---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

Form 10-Q

[ x ] Quarterly report pursuant section 13 or 15(d) of the
Securities Exchange Act of 1934 For the quarterly period ended July 31,
2008

[ ] Transition report pursuant section 13 or 15(d) of the
Securities Exchange Act of 1934For the transition period from
________________to ________________

Commission file number 000-52499

CANDEV RESOURCE EXPLORATION, INC.(Exact name of small business issuer as specified in its
charter)

|Nevada                   | 98-0515290                          
|------------------------ | ------------------------------------
|(State of Incorporation) | (I.R.S. Employer Identification No.)

Suite 2200 - 1177 West Hastings Street Vancouver, British
Columbia, Canada V6E 2K3 Tel: (604) 688-7526(Address and
telephone number of Registrant's principal executive offices and principal
place of business)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes [
x ] No [ ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

|Large accelerated filer [ ]                   | Accelerated filer [ ]          
|--------------------------------------------- | -------------------------------
|Non-accelerated filer [ ]                     | Smaller reporting company [ x ]
|(Do not check if a smaller reporting company) |                                

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes [ x ] No [ ]

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date.

|Class                                    | Outstanding at September 11, 2008
|---------------------------------------- | ---------------------------------
|Common Stock, $0.001 par value per share | 8,780,000 shares                 

---

CANDEV RESOURCE EXPLORATION, INC.(An Exploration
Stage Company)INTERIM FINANCIAL STATEMENTSFOR THE NINE MONTHS ENDED
JULY 31, 2008

(Stated in US Dollars)

(Unaudited - Prepared by Management)

| | ------INDEX -------                       | 
| | ----------------------------------------- | 
| |                                           | 
| | Interim Balance Sheets                    | 
| |                                           | 
| | Interim Statements of Operations          | 
| |                                           | 
| | Interim Cash Flow Statements              | 
| |                                           | 
| | Interim Statement of Stockholders' Equity | 
| |                                           | 
| | Notes to Interim Financial Statements     | 

2

---

|CANDEV RESOURCE EXPLORATION, INC.   
|------------------------------------
|(An Exploration Stage Company)      
|INTERIM BALANCE SHEETS              
|(Unaudited  Prepared by Management)
|                                    
|(Stated in US Dollars)              

|                                                               |   | July 31     |   |   | October 31 |  
|-------------------------------------------------------------- | - | ----------- | - | - | ---------- | -
|                                                               |   | 2008        |   |   | 2007       |  
|                                                               |   | (Unaudited) |   |   | (Audited)  |  
|ASSETS                                                         |  
|                                                               |   |             |   |   |            |  
|CURRENT                                                        |   |             |   |   |            |  
|Cash                                                           | $ | 1,018       |   | $ | 42,630     |  
|Receivables                                                    |   | 2,785       |   |   | 356        |  
|Prepaid expenses and deposits                                  |   | -           |   |   | 1,000      |  
|                                                               |   |             |   |   |            |  
|Total Assets                                                   | $ | 3,803       |   | $ | 43,986     |  
|                                                               |   |             |   |   |            |  
|                                                               |   |             |   |   |            |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                           |  
|                                                               |   |             |   |   |            |  
|CURRENT LIABILITIES                                            |   |             |   |   |            |  
|Accounts payable and accrued
      liabilities                 | $ | 36,810      |   | $ | 10,000     |  
|                                                               |   |             |   |   |            |  
|Total Liabilities                                              |   | 36,810      |   |   | 10,000     |  
|                                                               |   |             |   |   |            |  
|STOCKHOLDERS' EQUITY                                           |   |             |   |   |            |  
|Authorized:                                                    |   |             |   |   |            |  
|100,000,000
      preferred shares, par value $0.001 per share |   |             |   |   |            |  
|100,000,000 common shares, par value $0.001 per share          |   |             |   |   |            |  
|Issued and outstanding:                                        |   |             |   |   |            |  
|8,780,000 (2007 - 8,760,000) common shares (Note 4)            |   | 8,780       |   |   | 8,760      |  
|Additional paid in capital                                     |   | 126,680     |   |   | 116,940    |  
|Deficit - Accumulated
      during exploration stage           |   | (168,467    | ) |   | (91,714    | )
|                                                               |   |             |   |   |            |  
|Total Stockholders'
      Equity                               |   | (33,007     | ) |   | 33,986     |  
|                                                               |   |             |   |   |            |  
|Total Liabilities
      and Stockholders' Equity               | $ | 3,803       |   | $ | 43,986     |  

Going concern (Note 2)

Commitments (Note 5)

The accompanying notes are an integral part of these financial
  statements.

3

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|CANDEV RESOURCE EXPLORATION, INC.   
|------------------------------------
|(An Exploration Stage Company)      
|INTERIM STATEMENTS OF OPERATIONS    
|(Unaudited  Prepared by Management)
|                                    
|(Stated in US Dollars)              

|                                      |   | Cumulative   |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|------------------------------------- | - | ------------ | - | - | -------------------------- | - | - | ------------------------- | - | - | --------- | - | - | --------- | -
|                                      |   | Amounts      |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|                                      |   | from         |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|                                      |   | Inception to |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|                                      |   | July 31      |   |   | Three Months Ended July 31 |   |   | Nine Months Ended July 31 |  
|                                      |   | 2008         |   |   | 2008                       |   |   | 2007                      |   |   | 2008      |   |   | 2007      |  
|                                      |   |              |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|                                      |   |              |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|GENERAL AND ADMINISTRATIVE EXPENSES   |   |              |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|Accounting and auditing               | $ | 42,572       |   | $ | 3,900                      |   | $ | 3,000                     |   | $ | 17,840    |   | $ | 6,923     |  
|Advertising and
      promotion       |   | 5,118        |   |   | -                          |   |   | 537                       |   |   | 3,260     |   |   | 537       |  
|Bank charges and interest             |   | 284          |   |   | 19                         |   |   | 22                        |   |   | 120       |   |   | 103       |  
|Consulting                            |   | 10,000       |   |   | -                          |   |   | -                         |   |   | 10,000    |   |   | -         |  
|Foreign exchange loss                 |   | 409          |   |   | (622                       | ) |   | 1,664                     |   |   | (484      | ) |   | 1,879     |  
|Legal                                 |   | 67,500       |   |   | 2,479                      |   |   | 13,058                    |   |   | 28,135    |   |   | 35,845    |  
|Office and sundry                     |   | 2,485        |   |   | 350                        |   |   | 500                       |   |   | 1,669     |   |   | 715       |  
|Transfer agent                        |   | 3,053        |   |   | 203                        |   |   | 1,051                     |   |   | 793       |   |   | 2,101     |  
|Travel                                |   | 2,193        |   |   | -                          |   |   | -                         |   |   | 2,193     |   |   | -         |  
|                                      |   |              |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|                                      |   | 133,614      |   |   | 6,329                      |   |   | 19,832                    |   |   | 63,526    |   |   | 48,103    |  
|                                      |   |              |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|MINERAL PROPERTY EXPENSES (Note 5)    |   |              |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|Acquisition costs                     |   | 14,260       |   |   | -                          |   |   | -                         |   |   | 9,760     |   |   | -         |  
|Exploration costs                     |   | 20,593       |   |   | -                          |   |   | -                         |   |   | 3,467     |   |   | -         |  
|                                      |   |              |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|                                      |   | 34,853       |   |   | -                          |   |   | -                         |   |   | 13,227    |   |   | -         |  
|                                      |   |              |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|NET AND COMPREHENSIVE LOSS            | $ | (168,467     | ) | $ | (6,329                     | ) | $ | (19,832                   | ) | $ | (76,753   | ) | $ | (48,103   | )
|                                      |   |              |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|                                      |   |              |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|BASIC AND DILUTED NET LOSS PER COMMON |   |              |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|SHARE                                 |   |              |   | $ | (0.00                      | ) | $ | (0.00                     | ) | $ | (0.01     | ) | $ | (0.01     | )
|                                      |   |              |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|                                      |   |              |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|WEIGHTED AVERAGE NUMBER OF BASIC AND  |   |              |   |   |                            |   |   |                           |   |   |           |   |   |           |  
|DILUTED COMMON SHARES OUTSTANDING     |   |              |   |   | 8,780,000                  |   |   | 8,750,000                 |   |   | 8,774,380 |   |   | 8,750,000 |  

The accompanying notes are an integral part of these financial
  statements.

4

---

|CANDEV RESOURCE EXPLORATION, INC.   
|------------------------------------
|(An Exploration Stage Company)      
|INTERIM STATEMENTS OF CASH FLOWS    
|(Unaudited  Prepared by Management)
|                                    
|(Stated in US Dollars)              

|                                                |   | Cumulative   |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|----------------------------------------------- | - | ------------ | - | - | -------------------------- | - | - | ------------------------- | - | - | ------- | - | - | ------- | -
|                                                |   | Amounts      |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|                                                |   | from         |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|                                                |   | Inception to |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|                                                |   | July 31      |   |   | Three Months Ended July 31 |   |   | Nine Months Ended July 31 |  
|                                                |   | 2008         |   |   | 2008                       |   |   | 2007                      |   |   | 2008    |   |   | 2007    |  
|                                                |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|                                                |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|OPERATING ACTIVITIES                            |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|Net loss for the period                         | $ | (168,467     | ) | $ | (6,329                     | ) | $ | (19,832                   | ) | $ | (76,753 | ) | $ | (48,103 | )
|Shares issued
      for mineral property        |   | 11,960       |   |   | -                          |   |   | -                         |   |   | 9,760   |   |   | -       |  
|Changes in non-cash working capital
      items |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|Receivables                                     |   | (2,785       | ) |   | (300                       | ) |   | -                         |   |   | (2,429  | ) |   | -       |  
|Prepaid
      expenses and deposits             |   | -            |   |   | -                          |   |   | 12,745                    |   |   | 1,000   |   |   | 5,201   |  
|Accounts
      payable and accrued liabilities  |   | 36,810       |   |   | 6,407                      |   |   | 2,692                     |   |   | 26,810  |   |   | (133    | )
|                                                |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|Cash
      used in operating activities         |   | (122,482     | ) |   | (222                       | ) |   | (4,395                    | ) |   | (41,612 | ) |   | (43,035 | )
|                                                |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|                                                |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|INVESTING ACTIVITY                              |   | -            |   |   | -                          |   |   | -                         |   |   | -       |   |   | -       |  
|                                                |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|                                                |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|FINANCING ACTIVITY                              |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|Common stock issued for cash                    |   | 123,500      |   |   | -                          |   |   | -                         |   |   | -       |   |   | -       |  
|                                                |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|Cash provided by financing activity             |   | 123,500      |   |   | -                          |   |   | -                         |   |   | -       |   |   | -       |  
|                                                |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|                                                |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|NET INCREASE (DECREASE) IN CASH                 |   | 1,018        |   |   | (222                       | ) |   | (4,395                    | ) |   | (41,612 | ) |   | (43,035 | )
|                                                |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|CASH, BEGINNING OF PERIOD                       |   | -            |   |   | 1,240                      |   |   | 66,834                    |   |   | 42,630  |   |   | 105,474 |  
|                                                |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|CASH, END OF PERIOD                             | $ | 1,018        |   | $ | 1,018                      |   | $ | 62,439                    |   | $ | 1,018   |   | $ | 62,439  |  
|                                                |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|                                                |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|SUPPLEMENTAL DISCLOSURE                         |   |              |   |   |                            |   |   |                           |   |   |         |   |   |         |  
|Interest paid                                   | $ | -            |   | $ | -                          |   | $ | -                         |   | $ | -       |   | $ | -       |  
|Income taxes paid                               | $ | -            |   | $ | -                          |   | $ | -                         |   | $ | -       |   | $ | -       |  

The accompanying notes are an integral part of these financial
  statements.

5

---

|CANDEV RESOURCE EXPLORATION, INC.                
|-------------------------------------------------
|(An Exploration Stage Company)                   
|INTERIM STATEMENT OF STOCKHOLDERS EQUITY        
|FROM INCEPTION (JANUARY 9, 2006) TO JULY 31, 2008
|(Unaudited  Prepared by Management)             
|                                                 
|(Stated in US Dollars)                           

|                                   |  |               |  |   |            |  |   |             |  |   | Deficit     |   |   |               |  
|---------------------------------- |  | ------------- |  | - | ---------- |  | - | ----------- |  | - | ----------- | - | - | ------------- | -
|                                   |  | (Note 4)      |  |   |            |  |   | Accumulated |  |   |             |  
|                                   |  | Common Shares |  |   | Additional |  |   | During      |  |   | Total       |  
|                                   |  | Number        |  |   |            |  |   | Paid In     |  |   | Exploration |   |   | Stockholders' |  
|                                   |  | of Shares     |  |   | Amount     |  |   | Capital     |  |   | Stage       |   |   | Equity        |  
|                                   |  |               |  |   |            |  |   |             |  |   |             |   |   |               |  
|Shares issued for cash @ $0.001    |  |               |  |   |            |  |   |             |  |   |             |   |   |               |  
|on January 13, 2006                |  | 5,500,000     |  | $ | 5,500      |  | $ | -           |  | $ | -           |   | $ | 5,500         |  
|Shares issued for cash @ $0.01     |  |               |  |   |            |  |   |             |  |   |             |   |   |               |  
|on August 24, 2006                 |  | 2,300,000     |  |   | 2,300      |  |   | 20,700      |  |   | -           |   |   | 23,000        |  
|Shares issued for cash @ $0.10     |  |               |  |   |            |  |   |             |  |   |             |   |   |               |  
|on October 31, 2006                |  | 950,000       |  |   | 950        |  |   | 94,050      |  |   | -           |   |   | 95,000        |  
|Net loss for the period            |  | -             |  |   | -          |  |   | -           |  |   | (22,176     | ) |   | (22,176       | )
|Balance, October 31, 2006          |  | 8,750,000     |  |   | 8,750      |  |   | 114,750     |  |   | (22,176     | ) |   | 101,324       |  
|Shares issued for mineral property |  | 10,000        |  |   | 10         |  |   | 2,190       |  |   | -           |   |   | 2,200         |  
|@ $0.22 on September 7, 2007       |  |               |  |   |            |  |   |             |  |   |             |   |   |               |  
|Net loss for the year              |  | -             |  |   | -          |  |   | -           |  |   | (69,538     | ) |   | (69,538       | )
|Balance, October 31, 2007          |  | 8,760,000     |  |   | 8,760      |  |   | 116,940     |  |   | (91,714     | ) |   | 33,986        |  
|Shares issued for mineral property |  |               |  |   |            |  |   |             |  |   |             |   |   |               |  
|@ $0.488 on January 16, 2008       |  | 20,000        |  |   | 20         |  |   | 9,740       |  |   | -           |   |   | 9,760         |  
|Net loss for the period            |  | -             |  |   | -          |  |   | -           |  |   | (76,753     | ) |   | (76,753       | )
|Balance, July 31, 2008             |  | 8,780,000     |  | $ | 8,780      |  | $ | 126,680     |  | $ | (168,467    | ) | $ | (33,007       | )

The accompanying notes are an integral part of these financial
  statements.

6

---

|CANDEV RESOURCE EXPLORATION, INC.    
|-------------------------------------
|(An Exploration Stage Company)       
|NOTES TO INTERIM FINANCIAL STATEMENTS
|JULY 31, 2008                        
|(Unaudited  Prepared by Management) 
|                                     
|(Stated in US Dollars)               

|1. | ORGANIZATION AND DESCRIPTION OF THE BUSINESS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Candev Resource Exploration, Inc. (the Company)
        was incorporated on January 9, 2006 under the laws of the State of Nevada
        and extraprovincially registered under the laws of the Province of British
        Columbia on August 15, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Company is an exploration stage company engaged
        in the acquisition, exploration and development of resource properties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2. | GOING CONCERN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The accompanying financial statements have been prepared
        assuming that the Company will continue as a going concern, which contemplates,
        among other things, the realization of assets and satisfaction of liabilities
        in the normal course of business. As shown in the accompanying financial
        statements, the Company incurred a net loss of $76,753 for the nine months
        ended July 31, 2008, and has an accumulated deficit of $168,467. The Company
        intends to fund operations through equity financing arrangements, which
        may be insufficient to fund its capital expenditures, working capital,
        and other cash requirements.                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The ability of the Company to emerge from the exploration
        stage is dependent upon, among other things, obtaining additional financing
        to continue operations, explore and develop mineral properties, and the
        discovery, development and sale of ore reserves.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | These factors, among others, raise substantial doubt
        about the Companys ability to continue as a going concern. In response
        to these problems, management intends to raise additional funds through
        public or private placement offerings. The accompanying financial statements
        do not include any adjustments that might result from the outcome of this
        uncertainty.                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3. | BASIS OF PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | These interim financial statements have been prepared
        in accordance with U.S. generally accepted accounting principles for financial
        information and with the instructions to Form 10-Q and Item 310(b) of
        Regulation S. In the opinion of management, all adjustments (consisting
        of normal recurring accruals) considered necessary for a fair presentation
        have been included. Operating results for the nine months ended July 31,
        2008 are not necessarily indicative of the results that may be expected
        for any interim period or an entire year. The Company applies the same
        accounting policies and methods in its interim financial statements as
        those in the most recent audited annual financial statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4. | COMMON SHARES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On January 13, 2006, the Company issued 5,500,000 common
        shares valued at $0.001 per share, for total gross proceeds of $5,500
        to the President of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On August 24, 2006, the Company issued 2,300,000 common
        shares valued at $0.01 per share, for total gross proceeds of $23,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

7

---

|CANDEV RESOURCE EXPLORATION, INC.    
|-------------------------------------
|(An Exploration Stage Company)       
|NOTES TO INTERIM FINANCIAL STATEMENTS
|JULY 31, 2008                        
|(Unaudited  Prepared by Management) 
|                                     
|(Stated in US Dollars)               

|4. | COMMON SHARES(Continued)                                                                                                                                                                                                                                                                                          
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                   
|   | On October 31, 2006, the Company issued 950,000 common
        shares valued at $0.10 per share, for total gross proceeds of $95,000.                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                   
|   | On September 7, 2007, the Company issued 10,000 common
        shares valued at $0.22 per share, pursuant to the terms of the King Property
        agreement (Note 5).                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                   
|   | On January 16, 2008 the Company issued 20,000 common
        shares valued at $9,760, pursuant to the terms of the King Property agreement
        (Note 5).                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                   
|5. | MINERAL PROPERTY EXPLORATION EXPENSES                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                   
|   | On August 25, 2006 (and as amended on January 15, 2008)
        the Company entered into an agreement to acquire a 100% interest in certain
        mineral claims that make up the King Property located in the Iskut River
        region in northwestern British Columbia. The costs are summarized as follows:

Acquisition costs
      $
      14,260Exploration costs
      
      20,593Balance, July 31, 2008
      $
      34,853


In order to earn this 100% interest,
  subject to a 2% Net Smelter Return royalty, the Company must make cash payments
  totalling $297,272 (Cdn$305,000) and issue 10,000 common shares as follows:

| | (a) | $2,300 (Cdn$2,500) cash payment within ten business
        days of signing the agreement (paid);                                                                        
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | $2,354 (Cdn$2,500) cash payment and issuance of 10,000
        common shares (issued) within ten business days of the Company becoming
        free trading on the OTCBB;
| | (c) | $9,416 (Cdn$10,000) cash payment on October 31, 2007
        (20,000 common shares in lieu of cash issued);                                                              
| | (d) | $39,062 (Cdn$40,000) cash payment on October 31, 2008;                                                                                                                   
| | (e) | $48,828 (Cdn$50,000) cash payment on October 31, 2009;                                                                                                                   
| | (f) | $97,656 (Cdn$100,000) cash payment on October 31, 2010;
        and                                                                                                      
| | (g) | $97,656 (Cdn$100,000) cash payment on October 31, 2011.                                                                                                                  

The Company may, at any time, purchase
  up to half (1%) of the Net Smelter Return royalty by paying the vendor $976,500
  (Cdn$1,000,000).

|6. | FINANCIAL INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Companys financial instruments consist of
        cash, receivables and accounts payable and accrued liabilities. It is
        managements opinion that the Company is not exposed to significant
        interest, currency, or credit risks arising from these financial instruments.
        The fair values of these financial instruments approximate their carrying
        values due to their short term-maturity or capacity of prompt liquidation.

8

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|CANDEV RESOURCE EXPLORATION, INC.    
|-------------------------------------
|(An Exploration Stage Company)       
|NOTES TO INTERIM FINANCIAL STATEMENTS
|JULY 31, 2008                        
|(Unaudited  Prepared by Management) 
|                                     
|(Stated in US Dollars)               

|7. | RELATED PARTY TRANSACTIONS                                                                                                                                              
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                         
|   | On January 13, 2006, the Company issued 5,500,000 common
        shares valued at $0.001 per share to the president of the Company for
        gross proceeds of $5,500.

9

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Item 2. Management's Discussion and Analysis or Plan of
Operations

Overview

This quarterly report contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These include statements about our expectations, beliefs, intentions or
strategies for the future, which we indicate by words or phrases such as
"anticipate," "expect," "intend," "plan," "will," "we believe," "our company
believes," "management believes" and similar language. These forward-looking
statements are based on our current expectations and are subject to certain
risks, uncertainties and assumptions, including those set forth in the following
discussion, including under the heading "- Risk Factors". Our actual results may
differ materially from results anticipated in these forward-looking statements.
We base our forward-looking statements on information currently available to us,
and we assume no obligation to update them. In addition, our historical
financial performance is not necessarily indicative of the results that may be
expected in the future and we believe that such comparisons cannot be relied
upon as indicators of future performance. Other important factors that could
cause actual results to differ materially include the following: business
conditions, the price of precious metals, ability to attract and retain
personnel; the price of the Company's stock; and the risk factors set forth from
time to time in the Company's SEC reports, including but not limited to its
annual report on Form 10-K; its quarterly reports on Forms 10-Q; and any reports
on Form 8-K. In addition, the Company disclaims any obligation to update or
correct any forward-looking statements in all the Company's annual reports and
SEC filings to reflect events or circumstances after the date hereof.

Business

History and Organization

Candev Resource Exploration, Inc. (the "Company" or "Candev")
was incorporated under the laws of the state of Nevada on January 9, 2006. We
are considered an exploration stage company. To date, our activities have been
limited to organizational matters, obtaining a geology report on the King claims
and the preparation and filing of a registration statement. In connection with
the organization of our Company, the founding shareholders of our Company
contributed an aggregate of US$5,500 cash in exchange for a total of 5,500,000
shares of common stock. The Company is quoted for trading on the OTC Bulletin
Board under the stock symbol CVRX. Candev is defined as a shell company
under Rule 12b-2 of the Exchange Act.

We acquired our mining property from Carl von Einsiedel under a
Property Option Agreement dated August 25, 2006 whereby we have a right and
option to acquire a 100% interest in and to the King claims. On January 15, 2008
Candev amended the Property Option Agreement. The Amended Property Option
Agreement now includes two (2) additional mining claims located in the Iskut
River region in northwestern British Columbia: tenure numbers 552025 and 552026.
The two additional claims increase the area of the King claims by 993.7 hectares
and are known as the King South Claims. The original three (3) claims subject
to the Property Option Agreement are now known as the King North Claims. The
total five (5) claims now included within the Amended Property Option Agreement
comprise two non-contiguous blocks, which total 1,614.1 hectares. In addition,
the payments have been amended whereby Candev is now obligated to make cash
payments of CDN$305,000 over a five year period instead of CDN$100,000 over a
four year period. Mr. Von Einsiedel also had the option to receive $10,000 on
the first anniversary of the Agreement as cash or 20,000 shares of Candev, which
Mr. Von Einsiedel subsequently decided to exercise and 20,000 shares were issued
on January 16, 2008. The anniversary date of the Agreement is now defined as
October 31 of each year.

Property Option Agreement

The King claims consist of five mineral claims covering approximately
  1,614.1 hectares (3,987 acres). The following table sets forth the details of
  the claims:

10

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Name - Tenure #
    Area in Ha
    Expiry DateKing North Claim - 508287
    159 (394 acres)
    September 30, 2009King North Claim - 528276
    443 (1,095 acres)
    September 30, 2009King North Claim - 531518
    17.72 (43.79 acres)
    September 30, 2009King South Claim - 552025
    976 (2,411 acres)
    September 30, 2009King South Claim -552026
    17.75 (43.84 acres)
    September 30, 2009


Under the Amended Property Option Agreement, Carl von Einsiedel
has a 2% Net Smelter Return ("NSR") royalty interest in the King claims, if and
when Candev exercises its option to acquire a 100% interest in the King Property
by making the required cash payments. The NSR means the gross value of ore, ore
concentrates or bullion shipped from the King Property as shown on the smelter
settlement sheets and any output or production tax levied with respect to
production from the King Property.

Candev also has the right to purchase at any time up to 1% (or
50% of the NSR) by paying Mr. von Einsiedel $976,500 (CDN$1,000,000).

Under the Agreement, Candev is required to make all filings
related to the King Property and to maintain the King Property in good standing
by preparing and filing the assessment reports, paying taxes and keeping the
King Property free and clear of all liens and encumbrances.

The $302,652 (CDN$305,000) cash payments will be paid as
follows:

| | (a) | $2,300 (CDN$2,500) upon signing of the Agreement
      (paid);                                                                                                                                                    
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                   
| | (b) | $2,482 (CDN$2,500) when Candev is quoted for trading on
      the OTC Bulletin Board (paid);                                                                                                                      
| |     |                                                                                                                                                                                                                   
| | (c) | $9,929 (CDN$10,000) on the first anniversary date
      (October 31, 2007) of the Agreement or 20,000 shares of Candev
      (subsequently issued on January 16, 2008) at the choosing of Mr. von
      Einsiedel;
| |     |                                                                                                                                                                                                                   
| | (d) | $39,062 (CDN$40,000) on the second anniversary date
      (October 31, 2008) of the Agreement;                                                                                                                    
| |     |                                                                                                                                                                                                                   
| | (e) | $48,828 (CDN$50,000) on the third anniversary date
      (October 31, 2009) of the Agreement;                                                                                                                     
| |     |                                                                                                                                                                                                                   
| | (f) | $97,656 (CDN$100,000) on the fourth anniversary date
      (October 31, 2010) of the Agreement; and                                                                                                               
| |     |                                                                                                                                                                                                                   
| | (g) | $97,656 (CDN$100,000) on the fifth anniversary date
      (October 31, 2011) of the Agreement.                                                                                                                    

As required under the Property Option Agreement, the Company
  issued 10,000 shares to Mr. von Einsiedel on September 7, 2007 and 20,000 shares
  pursuant to the Amended Property Option Agreement on January 16, 2008.

11

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Geology Report

In August 2006, Mr. Ian Foreman, P.Geo. was hired by Candev to
  provide an initial Geology Report on the King claims. Mr. Foreman has 8 years
  experience as a consulting geologist and has continuously practiced in his profession
  as a geologist since 1993. He graduated in 1992 from Queen's University in Ontario,
  Canada, with a Bachelor of Science degree in geology. He is a member of the
  Association of Professional Engineers and Geoscientists of the Province of British
  Columbia (No. 23572). The purpose of this report was to evaluate the area of
  the claim group, and the prior exploration work conducted on the claims, and
  to recommend an exploration program.

Recommended Exploration Program

Mr. Foreman has updated the recommended initial exploration
program in a summary report dated January 7, 2008. Mr. Foreman recommends
sampling and mapping be completed on the King North Claims and the King South
Claims prior to implementing a more extensive exploration program. The 2008
program should include sampling and mapping of all of the known prospects at an
estimated cost of $19,858 (CDN$20,000) for a stage 1 program. This should also
include an allowance for an additional $79,432 (CDN$80,000) to provide funding
for a stage 2 program that would include detailed sampling and geophysical
surveys, which would then prepare the property for drill testing. Presently, we
are attempting to raise money in a financing for the stage 1 and stage 2
programs.

Geological Exploration Program

Our mineral claims presently do not have any mineral reserves.
The property that is the subject of our mineral claims is undeveloped and does
not contain any open-pit or underground mines. There is no mining plant or
equipment located on the property.

Exploration is currently in the preliminary stages. Our
exploration program is exploratory in nature and there is no assurance that
mineral reserves will be found.

Candev should be prepared to run stages 1 and 2 concurrently.
In the event that initial sampling indicates that additional work is justified
it should be possible to complete the geophysical surveys. This would then allow
the Company to prepare sites for drill testing in time for the 2009 field
season.

Budget allocations are as follows:

Stage 1:Crew mobilization
      and accommodation
    CDN$2,500Geological
      personnel (allow 15 man days @$500)
    CDN$7,500Helicopter support
      (allow 5 hours @$1,000)
    CDN$5,000Assays
    CDN$1,000Contingency
    CDN$2,000Technical reports
    CDN$2,000Total
    CDN$20,000 (US$19,858)Stage 2:Crew mobilization
      and accommodation
    CDN$4,500


12

---

Geological
      personnel (allow 20 man days @$500)
    CDN$10,000Helicopter support
      (allow 10 hours @$1,000)
    CDN$10,000Assays
    CDN$1,000Geophysics
    CDN$45,000Contingency
    CDN$6,500Technical reports
    CDN$3,000Total
    CDN$80,000 (US$79,432)


Foremost Geological Consulting is a business operated by Mr.
Ian Foreman. Mr. Foreman is a qualified geologist and we will engage him to
conduct the mineral exploration program under industry standards. He will be
responsible for hiring personnel and for all appropriate worker-related costs
and will bill us for their services.

Canadian Mining Law

Work on the claim is governed by the laws of British Columbia.
Title to mineral claims are issued and administered by the Mineral Titles
Branch, Ministry of Energy and Mines, and title must comply with all provisions
under the Mineral Tenure Act (British Columbia). A mineral claim acquires the
right to the minerals which were available at the time of location and as
defined in the Mineral Tenure Act (British Columbia). There are no surface
rights included, but the title holder has the right to use the surface of the
claim for mining purposes only. All work carried out on a claim that disturbs
the surface by mechanical means requires a Notice of Work and must receive
written approval from the District Inspector of Mines prior to commencement.

The sections below describing the property are excerpts from
a geological report dated October 31, 2006 prepared by Mr. Ian Foreman, our
consulting geologist.

Location and Access

The King claims are located in the Iskut River region in
northwestern British Columbia in the Liard Mining Division. The King Project is
located within the eastern boundary of the Coast Range Mountains approximately
275 kilometres (170 miles) northwest of Smithers, British Columbia.

The King claims are located at NTS 104-B/14E and 104-B15/W. The
area is accessed by using fixed wing aircraft from Smithers to the Bronson Creek
airstrip located on the southern side of the Iskut River. Daily travel to the
property is via helicopter only. Alternate access to the Bronson Creek airstrip,
by fixed wing aircraft is possible via Terrace, Stewart or Wrangell. Personnel
and material delivered via the Stewart-Cassiar Highway to Bob Quinn Lake can be
transported via helicopter to the property.

Claim Status

The King claims consist of three mineral claims covering 600
hectares (1,482 acres). Claim title is recorded with the Provincial Ministry of
Energy, Mines and Petroleum Resources. The recorded owner is Carl von Einsiedel.
Upon exercise of the option under the Property Option Agreement, Mr. von
Einsiedel will transfer the King claims to Candev.

Physiography

The King Project is situated in a mountainous, heavily
glaciated region to the west of the head of the Verrett River. Relief ranges
from 500 meters (0.31 miles) above sea level to approximately 1800 meters (1.12
miles) along the northern boundary. The Forrest Kerr Icefield lies immediately
to the northwest of the area.

13

---

The tree line is at approximately 1200 (0.75 miles) meters
above sea level. Below this elevation the vegetation is dense and predominantly
made up of coniferous trees with an undergrowth of devil's club. Steep side
creeks provide the best access and geologic control in this area. Snow cover is
a limiting factor on the field season. The period of least snow cover occurs
between July and mid-September.

History and Previous Work

The Iskut River area has been actively explored since Hudson's
Bay Mining and Smelting located the Pick Axe showing and high grade gold,
silver, lead and zinc geological formations on the upper slopes of nearby Johnny
Mountain in 1954. During the 1960's several claims were staked on Johnny
Mountain and Sulphurets Creek. Airborne geophysical surveys were carried out on
a reconnaissance basis by several major mining companies. A promising geological
formation was located at the head of Bronson Creek in 1969 by Skyline
Exploration Ltd.

During the period 1980-1986, Skyline completed a follow-up
exploration program on the Stonehouse Gold Zone. This revealed the presence of
high grade gold mineralization with significant values in silver and copper.

In response to this an extensive and ongoing underground
development and diamond drill program was undertaken in 1987.

DuPont of Canada Explorations Ltd. staked the McLymont
property, located approximately two kilometers to the northeast, on the basis of
a regional stream sediment survey in 1980. A number of geophysical and
geochemical targets plus gold-silver bearing quartz veins were discovered.

Between 1962 and 1972 Newmont Mining Corporation of Canada Ltd.
investigated several copper-bearing skarn zones northwest of Newmont Lake. A
limited follow-up silt sampling program encountered some anomalous gold values
but subsequently no further work was done.

During July and August 1987, Ticker Tape Resources ran phase
one of a two phase exploration program. Phase 1 included prospecting, geological
mapping and geochemical sampling.

In October 1987 Ticker Tape Resources, undertook phase 2
portion of the exploration program including 4.1 km of ground geophysical
surveying completed over the North silver-lead-zinc zone that identified a
subsequent diamond drilling program.

This is a historical summary of exploration work done on the
King claims or areas around the claim. There is no assurance that a commercially
viable ore deposit (if any) exists on the King Property until further
exploration work and comprehensive evaluation based upon unit cost, grade,
recoveries and other factors including economic feasibility.

Property Geology

The King Project lies within the western most part of the
Intermontane Tectonic Belt, close to its boundary with the Coastal Crystalline
Tectonic Belt. As a result of the proximity of this area, geologic relationships
tend to be quite complex.

Discussion in January 7, 2008 Report

During June 2007 Candev reviewed the technical data for a
second claim group comprising 993.7 hectares (2,454 acres) owned by the same
vendor that hosts an additional gold prospect (referred to as the King South
Prospect) located immediately southwest of the King Project but separated by a
narrow fractional claim owned by unrelated third parties.

In early July a site visit was completed and field personnel
  were able to complete a limited examination of the King Vein area however, both
  the North and South Zones and the King South Prospect were still snow covered
  as a result of an unusually late spring melt. Although most of the King Vein
  area was also snow covered, field personnel were able to sample several large
  angular blocks of quartz containing sulfide minerals that were obviously dislodged
  from the King Vein.

14

---

A second attempt was made to visit all of the known mineralized
zones on September 15 but an early winter storm made it impossible to safely
access the property and no further work was carried out. The total cost of
fieldwork and geo-referencing of historical sampling data completed during the
calendar year 2007 was $9,293 (CDN$9,111).

Geological and Technical Staff

Foremost Geological Consulting has subcontracted Ram
Explorations Ltd. to assist with the exploration programs. At the right time, we
will hire from the available pool of contract geologists depending on the time
of the year and availability of experience. Presently, there are no other
agreements or understandings to hire such geologists or engineers.

Competitive Factors

The mineral industry is fragmented. We compete with other
exploration companies looking for a variety of mineral resources. We are a very
small exploration company compared to many of our competitors. Although we will
be competing with other exploration companies, there is no competition for the
exploration of minerals on our mineral claim. We intend to explore and hope to
find sufficient mineralization to a point in which major mining companies or
mining financial groups would seriously consider pursuing the mineral claim as a
valuable and significant acquisition.

Location Challenges

We do not expect any major challenges in accessing the property
during the initial exploration stages. However, due to the seasonal winter
conditions of the area, we can only access the property between May and
September of each year.

Regulations

Our mineral exploration program will comply with the British
Columbia Mineral Tenure Act. This act sets forth rules for:

| | * | locating claims         
| | - | ------------------------
| | * | posting claims          
| | * | working claims          
| | * | reporting work performed

We also have to comply with the British Columbia Mineral
Exploration Code which tells us how and where we can explore for minerals. We
must comply with these laws to operate our business. Compliance with these rules
and regulations will not adversely affect our operations.

In order to explore for minerals on our mineral claim we must
submit our plan for review. We believe that the plan will be accepted and an
exploration permit will be issued to us or our agent. The exploration permit is
the only permit or license we will need to explore for precious and base
minerals on the mineral claim.

We will be required to obtain additional work permits from the
  British Columbia Ministry of Energy and Mines for any exploration work that
  results in a physical disturbance to the land. Accordingly, we may be required
  to obtain a work permit if we proceed beyond the exploration work contemplated
  by our proposed Phase I and Phase II exploration programs. There is a charge
  of approximately $1,489 (CDN$1,500) in order to obtain a work permit under the
  Mining Act. The time required to obtain a work period is approximately four
  weeks. We will incur the expense of our consultants to prepare the required
  submissions to the Ministry of Energy and Mines. We will be required by the
  Mining Act to undertake remediation work on any work that results in physical
  disturbance to the land. The cost of remediation work will vary according to
  the degree of physical disturbance. No remediation work is anticipated as a
  result of completion of Phase I and Phase II of the exploration program.

15

---

We have budgeted for regulatory compliance costs in the
proposed exploration program recommended by the summary report. As mentioned
above, we will have to sustain the cost of reclamation and environmental
remediation for all exploration and other work undertaken. The amount of
reclamation and environmental remediation costs are not known at this time as we
do not know the extent of the exploration program that will be undertaken beyond
completion of the recommended exploration program. Because there is presently no
information on the size, tenor, or quality of any mineral resource at this time,
it is impossible to assess the impact of any capital expenditures on earnings or
our competitive position in the event a potential mineral deposit is
discovered.

If we enter into substantial exploration, the cost of complying
with permit and regulatory environment laws will be greater than in Phase I and
Phase II because the impact on the project area is greater. Permits and
regulations will control all aspects of any program if the project continues to
that stage because of the potential impact on the environment. We may be
required to conduct an environmental review process under the British Columbia
Environmental Assessment Act if we determine to proceed with a substantial
project. An environmental review is not required under the Environmental
Assessment Act to proceed with the recommended Phase I or Phase II exploration
programs on our King claims.

Environmental Factors

We will also have to sustain the cost of reclamation and
environmental remediation for all work undertaken which causes sufficient
surface disturbance to necessitate reclamation work. Both reclamation and
environmental remediation refer to putting disturbed ground back as close to its
original state as possible. Other potential pollution or damage must be cleaned
up and renewed along standard guidelines outlined in the usual permits.
Reclamation is the process of bringing the land back to a natural state after
completion of exploration activities. Environmental remediation refers to the
physical activity of taking steps to remediate, or remedy, any environmental
damage caused, i.e. refilling trenches after sampling or cleaning up fuel
spills. Our Phase I and II programs do not require any reclamation or
remediation other than minor clean up and removal of supplies because of minimal
disturbance to the ground. The amount of these costs is not known at this time
as we do not know the extent of the exploration program we will undertake,
beyond completion of the recommended two phases described above. Because there
is presently no information on the size, tenor, or quality of any resource or
reserve at this time, it is impossible to assess the impact of any capital
expenditures on our earnings or competitive position in the event a
potential-economic deposit is discovered.

Employees

Initially, we intend to use the services of contractors and
consultants for exploration work on our properties. At present, we have no paid
employees. We believe keeping a low number of full-time employees will conserve
cash and allow greater flexibility in the future.

Plan Of Operations

Our business plan is to proceed with the exploration of the
King claims to determine whether there are commercially exploitable reserves of
base and precious metals. We have decided to embark upon the initial phase of
the exploration program recommended by Ian Foreman, P.Geo. Stage 1 and Stage 2
of the recommended program will cost approximately $99,290 (CDN$100,000). On
July 31, 2008 we had cash on hand of $1,018 and working capital deficit of
$33,007. Accordingly, we are not able to proceed with Stage 1 or Stage 2 of our
exploration program. We will need additional funding of at least $168,793
(CDN$170,000) to complete stage 1 and 2, make the $39,062 (CDN$40,000) payment
under the Amended Property Option Agreement due October 31, 2008 and meet
operating expenses.

As a result of an assessment of the results of our initial
exploration program conducted in 2007 and amendment of the Property Option
Agreement to include two additional claims known as the King South claims, we
updated

16

---

and modified our proposed exploration. Should a follow-up
exploration program be undertaken, it would likely commence in 2009 after
reviewing the results of stage 1 and stage 2 exploration results. The cost of
stage 1 is $19,858 (CDN$20,000) and for stage 2 is $79,432 (CDN$80,000). We
presently do not have sufficient working capital to carry out stage 1 or stage 2
of our exploration program. We are now attempting to raise money in a financing
for the stage 1 and stage 2 programs.

During this exploration stage, Mr. McLeary, our president, will
only be devoting approximately 20 hours per week of his time to our business. We
do not foresee this limited involvement as negatively impacting our company over
the next 12 months as all exploratory work is being performed by an outside
consultant. If, however, the demands of our business require more time of Mr.
McLeary, such as raising additional capital or addressing unforeseen issues with
regard to our exploration efforts, he is prepared to adjust his timetable to
devote more time to our business, up to 30-40 hours per week.

In the event that we require additional funding, we anticipate
that such funding will be in the form of equity financing from the sale of our
common stock. We will not be using our effective registration statement in any
subsequent unregistered offering and we will comply with applicable integration
rules as set forth in Rule 502(a) of Regulation D. However, we cannot provide
investors with any assurance that we will be able to raise sufficient funding
from the sale of our common stock to fund additional phases of the exploration
program should we decide to proceed. We believe that debt financing will not be
an alternative for funding any further phases in our exploration program. The
risky nature of this enterprise and lack of tangible assets places debt
financing beyond the credit-worthiness required by most banks or typical
investors of corporate debt until such time as an economically viable mine can
be demonstrated. We do not have any arrangements in place for any future equity
financing.

We anticipate that we will incur the following expenses over
the next 12 months:

|(1) | $99,290 (CDN$100,000) in connection with the completion
      of stage 1 and stage 2 of our recommended geological work program;
    and                                   
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                            
|(2) | $20,000 for operating expenses and $39,062 (CDN$40,000)
      for the second anniversary payment due on October 31, 2008 under the
      Amended Property Option Agreement.

We had cash in the amount of $1,018 as of July 31, 2008. We do
not have plans to purchase any significant equipment or change the number of our
employees during the next 12 months. Accordingly, we will need to obtain
additional financing to meet exploration work program expenses, operating
expenses and property payments for the next 12 months.

Results of Operations for the Nine Month Period Ended July
31, 2008

We did not earn any revenues from inception on January 9, 2006
to July 31, 2008. We do not anticipate earning revenues until such time as we
have entered into commercial production of our mineral properties. We are
presently in the exploration stage of our business and we can provide no
assurance that we will discover commercially exploitable levels of mineral
resources on our properties, or if such resources are discovered, that we will
enter into commercial production of our mineral properties.

We incurred a net loss of $76,753 for the nine month period
ended July 31, 2008.

Liquidity and Capital Resources

We had cash of $1,018 as of July 31, 2008. We had a working
capital deficit of $33,007 as of July 31, 2008.

17

---

We have not attained profitable operations and are dependent
upon obtaining financing to pursue exploration activities. For these reasons our
auditors stated in their report that they have substantial doubt we will be able
to continue as a going concern.

Risk Factors

There is no assurance that our business will be profitable. We
must conduct exploration to determine what amount, type and tenure of minerals,
if any, exist on our property. We do not claim to have any reserves whatsoever
at this time on any of our claims. An investment in our common stock involves a
high degree of risk. You should carefully consider the risks described below and
the other information in this report before investing in our common stock. If
any of the following risks occur, our business, operating results and financial
condition could be seriously harmed.

We are a recently organized business and you cannot evaluate
the investment merits of our Company because we have no operating
history.

Our Company is only recently organized with no operating
history, which makes it difficult to evaluate the investment merits of our
Company. Our Company was recently organized on January 9, 2006 and is a start-up
company. We have no operating history and we do not have any business prior to
our organization. From inception to July 31, 2008, we incurred losses in the
amount of $168,467 in our operations.

We may not be able to continue as a going concern if we do
not obtain additional financing.

Because of our lack of funds and short operating history
incurring only expenses, our independent accountants' audit report states that
there is substantial doubt about our ability to continue as a going concern. Our
independent auditor pointed out that we incurred only losses since our inception
raising substantial doubt about our ability to continue as a going concern.
Therefore, our ability to continue as a going concern is highly dependent upon
obtaining additional financing for our planned operations. As of the date
hereof, all our cash has been raised from the issuance of securities.

If we do not obtain additional financing, our business will
fail because we cannot fund our planned exploration program.

In order for us to perform any further exploration under our
exploration program, we will need to obtain additional financing. As of July 31,
2008, we had cash in the amount of $1,018. We currently do not have any
operations and we have no income. Our business plan calls for incurring
additional expenses in connection with the mapping, prospecting and surveying
program of our mineral claims. Presently, we do not have sufficient funds to
carry out stage 1 or stage 2. We will need to raise additional cash for funding
stage 1 and 2. If our exploration programs are successful in discovering ore of
commercial tonnage and grade, we will require additional funds in order to place
the King claims into commercial production. We currently do not have any
arrangements for financing and we may not be able to obtain financing when
required. Obtaining additional financing would be subject to a number of
factors, including the market price for base and precious metals and the cost of
exploring for these minerals. These factors may make the timing, amount, terms
or conditions of additional financing unavailable to us.

Because our sole executive officer and director does not
have formal training specific to the mining industry, there is a higher risk our
business will fail.

Mr. Mark McLeary, our sole executive officer and director, does
not have any formal training as a geologist, or in the technical aspects of
management of a company specializing in mining and exploration for base and
precious metals. With no direct training or experience in these areas, our
management may not be fully aware of the specific requirements related to
working within this industry. Although Mr. McLeary has some significant business
experience, his decisions and choices may not take into account standard
exploration or mining approaches commonly used in the industry. Consequently,
our operations, earnings, and ultimate financial success could suffer
irreparable harm due to management's lack of experience in this industry.

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Because our sole executive officer and director has only
agreed to provide his services on a part-time basis, he may not be able or
willing to devote a sufficient amount of time to our business operations,
causing our business to fail.

Mr. Mark McLeary, our sole executive officer and director, is
also a principal of McLeary Capital Management, Inc., a company specializing in
the provision of retirement, tax and estate planning advice to individuals and
corporations in British Columbia. Because we are in the early stages of our
business, Mr. McLeary devotes approximately 20 hours per week to our affairs. If
the demands of our business require the full business time of Mr. McLeary, he is
prepared to adjust his timetable to devote up to 30-40 hours a week. However,
Mr. McLeary may not be able to devote sufficient time to the management of our
business, as and when needed. It is possible that the demands of Mr. McLeary's
other business interests will increase with the result that he would no longer
be able to devote sufficient time to the management of our business. Competing
demands on Mr. McLeary's time may lead to a divergence between his interests and
the interests of other shareholders.

We are highly dependent on our senior management. The loss
of our sole executive officer could hinder our ability to pursue our stated plan
of operation and obtain debt or equity financing, if and when required.

We believe that our continued success depends to a significant
extent upon the efforts and abilities of our senior management and in particular
Mark McLeary, our sole executive officer and director. Mr. McLeary has been a
certified financial planner since 1995 and a chartered financial planner since
1993. He has worked in the financial planning industry for over 17 years with an
emphasis on investment and tax planning. We believe that the loss of Mr.
McLeary's business and management experience could hinder our ability to pursue
our stated plan of operation and obtain debt or equity financing, if and when
required.

We have no known mineral resources and if we cannot find any
mineral resources we may have to cease operations.

We have no measured mineral bodies. If we do not find a mineral
body or bodies containing valuable minerals or metals or if we cannot conduct
further exploration of any discovered minerals, either because we do not have
money to do it or because it is not economically feasible to do it, we may have
to cease operations and you will lose your investment.

Our sole asset is an Amended Property Option Agreement and
if we fail to make the required payments on a timely basis, we will lose the
right to acquire a 100% interest in and to the King Project.

Under the Amended Property Option Agreement we have a right and
option to acquire a 100% interest in and to the King claims by paying a total of
$302,652 (CDN$305,000) in cash over a five year period to Mr. Carl von
Einsiedel. The failure of our Company to make any cash payments or issue the
shares within the contractual time limit will allow Mr. von Einsiedel to
terminate the Agreement. If the Agreement is terminated, we will lose all rights
to the King Property, including any payments previously made to Mr. von
Einsiedel. The Amended Property Option Agreement is our sole asset and if we
lose the contractual rights to acquire the King Property, we will have no assets
and you may lose all your investment in our Company.

Title to the King claims is registered in the name of Mr.
Carl von Einsiedel and he may transfer title to third parties without our
knowledge.

The Property Option Agreement only gives us a right to acquire
the King claims by fulfilling our obligations under the contract. We cannot
absolutely prevent Mr. Carl von Einsiedel from transferring the King Property to
third parties without our knowledge. A third party has no way of knowing that we
have rights to the King Property since ownership is registered in the name of
Mr. von Einsiedel at the Minerals Title Office of British Columbia. If the King
Property is transferred to third parties we may have to litigate in order to
determine our ownership rights. There is no way of knowing if Mr. von Einsiedel
will or has transferred the property to third parties. Our only protection is
our contractual rights under the Agreement.

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As we will be subject to compliance with government
regulation, which may change, the anticipated costs of our exploration program
may increase.

There are several governmental regulations that materially
restrict mineral exploration or exploitation. We will be subject to the Mining
Act of British Columbia as we carry out our exploration programs. We may be
required to obtain work permits, post bonds and perform remediation work for any
physical disturbance to the land in order to comply with these regulations.
While our planned exploration program budgets for regulatory compliance, there
is a risk that new regulations could increase our costs of doing business and
prevent us from carrying out our exploration program.

As the Province of British Columbia owns the land covered by
our mineral claims and native land claims might affect our title to the mineral
claims or to British Columbia's title to the property, our business plan may
fail.

We are unaware of any outstanding native land claims on the
King claims. However, it is possible that a native land claim could be made in
the future. The federal and provincial government policy at this time is to
consult with all potentially affected native bands and other stakeholders in the
area of any potential mining. Should we encounter a situation where a native
person or group claims an interest in our claims, we may be able to provide
compensation to the affected party in order to continue with our exploration
work, or if such an option is not available, we may have to relinquish our
interest in these claims. In either case, the costs and/or losses could be
greater than our financial capacity and our business would fail.

Because we have nominal operations and nominal assets, we
are considered a "shell company" and will be subject to more stringent reporting
requirements.

The Securities and Exchange Commission ("SEC") adopted Rule 405
and Exchange Act Rule 12b-2 which defines a shell company as a registrant that
has no or nominal operations, and either (a) no or nominal assets; (b) assets
consisting solely of cash and cash equivalents; or (c) assets consisting of any
amount of cash and cash equivalents and nominal other assets. Our balance sheet
states that we have cash as our only asset; therefore, we are defined as a shell
company. The rules prohibit shell companies from using a Form S-8 to register
securities pursuant to employee compensation plans. However, the rules do not
prevent us from registering securities pursuant to the registration statements.
Additionally, the rule regarding Form 8-K requires shell companies to provide
more detailed disclosure upon completion of a transaction that causes it to
cease being a shell company. We must file a current report on Form 8-K
containing the information required in a registration statement on Form 10,
within four business days following completion of the transaction together with
financial information of the private operating company. In order to assist the
SEC in the identification of shell companies, we are also required to check a
box on Form 10-Q and Form 10-K indicating that we are a shell company. To the
extent that we are required to comply with additional disclosure because we are
a shell company, we may be delayed in executing any mergers or acquiring other
assets that would cause us to cease being a shell company. The SEC adopted a new
Rule 144 effective February 15, 2008, which does not allow a holder of
restricted securities of a shell company to resell under the prospectus
exemptions of new Rule 144.

Because our sole executive officer and director, Mr. Mark
McLeary, controls approximately 62% of our outstanding common stock, investors
may find that corporate decisions influenced by Mr. McLeary are inconsistent
with the best interests of other stockholders.

Mr. Mark McLeary, our sole executive officer and director, controls
  approximately 62% of our issued and outstanding shares of common stock. Accordingly,
  in accordance with our articles of incorporation and bylaws, Mr. McLeary is
  able to control the election of our board of directors and thus could act, or
  could have the power to act, as our management. The interests of Mr. McLeary
  may not be, at all times, the same as that of other shareholders. Since Mr.
  McLeary is not simply a passive investor but is also one of our active executives,
  his interests as an executive may be adverse to those of passive investors.
  Where those conflicts exist, our shareholders will be dependent upon Mr. McLeary
  exercising, in a manner fair to all of our shareholders, his fiduciary duties
  as an officer or as a member of our board of directors. Also, Mr. McLeary will
  have the ability to significantly influence the outcome of most corporate actions
  requiring shareholder approval, including the merger of Candev with or into
  another company, the sale of all or substantially all of our assets and amendments
  to our articles of incorporation. This concentration of ownership with Mr. McLeary
  may also have the effect of delaying, deferring or preventing a change in control
  of Candev, which may be disadvantageous to minority shareholders.

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If the selling shareholders sell a large number of shares
all at once or in blocks, the market price of our shares would most likely
decline.

The selling shareholders are offering 3,800,000 shares of our
common stock through an effective registration statement and may sell their
shares at anytime. Our common stock is presently quoted for trading on the OTC
Bulletin Board. The offer or sale of a large number of shares at any price may
cause the market price to fall. The outstanding shares of common stock covered
by our previously filed effective registration statement represent approximately
43% of the common shares outstanding.

Item 3. Controls and Procedures

|a) | EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.
      As of the end of the period covered by this report, we conducted an
      evaluation, under the supervision and with the participation of our chief
      executive officer and chief financial officer of our disclosure controls
      and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the
      Exchange Act). Based upon this evaluation, our chief executive officer and
      chief financial officer concluded that our disclosure controls and
      procedures are effective to ensure that the information required to be
      disclosed by us in the reports that we file or submit under the Exchange
      Act is (i) recorded, processed, summarized and reported within the time
      periods specified in the Securities and Exchange Commission's rules and
      forms, and (ii) is accumulated and communicated to our management,
      including our chief executive officer and chief financial officer, to
      allow timely decisions regarding required disclosure.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|b) | CHANGES IN INTERNAL CONTROLS. There was no change
      in our internal controls or in other factors that could affect these
      controls during our last fiscal quarter that has materially affected, or
      is reasonably likely to materially affect, our internal control over
      financial reporting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are currently not aware of any legal proceedings or claims
that we believe will have, individually or in the aggregate, a material adverse
affect on our business, financial condition or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds

None.

Item 3. Defaults upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security
Holders

None.

Item 5. Other Information

We have adopted a Code of Ethics that applies to all our
directors, officers and employees. The Code of Ethics was filed on September 19,
2007 as an exhibit to a Form 10-QSB. If we make any substantive amendments to
the Code of Ethics or grant any waiver, including any implicit waiver, from a
provision of the Code of Ethics to our directors, officers and employees, we
will disclose the nature of such amendment or waiver in a report on Form
8-K.

Item 6. Exhibits

|Exhibit No. | Description of Exhibit                                                                                                                                                                                                                                                                         
|----------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |                                                                                                                                                                                                                                                                                                
|31.1        | Certification by Chief Executive Officer/Chief Financial
      Officer, required by Rule 13a- 14(a) or Rule 15d-14(a) of the Exchange
      Act, promulgated pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                         
|            |                                                                                                                                                                                                                                                                                                
|32.1        | Certification by Chief Executive Officer/Chief Financial
      Officer, required by Rule 13a- 14(b) or Rule 15d-14(b) of the Exchange Act
      and Section 1350 of Chapter 63 of Title 18 of the United States Code,
    promulgated pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

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

|                         | CANDEV RESOURCE
      EXPLORATION, INC.
|------------------------ | ---------------------------------------
|                         |                                        
|                         |                                        
|                         |                                        
|Date: September 11, 2008 | By:                                    
|                         |                                        
|                         |                                        
|                         |                                        
|                         |                                        

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