Yinfu Gold Corp. - Quarter Report: 2011 June (Form 10-Q)

Unassociated Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2011

¨ 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: 333-152242

YINFU GOLD CORPORATION

(Exact name of registrant as specified in its charter)

Wyoming	20-8531222
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization

Level 19, Two International Finance Centre
8 Finance St., Central, Hong Kong	N/A
(Address of principal executive offices)	(Zip Code)

852 2251 1695

(Registrant’s telephone number, including area code)

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 short period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

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

Large accelerated filer	¨	Accelerated filer ¨

Non-accelerated filer	¨	Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-c of the Act).

Yes ¨ No x

As of August 15, 2011, there were outstanding 88,048,000 shares of the registrant’s common stock, $.001 par value.

YINFU GOLD CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2011

INDEX

		PAGE

PART 1.	Financial Information

Item 1.	Financial Statements

	Consolidated Balance Sheet as of June 30, 2011 (Unaudited) and March 31, 2011 (Audited)	1

	Consolidated Statement of Operations for the Three Months Ended June 30, 2011 (Unaudited) and June 30, 2010 (Unaudited)	3

	Consolidated Statement of Changes in Stockholders’ Deficit for the Three Months Ended June 30, 2011 (Unaudited)	5

	Consolidated Statement of Cash Flows for the Three Months Ended June 30, 2011 (Unaudited) and June 30, 2010 (Unaudited)	4

	Notes to Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis	10

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14

Item 4T.	Controls and Procedures	14

PART 11.	Other Information

Item 1.	Legal Proceedings	15

Item 1A.	Risk Factors	15

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15

Item 3.	Defaults Upon Senior Securities	15

Item 4.	Submission of Matters to a Vote of Security Holders	15

Item 5.	Other Information	15

Item 6.	Exhibits	16

	Signatures	17

	Exhibits

YINFU GOLD CORP.

CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2011

(STATED IN US DOLLARS)

YINFU GOLD CORP.

CONTENT		PAGE

CONSOLIDATED BALANCE SHEETS		1

CONSOLIDATED STATEMENT OF INCOME		3

CONSOLIDATED STATEMENT OF CASH FLOWS		4

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY		5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS		6

YINFU GOLD CORP.

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2011

	Notes	As of June 30, 2011		As of March 31, 2011
		$		$
ASSETS
Current assets
Cash and cash equivalents	3		59,348		19,024
Other receivables, net			1,312,110		959,798
Total current assets			1,371,458		978,822

Investment	6		6,300,000		6,300,000
Property, plant and equipments, net	4		2,350,101		1,986,364
Intangible asset- mineral right	5		24,046,920		24,046,920
Other non-current assets			37,828		-
Total non-current assets			32,734,849		32,333,284

Subsidiary held-for-sales-assets	2		24,590		24,464

TOTAL ASSETS			34,130,897		33,336,570

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accrued payments and expenses			2,007,236		1,970,235
Other payables			23,203,402		22,580,750
Due to related party	7		1,902,000		1,287,862
Total current liabilities			27,112,638		25,838,847

Subsidiary held-for-sales-liabilities	2		2,682,406		2,657,094

TOTAL LIABILITIES			29,795,044		28,495,941

YINFU GOLD CORP.

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2011 (CONTINUED)

	Notes	As of June 30,2011			As of March 31,2011
		$			$
STOCKHOLDERS’ EQUITY
Common stock
Authorized: 1,000,000,000 shares,
Issued and outstanding: 88,048,000			82,648			82,648

Additional paid-in capital			6,471,938			6,471,938
Reserve			1,642			-
Retained earnings			(2,251,753	)		(1,726,443	)
Foreign exchange reserve			31,378			12,486

TOTAL STOCKHOLDERS’ EQUITY			4,335,853			4,840,629

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			34,130,897			33,336,570

See accompanying notes to the consolidated financial statement

YINFU GOLD CORP.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

	Notes	For the three months ended June 30,2011			For the three months ended June 30,2010
		$			$

Administrative expenses			(201,364	)		(376,150	)

Other income			10,118			-
Provisional loss			(309,366	)		-

Income (Loss) before taxes			(500,612	)		(376,150	)

Income tax			-			-

Net income (loss ) from continuing operations			(500,612	)		(376,150	)

Net income (loss) from discontinued operations	2		(24,698	)		-

Net income (loss)			(525,310	)		(376,150	)

See accompanying notes to the consolidated financial statement

YINFU GOLD CORP.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

	For the three months ended June 30,2011			For the three month ended June 30, 2010
Cash flows from (used in) operating activities
Net income (loss )for the period		(525,310	)		(376,150	)
Depreciation		20,847			-
Change in other receivables		94,738			-
Change in accrued expenses		37,000			1,613
Change in other payables		670,349			32,129
Change in account due to related parties		126,247			51,295
Change in non-current assets		-			36,387
Net cash provided by(used in) operating activities		423,871			(254,726	)

Cash flows from Investing activities
Acquisition of equipment		(384,584	)		—
Net cash used in investing activities		(384,584	)		—

Increase (Decrease) in cash and cash equivalents		39,287			(254,726	)
Foreign exchange effect		863			-
Cash and cash equivalents, beginning of period		21,493			335,908
Cash and cash equivalents,end of period		61,643			81,182
Less: Cash from discontinued operations		2,295			5,773
Cash from continuing operations		59,348			75,409

See accompanying notes to the consolidated financial statement

YINFU GOLD CORP.

(An Exploration Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY FOR THE THREE MONTHS ENDED JUNE 30, 2011

	Number Of shares		Par value ($0.001/share)		Additional paid-in capital			Retained earnings			Foreign exchange reserve		Reserve		Total
			$		$			$							$
Balance, March 31,2009		76,500,000		76,500		(76,399	)		(728,444	)		-		-		(728,343	)
Net income for the year		-		-		-			2,554,658			-		-		2,554,658
Foreign exchange reserve												4,624		-		4,624

Balance, March 31,2010		76,500,000		76,500		(76,399	)		1,826,214			4,624		-		1,830,939

Issued for services@ $1.03		300,000		300		308,700			-			-		-		309,000
Issued for acquisition @ $3.15		1,098,000		1,098		3,457,602			-			-		-		3,458,700
Issued for acquisition @ $3.15		902,000		902		2,840,398			-			-		-		2,841,300
Recapitalization		9,248,000		3,848		(58,363	)		-			-		-		(54,515	)
Net loss for the period		-		-		-			(3,552,657	)		-		-		(3,552,657	)
Foreign exchange reserve		-		-		-			-			7,862		-		7,862

Balance, March 31,2011		88,048,000		82,648		6,471,938			(1,726,443	)		12,486		-		4,840,629

Net loss for the period		-		-		-			(525,310	)		-		-		(525,310	)
Reserve		-		-		-			-			-		1,642		1,642
Foreign exchange reserve		-		-		-			-			18,892		-		18,892

Balance, June 30, 2011		88,048,000		82,648		6,471,938			(2,251,753	)		31,378		1,642		4,335,853

See accompanying notes to the consolidated financial statement

YINFU GOLD CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2011

YINFU GOLD CORP.

(An Exploration Stage Company)

Notes to the consolidated financial statements as of June 30, 2011

1. QUARTERLY FINANCIAL INFORMATION

These unaudited consolidated quarterly financial statements should be read in conjunction with the 31 March 2011 financial statements and the notes included therein. In the opinion of the Management, all material adjustments necessary for a fair statement of the results of operations for the three-month periods ended 30 June 2011 have been included. The results of operations for quarterly period are

not necessarily indicative of the results to be expected for the full year.

The Company’s financial statements are presented on a going concern basis, which assumes that the Company will continue to realize its assets and discharge its liabilities in the normal course of operations.

These financial statements and related notes are prepared in conformity with accounting principles generally accepted in the United States generally accepted accounting principles (“GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year-end is March 31. The Company will only consolidate investments once control of the management of the investment concerned has been placed in the hands of the Company’s management.

In 2010, the Company entered into a Share Exchange Agreement with Joyous Fame International Limited (“Joyous Fame”) , the shareholders of Joyous Fame transferred all their shares of Joyous Fame, representing the entire issued share capital of Joyous Fame, to the Company in exchange for an aggregate of 76,500,000 shares of restricted common shares of the Company, thus causing Joyous Fame to become a wholly-owned subsidiary of the Company.

The acquisition of Joyous Fame and is being accounted as a reverse acquisition of Yinfu Gold Corp. by Joyous Fame International Limited, since the stockholders of Joyous Fame will own the majority of the outstanding shares of the Company’s common stock immediately following the acquisition. Joyous Fame is deemed to be the acquirer in the reverse merger; as a result, the comparative information of the income statement and statement of cash flow for the three months ended June 30, 2010 represent results of Joyous Fame International Limited only.

YINFU GOLD CORP.

(An Exploration Stage Company)

Notes to the consolidated financial statements as of June 30, 2011

2. DISCONTINUED SUBSIDIARY’S FINANCIAL INFORMATION

The following presents the discontinued subsidiary’s (Yantai Muping Yinlong Investment Consulting Company Limited’s) financial information as of June 30, 2011 and March 31, 2011

Account	June 30, 2011			Mach 31, 2011
	$			$
Cash		2,295			2,469
Other receivables		22,295			21,995
Total assets		24,590			24,464

Due to related parties		242,992			217,680
Tax payable		2,439,414			2,439,414
Total liabilities		2,682,406			2,657,094

	For the three months ended June 30,2011			For the three months ended June 30,2010
	$			$

General and administrative expenses		(24,698	)		-

Net income (loss) before tax		(24,698	)		-
Income tax		-			-

Net income (loss)		(24,698	)		-

YINFU GOLD CORP.

(An Exploration Stage Company)

Notes to the consolidated financial statements as of June 30, 2011

3. CASH

	As of June 30,2011		As of March 31, 2011
	$		$
Cash-continuing operations		59,348		19,024

4. PROPERTY, PLANT AND EQUIPMENT

The following is a summary of property, plant and equipment:

	As of June 30,2011		As of March 31,2011
	$		$
At Cost		2,655,188		2,270,604
Less: Accumulated depreciation		305,087		284,240
Net Book Value		2,350,101		1,986,364

5. MINING

	As of June 30,2011		As of March 31,2011
	$		$
Mining		24,046,920		24,046,920

The Company’s subsidiary, Penglai Huwei currently holds a mining permit conferring rights to carry out gold mining activities and an exploration permit conferring rights to carry out gold exploration activities in a mine close to the city of Penglai, in the Province of Shandong, PRC. The mining permit covers an area of 0.2224 sq km and will expire on January 22, 2015. The exploration permit covers an area of 3.40 sq km, which includes the 0.2224 sq km covered by the mining permit. As of June 30, 2011, the management believes the mining has a value of USD 24,046,920. The management is planning to evaluate the value of the mining by employing a certified valuer. Appropriate adjustments will be made based on the results of the valuation.

YINFU GOLD CORP.

(An Exploration Stage Company)

Notes to the consolidated financial statements as of June 30, 2011

6. INVESTMENT

On June 1, 2010 and June 11, 2010, the Company acquired 100% equity interest of Joyous Fame International Limited at the carrying value US$ 78,795,000 and 28% equity interest of Legarleon Precious Metals Limited at the carrying value of US$ 3,458,700 and in September, the Company acquired 23% equity interest of Legarleon Precious Metals Limited at the carrying value of US$2,841,300.

As of June 30, 2011, the Group’s management lost its control over investment in Legarleon and thus, it has been recorded as investments made by the Group rather than related or subsidiaries. Thus, no consolidation of the results of the investment has been during the year ended March 31, 2011 and the period ended June 30, 2011. The management is going to take legal action to obtain control of Legarleon Precious Metals Limited. As of June 30, 2011, the management believes that no provision is needed and therefore such investment is carried at cost.

7. RELATED PARTY TRANSACTIONS

During the three months ended June 30, 2011 and the year ended March 31, 2011, due to related parties are as followings:

	As of 30,June,2011		As of 31,March,2011
	$		$
Due to related party
-Continuing subsidiaries		1,902,000		1,287,862

8. SUBSEQUENT EVENTS

As of August, 2011, the Company’s management were still in discussion of the transfer of equity interest of one of its subsidiaries, Yantai Muping Yinlong Investment Consulting Company Limited, to a third party.

Closing of the transfer will be subject to certain conditions. The parties agreed to use their best efforts to effect the closing on a timely basis, but there is no assurance that the parties will complete the transactions as discussed.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following management discussion and analysis provides information on the activities of Yinfu Gold Corporation (formerly “Element92 Resources Corp.” or the “Company”) and should be read in conjunction with the financial statements and notes thereto for the financial statements and notes thereto for the three months ended June 30, 2011 Readers are cautioned that management’s discussion and analysis contains forward-looking statements and that actual events may vary from management’sexpectations

Overview

The Company is a development stage company engaged in the search for commercially viable mineral properties for acquisition, for exploration, for development and for ultimate claims on exploiting minerals. The Company has the rights to 14 mineral claims in the Province of Quebec, Canada. The Company has no property in Canada other than an option to acquire the claims. There is no assurance that a commercially viable mineral deposit (reserve) exists on the Quebec claims or can be shown to exist until sufficient and appropriate exploration is done and a comprehensive evaluation of such work concludes economic and legal feasibility. The Company will proceed only if minerals are found and their extraction be deemed economically feasible.

On June 15, 2010, the Company became a gold mining company after it closed on the acquisition of the Penglai (Huwei) gold mine, a producing gold mine, and the Roncheng gold deposit, both in Shandong Province of The Peoples’ Republic of China. The Company paid a total of 76,500,000 restricted shares for the acquisition of 100% equity of the two gold mining companies. Based on further due diligence results, the Company determined that the value of Roncheng was far below the agreed purchase value. On February 4, 2011, the Company reached an agreement with the seller of Rongcheng to terminate the purchase and received the Company’s common stock deposit towards the purchase in return. In the future, the Company may decide to renegotiate the purchase of the mine at a lower price.

Gold Mine

Huwei (Wujia) Gold Mine and Processing Plant

Status: The Huwei gold mine (also referred to as the Wujia gold mine in some reports) was granted a mining license in late 2009 and commenced mining activities using typical Chinese underground mining methods. As part of the documentation to support the closing of the purchase of the Huwei gold mine by the Company, the owners and operators of Huwei commissioned the Sixth Shandong Institute of Geology and Mineral Exploration to conduct a comprehensive geological survey and mining feasibility analysis of the property. The report provides strong evidences to support the feasibility of effective gold extraction via underground tunnels and indicates that the Huwei mine has a contained gold reserve of 10.57 tons. The owners and operators of the Huwei gold mine had finished the construction of a mining shaft for vein No. 2 (as identified by the geological survey) and developed underground mining tunnels at four levels with maximum depth at 215 meters below ground.

The Huwei gold mine and its processing plant are located 70 km west of Yantai City of the Shandong Province of The Peoples’ Republic of China. The mine can be accessed by a paved road which connects the main highway to the mine and its processing plant.

Licenses and Permits: The licensed mining area covers 0.222 square kilometers within the existing licensed exploration area of 0.34 square kilometers. Both the Mining License and the Exploration License are owned by the Panglai Huwei Mining Investment Co., Ltd.

Revenues: For the year ending March 31, 2010, the Huwei mining operations produced revenues of $8.3 million

Temporary Mine Closure April 2010 until February 2011: As a result of a severe gold mining accident in Shandong in early 2010, the Shandong Province government ordered a temporary closure of all gold mines to conduct a province-wide safety inspection. Only the gold mines which could pass the safety inspection were allowed to resume mining activities. In January 2011, Huwei passed the safety inspection and received the permit to resume its mining activities.

Corporate History

The Company was originally incorporated as Ace Lock and Security Inc. in the State of Wyoming on September 1, 2005 and established a fiscal year at the end of March 31. On March 5, 2007, Ace Lock and Security Inc. filed a Certificate of Amendment with the Wyoming Secretary of State to change the Company's name to Element92 Resources Corp. and increased the Company's authorized capital to 100,000,000 common shares. The Company applied to the Financial Industry Regulatory Authority (FINRA) to change its name from Element92 Resources Corp. to Yinfu Gold Corporation in 2010. On November 18, 2010 FINRA notified the Company that its name change from Element92 Resources Corp. to Yinfu Gold Corporation was effective.

Strategy

We intend to raise additional funds in order to be able to manage our operations and cash resources in a manner consistent with its expectation that we will be able to satisfy cash requirements through fiscal 2011. Our anticipated primary operating costs for 2011 are as follows:

1. Required work program on the Quebec Claims: The work will consist of grid emplacement, concentrated geological mapping and sampling and geophysical surveys.

2. Increase the Company's revenues by:

increasing mining output of the Huwei gold mine by expanding the capacity of its processing plant, adding a second mining shaft and additional mining tunnels; these will double the existing production capacity when the shafts and mining tunnels are completed;

closing the purchase of one or two operating gold mines with confirmed reserves of 10 tons or more, preferably in close proximity to Huwei in the Shandong Province to allow the economic use of management and Company resources.

We may consider an equity offering within the next six months to provide funding for the above activities. We are also exploring other financing vehicles to fund our operations, including debt financing.

We also are seeking a joint venture partner to assist in the effort to explore and develop our Quebec claims. We may decide to abandon these claims if no suitable joint venture partner can be found and focus our business on gold exploration, gold mining and growing our business through strategic gold mine acquisitions.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, US GAAP.

We believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Basis of Presentation

The Company’s audited financial statements have been stated in United States Dollars and prepared in accordance with generally accepted accounting principles in the United States of America.

Use of Estimates

The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Revenue Recognition

Revenue is recognized when all of the following criteria are met:

- Persuasive evidence of an arrangement exists;

- Delivery has occurred or services have been rendered;

- The seller's price to the buyer is fixed or determinable; and

- Collectability is reasonably assured.

The Company continually performs analyses of returns and allowances and records a provision at the time of sale if necessary. The Company revisits this estimate regularly and adjusts it if conditions change.

Mining and Exploration Costs

Mining and Exploration costs are charged as costs when incurred and included in operating costs.

Results of Operations for the Year Ended March 31, 2011 versus 2010

Revenue, Costs of Sales and Gross profit

There were no changes in revenue, costs of sales and gross profit for the quarters end June 30, 2011 and 2010 since in both cases there were no revenues, costs of sale, sales tax and gross profit as a result of the safety inspection being conducted at the Huwei gold mine that required it to cease gold mining. The Company anticipates that gold production and exploration of Penglai has resumed in August, 2011.

The following table reconciles gross profit to income before income taxes.

	For the three months ended June 30,						Increase (Decrease)
	2011 US$			2010 US $			$ Change US $			% Change
Gross profit		0			0			0			0
Sales expenses		0			0			0			0
Administrative expense		(201,364	)		(376,150	)		(174,786	)		-46	%
Finance expenses		0			0			0			0
Operating profit (loss)		(201,364	)		(376,150	)		(174,786	)		-46	%
Subsidy income		0			0			0			0
Sundry income		10,118			0			10,118			100	%
Provisional loss		(309,366	)		0			(309,366	)		-100	%
Net profits (loss) before tax		(500,612	)		(376,150	)		(124,462	)		-33	%
Profit tax		(0	)		0			0			0
Net profit (loss) after tax		(500,612	)		(376,150	)		(124,462	)		-33	%

Sales and Administrative Expenses

Administrative expenses for the three months ended June 30, 2011 amounted to $201,364 compared with $376,150 for 2010, a decrease of $174,786 or 46%. The administrative expenses are primarily due to frequent financing activities by management.

Income Tax Expense

All of our income was generated from mainland China and was generally subject to tax at a statutory rate of 25% on income reported in the statutory financial statements after appropriate tax adjustments.

The profit tax expense amounted to zero for the three months ended June 30, 2011 as no profit was made in this year.

Liquidity and Capital Resources

As of June 30, 2011 we had cash and bank balances of $61,643. The following table provides a summary of our cash flows for the periods indicated:

	For the three months ended June 30
	2011 (US $)			2010 (US $)
Net cash provided by (used in) operating activities		423,871			(254,726	)
Net cash provided by (used in) investing activities		(384,584	)		0
Net cash provided by (used in) financial activities		0			0
Net increase (decrease) in cash		39,287			(254,726	)

Operating Activities

Due to the inspection of the mine for compliance with local government safety regulations and ensuring compliance with those regulations, the Company had no operating activities this quarter.

The Company needs to raise additional funds in order to be able manage its operations and cash resources in a manner consistent with its expectation that it will be able to satisfy cash requirements through fiscal 2011. The main operating costs for the Company include:

1.	Required work program on the Quebec Claims: The work will consist of grid emplacement, concentrated geological mapping and sampling and geophysical surveys.

2.	The Company plans to increase the operating capacity of the mine and processing plant at Penglai Huwei, but at this time it is not possible to determine the full cost of such a plan.

There are no significant capital equipment purchases expected during the next 12 months over and above planned requirements as currently comprised within the Company's business plan.

The Company may consider an additional equity offering within the next 12 months. In such case, the use of proceeds would center on the acceleration of work on the claims and meeting our regulatory obligations. We continue to seek a joint venture partner to assist is to explore and develop our claims.

Investing Activities

Net cash used in investing activities was $384,584 for the three months ended June 30, 2011, compared to the amount of zero in the year of 2010, a decrease of $384,584. This decrease is primarily due to new investment in fixed assets.

Financing Activities

Net cash used in financing activities was zero for the three months ended June 30, 2010 and 2011.

In order to proceed with our planned exploration activities we will need to raise additional capital either through loans, through equity financing or find a joint venture partner. Unless we are able to raise additional capital or find a joint venture partner with sufficient funds there is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on their investment in our common stock. Further, we may continue to be unprofitable. The company does not plan to make any capital expenditures for new mineral claims or equipment during the next twelve months.

The recent weakening of economic conditions in the U.S. and around the world could have harmful effects on our ability to raise money to fund our planned operations. If this happens, we would likely go out of business and our investors will lose their entire investment in our company.

We believe that recent decreases in value of the common shares of many companies worldwide will make selling shares of our common stock increasingly difficult. If we are not able to sell enough of our shares to meet our financial needs, we will have to consider borrowing the money we need. A tightening of credit conditions has also been experienced in the economy recently. Because of the recent credit crisis, it is possible that we would not be able to borrow adequate amounts to fund our operations on terms and at rates of interest we find acceptable and in the best interests of our company. If we are unable to obtain the amount of money that we need to fund our operations, then we will likely go out of business and investors will lose their entire investment in our company.

We do not expect that the difficult economic conditions are likely to improve significantly in the near future. Further deterioration of the economy, and even consumer fear that the economy will deteriorate further could intensify the adverse effects of these difficult market conditions.

Economy and Inflation

The recent weakening of economic conditions in the United States and around the world could have harmful effects on our ability to raise money to fund our planned operations. If this happens, we would likely go out of business and our investors will lose their entire investment in our company.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements that have, or are reasonably likely to have a current or future effect on our financial statements.

Seasonality

Our operating results and operating cash flows historically have not been subject to significant seasonal variations.

Recent Accounting Pronouncements

We do not have any accounting pronouncement recently.

Going Concern

We continue to operate without attaining profitable operations and are dependent upon obtaining financing to pursue exploration activities. For these reasons our auditors believe that there is substantial doubt that we will be able to continue as a going concern.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not Applicable

Item 4T. Controls and Procedures.

Evaluation of disclosure controls and procedures.

Our management, with the participation of our Acting President and Chief Executive Officer and Acting Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of June 30, 2011. Based on this evaluation, our Acting President and Chief Executive Officer and Acting Chief Financial Officer concluded that our disclosure controls and procedures are not effective due to the existence of material weaknesses in our internal control over financial reporting, discussed below.

Management’s Report on Internal Control Over Financial Reporting.

Internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act), is a process designed by, or under the supervision of, our Acting President and Chief Executive Officer and Acting Chief Financial Officer, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our management, with the participation of our Acting President Chief Executive Officer and Acting Chief Financial Officer, or persons performing similar functions, and in consultation with our board of directors, has established and maintained policies and procedures designed to maintain the adequacy of our internal control over financial reporting that it believes are appropriate in light of our limited activities, personnel and resources as a development stage company, and includes those policies and procedures that:

(1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect transactions and dispositions of our assets;

(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Our management has evaluated the effectiveness of our internal control over financial reporting as of June 30, 2011 based on the criteria established in a report entitled Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

During the conduct of our assessment of internal control over financial reporting, we identified two material weaknesses and have advised the Board of Directors that the following material weaknesses existed at June 30, 2011. As defined by the Public Company Accounting Oversight Board Auditing Standard No. 5, a “material weakness” is a control deficiency or a combination of control deficiencies such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses exist in (i) the lack of segregation of duties in the financial reporting and (ii) we have informal policies and procedures and we lack a formal budgeting process. Due to the lack of financial resources, we have not taken any substantial steps towards resolving the material weaknesses described above.

While these material weaknesses did not have an effect on our reported results or result in the restatement of any previously issued financial statements or any other related disclosure, they nevertheless constituted deficiencies in our controls. In light of these material weaknesses and the requirements enacted by the Sarbanes-Oxley Act of 2002, and the related rules and regulations adopted by the SEC, our Acting President and Chief Executive Officer and Acting Chief Financial Officer concluded that, as of June 30, 2011, our controls and procedures needed improvement and were not effective at a reasonable assurance level. Despite those deficiencies in our internal controls, management believes that there were no material inaccuracies or omissions of material fact in this quarterly report.

The elimination of the material weaknesses identified above will be among our highest priorities once we have sufficient resources to devote.

We cannot provide any assurance that neither we nor our independent auditors will in the future identify further material weaknesses or significant deficiencies in our internal control over financial reporting that we have not discovered to date.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

Not Applicable

Item 1A. Risk Factors

Not Applicable

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

Not Applicable

Item 3. Defaults Upon Senior Securities

Not Applicable

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

Not Applicable

Item 5. Other Information

Not Applicable

Item 6. Exhibits

31.1	Certification of the President required by Rule 13a-14(a) or Rule 15d-14(a)

31.2	Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)

32	Certification of the President and Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	YINFU GOLD CORPORATION
	(Registrant)

August 22, 2011	/s/ Wilson Dong Sheng Huang
	Wilson Dong Sheng Huang
	Acting President and CEO

August 22, 2011	/s/ Charles Ying-Wai Lam
	Charles Ying-Wai Lam, Acting Chief Financial Officer
	Principal Financial and Accounting Officer