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**SECURITIES AND EXCHANGE COMMISSION****WASHINGTON, D.C. 20549**____________________________**FORM 10-Q**[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES				EXCHANGE ACT OF 1934**For the Quarter Ended February 29, 2008**OR[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES				EXCHANGE ACT OF 1934				FOR THE TRANSITION PERIOD FROM __________________ TO __________________				Commission File # 000-52268**ASIAN DRAGON GROUP INC.**(Exact name of registrant as specified in its charter)**Nevada**(State or other jurisdiction of incorporation or organization)**98-0418754**(IRS Employer Identification Number)**#203 - 1030 Hamilton Street****Vancouver, BC, Canada V6B 2R9**(Address of principal executive offices) (Zip Code)**(604) 688-8127**(Registrant’s telephone no., including area code)				1100 – 475 Howe Street, Vancouver, BC, Canada V6C 2B3				(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes [X]  No [  ]					Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated file.
> Large accelerated filer[  ]Accelerated filer[  ]Non-accelerated filer[  ]Smaller reporting company[X]

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.   Yes [  ]  No [X]				The issuer had 38,775,000 shares of common stock issued and outstanding as of April 21, 2008.

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***ASIAN DRAGON GROUP INC.******(an Exploration Stage Company)*****Table of Contents**

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|                          | Page                                                                                                |
|-------------------------------|-----------------------------------------------------------------------------------------------------|
| PART I. Financial Information |                                                                                                |
|                     |                                                                                                |
|                          | Item 1. Financial Statements.                                                                       |  |
|                     |                                                                                                |  |
|                          |                                                                                                | Balance Sheets at February 29, 2008 (unaudited) and August 31, 2007 (audited) | F-1 |
|                     |                                                                                                |   |  |
|                          |                                                                                                | Unaudited Statements of Operations for the three and six month periods ended February 29, 2008								and February 28, 2007 and the Exploration Stage Period of August 15, 2006 to February 29, 2008 | F-2 |
|                     |                                                                                                |   |  |
|                               |                                                                                                     | Statement of Stockholders’ Equity (audited, unless otherwise noted) | F-3 |
|                     |                                                                                                     |  |  |
|                          |                                                                                                | Unaudited Statements of Cash Flows for the six month periods ended February 29, 2008 and								February 28, 2007 and the Exploration Stage Period of August 15, 2006 to February 29, 2008 | F-4 |
|                     |                                                                                                |   |  |
|                               |                                                                                                     | Unaudited Supplemental Disclosure of Non-cash Investing and Financing Activities | F-4 |
|                     |                                                                                                     |  |  |
|                          |                                                                                                | Notes to Unaudited Financial Statements | F-5 to F-14 |
|                     |                                                                                                |   |  |
|                          | Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 15 |
|                          |                                                                                                |  |
|                          | Item 3. Quantitative and Qualitative Disclosures about Market Risk                                  | 31 |
|                          |                                                                                                |  |
|                          | Item 4. Controls and Procedures                                                                     | 32 |
|                     |                                                                                                |  |
| PART II. Other Information    |                                                                                                     |
|                     |                                                                                                     |
|                          | Item 1. Legal Proceedings                                                                           | 32 |
|                     |                                                                                                |  |
|                          | Item 1A. Risk Factors                                                                               | 32 |
|                     |                                                                                                |  |
|                          | Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                 | 37 |
|                     |                                                                                                |  |
|                          | Item 3. Defaults Upon Senior Securities                                                             | 37 |
|                     |                                                                                                |  |
|                          | Item 4. Submission of Matters to a Vote of Security Holders                                         | 37 |
|                     |                                                                                                |  |
|                          | Item 5. Other Information                                                                           | 38 |
|                     |                                                                                                |  |
|                          | Item 6. Exhibits                                                                                    | 38 |
|                     |                                                                                                |  |
| Signatures                    | 38                                                                                                  |

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**PART I – FINANCIAL INFORMATION**

**ITEM 1.   FINANCIAL STATEMENTS (unaudited)**

**ASIAN DRAGON GROUP INC.*****(an Exploration Stage Company)******Balance Sheets***

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******

| **                                                                     ** |   | February 29, 2008							(Unaudited) |   | Year ended							August 31, 2007							(Note 1) |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---|-------------------------------------|---|-------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                     |   |                                                 |
| **ASSETS**                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                     |   |                                                 |
| CURRENT ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                     |   |                                                 |
|    Cash                                                                                                                                                                                                                                                                                                                                                                                                             | $ | 67,845                              | $ | 326,381                                         |
|    Prepaid expenses                                                                                                                                                                                                                                                                                                                                                                                                 |   | 6,416                               |   | -                                               |
|    Subscription receivable                                                                                                                                                                                                                                                                                                                                                                                          |   | -                                   |   | 1,000,000                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                     |   |                                                 |
|       Total current assets                                                                                                                                                                                                                                                                                                                                                                           |   | 74,261                              |   | 1,326,381                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                     |   |                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                     |   |                                                 |
|          Total assets                                                                                                                                                                                                                                                                                                                                                                 | $ | 74,261                              | $ | 1,326,381                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | ===============                     |   | ===============                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                     |   |                                                 |
| **LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)**                                                                                                                                                                                                                                                                                                                                                                           |   |                                     |   |                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                     |   |                                                 |
| CURRENT LIABILITIES                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                     |   |                                                 |
|    Commitments payable (Notes 4 and 8) – current portion                                                                                                                                                                                                                                                                                                                                                       | $ | -                                   | $ | 7,179,407                                       |
|    Accounts payable                                                                                                                                                                                                                                                                                                                                                                                                 |   | 23,597                              |   | 66,470                                          |
|    Account payable - related party                                                                                                                                                                                                                                                                                                                                                                                  |   | -                                   |   | 75,000                                          |
|    Accrued liabilities                                                                                                                                                                                                                                                                                                                                                                                              |   | 5,000                               |   | 40,000                                          |
|    Shareholder loans (Notes 5 and 6)                                                                                                                                                                                                                                                                                                                                                                                |   | 189,582                             |   | 237,840                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                     |   |                                                 |
|          Total current liabilities                                                                                                                                                                                                                                                                                                                                                    | $ | 218,179                             | $ | 7,598,717                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                     |   |                                                 |
| LONG-TERM LIABILITIES                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                     |   |                                                 |
|     Commitments payable (Note 4) – long-term portion                                                                                                                                                                                                                                                                                                                                                           | $ | -                                   | $ | 2,500,000                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                     |   |                                                 |
|          Total long-term liabilities                                                                                                                                                                                                                                                                                                                                                  | $ | -                                   | $ | 2,500,000                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                     |   |                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                     |   |                                                 |
|          Total liabilities                                                                                                                                                                                                                                                                                                                                                            | $ | 218,179                             | $ | 10,098,717                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                     |   |                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                     |   |                                                 |
| COMMITMENTS AND CONTINGENCIES (Notes 4,5,6 and 8)                                                                                                                                                                                                                                                                                                                                                                                  |   | -                                   |   | -                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                     |   |                                                 |
| STOCKHOLDERS’ EQUITY (DEFICIT)                                                                                                                                                                                                                                                                                                                                                                                               |   |                                     |   |                                                 |
|    Common shares, 100,000,000 shares par value $0.001 authorized,   38,775,000 and 38,275,000 issued and outstanding at February 29,   2008 and August 31, 2007 respectively (Note 7)                                                                                                                                                                                                 |   | 38,675                              |   | 38,275                                          |
|    Paid-in Capital (Notes 7)                                                                                                                                                                                                                                                                                                                                                                                        |   | 22,984,442                          |   | 22,584,842                                      |
|    Accumulated deficit in the exploration stage                                                                                                                                                                                                                                                                                                                                                                     |   | (23,167,188)                        |   | (31,382,181)                                    |
|    Accumulated other comprehensive income (loss)                                                                                                                                                                                                                                                                                                                                                                    |   | 153                                 |   | (13,272)                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                     |   |                                                 |
|          Total stockholders’ (deficit)                                                                                                                                                                                                                                                                                                                                          |   | (143,918)                           |   | (8,772,336)                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                     |   |                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                     |   |                                                 |
|          Total liabilities and stockholders’ equity                                                                                                                                                                                                                                                                                                                             | $ | 74,261                              | $ | 1,326,381                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | ===============                     |   | ===============                                 |

----

******

******

******

****

|                                                                                                                                 |   | Three Months								ending								February 29,								2008 |   | Three Months								ending								February 28,								2007 |   | Six Months								ending								February 29,								2008 |   | Six Months								ending								February 28,								2007 |   | Exploration								Stage								August 15,								2006								(inception)								through								February 29,								2008 |
|---------------------------------------------------------------------------------------------------------------------------------|---|------------------------------------------------------------|---|------------------------------------------------------------|---|----------------------------------------------------------|---|----------------------------------------------------------|---|--------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                 |   |                                                            |   |                                                            |   |                                                          |   |                                                          |   |                                                                                                                          |
| EXPENSES:                                                                                                                       |   |                                                            |   |                                                            |   |                                                          |   |                                                          |   |                                                                                                                          |
|    Exploration licenses                                                                                               | $ | 400,000                                                    | $ | 2,000,000                                                  | $ | 1,200,000                                                | $ | 3,000,000                                                | $ | 23,052,000                                                                                                               |
|    Exploration expenses                                                                                               |   | -                                                          |   | 13,000                                                     |   | -                                                        |   | 26,733                                                   |   | 50,215                                                                                                                   |
|    Agent fees                                                                                                         |   | 30,000                                                     |   | 30,000                                                     |   | 30,000                                                   |   | 30,000                                                   |   | 1,852,500                                                                                                                |
|    Professional and consultant fees                                                                                   |   | 77,319                                                     |   | 39,532                                                     |   | 138,624                                                  |   | 40,861                                                   |   | 411,038                                                                                                                  |
|    Stock-based compensation 								      – officers and directors                 |   | -                                                          |   | -                                                          |   | -                                                        |   | -                                                        |   | 6,975,491                                                                                                                |
|    Investor  relations                                                                                           |   | -                                                          |   | 25,001                                                     |   | 57,708                                                   |   | 25,001                                                   |   | 131,111                                                                                                                  |
|    Administrative expenses                                                                                            |   | 16,909                                                     |   | 17,620                                                     |   | 33,403                                                   |   | 64,243                                                   |   | 144,789                                                                                                                  |
|                                                                                                                                 |   |                                                            |   |                                                            |   |                                                          |   |                                                          |   |                                                                                                                          |
|       Total expenses                                                                                   | $ | 524,228                                                    | $ | 2,124,973                                                  | $ | 1,459,735                                                | $ | 3,186,838                                                | $ | 32,617,144                                                                                                               |
|                                                                                                                       |   |                                                            |   |                                                            |   |                                                          |   |                                                          |   |                                                                                                                          |
| Net loss from operations                                                                                                        | $ | (524,228)                                                  | $ | (2,124,973)                                                | $ | (1,459,735)                                              | $ | (3,186,838)                                              | $ | (32,617,144)                                                                                                             |
| Interest expense                                                                                                                |   | (2,280)                                                    |   | (2,374)                                                    |   | (4,679)                                                  |   | (4,469)                                                  |   | (15,121)                                                                                                                 |
|                                                                                                                                 |   |                                                            |   |                                                            |   |                                                          |   |                                                          |   |                                                                                                                          |
| Net loss from continuing operations                                                                                             | $ | (526,508)                                                  | $ | (2,127,347)                                                | $ | (1,464,414)                                              | $ | (3,191,307)                                              | $ | (32,632,266)                                                                                                             |
| Net loss from discontinued operations                                                                                           |   | -                                                          |   | -                                                          |   | -                                                        |   | -                                                        |   | (214,330)                                                                                                                |
|                                                                                                                       |   |                                                            |   |                                                            |   |                                                          |   |                                                          |   |                                                                                                                          |
| OTHER INCOME (EXPENSE):								   Cancelation of debt relating to								   commitments                     |   | 9,679,407                                                  |   | -                                                          |   | 9,679,407                                                |   | -                                                        |   | 9,679,407                                                                                                                |
|                                                                                                                                 |   |                                                            |   |                                                            |   |                                                          |   |                                                          |   |                                                                                                                          |
| Net Income (Loss)                                                                                                               | $ | 9,152,899                                                  | $ | (2,127,347)                                                | $ | 8,214,993                                                | $ | (3,191,307)                                              | $ | (23,167,188)                                                                                                             |
|                                                                                                                                 |   | ===========                                                |   | ===========                                                |   | ===========                                              |   | ===========                                              |   | ===========                                                                                                              |
|                                                                                                                       |   |                                                            |   |                                                            |   |                                                          |   |                                                          |   |                                                                                                                          |
| Loss per common share, basic and								diluted from discontinued								operations:                                            | $ | n/a                                                        | $ | n/a                                                   | $ | n/a                                                      | $ | n/a                                                 | $ |                                                                                                                          |
| Income (Loss) per common share,								basic and diluted from continuing								operations:       | $ | 0.24                                             | $ | (0.07)                                                | $ | 0.21                                                     | $ | (0.10)                                              | $ |                                                                                                                          |
| Weighted average shares outstanding								basic and diluted                                                                    |   | 38,404,834                                                 |   | 32,343,826                                            |   | 38,404,834                                               |   | 32,343,826                                          |   | 34,571,619                                                                                                               |
|                                                                                                                       |   |                                                            |   |                                                            |   |                                                          |   |                                                          |   |                                                                                                                          |
| OTHER COMPREHENSIVE								INCOME (LOSS):                                                                                       |   |                                                            |   |                                                            |   |                                                          |   |                                                          |   |                                                                                                                          |
| Net Income (Loss)                                                                                                               | $ | 9,152,899                                                  | $ | (2,127,347)                                                | $ | 8,214,993                                                | $ | (3,191,307)                                              | $ | (23,167,188)                                                                                                             |
|                                                                                                                       |   |                                                            |   |                                                            |   |                                                          |   |                                                          |   |                                                                                                                          |
| Foreign currency translation								adjustment                                                                                  |   | 395                                                        |   | -                                                          |   | 13,425                                                   |   | -                                                        |   | 153                                                                                                                      |
| Total Other Comprehensive Income								(Loss)                                                                                  | $ | 9,153,294                                                  | $ | (2,127,347)                                                | $ | 8,228,418                                                | $ | (3,191,307)                                              | $ | (23,167,035)                                                                                                             |

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**ASIAN DRAGON GROUP INC.*****(an Exploration Stage Company)******Statement of Stockholders’ Equity (Deficit)******(all data audited, unless otherwise stated)***

******

******

|                                                                                                                   | Common										Shares               |   | Common										Stock |   | Discount on										Common										Stock |   | Paid-in										Capital |   | Accumulated										Other										Compre-										hensive										Income |   | Deficit										Accumulated										duringExploration										Stage |   | Total										Stockholders'										Equity										(Deficit) |
|-------------------------------------------------------------------------------------------------------------------|--------------------------------------|---|-----------------------|---|--------------------------------------------|---|--------------------------|---|------------------------------------------------------------------------------|---|------------------------------------------------------------------------|---|-----------------------------------------------------------------|
|                                                                                                                   |        |   | $                     |   | $                                          |   | $                        |   | $                                                                            |   | $                                                                      |   | $                                                               |
|                                                                                                                   |                                      |   |                       |   |                                            |   |                          |   |                                                                              |   |                                                                        |   |                                                                 |
|                                                                                                         |                                      |   |                       |   |                                            |   |                          |   |                                                                              |   |                                                                        |   |                                                                 |
| To give effect to 4 for 1 stock dividend                                                                          | 96,575,000                           | $ | 19,315                | $ | (7,309)                                    | $ | 29,260                   | $ | (462)                                                                        | $ | (121,066)                                                              | $ | (80,262)                                                        |
| Cancellation of common shares                                                                                     | (64,550,000)                         | $ | 12,710                | $ | 7,309                                      | $ | (20,019)                 | $ | —                                                                       | $ | —                                                                 | $ | —                                                          |
|                                                                                                         |                                      |   |                       |   |                                            |   |                          |   |                                                                              |   |                                                                        |   |                                                                 |
| Net loss for period Sept. 1,  2005 to Aug. 15, 2006                                                          | —                               | $ | —                | $ | —                                     | $ | —                   | $ | (313)                                                                        | $ | (93,264)                                                               | $ | (93,577)                                                        |
| Net loss Exploration Stage ended Aug. 31, 2006                                                                    | —                               | $ | —                | $ | —                                     | $ | —                   | $ | —                                                                       | $ | (1,424)                                                                | $ | (1,424)                                                         |
|                                                                                                                   |                                      |   |                       |   |                                            |   |                          |   |                                                                              |   |                                                                        |   |                                                                 |
| Balance, August 31, 2006                                                                                          | 32,025,000                           | $ | 32,025                | $ | —                                     | $ | 9,241                    | $ | (775)                                                                        | $ | (215,754)                                                              | $ | (175,263)                                                       |
| Common shares issued for cash at $4.00 per     share November 6, 2006                         | 250,000                              | $ | 250                   | $ | —                                     | $ | 999,750                  | $ | —                                                                       | $ | —                                                                 | $ | 1,000,000                                                       |
| Common shares issued for cash at $5.00 per    share December 18, 2006                              | 400,000                              | $ | 400                   | $ | —                                     | $ | 1,999,600                | $ | —                                                                       | $ | —                                                                 | $ | 2,000,000                                                       |
| Common shares issued for cash at $5.00 per    share April 2, 2007                                  | 300,000                              | $ | 300                   | $ | —                                     | $ | 1,499,700                | $ | —                                                                       | $ | —                                                                 | $ | 1,500,000                                                       |
| Common shares issued as compensation and    expensed at $2.30 per share June 15, 2007              | 500,000                              | $ | 500                   | $ | —                                     | $ | 1,149,500                | $ | —                                                                       | $ | —                                                                 | $ | 1,150,000                                                       |
| Common shares issued for cash at $2.22 per    share June 18, 2007                                  | 450,000                              | $ | 450                   | $ | —                                     | $ | 998,550                  | $ | —                                                                       | $ | —                                                                 | $ | 999,000                                                         |
| Common shares issued as License fees and Agent    fees expensed at $2.35 per share August 29, 2007 | 3,750,000                            | $ | 3,750                 | $ | —                                     | $ | 8,808,750                | $ | —                                                                       | $ | —                                                                 | $ | 8,812,500                                                       |
| Additional Paid-In Capital relating to options    expensed at $2.13 per share August 31, 2007      | —                               | $ | —                | $ | —                                     | $ | 5,825,491                | $ | —                                                                       | $ | —                                                                 | $ | 5,825,491                                                       |
| Common shares issued for cash at $2.1581 per    share August 31, 2007                              | 600,000                              | $ | 600                   | $ | —                                     | $ | 1,294,260                | $ | —                                                                       | $ | —                                                                 | $ | 1,294,860                                                       |
| Net loss for year ended August 31, 2007                                                                           | —                               | $ | —                | $ | —                                     | $ | —                   | $ | (12,497)                                                                     | $ | (31,166,427)                                                           | $ | (31,178,924)                                                    |
|                                                                                                                   |                                      |   |                       |   |                                            |   |                          |   |                                                                              |   |                                                                        |   |                                                                 |
| Balance, August 31, 2007                                                                                          | 38,275,000                           | $ | 38,275                | $ | —                                     | $ | 22,584,842               | $ | (13,272)                                                                     | $ | (31,382,181)                                                           | $ | (8,772,336)                                                     |
|                                                                                                         |                                      |   |                       |   |                                            |   |                          |   |                                                                              |   |                                                                        |   |                                                                 |
| Common shares issued for cash at $0.80 per    share January 14, 2008                               | 500,000                              | $ | 400                   | $ | —                                     | $ | 399,600                  | $ | —                                                                       | $ | —                                                                 | $ | 400,000                                                         |
| Net Income (unaudited) for six months									    ended February 29, 2008                     | —                               | $ | —                | $ | —                                     | $ | —                   | $ | 13,425                                                                       | $ | 8,214,993                                                              | $ | 8,228,418                                                       |
|                                                                                                                   |                                      |   |                       |   |                                            |   |                          |   |                                                                              |   |                                                                        |   |                                                                 |
| Balance (unaudited), February 29, 2008                                                                            | 38,775,000                           | $ | 38,675                | $ | —                                     | $ | 22,984,442               | $ | 153                                                                          | $ | (23,167,188)                                                           | $ | (143,918)                                                       |
|                                                                                                                   | ========                             |   | =======               |   | ========                                   |   | =======                  |   | =========                                                                    |   | =========                                                              |   | =========                                                       |

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**ASIAN DRAGON GROUP INC.*****(an Exploration Stage Company)******Statements of Cash Flows******(unaudited)***

******

******

|                                                                                                                                                                                     |   | Six Months								ending								February 29,								2008 |   | Six Months								ending								February 28,								2007 |   | Exploration								Stage								August 15,								2006								through								February 29,								2008 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---|----------------------------------------------------------|---|----------------------------------------------------------|---|-------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                     |   |                                                          |   |                                                          |   |                                                                                                       |
| Cash flows from operating activities:                                                                                                                                               |   |                                                          |   |                                                          |   |                                                                                                       |
|       Net Income (Loss) for the period                                                                                                                | $ | 8,214,993                                                | $ | (3,191,307)                                              | $ | (23,167,188)                                                                                          |
|       Reconciling adjustments:                                                                                                                             |   |                                                          |   |                                                          |   |                                                                                                       |
|       Cancelation of debt relating to commitments                                                                                                     |   | (9,679,407)                                              |   | -                                                        |   | (9,679,407)                                                                                           |
|          Adjustments to reconcile net loss to net cash           used in operating activities: |   |                                                          |   |                                                          |   |                                                                                                       |
|       Net change in operating assets and liabilities:                                                                                                      |   |                                                          |   |                                                          |   |                                                                                                       |
|              Subscription receivable                                                                                    |   | 1,000,000                                                |   |  -                                                  |   | -                                                                                                     |
|              Prepaid expenses                                                                                           |   | (6,416)                                                  |   | (7,000)                                                  |   | 3,084                                                                                                 |
|              Commitments payable                                                                                        |   | -                                                        |   | -                                                        |   | 9,679,407                                                                                             |
|              Accounts payable and accrued  liabilities                                                                  |   | (152,873)                                                |   | 140,216                                                  |   | 28,597                                                                                                |
|                                                                                                                                                                                     |   |                                                          |   |                                                          |   |                                                                                                       |
| Net cash provided (used) by operating activities                                                                                                                                    |   | (623,703)                                                |   | (3,058,091)                                              |   | (23,135,507)                                                                                          |
| Cash flows provided (used) by discontinued  operating activities                                                                                                          |   | -                                                        |   | -                                                        |   | 193,168                                                                                               |
| Cash flows from financing activities:                                                                                                                                               |   |                                                          |   |                                                          |   |                                                                                                       |
|       Common stock issued for cash                                                                                                                         |   | 400,000                                                  |   | 3,000,000                                                |   | 7,193,860                                                                                             |
|       Common stock issued for compensation                                                                                                                 |   | -                                                        |   | -                                                        |   | 1,150,000                                                                                             |
|       Additional Paid-In Capital relating to Options                                                                                                       |   | -                                                        |   | -                                                        |   | 5,825,491                                                                                             |
|       Common stock issued for license fee payments                                                                                                    |   | -                                                        |   | -                                                        |   | 7,050,000                                                                                             |
|       Common stock issued for agent fee payments                                                                                                           |   | -                                                        |   | -                                                        |   | 1,762,500                                                                                             |
|       Loans from shareholders                                                                                                                              |   | (48,258)                                                 |   | 58,019                                                   |   | 28,108                                                                                                |
|                                                                                                                                                                                     |   |                                                          |   |                                                          |   |                                                                                                       |
| Net cash provided by financing activities                                                                                                                                           |   | (271,961)                                                |   | 3,058,019                                                |   | 23,009,959                                                                                            |
|                                                                                                                                                                           |   |                                                          |   |                                                          |   |                                                                                                       |
| Effect of foreign currency translation                                                                                                                                              |   | 13,425                                                   |   | -                                                        |   | 153                                                                                                   |
|                                                                                                                                                                           |   |                                                          |   |                                                          |   |                                                                                                       |
| Net increase (decrease) in cash                                                                                                                                                     |   | (258,536)                                                |   | (72)                                                     |   | 67,773                                                                                                |
|                                                                                                                                                                           |   |                                                          |   |                                                          |   |                                                                                                       |
| Cash, beginning of period                                                                                                                                                           |   | 326,381                                                  |   | 72                                                       |   | 72                                                                                                    |
|                                                                                                                                                                                     |   |                                                          |   |                                                          |   |                                                                                                       |
|                                                                                                                                                                           |   |                                                          |   |                                                          |   |                                                                                                       |
| Cash, end of period                                                                                                                                                                 | $ | 67,845                                                   | $ | -                                                        | $ | 67,845                                                                                                |
|                                                                                                                                                                                     |   | ============                                             |   | ============                                             |   | =============                                                                                         |

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|                                                                                  |  | Six Months							ending							February 29,							2008 |  | Six Months							ending							February 28,							2007 |  | Exploration							Stage							August 15,							2006							through							February 29,							2008 |
|----------------------------------------------------------------------------------|--|-------------------------------------------------------|--|-------------------------------------------------------|--|-------------------------------------------------------------------------------------------------|
|                                                                                  |  |                                                       |  |                                                       |  |                                                                                                 |
|                                                                        |  |                                                       |  |                                                       |  |                                                                                                 |
|        Cancelation of debt relating to commitments |  | (9,679,407)                                           |  | -                                                     |  | (9,679,407)                                                                                     |

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**ASIAN DRAGON GROUP INC.*****(an Exploration Stage Company)******Notes to Financial Statements***

***NOTE 1 – Nature of Business and Basis of Presentation***Asian Dragon Group Inc. (“Asian Dragon”, “ADG”, “We”, the “Registrant”, or the “Company”) was incorporated as a Nevada corporation on June 11, 2003. Asian Dragon was established to develop projects which focus on China’s growing precious and base metals reserves and markets. Effective August 15, 2006, the business of its operating subsidiary Galaxy Telnet SRL was wound-up and the subsidiary was de-registered as a corporate entity. Asian Dragon’s August 31, 2006 audited financial statements were presented to reflect the discontinuation of operation of Galaxy Telnet SRL and concurrently the date at which Asian Dragon became an Exploration Stage Company was set as August 15, 2006.				The unaudited financial statements as of February 29, 2008 included herein have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  It is suggested that these financial statements be read in conjunction with the August 31, 2007 audited financial statements and notes thereto.***Exploration Stage Activities***The Company has been in the exploration stage since August 15, 2006 and has not yet realized any revenues from its operations.***NOTE 2 – Going Concern***Generally accepted accounting principles in the United States of America contemplate the continuation of the Company as a going concern. However, the Company has an operating loss for the six month period ending February 29, 2008 of $(1,464,414) and has accumulated operating losses since its inception. Additionally the Company has a deficit in working capital and stockholders equity and has had limited business operations, which raises substantial doubt about the Company’s ability to continue as a going concern. The continuation of the Company is dependent on many factors, many of which have a high degree of uncertainty.				During the quarter ended February 29, 2008, we addressed the going concern issue by completing a private placement of 500,000 common shares at $0.80 per share for aggregate proceeds of $400,000. The Company’s ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability to successfully fulfill its business plan. Management plans to attempt to raise additional funds to finance the operating and capital requirements of the Company through a combination of equity and debt financings. While the Company is making its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations. The accompanying financial statements do not include any adjustments that might result from the resolution of these matters.

F-5

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***NOTE 3 – Exploration License Agreements*****Jinjishan Property and Concentration Plant**The Jinjishan License consists of an Exploration License on a contiguous 28.3 sq km property located in the Northwest part of the Luoning County, Henan Province, China, in the Changshui community. The Jinjishan Plant is located in the same area and we note that this formerly operating plant, and other infrastructure and buildings acquired in each of our Exploration License purchases to date entirely, and without exception, have no value from an accounting or operational perspective due to age and state of repair. 				Asian Dragon entered into an agreement (the “Jinjishan Rights Agreement”) with World Fortune Enterprise, Inc. (“WFEI”) effective August 29, 2007, to acquire a 70% interest in The Jinjishan License (the “Jinjishan Rights”) and a 100% interest in the Jinjishan Plant (collectively the “Jinjishan Interests”). Under the Jinjishan Rights Agreement Asian Dragon assumed the payment responsibilities of WFEI for the Jinjishan Interests.				WFEI does not own the exploration license referenced in the Jinjishan Rights Agreement with Asian Dragon. Rather, WFEI has an agreement with Luoyang Canadian United Mining Ltd. (“LCUML”) for the Jinjishan Interests. LCUML owns the rights for the Jinjishan Interests and WFEI has represented, pursuant to the Jinjishan Rights Agreement, that once WFEI has acquired clear title to the Jinjishan Interests from LCUML it will assign the rights to Asian Dragon and that those rights will be free and clear of all transfer, assignment, liens, charges, or encumbrances of any kind. WFEI has also represented that when it acquires clear title to the Jinjishan Interests, it will have the right and authority to transfer those rights to Asian Dragon.				Asian Dragon is not a party to the agreement between WFEI and LCUML. Nor is it a party to the agreement between LCUML and the party that previously owned the rights to the Jinjishan Interests and may have little or no recourse on LCUML, or the party from whom LCUML purchased the rights, in the event that the Jinjishan Rights Agreement, or subsequent agreements between WFEI and Asian Dragon, do not comply with the agreements between these third parties. However, Asian Dragon has received an attorney’s letter stating that these third party agreements are valid. Transfer of any rights in any of the above agreements will not be complete until all payments are completed.				Asian Dragon issued 250,000 shares of its common stock to WFEI on August 29, 2007 and an additional 1,000,000 shares to WFEI nominees in regards to the Jinjishan Rights Agreement.				The Jinjishan Rights Agreement required payment of $2,500,000 for the Jinjishan License and $800,000 for the Jinjishan Plant for total consideration of $3,300,000. The Jinjishan Rights Agreement acknowledged Asian Dragon provided payments totaling US$1,792,593 to August 29, 2007 (inclusive of a payment of US$600,000 toward the Jinjishan Plant) and required further investment by Asian Dragon as follows: (i) US$507,407 by October 1, 2007; (ii) US$500,000 by March 1, 2008; and (iii) US$500,000 by October 1, 2008.

F-6

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The Company did not make payment of installment one of the Jinjishan commitment to WFEI due October 1, 2007 and was in default as to $507,407toward the Jinjishan Agreement as of the end of the quarter ended November 30, 2007. A discussion was held with WFEI and LCUML regarding this matter and WFEI agreed to extend the payment schedule to accommodate this default. No damages were claimed by WFEI or LCUML.				On December 12, 2007, with the mutual consent of WFEI, the Jinjishan Rights Agreement was replaced with the “Jinjishan Agreement” which clarified certain terminology in the predecessor agreements but maintained the same payment terms. This agreement was filed with our Report on Form 10-K as Exhibit 10.1. WFEI provided Asian Dragon with an undertaking that it extinguished all rights to any payments under the predecessor agreements and has acknowledged that it recorded all cash and share payments made under the predecessor agreements as payments under the Jinjishan Agreement.				Subsequent to the end of the quarter ended February 29, 2008, the Company did not make payment of the $500,000 installment two of the Jinjishan commitment to WFEI which was due March 1, 2008 and was in default as to a total of $1,007,407 toward the Jinjishan Agreement. A discussion was held with WFEI and LCUML regarding this matter and WFEI agreed to extend the payment schedule to accommodate this default. No damages were claimed by WFEI or LCUML.				Subsequent to the end of the quarter ended February 29, 2008, on April 14, 2008 with the mutual consent of WFEI, the Jinjishan Agreement was replaced with the “Jinjishan (Revised) Agreement” in which WFEI provided Asian Dragon with certain indemnifications which allowed a reclassification to $nil of certain short term and long term commitments payable, recorded as a total of $1,499,407 at August 31, 2007. This agreement is attached to this Form 10-Q as Exhibit 10.1.				Subsequent to the end of the quarter ended February 29, 2008, the Company did not make payment of the $500,000 installment two of the Jinjishan commitment to WFEI which was due March 1, 2008 and is in default as to a total of $1,007,407 toward the Jinjishan (Revised) Agreement. A discussion was held with WFEI and LCUML regarding this matter and WFEI agreed to extend the payment schedule to accommodate this default. No damages were claimed by WFEI or LCUML.**Loning Property**The Loning License consists of an Exploration License on a 9.1 sq km property located in the Xiaoqinling Region, China, and is three km southwest of the Jinjishan License.				Asian Dragon entered into an agreement (the “Loning Rights Agreement”) with WFEI effective August 29, 2007, to acquire a 70% interest in the Loning License (the “Loning Rights”). Under the Loning Rights Agreement, Asian Dragon assumed the payment responsibilities of WFEI for the Loning License.				WFEI does not own the exploration license referenced in the Loning Rights Agreement with Asian Dragon. Rather, WFEI has an agreement with Henan Yunfeng Resource of Mining Development Co. (“Yunfeng”) for the Loning Rights. However, Yunfeng does not own the Loning License, but has entered into a purchase agreement with a third

F-7

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party for the Loning License. WFEI has represented, pursuant to the Loning Rights Agreement, that once it has acquired clear title to the Loning Rights from Yunfeng, it will assign those rights to Asian Dragon and that the rights will be free and clear of all transfer, assignment, liens, charges, or encumbrances of any kind. WFEI has also represented that when it has clear title to the Loning Rights, it will have the right and authority to transfer those rights to Asian Dragon.				Asian Dragon is not a party to the agreement between WFEI and Yunfeng. Nor is it a party to the agreement between Yunfeng and the party that previously owned the Loning Rights and may have little or no recourse on Yunfeng or the party from whom Yunfeng purchased the rights, in the event that the Loning Rights Agreement, or subsequent agreements between WFEI and Asian Dragon, do not comply with the agreements between these third parties. However, Asian Dragon has received an attorney’s letter stating that these third party agreements are valid. Transfer of any rights in any of the above agreements will not be complete until all payments are completed.				Asian Dragon issued 250,000 shares of its common stock to WFEI on August 29, 2007 and an additional 1,000,000 shares to WFEI nominees in regards to the Loning Rights Agreement.				The Loning Rights Agreement required total payments by Asian Dragon of $1,510,000, of which $1,000,000 was to be expended by Asian Dragon for exploration purposes. The Loning Rights Agreement acknowledged Asian Dragon has provided payments totaling US$400,000 to August 29, 2007 and required further investment by Asian Dragon as follows: (i) US$110,000 by March 1, 2008; (ii) US$500,000 by September 30, 2008; and (iii) US$500,000 by September 30, 2009.				On August 29, 2007 the Company made a payment of $27,454 to WFEI toward Loning commitment installment one which was due October 1, 2007. Subsequently the Company has not completed full payment of installment one and is in default as to $82,546 toward the Loning Agreement. A discussion was held with WFEI and Yunfeng regarding this matter and WFEI agreed to extend the payment schedule to accommodate this default. No damages were claimed by WFEI or Yunfeng.				On December 12, 2007, with the mutual consent of WFEI, the Loning Rights Agreement was replaced with the “Loning Agreement” which clarified certain terminology in the predecessor agreements, but maintained the same payment terms. This agreement was filed with our Report on Form 10-K as Exhibits 10.2. WFEI provided Asian Dragon with an undertaking that it extinguished all rights to any payments under the predecessor agreements and has acknowledged that it recorded all cash and share payments made under the predecessor agreements as payments respectively under the Loning Agreement.				Subsequent to the end of the quarter ended February 29, 2008, on April 14, 2008 with the mutual consent of WFEI, the Loning Agreement was replaced with the “Loning (Revised) Agreement” in which WFEI provided Asian Dragon with certain indemnifications which allowed a reclassification to $nil of certain short term and long term commitments payable, recorded as a total of $1,076,822 at August 31, 2007. This agreement is attached to this Form 10-Q as Exhibit 10.2. As of April 14, 2008, Asian Dragon was in default as to a total of $82,546 toward the Loning (Revised) Agreement.

F-8

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**Luanchuan Mozigou Molybdenum Property****Lushi Jiashapa Vanadium Property****Luoning Xiayu Fanggelewan Silver-Lead Property****XWG Silver-Lead Property**The MZG License consists of an Exploration License on a 14.09 sq km property located in the Jiaohe Village of Luanchuan County, Henan Province, China. The JSP License consists of an Exploration License on an 8.3 sq km property located in the area of Wenguxiang to Dashihe in Lushi County, Henan Province, China. The FGLW License consists of a 1.75 sq km exploration license located approximately 240 km west of Zhengzhou and 80 km west of Luoyang. The XWG License consists of a 2.13 sq km exploration license located in the area of Xiayu, Henan Province, China. (Collectively, these licenses are hereafter referenced as the “Fuding Properties”). 				Asian Dragon entered into an agreement (the “Fuding Rights Agreement”) with WFEI effective August 29, 2007, to acquire a 51% interest in the Fuding Properties (the “Fuding Rights”). Under the Fuding Agreement, Asian Dragon assumed the payment responsibilities of WFEI for the various rights and interests.				WFEI does not own the interests referenced in the Fuding Rights Agreement with Asian Dragon. Rather, WFEI has an agreement with Luoning Fuding Mining Development, Ltd. (“Fuding”) for those interests. However, Fuding does not own the rights, but has entered into purchase agreements for the Fuding Properties with other third parties. WFEI has represented, pursuant to the Fuding Rights Agreement that once it has clear title to the Fuding Rights from Fuding it will assign the rights to Asian Dragon and that those rights will be free and clear of all transfer, assignment, liens, charges, or encumbrances of any kind. WFEI has also represented that when it has clear title to the Fuding Rights, it will have the right and authority to transfer those rights to Asian Dragon.				Asian Dragon is not a party to the agreement between WFEI and Fuding. Nor is it a party to the agreements between Fuding and the third parties who previously owned the Fuding Rights and may have little or no recourse on Fuding, or the other third parties with whom Funding has entered into purchase agreements, in the event that the Fuding Rights Agreement, or subsequent agreements between WFEI and Asian Dragon do not comply with the agreements between these third parties. However, Asian Dragon has received an attorney’s letter stating that these third party agreements are valid. Transfer of any rights in any of the above agreements will not be complete until all payments are completed.				Asian Dragon issued 250,000 shares of its common stock to WFEI on August 29, 2007 and an additional 1,000,000 shares to WFEI nominees in regards to the Fuding Rights Agreement.				The Fuding Agreement required total consideration of $10,000,000. The Fuding Rights Agreement acknowledged Asian Dragon provided an initial payment of $2,730,000 and required further payments as follows: $1,270,000 on October 1, 2007; $2,000,000 before March 1, 2008; $2,000,000 on June 1, 2008; and $2,000,000 on October 1, 2008.

F-9

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On August 29, 2007 and September 14, 2007 the Company made payments of $172,546 and $800,000 respectively toward Fuding commitment installment one which was due October 1, 2007. These payments totaled $972,546 and were not sufficient to meet the full amount of Fuding commitment installment one prior to October 1, 2007. As such, the Company was in default as to $297,454 regarding the Fuding Agreement at the end of the quarter ended November 30, 2007. A discussion was held with WFEI and Fuding regarding this matter and WFEI agreed to extend the payment schedule to accommodate this default. No damages were claimed by WFEI or Fuding. During the quarter ended February 29, 2008, on January 14, 2008 the Company completed payment of the remaining $297,454 regarding Fuding installment one.				On December 12, 2007, with the mutual consent of WFEI, the Fuding Rights Agreement was replaced with the “Fuding Agreement” which clarified certain terminology in the predecessor agreements, but maintained the same payment terms. This agreement was filed with our Report on Form 10-K as Exhibits 10.3. WFEI provided Asian Dragon with an undertaking that it extinguished all rights to any payments under the predecessor agreements and has acknowledged that it recorded all cash and share payments made under the predecessor agreements as payments under the Fuding Agreement.				During the quarter ended February 29, 2008, on January 14, 2008 the Company made a payment of $102,546 toward Fuding installment two.				Subsequent to the end of the quarter ended February 29, 2008, the Company did not complete full payment of installment two of the Fuding commitment prior to the deadline on March 1, 2008 and was in default as to $1,897,454 toward the Fuding Agreement. A discussion was held with WFEI and Fuding regarding this matter and WFEI agreed to extend the payment schedule to accommodate this default. No damages were claimed by WFEI or Fuding.				Subsequent to the end of the quarter ended February 29, 2008, on April 14, 2008 with the mutual consent of WFEI, the Fuding Agreement was replaced with the “Fuding (Revised) Agreement” in which WFEI provided Asian Dragon with certain indemnifications which allowed a reclassification to $nil of certain short term and long term commitments payable, recorded as a total of $7,103,178 at August 31, 2007. This agreement is attached to this Form 10-Q as Exhibit 10.3. As of April 14, 2008, Asian Dragon was in default as to a total of $1,897,454 toward the Fuding (Revised) Agreement. ***NOTE 4 – Commitments and Contingencies*****Exploration License Transfers Contingencies**The Company has secured an attorney’s review of the agreements which transfer the Exploration Licenses of which it is in the process of acquiring, and to the best of its knowledge, all of these Agreements are in good standing. However, the Exploration Licenses may be subject to prior unregistered agreements or transfers and title may be affected by undetected defects. There may be valid challenges to the title of the Company’s Exploration Licenses, once acquired, which, if successful, could impair development and/or operations. The Company cannot give any assurance that title to its Exploration Licenses will not be challenged.

F-10

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**ASIAN DRAGON GROUP INC.*****(an Exploration Stage Company)******Notes to Financial Statements***

In addition the Company is relying on a series of agreements between Chinese companies and entities to ultimately transfer title of the Exploration Licenses to the Company. While the Company has relied on opinions provided by Chinese counsel and to the best of its knowledge these agreements will effectively transfer title, the agreements and the transfer may be affected by undetected defects and the Company cannot give any assurance that the transfer of title to the Company will not be challenged.				If a material defect in the transfer of any Exploration Licenses for which the Company is currently in the process of acquiring were to occur, the Company may in the future be required to record an impairment to any future capitalized amounts it had recorded relating to its Exploration Licenses or exploration activities. Such would not be the case at present however, because the Company has not yet capitalized any amounts with respect to its exploration activities.**License Issuance Contingencies**In China, two levels of government primarily deal with the approval of the establishment of a foreign-invested joint venture in mineral exploration and mining (“Mining JV”): the central and the local (e.g., provincial or municipal). China’s Ministry of Commerce (“MOFCOM”) is the central-government-level ministry in charge of reviewing and approving the establishment of Mining JVs. Applications must be submitted to MOFCOM’s local-level counterparts for upward submission to MOFCOM. However, in practice, many provincial bureaus of commerce, such as those in Henan Province, claim final approval authority and do not forward applications to MOFCOM. To our knowledge, MOFCOM is aware of this practice but has not taken any steps to intervene or take action against Mining JVs which have been approved only at the provincial level.				Once MOFCOM or its authorized local counterpart has issued its approval documents, the Chinese partners to the joint venture then apply to China’s State Administration of Industry and Commerce or its authorized local counterpart for a business license. The issuance of the business license marks the legal establishment of a Mining JV and confirms the permitted scope of the Mining JV’s activities. The business license is subject to annual review and renewal and is subject to the risk of non-renewal. To date all Joint Venture business licenses have been issued to the Mining JVs formed by WFEI and its Chinese partners.				The Ministry of Land and Resources (“MOLAR”) is the central-government-level ministry in charge of exploration and mining licenses. Generally speaking, MOLAR holds the final authority to issue exploration and mining licenses to Mining JVs; however, for projects in Henan province, it has delegated this authority to the respective provincial-level bureaus of land and resources in those provinces, for the Company’s current purposes, the Gold Bureau in particular. To date, all exploration licenses which have been granted regarding properties for which Asian Dragon has entered purchase agreements have been issued at the local-level. This raises the contingency that MOLAR may deem these licenses lack validity, or require further applications be submitted to it regarding these properties.  				Once the Company has performed sufficient work on a property to determine that it has value it must develop and submit a Development Report to the Chinese Government. This report forms a part of the application for a mining permit. There is no assurance that any applicant will be granted a mining license and therefore this represents a contingency risk for the Company’s future operations.

F-11

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**Financial Commitments**The Company’s remaining commitments under its Agreements referenced in NOTE 3 are as follows:PART ONE – Monetary Commitments:

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| **Project Item**                                                                                                                                                                                                                                                | **Installments									Required** | **Payments									Made** | ****

**Balance									Due** | ****

**Deadlines** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|---------------------------|-------------------------------|---------------------|
|                                                                                                                                                                                                                                                            |                              |                      |                          |                |
| **Jinjishan Agreement commitments:**                                                                                                                                                                                                                            |                              |                      |                          |                |
| - initial payment                                                                                                                                                                                                                                               | $ 1,792,593                       | $ 1,792,593               | $ Nil                         | August 29, 2007     |
| - installment one (1)                                                                                                                                                                                                                                      |     507,407        | -                         | 507,407                       | October 1, 2007     |
| - installment two (2)                                                                                                                                                                                                                                           |     500,000        | -                         | 500,000                       | March 1, 2008       |
| - installment three                                                                                                                                                                                                                                             |     500,000        | -                         | 500,000                       | October 1, 2008     |
|                                                                                                                                                                                                                                                            |                              |                      |                          |                |
| **Sub-total**                                                                                                                                                                                                                                                   | **$  3,300,000**             | **$ 1,792,593**           | **$ 1,507,407**               |                |
|                                                                                                                                                                                                                                   |
| **Loning Agreement commitments:**                                                                                                                                                                                                                               |                              |                      |                          |                |
| - initial payment                                                                                                                                                                                                                                               | $ 400,000                         | $ 400,000                 | $ Nil                         | August 29, 2007     |
| - installment one (3)                                                                                                                                                                                                                                           |    110,000              | 27,454                    | 82,546                        | March 1, 2008       |
| - installment two (4)                                                                                                                                                                                                                                           |     500,000        | -                         | 500,000                       | September 30, 2008  |
| - installment three (4)                                                                                                                                                                                                                                         |     500,000        | -                         | 500,000                       | September 30, 2009  |
|                                                                                                                                                                                                                                                            |                              |                      |                          |           |
| **Sub-total**                                                                                                                                                                                                                                                   | **$ 1,510,000**                   | **$427,454**              | **$1,082,546**                |                |
|                                                                                                                                                                                                                                                       |
| **Fuding Agreement commitments:**                                                                                                                                                                                                                               |                              |                      |                          |                |
| - initial payment                                                                                                                                                                                                                                               | $ 2,730,000                       | $ 2,730,000               | $ Nil                         | August 29, 2007     |
| - installment one (5)                                                                                                                                                                                                                                           |    1,270,000            | 1,270,000                 | Nil                           | October 1, 2007     |
| - installment two (6)                                                                                                                                                                                                                                           |    2,000,000            | 102,546                   | 1,897,454                     | March 1, 2008       |
| - installment three                                                                                                                                                                                                                                             |    2,000,000            | -                         | 2,000,000                     | June 1, 2008        |
| - installment four                                                                                                                                                                                                                                              |    2,000,000            | -                         | 2,000,000                     | October 1, 2008     |
|                                                                                                                                                                                                                                                            |                              |                      |                          |                |
| **Sub –total**                                                                                                                                                                                                                                             | **$ 10,000,000**                  | **$4,102,546**            | **$5,897,454**                |           |
|                                                                                                                                                                                                                                        |
| **Grand Totals**                                                                                                                                                                                                                                                |                              | **$6,322,593**            | **$8,487,407**                |                |
|                                                                                                                                                                                                                                                  |
| (1)   The Company did not make payment of installment one of the Jinjishan commitment during the quarter ended November 30, 2007 and as at November 30, 2007 was in default regarding the Jinjishan Agreement as to $507,407.								(Continued) |

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PART ONE – Monetary Commitments (continued):

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| (2)   Subsequent to the end of the quarter ended February 29, 2008, the Company did not make payment of the $500,000 installment two of the Jinjishan commitment and is currently in default as to a total of $1,007,407 toward the Jinjishan (Revised) Agreement.                                                                                                                                                                                                                                                                                                                                                            |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3)   On August 29, 2007 the Company made a payment of $27,454 toward Loning commitment installment one which was due October 1, 2007. Subsequently the Company has not completed full payment of installment one and is in default as to $82,546 toward the Loning (Revised) Agreement.                                                                                                                                                                                                                                                                                                                                      |
| (4)   The final two payments included in the Loning Agreement of $500,000 are not due to WFEI, but are instead agreed to be spent by ADG for exploration expenses to develop the Loning Property.                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (5)   On August 29, 2007 and September 14, 2007 the Company made payments of $172,546 and $800,000 respectively toward Fuding commitment installment one which was due October 1, 2007. These payments totaled $972,546 and were not sufficient to meet the full amount of Fuding commitment installment one prior to October 1, 2007. As such, the Company was in default as to $297,454 regarding the Fuding Agreement as of the quarter ended November 30, 2007. During the quarter ended February 29, 2008, on January 14, 2008 the Company completed payment of the remaining $297,454 regarding Fuding installment one. |
| (6)    During the quarter ended February 29, 2008, on January 14, 2008 the Company made a payment of $102,546 toward Fuding installment two. Subsequent to February 29, 2008, the Company did not complete full payment of installment two of the Fuding commitment prior to the deadline on March 1, 2008 and is in default as to $1,897,454 toward the Fuding (Revised) Agreement.                                                                                                                                                                                                                                          |

***NOTE 5 – Shareholder Loan***At February 29, 2008, the Company had one shareholder loan outstanding from a related party of $189,582, which included $4,679 of accrued interest for the six month period. This loan is uncollateralized and has no fixed repayment dates. During the six months ending February 29, 2008 a repayment of $52,937 was made toward this shareholder loan.***NOTE 6 – Related Party Transactions***During the six months ending February 29, 2008 related party transactions include: (i) Note 5 shareholder loan activity; (ii) payment of $20,000 in legal fees to Karlsson Law Corporation, of which our CEO is principal; (iii) the provision of office facilities by our CEO for no charge; and (iv) the payment of a $75,000 payable to our CEO for consulting fees recorded in fiscal 2007. Additionally, one of our independent directors visited our exploration sites in China on a geological consulting basis for which he received fees of $32,805 and reimbursement for expenses of $14,401.

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***NOTE 7 – Common Stock***At August 31, 2007 a $1,000,000 subscription receivable was recorded regarding a private placement completed during fiscal 2007. This was collected in full on September 13, 2007.				On January 14, 2008, the Company completed a private placement sale of 500,000 shares of its common stock at $0.80 per share for aggregate proceeds of $400,000. ***NOTE 8 – Subsequent Events***Subsequent to the February 29, 2008 quarter end, the Company did not fulfill its Jinjishan Agreement installment payments and was in default as to $1,007,407. A discussion was held with WFEI and LCUML and WFEI agreed to extend the payment schedule. No damages were claimed by WFEI or LCUML.				Subsequent to the February 29, 2008 quarter end, the Company did not fulfill its Loning Agreement installment one payment and was in default as to $82,546. A discussion was held with WFEI and Yunfeng and WFEI agreed to extend the payment schedule. No damages were claimed by WFEI or Yunfeng.				Subsequent to the February 29, 2008 quarter end, the Company did not fulfill its Fuding Agreement installment two payment and was in default as to $1,897,454. A discussion was held with WFEI and Fuding and WFEI agreed to extend the payment schedule. No damages were claimed by WFEI or Fuding.				Subsequent to the February 29, 2008 quarter end, on March 14, 2008 Mr. Daniel Hachey resigned as a member of the board of directors of the Company for personal reasons and there was no disagreement with the Company relating to its operations, policies or practices.				Subsequent to the February 29, 2008 quarter end, on April 14, 2008 with the mutual consent of WFEI, the Jinjishan Agreement, Loning Agreement, and Fuding Agreement were replaced with the “Jinjishan (Revised) Agreement”, “Loning (Revised) Agreement”, and “Fuding (Revised) Agreement”, respectively.  In these revised agreements, WFEI provided Asian Dragon with certain indemnifications which allowed a reclassification to $nil of certain short term and long term commitments payable, which had been recorded as a total of $9,679,407 at August 31, 2007.				Although the three revised contracts referenced in the paragraph above were executed subsequent to the quarter ended February 29, 2008, management elected to record the effect of the cancellation of debt relating to the commitments in these financial statements for the period ended February 29, 2008.

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**PART II – OTHER INFORMATION**

**ITEM 1.   LEGAL PROCEEDINGS**There is no litigation pending or threatened by or against us.**ITEM 1A.   RISK FACTORS**The following risk factors should be considered in connection with an evaluation of our business:**THE COMPANY CANNOT GIVE ASSURANCE THAT TRANSFER OF TITLE TO EXPLORATION LICENSES DOES NOT CONTAIN UNDETECTED MATERIAL DEFECTS**The Company has investigated title to all of the Exploration Licenses of which it is in the process of acquiring, and to the best of its knowledge, title to all of these Exploration Licenses are in good standing. However, the Exploration Licenses may be subject to prior unregistered agreements or transfers and title may be affected by undetected defects. There may be valid challenges to the title of the Company’s Exploration Licenses, once acquired, which, if successful, could impair development and/or operations. The Company cannot give any assurance that title to its Exploration Licenses will not be challenged.				In addition the Company is relying on a series of agreements between Chinese companies and entities to ultimately transfer title of the Exploration Licenses to the Company. While the Company has relied on opinions provided by Chinese

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- Costs of bringing each property into production, including exploration work, preparation of production feasibility studies, and construction of production facilities;			 Availability and costs of financing;			Ongoing costs of production;			
- Market prices for the precious metals to be produced;			 Environmental compliance regulations and restraints; and			Political climate and/or governmental regulation and control.		
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**GENERAL MINING RISKS**Factors beyond our control may affect the marketability of any substances discovered from any resource properties the Company may acquire. Metal prices, in particular gold and silver prices, have fluctuated widely in recent years. Government regulations relating to price, royalties, and allowable production and importing and exporting of precious metals can adversely affect the Company. There can be no certainty that the Company will be able to obtain all necessary licenses and permits that may be required to carry out exploration, development and operations on any projects it may acquire and environmental concerns about mining in general continue to be a significant challenge for all mining companies.**ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**On January 14, 2008, the Company accepted a subscription agreement with one entity for the purchase of 500,000 common shares of the Company at $0.80 per share for aggregate proceeds of $400,000. There were no finder’s fees or commissions paid, nor warrants issued, regarding this sale. The Company believes that such issuance is exempt from registration under Regulation S promulgated under the Securities Act of 1933, as amended, as the securities were issued to the entities through an offshore transaction which was negotiated and consummated outside of the United States.			The funds received from the investors mentioned above have been used for exploration license installment payments.**ITEM 3.   DEFAULTS UPON SENIOR SECURITIES**The Company has no senior securities outstanding.**ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**During the quarter ended February 29, 2008, no matters were submitted to a vote of the Company's security holders, through the solicitation of proxies or otherwise.

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ITEM 5.   OTHER INFORMATION
There is no other information to record under this Item.
ITEM 6.   EXHIBITS
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NumberExhibit Description  10.1Jinjishan (Revised) Agreement  10.2Loning (Revised) Agreement  10.3Fuding (Revised) Agreement  31.1Certificate of President (chief executive officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  31.2Certificate of Chief Financial Officer (principal financial officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  32.1Certificate of President (chief executive officer) and Treasurer (principal financial officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.
ASIAN DRAGON GROUP INC.
/s/ John Karlsson
John Karlsson
		President and CEO, CFO,
		Principal Accounting Officer,
		Secretary and Treasurer,
		Director and Board Chair
		Dated: April 21, 2008
		Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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NAME

TITLE

DATE
  
*/s/ John Karlsson *

 

 

   John Karlsson

President & CEO, CFO, Principal Accounting Officer,						Secretary, Treasurer, Director and Board Chair

April 21, 2008
  
*/s/ Jacques Trottier*

 

 

   Jacques Trottier

Director

April 21, 2008

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