** **

**UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION****Washington,D.C.  20549**

**FORM 10-Q**

(Mark One)

**x****                             ****QUARTERLY REPORT PURSUANT TOSECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For thequarterly period ended June 30, 2007**

**o****                                ****TRANSITION REPORT PURSUANT TOSECTION 13 OR 15(d) OF THE EXCHANGE ACT**

**For thetransition period from             to             **

**CommissionFile Number:333-133725-01**

**US GOLDCANADIAN ACQUISITION CORPORATION******(Exact name of registrant as specified in its charter)

| **Alberta, Canada**              |   | **42-1701924**       |
|----------------------------------|--------|----------------------|
| (State or other  jurisdiction of |   | (I.R.S. Employer     |
| incorporation or  organization)  |   | Identification  No.) |

 

**165 South Union Blvd., Suite 565, Lakewood,Colorado 80228**(Addressof principal executive offices)  (Zipcode)

Registrant’stelephone number including area code:  **(303) 238-1438**(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant (1) filed all reportsrequired to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the past 12 months (or for such shorter period that the registrantwas required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.    Yes x    No o

Indicate by check mark whether the registrant is a large acceleratedfiler, an accelerated filer, or a non-accelerated filer.  

| Larger accelerated  filer o |   | Accelerated  filer o |   | Non-accelerated  filer x |
|----------------------------------|--------|---------------------------|--------|-------------------------------|

 

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

Indicate the number of shares outstanding of each of the issuer’sclasses of common stock, as of the latest practicable date: As of August 7,2007, 2 shares of common stock and, 42,968,830 exchangeable shares wereoutstanding.

 

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**US GOLD CANADIAN ACQUISITION CORPORATION**

**Index**
|                                | ** **                                                                                          | ** ** | ** ** |
|--------------------------------|-----------------------------------------------------------------------------------------------------|------------|------------|
| Part I - FINANCIAL INFORMATION |                                                                                                |       |
|                           |                                                                                                |       |       |
| Item 1.                        | Consolidated Balance Sheets at June 30, 2007  (unaudited) and December 31, 2006                     |       |       |
|                           |                                                                                                |       |       |
|                           | Consolidated Statements of Operations for the three  and six months ended June 30, 2007 (unaudited) |       |       |
|                           |                                                                                                |       |       |
|                           | Consolidated Statement of Cash Flows for the six  months ended June 30, 2007 (unaudited)            |       |       |
|                           |                                                                                                |       |       |
|                           | Notes to Consolidated Financial Statements (unaudited)                                              |       |       |
|                           |                                                                                                |       |       |
| Item 2.                        | Management’s  Discussion and Analysis or Plan of Operation                                     |       |       |
|                           |                                                                                                |       |       |
| Item 3.                        | Quantitative  and Qualitative Disclosure about Market Risk                                          |       |       |
|                           |                                                                                                |       |       |
| Item 4.                        | Controls and  Procedures                                                                            |       |       |
|                           |                                                                                                |       |       |
| Part II - OTHER INFORMATION    |                                                                                                |       |
|                           |                                                                                                |       |       |
| SIGNATURES                     |                                                                                                |       |
|                           |                                                                                                |       |       |
| Item 6.                        | Exhibits                                                                                            |       |       |

** **

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**US GOLD CANADIANACQUISITION CORPORATIONCONSOLIDATED BALANCE SHEETS**
| ** **                                                                                                                                                                              | ** ** | **June 30,** | ** **  | **December 31,** | ** ** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------|-------------|-----------------------|------------|
| ** **                                                                                                                                                                              | ** ** | **2007**          | ** **  | **2006**              | ** ** |
| ** **                                                                                                                                                                              | ** ** | **(Unaudited)**   | ** **  | ** **            | ** ** |
| ASSETS                                                                                                                                                                                  | ** ** | ** **        |        |                  |       |
| Current assets:                                                                                                                                                                         |       |              |        |                  |       |
| Cash and cash  equivalents                                                                                                                                                              |       | $                 | 7,080,295   |                  | $          | 1 |   |
| Other current  assets                                                                                                                                                                   |       | 681,764           |        | —                |       |
| Total current  assets                                                                                                                                                                   |       | 7,762,059         |        | 1                     |       |
|                                                                                                                                                                                    |       |              |        |                  |       |
| Property and equipment,  net                                                                                                                                                            |       | 8,550,643         |        | —                |       |
| Mineral property  interests                                                                                                                                                             |       | 375,339,845       |        | —                |       |
| Restrictive time  deposits for reclamation bonding                                                                                                                                      |       | 234,356           |        | —                |       |
| Goodwill                                                                                                                                                                                |       | 24,112,001        |        | —                |       |
| Other assets                                                                                                                                                                            |       | 414,298           |        | —                |       |
| TOTAL ASSETS                                                                                                                                                                            |       | $                 | 416,413,202 |                  | $          | 1 |   |
|                                                                                                                                                                                    |       |              |        |                  |       |
| LIABILITIES &  SHAREHOLDERS’ EQUITY (DEFICIT)                                                                                                                                  |       |              |        |                  |       |
| Current liabilities:                                                                                                                                                                    |       |              |        |                  |       |
| Accounts payable  and accrued liabilities                                                                                                                                               |       | $                 | 3,086,883   |                  | $          | — |   |
| Total current  liabilities                                                                                                                                                              |       | 3,086,883         |        | —                |       |
|                                                                                                                                                                                    |       |              |        |                  |       |
| Intercompany - US Gold                                                                                                                                                                  |       | 14,192,424        |        | 6,833,845             |       |
| Retirement obligation                                                                                                                                                                   |       | 1,870,933         |        | —                |       |
| Deferred income tax  liability                                                                                                                                                          |       | 130,960,309       |        | —                |       |
| Other liabilities                                                                                                                                                                       |       | 76,128            |        | —                |       |
| Total  liabilities                                                                                                                                                                      |       | 150,186,677       |        | 6,833,845             |       |
|                                                                                                                                                                                    |       |              |        |                  |       |
| Shareholders’ equity:                                                                                                                                                              |       |              |        |                  |       |
| Common stock, no  par value, 2 shares authorized, issued andoutstanding as of June 30, 2007 and  1 share authorized, issued and outstanding as of December 31, 2006                     |       | 7                 |        | 1                     |       |
| Exchangeable  stock, no par value, unlimited shares authorized, 42,968,830 shares issued  and outstanding June 30, 2007, none issued and outstanding as of  December 31, 2006 |       | 276,127,463       |        | —                |       |
| Accumulated  (deficit)                                                                                                                                                                  |       | (9,900,945        | )           | (6,833,845            | )          |
| Total  shareholders’ equity (deficit)                                                                                                                                              |       | 266,226,525       |        | (6,833,844            | )          |
|                                                                                                                                                                                    |       |              |        |                  |       |
| TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY (DEFICIT)                                                                                                                             |       | $                 | 416,413,202 |                  | $          | 1 |   |

 

The accompanying notesare an integral part of these consolidated financial statements.

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**US GOLD CANADIANACQUISITION CORPORATIONCONSOLIDATED  STATEMENT OF OPERATIONS(UNAUDITED)**
| ** **                                   | ** ** | **Three Months Ended** | ** ** | **Six Months Ended** | ** ** |
|----------------------------------------------|------------|----------------------------------|------------|--------------------------------|------------|
| ** **                                   | ** ** | **June 30, 2007**      | ** ** | **June 30, 2007**    | ** ** |
| REVENUE:                                     |       |                             |       |                           |       |
| Revenue                                      |       | $                                | —     |                           | $          | — |   |
| Total revenue                                |       | —                           |       | —                         |       |
|                                         |       |                             |       |                           |       |
| COSTS AND  EXPENSES:                         |       |                             |       |                           |       |
| General and  administrative                  |       | 2,958                            |       | 2,957                          |       |
| Acquisition costs                            |       | —                           |       | 451,234                        |       |
| Property holding  costs                      |       | 1,037,697                        |       | 1,037,697                      |       |
| Exploration  costs                           |       | 1,780,373                        |       | 1,780,373                      |       |
| Stock option  expense                        |       | 203,091                          |       | 203,091                        |       |
| Accretion of  asset retirement obligation    |       | 36,043                           |       | 36,043                         |       |
| Depreciation                                 |       | 17,619                           |       | 17,619                         |       |
| Total costs and expenses                     |       | 3,077,781                        |       | 3,529,014                      |       |
|                                         |       |                             |       |                           |       |
| Operating (loss)                             |       | (3,077,781                       | )          | (3,529,014                     | )          |
|                                         |       |                             |       |                           |       |
| OTHER INCOME  (EXPENSES):                    |       |                             |       |                           |       |
| Interest income                              |       | 43,786                           |       | 43,786                         |       |
| Interest expense                             |       | —                           |       | —                         |       |
| Foreign currency  gain                       |       | 30,108                           |       | 30,108                         |       |
| Total other income                           |       | 73,894                           |       | 73,894                         |       |
|                                         |       |                             |       |                           |       |
| (Loss) before income taxes                   |       | (3,003,887                       | )          | (3,455,120                     | )          |
| Provision for income taxes                   |       | —                           |       | —                         |       |
| Net (loss) before minority interset          |       | (3,003,887                       | )          | (3,455,120                     | )          |
|                                         |       |                             |       |                           |       |
| Minority  interest share of net (loss)       |       | 388,020                          |       | 388,020                        |       |
| Net (loss)                                   |       | (2,615,867                       | )          | (3,067,100                     | )          |
|                                         |       |                             |       |                           |       |
| Weighted average  shares - basic and diluted |       | 38,191,862                       |       | 20,041,855                     |       |
|                                         |       |                             |       |                           |       |
| Basic and  diluted per share data:           |       |                             |       |                           |       |
| Net (loss) -  basic and diluted              |       | $                                | (0.07      | )                              | $          | (0.15 | ) |

 

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

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**US GOLD CANADIANACQUISITION CORPORATIONCONSOLIDATED UNAUDITED STATEMENT OF CASH FLOWSFor the Six Months Ended June 30, 2007**
| Cash flows from  operating activities:                                |   |       |       |
|-----------------------------------------------------------------------|--------|------------|------------|
| Cash paid to suppliers and employees                                  |   | $          | (4,432,014 | ) |
| Interest received                                                     |   | 43,786     |       |
| Income taxes paid                                                     |   | —     |       |
| Cash (used in) operating activities                                   |   | (4,388,228 | )          |
|                                                                  |   |       |       |
| Cash flows from  investing activities:                                |   |       |       |
| Capital expenditures                                                  |   | (10,138    | )          |
| Loss on disposal of asset                                             |   | 15,490     |       |
| Increase to restricted investments securing  reclamation              |   | 105,327    |       |
| Cash from acquisitions                                                |   | 6,133,471  |       |
| Acquisition costs paid for mineral property  interests                |   | (3,775,049 | )          |
| Cash provided by investing activities                                 |   | 2,469,101  |       |
|                                                                  |   |       |       |
| Cash flows from  financing activities:                                |   |       |       |
| Advances from US Gold                                                 |   | 7,358,578  |       |
| Exercise of stock options                                             |   | 1,113,450  |       |
| Common stock purchased by US Gold                                     |   | 6          |       |
| Cash provided by financing activities                                 |   | 8,472,034  |       |
| Effect of  exchange rate change on cash and cash equivalents          |   | 527,387    |       |
| Increase  (decrease) in cash and cash equivalents                     |   | 7,080,294  |       |
|                                                                  |   |       |       |
| Cash and cash  equivalents, beginning of period                       |   | 1          |       |
| Cash and cash  equivalents, end of period                             |   | $          | 7,080,295  |   |
|                                                                  |   |       |       |
| Reconciliation  of net (loss) to cash (used in) operating activities: |   |       |       |
|                                                                  |   |       |       |
| Net (loss)                                                            |   | $          | (3,067,100 | ) |
| Items not  providing/requireing cash:                                 |   |       |       |
| Stock option expense                                                  |   | 203,091    |       |
| Accreation of asset retirement obligation                             |   | 36,043     |       |
| Depreciation and amortization                                         |   | 17,619     |       |
| Decrease in other assets related to operations                        |   | 137,556    |       |
| Increase in liabilities related to operations                         |   | (1,327,417 | )          |
| Minority interest                                                     |   | (388,020   | )          |
| Cash (used in)  operating activities                                  |   | $          | (4,388,228 | ) |

 

The accompanying notesare an integral part of these consolidated financial statements.

5

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**US GOLD CANADIANACQUISITION CORPORATIONNOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**June 30, 2007

**1.             Summary ofSignificant Accounting Policies**

**Basisof Presentation.**  US Gold Canadian Acquisition Corporation (“we”or the “Company”) is a subsidiary of US Gold Corporation (“US Gold”).  The consolidated financial statements arereported in United States dollars. We were organized under the laws of theProvince of Alberta, Canada on April 18, 2006 to facilitate the acquisition of theAcquired Companies as discussed in Note 2.

The interim condensedconsolidated financial statements included herein have been prepared by theCompany, without audit, pursuant to the rules and regulations of the Securitiesand Exchange Commission.  Certain informationand footnote disclosures normally included in financial statements prepared inaccordance with accounting principles generally accepted in the United Statesof America (“US GAAP”) have been condensed or omitted pursuant to such rulesand regulations, although the Company believes that the disclosures areadequate to make the information presented not misleading.

In management’s opinion, the condensedconsolidated balance sheets as of June 30, 2007 (unaudited) and December 31,2006, the condensed unaudited statements of operations for the three and sixmonth periods ended June 30, 2007, and unaudited statement of cash flows forthe six month period ended June 30, 2007, contained herein, reflect alladjustments, consisting solely of normal recurring items, which are necessaryfor the fair presentation of our financial position, results of operations andcash flows on a basis consistent with that of our prior audited consolidatedfinancial statements.  However, the results of operations for the interimperiods may not be indicative of results to be expected for the full fiscalyear.  It is suggested that thesefinancial statements be read in conjunction with the audited financialstatements and notes thereto included in the Company’s Form 10-K for theyear ended December 31, 2006.

**Basis of Consolidation**:  The consolidatedfinancial statements include the accounts of the Company and the threeexploration companies acquired effective March 28, 2007, and June 28 and 29,2007, as more fully disclosed in Note 2. Significant intercompany accounts and transactions have been eliminated.

**Estimates.**  The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

**Per Share Amounts.**  SFAS 128, “Earnings Per Share,” provides forthe calculation of “Basic” and “Diluted” earnings per share.  Basic earnings per share includes no dilutionand is computed by dividing income available to common shareholders by theweighted-average number of shares outstanding during the period (38,191,862 and20,041,855 for the three and six month periods ended June 30, 2007).

**2.             Business Acquisitions**

On June 28 and 29,2007, US Gold Corporation (“US Gold”) and the Company completed theacquisition of all of the outstanding common shares of Nevada Pacific Gold Ltd.(“Nevada Pacific”), Tone Resources Limited (“Tone”) and White Knight ResourcesLtd. (“White Knight”), individually, and collectively the “Acquired Companies”.The transactions completed on June 28 and 29, 2007 represented the second stageof the acquisitions that were originally commenced as tender offers in February2007 (“Tender Offer”).  The first stageof the acquisitions was completed on March 28, 2007, at which time the Companyacquired at least 80% of the common shares of each Acquired 

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Company and took control oftheir operations.  The Acquired Companieswere acquired in exchange for the issuance of exchangeable shares of theCompany, on the following terms:

·         0.23 of an exchangeable share of the Company for each outstandingcommon share of Nevada Pacific;

·         0.26 of an exchangeable share of the Company for each outstandingcommon share of Tone; and

·         0.35 of an exchangeable share of the Company for each outstanding commonshare of White Knight.

With the second stageacquisition transactions, the minority interests in the Acquired Companies notpreviously owned by the Company were acquired. Therefore, the Company own 100% of the Acquired Companies as of June 30,2007.

The Company believes theacquisition of the Acquired Companies was beneficial because each of them wasexploring in the Cortez Trend in Nevada and owned and operated explorationproperties that are adjacent to or near US Gold’s Tonkin property, and becausethe acquisitions resulted in US Gold having a larger land position withinthe Cortez Trend along with added technical expertise with retained keyemployees of the Acquired Companies.

In the Tender Offertransactions, the Company issued approximately 38,027,674 exchangeable sharesto tendering shareholders, and in the second stage acquisition transactions,issued approximately 4,941,156 additional exchangeable shares, for aggregate ofapproximately 42,968,830 exchangeable shares of the Company for all of theAcquired Companies.

 The exchangeable shares are exchangeable forUS Gold common stock on a one-for-one basis. Optionholders and warrantholders of the Acquired Companies have receivedreplacement options or warrants entitling the holders to receive, uponexercise, shares of US Gold’s common stock reflecting the same share exchangeratio as that of the Tender Offer transactions with appropriate adjustment ofthe exercise price per share of common stock.

The options and warrants of the AcquiredCompanies exercisable for US Gold’s shares have been included as part of thepurchase price consideration at their fair values based on the Black-Scholes optionpricing model.

|                | ** ** | **Warrants** | ** ** | **Stock Options** | ** ** |
|----------------|------------|--------------|------------|------------------------|------------|
| Nevada Pacific |       | $            | 12,365,070 |                   | $          | 2,252,353 |   |
| Tone           |       | 3,587,662    |       | 1,069,183              |       |
|                |            |              |            |                        |            |  |  |

 

Theprincipal assumptions used in applying the Black-Scholes option pricing modelwere as follows:

| Risk-free average interest  rate                       |   | 5%            |   |
|--------------------------------------------------------|--------|---------------|--------|
| Dividend yield                                         |   | N/A           |   |
| Volatility  factor                                     |   | 102%          |   |
| Expected life —  options                          |   | 0.25-4  years |   |
| Remaining periods to  expiration dates — warrants |   | 9-14 months   |   |

 

7

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The acquisitions have beenaccounted for as purchase transactions, with the Company being identified asthe acquirer and each of Nevada Pacific, Tone and White Knight as the acquireespursuant to SFAS 141 “Business Combinations”.

The measurement of thepurchase consideration is based on market prices of US Gold’s common stock 2days before and 2 days after the announcement date of March 5, 2006, which was$5.90 per share.

The preliminary allocationof the purchase price for the shares of Nevada Pacific, Tone and White Knightis summarized in the following table and is subject to further refinement:
| ** **                                                                             | ** ** | **White Knight** | ** **  | **Nevada Pacific** | ** ** | **Tone**    | ** ** | **Total**    | ** ** |
|----------------------------------------------------------------------------------------|------------|-----------------------|-------------|--------------------|------------|-------------|------------|--------------|------------|
| Preliminary  purchase price:                                                           |       |                  |        |               |       |        |       |         |       |
|                                                                                   |       |                  |        |               |       |        |       |         |       |
| Exchangeable shares of US Gold Canadian Acquisition  Corporation issued on acquisition |       | $                     | 115,094,604 |               | $          | 80,440,624  |       | $            | 28,828,049 |   | $ | 224,363,277 |   |
| Stock options to be exchanged for options of US Gold  Corporation                      |       | 1,144,500             |        | 2,252,353          |       | 1,069,183   |       | 4,466,036    |       |
|                                                                                   |       |                  |        |               |       |        |       |         |       |
| Share purchase warrants to be exchanged for warrants  of US Gold Corporation           |       | —                |        | 12,365,070         |       | 3,587,662   |       | 15,952,732   |       |
| Acquisition costs                                                                      |       | 2,009,186             |        | 1,643,073          |       | 578,784     |       | 4,231,043    |       |
|                                                                                   |       | $                     | 118,248,290 |               | $          | 96,701,120  |       | $            | 34,063,678 |   | $ | 249,013,088 |   |
|                                                                                   |       |                  |        |               |       |        |       |         |       |
| Net assets  acquired:                                                                  |       |                  |        |               |       |        |       |         |       |
| Cash and cash equivalents                                                              |       | $                     | 5,389,982   |               | $          | 208,390     |       | $            | 1,037,971  |   | $ | 6,636,343 |   |
| Other current assets                                                                   |       | 156,535               |        | 508,960            |       | 16,066      |       | 681,561      |       |
| Long - term receivable                                                                 |       | 482,008               |        | —             |       | —      |       | 482,008      |       |
| Deferred compensation charges                                                          |       | —                |        | 283,976            |       | 17,030      |       | 301,006      |       |
| Property, plant and equipment, net                                                     |       | 61,837                |        | 8,511,779          |       | —      |       | 8,573,616    |       |
| Mineral property interests                                                             |       | 153,021,926           |        | 127,076,604        |       | 48,055,025  |       | 328,153,555  |       |
| Reclamation bonds                                                                      |       | 221,855               |        | 87,683             |       | 30,145      |       | 339,683      |       |
| Accounts payable and accrued liabilities                                               |       | (217,540              | )           | (2,068,412         | )          | (138,127    | )          | (2,424,079   | )          |
| Other liabilities                                                                      |       | —                |        | (75,161            | )          | —      |       | (75,161      | )          |
| Retirement obligation                                                                  |       | (143,760              | )           | (1,691,130         | )          | —      |       | (1,834,890   | )          |
| Deferred income tax liability                                                          |       | (53,242,068           | )           | (44,423,633        | )          | (16,799,150 | )          | (114,464,851 | )          |
| Minority interest                                                                      |       | (462,874              | )           | (904,548           | )          | (100,282    | )          | (1,467,704   | )          |
| Net identifiable assets                                                                |       | 105,267,901           |        | 87,514,508         |       | 32,118,678  |       | 224,901,087  |       |
| Residual  purchase price allocated to goodwill                                         |       | 12,980,389            |        | 9,186,612          |       | 1,945,000   |       | 24,112,001   |       |
|                                                                                   |       | $                     | 118,248,290 |               | $          | 96,701,120  |       | $            | 34,063,678 |   | $ | 249,013,088 |   |

 

Minority interests have beenassigned to the 16.5%, 10.6% and 6.3% interests in each of Nevada Pacific, Toneand White Knight that the Company did not own until June 28 and 29, 2007.

The purchase considerationfor the mining assets exceeded the carrying value of the underlying assets fortax purposes by approximately $212,969,072. This amount has been applied toincrease the carrying value of the mineral properties for accounting purposes.However, this did not increase the carrying value of the underlying assets fortax purposes and resulted in a temporary difference between accounting and taxvalue. The resulting estimated future income tax liability associated with thistemporary difference of approximately $114,464,851 was also applied to increasethe carrying value of the mineral properties.

For the purposes of theCompany’s financial statements, the purchase consideration has been allocatedon a preliminary basis to the fair value of assets acquired and liabilitiesassumed, with goodwill assigned to 

8

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specific reporting units,based on management’s best estimates and taking into account all availableinformation at the time these consolidated financial statements were prepared.The Company will continue to review information relating to each of theAcquired Companies’ assets and intends to perform further analysis with respectto these assets, including an independent valuation, prior to finalizing theallocation of the purchase price. This process will be performed in accordancewith EITF Abstracts, Issue No. 04-3, *MiningAssets: Impairment and Business Combinations*. Although the resultsof this review are presently unknown, it is anticipated that it will result ina change to the amount assigned to goodwill and a change to the valueattributable to tangible assets.

As previously described, asof June 28 and 29, 2007 the Company acquired the remaining minority interestsin each of the 16.5%, 10.6% and 6.3% interests in each of Nevada Pacific, Tone,and White Knight that the Company did not own as of March 31, 2007.  The following table sets out details of theconsideration issued in the second stage transactions and the allocation of thecost of acquisition:
| ** **                                                                             | ** ** | **White Knight** | ** ** | **Nevada Pacific** | ** ** | **Tone**   | ** ** | **Total**  | ** ** |
|----------------------------------------------------------------------------------------|------------|-----------------------|------------|--------------------|------------|------------|------------|------------|------------|
| Preliminary  purchase price:                                                           |       |                  |       |               |       |       |       |       |       |
| Exchangeable  shares of US Gold Canadian Acquisition Corporation issued on acquisition |       | $                     | 8,591,912  |               | $          | 16,240,800 |       | $          | 4,295,086  |   | $ | 29,127,798 |   |
| Acquisition  costs                                                                     |       | 742,236               |       | 606,985            |       | 213,815    |       | 1,563,036  |       |
|                                                                                   |       | $                     | 9,334,148  |               | $          | 16,847,785 |       | $          | 4,508,901  |   | $ | 30,690,834 |   |
|                                                                                   |       |                  |       |               |       |       |       |       |       |
|                                                                                   |       |                  |       |               |       |       |       |       |       |
| Deferred income  tax liability                                                         |       | $                     | (5,016,842 | )                  | $          | (9,055,209 | )          | $          | (2,423,407 | ) | $ | (16,495,458 | ) |
| Acquired mineral  property interests                                                   |       | 14,350,990            |       | 25,902,994         |       | 6,932,308  |       | 47,186,292 |       |
| Net identifiable  assets                                                               |       | 9,334,148             |       | 16,847,785         |       | 4,508,901  |       | 30,690,834 |       |
|                                                                                   |       | $                     | 9,334,148  |               | $          | 16,847,785 |       | $          | 4,508,901  |   | $ | 30,690,834 |   |

 

**3.             Mineral Properties and Retirement Obligations**

Effective March 28, 2007 and June 28 and 29, 2007the Company acquired the Acquired Companies. The following is a general description of the mineral property of theTarget Companies:

Nevada Pacific holds anexploratory property portfolio covering approximately 890 square miles ofmineral rights in Mexico, including the Magistral Gold Mine, as well as elevenproperties in Nevada and one in Utah. The Nevada property portfolio coversapproximately 85 square miles, including land packages in two significantgold producing regions: the Battle Mountain/Eureka Trend/Cortez Trend and theCarlin Trend.

White Knight controls alarge land holding in Nevada, with most of the properties located in the CortezTrend. Its portfolio includes 19 properties totaling over 115 square miles: 15of the properties are located in the Cortez Trend. Four of these properties arejoint ventured to various companies subject to earn-in agreements.  Barrick Gold Corporation has earned a 60%controlling interest in the Patty (Indian Ranch) Project, with White Knightretaining approximately 30%, and Chapleau Resources Ltd. retaining 10%. In 

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the three remaining jointventures, White Knight holds 100% ownership.

Tone controls substantiallyall mineral interests in seven properties totaling approximately 7 squaremiles, and located in Elko, Eureka, Lander, and Pershing counties inNevada.   Tone’s mineral properties wereacquired by Tone from KM Exploration Ltd., a private company with a formercommon director, or were staked by that former Tone director. The propertiesare subject to a royalty of 1% of net smelter returns, excepting the Red Ridgeproperty, portions of which are subject to a royalty of 4% of net smelterreturns.

The Company is responsiblefor reclamation of certain past and future disturbances at its properties.   In connection with the acquisitions of theAcquired Companies, the Company assumed and consolidated the respective assetretirement and reclamation obligations of those companies, as reflected in thetable below, and $234,356 in restrictive deposits to secure those obligationsas of June 30, 2007.

Relatedto its obligations, the Company follows SFAS 143 “Accounting for Asset RetirementObligations.” The following is a reconciliation of the aggregate of assetretirement obligation projected for books since January 1, 2007:

| Asset retirement and  reclamation liability - January 1, 2007 |   | $         | —    |   |
|---------------------------------------------------------------|--------|-----------|-----------|--------|
| Retirement and  reclamation liability of acquisitions         |   | 1,834,890 |      |
| Accretion of  liability                                       |   | 36,043    |      |
| Asset Retirement and  reclamation liability - June 30, 2007   |   | $         | 1,870,933 |   |

 

It is anticipated that thecapitalized asset retirement costs will be charged to expense based on theunits of production method commencing with gold or silver production of thevarious mineral properties, if any. There was no projected adjustment during 2007 for amortization expenseof capitalized asset retirement cost required under SFAS 143 since none ofthese properties were in operation. Actual asset retirement and reclamation,generally, will be commenced upon the completion of operations at the property.

On June 12, 2007, US Gold’s board ofdirectors authorized efforts to investigate strategic alternatives, includingthe possible sales of its assets located in Mexico.  Pursuant to the guidelines in Statement ofFinancial Accounting Standard (SFAS) 144 *Accounting for theImpairment or Disposal of Long-Lived Assets*(“SFAS 144 Criteria”),the Company has determined that the potential sale of its Mexico assets was notsubject to reclassification as a held-for-sale asset as of  June 30, 2007.

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**4****.             Property and Equipment**

At June 30, 2007, property and equipmentconsisted of the following:

| Trucks and trailers             |   | $         | 145,337   |   |
|---------------------------------|--------|-----------|-----------|--------|
| Office furniture  and equipment |   | 37,863    |      |
| Building                        |   | 607,913   |      |
| Deferred mine  costs            |   | 6,090,187 |      |
| Mining equipment                |   | 1,686,962 |      |
| Subtotal                        |   | 8,568,262 |      |
| Less:  accumulated depreciation |   | (17,619   | )         |
| Total                           |   | $         | 8,550,643 |   |

 

Depreciation and amortization expense forthe six month period ended June 30, 2007 was $17,619.

**5.             IncomeTaxes**

Effective January 1, 2007,the Company adoped the provision of  FIN48, “Accounting for Uncertainty in Income Taxes.”  FIN 48 clarifies the accounting foruncertainty in income taxes by prescribing a minimum recognition threshold thata tax position is required to meet before being recognized. An entity isrequired to recognize the best estimate of a tax position if that position ismore likely than not to be sustained upon examination, based solely on thetechnical merits of the position.  TheCompany has determined that the adoption of FIN 48 has had no impact on itsconsolidated financial statements.

As of June 30, 2007, theCompany completed the acquisition of certain businesses, as more fullydescribed in Note 2. The Company is currently in the process of completing itsdue diligence and independent valuations of the assets and liabilities assumed,including any potential items giving rise to a liability under FIN 48. Uponcompletion of the due diligence and valuation exercise the Company will recordadditional liabilities, if any, as part of its purchase price allocation.

**6.             Shareholders’Equity**

As explained in Note 2,effective March 28, 2007, the Company took up and accepted the shares tenderedby the shareholders of the Acquired Companies and issued 38,027,674exchangeable shares in payment for the tendered shares of the AcquiredCompanies.  Effective June 28, 2007, theCompany completed plans of arrangement with Nevada Pacific and Tone, and onJune 29, 2007, completed a compulsory acquisition of White Knight (collectivelythe “Second Phase Acquisition Transaction”) Under which the Company acquiredthe remaining shares of each of the Acquired Companies.  Related to the Second Phase AcquisitionTransaction, the Company issued 4,941,156 additional exchangeable sharesresulting in the issuance of an aggregate 42,968,830 exchangeable shares forthe acquisition of 100% of the issued and outstanding shares of the AcquiredCompanies.

The exchangeable shares, byvirtue of the redemption and exchange rights attaching to them and theprovisions of certain voting and support agreements, provide the holders withthe economic and voting rights that are, as nearly as practicable, equivalentto those of a holder of shares of common stock of US Gold. Through June 30,2007, 15,007,544 exchangeable shares of the Company had been exchanged forequivalent amount of common stock of US Gold and US Gold acquired that numberof shares 

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of the Company through thatdate.  Therefore, as of June 30, 2007, USGold holds 35% of the outstanding shares of the Company.

**7.             Related Party Transactions**

*RobertR. McEwen.**  *

Inconnection with the acquisition of the Acquired Companies, Robert McEwentendered all of his shares in the Acquired Companies and received 6,868,350exchangeable shares on the same basis as the other shareholders of the AcquiredCompanies.  Robert McEwen is the Chairmanof our Board of Directors and is our Chief Executive Officer.

Inconnection with the second stage of the acquisition of the Acquired Companies,US Gold assumed the obligations under warrant agreements of thosecompanies.  Warrants of White Knight andNevada Pacific held by Mr. McEwen were assumed by US Gold on the same basis asthe other warrant holders, and are now exercisable to acquire 3,525,000 sharesof common stock of US Gold for exercise prices of approximately $0.90 to $2.40per share and expiring between December 14, 2007 and May 11, 2008.

*Ann S. Carpenter*.

Weissued a total of 2,550 exchangeable shares to Ann Carpenter in connection withthe acquisition of the Acquired Companies. Ms. Carpenter is our President, Chief Operating Officer and a member ofour Board of Directors.

**Item 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLANOF OPERATION**

**Overview**

The following discussion updates our plan ofoperation for the foreseeable future. It also analyzes our financial conditionat June 30, 2007 and compares it to our financial condition atDecember 31, 2006.  Finally, thediscussion summarizes the results of our operations for the three and sixmonths ended June 30, 2007.  We had nooperations during the six months ended June 30, 2006 and consequently nofinancial statements are presented for periods then ended. We suggest that youread this discussion in connection with MANAGEMENT’S DISCUSSION AND ANALYSIS ORPLAN OF OPERATION contained in the annual report on Form 10-KSB of US Gold forthe year ended December 31, 2006 and our audited financial statements containedin our annual report on Form 10-K for the year ended December 31, 2006.

We were organized in April 2006 to facilitate theacquisition of the Acquired Companies by US Gold.  Specifically, we were organized in an effortto provide more favorable tax treatment to the Canadian shareholders of theAcquired Companies in connection with the anticipated exchange of stock for thecommon shares of those companies.  Uponexpiration of the offers, discussed more fully below, our exchangeable shareswere issued to the shareholders of the Acquired Companies and we now own 100%of each of the Acquired Companies.  Weare in the exploration stage for accounting purposes, since we have had norevenue from operations.   There is nocomparative operating data for the three or six months ended June 30, 2006.

On June 28 and 29, 2007, weand US Gold Corporation (“US Gold”) completed the acquisition of all of theoutstanding common shares of Nevada Pacific Gold Ltd. (“Nevada Pacific”), ToneResources Limited (“Tone”) and White Knight Resources Ltd. (“White Knight”),collectively the “Acquired Companies”. The transactions completed on June 28and 29, 2007 represented the second stage of these acquisitions that was originallycommenced as tender offers in February 2007. The first stage of the acquisitions was completed on March 28, 2007, atwhich time we acquired at least 80% of the common

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shares of each AcquiredCompany and took control of their operations. The Acquired Companies were acquired in exchange for the issuance of ourexchangeable shares on the following terms:

·         0.23 of an exchangeable share of the Company for each outstandingcommon share of Nevada Pacific;

·         0.26 of an exchangeable share of the Company for each outstandingcommon share of Tone; and

·         0.35 of an exchangeable share of the Company for each outstandingcommon share of White Knight.

With these second stageacquisition transactions, the minority interests in the Acquired Companies notpreviously owned by us were acquired. Therefore, we own 100% of the Acquired Companies as of June 30, 2007.

**Plan of Operation**

Our plan of operation for the balance of 2007 is toevaluate data acquired from the Acquired Companies and integrate and initiateexploration at the Acquired Company mineral properties. Our assets at presentconsist of all the assets acquired with the Acquired Companies, includingmineral interests in a number of exploration properties.  A majority of the properties acquired fromthe Acquired Companies are located in the State of Nevada, in proximity to theTonkin property owned by US Gold, although we also acquired an interest inother properties, including in the State of Utah and in Mexico.  Our goal is to focus exploration in Nevada,primarily on the Cortez trend, and ultimately, become a producer of gold andother precious metals.  A budget for our2007 exploration program is still being developed by the Company.

Wehave only obtained access to the books and records of the Acquired Companiesfollowing completion of the tender offers. As a result, we will require time to evaluate the properties of thosecompanies and decide whether and when to commence exploration efforts.  Certain of the properties acquired from theAcquired Companies are in close proximity to the Tonkin property in which USGold has an interest, so it may be easier to evaluate those properties based onthe experience of US Gold in the region. In any event, we expect that our efforts in the foreseeable future willbe geared toward integrating the personnel, operations and data of the AcquiredCompanies and understanding and evaluating the properties of the AcquiredCompanies.   Priority exploration drilling targets on theacquired properties include Gold Pick, located South of the Tonkin property,and the Resurrection Ridge target on the Limousine Butte property located onthe Carlin Trend.

We expect to devote substantial efforts during 2007to the integration of these acquisitions. This process will involve significantexecutive time, considerable expenditures related to professional fees andother related costs.

**Liquidity and Capital Resources**

We rely upon USGold for all of our liquidity and capital resource needs.

As of June 30,2007, we had a working capital of $4,675,176 comprised of current assets of$7,762,059 and current liabilities of $3,086,883.   We expect that the liquidity and capital ofUS Gold will be sufficient to allow us to continue operations for the remainderof the year, although we and US Gold will likely require additional resourcesafter that time to continue our exploration program.

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Net cashused in operations is ($4,388,228) for the six months ended June 30, 2007.  Cash paid to suppliers, consultants andemployees is $4,432,014 during the 2007 period reflecting payments of fees andexpenses in connection with the acquisitions and assumption of responsibilitiesfor management and operations of the Acquired Companies as well as exploration.

Cashprovided by investing activities was $2,469,101 for the first half of 2007primarily reflecting cash acquired in the acquisitions, exercise of stockoptions and acquisition costs paid for mineral property interests

**Results of Operations**

*Six month period ended June 30, 2007*

For the six months ended June 30, 2007, werecorded a net loss of $(3,067,100), or $(0.15) per share, generally reflectingcosts related to the acquisitions, property holding expenses, and exploration expense.   Property holding costs totaled approximately$1.0 million while exploration costs were approximately $1.8 million.

We haveincurred significant fees and expenses in connection with the acquisitions ofthe Acquired Companies with $6.8 million expensed during the year endedDecember 31, 2006, including investment banking, legal and accounting fees, andexpect to incur additional fees and expenses in the future.  For the six months ended June 30, we haveincurred or accrued approximately $6.2 million of such costs of whichapproximately $451 thousand were expensed prior to the acquisitions beingdeemed probable, and $5.8 million capitalized in the costs of the acquisitions.

*Three month periodended June 30, 2007*

For thethree months ended June 30, 2007, we recorded a net loss of $(2,615,867), or$(0.07) per share.  The net loss wasprimarily the result of property holding costs and exploration.

**Forward-LookingStatements**

ThisForm 10-Q contains or incorporates by reference “forward-looking statements,”as that term is used in federal securities laws, about our financial condition,results of operations and business. These statements include, among others:

·              statementsconcerning the benefits that we expect will result from our business activitiesand certain transactions that we contemplate or have completed, such asincreased revenues, decreased expenses and avoided expenses and expenditures;and

·              statementsof our expectations, beliefs, future plans and strategies, anticipateddevelopments and other matters that are not historical facts.

Thesestatements may be made expressly in this document or may be incorporated byreference to other documents that we will file with the SEC.  You can find many of these statements bylooking for words such as “believes,” “expects,” “anticipates,” “estimates” orsimilar expressions used in this report or incorporated by reference in thisreport.

These forward-looking statements are subject to numerous assumptions,risks and uncertainties that may cause our actual results to be materiallydifferent from any future results expressed or implied in thosestatements.  Because the statements aresubject to risks and uncertainties, actual results may 

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differ materially from those expressed or implied.  We caution you not to put undue reliance onthese statements, which speak only as of the date of this report.  Further, the information contained in thisdocument or incorporated herein by reference is a statement of our presentintention and is based on present facts and assumptions, and may change at anytime and without notice, based on changes in such facts or assumptions.

**Risk Factors Impacting Forward-Looking Statements**

The important factors that could prevent us from achieving our statedgoals and objectives include, but are not limited to, those set forth in itsother reports filed with the SEC and the following:

·      Thesuccess of our ongoing exploration program.

·                  The worldwide economic situation;

·                  Any change in interest rates or inflation;

·                  The willingness and ability of third partiesto honor their contractual commitments;

·                  Our ability to raise additional capital, as itmay be affected by current conditions in the stock market and competition inthe gold mining industry for risk capital;

·                  Our costs of production;

·                  Environmental and other regulations, as thesame presently exist and may hereafter be amended;

·                  Our ability to identify, finance andintegrate other acquisitions; and

·                  Volatility of our stock price.

We  undertake no responsibilityor obligation to update publicly these forward-looking statements, but may doso in the future in written or oral statements. Investors should take note of any future statements made by or on ourbehalf.

**Item 3. QUANTITATIVE ANDQUALITATIVE DISCLOSURE ABOUT MARKET RISK**

Our exposure to market risks includes, but is notlimited to, the following risks: changes in foreign currency exchange rates,changes in interest rates, equity price risks, and commodity pricefluctuations. We do not use derivative financial instruments as part of anoverall strategy to manage market risk.

**Foreign Currency Risk**

While we transact most of our business in US dollars, some expenses,purchases of labor, operating supplies and capital assets are denominated inCanadian dollars or Mexican pesos. As a result, currency exchange fluctuationsmay impact the costs incurred in our operations. The appreciation of non-USdollar currencies against the US dollar increases costs and the cost of capitalassets in US dollar terms at our properties located outside the US, which canadversely impact our operating results and cash flows. Conversely, adepreciation of non-US dollar currencies usually decreases production costs andcapital asset purchases in US dollar terms.

The value of cash and cashequivalent investments denominated in foreign currencies also fluctuates withchanges in currency exchange rates. Appreciation of non-US dollar currenciesresults in a foreign currency gain on such investments and a decrease in non-USdollar currencies results in a loss. We have not utilized market risk sensitiveinstruments to manage our exposure to foreign currency exchange rates but mayin the future actively manage our exposure to foreign currency exchange raterisk. We also hold portions of our cash reserves in non-US dollar currencies.

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**Interest Rate Risk**

We have no debt outstanding nor do we have anyinvestment in debt instruments other than highly liquid short-term investments.Accordingly, we consider our interest rate risk exposure to be insignificant atthis time.

# **Equity Price Risk**

We have in the past soughtand may in the future seek to acquire additional funding by sale of commonshares. Movements in the price of our common shares have been volatile in thepast and may also be volatile in the future. As a result, there is a risk thatwe may not be able to sell new common shares at an acceptable price should theneed for new equity funding arise.

**Commodity Price Risk**

We currently do not have any production at any of our units and expectto be engaged in exploration activities for the foreseeable future. However, ifwe commence production and sales, changes in the price of gold couldsignificantly affect our results of operations and cash flows in the future.

**Item 4. CONTROLS AND PROCEDURES**

 (a)          We maintain a system of controls andprocedures designed to ensure that information required to be disclosed by usin reports that we file or submit under the Securities Exchange Act of 1934, asamended, is recorded, processed, summarized and reported, within time periodsspecified in the SEC’s rules and forms and to ensure that information requiredto be disclosed by us in the reports that we file or submit under theSecurities Exchange Act of 1934, as amended, is accumulated and communicated toour management, including our Chief Executive Officer and Principal FinancialOfficer, as appropriate to allow timely decisions regarding requireddisclosure.  As of June 30, 2007, underthe supervision and with the participation of our Chief Executive Officer andPrincipal Financial Officer, management has evaluated the effectiveness of thedesign and operation of our disclosure controls and procedures.  Based on that evaluation, the Chief ExecutiveOfficer and Principal Financial Officer concluded that our disclosure controlsand procedures were effective.

 (b)          Changes in Internal Controls.  Therewere no changes in our internal control over financial reporting during thequarter ended June 30, 2007, that materially affected, or is reasonably likelyto materially affect, our internal controls over financial reporting.

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**PART II**

**SIGNATURES**

In accordance with Section13 or 15(d) of the Securities Exchange Act of 1934, the Company caused thisReport to be signed on its behalf by the undersigned, thereunto dulyauthorized.
|                        | US GOLD CANADIAN ACQUISITION CORPORATION   |
|------------------------|--------------------------------------------|
|                   |                                       |
|                   | /s/ Robert R. McEwen                       |
| Dated: August 8,  2007 | By Robert R. McEwen, Chairman of the Board |
|                   | and Chief Executive Officer                |
|                   |                                       |
|                   | /s/ William F. Pass                        |
| Dated: August 8,  2007 | By William F. Pass, Vice President and     |
|                   | Chief Financial Officer                    |

** **

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**Item6.  Exhibits**

The following exhibits are filed with thisreport:

| 31.1 | Certification pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002 for Robert R. McEwen.                     |
|------|--------------------------------------------------------------------------------------------------------------------|
| 31.2 | Certification pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002 for William F. Pass.                      |
| 32   | Certification pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002 for Robert R. McEwen and William F. Pass. |

** **

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