SECURITIES AND EXCHANGE COMMISSION

FORM 10-QSB

QQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 
FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2008

OR

£  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 
FOR THE TRANSITION PERIOD FROM ________ TO __________

Commission File Number: 000-51068

YUKON GOLD CORPORATION, INC.

|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 Q         NO
£

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

YES £        
NO Q

APPLICABLE ONLY TO CORPORATE ISSUERS:

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 January 31, 2008
|----------------------------------- | ----------------------------------
|Common
    Shares $ .0001 par value | 28,990,440                        

Transitional Small Business Disclosure Format (Check one):
Yes £      
No Q

1

---

YUKON GOLD CORPORATION, INC.(AN EXPLORATION STAGE COMPANY) 
INTERIM CONSOLIDATED FINANCIAL STATEMENTS 
JANUARY 31, 2008 
(Amounts expressed in US Dollars) 
(Unaudited-Prepared by Management)

|TABLE OF CONTENTS                                                                                                                                  
|---------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                   
|                                                                                                                                                   
|Interim Consolidated Balance Sheets as of January 31, 2008 and April 30,
    2007                                                                  
|                                                                                                                                                   
|Interim Consolidated Statements of Operations for the nine months and three
    months ended January 31, 2008 and January 31, 2007                 
|                                                                                                                                                   
|Interim Consolidated Statements of Cash Flows for the nine months ended
    January 31, 2008 and January 31, 2007.                                 
|                                                                                                                                                   
|Interim Consolidated Statements of Changes in Stockholders' Equity for the
    nine months ended January 31, 2008 and the year ended April 30, 2007
|                                                                                                                                                   
|Condensed Notes to Interim Consolidated Financial Statements                                                                                       



2

---

YUKON GOLD CORPORATION, INC.(An Exploration Stage
Company) 
Interim Consolidated Balance Sheets 
As at January 31, 2008 and April 30, 2007 
(Amounts expressed in US Dollars) 
(Unaudited)

|ASSETS                                                               |                 |  |              
|-------------------------------------------------------------------- | --------------- |  | -------------
|                                                                     |                 |  |              
|                                                                     | January
    31, |  | April
    30,
|                                                                     | 2008            |  | 2007         
|                                                                     | $               |  | $            
|                                                                     |                 |  |              
|CURRENT ASSETS                                                       |                 |  |              
|                                                                     |                 |  |              
|Cash and cash equivalents                                            | 1,063,192       |  | 936,436      
|Prepaid expenses and other (note 11)                                 | 278,146         |  | 464,371      
|Exploration Tax Credit Receivable (note 4)                           | 483,258         |  | 483,258      
|Short-term investment in available-for-sale
    securities (note 10) | 140,000         |  | -            
|Restricted Deposit                                                   | -               |  | 17,889       
|                                                                     |                 |  |              
|                                                                     | 1,964,596       |  | 1,901,954    
|RESTRICTED SHORT TERM DEPOSITS (Note 5)                              | 836,820         |  | -            
|RESTRICTED CASH                                                      | -               |  | 2,266,602    
|PROPERTY, PLANT AND EQUIPMENT                                        | 88,539          |  | 56,551       
|                                                                     |                 |  |              
|                                                                     | 2,889,955       |  | 4,225,107    

See condensed notes to the interim consolidated financial
statements.

APPROVED ON BEHALF OF THE BOARD

/s/ Ronald K. MannRonald K. Mann, Director

/s/ J.L. Guerra, JrJ.L. Guerra, Jr., Director

3

---

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

Interim Consolidated Balance Sheets 
As at January 31, 2008 and April 30, 2007 
(Amounts expressed in US Dollars) 
(Unaudited)

|LIABILITIES                                           
|------------------------------------------------------
|                                                      
|                                                      
|                                                      
|                                                      
|CURRENT LIABILITIES                                   
|                                                      
|Accounts payable and accrued liabilities (note
    12)
|Obligation under Capital Leases                       
|                                                      
|Total Current Liabilities                             
|                                                      
|Long Term Portion of:                                
|Obligation under Capital Lease                        
|                                                      
|TOTAL LIABILITIES                                     
|                                                      
|                                                      
|SHAREHOLDERS' EQUITY                                  
|                                                      
|CAPITAL STOCK                                         
|                                                      
|ADDITIONAL PAID-IN CAPITAL                            
|                                                      
|ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)         
|                                                      
|DEFICIT, ACCUMULATED DURING THE EXPLORATION
    STAGE 
|                                                      
|                                                      
|                                                      
|                                                      

See condensed notes to the interim consolidated financial
statements.

4

---

YUKON GOLD CORPORATION, INC.(An Exploration Stage
Company) 
Interim Consolidated Statements of Operations 
For the nine months and three months ended January 31, 2008 and January 31, 2007

(Amounts expressed in US Dollars) 
(Unaudited)

|                                            |              |  | For the     |  | For the     |  | For the      |  | For the     
|------------------------------------------- | ------------ |  | ----------- |  | ----------- |  | ------------ |  | ------------
|                                            |              |  | nine months |  | nine months |  | three months |  | three months
|                                            | Cumulative   |  | ended       |  | ended       |  | ended        |  | ended       
|                                            | Since        |  | January 31, |  | January 31, |  | January 31,  |  | January 31, 
|                                            | inception    |  | 2008        |  | 2007        |  | 2008         |  | 2007        
|                                            |              |  |             |  |             |  |              |  |             
|                                            | $            |  | $           |  | $           |  | $            |  | $           
|OPERATING EXPENSES                          |              |  |             |  |             |  |              |  |             
|General and administration                  | 5,514,886    |  | 1,409,684   |  | 1,906,256   |  | 942,711      |  | 743,232     
|Project expenses                            | 7,071,826    |  | 3,263,022   |  | 1,832,808   |  | 265,211      |  | 136,954     
|Exploration Tax Credit                      | (605,716)    |  | -           |  | -           |  | -            |  | -           
|Amortization                                | 31,032       |  | 13,098      |  | 9,409       |  | 6,009        |  | 3,102       
|Loss
    on sale/disposal of capital assets | 5,904        |  | -           |  | -           |  | -            |  | -           
|                                            |              |  |             |  |             |  |              |  |             
|TOTAL
    OPERATING EXPENSES                | 12,017,932   |  | 4,685,804   |  | 3,748,473   |  | 1,213,931    |  | 883,288     
|                                            |              |  |             |  |             |  |              |  |             
|LOSS
    BEFORE INCOME TAXES                | (12,017,932) |  | (4,685,804) |  | (3,748,473) |  | (1,213,931)  |  | (883,288)   
|                                            |              |  |             |  |             |  |              |  |             
|Income
    taxes recovery (note 13)         | 509,170      |  | 112,424     |  | 370,746     |  | 112,424      |  | 370,746     
|                                            |              |  |             |  |             |  |              |  |             
|NET
    LOSS                                | (11,508,762) |  | (4,573,380) |  | (3,377,727) |  | (1,101,507)  |  | (512,542)   
|                                            |              |  |             |  |             |  |              |  |             
|Loss
    per share  basic and diluted      |              |  | (0.18)      |  | (0.19)      |  | (0.04)       |  | (0.03)      
|                                            |              |  |             |  |             |  |              |  |             
|Weighted average common shares outstanding  |              |  | 25,472,297  |  | 17,704,211  |  | 28,418,050   |  | 18,809,457  

See condensed notes to the interim consolidated financial
statements.

5

---

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

Interim Consolidated Statements of Cash Flows 
For the nine months ended January 31, 2008 and January 31, 2007 
(Amounts expressed in US Dollars) 
(Unaudited)

|                                                                             |              |  | For the     |  | For the    
|---------------------------------------------------------------------------- | ------------ |  | ----------- |  | -----------
|                                                                             |              |  | nine months |  | nine months
|                                                                             | Cumulative   |  | ended       |  | ended      
|                                                                             | since        |  | January 31, |  | January 31,
|                                                                             | inception    |  | 2008        |  | 2007       
|                                                                             | $            |  | $           |  | $          
|CASH FLOWS FROM OPERATING
    ACTIVITIES                                     |              |  |             |  |            
|Net loss for the period                                                      | (11,508,762) |  | (4,573,380) |  | (3,377,727)
|Items not requiring an
    outlay of cash:                                   |              |  |             |  |            
|Amortization                                                                 | 31,032       |  | 13,098      |  | 9,409      
|Loss on sale/disposal of
    capital assets                                  | 5,904        |  | -           |  | -          
|Registration rights penalty
    expense                                      | 188,125      |  | -           |  | -          
|Shares issued for property
    payment                                       | 525,339      |  | 57,252      |  | 153,845    
|Common shares issued for
    settlement of severance liability to ex-officer | 113,130      |  | -           |  | 113,130    
|Stock-based compensation                                                     | 1,145,576    |  | 469,057     |  | 321,165    
|Compensation expense on
    issue of warrants                                | 88,228       |  | 88,228      |  |            
|Issue of shares for
    professional services                                | 852,523      |  | -           |  | 722,023    
|Issue of units against
    settlement of debts                               | 20,077       |  | -           |  | -          
|Decrease (Increase) in
    prepaid expenses and deposits                     | (276,989)    |  | 186,225     |  | (461,798)  
|Increase in exploration tax
    credit receivable                            | (483,258)    |  | -           |  | -          
|Increase (Decrease) in
    accounts payable and accrued Liabilities          | 183,515      |  | (76,129)    |  | (88,261)   
|(Increase) Decrease in
    restricted cash                                   | -            |  | 2,266,602   |  | (2,425,230)
|Decrease in restricted
    deposit                                           | -            |  | 17,889      |  | -          
|Decrease in other
    liabilities                                            |              |  |             |  | (3,750)    
|                                                                             |              |  |             |  |            
|NET CASH USED IN OPERATING
    ACTIVITIES                                    | (9,115,560)  |  | (1,551,158) |  | (5,037,194)
|                                                                             |              |  |             |  |            
|CASH FLOWS FROM INVESTING
    ACTIVITIES                                     |              |  |             |  |            
|Purchase of property, plant
    and equipment                                | (122,258)    |  | (41,520)    |  | (3,356)    
|Investment in available for
    sale securities                              | (250,000)    |  | (250,000)   |  | -          
|Sale of available for sale
    securities                                    | 210,000      |  | 210,000     |  | -          
|Investment in restricted
    short-term deposits                             | (836,820)    |  | (836,820)   |  | -          
|                                                                             |              |  |             |  |            
|NET CASH USED IN INVESTING
    ACTIVITIES                                    | (999,078)    |  | (918,340)   |  | (3,356)    
|                                                                             |              |  |             |  |            
|CASH FLOWS FROM FINANCING
    ACTIVITIES                                     |              |  |             |  |            
|Repayments from a
    shareholder                                            | 1,180        |  | -           |  | -          
|Proceeds from demand
    promissory notes                                    | 200,000      |  | -           |  | -          
|Proceeds from Convertible
    promissory notes converted                     | 200,500      |  | -           |  | -          
|Proceeds from exercise of
    stock options                                  | 61,000       |  | -           |  | 55,500     
|Proceeds from exercise of
    warrants-net                                   | 450,309      |  | -           |  | 425,497    
|Proceeds from subscription
    of warrants-net                               | 525,680      |  | -           |  | 2,146,784  
|Proceeds from issuance of
    units /shares-net                              | 9,678,204    |  | 2,489,203   |  | 862,978    
|Proceeds (Repayments) from
    capital lease obligation                      | 10,289       |  | (1,660)     |  | (2,131)    
|                                                                             |              |  |             |  |            
|NET CASH PROVIDED BY
    FINANCING ACTIVITIES                                | 11,127,162   |  | 2,487,543   |  | 3,488,628  
|                                                                             |              |  |             |  |            
|EFFECT OF FOREIGN CURRENCY
    EXCHANGE RATE CHANGES                         | 50,668       |  | 108,711     |  | (79,981)   
|                                                                             |              |  |             |  |            
|NET INCREASE (DECREASE) IN
    CASH AND CASH EQUIVALENTS FOR THE YEAR        | 1,063,192    |  | 126,756     |  | (1,631,903)
|                                                                             |              |  |             |  |            
|Cash and cash equivalents,
    beginning of year                             | -            |  | 936,436     |  | 2,412,126  
|                                                                             |              |  |             |  |            
|CASH AND CASH EQUIVALENTS,
    END OF PERIOD                                 | 1,063,192    |  | 1,063,192   |  | 780,223    
|                                                                             |              |  |             |  |            
|INCOME TAXES PAID                                                            |              |  | -           |  | -          
|                                                                             |              |  |             |  |            
|INTEREST PAID                                                                |              |  | -           |  | -          

See condensed notes to the interim consolidated financial
statements.

6

---

YUKON GOLD CORPORATION, INC.(An Exploration Stage Company) 
Interim Consolidated Statements of Changes in Stockholders' Equity From
Inception to January 31, 2008 
(Amounts expressed in US Dollars)(Unaudited)

|                                                                                | Number of Common Shares | Common Shares Amount | Additional Paid-in
    Capital | Subscription for
    Warrants | Deficit, Accumulated
    during the Exploration Stage | Comprehensive Income
    (loss) | Accumulated Other
    Comprehensive Income (loss)
|------------------------------------------------------------------------------- | ----------------------- | -------------------- | ------------------------------ | ----------------------------- | ----------------------------------------------------- | ------------------------------- | -------------------------------------------------
|                                                                                | #                       | $                    | $                              | $                             | $                                                     | $                               | $                                                
|Issuance of Common shares                                                       | 2,833,377               | 154,063              | -                              | -                             | -                                                     | -                               | -                                                
|Issuance of warrants                                                            | -                       | -                    | 1,142                          | -                             | -                                                     | -                               | -                                                
|Foreign currency
    translation                                                | -                       | -                    | -                              | -                             |                                                       | 604                             | 604                                              
|Net loss for the year                                                           | -                       | -                    | -                              |                               | (124,783)                                             | (124,783)                       | -                                                
|                                                                                |                         |                      |                                |                               |                                                       |                                 |                                                  
|Balance as of April 30,
    2003                                                | 2,833,377               | 154,063              | 1,142                          | -                             | (124,783)                                             | (124,179)                       | 604                                              
|                                                                                |                         |                      |                                |                               |                                                       |                                 |                                                  
|Issuance of Common shares                                                       | 1,435,410               | 256,657              | -                              | -                             | -                                                     | -                               |                                                  
|Issuance of warrants                                                            | -                       | -                    | 2,855                          | -                             | -                                                     | -                               |                                                  
|Shares repurchased                                                              | (240,855 )              | (5,778)              | -                              | -                             | -                                                     | -                               |                                                  
|Recapitalization pursuant
    to reverse acquisition                            | 2,737,576               | (404,265)            | 404,265                        | -                             | -                                                     | -                               |                                                  
|Issuance of Common shares                                                       | 1,750,000               | 175                  | 174,825                        | -                             | -                                                     | -                               |                                                  
|Issuance of Common shares
    for Property Payment                              | 300,000                 | 30                   | 114,212                        | -                             | -                                                     | -                               |                                                  
|Foreign currency
    translation                                                | -                       | -                    | -                              | -                             | -                                                     | (12,796)                        | (12,796)                                         
|Net loss for the year                                                           | -                       | -                    | -                              | -                             | (442,906)                                             | (442,906)                       | -                                                
|                                                                                |                         |                      |                                |                               |                                                       |                                 |                                                  
|Balance as of April 30,
    2004                                                | 8,815,508               | 882                  | 697,299                        | -                             | (567,689)                                             | (455,702)                       | (12,192)                                         
|                                                                                |                         |                      |                                |                               |                                                       |                                 |                                                  
|Issuance of Common shares
    for Property Payment                              | 133,333                 | 13                   | 99,987                         | -                             | -                                                     | -                               | -                                                
|Issuance of common shares
    on Conversion of Convertible Promissory note      | 76,204                  | 8                    | 57,144                         | -                             | -                                                     | -                               | -                                                
|Foreign currency
    translation                                                | -                       | -                    | -                              | -                             | -                                                     | 9,717                           | 9,717                                            
|Net loss for the year                                                           | -                       | -                    | -                              | -                             | (808,146)                                             | (808,146)                       | -                                                
|                                                                                |                         |                      |                                |                               |                                                       |                                 |                                                  
|Balance as of April 30,
    2005                                                | 9,025,045               | 903                  | 854,430                        | -                             | (1,375,835)                                           | (798,429)                       | (2,475)                                          
|                                                                                |                         |                      |                                |                               |                                                       |                                 |                                                  
|Stock based compensation -
    Directors and officers                           |                         |                      | 216,416                        |                               |                                                       |                                 |                                                  
|Stock based compensation -
    Consultants                                      |                         |                      | 8,830                          |                               |                                                       |                                 |                                                  
|Issue of common shares and
    Warrants on retirement of Demand Promissory note | 369,215                 | 37                   | 203,031                        |                               |                                                       |                                 |                                                  
|Units issued to an outside
    company for professional services settlement     | 24,336                  | 2                    | 13,384                         |                               |                                                       |                                 |                                                  
|Units issued to an officer
    for professional services settlement             | 12,168                  | 1                    | 6,690                          |                               |                                                       |                                 |                                                  
|Issuance of common shares
    for professional services                         | 150,000                 | 15                   | 130,485                        |                               |                                                       |                                 |                                                  

7

---



|Units issued to shareholder                                                  | 490,909    | 49    | 269,951   |         |             |             |        
|---------------------------------------------------------------------------- | ---------- | ----- | --------- | ------- | ----------- | ----------- | -------
|Units issued to a director                                                   | 149,867    | 15    | 82,412    |         |             |             |        
|Units issued to outside
    subscribers                                      | 200,000    | 20    | 109,980   |         |             |             |        
|Issuance of common shares
    on Conversion of Convertible Promissory notes  | 59,547     | 6     | 44,654    |         |             |             |        
|Issuance of common shares
    on Exercise of warrants                        | 14,000     | 2     | 11,998    |         |             |             |        
|Issuance of common shares
    on Conversion of Convertible Promissory notes  | 76,525     | 8     | 57,386    |         |             |             |        
|Private placement of shares                                                  | 150,000    | 15    | 151,485   |         |             |             |        
|Issuance of Common shares
    for property payment                           | 133,333    | 13    | 99,987    |         |             |             |        
|                                                                             |            |       |           |         |             |             |        
|Issuance of common shares
    on Conversion of Convertible Promissory notes  | 34,306     | 4     | 25,905    |         |             |             |        
|Issuance of common shares
    on Exercise of warrants                        | 10,000     | 1     | 8,771     |         |             |             |        
|Issuance of common shares
    on Conversion of Convertible Promissory notes  | 101,150    | 10    | 76,523    |         |             |             |        
|Issue of 400,000 Special
    Warrants net                                    |            |       |           | 371,680 |             |             |        
|Issue of 200,000 flow
    through warrants                                   |            |       |           | 154,000 |             |             |        
|Brokered private placement
    of shares- net                                | 5,331,327  | 533   | 2,910,375 |         |             |             |        
|Brokered Private placement
    of flow through Shares- net                   | 25,000     | 2     | 13,310    |         |             |             |        
|Exercise of stock options                                                    | 10,000     | 1     | 5,499     |         |             |             |        
|Foreign currency
    translation                                             | -          | -     | -         |         |             | (2,687)     | (2,687)
|Net loss for the year                                                        | -          | -     | -         |         | (1,855,957) | (1,855,957) | -      
|                                                                             |            |       |           |         |             |             |        
|Balance as of April 30,
    2006                                             | 16,366,728 | 1,637 | 5,301,502 | 525,680 | (3,231,792) | (1,858,644) | (5,162)
|                                                                             |            |       |           |         |             |             |        
|Exercise of warrants                                                         | 10,000     | 1     | 8,986     |         |             |             |        
|Exercise of warrants                                                         | 45,045     | 5     | 40,445    |         |             |             |        
|Exercise of warrants                                                         | 16,000     | 2     | 14,278    |         |             |             |        
|Common shares issued for
    settlement of severance liability to ex-officer | 141,599    | 14    | 113,116   |         |             |             |        
|Exercise of warrants                                                         | 43,667     | 4     | 39,364    |         |             |             |        
|Exercise of warrants                                                         | 17,971     | 2     | 15,937    |         |             |             |        
|Exercise of warrants                                                         | 43,667     | 4     | 38,891    |         |             |             |        
|Exercise of warrants                                                         | 16,000     | 2     | 14,251    |         |             |             |        
|Exercise of warrants                                                         | 158,090    | 16    | 141,616   |         |             |             |        
|Issue of common shares for
    property payment                              | 43,166     | 4     | 53,841    |         |             |             |        
|Exercise of warrants                                                         | 64,120     | 6     | 57,863    |         |             |             |        
|Exercise of warrants                                                         | 61,171     | 6     | 53,818    |         |             |             |        
|Exercise of stock options                                                    | 24,000     | 2     | 17,998    |         |             |             |        
|Issuance of common shares
    for professional services                      | 342,780    | 34    | 438,725   |         |             |             |        
|Brokered private placement
    of units-net                                  | 400,000    | 40    | 363,960   |         |             |             |        

8

---



|Brokered private placement
    of units-net                              | 550,000   | 55  | 498,923   |             |  |  | 
|------------------------------------------------------------------------ | --------- | --- | --------- | ----------- |  |  | 
|Stock based
    compensation-Directors and Officers                      |           |     | 451,273   |             |  |  | 
|Exercise of stock options                                                | 50,000    | 5   | 37,495    |             |  |  | 
|Issuance of common shares
    for property payment                       | 133,334   | 13  | 99,987    |             |  |  | 
|Issuance of common shares
    for professional services                  | 160,000   | 16  | 131,184   |             |  |  | 
|Issuance of common shares
    for professional services                  | 118,800   | 12  | 152,052   |             |  |  | 
|Issue of shares for
    flow-through warrants                            | 200,000   | 20  | 153,980   | (154,000)   |  |  | 
|Issue of shares for special
    warrants                                 | 404,000   | 41  | 375,679   | (371,680)   |  |  | 
|Issue of 2,823,049 flow-
    through warrants -net                       |           |     |           | 1,916,374   |  |  | 
|Issue of 334,218 unit
    special warrants-net                           |           |     |           | 230,410     |  |  | 
|Issue of 3,105,358 common
    shares for 2,823,049 flow through warrants | 3,105,358 | 310 | 1,916,064 | (1,916,374) |  |  | 
|Issue of 367,641 common
    shares for 334,218 unit special warrants     | 367,641   | 37  | 230,373   | (230,410)   |  |  | 
|Registration rights penalty
    expense                                  |           |     | 188,125   |             |  |  | 

|Foreign currency
    translation                     |            |           |            |           |              | (58,446)    | (58,446) 
|---------------------------------------------------- | ---------- | --------- | ---------- | --------- | ------------ | ----------- | ---------
|Net loss for the year                                |            |           |            |           | (3,703,590)  | (3,703,590) |          
|                                                     |            |           |            |           |              |             |          
|Balance as of April 30,
    2007                     | 22,883,137 | 2,288     | 10,949,726 | -         | (6,935,382)  | (3,762,036) | (63,608) 
|Issuance of common shares
    for property payment   | 136,364    | 13        | 57,239     |           | -            | -           | -        
|                                                     |            |           |            |           |              |             |          
|Stock based compensation                             |            |           | 196,259    |           | -            | -           |          
|Unrealized gain on
    available-for-sale securities |            |           |            |           |              | 100,000     | 100,000  
|                                                     |            |           |            |           |              |             |          
|Realized gain on
    available-for-sale securities   |            |           |            |           |              | (40,000)    | (40,000) 
|Issue of 543,615 flow
    through units              | 543,615    | 54        | 227,450    |           |              |             |          
|Issue of 1,916,666 units 
    net                   | 1,916,666  | 192       | 698,110    |           |              |             |          
|Issue of 1,071,770 flow
    through units            | 1,071,770  | 108       | 449,379    |           |              |             |          
|Issue of 2,438,888
    units-net                     | 2,438,888  | 244       | 1,036,622  |           |              |             |          
|Realized gain on available-
    for- sale securities |            |           |            |           |              | (20,000)    | (20,000) 
|                                                     |            |           |            |           |              |             |          
|Stock based compensation                             |            |           | 272,798    |           |              |             |          
|Compensation expense on
    issue of warrants        |            |           | 88,228     |           |              |             |          
|Foreign currency
    translation                     |            |           |            |           |              | 281,303     | 248,504  
|                                                     |            |           |            |           |              |             |          
|Net loss for the period                              | _________  | _________ | _________  | _________ | (4,573,380)  | (4,573,380) | _________
|                                                     |            |           |            |           |              |             |          
|Balance as of January 31,
    2008                   | 28,990,440 | 2,899     | 13,975,811 |           | (11,508,762) | (4,252,077) | 224,896  

9

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YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
January 31, 2008
(Amounts expressed in US Dollars)
(Unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of all recurring accruals) considered necessary for fair presentation have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the year ended April 30, 2008. 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 assisted the Company in meeting its commitments and requirements for project expenses and general and administrative expenses. The Company also raised (net) approximately $1.3 million during the six months ended October 31, 2006. The Company raised (net) approximately $1.9 million through subscription of flow-through special warrants and raised (net) approximately $230,000 through subscription of unit special warrants during the three months ended January 31, 2007. The Company further raised an additional (net) approximately $227,000 through subscription of flow-through units and raised (net) approximately $698,000 through subscription of units during the three months ended October 31, 2007. The company further raised approximately (net) $450,000 through subscription of flow-through units and raised (net) approximately $1,037,000 through subscription of units during the three months ended January 31, 2008. The Company's common shares are listed on the Toronto Stock Exchange (the TSX) and included for quotation on the Over-The-Counter Bulletin Board maintained by the NASD in the United States. The trading of the Company's stock in both the United States and Canada has expanded its investor base, as the Company continues to explore sources of funding from both the 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 Yukon, Canada. The Company has not yet determined whether these properties contain mineral reserves that are economically recoverable. The business of mining and exploring for minerals involves a high degree of risk and there can be no assurances that current exploration programs will result in profitable mining operations.

4. EXPLORATION TAX CREDIT RECEIVABLE

The Company has a claim to a Yukon exploration tax credit, since it maintains a permanent establishment in 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 $483,258 (CDN$481,685) for the years 2006 and 2007 is based on the history of receiving past credits. The Company, subsequent to the quarter, received on March 6, 2008 $180,970 (CDN$181,658) which represents the 2006 Yukon tax credit of $171,035 (CDN$171,685) plus accumulated interest of $9,935 (CDN$9,973) and on March 11, 2008 the Company received $299,207 (CDN$300,344) which represents the 2007 Yukon Tax Credit of $298,864 (CDN$300,000) plus accumulated interest of $343 (CDN$344).

10

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YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
January 31, 2008
(Amounts expressed in US Dollars)
(Unaudited)

5. RESTRICTED CASH AND SHORT TERM DEPOSITS

Under Canadian income tax regulations, a
company is permitted to issue flow-through shares whereby the company agrees to
incur qualifying expenditures and renounce the related income tax deductions to
the investors. Notwithstanding that, there is no specific requirement to
segregate the funds.  The flow-through funds, which are unexpended at the
consolidated balance sheet date are considered to be restricted and are not
considered to be short term deposits or cash or cash equivalents. As of January
31, 2008 unexpended flow-through funds were $836,820 (CDN$840,000) which were
restricted short-term deposits. On April 30, 2007, unexpended flow-through funds
were $2,266,602 (CDN$2,516,155) which were restricted cash.

6. STOCK BASED COMPENSATION

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

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

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

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

The purchase price (the Price) per share under each Stock Option shall be determined by the board of directors or a committee, as applicable. The Price shall not be lower than the closing market price on the TSX, or another stock exchange where the majority of the trading volume and value of the Shares occurs, on the trading day immediately preceding the date of grant, or if not so traded, the average between the closing bid and asked prices thereof as reported for the trading day immediately preceding the date of the grant; provided that if the shares have not traded on the TSX or another stock exchange for an extended period of time, the market price will be the fair market value of the shares at the time of grant, as determined by the board of directors or committee. The board of directors or committee may determine that the Price may escalate at a specified rate dependent upon the date on which an option may be exercised by the Eligible Participant. The Company has adopted SFAS123 (Revised) commencing May 1, 2005.

During the nine month period ended January 31, 2008, the following stock options were granted under the 2006 stock option plan:

a)

On August 15, 2007 Stock options to one consultant to purchase 125,000 common shares each at an exercise price of $0.42 (CND $0.45) per share. These options were granted in accordance with the terms of the Company's 2006 Stock Option Plan and shall vest at 31,250 options each on November 15, 2007, February 15, 2008, May 15, 2008 and August 15, 2008 respectively. The first exercise date of the option is August 15, 2008 and these options shall expire on August 15, 2010.  The Company terminated the contract with this consultant in February 2008.

11

---



YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
January 31, 2008
(Amounts expressed in US Dollars)
(Unaudited)

6. STOCK BASED COMPENSATION-Cont'd

b)

On September 28, 2007 Stock Options to one officer to purchase 200,000 common shares at a price of $0.38 (CDN$0.38) and to one employee to purchase 100,000 common shares at a price of $0.39 (CDN$0.39) per share. These options were granted in accordance with the terms of the Company's 2006 Stock Option Plan. Options to the officer shall vest at the rate of one twelfth (1/12) each month, commencing, on the 1st day of October 2007, for a period of twelve months. The options granted shall be for a term of 5 years.   Options to the employee shall vest at the rate of one twenty-forth (1/24) each month, commencing on October 28, 2007, for a period of 24 months. The options granted shall be for a term of 5 years.

c)

On December 18, 2007 Stock Options to one officer to purchase 200,000 common shares at a price of $0.24 (CDN$0.24).  These options were granted in accordance with the terms of the Company's 2006 Stock Option Plan. The options granted were fully vested upon issuance and have a term of 5 years.

d)

On January 14, 2008 Stock Options to two directors to purchase 200,000 common shares each at a price of $0.31 (CDN$0.31), to two directors to purchase 100,000 common shares each at a price of $0.31 (CDN$0.31), to two officers to purchase 75,000 common shares each at a price of $0.31 (CDN$0.31) and to one employee to purchase 75,000 common shares at a price of $0.31 (CDN$0.31), for a total of 825,000 options. These options were granted in accordance with the terms of the Company's 2006 Stock Option Plan. The options granted were fully vested upon issuance and have a term of 5 years.

For the nine month period ended January 31, 2008, the Company recognized in the financial statements, stock-based compensation costs as per the following details. The fair value of each option used for the purpose of estimating the stock compensation is based on the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:

|                                                                                               | 19-Jan   | 20-Mar  | 28-Mar  | 15-Aug  | 28-Sept | 18-Dec  | 14-Jan   |        
|---------------------------------------------------------------------------------------------- | -------- | ------- | ------- | ------- | ------- | ------- | -------- | -------
|                                                                                               | 2007     | 2007    | 2007    | 2007    | 2007    | 2007    | 2008     | TOTAL  
|                                                                                               |          |         |         |         |         |         |          |        
|Risk
    free rate                                                                             | 4.5%     | 4.5%    | 4.5%    | 4.5%    | 4.5%    | 5.0%    | 5.0%     |        
|Volatility factor                                                                              | 45.19%   | 57.48%  | 98.67%  | 71.49%  | 49.04%  | 101.61% | 95.77%   |        
|Stock-based compensation cost expensed during the nine month period ended
    January 31, 2008 | $167,515 | $19,944 | $35,913 | $11,215 | $19,008 | $31,738 | $183,724 | 469,057
|Unexpended Stock based compensation cost deferred over the vesting period                     | -        | $30,178 | $7,510  | $995    | $37,395 | -       | -        | 76,078 

As of January 31, 2008 there was $76,078 of unrecognized expenses related to non-vested stock-based compensation arrangements granted. The stock-based compensation expense for the nine month period ended January 31, 2008 was $469,057.

7. WARRANTS

On December 15, 2007 warrants were issued to the newly appointed President and CEO to purchase 500,000 common shares at a price of $0.24 (CDN$0.24). 250,000 warrants vested immediately commencing on December 15, 2007 and the balance 250,000 warrants shall vest after six months on June 15, 2008. The warrants granted had a term of 5 years commencing the date of vesting. The fair value of the warrants were calculated using the Black-Scholes method of valuation, using 5% risk free rate and volatility factor of 96.21%. The Company expensed compensation cost for issue of warrants for $88,228 during the quarter ended January 31, 2008 and carried forward $52,664 being the unexpended compensation cost deferred over the vesting period.

On November 27, 2007 the board of directors approved to extend the expiry dates of the following warrants by one (1) year:

1.

2,665,669 warrants expiring on March 28, 2008 exercisable at $0.90 per warrant to March 28, 2009, having a fair value of $76,483;

12

---



YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
January 31, 2008
(Amounts expressed in US Dollars)
(Unaudited)

2.

950,000 warrants expiring on October 4, 2008 which are exercisable at $2.00 per warrant to October 4, 2009, having a fair value of $5,144; and

3.

533,133 Broker warrants expiring on March 28, 2008 exercisable at $0.60 per Unit to March 28, 2009, having a fair value of $28,645.

The fair value of the warrants were calculated using the Black  Scholes method of valuation, using 5% risk free rate and volatility factor of 90.77%.

8. ISSUANCE OF COMMON SHARES

Year ended April 30, 2007

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).

13

---



YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
January 31, 2008
(Amounts expressed in US Dollars)
(Unaudited)

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).

On August 11, 2006 the Company issued 817,980 restricted shares in total to three consultants for services relating to business promotion and development. These consultants assisted management in the preparation of financial offerings and in arranging meetings and making presentations to the brokerage community and institutional investors in both the United States and Canada. Except for 342,780 common shares which were earned by these consultants as of October 31, 2006, the balance of 475,200 common shares were held in escrow to be released to each consultant in 8 monthly installments of 19,800 common shares commencing November 1, 2006. Out of 475,200 common shares held in escrow, the Company received back 356,400 common shares for cancellation.

On September 7, 2006 the Company issued 24,000 shares to an officer upon exercising 24,000 vested stock options at $0.75 for a total of $18,000.

On October 3, 2006, the Company completed a brokered private placement and issued 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 paid a finders fee of 6% and reimbursed expenses for 3% of the total consideration. 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.

14

---



YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
January 31, 2008
(Amounts expressed in US Dollars)
(Unaudited)

8. ISSUANCE OF COMMON SHARES-Cont'd

On October 3, 2006, the Company completed another brokered private placement and issued 550,000 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 $550,000. The Company paid a finders fee of $33,000 and reimbursed expenses for $18,022 (CDN$20,000). 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.

On December 12, 2006 the Company issued 50,000 shares to a former officer upon exercising of 50,000 vested stock options at $0.75 for a total of $37,500.

On December 6, 2006 the board of directors authorized the issuance of 133,334 common shares in the amount of $100,000 for a property payment to Atna Resources Ltd., along with a cash payment of $86,805 (CDN$100,000) as per terms of the agreement. The common shares along with the cash payment were delivered to Atna Resources Ltd. on December 12, 2006. This entire payment of $186,805 was expensed in the consolidated statements of operations.

On December 19, 2006 the Company issued 160,000 common shares to a consultant for services rendered. These services related to the consulting agreement dated March 21, 2006. As per terms of that agreement, the Consultant was to 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 was for a period of twelve months commencing the day of trading of the Company's stock on the Toronto Stock Exchange (April 19, 2006). As per the agreement, the Consultant was to be compensated a fee equal to 240,000 restricted common shares of the Company with a fair value of $196,800 and was to receive these shares on a monthly basis. Each party was able to cancel the agreement on 30 days notice. The Company cancelled the agreement as of November 30, 2006 and on December 19, 2006 issued 160,000 common shares as full and final consideration.

On December 19, 2006 the Company issued 200,000 common shares in lieu of sale of 200,000 Flow-Through Special Warrants made to a Canadian accredited investor, for $180,000 (CDN$205,020) on December 30, 2005. Each Flow-Through Special Warrant entitled the Holder to acquire one flow-through common share of the Company at no additional cost.

On December 28, 2006, the Company completed a private placement of 2,823,049 flow-through special warrants (which qualify as flow-through shares for the purposes of the Canadian Income Tax Act) at a price of $0.90 (CDN$1.05) per warrant and 334,218 unit special warrants at a price of $0.77 (CDN$0.90) per warrant for aggregate gross proceeds to the Company of $2,801,610 (CDN$3,264,996).  Each flow-through special warrant entitles the holder to acquire, for no additional consideration, one common share of the Company.  Each unit special warrant entitles the holder to acquire, for no additional consideration, one common share and one common share purchase warrant of the Company.  Each common share purchase warrant entitles the holder to acquire one common share of the Company at a price of $0.90 (CDN$1.05) for a period of 24 months from the closing date.  In connection with this private placement, the Company agreed to file a prospectus in Canada qualifying the issuance of the common shares and warrants issuable upon the exercise of the special warrants as well as those common shares issuable on exercise of the common share purchase warrants. In addition, the Company agreed to file a registration statement in the United States covering the re-sale of common shares
underlying the units and warrants by the respective shareholders.

15

---



YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
January 31, 2008
(Amounts expressed in US Dollars)
(Unaudited)

8. ISSUANCE OF COMMON SHARES-Cont'd

The Company subsequently declined to file a prospectus in Canada but did file the registration statement in the United States.  As a result of the Company's decision not to file a prospectus in Canada, primarily because of the cost involved, the Company was obligated to pay a penalty to the holders of the securities issued in the private placement.  As a result of the penalty, (i) each flow-through special warrant entitles the holder to acquire 1.1 common shares on exercise thereof and (ii) each unit special warrant entitles the holder to acquire 1.1 common shares and 1.1 common share purchase warrants on exercise thereof.  In connection with the private placement, Northern Securities Inc., the lead agent, received a cash commission of $171,164 (CDN$198,550) as well as 169,042 flow-through compensation options and 23,395 unit compensation options.  In addition, as part of the private placement, Limited Market Dealer Inc. received a cash commission of $25,862 (CDN$30,000) as well as 28,571 flow-through compensation options and Novadan Capital Ltd. received a cash payment of $28,362 (CDN$32,900) as well as 32,900 unit compensation options.  Each flow-through compensation option entitles the holder to acquire,  for no additional consideration, one flow-through compensation warrant, each exercisable into one common share of the Company at a price of $0.90 (CDN$1.05) for a period of 24 months from the closing date of December 28, 2006.  Each unit compensation option entitles the holder to acquire, for no additional consideration, one unit compensation warrant, each exercisable at $0.81 (CDN$0.941) into one common share and one common share purchase warrant of the Company at a price of $0.90 (CDN$1.05) for a period of 24 months from the closing date of December 28, 2006.  As a result of the penalty, (i) each flow-through compensation option entitles the holder to acquire 1.1 flow-through compensation warrants on exercise thereof and (ii) each unit compensation option granted to
Northern Securities, Inc. entitles the holder to acquire 1.1 unit compensation warrants on exercise thereof.  The private placement was exempt from registration under the Securities Act of 1933, as amended (the Securities Act) pursuant to an exemption afforded by Regulation S promulgated under the Securities Act (Regulation S).

On January 11, 2007, the Company issued its obligated 400,000 common shares and an additional 4,000 common shares as penalty, in lieu of sale of 400,000 Special Warrants to a Canadian accredited investor for $404,000 paid on December 15, 2005. Each Special Warrant entitled its holder to acquire one common share of the Company and one common share purchase warrant at no additional cost. The Company was obligated to have a registration statement become effective within 181 days of the closing. In the absence of a registration statement being declared effective within 181 days of the closing, the Company issued an additional 4,000 common shares to the Canadian accredited investor at no extra cost as a penalty.  The Company expensed an amount of $5,000 to registration rights penalty expense under the head General and Administration and credited this to Additional paid in capital.

On April 25, 2007 the Company issued 2,823,049 common shares and an additional 282,309 shares as a penalty, relating to the private placement of 2,823,049 flow-through special warrants on December 28, 2006 (refer to note above). The penalty shares were issued as the Company failed to obtain receipts for the final prospectus or effectiveness of the registration statement by February 26, 2007 (60 days from the closing date). The Company expensed an amount of $163,739 to registration rights penalty expense under the head General and Administration and credited this to Additional paid in capital.

On April 25, 2007 the Company issued 334,218 common shares and an additional 33,423 shares as a penalty, relating to the private placement of 334,218 unit special warrants on December 28, 2006 (refer to note above). The penalty shares were issued as the Company failed to obtain receipts for the final prospectus or effectiveness of the registration statement by February 26, 2007 (60 days from the closing date). The Company expensed an amount of $19,386 to registration rights penalty expense under the head General and Administration and credited this to Additional paid in capital.

Nine Months ended January 31, 2008

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

16

---



YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
January 31, 2008
(Amounts expressed in US Dollars)
(Unaudited)

8. ISSUANCE OF COMMON SHARES-Cont'd

On August 16, 2007 the Company completed a private placement (the Financing) with Northern Securities Inc. (Northern), acting as agent. The Financing was comprised of the sale of 1,916,666 units (the Units) at $0.42 (CDN$0.45) per Unit (the Unit Issue Price) for gross proceeds of $802,101 (CDN$862,499.70) and the sale of 543,615 flow-through units (the Flow-Through Units which qualify as flow-through shares for the purposes of the Canadian Income Tax Act) at $0.49 (CDN$0.52) per Flow-Through Unit (the Flow-Through Unit Issue Price) for gross proceeds of $262,884 (CDN$282,680). The proceeds raised were allocated between the offering of shares and the sale of tax benefits A liability of $35,381 was recognized for the sale of taxable benefits, which was reversed and credited to income when the Company renounced resource expenditure deduction to the investor.  Each Unit consisted of one non-flow through common share (Common Share) and one half of one Common Share purchase warrant (each whole warrant, a Warrant).  Each Warrant is exercisable into one Common Share until August 16, 2009 at an exercise price of $0.60 (CDN$0.60) per share.  Each Flow-Through Unit consisted of one flow-through common share and one half of one Common Share purchase warrant (each whole warrant, an FT Warrant).  Each FT Warrant is exercisable into one Common Share until August 16, 2009 at an exercise price of $0.70 (CDN$0.70) per share.  The Company paid Northern a commission equal to 8% of the aggregate gross proceeds which amounted to $85,199 (CDN$91,614) and issued 153,333 Unit Compensation Options and 43,489 FT Unit Compensation Options.  Each Unit Compensation Option is exercisable into one Unit at the Unit Issue Price until August 16, 2009.  Each FT Unit Compensation Option is exercisable into one Common Share and one half of one FT Warrant at the Flow-Through Unit Issue Price until August 16, 2009.    The Company reimbursed Northern expenses of $18,600 (CDN $20,000).

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

17

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YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
January 31, 2008
(Amounts expressed in US Dollars)
(Unaudited)

9. 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                                                    | $141,979 (CDN$ 150,000) Paid           
| | On
    July 7, 2008                                                    | $149,432 (CDN$ 150,000)                
| | TOTAL                                                                  | $748,164 (CDN$850,000)                 
| |                                                                        |                                        
| | WORK PROGRAM-expenditures to be
    incurred in the following periods;
| |                                                                        |                                        
| | July
    7/02 to July 6/03                                             | $
    118,157 (CDN$ 150,000) Incurred  
| | July
    7/03 to July 6/04                                             | $
    196,928 (CDN$ 250,000) Incurred  
| | July
    7/04 to July 6/05                                             | $
    256,006 (CDN$ 325,000) Incurred  
| | July
    7/05 to Dec. 31/06                                            | $
    667,795 (CDN$ 750,000) Incurred  
| | Jan.
    1/07 to Dec. 31/07                                            | $
    937,383 (CDN$ 1,000,000) Incurred
| | Jan.
    1/08 to Dec. 31/08                                            | $1,245,250 (CDN$ 1,250,000)**Deferred  
| | Jan.
    1/09 to Dec. 31/09                                            | $1,494,321 (CDN$ 1,500,000)            
| | TOTAL                                                                  | $4,915,840 (CDN$5,225,000)             

18

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YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
January 31, 2008
(Amounts expressed in US Dollars)
(Unaudited)

9. COMMITMENTS AND CONTINGENCIES-Cont'd

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

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

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

25% interest upon completion of Work Program expenditures of $1,587,806 (CDN$1,500,000)

50% interest upon completion of Work Program expenditures of $2,646,343 (CDN$2,500,000)

75% interest upon completion of Work Program expenditures of $4,915,840 (CDN$5,225,000)

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

The Hinton Option Agreement contemplates that upon the earlier of: (i) a production decision or (ii) investment of $4,915,840 (CDN$5,225,000) or (iii) YGC has a minority interest and decides not to spend any more money on the project, YGC's relationship with the Hinton Syndicate will become a joint venture for the further development of the property. Under the terms of the Hinton Option Agreement, the party with the majority interest would control the joint venture. Although YGC had earned a 50% interest as at October 31, 2007, if the relationship is converted to a joint venture currently, YGC's interest would automatically be reduced to a 45% interest in the joint venture (by the terms of the Hinton Option Agreement) and the Hinton Syndicate would control the joint venture. Once the 75% interest is earned, as described above, YGC has a further option to acquire the remaining 25% interest in the mineral claims for a further payment of $4,981,072 (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 the Hinton Syndicate) with rights of first refusal in the event that either party desires to sell or transfer its interest.

19

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YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
January 31, 2008
(Amounts expressed in US Dollars)
(Unaudited)

9. COMMITMENTS AND CONTINGENCIES-Cont'd

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

The Hinton Option Agreement pertains to an area of interest which includes the area within ten kilometers of the outermost boundaries of the 273 mineral claims, which constitute our mineral properties. Either party to the Hinton Option Agreement may stake claims outside the 273 mineral claims, but each must notify the other party if such new claims are within the area of interest. The non-staking party may then elect to have the new claims included within the Hinton Option Agreement. As of December 11, 2006, there were an additional 24 claims staked, known as the Gram Claims which became subject to the Hinton Option Agreement.

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

b) The Marg Property

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

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

The Company has agreed to make subsequent payments under the Agreement of: $199,243 (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 $996,214 (CDN$1,000,000) in cash and/or common shares of the Company, or some combination thereof to be determined.

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

20

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YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
January 31, 2008
(Amounts expressed in US Dollars)
(Unaudited)

9. COMMITMENTS AND CONTINGENCIES-Cont'd

c) On August 15, 2007 the Company entered into an investor relations marketing agreement with a consultant for a one year term, with the option to renew for an additional 12 months.  In return for services rendered, the Company will pay the consultant $1,992 (CDN$2,000) per month.  On August 31, 2007 the Company paid $3,787 (CDN$4,000) being the first and last payments of the contract. On September 15, 2007 the Company paid $1,941 (CDN$2,000) and on October 15, 2007 the Company paid $2,048 (CDN$2,000), being the second and third payments respectively. On November 15, 2007 the Company paid $2,030 (CDN$2,000) being the fourth payment of the contract. On December 14, 2007 the Company paid $1,967 (CDN$2,000) and on January 15, 2008 the

Company paid $1,967 (CDN$2,000), being the fifth and sixth payments of the contract respectively. In addition, the consultant has been granted an option to purchase 125,000 shares of the Company at $0.45 (CDN$0.45) per share, with the option vesting in equal quarterly amounts of 31,250 shares on November 15, 2007, February 15, 2008, May 15, 2008 and August 15, 2008, and the first exercise date being August 15, 2008 and an expiry date of August 15, 2010.  Subsequently on February 12, 2008 the Company terminated the contract and is due a refund of $1,992 (CDN$2,000) previously paid on August 31, 2007 to cover the last payment of the one year term.

d) On December 5, 2007 the Company entered into an agreement with a consultant to create investor awareness for a period of six months, commencing on December 5, 2007 for a fee of $20,000 and 300,000 restricted common shares to be issued in equal tranches of 50,000 shares at the end of each month during the term of the agreement.  On December 6, 2007 the Company received conditional approval from the TSX to issue the 300,000 restricted shares as per the terms of the agreement.  The consulting fee of $20,000 was paid on December 11, 2007. The Company has accrued the expense of $22,000 for 100,000 shares to be issued to January 31, 08 and has not yet issued the stock to the consultant.

e)  On December 15, 2007 the Company entered into an agreement with
its new President and CEO to provide senior management services for a period of one (1) year, commencing on December 15, 2008  and renewing automatically on the anniversary date thereof, for an annual base fee of $149,150 (CDN$150,000) excluding bonuses, benefits and other compensation.  The CEO and the Company shall indicate their respective intentions to renew the term of the agreement after the passage of eight (8) months from December 15, 2007.  The
CEO was further granted 500,000 warrants at an exercise price of $0.24 (CDN$0.24). 250,000 warrants
are exercisable commencing on December 15, 2007 and the balance of 250,000 warrants
are exercisable after six months on June 15, 2008. The warrants granted have a term of 5 years commencing on the respective dates
they are exercisable.

f)  On December 18, 2007 the Company entered into an agreement with a consultant to provide corporate development management services for a period of six (6) months commencing on December 18, 2007 and renewing automatically on each six (6) month anniversary, for an annual fee of $119,320 (CDN$120,000).  The consultant and the Company shall indicate their respective intentions to renew the term of the agreement after the passage of four (4) months from December 18, 2007.  Subsequent to the quarter ended January 31, 2008 the consultant and the Executive Committee have renewed the consultants' agreement for a further six (6) months. The consultant was further granted 200,000 stock options under the 2006 Stock Option Plan at an exercise price of $0.24 (CDN$0.24). These options were fully vested upon issuance and have a term of 5 years.

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

The Company entered into a subscription agreement dated as of April 3, 2007 (the Agreement) with Industrial Minerals, Inc. (Industrial Minerals) to acquire (i) 5,000,000 common shares of Industrial Minerals at a price of $0.05 per share and (ii) a Warrant entitling the holder: (a) to purchase 5,000,000 common shares of Industrial Minerals at a purchase price of $0.05 per share (the option price) or, at the option of the holder, (b) to surrender the Warrant for a number of common shares to be determined by application of an anti-dilution formula which would result in a larger number of shares issued to the holder if the market price of the common stock is less than the option price at the time of exercise. The Warrant expires on April 3, 2008. The total subscription price paid by the Company was $250,000. The Company entered into the Agreement as of May 14, 2007. The common stock of Industrial Minerals is quoted on the Over-the-Counter Bulletin Board under the symbol, IDSM. The Company accounted for this investment as a short term investment in available-for-sale securities. The unrealized gain of $100,000 as at October 31, 2007 has been excluded from earnings and reported as Other Comprehensive Income'. On August 17, 2007, the Company entered into an agreement with Global Capital SPE-1 LLC (Global) pursuant to which Global agreed to purchase 2 million shares of Industrial Minerals Inc. (IDSM) held by the Company for consideration of $140,000.  Pursuant to the Agreement, Global has the option to purchase from the Company an additional 3 million shares of IDSM for consideration of $210,000.  The Company also assigned to Global 5 million warrants to purchase IDSM stock.  The Company will receive up to $100,000 in the event that Global exercises all or a portion of the warrants.  Global consummated the purchase of the first 2 million shares of IDSM on September 6, 2007 and another 1,000,000 shares on January 30, 2008 and paid the Company a total of $210,000. The Company accounted for $60,000 as realized gain on sale of securities as a credit to the general and administrative expenses and reduced the unrealized gain of $100,000 by $60,000.

21

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YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
January 31, 2008
(Amounts expressed in US Dollars)
(Unaudited)

11. PREPAID EXPENSES AND OTHER

Included in prepaid expenses and other is an amount of $204,287 (CDN$205,064) being Goods and Services tax receivable from the Federal Government of Canada.

12. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The Company entered into a one year consulting agreement with a consultant on December 28, 2006 commencing January 1, 2007. As per terms of the agreement, the consultant was to provide consulting services which included market awareness, financial and strategic advice. The Company was to compensate the consultant with a fee of 500,000 restrictive shares over a period of twelve months with shares to be delivered on a monthly basis. The Company had accrued the cost of $136,668 in the April 30, 2007 statements, although in the opinion of the Company, it was not obligated to issue stock as the consultant was in breach of the contract due to non performance of the agreed services. The Company received a cancellation and waiver of the agreement from the consultant and reversed this accrual to the credit of general and administrative expense during the quarter ended July 31, 2007.

On August 22, 2007 the Company entered into an agreement with a consultant.  In return for services rendered, the Company will pay the consultant $37,608 (CDN$40,000) in installments as set out in the agreement.  The first installment was paid on August 22, 2007 for $12,537 (CDN$13,333) and the second installment was paid on October 1, 2007 for $4,483 (CDN$4,444).  The third and fourth installments were each paid on November 1, 2007 and December 1, 2007 for $4,672 (CDN$4,444) and $4,444 (CDN$4,444) respectively. The fifth installment was paid on January 1, 2008 for $4,483 (CDN$4,444). The sixth and the final installments due on February 1 and March 1, 2008 for $4,427 (CDN$4,444) respectively were paid subsequently on their due dates.

13.  INCOME TAX RECOVERY

On August 16, 2007 the Company completed a brokered private placement through the issuance of 543,615 flow-through units at a price of $0.49 (CDN$0.52) per Flow-Through Unit for gross proceeds of $262,884 (CDN$282,680).  The proceeds raised were allocated between the offering of shares and the sale of tax benefits. A liability of $35,381 was recognized for the sale of taxable benefits, which was reversed and credited to income when the Company renounced resource expenditure deduction to the investor in January 2008.

On November 16, 2007 the Company completed a brokered private placement through the issuance of 1,071,770 flow-through units at a price of $0.53 (CDN$0.52) per Flow-Through Unit for gross proceeds of $572,315 (CDN$557,320).  The proceeds raised were allocated between the offering of shares and the sale of tax benefits. A liability of $77,043 was recognized for the sale of taxable benefits, which was reversed and credited to income when the Company renounced resource expenditure deduction to the investor in January 2008.

14. CHANGES IN OFFICERS AND DIRECTORS

On October 30, 2007, the Company's board of directors accepted the resignation of Chester Idziszek in his capacity as director and as a member of the Audit Committee, effective as of October 22, 2007. There were no disagreements between the Company and Mr. Idziszek with respect to the Company's operations, policies or practices.  On December 6, 2007 the board appointed Mr. Howard Barth to fill the vacancy left by Mr. Idziszek on the Audit Committee.  Mr. Barth's appointment will expire on April 30, 2008.

On December 13, 2007 the Company's board of directors accepted the resignation of Mr. Paul A. Gorman in his capacity as CEO and as a director.  There were no disagreements between the Company and Mr. Gorman with respect to the Company's operations, policies or practices.  Mr. Ken Hill was appointed interim CEO until a successor for Mr. Gorman was appointed.

On December 15, 2007 the Company's board of directors appointed Mr. Ronald K. Mann as President and CEO and a director.

On December 18, 2007 the Company's board of directors appointed Mr. Cletus J. Ryan as Vice President Corporate Development.

On January 14, 2008 the Company's board of directors formed an Executive Committee and appointed Mr. J.L Guerra, Jr, Mr. Kenneth J. Hill and Mr. Ronald K. Mann, all directors of the Company, to sit on said committee.

22

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YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
January 31, 2008
(Amounts expressed in US Dollars)
(Unaudited)

15. SUBSEQUENT EVENTS

a)  Subsequent Exploration Tax Credit Receipt

On March 6, 2008 the Company received $180,970 (CDN$181,658) which represents the 2006 Yukon tax credit of $171,035 (CDN$171,685) plus accumulated interest of $9,935 (CDN$9,973).  (Refer to note 4)

On March 11, 2008 the Company received $299,207 (CDN$300,344) which represents the 2007 Yukon Tax Credit of $298,864 (CDN$300,000) plus accumulated interest of $343 (CDN$344).  (Refer to note 4)

b)  Subsequent Changes in Officers and Directors

On February 21, 2008 the Company's board of directors accepted the resignation, effective March 11, 2008 of Mr. Stewart Fumerton as Vice President, Exploration.  There were no disagreements between Mr. Fumerton and the Company with respect to the Company's operations, policies or practices.  A search for a replacement is currently underway.

On February 21, 2008 the Company's board of directors appointed Mr. G.E. (Ted) Creber as a director and member of the Audit Committee.

c) Annual and Special Meeting of the Shareholders

On February 21, 2008, the Company adjourned its Annual and Special Meeting of Shareholders, originally scheduled for February 21, 2008, to March 18, 2008

d)  Subsequent Issue/Cancellation of Stock Based Compensation

On February 12, 2008 the Company issued notice of termination of the contract with one consultant effective as of February 15, 2008.  The 31,250 options granted under the contract to vest on each of May 15, 2008 and August 15, 2008 respectively were cancelled.  (Refer to note 6 a).

On February 21, 2008 the Company issued stock options under it's 2006 Stock Option Plan to a director  to purchase 150,000 common shares at a price of  $0.28 (CDN$0.28).  All of the options vest immediately.  The options shall be granted for a term of five years.

On March 13, 2008 the 248,000 stock options from the 2003 Stock Option Plan and the 250,000 stock options from the 2006 Stock Option Plan, granted to one former officer and director were cancelled.

On March 13, 2008 the 150,000 stock options from the 2006 Stock Option Plan granted to one former consultant were cancelled.

e)  Subsequent Commitments and Contingencies

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

On February 12, 2008 the Company terminated the investor relations marketing agreement with a consultant effective as of February 15, 2008 and is due a refund of $1,992 (CDN$2,000) previously paid on August 31, 2007 to cover the last payment of the one year term.  (Refer to note
9 c)

23

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YUKON GOLD CORPORATION, INC. 
(An Exploration Stage Company)
Condensed Notes to Interim Consolidated Financial Statements
January 31, 2008
(Amounts expressed in US Dollars)
(Unaudited)

15. SUBSEQUENT EVENTS  Cont'd

On February 18, 2008 the Company signed a surface drilling contract with a diamond drilling company for the Marg Project to commence on or about June 18, 2008, with an estimated all-in cost of $1,992,400 (CDN$2,000,000).

On March 7, 2008 the Executive Committee and the consultant renewed the consultant's agreement for a further six (6) months.  (Refer to note 9 f)

On March 10, 2008 the Company signed a contract with a global mining consultancy business for a scoping study to determine the potential of the Marg Deposit at an estimated cost of between $139,470 (CDN$140,000) and $149,432 (CDN$150,000).

f)  Subsequent Accounts Payable

The sixth and the final installments, of a consulting agreement entered into August 22, 2007, due on February 1 and March 1, 2008 for $4,427 (CDN$4,444) respectively were paid subsequently on their due dates.  (Refer to note 12)

g)  Subsequent Sale of  Securities

Subsequent to the quarter ended January 31, 2008 the Company sold 455,000 shares of Industrial Minerals, Inc. at an average selling price of $.0948 for a total consideration of $43,139 in the open market.

h)  Subsequent Acquisition of Capital Assets

Subsequent to the quarter ended January 31, 2008 the Company acquired capital assets in the amount of $56,186 (CDN$56,400).

24

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
FINANCIAL CONDITION AND RESULTS OF OPERATION 
FOR THE THREE AND NINE MONTH PERIODS 
ENDED JANUARY 31, 2008
Discussion of Operations & Financial Condition

Yukon Gold has no source of revenue, operates at a loss and
expects operating losses to continue as long as it remains in an exploration
stage and perhaps thereafter. As at January 31, 2008, we had accumulated losses
of $11,508,762. These losses raise substantial doubt about our ability to
continue as a going concern. Our ability to emerge from the exploration stage
and conduct mining operations is dependent, in large part, upon our raising
additional equity financing.
As described in greater detail below, the Company's major endeavor over the quarter ended January 31, 2008 has been its effort to raise
additional capital to meet its ongoing obligations under both the Hinton Option
Agreement and the Marg Acquisition Agreement and to pursue its exploration
activities.
Having obtained material financing, we implemented
exploration programs at both the Mount Hinton and Marg Properties.
SELECTED INFORMATION

|                                  | Three months ended | Three months ended
|--------------------------------- | ------------------ | ------------------
|                                  | January 31, 2008   | January 31, 2007  
|                                  |                    |                   
|Revenues                          | Nil                | Nil               
|Net Loss                          | $1,101,507         | $512,542          
|Loss per share-basic and diluted  | $ (0.04)           | $ (0.03)          
|                                  |                    |                   
|                                  | Nine months ended  | Nine months ended 
|                                  | January 31, 2008   | January 31, 2007  
|                                  |                    |                   
|Revenues                          | Nil                | Nil               
|Net Loss                          | $4,573,380         | $3,377,727        
|Loss per share-basic and diluted  | $(0.18)            | $ (0.19)          
|                                  |                    |                   
|                                  | As at              | As at             
|                                  | January 31, 2008   | April 30, 2007    
|                                  |                    |                   
|Total Assets                      | $2,889,955         | $4,225,107        
|Total Liabilities                 | $195,111           | $272,083          
|Cash dividends declared per share | Nil                | Nil               

Revenues

No revenue was generated by the Company's operations during
the quarter and nine month period ended January 31, 2008 and the quarter and
nine month period ended January 31, 2007.



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Net Loss
The Company's expenses are reflected in the Consolidated
Statements of Operations under the category of Operating Expenses. To meet the
criteria of United States generally accepted accounting principles (GAAP), all
exploration and general and administrative costs related to projects are charged
to operations in the year incurred.
The significant components of expense that have contributed
to the total operating expense are discussed as follows:
(a) General and Administrative Expense
Included in operating expenses for
the nine months ended January 31, 2008 is general and administrative expense of
$1,409,684 as compared to $1,906,256for the nine months ended January 31, 2007.
General and administrative expense represents approximately 30% of the total
operating expense for the nine months ended January 31, 2008 and approximately
50.9% of the total operating expense for the nine months ended January 31, 2007.
The major component of this expense for the nine month period ended January 31,
2008 is the non cash expense relating to stock based compensation for $469,057
and compensation expense on warrants for $88,228.
(b) Project Expense
Included in operating expenses for
the nine months ended January 31, 2008 is project expenses of $3,263,022 as
compared with $1,832,808 for the nine months ended January 31, 2007. Project
expense is a significant expense and it represents approximately 69.6% of the
total operating expense for the nine months ended January, 2008 and
approximately 48.9% of the total operating expense for the nine months ended
January 31, 2007.
Exploration Expenditures at the Company's Properties
Mount Hinton
On April 2, 2007 the Company accepted a proposed work
program, budget and cash call schedule for the Mount Hinton project which was
revised on May 15, 2007, totaling $2,152,317 (CDN$2,105,200) for the 2007 Work
Program. The Company had approximately $70,304 (CDN$75,000) on deposit left over
from the 2006 cash call schedule. On May 15, 2007 the Company paid $180,164
(CDN$200,000), on June 15, 2007 the Company paid $202,684 (CDN$225,000), being
two of the four cash call payments. Due to delays in the drilling program the
third payment of $635,123 (CDN$600,000) which was due on July 31, 2007 was
changed to August 31, 2007. On August 15, 2007 the Company paid $97,259
(CDN$91,880) towards the third cash call payment for the Mount Hinton 2007 Work
Program. On August 31, 2007 the Company re-allocated $537,864 (CDN$508,120)
being the balance of the third cash call payment from cash call funds previously
allocated to the Marg Project. These re-allocated funds were not needed for the
Marg Project. The fourth payment of $428,919 (CDN$405,200) which was originally
due on August 15, 2007 was changed to and paid on September 15, 2007.
By letter agreement dated August 17, 2006, the Hinton
Syndicate agreed to allow the Company to defer a portion of the Work Program
expenditure scheduled to be incurred by December 31, 2006. The agreement to
defer such Work program expenditures was due to the mechanical break-down of
drilling equipment and the unavailability of replacement drilling equipment at
the Mount Hinton site. As a result, the Company was allowed to defer the
expenditure of approximately $220,681 (CDN$235,423) until December 31, 2007. The
Company had incurred that expenditure in addition to the expenditure for January
1 to December 31, 2007 as at October 31, 2007. All other Property Payments and
Work Program expenditures due have been made and incurred.
Subsequent to the quarter ending January 31, 2008 by letter
agreement dated February 29, 2008, the Company gave notice to the Hinton
Syndicate that all of the Work Program expenditures scheduled to be incurred by
December 31, 2008 would be deferred until December 31, 2009. Subsection 2.2(f)
of the Hinton Option Agreement provides that if Yukon Gold has earned at least
25% of the right, title and interest in the Property as provided for in
Subsection 2.2(e) of the Hinton Option Agreement and is unable to meet its next
year's Work Program expenditures as set out in Section 2.2 of the Hinton Option
Agreement, it shall be entitled to extend the time required to incur the Work
Program expenditures from year to year by giving notice to the
Hinton Syndicate to such effect; provided that the full amount of the Work
Program expenditures has been incurred by December 31, 2009.26

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The Hinton Option Agreement contemplates that upon the
earlier of: (i) a production decision or (ii) investment of $4,915,840
(CDN$5,225,000) or (iii) YGC has a minority interest and decides not to spend
any more money on the project, YGC's relationship with the Hinton Syndicate will
become a joint venture for the further development of the property. Under the
terms of the Hinton Option Agreement, the party with the majority interest would
control the joint venture. Although YGC had earned a 50% interest as at October
31, 2007, if the relationship is converted to a joint venture currently, YGC's
interest would automatically be reduced to a 45% interest in the joint venture
(by the terms of the Hinton Option Agreement) and the Hinton Syndicate would
control the joint venture. Once the 75% interest is earned, as described above,
YGC has a further option to acquire the remaining 25% interest in the mineral
claims for a further payment of $4,981,072 (CDN$5,000,000).
The Hinton Option Agreement pertains to an area of interest
which includes the area within ten kilometers of the outermost boundaries of the
273 mineral claims, which constitute our mineral properties. Either party to the
Hinton Option Agreement may stake claims outside the 273 mineral claims, but
each must notify the other party if such new claims are within the area of
interest. The non-staking party may then elect to have the new claims included
within the Hinton Option Agreement. As of December 11, 2006, there were an
additional 24 claims staked, known as the Gram Claims which became subject to
the Hinton Option Agreement.
Marg Property
On April 2, 2007 the Company accepted a proposed work
program, budget and cash call schedule for the Marg project.
The Company has paid cash calls in the amount of
$2,100,528 (CDN$2,281,880) for the 2007 Work Program. The Company had approximately
$515,561(CDN $550,000) on deposit left over from the 2006 cash call schedule. On
May 15, 2007 the Company paid $703,037 (CDN$750,000), on June 15, 2007 the
Company paid $703,037 (CDN$750,000), and on July 15, 2007 the Company paid
$703,037 (CDN$750,000) being three of the four cash call payments. The fourth
and final payment of $402,244 (CDN$380,000) was paid on August 15, 2007. On
August 31, 2007 the Company re-allocated $537,864 (CDN$508,120) being the
balance of the third cash call payment for the Mount Hinton 2007 Work Program
from cash call funds previously allocated to the Marg Project. These
re-allocated funds were not needed for the Marg Project. On January 23, 2008 the
Company was refunded $388,524 (CDN$390,000) as these funds were not needed for
the Marg Project.
Under the terms of the Property Purchase Agreement
(Agreement) with Atna Resources Ltd. (Atna), the Company paid a Property
Payment of $98,697 (CDN$100,000) cash on December 12, 2007.
Liquidity and Capital Resources
The following table summarizes the Company's cash flows and cash in hand:

|                                      | January 31, 2008 | January 31, 2007
|------------------------------------- | ---------------- | ----------------
|                                      |                  |                 
|Cash and cash equivalent              | $1,063,192       | $ 780,223       
|Working capital                       | $1,777,983       | $1,326,339      
|Cash used in operating activities     | $1,551,158       | $5,037,194      
|Cash used in investing activities     | $ 918,340        | $ 3,356         
|Cash provided in financing activities | $2,487,543       | $3,488,628      

Off-Balance Sheet Arrangement

The Company has no Off-Balance Sheet Arrangement as of January 31, 2008.



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Contractual Obligations and Commercial Commitments
In addition to the contractual obligations and commitments of
the Company to acquire its mineral properties as described in Note 9 to our
Financial Statements included with this report, the Company has additional
commitments for its office lease and to pay minimum lease payments under its
capital lease. Refer to our annual financial statements for April 30, 2007 for
future obligation payments.
Flow-Through and Unit Share Subscriptions
The Company entered into flow-through share subscription
agreements during the year ended April 30, 2007 whereby it was committed to
incur on or before December 31, 2007, a total of $3,966,718 (CDN$2,964,200) of
qualifying Canadian Exploration expenses as described in the Income Tax Act of
Canada. As of April 30, 2007 an expenditure of $133,363 (CDN$148,046) had been
incurred and as of the quarter ended July 31, 2007 $852,352 (CDN$909,289) had
been incurred resulting in $2,981,003 (CDN$2,816,154) not yet being spent. As of
the quarter ended October 31, 2007 the full amount committed to had been spent.
Commencing March 1, 2007 the Company was liable to pay a tax of approximately 5%
per annum, calculated monthly on the unspent portion of the commitment which has
been accrued in the statements.
The Company entered into share subscription agreements in August of 2007 and
November of 2007.
On August 16, 2007 the Company completed a private placement
(the Financing) with Northern Securities Inc. (Northern), acting as agent.
The Financing was comprised of the sale of 1,916,666 units (the Units) at
$0.42 (CDN$0.45) per Unit (the Unit Issue Price) for gross proceeds of
$802,101 (CDN$862,499.70) and the sale of 543,615 flow-through units (the
Flow-Through Units which qualify as flow-through shares for the purposes of
the Canadian Income Tax Act) at $0.49 (CDN$0.52) per Flow-Through Unit (the Flow-Through Unit Issue Price) for gross proceeds of $262,884 (CDN$282,680).
The proceeds raised were allocated between the offering of shares and the sale
of tax benefits. A liability of $35,381 was recognized for the sale of taxable
benefits, which was reversed and credited to income when the Company renounced
resource expenditure deduction to the investor. Each Unit consisted of one
non-flow through common share (Common Share) and one half of one Common Share
purchase warrant (each whole warrant, a Warrant). Each Warrant is exercisable
into one Common Share until August 16, 2009 at an exercise price of $0.60
(CDN$0.60) per share. Each Flow-Through Unit consisted of one flow-through
common share and one half of one Common Share purchase warrant (each whole
warrant, an FT Warrant). Each FT Warrant is exercisable into one Common Share
until August 16, 2009 at an exercise price of $0.70 (CDN$0.70) per share. The
Company paid Northern a commission equal to 8% of the aggregate gross proceeds
which amounted to $85,199 (CDN$91,614) and issued 153,333 Unit Compensation
Options and 43,489 FT Unit Compensation Options. Each Unit Compensation
Option is exercisable into one Unit at the Unit Issue Price until August 16,
2009. Each FT Unit Compensation Option is exercisable into one Common Share and
one half of one FT Warrant at the Flow-Through Unit Issue Price until August 16,
2009. The Company reimbursed Northern expenses of $18,600 (CDN $20,000).
On November 16, 2007 the Company completed the second tranche
of the Financing with Northern acting as agent. The second tranche of the
Financing was comprised of the sale of 2,438,888 units (the Units) at $0.46
(CDN$0.45) per Unit (the Unit Issue Price) for gross proceeds of $1,127,028
(CDN$1,097,500) and the sale of 1,071,770 flow through units (the Flow-Through
Units) at $0.53 (CDN$0.52) per Flow-Through Unit (the Flow-Through Unit Issue
Price) for gross proceeds of $572,315 (CDN$557,320) . The proceeds raised were
allocated between the offering of shares and the sale of tax benefits. A
liability of $77,043 was recognized for the sale of taxable benefits, which was
reversed and credited to income when the Company renounced resource expenditure
deduction to the investor. The closing represented the final tranche of a
$2,816,673 (CDN$2.8 million) private placement with Northern announced on July
24, 2007. Each Unit consists of one non-flow through common share (Common
Share) and one half of one Common Share purchase warrant (each whole warrant, a
Warrant). Each Warrant is exercisable into one Common Share until November 16,
2009 at an exercise price of $0.60 (CDN$0.60) per share. Each Flow-Through Unit
consists of one flow-through common share and one half of one Common Share
purchase warrant (each whole warrant, an FT Warrant). Each FT Warrant is
exercisable into one Common Share until November 16, 2009 at an exercise price
of $0.70 (CDN$0.70) per share. Yukon Gold paid Northern a commission equal to 8%
of the aggregate gross proceeds and issued 195,111 Unit Compensation Options
and 85,741 FT Unit Compensation Options. Each Unit Compensation Option is
exercisable into one Common Share and one half of one Common Share purchase
warrant at the Unit Issue Price until November 16, 2009. Each full Common share
purchase warrant is exercisable at $0.60 (CDN$0.60). Each FT Unit Compensation
Option is exercisable into one Common share and one half of one Common share
purchase warrant at the Flow-Through Unit Issue Price. Each full Common share
purchase warrant is exercisable at $0.70 (CDN$0.70).
28

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The proceeds of the Financing will be used for the exploration and
development of Yukon Gold's properties, and for working capital.
Consulting Agreements
On August 15, 2007, the Company entered into an investor
relations marketing agreement with a consultant for a one year term, with the
option to renew for an additional 12 months. In return for services rendered,
the Company will pay the consultant $1,992 (CDN$2,000) per month. On August 31,
2007 the Company paid $3,787 (CDN$4,000) being the first and last payments of
the contract. On September 15, 2007 the Company paid $1,941 (CDN$2,000) and on
October 15, 2007 the Company paid $2,048 (CDN$2,000), being the second and third
payments respectively. On November 15, 2007 the Company paid $2,030 (CDN$2,000)
being the fourth payment of the contract. On December 14, 2007 the Company paid
$1,967 (CDN$2,000) and on January 15, 2008 the Company paid $1,967 (CDN$2,000),
being the fifth and sixth payments of the contract respectively. In addition,
the consultant was granted an option to purchase 125,000 shares of the Company
at $0.45 (CDN$0.45) per share, with the option vesting in equal quarterly
amounts of 31,250 shares on November 15, 2007, February 15, 2008, May 15, 2008
and August 15, 2008, and the first exercise date being August 15, 2008 and an
expiry date of August 15, 2010. Subsequently on February 12, 2008 the Company
terminated the contract and is due a refund of $1,992 (CDN$2,000) previously
paid on August 31, 2007 to cover the last payment of the one year term. The
31,250 options granted under the contract to vest on each of May 15, 2008 and
August 15, 2008 respectively were also cancelled subsequently.
On August 22, 2007 the Company entered into an agreement with
a consultant. In return for services rendered, the Company will pay the
consultant $37,608 (CDN$40,000) in installments as set out in the agreement. The
first installment was paid on August 22, 2007 for $12,537 (CDN$13,333) and the
second installment was paid on October 1, 2007 for $4,483 (CDN$4,444). The third
and fourth installments were each paid on November 1, 2007 and December 1, 2007
for $4,672 (CDN$4,444) and $4,444 (CDN$4,444) respectively. The fifth
installment was paid on January 1, 2008 for $4,483 (CDN$4,444). Subsequent to
the quarter ended January 31, 2008 the sixth and the final installments (due on
February 1, 2008 and March 1, 2008 respectively) for $4,427 (CDN$4,444) were
paid on their due dates.
On December 5, 2007 the Company entered into an agreement
with a consultant to create investor awareness for a period of six months,
commencing on December 5, 2007 and continuing through May 6, 2008 for a fee of
$20,000 and 300,000 restricted common shares to be issued in equal tranches of
50,000 shares at the end of each month during the term of the agreement. On
December 6, 2007 the Company received conditional approval from the TSX to issue
the 300,000 restricted shares as per the terms of the agreement. The consulting
fee of $20,000 was paid on December 11, 2007. The Company has accrued the
expense of $22,000 for 100,000 shares to be issued to January 31, 2008 and has not
yet issued the stock to the consultant.
On December 15, 2007 the Company entered into a consulting
agreement with its new President and CEO to provide senior management services
for a period of one (1) year, commencing on December 15, 2008 and renewing
automatically on the anniversary date thereof, for an annual base fee of
$149,150 (CDN$150,000) excluding bonuses, benefits and other compensation. The
CEO and the Company shall indicate their respective intentions to renew the term
of the agreement after the passage of eight (8) months from December 15, 2007.
The CEO was further granted 500,000 warrants at an exercise price of
$0.24 (CDN$0.24). 250,000 warrants were exercisable upon issuance and the
balance of 250,000 warrants are exercisable on June 15, 2008. The warrants granted
have a term of 5 years commencing on the respective dates they are exercisable.

29

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On December 18, 2007 the Company entered into an agreement
with a consultant to provide corporate development management services for a
period of six (6) months commencing on December 18, 2007 and renewing
automatically on each six (6) month anniversary, for an annual fee of $119,320
(CDN$120,000). The consultant and the Company shall indicate their respective
intentions to renew the term of the agreement after the passage of four (4)
months from December 18, 2007. Subsequent to the quarter ended January 31, 2008
the consultant and the Executive Committee have renewed the consultant's
agreement for a further six (6) months. The consultant was also granted
200,000 stock options under the Company's 2006 Stock Option Plan at an exercise
price of $0.24 (CDN$0.24) which were fully vested upon issuance. The options
granted have a term of 5 years commencing the date of vesting.
On February 18, 2008 the Company signed a surface drilling
contract with a diamond drilling company for the Marg Project to commence on or
about June 18, 2008, with an estimated all-in cost of $1,992,400
(CDN$2,000,000).
Subsequent to the quarter ended January 31, 2008, on March
10, 2008 the Company entered into a contract with a global mining consultancy
business for a scoping study and to prepare a report pursuant to the terms of
Canadian National Instrument 43-101, regarding the Marg Deposit at an estimated
cost of between $139,470 (CDN$140,000) and $149,432 (CDN$150,000).
Critical Accounting Policies
The preparation of financial statements in accordance with
accounting principles generally accepted in the United States of America
requires us to make estimates and assumptions that affect reported amounts of
assets and liabilities at the date of the financial statements, the reported
amount of revenues and expenses during the reporting period and related
disclosure of contingent assets and liabilities. On an ongoing basis, we
evaluate our estimates and judgments, particularly those related to the
determination of the estimated Canadian exploration tax credit receivable and
accrued liabilities. To the extent actual results differ from those estimates,
our future results of operations may be affected. Besides this critical
accounting policy on use of estimates, we believe the following critical
accounting policy affects the preparation of our consolidated financial
statements.
Acquisition, Exploration and Evaluation Expenditures
Mineral property acquisition costs will be capitalized in
accordance with the FASB Emerging Issues Task Force (EITF) Issue 04-2 when
management has determined that probable future benefits consisting of a
contribution to future cash inflows have been identified and that adequate
financial resources are available or are expected to be available as required to
meet the terms of property acquisition and budgeted exploration and development
expenditures. Mineral property acquisition costs are expensed as incurred if the
criteria for capitalization is not met.
To date, mineral property exploration costs have been
expensed as incurred. If it is determined that a mineral property can be
economically developed as a result of establishing proven and probable reserves
(if ever), the costs incurred to develop such property will be capitalized. As
of the date of these financial statements, the Company has incurred only
acquisition and exploration costs which have been expensed. To date the Company
has not established any proven or probable reserves on its mineral properties.
CONTROLS AND PROCEDURES

(a)
Disclosure
Controls and Procedures. The Company's management, with the participation of the
principal executive officer and principal financial officer, respectively, has
evaluated the effectiveness of the Company's disclosure controls and procedures
(as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the Exchange Act) as at January 31, 2008.
Based on such evaluation, the principal executive officer and principal
financial officer of the Company, respectively, have concluded that, as of the
end of the current quarter, the Company's disclosure controls and procedures are
effective.
(b)
Internal Control
Over Financial Reporting. There have not been any changes in the Company's
internal control over financial reporting (as such term is defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended January
31, 2008 that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting.
30
(c) Limitations on the Effectiveness of Controls. We believe
that a control system, no matter how well designed and operated, cannot provide
absolute assurance that the objectives of the control system are met, and no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within a company have been detected.
RISK FACTORS

1.
WE DO NOT HAVE AN OPERATING
BUSINESS.
The Company has rights in certain
mineral claims located in  Yukon, Canada. To date we have done
limited exploration of the property covered by our mineral claims. We do not
have a mine or a mining business of any kind. There is no assurance that we will
develop an operating business in the future.
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:
  further exploration of the Mount Hinton
  Property and the results of that exploration;
  our ability to raise the capital
  necessary to conduct this exploration and preserve our interest in these
  mineral claims; and

our ability to raise capital to explore
  the Marg Property.

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.

We cannot predict the results of
the drilling tests as exploration of our properties proceeds. 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.

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
a material deferred payment on December 12, 2008. If we are unable to
raise sufficient capital to make these payments we may lose all of our rights in
the Marg Property.



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5.
WEATHER INTERRUPTIONS IN  YUKON MAY DELAY OUR PROPOSED EXPLORATION OPERATIONS.
Weather factors will significantly
affect our exploration efforts. Currently, we can only work above ground at the
Mount Hinton and Marg Properties from late May until early October of each year,
depending upon how early snowfall occurs.
6.
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.
7.
GOING CONCERN QUALIFICATION
The Company has included a going
concern qualification in the Consolidated Interim Financial Statements to the
effect that we are an exploration stage company and have no established sources
of revenue. In the event that we are unable to raise additional capital and/or
locate mineral resources, as to which in each case there can be no assurance, we
may not be able to continue our operations. In addition, the existence of the going concern qualification in our auditor's report may make it more difficult
for us to obtain additional financing. If we are unable to obtain additional
financing, you may lose all or part of your investment.
8.
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.
9.
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.
10.
OUR BUSINESS IS SUBJECT TO
CURRENCY RISKS.
The Company conducts the majority
of its business activities in Canadian dollars. Consequently, the Company is
subject to gains or losses due to fluctuations in Canadian currency relative to
the U.S. dollar.
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.

32

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PART II-OTHER INFORMATION
Item 1.     LEGAL PROCEEDINGSNone.
Item 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On August 16, 2007 the Company completed the first tranche of
private placement (the Financing) with Northern Securities Inc. (Northern),
acting as agent. The Financing was comprised of the sale of 1,916,666 units (the
Units) at $0.42 (CDN$0.45) per Unit (the Unit Issue Price) for gross
proceeds of $802,101 (CDN$862,499.70) and the sale of 543,615 flow-through units
(the Flow-Through Units which qualify as flow-through shares for the purposes
of the Canadian Income Tax Act) at $0.49 (CDN$0.52) per Flow-Through Unit (the Flow-Through Unit Issue Price) for gross proceeds of $262,884 (CDN$282,680).
The proceeds raised were allocated between the offering of shares and the sale
of tax benefits. A liability of $35,381 was recognized for the sale of taxable
benefits, which was reversed and credited to income when the Company renounced
resource expenditure deduction to the investor. Each Unit consisted of one
non-flow through common share (Common Share) and one half of one Common Share
purchase warrant (each whole warrant, a Warrant). Each Warrant is exercisable
into one Common Share until August 16, 2009 at an exercise price of $0.60
(CDN$0.60) per share. Each Flow-Through Unit consisted of one flow-through
common share and one half of one Common Share purchase warrant (each whole
warrant, an FT Warrant). Each FT Warrant is exercisable into one Common Share
until August 16, 2009 at an exercise price of $0.70 (CDN$0.70) per share. The
Company paid Northern a commission equal to 8% of the aggregate gross proceeds
which amounted to $85,199 (CDN$91,614) and issued 153,333 Unit Compensation
Options and 43,489 FT Unit Compensation Options. Each Unit Compensation
Option is exercisable into one Unit at the Unit Issue Price until August 16,
2009. Each FT Unit Compensation Option is exercisable into one Common Share and
one half of one FT Warrant at the Flow-Through Unit Issue Price until August 16,
2009. The Company reimbursed Northern expenses of $18,600 (CDN $20,000).
On November 16, 2007 the Company completed the second tranche
of the Financing with Northern. The Financing was comprised of the sale of
2,438,888 units (the Units) at $0.46 (CDN$0.45) per Unit (the Unit Issue
Price) for gross proceeds of $1,127,028 (CDN$1,097,500) and the sale of
1,071,770 flow through units (the Flow-Through Units) at $0.53 (CDN$0.52) per
Flow-Through Unit (the Flow-Through Unit Issue Price) for gross proceeds of
$572,315 (CDN$557,320. The proceeds raised were allocated between the offering
of shares and the sale of tax benefits. A liability of $77,043 was recognized
for the sale of taxable benefits, which was reversed and credited to income when
the Company renounced resource expenditure deduction to the investor. The
closing represented the final tranche of a $2,816,673 (CDN$2.8 million) private
placement with Northern announced on July 24, 2007. Each Unit consists of one
non-flow through common share (Common Share) and one half of one Common Share
purchase warrant (each whole warrant, a Warrant). Each Warrant is exercisable
into one Common Share until November 16, 2009 at an exercise price of $0.60
(CDN$0.60) per share. Each Flow-Through Unit consists of one flow-through common
share and one half of one Common Share purchase warrant (each whole warrant, an
FT Warrant). Each FT Warrant is exercisable into one Common Share until
November 16, 2009 at an exercise price of $0.70 (CDN$0.70) per share. Yukon Gold
paid Northern a commission equal to 8% of the aggregate gross proceeds and
issued 195,111 Unit Compensation Options and 85,741 FT Unit Compensation
Options. Each Unit Compensation Option is exercisable into one Common Share and
one half of one Common Share purchase warrant at the Unit Issue Price until
November 16, 2009. Each full Common share purchase warrant is exercisable at
$0.60 (CDN$0.60). Each FT Unit Compensation Option is exercisable into one
Common share and one half of one Common share purchase warrant at the
Flow-Through Unit Issue Price. Each full Common share purchase warrant is
exercisable at $0.70 (CDN$0.70).
The foregoing placements were undertaken pursuant to an
exemption offered by Regulation S promulgated under the Securities Act of 1933,
as amended.33

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Subsequent to the quarter ended January 31, 2008, on February
29, 2008 the Company filed a registration statement on Form S-1 pursuant to the
Securities Act of 1933, as amended, with the United States Securities and
Exchange Commission. The registration statement, when made effective, will cover
the re-sale of shares issued in connection with the Financing (as described
above) by their respective holders and the re-sale of shares underlying certain
stock options and share purchase warrants issued to directors, officers and
consultants of the Company by their respective holders.
Item 3.     DEFAULTS UPON SENIOR SECURITIES

None.
Item 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Item 5. OTHER INFORMATION
a) Changes in Officers and Directors
On October 30, 2007, the Company's board of directors
accepted the resignation of Chester Idziszek in his capacity as director and as
a member of the Audit Committee, effective as of October 22, 2007. There were no
disagreements between the Company and Mr. Idziszek with respect to the Company's
operations, policies or practices. On December 6, 2007 the board appointed Mr.
Howard Barth to fill the vacancy left by Mr. Idziszek on the Audit Committee.
Mr. Barth's appointment will expire on April 30, 2008.
On December 13, 2007, the Company's board of directors
accepted the resignation of Paul Gorman as director and Chief Executive Officer.
There were no disagreements between the Company and Mr. Gorman with respect to
the Company's operations, policies or practices. Following the resignation of
Mr. Gorman, Mr. Kenneth J. Hill, a director, was appointed interim Chief
Executive Officer.
On December 15, 2007 the Company's board of directors
appointed Mr. Ronald K. Mann as President and Chief Executive Officer and as a
director.
On December 18, 2007 the Company's board of directors
appointed Mr. Cletus J. Ryan as Vice President Corporate Development.
On January 14, 2008 the Company's board of directors formed
an Executive Committee and appointed Mr. J.L Guerra, Jr, Mr. Kenneth J. Hill and
Mr. Ronald K. Mann, all directors of the Company, to sit on this new committee.
On February 21, 2008 the Company's board of directors
accepted the resignation, effective March 11, 2008 of Mr. Stewart Fumerton as
Vice President Exploration. There were no disagreements between Mr. Fumerton and
the Company with respect to the Company's operations, policies or practices. A search for a
replacement is currently underway.
On February 21, 2008 the Company's board of directors
appointed Mr. G.E. (Ted) Creber as a director and member of the Audit Committee.
b) Annual and Special Meeting of the Shareholders
On February 21, 2008, the Company adjourned its Annual and
Special Meeting of Shareholders, originally scheduled for February 21, 2008, to
March 18, 2008.34

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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.

Reports on Form 8-K

|(b) |                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------
|    | Current Report on Form
    8-K, Item 5.02- Departure of Directors of Principal Officers, dated
    February 21, 2008
|    | Current Report on Form
    8-K, Item 5.02- Departure of Directors of Principal Officers, dated
    December 13, 2007
|    | Current Report on Form
    8-K, Item 3.02- Unregistered Sales of Equity Securities, dated November
    11, 2007     
|    | Current Report on Form
    8-K, Item 5.02- Departure of Directors of Principal Officers, dated
    November 1, 2007 

SIGNATURE

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

|Dated:
    March 14, 2008 | By: | /s/Ronald K. Mann                       
|------------------------- | --- | ----------------------------------------
|                          |     | Ronald K.
    Mann                      
|                          |     | Chief
    Executive Officer and Director

35

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