exercise of 16,000 warrants at $0.89 (CDN$1.00) from a warrant holder in
      consideration of $14,253 (CDN$16,000).

            On June 29, 2006 the Company issued 158,090 common shares for the
      exercise of 158,090 warrants at $0.89 (CDN$1.00) from a warrant holder in
      consideration of $141,632 (CDN$158,090).

            On July 7, 2006 the Company issued 43,166 common shares in
      settlement of a property payment on the Mount Hinton property. The shares
      represent $53,845 (CDN$60,000) payment and were valued $1.25 (CDN$1.39)
      each.

            On July 7, 2006 the Company issued 64,120 common shares for the
      exercise of 64,120 warrants at $0.90 (CDN$1.00) from a warrant holder in
      consideration of $57,869 (CDN$64,120).

            On July 17, 2006 the Company issued 61,171 common shares for the
      exercise of 61,171 warrants at $0.88 (CDN$1.00) from a warrant holder in
      consideration of $53,824 (CDN$61,171).

Subsequent Issuance of Securities

On August 22, 2006, the Company completed a private placement of 400,000 units
where each unit consisted of a common share and a share purchase warrant. The
units were priced at $1.00 per unit for a total of $400,000. The Company will
pay a finders fee equal to 6% of the gross proceeds. The warrants have a
two-year term and are exercisable at $1.50 per share in the first twelve months
of the term and $2.00 per share in the remaining twelve months of the term.
Closing of this placement requires Toronto Stock Exchange approval. Conditional
approval was given by the Toronto Stock Exchange on August 29, 2006.

On August 11, 2006 the Company issued 817,980 restrictive shares to consultants
in accordance with 11 (c) as noted on the Condensed Notes to Interim
Consolidated Financial Statements July 31, 2006 included with this report.
Except 223,980 common shares which were in total earned by these consultants,
the balance of 594,000 common shares are held in escrow to be released to each
consultant in 10 monthly installments of 19,800 common shares commencing
September 1, 2006.

<PAGE>

On September 7, 2006 the Company issued 24,000 shares to an officer upon
exercising 24,000 vested stock options at US$.075 for a total of US$18,000.00.

ITEM  3: DEFAULTS UPON SENIOR SECURITIES:

      None.

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

      None.

ITEM  5: OTHER INFORMATION:

ITEM  6: EXHIBITS & REPORTS ON FORM 8-K

Exhibits

(a)   31.1 Certification of Chief Executive Officer.
      31.2  Certification of Chief Financial Officer.
      32.1  Certificate of Chief Executive Officer and Chief Financial Officer.

                                    SIGNATURE

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


Dated: September 13, 2006                /s/ Howard Barth
                                         ---------------------------------------
                                         Howard Barth, President, CEO and
                                         Director