---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31,
2009

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
EXCHANGE ACT

For the transition period from _________ to ________

Commission File No. 000-52499

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

|Nevada                                                               | 98-0515290                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)

Suite 2200  1177 West Hastings Street, Vancouver, British
Columbia, Canada V6E 2K3(Address of principal executive offices)
(zip code)

604.688.7526(Registrants telephone number,
including area code)

N/A(Former name, former address and former
fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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 definitions of large accelerated filer, accelerated
filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.
(Check one):

|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[ ]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after
distribution of securities under a plan confirmed by a court. Yes[ ] No[ ]
N/A

---

2

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuers
classes of common equity as of the latest practicable date: As of March 16,
2009, there were 8,780,000 shares of common stock, par value $0.001,
outstanding.

---

- 3 -

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS



---

|CANDEV RESOURCE EXPLORATION, INC.          
|-------------------------------------------
|(An Exploration Stage Company)             
|FINANCIAL STATEMENTS                       
|FOR THE THREE MONTHS ENDED JANUARY 31, 2009
|(Unaudited - Prepared by Management)       
|                                           
|(Stated in US Dollars)                     





INDEX

| | Interim Balance Sheets                                   
| | ---------------------------------------------------------
| |                                                          
| | Interim Statements of Operations                         
| |                                                          
| | Interim Statements of Cash
      Flows                   
| |                                                          
| | Interim Statement of Stockholders
      Equity (Deficit)
| |                                                          
| | Notes to the Interim Financial
      Statements          

F-1

---

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

|                                                               |   | January 31 |   |   | October 31 |  
|-------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                               |   | 2009       |   |   | 2008       |  
|                                                               |   |            |   |   |            |  
|ASSETS                                                         |  
|                                                               |   |            |   |   |            |  
|CURRENT ASSETS                                                 |   |            |   |   |            |  
|Cash                                                           | $ | 20,578     |   | $ | 225        |  
|Receivables                                                    |   | 469        |   |   | 2,867      |  
|                                                               |   |            |   |   |            |  
|                                                               |   |            |   |   |            |  
|Total Current Assets                                           |   | 21,047     |   |   | 3,092      |  
|                                                               |   |            |   |   |            |  
|                                                               |   |            |   |   |            |  
|Property and Equipment (Note 5)                                |   | 3,772      |   |   | 4,003      |  
|                                                               |   |            |   |   |            |  
|Total Assets                                                   | $ | 24,819     |   | $ | 7,095      |  
|                                                               |   |            |   |   |            |  
|                                                               |   |            |   |   |            |  
|LIABILITIES AND STOCKHOLDERS'
      DEFICIT                    |  
|                                                               |   |            |   |   |            |  
|CURRENT LIABILITIES                                            |   |            |   |   |            |  
|Accounts payable and accrued liabilities                       | $ | 22,229     |   | $ | 18,781     |  
|Due to director (Note 6)                                       |   | 30,647     |   |   | 31,234     |  
|Advances received                                              |   | 28,000     |   |   | -          |  
|                                                               |   |            |   |   |            |  
|Total Liabilities                                              |   | 80,876     |   |   | 50,015     |  
|                                                               |   |            |   |   |            |  
|STOCKHOLDERS' DEFICIT                                          |   |            |   |   |            |  
|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 (2008 - 8,780,000)
      common shares (Note 7)      |   | 8,780      |   |   | 8,780      |  
|Additional paid in capital                                     |   | 126,680    |   |   | 126,680    |  
|Deficit - Accumulated during exploration
      stage           |   | (191,517   | ) |   | (178,380   | )
|                                                               |   |            |   |   |            |  
|Total Stockholders' Deficit                                    |   | (56,057    | ) |   | (42,920    | )
|                                                               |   |            |   |   |            |  
|Total Liabilities and Stockholders' Deficit                    | $ | 24,819     |   | $ | 7,095      |  
|                                                               |   |            |   |   |            |  
|Going concern (Note 2)                                         |   |            |   |   |            |  

The accompanying notes are an integral part of these interim
  financial statements.
  F-2

---

|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 |       |   |                                     |       |   |           |  
|                                             |   | January 31   |       |   | Three Months Ended January
      31 |      
|                                             |   | 2009         |       |   | 2009                                |       |   | 2008      |  
|                                             |   |              |       |   |                                     |       |   |           |  
|GENERAL AND ADMINISTRATIVE EXPENSES          |   |              |       |   |                                     |       |   |           |  
|Accounting and auditing                      | $ | 55,690       |       | $ | 2,538                               |       | $ | 4,040     |  
|Advertising and promotion                    |   | 5,118        |       |   | -                                   |       |   | -         |  
|Amortization                                 |   | 758          |       |   | 231                                 |       |   | -         |  
|Bank charges and interest                    |   | 383          |       |   | 77                                  |       |   | 77        |  
|Consulting                                   |   | 10,000       |       |   | -                                   |       |   | 10,000    |  
|Foreign exchange (gain) loss                 |   | (4,668       | )     |   | (397                                | )     |   | 15        |  
|Legal                                        |   | 77,657       |       |   | 7,093                               |       |   | 19,224    |  
|Meals and entertainment                      |   | 1,319        |       |   | -                                   |       |   | -         |  
|Office and sundry                            |   | 1,935        |       |   | 694                                 |       |   | 729       |  
|Rent                                         |   | 2,860        |       |   | 2,860                               |       |   | -         |  
|Telephone                                    |   | 41           |       |   | 41                                  |       |   | -         |  
|Transfer agent                               |   | 3,378        |       |   | -                                   |       |   | 262       |  
|Travel and accommodation                     |   | 2,193        |       |   | -                                   |       |   | -         |  
|                                             |   |              |       |   |                                     |       |   |           |  
|                                             |   | 156,664      |       |   | 13,137                              |       |   | 34,347    |  
|                                             |   |              |       |   |                                     |       |   |           |  
|MINERAL PROPERTY EXPENSES (Note 8)           |   |              |       |   |                                     |       |   |           |  
|Acquisition costs                            |   | 14,260       |       |   | -                                   |       |   | 9,760     |  
|Exploration costs                            |   | 20,593       |       |   | -                                   |       |   | 3,467     |  
|                                             |   |              |       |   |                                     |       |   |           |  
|                                             |   | 34,853       |       |   | -                                   |       |   | 13,227    |  
|                                             |   |              |       |   |                                     |       |   |           |  
|NET AND COMPREHENSIVE LOSS                   | $ | (191,517     | )     | $ | (13,137                             | )     | $ | (47,574   | )
|                                             |   |              |       |   |                                     |       |   |           |  
|                                             |   |              |       |   |                                     |       |   |           |  
|BASIC AND DILUTED NET LOSS PER COMMON SHARE  |   | $            | (0.00 | ) | $                                   | (0.01 | )
|                                             |   |              |       |   |                                     |       |   |           |  
|                                             |   |              |       |   |                                     |       |   |           |  
|                                             |   |              |       |   |                                     |       |   |           |  
|WEIGHTED AVERAGE NUMBER OF BASIC AND DILUTED |   |              |       |   |                                     |       |  
|COMMON SHARES OUTSTANDING                    |   |              |       |   | 8,780,000                           |       |   | 8,763,261 |  

The accompanying notes are an integral part of these interim
  financial statements.
  F-3

---

|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 |   |   |                                     |   |   |         |  
|                                                  |   | January 31   |   |   | Three Months Ended January
      31 |  
|                                                  |   | 2009         |   |   | 2009                                |   |   | 2008    |  
|                                                  |   |              |   |   |                                     |   |   |         |  
|OPERATING ACTIVITIES                              |   |              |   |   |                                     |   |   |         |  
|Net loss for the
      period                     | $ | (191,517     | ) | $ | (13,137                             | ) | $ | (47,574 | )
|Items not affecting cash                          |   |              |   |   |                                     |   |   |         |  
|Shares issued for mineral property                |   | 11,960       |   |   | -                                   |   |   | 9,760   |  
|Amortization                                      |   | 758          |   |   | 231                                 |   |   | -       |  
|Changes in
      operating assets and liabilities |   | -            |   |   |                                     |   |   |         |  
|Receivables                                       |   | (469         | ) |   | 2,398                               |   |   | (680    | )
|Accounts payable and accrued liabilities          |   | 22,229       |   |   | 3,448                               |   |   | 21,577  |  
|Due
      to director                             |   | 30,647       |   |   | (587                                | ) |   | -       |  
|                                                  |   |              |   |   |                                     |   |   |         |  
|Cash used in operating
      activities           |   | (126,392     | ) |   | (7,647                              | ) |   | (16,917 | )
|                                                  |   |              |   |   |                                     |   |   |         |  
|                                                  |   |              |   |   |                                     |   |   |         |  
|INVESTING ACTIVITY                                |   |              |   |   |                                     |   |   |         |  
|Equipment acquired                                |   | (4,530       | ) |   | -                                   |   |   | -       |  
|                                                  |   |              |   |   |                                     |   |   |         |  
|                                                  |   |              |   |   |                                     |   |   |         |  
|FINANCING ACTIVITIES                              |   |              |   |   |                                     |   |   |         |  
|Advances received                                 |   | 28,000       |   |   | 28,000                              |   |   | -       |  
|Common stock
      issued for cash                |   | 123,500      |   |   | -                                   |   |   | -       |  
|                                                  |   |              |   |   |                                     |   |   |         |  
|Cash provided by
      financing activities       |   | 151,500      |   |   | 28,000                              |   |   | -       |  
|                                                  |   |              |   |   |                                     |   |   |         |  
|                                                  |   |              |   |   |                                     |   |   |         |  
|NET INCREASE (DECREASE) IN CASH                   |   | 20,578       |   |   | 20,353                              |   |   | (16,917 | )
|                                                  |   |              |   |   |                                     |   |   |         |  
|CASH, BEGINNING OF PERIOD                         |   | -            |   |   | 225                                 |   |   | 42,630  |  
|                                                  |   |              |   |   |                                     |   |   |         |  
|CASH, END OF PERIOD                               | $ | 20,578       |   | $ | 20,578                              |   | $ | 25,713  |  
|                                                  |   |              |   |   |                                     |   |   |         |  
|                                                  |   |              |   |   |                                     |   |   |         |  
|SUPPLEMENTAL DISCLOSURE                           |   |              |   |   |                                     |   |   |         |  
|Interest paid                                     | $ | -            |   | $ | -                                   |   | $ | -       |  
|Income taxes
      paid                           | $ | -            |   | $ | -                                   |   | $ | -       |  

The accompanying notes are an integral part of these interim
  financial statements.
  F-4

---

|CANDEV RESOURCE EXPLORATION, INC.                          
|-----------------------------------------------------------
|(An Exploration Stage Company)                             
|INTERIM STATEMENT OF STOCKHOLDERS EQUITY
      (DEFICIT)  
|FROM INCEPTION ON JANUARY 9, 2006 TO JANUARY 31,
      2009
|(Unaudited - Prepared by Management)                       
|                                                           
|(Stated in US Dollars)                                     

|                                   |  |               |  |   |            |  |   |             |  |   | Deficit     |   |   |                  |  
|---------------------------------- |  | ------------- |  | - | ---------- |  | - | ----------- |  | - | ----------- | - | - | ---------------- | -
|                                   |  | (Note 7)      |  |   |            |  |   | Accumulated |  |   |             |  
|                                   |  | Common Shares |  |   | Additional |  |   | During      |  |   | Total       |  
|                                   |  | Number        |  |   |            |  |   | Paid In     |  |   | Exploration |   |   | Stockholders'    |  
|                                   |  | of Shares     |  |   | Amount     |  |   | Capital     |  |   | Stage       |   |   | Equity (Deficit) |  
|                                   |  |               |  |   |            |  |   |             |  |   |             |   |   |                  |  
|                                   |  |               |  |   |            |  |   |             |  |   |             |   |   |                  |  
|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 |  |               |  |   |            |  |   |             |  |   |             |   |   |                  |  
|@ $0.22 on
      September 7, 2007 |  | 10,000        |  |   | 10         |  |   | 2,190       |  |   | -           |   |   | 2,200            |  
|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 year              |  | -             |  |   | -          |  |   | -           |  |   | (86,666     | ) |   | (86,666          | )
|                                   |  |               |  |   |            |  |   |             |  |   |             |   |   |                  |  
|Balance, October 31, 2008          |  | 8,780,000     |  |   | 8,780      |  |   | 126,680     |  |   | (178,380    | ) |   | (42,920          | )
|                                   |  |               |  |   |            |  |   |             |  |   |             |   |   |                  |  
|Net loss for the period            |  | -             |  |   | -          |  |   | -           |  |   | (13,137     | ) |   | (13,137          | )
|                                   |  |               |  |   |            |  |   |             |  |   |             |   |   |                  |  
|Balance, January 31, 2009          |  | 8,780,000     |  | $ | 8,780      |  | $ | 126,680     |  | $ | (191,517    | ) | $ | (56,057          | )

The accompanying notes are an integral part of these interim
  financial statements.
  F-5

---

|CANDEV RESOURCE EXPLORATION, INC.        
|-----------------------------------------
|(An Exploration Stage Company)           
|NOTES TO THE INTERIM FINANCIAL STATEMENTS
|JANUARY 31, 2009                         
|(Unaudited - Prepared by Management)     
|                                         
|(Stated in US Dollars)                   

|1. | ORGANIZATION AND DESCRIPTION OF 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 mineral
      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
      $13,137 for the three months ended January 31, 2009, and has an
      accumulated deficit of $191,517. 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 United States 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 three months
      ended January 31, 2009 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, except as discussed in Note 4 below.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4. | RECENTLY ADOPTED ACCOUNTING
      PRONOUNCEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Effective November 1, 2008, the Company adopted Statement
      of Financial Accounting Standards No. 157, Fair Value Measurements
      (SFAS 157). SFAS 157 defines fair value, establishes a framework for
      measuring fair value in generally accepted accounting principles (GAAP),
      and expands disclosures about fair value measurements. The adoption of
      SFAS 157 has not had any impact on the Companys financial position,
      results of operations, or cash flows.                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Effective November 1, 2008, the Company adopted Statement
      of Financial Accounting Standards No. 159, The Fair Value Option for
      Financial Assets and Financial Liabilities (SFAS 159). SFAS 159 permits
      entities to choose to measure many financial instruments, and certain
      other items, at fair value. The adoption of SFAS 159 has not had any
      impact on the Companys financial position, results of operations, or cash
      flows.                                                                                                                                                                                                                                                                                                                                                             

F-6

---

|CANDEV RESOURCE EXPLORATION, INC.        
|-----------------------------------------
|(An Exploration Stage Company)           
|NOTES TO THE INTERIM FINANCIAL STATEMENTS
|JANUARY 31, 2009                         
|(Unaudited - Prepared by Management)     
|                                         
|(Stated in US Dollars)                   

|5. | PROPERTY AND EQUIPMENT
|-- | ----------------------

|                        |   |       |  |   |                  |  |   |          |  |   | October 31, | 
|----------------------- | - | ----- |  | - | ---------------- |  | - | -------- |  | - | ----------- | 
|                        |   |       |  |   | January 31, 2009 |  |   |          |  |   | 2008        | 
|                        |   |       |  |   | Accumulated      |  |   | Net Book |  |   | Net Book    | 
|                        |   | Cost  |  |   | Amortization     |  |   | Value    |  |   | Value       | 
|                        |   |       |  |   |                  |  |   |          |  |   |             | 
|Computer equipment      | $ | 1,477 |  | $ | 359              |  | $ | 1,118    |  | $ | 1,255       | 
|Furniture and equipment |   | 3,053 |  |   | 399              |  |   | 2,654    |  |   | 2,748       | 
|                        | $ | 4,530 |  | $ | 758              |  | $ | 3,772    |  | $ | 4,003       | 

|6. | DUE TO DIRECTOR                                                                                                                                                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                         
|   | The President and sole Director of the Company has
      advanced CDN $37,589 (US$30,647) as at January 31, 2009. This amount is
      due on demand, unsecured and does not bear interest; accordingly fair
      value can not be reliably determined.
|   |                                                                                                                                                                                                                                                         
|7. | 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.                                                                                                              
|   |                                                                                                                                                                                                                                                         
|   | 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 8).                                                                                     
|   |                                                                                                                                                                                                                                                         
|   | 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 8).                                                                                                

F-7

---

|CANDEV RESOURCE EXPLORATION, INC.        
|-----------------------------------------
|(An Exploration Stage Company)           
|NOTES TO THE INTERIM FINANCIAL STATEMENTS
|JANUARY 31, 2009                         
|(Unaudited - Prepared by Management)     
|                                         
|(Stated in US Dollars)                   

|8. | 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 incurred to date
      are summarized as follows:

|Acquisition costs         | $ | 14,260 | 
|------------------------- | - | ------ | 
|Exploration costs         |   | 20,593 | 
|Balance, January 31, 2009 | $ | 34,853 | 

In order to earn this 100% interest,
  subject to a 2% Net Smelter Return royalty, the Company was required to make
  cash payments totalling $254,894 (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) | $2,076 (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) | $9,760 (Cdn$10,000) cash payment on October 31, 2007
      (20,000 common shares in lieu of cash issued);                                                            
| | (d) | $33,208 (Cdn$40,000) cash payment on October 31,
      2008;                                                                                                         
| | (e) | $41,510 (Cdn$50,000) cash payment on October 31,
      2009;                                                                                                         
| | (f) | $83,020 (Cdn$100,000) cash payment on October 31, 2010;
      and                                                                                                    
| | (g) | $83,020 (Cdn$100,000) cash payment on October 31,
      2011.                                                                                                        

During the year ended October 31, 2008,
  the Company cancelled its option agreement relating to the King Property.

|9. | FINANCIAL INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Companys financial instruments consist of cash,
      receivables, accounts payable and accrued liabilities, due to director and
      advances received. 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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | As at January 31, 2009, the Company had the following
      financial assets and liabilities denominated in Canadian
      dollars:                                                                                                                                                                                                                                                                                                                                                                

|                                         |   | Cdn dollars | 
|---------------------------------------- | - | ----------- | 
|Cash                                     | $ | 3,321       | 
|Receivables                              | $ | 575         | 
|Accounts payable and accrued liabilities | $ | 18,124      | 
|Due to director                          | $ | 37,589      | 

The above amounts are subject to gains
  and losses arising from fluctuations in the exchange rate between the Canadian
  dollar and the U.S. dollar. As at January 31, 2009, Canadian dollar amounts were
  converted at a rate of $1.23 Canadian dollars to $1.00 U.S. dollar.

F-8

---

- 4 -

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

This quarterly report contains 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 statements
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as may, should,
expects, plans, anticipates, believes, estimates, predicts,
potential or continue or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks in the section
entitled Risk Factors and the risks set out below, any of which may cause our
or our industrys actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. These risks include, by way of example and not in
limitation:

- the uncertainty that we will not be able to successfully identify and
  evaluate a suitable business opportunity;
- risks related to the large number of established and well-financed entities
  that are actively seeking suitable business opportunities;
- risks related to the failure to successfully management or achieve growth
  of a new business opportunity; and
- other risks and uncertainties related to our business strategy.

This list is not an exhaustive list of the factors that may
affect any of our forward-looking statements. These and other factors should be
considered carefully and readers should not place undue reliance on our
forward-looking statements.

Forward looking statements are made based on managements
beliefs, estimates and opinions on the date the statements are made and we
undertake no obligation to update forward-looking statements if these beliefs,
estimates and opinions or other circumstances should change. Although we believe
that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.

Our financial statements are stated in United States dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

In this quarterly report, unless otherwise specified, all
dollar amounts are expressed in United States dollars and all references to
common stock refer to the common shares in our capital stock.

As used in this quarterly report, the terms we, us, our,
and Candev mean Candev Resource Exploration, Inc., unless the context clearly
requires otherwise.

Our Current Business

We were incorporated under the laws of the state of Nevada on
January 9, 2006. Our company is quoted for trading on the OTC Bulletin Board
under the stock symbol CVRX. We are an exploration stage company. We are
currently seeking other opportunities in the mining industry. Simultaneously, we
are seeking business opportunities with established business entities for the
merger of a target business with our company. In certain instances, a target
business may wish to become a subsidiary of us or may wish to contribute assets
to us rather than merge. We are currently in negotiations with several parties
to enter into a business opportunity but we have not entered into any definitive
agreements to date and there can be no assurance that we will be able to enter
into any definitive agreements. We anticipate that any new acquisition or
business opportunities by our company will require additional financing. There
can be no assurance, however, that we will be able to acquire the financing
necessary to

---

- 5 -

enable us to pursue our plan of operation. If our company
requires additional financing and we are unable to acquire such funds, our
business may fail.

Management of our company believes that there are perceived
benefits to being a reporting company with a class of publicly-traded
securities. These are commonly thought to include: (i) the ability to use
registered securities to acquire assets or businesses; (ii) increased visibility
in the financial community; (iii) the facilitation of borrowing from financial
institutions; (iv) improved trading efficiency; (v) stockholder liquidity; (vi)
greater ease in subsequently raising capital; (vii) compensation of key
employees through stock options; (viii) enhanced corporate image; and (ix) a
presence in the United States capital market.

We may seek a business opportunity with entities who have
recently commenced operations, or entities who wish to utilize the public
marketplace in order to raise additional capital in order to expand business
development activities, to develop a new product or service, or for other
corporate purposes. We may acquire assets and establish wholly-owned
subsidiaries in various businesses or acquire existing businesses as
subsidiaries.

In implementing a structure for a particular business
acquisition or opportunity, we may become a party to a merger, consolidation,
reorganization, joint venture, or licensing agreement with another corporation
or entity. We may also acquire stock or assets of an existing business. Upon the
consummation of a transaction, it is likely that our present management will no
longer be in control of our company. In addition, it is likely that our officer
and director will, as part of the terms of the acquisition transaction, resign
and be replaced by one or more new officers and directors.

As of the date hereof, management has not entered into any
formal written agreements for a business combination or opportunity. When any
such agreement is reached, we intend to disclose such an agreement by filing a
current report on Form 8-K with the Securities and Exchange Commission.

We anticipate that the selection of a business opportunity in
which to participate will be complex and without certainty of success.
Management believes that there are numerous firms in various industries seeking
the perceived benefits of being a publicly registered corporation. Business
opportunities may be available in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex. We can provide no assurance that we will be able to locate
compatible business opportunities.

As an exploration stage company, we are not able to fund our
cash requirements through our current operations. Historically, we have been
able to raise a limited amount of capital through private placements of our
equity stock, but we are uncertain about our continued ability to raise funds
privately. Further, we believe that our company may have difficulties raising
capital until we locate a prospective property through which we can pursue our
plan of operation. If we are unable to secure adequate capital to continue our
acquisition efforts, our shareholders may lose some or all of their investment
and our business may fail.

Results of Operations

The following summary of our results of operations should be
read in conjunction with our unaudited financial statements for the three month
period ended January 31, 2009 which are included herein.

Our operating results for the three month period ended January
31, 2009 and 2008 are summarized as follows:

Three Months EndedJanuary 31,2009
    
    
    2008Revenue
    $
    -
    
    $
    -Operating Expenses
    
    13,137
    
    
    34,347Net Loss
    $
    13,137
    
    $
    47,574


---

- 6 -

Revenues

We recently terminated our property option agreement on our
King claims, have not earned any revenues to date, and do not anticipate earning
revenues until such time as we are able to acquire an interest in a mineral or
oil and gas property or enter into a business opportunity.

Expenses

Our expenses for the three month period ended January 31, 2009
and 2008 are outlined in the table below:

Three Months Ended
    
    
    PercentageIncrease /(Decrease)2009
    
    
    2008General and Administrative ExpensesProfessional Fees
    $
    9,631
    
    $
    23,264
    
    
    (58.6%
    )Amortization
    
    231
    
    
    -
    
    
    100%Bank Charges and Interest
    
    77
    
    
    77
    
    
    -Consulting Fee
    
    -
    
    
    10,000
    
    
    (100%
    )Foreign Exchange Loss (gain)
    
    (397
    )
    
    15
    
    
    (2,746.6%
    )Office expenses
    
    3,595
    
    
    729
    
    
    393.1%Transfer Agent
    
    -
    
    
    262
    
    
    (100%
    )Total
    $
    13,137 $
    
    
    34,347
    
    
    (61.7%
    )


General and Administrative

The decrease in our general and administrative expenses for the
three month period ended January 31, 2009 compared to January 31, 2008 was
primarily due to: (i) a decrease in professional fees; and (ii) the fact that we
did not incur any consulting fees during the quarter as compared to the same
fiscal period in 2008.

Professional Fees

Professional fees include our accounting and auditing expenses
incurred in connection with the preparation and audit of our financial
statements and professional fees that we pay to our legal counsel. Our
accounting and auditing expenses were incurred in connection with the
preparation of our audited financial statements and unaudited interim financial
statements and our preparation and filing of a registration statement with the
SEC. Our legal expenses represent amounts paid to legal counsel in connection
with our corporate organization. Legal expenses will be ongoing during fiscal
2009 as we are subject to the reporting obligations of the Securities Exchange
Act of 1934.

---

- 7 -

Liquidity And Capital Resources

Working Capital

|                    |   |                  |   |   |               |   |  | Percentage |  
|------------------- | - | ---------------- | - | - | ------------- | - |  | ---------- | -
|                    |   | As at            |   |   | As at October |   |  | Increase / |  
|                    |   | January 31, 2009 |   |   | 31, 2008      |   |  | (Decrease) |  
|Current Assets      | $ | 21,047           |   | $ | 3,092         |   |  | (580.7%    | )
|Current Liabilities | $ | 80,876           |   | $ | 50,015        |   |  | (61.7%     | )
|Working Capital     | $ | (56,829          | ) | $ | (46,923       | ) |  | (21.1%     | )

Cash Flows

|                                      |   | Three Month      |   |   | Three Month      |   |  | Percentage |  
|------------------------------------- | - | ---------------- | - | - | ---------------- | - |  | ---------- | -
|                                      |   | Period Ended     |   |   | Period Ended     |   |  | Increase / |  
|                                      |   | January 31, 2009 |   |   | January 31, 2008 |   |  | (Decrease) |  
|Cash used in Operating Activities     | $ | (7,647           | ) | $ | (16,917          | ) |  | (54.8%     | )
|Cash provided by Investing Activities | $ | -                |   | $ | -                |   |  | N/A        |  
|Cash provided by Financing Activities | $ | 28,000           |   | $ | -                |   |  | 100%       |  
|Net Increase (Decrease) in Cash       | $ | 20,353           |   | $ | (16,917          | ) |  | 220.3%     |  

We anticipate that we will incur approximately $56,000 for
operating expenses, including professional, legal and accounting expenses
associated with our reporting requirements under the Exchange Act during the
next twelve months. Accordingly, we will need to obtain additional financing in
order to complete our business plan.

Cash Used In Operating Activities

We used cash in operating activities in the amount of ($7,647)
during the three period ended January 31, 2009 and ($16,917) during the three
month period ended January 31, 2008. Cash used in operating activities was
funded by cash from financing activities.

Cash From Investing Activities

No cash was used or provided in investing activities during the
three month period ended January 31, 2009.

Cash from Financing Activities

We generated  cash of $28,000 from financing activities during the three month period
  ended January 31, 2009.

Disclosure of Outstanding Share Data

As at the date of this quarterly report, the Company had
8,780,000 shares of common stock issued and outstanding. The Company does not
have any warrants, options or shares of any other class issued and outstanding
as at the date of this quarterly report.

---

- 8 -

Going Concern

The financial statements accompanying this report have been
prepared on a going concern basis, which implies that our company will continue
to realize its assets and discharge its liabilities and commitments in the
normal course of business. Our company has not generated revenues since
inception and has never paid any dividends and is unlikely to pay dividends or
generate earnings in the immediate or foreseeable future. The continuation of
our company as a going concern is dependent upon the continued financial support
from our shareholders, the ability of our company to obtain necessary equity
financing to achieve our operating objectives, and the attainment of profitable
operations. As at January 31, 2009, our company has accumulated losses of
$191,517 since inception. We do not have sufficient working capital to enable us
to carry out our stated plan of operation for the next twelve months.

Due to the uncertainty of our ability to meet our current
operating expenses and the capital expenses noted above in their report on the
financial statements for the year ended October 31, 2008, our independent
auditors included an explanatory paragraph regarding concerns about our ability
to continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
independent auditors.

The continuation of our business is dependent upon us raising
additional financial support. The issuance of additional equity securities by us
could result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.

Future Financings

We anticipate continuing to rely on equity sales of our common
shares in order to continue to fund our business operations. Issuances of
additional shares will result in dilution to our existing stockholders. There is
no assurance that we will achieve any additional sales of our equity securities
or arrange for debt or other financing to fund our planned activities.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are
material to stockholders.

Risks And Uncertainties

We are an exploration stage company with a limited operating
history that makes it impossible to reliably predict future growth and operating
results.

We have not been able to achieve profitable operations and
there are no assurances that we will be able to do so in the future. Potential
investors should be aware of the difficulties normally encountered by a new
enterprise and the high rate of failure of such enterprises. The potential for
future success must be considered in light of the problems, expenses,
difficulties, complications and delays encountered in connection with the
development of a business in general. There is no history upon which to base any
assumption as to the likelihood that we will prove successful, and there can be
no assurance that we will generate significant operating revenues in the future
or ever achieve profitable operations.

We have no formal written agreement for a business
combination or other transaction and there can be no assurance that we will be
able to successfully identify and evaluate a suitable business opportunity.

As at the date of this report, we have no formal written
agreement with respect to acquiring a business opportunity or engaging in a
business combination with any private entity. The success of our company
following an entry into any business opportunity or business combination will
depend to a great extent on the operations, financial condition and management
of any identified business opportunity. While management intends to seek
business opportunities

---

- 9 -

and/or business combinations with entities with established
operating histories, there is no assurance that we will successfully locate
business opportunities meeting such criteria. In the event that we complete a
business combination or otherwise acquire a business opportunity, the success of
our operations may be dependent upon management of the successor firm or venture
partner firm, together with a number of other factors beyond our control.

As there are a large number of established and well-financed
entities actively seeking suitable business opportunities and business
combinations, we are at a competitive disadvantage in identifying and completing
such opportunities.

We are, and will continue to be, an insignificant participant
seeking a suitable business opportunity or business combination. A large number
of established and well-financed entities, including venture capital firms, are
active in seeking suitable business opportunities or business combinations which
may also be desirable target candidates for our company. Virtually all such
entities have significantly greater financial resources, technical expertise and
managerial capabilities than our company. Consequently, we are at a competitive
disadvantage in identifying possible business opportunities and completing a
business combination. In addition, we will also compete with numerous other
small public companies seeking suitable business opportunities or business
combinations.

Upon completion of a business opportunity or combination,
there can be no assurance that we will be able to successfully manage or achieve
growth of that business opportunity or combination.

Our ability to achieve growth upon the acquisition of a
suitable business opportunity or business combination will be dependent upon a
number of factors including our ability to hire and train management and other
employees and the adequacy of our financial resources. There can be no assurance
that we will be able to successfully manage any business opportunity or business
combination. Failure to manage anticipated growth effectively and efficiently
could have a material adverse effect on our company.

If we complete a business opportunity or combination,
management of our company may be required to sell or transfer common shares and
resign as members of our board of directors.

A business combination or acquisition of a business opportunity
involving the issuance of our common shares may result in new shareholders
obtaining a controlling interest in our company. Any such business combination
or acquisition of a business opportunity may require management of our company
to sell or transfer all or a portion of the shares they hold in our company and
require such individuals to resign as members of our board. The resulting change
in control of our company could result in the removal of one or more of our
present officers and directors and a corresponding reduction in or elimination
of their participation in the future affairs of our company.

If we complete a business opportunity or combination, we may
be required to issue a substantial number of common shares which would dilute
the shareholdings of our current shareholders and result in a change of control
of our company.

We may pursue the acquisition of a business opportunity or a
business combination with a private company. The likely result of such a
transaction would result in our company issuing common shares to shareholders of
such private company. Issuing previously authorized and unissued common shares
in the capital of our company will reduce the percentage of common shares owned
by existing shareholders and may result in a change in the control of our
company and our management.

Our common stock is illiquid and shareholders may be unable
to sell their shares.

There is currently a limited market for our common stock and we
can provide no assurance to investors that a market will develop. If a market
for our common stock does not develop, our shareholders may not be able to
re-sell the shares of our common stock that they have purchased and they may
lose all of their investment. Public announcements regarding our company,
changes in government regulations, conditions in our market segment or changes
in earnings estimates by analysts may cause the price of our common shares to
fluctuate substantially. These fluctuations may adversely affect the trading
price of our common shares.

---

- 10 -

We may be unsuccessful at identifying, acquiring and
operating suitable business opportunities and if we are unable to find, acquire
or operate a suitable opportunity for our company, we may never achieve
profitable operations.

We may not be able to find the right business opportunity for
our company to become engaged in or we may not succeed in becoming engaged in
the business opportunity we choose because we may not act fast enough or have
enough money or other attributes to attract the new business opportunity. Before
we begin to have any significant operations, we will have to become involved in
a viable business opportunity. In addition, in order to be profitable, we will
have to, among other things, hire consultants and employees, develop products
and/or services, market our products/services, ensure supply and develop a
customer base. There is no assurance that we will be able to identify,
negotiate, acquire and develop a business opportunity and we may never be
profitable.

We have not paid any dividends and do not foresee paying
dividends in the future.

Payment of dividends on our common stock is within the
discretion of the board of directors and will depend upon our future earnings,
our capital requirements, financial condition and other relevant factors. We
have no plan to declare any dividends in the foreseeable future.

Our stock is a penny stock. Trading of our stock may be
restricted by the SECs penny stock regulations and the FINRAs sales practice
requirements, which may limit a stockholders ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customers
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in, and limit
the marketability of, our common stock.

In addition to the penny stock rules promulgated by the
Securities and Exchange Commission, the Financial Industry Regulatory Authority
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, the National Association of Securities Dealers believes that
there is a high probability that speculative low-priced securities will not be
suitable for at least some customers. The National Association of Securities
Dealers requirements make it more difficult for broker-dealers to recommend
that their customers buy our common stock, which may limit your ability to buy
and sell our stock.

Item 3. Quantitative and Qualitative Disclosures About
Market Risk.

Not Applicable.

---

- 11 -

Item 4T. Controls and Procedures.

Disclosure Controls and Procedures

As required by Rule 13a-15 of the Exchange Act, our principal
executive officer and principal financial officer evaluated our company's
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
of the Exchange Act) as of the end of the period covered by this report. Based
on this evaluation, these officers concluded that as of the end of the period
covered by this report, these disclosure controls and procedures were not
effective to ensure that the information required to be disclosed by our company
in reports it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the Securities Exchange Commission and include controls and procedures
designed to ensure that such information is accumulated and communicated to our
company's management, including our company's principal executive officer and
principal financial officer, to allow timely decisions regarding required
disclosure. The conclusion that our disclosure controls and procedures were not
effective was due to the presence of the following material weaknesses in
internal control over financial reporting which are indicative of many small
companies with small staff: (i) inadequate segregation of duties and effective
risk assessment; and (ii) insufficient written policies and procedures for
accounting and financial reporting with respect to the requirements and
application of both US GAAP and SEC guidelines. Management anticipates that such
disclosure controls and procedures will not be effective until the material
weaknesses are remediated.

We plan to take steps to enhance and improve the design of our
internal controls over financial reporting. During the period covered by this
quarterly report on Form 10-Q, we have not been able to remediate the material
weaknesses identified above. To remediate such weaknesses, we plan to implement
the following changes during our fiscal year ending October 31, 2009: (i)
appoint additional qualified personnel to address inadequate segregation of
duties and ineffective risk management; and (ii) adopt sufficient written
policies and procedures for accounting and financial reporting. The remediation
efforts set out above are largely dependent upon our securing additional
financing to cover the costs of implementing the changes required. If we are
unsuccessful in securing such funds, remediation efforts may be adversely
effected in a material manner.

Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues,
if any, within our company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty and that
breakdowns can occur because of simple error or mistake.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial
reporting during the fiscal quarter ended January 31, 2009 that have materially
affected or are reasonably likely to materially affect, our internal control
over financial reporting.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
by our company in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the SECs rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by our company in the reports that we file or submit
under the Exchange Act is accumulated and communicated to our management,
including our principal executive officer and principal financial officer, as
appropriate, to allow timely decisions regarding required disclosure.

---

- 12 -

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We know of no material, active or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.

ITEM 1A. RISK FACTORS.

Not Applicable.

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

None.

ITEM 6. EXHIBITS

Exhibit Number
      Description3.1
      Articles of Incorporation (filed
          as an exhibit to our Form SB-2 Registration Statement, filed on January
          22, 2007)3.2
      Bylaws and Amendments (filed
          as an exhibit to our Form SB-2 Registration Statement, filed on January
          22, 2007)10.1
      Property Option Agreement dated
          August 25, 2006 (filed as an exhibit to our Form SB-2 Registration Statement,
          filed on January 22, 2007)10.2
      Amended Property Option Agreement
          dated January 15, 2008 (filed as an exhibit to our Current Report on
          Form 8-K, filed on January 16, 2008)10.2
      Termination Agreement and Mutual
          Release dated December 3, 2008 (filed as an exhibit to our Current Report
          on Form 8-K, filed on December 12, 2008)14.1
      Code of Ethics (filed as an
          exhibit to our Quarterly Report on Form 10-QSB filed on September 19,
          2007)31.1*
      Certification
          of Chief Executive Officer and Chief Financial Officer pursuant to Section
          302 of the Sarbanes-Oxley Act of 200232.1*
      Certification
          of Chief Executive Officer and Chief Financial Officer pursuant Section
          906 Certifications under Sarbanes-Oxley Act of 200299.1
      Audit
          Committee Charter (filed as an exhibit to our Annual Report on Form
          10-K filed on January 29, 2009)


* Filed herewith.



---

- 13 -

SIGNATURES

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

CANDEV RESOURCE EXPLORATION, INC.

|By |                                                                  | 
|-- | ---------------------------------------------------------------- | 
|   | /s/ Mark McLeary                                                 | 
|   | Mark McLeary                                                     | 
|   | President, Secretary, Treasurer,
      Chief Executive Officer   | 
|   | and Chief Financial Officer                                      | 
|   | (Principal Executive Officer,
      Principal Accounting Officer | 
|   | and Principal Financial Officer)                                 | 
|   |                                                                  | 
|   | Date:          
      March 16, 2009                             | 

---