**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-QSB**

| **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**

| YES                x | NO                o |
|----------------------|---------------------|

| Class                                          |   | Outstanding                As of October 31, 2006 |
|------------------------------------------------|--------|---------------------------------------------------|
| Common                Shares $ .0001 par value |   | 18,819,204                                        |

----

**YUKON      GOLD CORPORATION, INC.**

**(AN      EXPLORATION STAGE COMPANY)**

**INTERIM      CONSOLIDATED FINANCIAL STATEMENTS**

**OCTOBER      31, 2006**

**(Amounts      expressed in US Dollars)**

**(Unaudited)**

----

**YUKON      GOLD CORPORATION, INC.**

**(AN      EXPLORATION STAGE COMPANY)**

**INTERIM      CONSOLIDATED FINANCIAL STATEMENTS**

**OCTOBER      31, 2006**

**(Amounts      expressed in US Dollars)**

**(Unaudited)**

**TABLE      OF CONTENTS**

|                                                                                                                                 | **Page                No** |
|--------------------------------------------------------------------------------------------------------------------------------------|----------------------------|
| Interim                Consolidated Balance Sheets as of October 31, 2006 and April 30,                2006                          | 1-2                        |
|                                                                                                                                 |                       |
| Interim                Consolidated Statements of Operations for the six months and three                months                      |                       |
| ended                October 31, 2006 and October 31, 2005                                                                           | 3                          |
|                                                                                                                                 |                       |
| Interim                Consolidated Statements of Cash Flows for the six months ended October                31,                2006 |                       |
| and                October 31, 2005                                                                                                  | 4                          |
|                                                                                                                                 |                       |
| Interim                Consolidated Statements of Changes in Stockholders’ Equity                                              |                       |
| for                the six months ended October 31, 2006 and the year ended April 30,                2006                            | 5-7                        |
|                                                                                                                                 |                       |
| Condensed                Notes to Interim Consolidated Financial Statements                                                          | 8-12                       |

----

**YUKON      GOLD CORPORATION, INC. **

**(An      Exploration Stage Company)**

**Interim      Consolidated Balance Sheets**

**As      at October 31, 2006 and April 30, 2006**

**(Amounts      expressed in US Dollars)**

**(Unaudited)**

**ASSETS**

|                                             |   | October                31, 2006 |      | April                30, 2006 |   |
|--------------------------------------------------|--------|---------------------------------|-----------|-------------------------------|--------|
|                                             |   |  $                         |      | $                             |   |
|                                             |   |                            |      |                          |   |
| CURRENT                ASSETS                    |   |                            |      |                          |   |
| Cash                and cash equivalents         |   |                            | 963,382   |                          |   | 2,412,126 |   |
| Prepaid                expenses and other        |   |                            | 777,296   |                          |   | 77,977 |   |
| Exploration                Tax Credit Receivable |   |                            | 153,145   |                          |   | 153,145 |   |
|                                             |   |                            | 1,893,823 |                          |   | 2,643,248 |   |
| RESTRICTED                CASH (Note 6)          |   |                            | -         |                          |   | 118,275 |   |
| RESTRICTED                DEPOSIT (Note 7)       |   |                            | 17,889    |                          |   | 17,889 |   |
| PROPERTY,                PLANT AND EQUIPMENT     |   |                            | 58,006    |                          |   | 63,141 |   |
|                                             |   |                            | 1,969,718 |                          |   | 2,842,553 |   |

| APPROVED                ON BEHALF OF THE BOARD |   |   |   |
|------------------------------------------------|--------|--------|--------|
|                                           |   |   |   |
| /s/                Paul A. Gorman              |   |   |        |
| Paul                A. Gorman, Director        |   |   |        |
|                                                |   |   |        |
| /s/                J.L. Guerra, Jr.            |   |   |   |
| J.L.              Guerra, Jr., Director        |   |   |   |

----

**YUKON      GOLD CORPORATION, INC. **

**(An      Exploration Stage Company)**

**Interim      Consolidated Balance Sheets**

**As      at October 31, 2006 and April 30, 2006**

**(Amounts      expressed in US Dollars)**

**(Unaudited)**

**LIABILITIES**

|                                                    |   | October                31, 2006 |    | April                30, 2006 |   |
|---------------------------------------------------------|--------|---------------------------------|---------|-------------------------------|--------|
|                                                    |   |  $                         |    | $                             |   |
| CURRENT                LIABILITIES                      |   |                            |    |                          |   |
| Accounts                payable and accrued liabilities |   |                            | 184,113 |                          |   | 232,282 |   |
| Other                Liability                          |   |                            | 3,750   |                          |   | 3,750 |   |
| Current                Portion of:                      |   |                            |    |                          |   |   |   |
| Obligation                under Capital Leases          |   |                            | 2,772   |                          |   | 2,792 |   |
|                                                    |   |                            |    |                          |   |   |   |
| Total                Current Liabilities                |   |                            | 190,635 |                          |   | 238,824 |   |
|                                                    |   |                            |    |                          |   |   |   |
| Long                -Term Portion of:                   |   |                            |    |                          |   |   |   |
| Obligation                under Capital Lease           |   |                            | 10,395  |                          |   | 11,864 |   |
| TOTAL                LIABILITIES                        |   |                            | 201,030 |                          |   | 250,688 |   |

**SHAREHOLDERS’      EQUITY**

| CAPITAL                STOCK                                     |   |   | 1,834      |   |   | 1,637      |   |
|------------------------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
|                                                             |   |   |       |   |   |       |   |
| ADDITIONAL                PAID-IN CAPITAL                        |   |   | 7,384,160  |   |   | 5,301,502  |   |
|                                                             |   |   |       |   |   |       |   |
| SUBSCRIPTION                FOR WARRANTS (Note 5)                |   |   | 525,680    |   |   | 525,680    |   |
|                                                             |   |   |       |   |   |       |   |
| ACCUMULATED                OTHER COMPREHENSIVE LOSS              |   |   | (46,009    | )      |   | (5,162     | )      |
|                                                             |   |   |       |   |   |       |   |
| DEFICIT,                ACCUMULATED DURING THE EXPLORATION STAGE |   |   | (6,096,977 | )      |   | (3,231,792 | )      |
|                                                             |   |   |       |   |   |       |   |
|                                                             |   |   | 1,768,688  |   |   | 2,591,865  |   |
|                                                             |   |   |       |   |   |       |   |
|                                                             |   |   | 1,969,718  |   |   | 2,842,553  |   |

----

**YUKON        GOLD CORPORATION, INC. **

**(An        Exploration Stage Company)**

**Interim        Consolidated Statements of Operations**

**For        the six months and three months ended October 31, 2006 and October 31,        2005**

**(Amounts        expressed in US Dollars)**

**(Unaudited)**

|                                                        |   | Cumulative                  since inception |       | For                  the six months ended                  October 31, 2006 |   | For                  the six months                  ended                  October 31, 2005 |   | For                  the three months ended                  October 31, 2006 |      | For                  the three months                  ended                  October 31, 2005 |   |
|-------------------------------------------------------------|--------|---------------------------------------------|------------|-----------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|-----------|------------------------------------------------------------------------------------------------|--------|
|                                                        |   | $                                           |       | $                                                                           |   | $                                                                                            |        | $                                                                             |      | $                                                                                              |   |
|                                                        |   |                                        |       |                                                                        |   |                                                                                         |   |                                                                          |      |                                                                                           |   |
| REVENUE                                                     |   |                                        | -          |                                                                        |   | -                                                                                            |   |                                                                          | -         |                                                                                           |   | - |   |   | - |   |
|                                                        |   |                                        |       |                                                                        |   |                                                                                         |   |                                                                          |      |                                                                                           |   |   |   |   |   |   |
| OPERATING                  EXPENSES                         |   |                                        |       |                                                                        |   |                                                                                         |   |                                                                          |      |                                                                                           |   |   |   |   |   |   |
|                                                        |   |                                        |       |                                                                        |   |                                                                                         |   |                                                                          |      |                                                                                           |   |   |   |   |   |   |
| Stock-based                  compensation                   |   |                                        | 395,892    |                                                                        |   | 170,646                                                                                      |   |                                                                          | 100,100   |                                                                                           |   | 85,323 |   |   | 4,260 |   |
| General                  and administration                 |   |                                        | 2,389,056  |                                                                        |   | 992,378                                                                                      |   |                                                                          | 270,850   |                                                                                           |   | 524,019 |   |   | 178,800 |   |
| Project                  expenses                           |   |                                        | 3,605,318  |                                                                        |   | 1,695,854                                                                                    |   |                                                                          | 250,521   |                                                                                           |   | 823,967 |   |   | 247,927 |   |
| Exploration                  Tax Credit                     |   |                                        | (284,703   | )                                                                           |   | -                                                                                            |   |                                                                          | -         |                                                                                           |   | - |   |   | - |   |
| Amortization                                                |   |                                        | 11,510     |                                                                        |   | 6,307                                                                                        |   |                                                                          | 496       |                                                                                           |   | 3,149 |   |   | 253 |   |
| Loss                  on sale/disposal of capital assets    |   |                                        | 5,904      |                                                                        |   | -                                                                                            |   |                                                                          | -         |                                                                                           |   | - |   |   | - |   |
|                                                        |   |                                        |       |                                                                        |   |                                                                                         |   |                                                                          |      |                                                                                           |   |   |   |   |   |   |
| TOTAL                  OPERATING EXPENSES                   |   |                                        | 6,122,977  |                                                                        |   | 2,865,185                                                                                    |   |                                                                          | 621,967   |                                                                                           |   | 1,436,458 |   |   | 431,240 |   |
|                                                        |   |                                        |       |                                                                        |   |                                                                                         |   |                                                                          |      |                                                                                           |   |   |   |   |   |   |
| LOSS                  BEFORE INCOME TAXES                   |   |                                        | (6,122,977 | )                                                                           |   | (2,865,185                                                                                   | )      |                                                                          | (621,967  | )                                                                                              |   | (1,436,458 | ) |   | (431,240 | ) |
|                                                        |   |                                        |       |                                                                        |   |                                                                                         |   |                                                                          |      |                                                                                           |   |   |   |   |   |   |
| Income                  taxes                               |   |                                        | 26,000     |                                                                        |   | -                                                                                            |   |                                                                          | -         |                                                                                           |   | - |   |   | - |   |
|                                                        |   |                                        |       |                                                                        |   |                                                                                         |   |                                                                          |      |                                                                                           |   |   |   |   |   |   |
| NET                  LOSS                                   |   |                                        | (6,096,977 | )                                                                           |   | (2,865,185                                                                                   | )      |                                                                          | (621,967  | )                                                                                              |   | (1,436,458 | ) |   | (431,240 | ) |
|                                                        |   |                                        |       |                                                                        |   |                                                                                         |   |                                                                          |      |                                                                                           |   |   |   |   |   |   |
| Loss                  per share - basic and diluted         |   |                                        |       |                                                                        |   | (0.17                                                                                        | )      |                                                                          | (0.06     | )                                                                                              |   | (0.08 | ) |   | (0.04 | ) |
|                                                        |   |                                        |       |                                                                        |   |                                                                                         |   |                                                                          |      |                                                                                           |   |   |   |   |   |   |
| Weighted                  average common shares outstanding |   |                                        |       |                                                                        |   | 17,151,588                                                                                   |   |                                                                          | 9,511,868 |                                                                                           |   | 17,646,550 |   |   | 9,998,691 |   |

----

**YUKON      GOLD CORPORATION, INC. **

**(An      Exploration Stage Company)**

**Interim      Consolidated Statements of Cash Flows**

**For      the six months ended October 31, 2006 and October 31, 2005**

**(Amounts      expressed in US Dollars)**

**(Unaudited)**

|                                                                                    |   | Cumulative                since inception |       | For                the six months ended October 31, 2006 |   | For                the six months ended October 31, 2005 |   |
|-----------------------------------------------------------------------------------------|--------|-------------------------------------------|------------|----------------------------------------------------------|--------|----------------------------------------------------------|--------|
|                                                                                    |   | $                                         |       | $                                                        |   | $                                    |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES                                     |   |                                      |       |                                                     |   |                                                     |   |
| Net                loss for the year                                                    |   |                                      | (6,096,977 | )                                                        |   | (2,865,185                                               | )      |   | (621,967 | ) |
| Items                not requiring an outlay of cash:                                   |   |                                      |       |                                                     |   |                                                     |   |   |   |   |
| Amortization                                                                            |   |                                      | 11,510     |                                                     |   | 6,307                                                    |   |   | 496 |   |
| Loss                on sale/disposal of capital assets                                  |   |                                      | 5,904      |                                                     |   | -                                                        |   |   | - |   |
| Shares                issued for property payment                                       |   |                                      | 368,087    |                                                     |   | 53,845                                                   |   |   | - |   |
| Common                shares issued for                                                 |   |                                      |       |                                                     |   |                                                     |   |   |   |   |
| Settlement                of severance liability to ex-officer                          |   |                                      | 113,130    |                                                     |   | 113,130                                                  |   |   | - |   |
| Stock-based                compensation         |   |                                      | 395,892    |                                                     |   | 170,646                                                  |   |   | 100,100 |   |
| Issue                of shares for professional services                                |   |                                      | 569,259    |                                                     |   | 438,759                                                  |   |   | 65,250 |   |
| Issue                of units against settlement of debts                               |   |                                      | 20,077     |                                                     |   | -                                                        |   |   | 20,077 |   |
| Decrease                (Increase) in prepaid expenses and deposits                     |   |                                      | (776,139   | )                                                        |   | (699,319                                                 | )      |   | (153,324 | ) |
| Increase                in exploration tax credit receivable                            |   |                                      | (153,145   | )                                                        |   | -                                                        |   |   | 72,203 |   |
| Increase                (Decrease) in accounts payable and accrued liabilities          |   |                                      | 183,623    |                                                     |   | (48,169                                                  | )      |   | 145,299 |   |
|                                                                                    |   |                                      |       |                                                     |   |                                                     |   |   |   |   |
| Decrease                in restricted cash                                              |   |                                      | -          |                                                     |   | 118,275                                                  |   |   | - |   |
| Increase                in restricted deposit                                           |   |                                      | (17,889    | )                                                        |   | -                                                        |   |   | - |   |
| Increase                in other liabilities                                            |   |                                      | 3,750      |                                                     |   | -                                                        |   |   | - |   |
|                                                                                    |   |                                      |       |                                                     |   |                                                     |   |   |   |   |
| NET                CASH USED IN OPERATING ACTIVITIES                                    |   |                                      | (5,372,918 | )                                                        |   | (2,711,711                                               | )      |   | (371,866 | ) |
|                                                                                    |   |                                      |       |                                                     |   |                                                     |   |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES                                     |   |                                      |       |                                                     |   |                                                     |   |   |   |   |
| Purchase                of property, plant and equipment                                |   |                                      | (76,034    | )                                                        |   | (1,437                                                   | )      |   | (549 | ) |
|                                                                                    |   |                                      |       |                                                     |   |                                                     |   |   |   |   |
| NET                CASH USED IN INVESTING ACTIVITIES                                    |   |                                      | (76,034    | )                                                        |   | (1,437                                                   | )      |   | (549 | ) |
|                                                                                    |   |                                      |       |                                                     |   |                                                     |   |   |   |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES                                     |   |                                      |       |                                                     |   |                                                     |   |   |   |   |
| Repayments                from a shareholder                                            |   |                                      | 1,180      |                                                     |   | -                                                        |   |   | - |   |
| Proceeds                from exercise of warrants                                       |   |                                      | 20,772     |                                                     |   | -                                                        |   |   | 12,000 |   |
| Proceeds                (Repayments) from demand promissory notes                       |   |                                      | 200,000    |                                                     |   | -                                                        |   |   | (47,676 | ) |
| Proceeds                from Convertible promissory notes converted                     |   |                                      | 200,500    |                                                     |   | -                                                        |   |   | - |   |
| Proceeds                from exercise of stock options                                  |   |                                      | 23,500     |                                                     |   | 18,000                                                   |   |   | - |   |
| Proceeds                from subscription of warrants                                   |   |                                      | 951,177    |                                                     |   | 425,497                                                  |   |   | - |   |
| Proceeds                from issuance of units /shares-net                              |   |                                      | 5,042,217  |                                                     |   | 862,978                                                  |   |   | 462,427 |   |
| Proceeds                (Repayments) from capital lease obligation                      |   |                                      | 13,167     |                                                     |   | (1,489                                                   | )      |   | - |   |
|                                                                                    |   |                                      |       |                                                     |   |                                                     |   |   |   |   |
| NET                CASH PROVIDED/ (USED) BY FINANCING ACTIVITIES                        |   |                                      | 6,452,513  |                                                     |   | 1,304,986                                                |   |   | 426,751 |   |
|                                                                                    |   |                                      |       |                                                     |   |                                                     |   |   |   |   |
| EFFECT                OF FOREIGN CURRENCY EXCHANGE RATE                CHANGES          |   |                                      | (40,179    | )                                                        |   | (40,582                                                  | )      |   | (2,867 | ) |
|                                                                                    |   |                                      |       |                                                     |   |                                                     |   |   |   |   |
| NET                INCREASE (DECREASE) IN CASH AND CASH                                 |   |                                      |       |                                                     |   |                                                     |   |   |   |   |
| EQUIVALENTS                FOR THE YEAR                                                 |   |                                      | 963,382    |                                                     |   | (1,448,744                                               | )      |   | 51,469 |   |
|                                                                                    |   |                                      |       |                                                     |   |                                                     |   |   |   |   |
| Cash                and cash equivalents, beginning of year                             |   |                                      | -          |                                                     |   | 2,412,126                                                |   |   | 79,256 |   |
|                                                                                    |   |                                      |       |                                                     |   |                                                     |   |   |   |   |
| CASH                AND CASH EQUIVALENTS, END OF PERIOD                                 |   |                                      | 963,382    |                                                     |   | 963,382                                                  |   |   | 130,725 |   |
|                                                                                    |   |                                      |       |                                                     |   |                                                     |   |   |   |   |
| INCOME                TAXES PAID                                                        |   |                                      |       |                                                     |   | -                                                        |   |   | - |   |
|                                                                                    |   |                                      |       |                                                     |   |                                                     |   |   |   |   |
| INTEREST                PAID                                                            |   |                                      |       |                                                     |   | -                                                        |   |   | - |   |

----

**YUKON        GOLD CORPORATION, INC. **

**(An        Exploration Stage Company)**

**Interim        Consolidated Financial Statements of Changes in Stockholders’Equity**

**From        Inception to October 31, 2006**

**(Amounts        expressed in US Dollars)**

**(Unaudited)**

|                                                         |   | Number                    of CommonShares |      | Common                    Sharesamount |   | Additional                    Paid-inCapital |   | Subscriptionforwarrants |    | Deficit,accumulatedduring                    theexplorationstage |   | ComprehensiveIncome                    (loss) |   | AccumulatedOtherComprehensiveIncome                    (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 | ) |

----

**YUKON        GOLD CORPORATION, INC. **

**(An        Exploration Stage Company)**

**Interim        Consolidated Financial Statements of Changes in Stockholders’Equity**

**From        Inception to October 31, 2006**

**(Amounts        expressed in US Dollars)**

**(Unaudited)**

|                                                    |   | Number                    of CommonShares |    | Common                    Sharesamount |   | Additional                    Paid-inCapital |   | Subscriptionforwarrants |    | Deficit,accumulatedduring                    theexplorationstage |   | ComprehensiveIncome                    (loss) |   | AccumulatedOtherComprehensiveIncome                    (loss) |   |
|---------------------------------------------------------|--------|-------------------------------------------|---------|----------------------------------------|--------|----------------------------------------------|--------|-------------------------|---------|------------------------------------------------------------------|--------|-----------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                                    |   |                                      |    | $                                      |   | $                                            |   |  $                 |    | $                                                                |   | $                                             |   | $                                                             |   |
| Stock                    based compensation-            |   |                                      |    |                                   |   |                                         |   |                    |    |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Directors                    and officers               |   |                                      |    |                                   |   |                                         |   |                    | 216,416 |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Stock                    based compensation-consultants |   |                                      |    |                                   |   |                                         |   |                    | 8,830   |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Issue                    of common shares and           |   |                                      |    |                                   |   |                                         |   |                    |    |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Warrants                    on retirement of            |   |                                      |    |                                   |   |                                         |   |                    |    |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Demand                    Promissory note               |   |                                      | 369,215 |                                   |   | 37                                           |   |                    | 203,031 |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Units                    issued to an outside company   |   |                                      |    |                                   |   |                                         |   |                    |    |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| for                    professional services settlement |   |                                      | 24,336  |                                   |   | 2                                            |   |                    | 13,384  |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Units                    issued to an officer           |   |                                      |    |                                   |   |                                         |   |                    |    |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| for                    professional services settlement |   |                                      | 12,168  |                                   |   | 1                                            |   |                    | 6,690   |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Issuance                    of common shares            |   |                                      |    |                                   |   |                                         |   |                    |    |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| for                    professional services            |   |                                      | 150,000 |                                   |   | 15                                           |   |                    | 130,485 |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Units                    issued to shareholder          |   |                                      | 490,909 |                                   |   | 49                                           |   |                    | 269,951 |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Units                    issued to a director           |   |                                      | 149,867 |                                   |   | 15                                           |   |                    | 82,412  |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Units                    issued to outside subscribers  |   |                                      | 200,000 |                                   |   | 20                                           |   |                    | 109,980 |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Issuance                    of common shares on         |   |                                      |    |                                   |   |                                         |   |                    |    |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Conversion                    of Convertible            |   |                                      |    |                                   |   |                                         |   |                    |    |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Promissory                    notes                     |   |                                      | 59,547  |                                   |   | 6                                            |   |                    | 44,654  |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Issuance                    of common shares on         |   |                                      |    |                                   |   |                                         |   |                    |    |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Exercise                    of warrants                 |   |                                      | 14,000  |                                   |   | 2                                            |   |                    | 11,998  |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Issuance                    of common shares on         |   |                                      |    |                                   |   |                                         |   |                    |    |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Conversion                    of Convertible            |   |                                      |    |                                   |   |                                         |   |                    |    |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Promissory                    notes                     |   |                                      | 76,525  |                                   |   | 8                                            |   |                    | 57,386  |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Private                    placement of shares          |   |                                      | 150,000 |                                   |   | 15                                           |   |                    | 151,485 |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Issuance                    of Common shares            |   |                                      |    |                                   |   |                                         |   |                    |    |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| for                    property payment                 |   |                                      | 133,333 |                                   |   | 13                                           |   |                    | 99,987  |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Issuance                    of common shares on         |   |                                      |    |                                   |   |                                         |   |                    |    |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Conversion                    of Convertible            |   |                                      |    |                                   |   |                                         |   |                    |    |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Promissory                    notes                     |   |                                      | 34,306  |                                   |   | 4                                            |   |                    | 25,905  |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Issuance                    of common shares on         |   |                                      |    |                                   |   |                                         |   |                    |    |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |
| Exercise                    of warrants                 |   |                                      | 10,000  |                                   |   | 1                                            |   |                    | 8,771   |                                                             |   |                                          |   |                                                          |   |   |   |   |   |   |   |   |

----

**YUKON        GOLD CORPORATION, INC.**

**(An        Exploration Stage Company)**

**Consolidated        Statements of Changes in Stockholders’ Equity**

**From        Inception to October 31, 2006**

**(Amounts        expressed in US Dollars)**

|                                                               |   | 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 on                    |   |                                                     |       |                                                  |   |                                                        |   |                                                       |      |                                                                               |   |                                      |   |                                                                           |       |
| Conversion                    of Convertible                       |   |                                                     |       |                                                  |   |                                                        |   |                                                       |      |                                                                               |   |                                      |   |                                                                           |       |
| Promissory                    notes                                |   |                                                          | 101,150    |                                                       |   | 10                                                               |   |                                                            | 76,523    |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Issue                    of 400,000 Special Warrants net           |   |                                                          |       |                                                       |   |                                                             |   |                                                            |           |                                                                                    |   | 371,680                                        |   |                                                                                |       |   |   |   |   |   |   |   |
| Issue                    of 200,000 flow through warrants          |   |                                                          |       |                                                       |   |                                                             |   |                                                            |      |                                                                                    |   | 154,000                                        |   |                                                                                |       |   |   |   |   |   |   |   |
| Brokered                    private placement of shares- net       |   |                                                          | 5,331,327  |                                                       |   | 533                                                              |   |                                                            | 2,910,375 |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Brokered                    Private placement of flow through      |   |                                                          |       |                                                       |   |                                                             |   |                                                            |      |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Shares-                    net                                     |   |                                                          | 25,000     |                                                       |   | 2                                                                |   |                                                            | 13,310    |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Exercise                    of stock options                       |   |                                                          | 10,000     |                                                       |   | 1                                                                |   |                                                            | 5,499     |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Foreign                    currency translation                    |   |                                                          | -          |                                                       |   | -                                                                |   |                                                            | -         |                                                                                    |   |                                           |   |                                                                                |       |   |   | (2,687 | ) |   | (2,687 | ) |
| Net                    loss for the year                           |   |                                                          | -          |                                                       |   | -                                                                |   |                                                            |      |                                                                                    |   |                                           |   |                                                                                | (1,855,957 | ) |   | (1,855,957 | ) |   | - |   |
|                                                               |   |                                                          |       |                                                       |   |                                                             |   |                                                            |      |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Balance                    as of April 30, 2006                    |   |                                                          | 16,366,728 |                                                       |   | 1,637                                                            |   |                                                            | 5,301,502 |                                                                                    |   | 525,680                                        |   |                                                                                | (3,231,792 | ) |   | (1,858,644 | ) |   | (5,162 | ) |
|                                                               |   |                                                          |       |                                                       |   |                                                             |   |                                                            |      |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Exercise                    of warrants                            |   |                                                          | 10,000     |                                                       |   | 1                                                                |   |                                                            | 8,986     |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Exercise                    of warrants                            |   |                                                          | 45,045     |                                                       |   | 5                                                                |   |                                                            | 40,445    |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Exercise                    of warrants                            |   |                                                          | 16,000     |                                                       |   | 2                                                                |   |                                                            | 14,278    |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Common                    shares issued for                        |   |                                                          |       |                                                       |   |                                                             |   |                                                            |      |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Settlement                    of severance liability to ex-officer |   |                                                          | 141,599    |                                                       |   | 14                                                               |   |                                                            | 113,116   |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Exercise                    of warrants                            |   |                                                          | 43,667     |                                                       |   | 4                                                                |   |                                                            | 39,364    |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Exercise                    of warrants                            |   |                                                          | 17,971     |                                                       |   | 2                                                                |   |                                                            | 15,937    |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Exercise                    of warrants                            |   |                                                          | 43,667     |                                                       |   | 4                                                                |   |                                                            | 38,891    |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Exercise                    of warrants                            |   |                                                          | 16,000     |                                                       |   | 2                                                                |   |                                                            | 14,251    |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Exercise                    of warrants                            |   |                                                          | 158,090    |                                                       |   | 16                                                               |   |                                                            | 141,616   |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Issuance                    of Common shares                       |   |                                                          |       |                                                       |   |                                                             |   |                                                            |      |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| for                    property payment                            |   |                                                          | 43,166     |                                                       |   | 4                                                                |   |                                                            | 53,841    |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Exercise                    of warrants                            |   |                                                          | 64,120     |                                                       |   | 6                                                                |   |                                                            | 57,863    |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Exercise                    of warrants                            |   |                                                          | 61,171     |                                                       |   | 6                                                                |   |                                                            | 53,818    |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Exercise                    of stock options                       |   |                                                          | 24,000     |                                                       |   | 2                                                                |   |                                                            | 17,998    |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Issuance                    of common shares                       |   |                                                          |       |                                                       |   |                                                             |   |                                                            |      |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| for                    professional services                       |   |                                                          | 342,780    |                                                       |   | 34                                                               |   |                                                            | 438,725   |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Brokered                    private placement of units- net        |   |                                                          | 400,000    |                                                       |   | 40                                                               |   |                                                            | 363,960   |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Brokered                    private placement of units- net        |   |                                                          | 550,000    |                                                       |   | 55                                                               |   |                                                            | 498,923   |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Stock                    based compensation-                       |   |                                                          |       |                                                       |   |                                                             |   |                                                            |      |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Directors                    and officers                          |   |                                                          |       |                                                       |   |                                                             |   |                                                            | 170,646   |                                                                                    |   |                                           |   |                                                                                |       |   |   |   |   |   |   |   |
| Foreign                    currency translation                    |   |                                                          |       |                                                       |   |                                                             |   |                                                            |      |                                                                                    |   |                                           |   |                                                                                |       |   |   | (40,847 | ) |   | (40,847 | ) |
| Net                    loss for the period                         |   |                                                          |       |                                                       |   |                                                             |   |                                                            |      |                                                                                    |   |                                           |   |                                                                                | (2,865,185 | ) |   | (2,865,185 | ) |   |   |   |
| Balance                    as of October 31, 2006 (see note 10)    |   |                                                          | 18,344,004 |                                                       |   | 1,834                                                            |   |                                                            | 7,384,160 |                                                                                    |   | 525,680                                        |   |                                                                                | (6,096,977 | ) |   | (2,906,032 | ) |   | (46,009 | ) |

----

**YUKON      GOLD CORPORATION, INC. **

**(An      Exploration Stage Company)**

**Condensed      Notes to Interim Consolidated Financial Statements**

**October      31, 2006**

**(Amounts      expressed in US Dollars)**

**(Unaudited)**

|   | 1. | BASIS                OF PRESENTATION |
|--------|----|--------------------------------------|

|  | 2. | GOING                CONCERN |
|--|----|------------------------------|

|  | 3. | NATURE                OF OPERATIONS |
|--|----|-------------------------------------|

----

**YUKON      GOLD CORPORATION, INC. **

**(An      Exploration Stage Company)**

**Condensed      Notes to Interim Consolidated Financial Statements**

**October      31, 2006**

**(Amounts      expressed in US Dollars)**

**(Unaudited)**

|  | 4. | EXPLORATION                TAX CREDIT RECEIVABLE |
|--|----|--------------------------------------------------|

|  | 5. | SUBSCRIPTION                FOR WARRANTS |
|--|----|------------------------------------------|

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

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

----

**YUKON      GOLD CORPORATION, INC. **

**(An      Exploration Stage Company)**

**Condensed      Notes to Interim Consolidated Financial Statements**

**October      31, 2006**

**(Amounts      expressed in US Dollars)**

**(Unaudited)**

|  | 6. | RESTRICTED                CASH |
|--|----|--------------------------------|

|  | 7. | RESTRICTED                DEPOSITS |
|--|----|------------------------------------|

|  | 8. | OTHER                LIABILITY |
|--|----|--------------------------------|

|  | 9. | STOCK                BASED COMPENSATION |
|--|----|-----------------------------------------|

|                                                                   |   | Three                Months Ended |     | Six                Months Ended |   |
|------------------------------------------------------------------------|--------|-----------------------------------|----------|---------------------------------|--------|
|                                                                   |   | October                31, 2005   |     | October                31, 2005 |   |
|                                                                   |   |  $                           |     | $                               |   |
| Net                Loss-as reported                                    |   |                              | (431,240 | )                               |   | (621,967 | ) |
| Add:                Stock-based compensation as expensed               |   |                              | 4,260    |                            |   | 100,100 |   |
| Proforma                stock-based compensation expense-as            |   |                              |     |                            |   |   |   |
| If                grant date fair value had been applied to all        |   |                              |     |                            |   |   |   |
| Stock                -based payment awards                             |   |                              | (4,260   | )                               |   | (100,100 | ) |
| Net                loss-pro forma for stock based compensation expense |   |                              | (431,240 | )                               |   | (621,967 | ) |
| Net                loss per share-basic, as reported                   |   |                              | (0.04    | )                               |   | (0.06 | ) |
| Net                loss per share-basic, proforma for stock- based     |   |                              |     |                            |   |   |   |
| Compensation                expense                                    |   |                              | (0.04    | )                               |   | (0.06 | ) |

----

**YUKON      GOLD CORPORATION, INC. **

**(An      Exploration Stage Company)**

**Condensed      Notes to Interim Consolidated Financial Statements**

**October      31, 2006**

**(Amounts      expressed in US Dollars)**

**(Unaudited)**

|  | 9. | STOCK                BASED COMPENSATION-Cont’d |
|--|----|------------------------------------------------------|

|  | 10. | ISSUANCE                OF COMMON SHARES AND WARRANTS |
|--|-----|-------------------------------------------------------|

----

**YUKON      GOLD CORPORATION, INC. **

**(An      Exploration Stage Company)**

**Condensed      Notes to Interim Consolidated Financial Statements**

**October      31, 2006**

**(Amounts      expressed in US Dollars)**

**(Unaudited)**

|  | 10. | ISSUANCE                    OF COMMON SHARES AND                    WARRANTS-Cont’d |
|--|-----|-------------------------------------------------------------------------------------------|

|  | 11. | COMMITMENTS                AND CONTINGENCIES |
|--|-----|----------------------------------------------|

|  | (a) | Mount                Hinton Property Mining Claims |
|--|-----|----------------------------------------------------|

**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                            |   | $      | 133,559                (CDN$ 150,000    | )                   |
| On                July 7, 2008                            |   | $      | 133,559                (CDN$ 150,000    | )                   |
|                                                      |   |   |                                    |                |
| **TOTAL**                                                 |   | **$**  | **723,871                (CDN$850,000** | **)**               |

----

**YUKON      GOLD CORPORATION, INC. **

**(An      Exploration Stage Company)**

**Condensed      Notes to Interim Consolidated Financial Statements**

**October      31, 2006**

**(Amounts      expressed in US Dollars)**

**(Unaudited)**

|  | 11. | COMMITMENTS                  AND CONTINGENCIES - Cont’d. |
|--|-----|----------------------------------------------------------------|

**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        | )                *Amended |
| Jan.                  1/07 to Dec. 31/07 |   | $      | 890,392                  (CDN$ 1,000,000      | )                         |
| Jan.                  1/08 to Dec. 31/08 |   | $      | 1,112,990                  (CDN$ 1,250,000    | )                         |
| Jan.                  1/09 to Dec. 31/09 |   | $      | 1,335,589                  (CDN$ 1,500,000    | )                         |
|                                     |   |   |                                          |                      |
| **TOTAL**                                |   | **$**  | **4,577,857                  (CDN$5,225,000** | **)**                     |

* *

----

**YUKON      GOLD CORPORATION, INC. **

**(An      Exploration Stage Company)**

**Condensed      Notes to Interim Consolidated Financial Statements**

**October      31, 2006**

**(Amounts      expressed in US Dollars)**

**(Unaudited)**

|   | 11. | COMMITMENTS                AND CONTINGENCIES-Cont’d |
|--------|-----|-----------------------------------------------------------|

| b) | The                Marg Property |
|----|----------------------------------|

| c) | The                Company completed the sale of 400,000 Special Warrants on December                15,                2005 as described in note 5a). In the absence of a registration statement                being declared effective within 181 days of the closing, the Company,                effective June 15, 2006 was obligated to issue 4,000 common shares                and                4,000 warrants to the accredited investor at no extra cost as a penalty.                The Company has not yet issued any shares or warrants as of October                31,                2006. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| 12. | CHANGES                IN DIRECTORS AND MANAGEMENT |
|-----|----------------------------------------------------|

| 13. | SUBSEQUENT                EVENTS |
|-----|----------------------------------|

----

**MANAGEMENT'S      DISCUSSION AND ANALYSIS OF**

**FINANCIAL      CONDITION AND RESULTS OF OPERATION**

**FOR      THE THREE AND SIX MONTH PERIOD ENDED OCTOBER 31, 2006**

**Discussion      of Operations & Financial Condition **

**SELECTED      INFORMATION**

|                                              |   | Three                  months ended |      | Three                  months ended |   |
|---------------------------------------------------|--------|-------------------------------------|-----------|-------------------------------------|--------|
|                                              |   | October                  31, 2006   |      | October                  31, 2005   |   |
|                                              |   |                                |      |                                |   |
| Revenues                                          |   |                                | Nil       |                                |   | Nil |   |
| Net                  Loss                         |   | $                                   | 1,436,458 |                                | $      | 431,240 |   |
| Loss                  per share-basic and diluted |   | $                                   | (0.08     | )                                   | $      | (0.04 | ) |
|                                              |   |                                |      |                                |   |   |   |

|                                              |   |   | Six                  months ended  |   |   | Six                  months ended |   |
|---------------------------------------------------|--------|--------|-----------------------------------------|--------|--------|-----------------------------------|--------|
|                                              |   |   | October                  31, 2006  |   |   | October                  31, 2005 |   |
|                                              |   |   |                                    |   |   |                              |   |
| Revenues                                          |   |   | Nil                                     |   |   | Nil                               |   |
| Net                  Loss                         |   | $      | 2,865,185                               |   | $      | 621,967                           |   |
| Loss                  per share-basic and diluted |   | $      | (0.17                                   | )      | $      | (0.06                             | )      |

|                                               |   |   | As                  at             |   |   | As                  at          |   |
|----------------------------------------------------|--------|--------|-----------------------------------------|--------|--------|---------------------------------|--------|
|                                               |   |   | October                  31, 2006  |   |   | April                  30, 2006 |   |
|                                               |   |   |                                    |   |   |                            |   |
| Total                  Assets                      |   | $      | 1,969,718                               |   | $      | 2,842,553                       |   |
| Total                  Liabilities                 |   | $      | 201,030                                 |   | $      | 250,688                         |   |
| Cash                  dividends declared per share |   |   | Nil                                     |   |   | Nil                             |   |

**Revenues**

----

**Net      Loss**

----

**Exploration      at Mount Hinton**

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

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

| 3.   | Convert                to a Joint Venture arrangement with the Hinton Syndicate as provided                in                the Hinton Syndicate Agreement whereby Yukon Gold would retain a                25%                interest in the property having met the expenditure of $1,335,589                (CDN$1,500,000) in work programs on the Mount Hinton Property. Yukon                Gold                must spend $890,393 (CDN$1,000,000) in 2007 plus the deferred expenditures                of approximately $245,000 to $267,000 (CDN $275,000 to CDN $300,000)                as                referred to above, in order to meet its work obligation under the                Mount                Hinton Agreement, unless it elects to convert to the joint venture                arrangement. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Exploration      at Marg Property**

**Resource      classified in accordance with NI:43-101**

| **Zone**  |   | **Classification** |   | **Avgerage                  Thickness** |   | **Tonnes**               |   | **Cu%**  |   | **Pb%**  |   | **Zn%**  |   | **Ag                  g/t** |   | **Au                  g/t** |
|-----------|--------|--------------------|--------|-----------------------------------------|--------|--------------------------|--------|----------|--------|----------|--------|----------|--------|-----------------------------|--------|-----------------------------|
| A         |   | Indicated          |   | 4.8                  metres             |   | 57,605                   |   | 1.93     |   | 3.56     |   | 6.33     |   | 105.14                      |   | 1.93                        |
|      |   | Inferred           |   |                                    |   | 75,                  413 |   | 0.68     |   | 0.96     |   | 2.10     |   | 35.22                       |   | 0.45                        |
| B         |   | Indicated          |   | 3.7                  metres             |   | 785,497                  |   | 1.70     |   | 2.21     |   | 4.08     |   | 61.90                       |   | 0.90                        |
|      |   | Inferred           |   |                                    |   | 80,548                   |   | 1.46     |   | 2.22     |   | 4.34     |   | 53.29                       |   | 0.87                        |
| C         |   | Indicated          |   | 8.6                  metres             |   | 1,459,564                |   | 1.60     |   | 2.45     |   | 4.31     |   | 73.41                       |   | 1.21                        |
|      |   | Inferred           |   |                                    |   | 289,330                  |   | 1.90     |   | 2.10     |   | 3.95     |   | 60.04                       |   | 1.26                        |
| D         |   | Indicated          |   | 5.1metres                               |   | 2,343,521                |   | 1.95     |   | 2.75     |   | 5.26     |   | 59.97                       |   | 0.85                        |
|      |   | Inferred           |   |                                    |   | 435,488                  |   | 1.48     |   | 1.88     |   | 3.80     |   | 46.12                       |   | 0.85                        |
|      |   |               |   |                                    |   |                     |   |     |   |     |   |     |   |                        |   |                        |
| **Total** |   | **Indicated**      |   |                                    |   | **4,646,200**            |   | **1.80** |   | **2.57** |   | **4.77** |   | **65.08**                   |   | **0.99**                    |
| **Total** |   | **Inferred**       |   |                                    |   | **880,800**              |   | **1.55** |   | **1.90** |   | **3.75** |   | **50.42**                   |   | **0.95**                    |

|   |                                                         |   |   | $US  |   |   | $CDN  |   |
|--------|--------------------------------------------------------------|--------|--------|-----------|--------|--------|------------|--------|
| · |   4400                  metres of diamond drilling |   | $      | 690,945   |   | $      | 776,000    |   |
| · |   Geological                  support services     |   | $      | 269,789   |   | $      | 303,000    |   |
| · |   Airborne                  geophysical survey     |   | $      | 133,559   |   | $      | 150,000    |   |
| · |   Helicopter                  support              |   | $      | 170,065   |   | $      | 191,000    |   |
| · |   Field                  support and management    |   | $      | 293,830   |   | $      | 330,000    |   |
|   |                                                         |   | $      | 1,558,188 |   | $      | 1,750,000  |   |

----

**Liquidity      And Capital Resources**

|                                                 |   | October                31, 2006 |      | October                31, 2005 |   |
|------------------------------------------------------|--------|---------------------------------|-----------|---------------------------------|--------|
| Cash                and cash equivalent              |   | $                               | 963,382   |                            | $      | 130,725 |   |
| Working                capital (deficiency)          |   | $                               | 1,703,188 |                            | $      | (242,243 | ) |
| Cash                used in operating activities     |   | $                               | 2,711,711 |                            | $      | 371,866 |   |
| Cash                used in investing activities     |   | $                               | 1,437     |                            | $      | 549 |   |
| Cash                provided in financing activities |   | $                               | 1,304,986 |                            | $      | 426,751 |   |

**Off-Balance      Sheet Arrangement**

**Contractual      Obligations and Commercial Commitments**

**Recent      Accounting Pronouncements **

----

**Critical      Accounting Policies**

----

**CONTROLS      AND PROCEDURES**

**RISK      FACTORS**

| **-  ** | 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 develop the Marg Property, establish                a mining                operation, and operate this mine in a profitable                manner. |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**DISCLOSURE      AND FINANCIAL CONTROLS AND PROCEDURES**

----

**PART      II: OTHER INFORMATION**

**ITEM      1:**
**LEGAL      PROCEEDINGS:**

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

----

**ITEM      3:**
**DEFAULTS      UPON SENIOR SECURITIES:**

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

**ITEM      5:**
**OTHER      INFORMATION:**

**ITEM      6:**
**EXHIBITS      & REPORTS ON FORM 8-K**

| (a) | 31.1                Certification of Chief Executive                Officer. |
|-----|------------------------------------------------------------------------------|

**SIGNATURE**

|                                 |                                            |               |
|--------------------------------------|-------------------------------------------------|--------------------|
| Dated:              December 8, 2006 |                                                 | /s/ Paul A. Gorman |
|                                 | Paul                A. Gorman, CEO and Director |
|                                 |                                                 |

----