Yellowcake Mining

Annual report

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our

plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this annual report on Form 10-K.

Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

Our assets consist of cash and cash equivalents, prepaid expenses and nominal equipment. There can be no assurance that we will generate revenues in the future or that we will be able to operate profitably in the future, if at all. We have incurred net losses in each fiscal year since inception of our operations. Our company has never declared bankruptcy, it has never been in receivership, and it has never been involved in any legal action or proceedings.

Due to the down-turn of the world economy, financing availability and our inability to raise adequate financing, we have put all exploration projects on hold. We have ceased our previous operations and are currently seeking new business opportunities with established business entities for the merger with or acquisition of a target business. In certain instances, a target business may wish to become our subsidiary or may wish to contribute assets to us rather than merge. We have not yet begun negotiations or entered into any definitive agreements for potential new business opportunities and there can be no assurance that we will be able to enter into any definitive agreements.

RESULTS OF OPERATIONS

The following summary of our results of operations should be read in conjunction with our audited financial statements for the year ended July 31, 2010.

REVENUES

We have not earned any revenues to date and do not anticipate earning revenues, if ever, until such time as we enter into a new business opportunity with an established business.

CONSULTING FEES AND MANAGEMENT FEES

Consulting and management fees represent fees paid for services provided by company officers and directors as well as consultants and the fair values of stock option expenses. The decrease in consulting fees the fiscal year ended July 31, 2010 was due to the fact that we no longer needed the financial consultant that was hired in August 2008. A decrease in management fee during the year was primarily due to the departure of directors during the year, therefore the stock options related to these individuals were forfeited and cancelled and the related expense was not recorded since their departure date.

GENERAL AND ADMINISTRATIVE EXPENSE

General and administrative expense which includes office rent and supplies, office services and travel, decreased by 60% in the fiscal year ended July 31, 2010 when compared to prior year due to us occupying office space that is provided free by the director.

IMPAIRMENT OF MINERAL INTERESTS EXPENSES

We currently do not have sufficient cash on hand to continue with exploration programs and to meet the cash payments requirement on the properties. We do not believe that we would be able to raise the money that we require on acceptable terms. In the fiscal year ended July 31, 2009, we recognized an impairment of $1,324,417 in respect of one of our mineral properties. We did not recognize any impairment in the fiscal year ended July 31, 2010.

MINERAL PROPERTY INTERESTS

During the fiscal year ended July 31, 2010, our expenses associated with mineral property interests decreased compared to prior year because of the suspension of exploration activities.

PROFESSIONAL FEES

Professional fees include legal, accounting and audit expenses associated with keeping our company in good standing with regulatory authorities. In the fiscal year ended July 31, 2010, we incurred 52% less expense for the fiscal year ended July 31, 2009. The decrease in the periods is primarily due to the fact that we did not have any acquisition activity during the year and therefore reduced legal costs.

LIQUIDITY AND CAPITAL RESOURCES

Our financial condition for the12 months ended July 31, 2010 and 2009 and the changes between those periods for the respective items are summarized as follows:

The decrease in our working capital deficiency was primarily the result of meeting our obligations to pay for our operating expenses during the year ended July 31, 2010.

CASH USED IN OPERATING ACTIVITIES

During the year ended July 31, 2010 we used net cash in operating activities in the amount of $166,825 compared to $794,002 for the year ended July 31, 2009. The cash used in the year ended July 31, 2010 is primarily represented by mineral property expenditures, general administrative expenses such fees paid to consultants, as well as professional fees paid in legal and audit. The decrease is primarily the result of us not incurring any mineral property expenditures and decreasing our stock-based compensation in the fiscal year ended July 31, 2010.

CASH USED IN INVESTING ACTIVITIES

During the year ended July 31, 2010 the net cash provided in investing activities was $162 compared to $174,305 net cash provided for the same period in 2009. The decrease was due to suspension of exploration activities.

CASH PROVIDED BY FINANCING ACTIVITIES

During the years ended July 31, 2010 and 2009, the net cash provided by financing activities was $140,214 and $Nil, respectively. The increase was primarily due to us receiving a demand loan of $125,000 in the fiscal year ended July 31, 2010.

There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to scale down or perhaps even cease the operation of our business.

CURRENT STATUS OF EXPLORATION PROJECTS

Due to the current market price of uranium, the down-turn of the world economy, financing availability and our inability to raise adequate financing, we have put all of our exploration projects on hold. We will continue to monitor the uranium market financing possibilities and other commercially feasible mining opportunities.

TERMINATION OF INTERESTS

We held four lode mining claims comprising approximately 60 acres in Colorado. However; due to the lack of funding we have allowed the claims to lapse because of regulatory non-compliance.

TERMINATION OF LETTER OF INTENT FOR OPTION AGREEMENT - TRINITY SILVER PROJECT

On September 1, 2009 we announced the signing of a letter of intent to enter into an Exploration Earn-in Agreement with AuEx Ventures, Inc. for the Trinity Silver property, located in Pershing County, Nevada. The property consists of 59 unpatented mining claims and 5,040 acres of fee land, about 5,800 acres in total. It is located about 25 miles northwest of the Rochester Silver Mine, one of the largest silver mines in the US and about 10 miles southeast of the Seven Troughs gold district.

The Earn-in Agreement was scheduled to be executed by November 1, 2009, but we were unable to provide the cash payment we were required to make because of our inability to raise financing. Due to our inability to provide the funding, the letter of intent with AuEx Ventures Inc. was formally terminated on December 31, 2009.

OFF-BALANCE SHEET ARRANGEMENTS

There are 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 is material to investors.

GOING CONCERN

Our audited financial statements have been prepared on a going concern basis, which implies that we will continue to realize our assets and discharge our liabilities and commitments in the normal course of business. We have not generated revenues since inception, have never paid any dividends and are unlikely to pay dividends or generate earnings in the immediate or foreseeable future. We have historically incurred losses and have incurred an accumulated deficit of $20,346,453 as of July 31, 2010. Because of these historical losses, we will require additional working capital to develop our business operations. We intend to raise additional working capital through private placements, public offerings, bank financing and/or advances from related parties or shareholder loans.

The continuation of our company as a going concern is dependent upon the continued financial support from its shareholders, the ability of our company to obtain necessary equity financing to achieve our operating objectives, confirmation of our company's interests in the underlying properties, and the attainment of profitable operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current or future stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

There are no assurances that we will be able to either (i) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (ii) obtain additional financing through either private placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us. If adequate working capital is not available we may not increase our operations.

Due to the uncertainty of our ability to meet our current operating expenses and the capital expenses noted above, in their report on the annual financial statements for the year ended July 31, 2010, 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.

RECENT ACCOUNTING PRONOUNCEMENTS

In March 2010, the FASB issued Accounting Standards Update ("ASU") No. 2010-11, which is included in the Codification under ASC 815. This update clarifies the type of embedded credit derivative that is exempt from embedded derivative bifurcation requirements. Only an embedded credit derivative that is related to the subordination of one financial instrument to another qualifies for the exemption. This guidance became effective for our interim and annual reporting periods beginning January 1, 2010. The adoption of this guidance did not have a material impact on our financial statements.

In February 2010, the FASB issued ASU No. 2010-09, which is included in the Codification under ASC 855, Subsequent Events ("ASC 855"). This update removes the requirement for an SEC filer to disclose the date through which subsequent events have been evaluated and became effective for interim and annual reporting periods beginning January 1, 2010. The adoption of this guidance did not have a material impact on our financial statements.

In January 2010, the FASB issued ASU No. 2010-06, which is included in the Codification under ASC 820, Fair Value Measurements and Disclosures ("ASC 820"). This update requires the disclosure of transfers between the observable input categories and activity in the unobservable input category for fair value measurements. The guidance also requires disclosures about the inputs and valuation techniques used to measure fair value and became effective for interim and annual reporting periods beginning January 1, 2010. The adoption of this guidance did not have a material impact on our financial statements.

FASB Accounting Standards Codification -- Effective for interim and annual periods ending after September 15, 2009, the FASB has defined a new hierarchy for U.S. GAAP and established the FASB Accounting Standards Codification (ASC) as the sole source for authoritative guidance to be applied by nongovernmental

entities. The adoption of the ASC changes the manner in which U.S. GAAP guidance is referenced, but it does not have any impact on our financial position or results of operations.

FASB Accounting Standards Codification -- Effective for interim and annual periods ending after September 15, 2009, the FASB has defined a new hierarchy for U.S. GAAP and established the FASB Accounting Standards Codification (ASC) as the sole source for authoritative guidance to be applied by nongovernmental entities. The adoption of the ASC changes the manner in which U.S. GAAP guidance is referenced, but it does not have any impact on our financial position or results of operations

In August 2009, the FASB issued ASU No. 2009-05, "Measuring Liabilities at Fair Value," or ASU 2009-05, which amends ASC 820 to provide clarification of a circumstances in which a quoted price in an active market for an identical liability is not available. A reporting entity is required to measure fair value using one or more of the following methods: 1) a valuation technique that uses
a) the quoted price of the identical liability when traded as an asset or b) quoted prices for similar liabilities (or similar liabilities when traded as assets) and/or 2) a valuation technique that is consistent with the principles of ASC 820. ASU 2009-05 also clarifies that when estimating the fair value of a liability, a reporting entity is not required to adjust to include inputs relating to the existence of transfer restrictions on that liability. The adoption of this ASU did not have an impact on our consolidated financial statements.

In May 2009, the FASB issued ASC No. 855 "Subsequent Events". ASC No. 855 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. ASC No. 855 sets forth (1) The period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) The circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and (3) The disclosures that an entity should make about events or transactions that occurred after the balance sheet date. ASC No. 855 was effective for interim or annual financial periods ending after June 15, 2009. We have evaluated subsequent events through December 21, 2009 which represents the date on which the interim financial statements were issued.

In April 2009, the FASB issued additional disclosure requirements related to fair values, which are included in ASC 820, "Interim Disclosures about Fair Value of Financial Instruments." The provisions require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in the annual financial statements. The required disclosures were effective for interim reporting periods ending after June 15, 2009. The adoption of the provision did not have a material impact on our statements of financial position, results of operations and cash flows.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

BASIS OF PRESENTATION

These financial statements are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars.

USE OF ESTIMATES

The preparation of financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. We regularly evaluate estimates and assumptions related to deferred income tax asset valuations, asset impairment, stock based compensation and loss contingencies. We base our estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by us may differ materially and adversely from our estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

BASIC AND DILUTED LOSS PER SHARE

We compute our net loss per share in accordance with FASB ASC 260-10-45 ("ASC 260-10-45", formerly referred to as SFAS No. 128), "Earnings per Share". ASC 260-10-45 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. For the year ended July 31, 2010, potentially dilutive common shares relating to options and warrants outstanding totalling 100,000 (2009 - 1,600,000) were not included in the computation of loss per share because the effect was anti-dilutive.

MINERAL RIGHTS AND MINERAL PROPERTY INTERESTS

Mineral rights includes the cost of advance minimum royalty payments, the cost of capitalized property leases, and the cost of property acquired either by cash payment, the issuance of term debt or common shares. Expenditures for exploration on specific properties with no proven reserves are written off as incurred. Mineral rights will be amortized against future revenues or charged to operations at the time the related property is determined to have impairment in value.

We also consider the provisions of EITF 04-02 "Whether Mineral Rights are Tangible or Intangible Assets" which concluded that mineral rights are tangible assets.

ASSET RETIREMENT OBLIGATIONS

We record the fair value of the liability for closure and removal costs associated with the legal obligations upon retirement or removal of any tangible long-lived assets in accordance with FASB ASC 410 ("ASC 410", formerly referred to as SFAS No. 143), "Accounting for Asset Retirement Obligations". The initial recognition of any liability will be capitalized as part of the asset cost and depreciated over its estimated useful life. At July 31, 2010 and 2009, we have not accrued any asset retirement obligations.

IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived assets are continually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the year ended July 31, 2010, we recognized an impairment of nil in respect of one of our mineral properties (2009 - $1,324,417).

FOREIGN CURRENCY TRANSLATION

Our functional and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated in accordance with FASB ASC 830 ("ASC 830", formerly referred to as SFAS No. 52), "Foreign Currency Translation", using the exchange rate prevailing at the balance sheet date. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. We have not, to the date of our financials statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

INCOME TAXES

We follow the asset and liability method of accounting for income taxes whereby deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. If it is determined that the realization of the future tax benefit is not more likely than not, we established a valuation allowance. On August 1, 2007, we adopted

FASB ASC 740 ("ASC 740", formerly referred to as FIN 48), regarding accounting for uncertainty in tax positions. We remain subject to examination of income tax filings in the United States and various state jurisdictions for periods since its inception in 2006. We have also determined that we are subject to examination in Canada for all prior periods due to our continued loss position in such jurisdictions. Material tax positions were examined under the more-likely-than-not guidance provided by ASC 740. If interest and penalties were to be assessed, we would charge interest to interest expense, and penalties to general and administrative expense.

As a result of the ASC 740 assessment, we concluded that it has not taken any uncertain tax positions on any of its open tax returns that would materially distort our financial statements. There was no material cumulative effect of adopting ASC 740 on our financial statements as of August 1, 2007.

STOCK-BASED COMPENSATION

We records stock-based compensation in accordance with FASB ASC 718 ("ASC 718", formerly referred to as SFAS No. 123R), "Accounting for Stock-based Compensation", and applied the recommendations of this standard using the modified prospective method. Under this application, we are required to record compensation expense, based on the fair value of the awards, for all awards granted after the date of the adoption and for the unvested portion of previously granted awards that remain outstanding as at the date of adoption. Prior to the adoption of ASC 718, we did not issue any compensation awards.

PURCHASE OF SIGNIFICANT EQUIPMENT

We do not anticipate the purchase or sale of any plant or significant equipment during the next 12 months.

PERSONNEL PLAN

We do not anticipate any significant changes in the number of employees during the next 12 months.