---

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 April 30, 2009

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

For the transition period from _________to ________

Commission File Number: 000-52499

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 has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).

Yes [  ]    No [  ] (does not yet apply to registrant)

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.

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

---

2

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:

Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court. Yes [  ]    No [  ] N/A

APPLICABLE ONLY TO CORPORATE ISSUERS:

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

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3

PART I-FINANCIAL INFORMATION

Item 1. Financial Statements.

|CANDEV RESOURCE EXPLORATION, INC.                
|-------------------------------------------------
|(An Exploration Stage Company)                   
|FINANCIAL STATEMENTS                             
|FOR THE THREE AND SIX MONTHS ENDED APRIL 30, 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          

---

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

|                                                               |   | April 30 |   |   | October 31 |  
|-------------------------------------------------------------- | - | -------- | - | - | ---------- | -
|                                                               |   | 2009     |   |   | 2008       |  
|                                                               |   |          |   |   |            |  
|ASSETS                                                         |  
|                                                               |   |          |   |   |            |  
|CURRENT ASSETS                                                 |   |          |   |   |            |  
|Cash                                                           | $ | 17,426   |   | $ | 225        |  
|Receivables                                                    |   | 2,239    |   |   | 2,867      |  
|                                                               |   |          |   |   |            |  
|Total Current Assets                                           |   | 19,665   |   |   | 3,092      |  
|Deposit (Note 7)                                               |   | 14,063   |   |   | -          |  
|Property and Equipment (Note 5)                                |   | 3,540    |   |   | 4,003      |  
|                                                               |   |          |   |   |            |  
|Total Assets                                                   | $ | 37,268   |   | $ | 7,095      |  
|                                                               |   |          |   |   |            |  
|                                                               |   |          |   |   |            |  
|LIABILITIES AND STOCKHOLDERS'
      DEFICIT                    |  
|                                                               |   |          |   |   |            |  
|CURRENT LIABILITIES                                            |   |          |   |   |            |  
|Accounts payable and accrued liabilities                       | $ | 15,541   |   | $ | 18,781     |  
|Due to director                                                |   | -        |   |   | 31,234     |  
|Advances received                                              |   | 115,020  |   |   | -          |  
|                                                               |   |          |   |   |            |  
|Total Liabilities                                              |   | 130,561  |   |   | 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               |   | 8,780    |   |   | 8,780      |  
|Additional paid in capital                                     |   | 126,680  |   |   | 126,680    |  
|Deficit - Accumulated during exploration
      stage           |   | (228,753 | ) |   | (178,380   | )
|                                                               |   |          |   |   |            |  
|Total Stockholders' Deficit                                    |   | (93,293  | ) |   | (42,920    | )
|                                                               |   |          |   |   |            |  
|Total Liabilities and Stockholders' Deficit                    | $ | 37,268   |   | $ | 7,095      |  
|                                                               |   |          |   |   |            |  
|Going concern (Note 2)                                         |   |          |   |   |            |  

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

F-1

---

|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 |       |   |                             |       |   |                           |       |   |           |       |   |           |  
|                                                  |   | April 30     |       |   | Three Months Ended April 30 |       |   | Six Months Ended April 30 |      
|                                                  |   | 2009         |       |   | 2009                        |       |   | 2008                      |       |   | 2009      |       |   | 2008      |  
|                                                  |   |              |       |   |                             |       |   |                           |       |   |           |       |   |           |  
|                                                  |   |              |       |   |                             |       |   |                           |       |   |           |       |   |           |  
|GENERAL AND ADMINISTRATIVE EXPENSES               |   |              |       |   |                             |       |   |                           |       |   |           |       |   |           |  
|Accounting and auditing                           | $ | 58,214       |       | $ | 2,524                       |       | $ | 9,900                     |       | $ | 5,062     |       | $ | 13,940    |  
|Advertising and promotion                         |   | 5,118        |       |   | -                           |       |   | 3,260                     |       |   | -         |       |   | 3,260     |  
|Amortization                                      |   | 990          |       |   | 232                         |       |   | -                         |       |   | 463       |       |   | -         |  
|Bank charges and interest                         |   | 458          |       |   | 75                          |       |   | 24                        |       |   | 152       |       |   | 101       |  
|Consulting                                        |   | 12,185       |       |   | 2,185                       |       |   | -                         |       |   | 2,185     |       |   | 10,000    |  
|Filing fees                                       |   | 4,001        |       |   | 3,307                       |       |   | -                         |       |   | 4,001     |       |   | -         |  
|Foreign exchange (gain) loss                      |   | (4,762       | )     |   | (94                         | )     |   | 123                       |       |   | (491      | )     |   | 138       |  
|Legal                                             |   | 93,076       |       |   | 15,419                      |       |   | 6,432                     |       |   | 22,512    |       |   | 25,656    |  
|Meals and entertainment                           |   | 2,319        |       |   | 1,000                       |       |   | -                         |       |   | 1,000     |       |   | -         |  
|Office and sundry                                 |   | 1,409        |       |   | 168                         |       |   | 590                       |       |   | 168       |       |   | 1,319     |  
|Rent                                              |   | 4,065        |       |   | 1,205                       |       |   | -                         |       |   | 4,065     |       |   | -         |  
|Telephone                                         |   | 286          |       |   | 245                         |       |   | -                         |       |   | 286       |       |   | -         |  
|Transfer agent                                    |   | 4,123        |       |   | 745                         |       |   | 328                       |       |   | 745       |       |   | 590       |  
|Travel and accommodation                          |   | 2,193        |       |   | -                           |       |   | 2,193                     |       |   | -         |       |   | 2,193     |  
|                                                  |   |              |       |   |                             |       |   |                           |       |   |           |       |   |           |  
|                                                  |   | 183,675      |       |   | 27,011                      |       |   | 22,850                    |       |   | 40,148    |       |   | 57,197    |  
|                                                  |   |              |       |   |                             |       |   |                           |       |   |           |       |   |           |  
|MINERAL PROPERTY EXPENSES                         |   |              |       |   |                             |       |   |                           |       |   |           |       |   |           |  
|Acquisition costs                                 |   | 14,260       |       |   | -                           |       |   | -                         |       |   | -         |       |   | 9,760     |  
|Exploration costs                                 |   | 30,818       |       |   | 10,225                      |       |   | -                         |       |   | 10,225    |       |   | 3,467     |  
|                                                  |   |              |       |   |                             |       |   |                           |       |   |           |       |   |           |  
|                                                  |   | 45,078       |       |   | 10,225                      |       |   | -                         |       |   | 10,225    |       |   | 13,227    |  
|                                                  |   |              |       |   |                             |       |   |                           |       |   |           |       |   |           |  
|NET AND COMPREHENSIVE LOSS                        | $ | (228,753     | )     | $ | (37,236                     | )     | $ | (22,850                   | )     | $ | (50,373   | )     | $ | (70,424   | )
|                                                  |   |              |       |   |                             |       |   |                           |       |   |           |       |   |           |  
|                                                  |   |              |       |   |                             |       |   |                           |       |   |           |       |   |           |  
|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                   |       |   | 8,780,000                 |       |   | 8,780,000 |       |   | 8,771,538 |  

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 CASH FLOWS    
|(Unaudited - Prepared by Management)
|                                    
|(Stated in US Dollars)              

|                                                  |   | Cumulative   |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|------------------------------------------------- | - | ------------ | - | - | --------------------------- | - | - | ------------------------- | - | - | ------- | - | - | ------- | -
|                                                  |   | Amounts      |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|                                                  |   | from         |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|                                                  |   | Inception to |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|                                                  |   | April 30     |   |   | Three Months Ended April 30 |   |   | Six Months Ended April 30 |  
|                                                  |   | 2009         |   |   | 2009                        |   |   | 2008                      |   |   | 2009    |   |   | 2008    |  
|                                                  |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|                                                  |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|OPERATING ACTIVITIES                              |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|Net loss for the
      period                     | $ | (228,753     | ) | $ | (37,236                     | ) | $ | (22,850                   | ) | $ | (50,373 | ) | $ | (70,424 | )
|Items not affecting cash                          |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|Shares issued for mineral property                |   | 11,960       |   |   | -                           |   |   | -                         |   |   | -       |   |   | 9,760   |  
|Amortization                                      |   | 990          |   |   | 232                         |   |   | -                         |   |   | 463     |   |   | -       |  
|Changes in
      operating assets and liabilities |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|Receivables                                       |   | (2,239       | ) |   | (1,770                      | ) |   | (1,449                    | ) |   | 628     |   |   | (2,129  | )
|Prepaid expenses and deposits                     |   | -            |   |   | -                           |   |   | 1,000                     |   |   | -       |   |   | 1,000   |  
|Accounts
      payable and accrued liabilities    |   | 6,190        |   |   | (6,688                      | ) |   | (1,174                    | ) |   | (3,240  | ) |   | 20,403  |  
|                                                  |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|Cash used in operating
      activities           |   | (211,852     | ) |   | (45,462                     | ) |   | (24,473                   | ) |   | (52,522 | ) |   | (41,390 | )
|                                                  |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|INVESTING ACTIVITIES                              |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|Deposit paid                                      |   | (14,063      | ) |   | (14,063                     | ) |   | -                         |   |   | (14,063 | ) |   | -       |  
|Equipment acquired                                |   | (4,530       | ) |   | -                           |   |   | -                         |   |   | -       |   |   | -       |  
|                                                  |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|Cash used in investing
      activities           |   | (18,593      | ) |   | (14,063                     | ) |   | -                         |   |   | (14,063 | ) |   | -       |  
|                                                  |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|FINANCING ACTIVITIES                              |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|Advances from
      (to) director                 |   | 9,351        |   |   | (30,647                     | ) |   | -                         |   |   | (31,234 | ) |   | -       |  
|Advances received                                 |   | 115,020      |   |   | 87,020                      |   |   | -                         |   |   | 115,020 |   |   | -       |  
|Common stock
      issued for cash                |   | 123,500      |   |   | -                           |   |   | -                         |   |   | -       |   |   | -       |  
|                                                  |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|Cash provided by
      financing activities       |   | 247,871      |   |   | 56,373                      |   |   | -                         |   |   | 83,786  |   |   | -       |  
|                                                  |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|NET INCREASE (DECREASE) IN CASH                   |   | 17,426       |   |   | (3,152                      | ) |   | (24,473                   | ) |   | 17,201  |   |   | (41,390 | )
|                                                  |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|CASH, BEGINNING OF PERIOD                         |   | -            |   |   | 20,578                      |   |   | 25,713                    |   |   | 225     |   |   | 42,630  |  
|                                                  |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|CASH, END OF PERIOD                               | $ | 17,426       |   | $ | 17,426                      |   | $ | 1,240                     |   | $ | 17,426  |   | $ | 1,240   |  
|                                                  |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|                                                  |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|SUPPLEMENTAL DISCLOSURE                           |   |              |   |   |                             |   |   |                           |   |   |         |   |   |         |  
|Interest paid                                     | $ | -            |   | $ | -                           |   | $ | -                         |   | $ | -       |   | $ | -       |  
|Income taxes paid                                 | $ | -            |   | $ | -                           |   | $ | -                         |   | $ | -       |   | $ | -       |  

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

F-3

---

|CANDEV RESOURCE EXPLORATION, INC.                        
|---------------------------------------------------------
|(An Exploration Stage Company)                           
|INTERIM STATEMENT OF STOCKHOLDERS EQUITY
      (DEFICIT)
|FROM INCEPTION ON JANUARY 9, 2006 TO APRIL 30,
      2009
|(Unaudited - Prepared by Management)                     
|                                                         
|(Stated in US Dollars)                                   

|                                   |  |               |  |   |            |  |   |             |  |   | Deficit     |   |   |                  |  
|---------------------------------- |  | ------------- |  | - | ---------- |  | - | ----------- |  | - | ----------- | - | - | ---------------- | -
|                                   |  |               |  |   |            |  |   | 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            |  | -             |  |   | -          |  |   | -           |  |   | (50,373     | ) |   | (50,373          | )
|                                   |  |               |  |   |            |  |   |             |  |   |             |   |   |                  |  
|Balance, April 30, 2009            |  | 8,780,000     |  | $ | 8,780      |  | $ | 126,680     |  | $ | (228,753    | ) | $ | (93,293          | )

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

F-4

---

|CANDEV RESOURCE EXPLORATION, INC.        
|-----------------------------------------
|(An Exploration Stage Company)           
|NOTES TO THE INTERIM FINANCIAL STATEMENTS
|APRIL 30, 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
      $50,373 for the six months ended April 30, 2009, and has an accumulated
      deficit of $228,753. 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 six months
      ended April 30, 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-5

---

|CANDEV RESOURCE EXPLORATION, INC.        
|-----------------------------------------
|(An Exploration Stage Company)           
|NOTES TO THE INTERIM FINANCIAL STATEMENTS
|APRIL 30, 2009                           
|(Unaudited - Prepared by Management)     
|                                         
|(Stated in US Dollars)                   

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

| |                         |   |       |  |   | April 30, 2009 |  |   |          |  |   | October 31, 2008 | 
| | ----------------------- | - | ----- |  | - | -------------- |  | - | -------- |  | - | ---------------- | 
| |                         |   |       |  |   | Accumulated    |  |   | Net Book |  |   | Net Book         | 
| |                         |   | Cost  |  |   | Amortization   |  |   | Value    |  |   | Value            | 
| |                         |   |       |  |   |                |  |   |          |  |   |                  | 
| | Computer equipment      | $ | 1,477 |  | $ | 410            |  | $ | 1,067    |  | $ | 1,255            | 
| | Furniture and equipment |   | 3,053 |  |   | 580            |  |   | 2,473    |  |   | 2,748            | 
| |                         | $ | 4,530 |  | $ | 990            |  | $ | 3,540    |  | $ | 4,003            | 

|6. | 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 April 30, 2009, the Company had the following
      financial assets and liabilities denominated in Canadian
  dollars:                                                                                                                                                                                                                                                                                                                                                                      

| |                                          |   | Cdn dollars | 
| | ---------------------------------------- | - | ----------- | 
| | Cash                                     | $ | 1,922       | 
| | Receivables                              | $ | 2,313       | 
| | Accounts payable and accrued liabilities | $ | 8,997       | 

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 April 30, 2009, Canadian dollar amounts were
converted at a rate of $1.19 Canadian dollars to $1.00 U.S. dollar.

|7. | LETTER OF INTENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | On February 13, 2009, the Company entered into a letter
      of intent (LOI) with Yale Resources Ltd. (Yale) as subsequently
      amended March 11, 2009, pursuant to the terms of which Yale agreed to sell
      the Company a 50% undivided interest in the Dos Naciones property and
      granted an option to acquire a further 30% in the property (the Option)
      in consideration of CDN$35,000. To exercise the Option, the Company must
      issue a total of 800,000 shares of common stock of the Company and fund
      exploration, development and other expenditures on the property in the
      amount of CDN$800,000.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Upon exercising the Option, the Company and Yale will
      form a joint venture with standard dilution clauses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The closing of the transaction contemplated in the LOI is
      subject to approval by the boards of directors of the parties, regulatory
      approval, completion of due diligence and entry into a definitive
      agreement between the parties.                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company has paid a deposit of $14,063 to Yale which
      is refundable in the event that the transaction does not
  close.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

F-6

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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,
expect, plan, anticipate, believe, estimate, predict, 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 companys
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 manage 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 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.

---

5

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.

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.

Letter of Intent with Yale Resources Ltd.

On February 13, 2009, we entered into a letter of intent with
Yale Resources Ltd. (Yale) as subsequently amended March 11, 2009, pursuant to
the terms of which Yale agreed to sell Candev a 50% undivided interest in the
Dos Naciones property and granted an option to acquire a further 30% in the
property (the Option) in consideration of CDN$35,000. To exercise the Option,
we must issue securities of our company and fund exploration, development and
other expenditures on the Dos Naciones property in the following manner:

- on or before one year after the Closing Date, we must issue 200,000 shares
  of our common stock to Yale and fund expenditures aggregating CDN$150,000 on
  the Dos Naciones property;
- on or before two years after the Closing Date, we must issue an additional
  250,000 shares of our common stock to Yale and fund additional expenditures
  aggregating CDN$250,000 on the Dos Naciones property; and
- on or before three years after the Closing Date, we must issue an
  additional 350,000 shares of our common stock to Yale and fund additional
  expenditures aggregating CDN$400,000 on the Dos Naciones property.

The letter of intent also contemplates that if we terminate the
agreement at any time prior to the exercise of the option, then Yale will have
the right to purchase all of our interest in the Dos Naciones property for
CDN$25,000. Closing of the transactions contemplated in the letter of intent is
conditional on (i) approval of the transactions by the board of directors of
both parties; (ii) receipt of any necessary regulatory approvals; (iii) the
satisfactory completion of our due diligence review of the Dos Naciones property
and our being satisfied, in our sole and absolute discretion, with the results
of such a review and verification; and (iv) the entry into a binding definitive
agreement with customary representations and warranties between the parties.
There is no assurance that the transaction will be completed as planned or at
all.

We paid a deposit of CDN$17,500 to Yale upon the execution of
the letter of intent. Yale agreed to refund CDN$17,500 if the proposed
transaction does not complete by August 30, 2009. Also, if within 90 days from
the date of the letter of intent or any time prior to the closing of the
definitive agreement, Yale decides to terminate the letter of intent, Yale
agreed to reimburse to us all the expenses that have been incurred including
legal fees, due diligence expenses, taxes and disbursements incurred by us in
relation to the review of the Dos Naciones property and drafting of the
definitive agreement, provided that such reimbursement costs does not exceed
$50,000.

The letter of intent also contemplates that, upon exercise of
the option, we and Yale Resources Ltd. will be deemed to have formed a joint
venture for holding, exploring, and exploiting the Dos Naciones property for
minerals and will enter into a joint venture agreement containing such terms and
conditions as would be customary for a comparable jointly owned project. Our
initial participating interest under the joint venture agreement would be 80%
and Yales initial participation interest under the joint venture agreement
would be 20%.

---

6

Results of Operations

The following summary of our results of operations should be
read in conjunction with our unaudited financial statements for the three and
six month periods ended April 30, 2009 which are included herein.

Our operating results for the three and six month periods ended
April 30, 2009 and 2008 are summarized as follows:

|                   |   | Three Months Ended |   |   | Six Months Ended | 
|------------------ | - | ------------------ | - | - | ---------------- | 
|                   |   | April 30,          |   |   | April 30,        | 
|                   |   | 2009               |   |   | 2008             | 
|Revenue            | $ | -                  |   | $ | -                | 
|Operating Expenses |   | 27,011             |   |   | 22,850           | 
|Acquisition Costs  |   | -                  |   |   | -                | 
|Exploration Costs  |   | 10,225             |   |   | -                | 
|Net Loss           | $ | (37,236            | ) | $ | 22,850           | 

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 and six month periods ended April
30, 2009 and 2008 are outlined in the table below:

|                             |   | Three Months Ended |   |   | Six Months Ended | 
|---------------------------- | - | ------------------ | - | - | ---------------- | 
|                             |   | April 30           |   |   | April 30         | 
|                             |   | 2009               |   |   | 2008             | 
|Professional fees            |   | 17,943             |   |   | 16,332           | 
|Advertising and promotion    |   | -                  |   |   | 3,260            | 
|Amortization                 |   | 232                |   |   | -                | 
|Bank charges and interest    |   | 75                 |   |   | 24               | 
|Consulting                   |   | 2,185              |   |   | -                | 
|Filing fees                  |   | 3,307              |   |   | -                | 
|Foreign exchange gain (loss) |   | (94                | ) |   | 123              | 
|Office expenses              |   | 2,618              |   |   | 2,783            | 
|Transfer agent               |   | 745                |   |   | 328              | 
|Total                        | $ | 27,011             |   | $ | 22,850           | 

General and Administrative

The increase in our general and administrative expenses for the
three month period ended April 30, 2009 compared to April 30, 2008 was primarily
due to: (i) an increase in professional fees; and (ii) the fact that we incurred
consulting fees and filing fees during the three month period ended April 30,
2009 as compared to the same fiscal period in 2008.

The decrease in our general and administrative expenses for the
six month period ended April 30, 2009 compared to April 30, 2008 was primarily
due to: (i) a decrease in professional fees and consulting fees; and (ii) the
fact that we did not incur any advertising and promotion fees during the six
month period ended April 30, 2009 as compared to the same fiscal period in
2008.

---

7

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 ongoing reporting requirements. Legal expenses will be ongoing during
fiscal 2009 as we are subject to the reporting obligations of the Securities
Exchange Act of 1934.

Liquidity And Capital Resources

Working Capital

|                    |   |                |   |   |               |   |  | Percentage | 
|------------------- | - | -------------- | - | - | ------------- | - |  | ---------- | 
|                    |   | As at          |   |   | As at October |   |  | Increase / | 
|                    |   | April 30, 2009 |   |   | 31, 2008      |   |  | (Decrease) | 
|Current Assets      | $ | 19,665         |   | $ | 3,092         |   |  | 535.9%     | 
|Current Liabilities | $ | 130,561        |   | $ | 50,015        |   |  | 161%       | 
|Working Capital     | $ | (110,896       | ) | $ | (46,923       | ) |  | 136.3%     | 

Cash Flows

|                                      |   | Six Month Period |   |   | Six Month Period |   |  | Percentage | 
|------------------------------------- | - | ---------------- | - | - | ---------------- | - |  | ---------- | 
|                                      |   | Ended            |   |   | Ended            |   |  | Increase / | 
|                                      |   | April 30, 2009   |   |   | April 30, 2008   |   |  | (Decrease) | 
|Cash Used in Operating Activities     | $ | (52,522          | ) | $ | (41,390          | ) |  | 26.9%      | 
|Cash Used in Investing Activities     | $ | (14,063          | ) | $ | -                |   |  | 100%       | 
|Cash Provided by Financing Activities | $ | 83,786           |   | $ | -                |   |  | 100%       | 
|Net Increase (Decrease) in Cash       | $ | 17,201           |   | $ | (41,390          | ) |  | 141.6%     | 

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 Securities Exchange Act of
1934 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 $52,522
during the six month period ended April 30, 2009 and $41,390 during the six
month period ended April 30, 2008. Cash used in operating activities was funded
by cash from financing activities.

Cash Used in Investing Activities

We used cash of $14,063 in investing activities during the six
month period ended April 30, 2009.

Cash Provided by Financing Activities

We generated cash of $83,786 from financing activities during
the six month period ended April 30, 2009.

Disclosure of Outstanding Share Data

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

Going Concern

The financial statements accompanying this report have been
prepared on a going concern basis, which implies that

---

8

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 April
30, 2009, our company has accumulated losses of $228,753 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 shares of
our common stock 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 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, other than our letter of intent
with Yale Resources Ltd. 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 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

---

9

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 shares of our
common stock and resign as members of our board of directors.

A business combination or acquisition of a business opportunity
involving the issuance of shares of our common stock 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 shares of our common stock 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 shares of our common stock to
shareholders of such private company. Issuing previously authorized and unissued
shares of our common stock will reduce the percentage of shares of our common
stock 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 shares of our common
stock to fluctuate substantially. These fluctuations may adversely affect the
trading price of shares of our common stock.

---

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 Financial Industry Regulatory Authority believes that there
is a high probability that speculative low-priced securities will not be
suitable for at least some customers. The Financial Industry Regulatory
Authoritys 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.

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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, this officer concluded that as of the end of the period
covered by this report, these disclosure controls and procedures were not
effective. 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 United States Generally Accepted Accounting Principles and
the Securities and Exchange Commission 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 April 30, 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 rules and forms of the Securities and Exchange Commission. 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 to allow timely decisions regarding required
disclosure.

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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.

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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  (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)10.3
      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)10.4*
      Letter of Intent between Candev Resource Exploration Inc.
        and Yale Resources Ltd. dated February 24, 200910.5*
      Amendment to Letter of Intent between Candev Resource Exploration
        Inc. and Yale Resources Ltd. dated March 11, 200914.1
      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.

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SIGNATURES

Pursuant to the requirements of the Securities 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.

|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: June 17, 2009

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