1 See NI 43-101 resource published June 2007 on www.sedar.com or www.tyhee.com

Fiscal 2007 marked a change for Tyhee Development Corp., as we introduced a significant exploration

component to our work in the Yellowknife area. We continued to advance our wholly-owned Yellowknife

Gold Project and added three grassroots exploration properties to our portfolio, enhancing our dominance

in this highly productive gold camp.

To Our Shareholders

Fiscal 2007 marked a change for Tyhee Development Corp., as we introduced a significant exploration

component to our work in the Yellowknife area. We continued to advance our wholly-owned Yellowknife

Gold Project and added three grassroots exploration properties to our portfolio, enhancing our dominance

in this highly productive gold camp.

Operations

On the Yellowknife Gold Project, Tyhee moved all of the

archived diamond drill core from the Nicholas Lake Main

Zone into our base camp, re-logged the core, and sampled

all intervals to evaluate the bulk mineable potential as

well as assessing the content of additional payable metals.

We are currently evaluating this data for a revision of the

resource. Preliminary results suggest the presence

of tungsten might occur in concentrations

that should be evaluated at the byproduct

level, and that the

overall resource is likely

to increase.

In an effort to better evaluate the near surface

resource, drilling on the Bruce Lake Zone concentrated

on shallow (within 300 m of surface) targets near

established resources.

To extend any potential open pit resource, drilling on

the Ormsby Zone concentrated on shallow (within 300

m of surface) targets north and south of the measured

resource. Results from the drill program were released

January 17, 2008 (NR S.9 R.1) and January 29, 2008 (NR

S.9 R.2).

Tyhee's surface 30,000 metre diamond drill program was

designed to add ounces in 2007. Targets included:

• Ormsby North Extension where step out and infill

drilling should contribute ounces to the Ormsby

Zone. The results of these drillholes continued to be

received during the first quarter of 2008.

• Ormsby South Extension where a modest extension of

the mineralization was established.

resources might be expanded.

• Typhoon Zone, a third volcanic unit north of the

Discovery Mine. Initial diamond drill results returned

a few low scattered gold values.

In addition to 2007's major drilling campaign, we

continued to implement another critical element of

our growth strategy — re-evaluating past-producing and

highly prospective properties in the region using today's

improved technology and geologic knowledge. We believe

this approach will ultimately help us find significant "overlooked"

economic gold deposits.

Tyhee, in 2006 and 2007 capitalized on an opportunity

to consolidate its presence in the Yellowknife Gold

Camp. We acquired three gold properties by option and

staking.

The Goodwin Lake Property is 14 km south of the

Yellowknife Gold Project. The claims cover a similar

geology to the Ormsby Zone, including gold-bearing mafic

igneous breccias (VAD Showing). The property also hosts

the historic LOG Showing where government assessment

records report a trench sample 2.1 metres long grading

181.4 gpt. Work completed by the property vendor shows

this gold trend to be exposed discontinuously over 1,200

metres, including grab samples of 22.8 gpt gold in an area

where government geologists report a 174.2 gpt gold and

82.8 gpt silver assay. No significant work has been recorded

on the Goodwin Lake Property since the discovery of the

high-grade LOG Showing. Our work confirmed the VAD

Showing and four diamond drillholes were completed

subsequent to year end. Results confirm broad domains of

low-grade gold values as well as narrower high-grade gold

values. Further drilling is warranted.

The Clan Lake Property is located 30 km south of our

Yellowknife Gold Project. It has been bulk sampled in the

past, however, previous exploration focused on selective

development or extraction of irregular quartz veins. Tyhee

recognizes similarities to our Ormsby-style low quartzhigh

sulphide type of deposit, within a breccia-hosted

gold deposit (Main Zone), as well as narrow higher-grade

shear zone type of mineralization (330 Zone). A previously

reported historic resource could not be confirmed and is

no longer reported.

The BigSky Property is adjacent to the Giant Mine Leases,

17 km north of the City of Yellowknife and adjacent to the

Bluefish hydroelectric complex. The property is underlain

by the late stage, highly evolved Duckfish Granite as well

as mafic volcanic rocks of the Kam Group and older rocks.

The Duckfish Granite is a moderately peralkaline, zoned

porphyritic intrusion that contains extensive domains

that have been intensely altered and contain gold as well

as fluorine, lead, bismuth, antimony, arsenic, silver and

tellurium. Initial sampling has identified grab samples

containing up to 2.2 gpt gold. We are encouraged by the

potential size of these zones although the low-grades

will make development a challenge. Further work will

continue to attempt to identify higher-grade domains.

Peripheral to the granite, a system of mineralized shear

zones extends for a width of 500 metres over a strike

length of 4 kilometres. Diamond drilling in the 1940’s

confirmed mineralization in some of these shear zones,

however, no follow-up work has been recorded on these

shear zones until recently.

Tyhee has confirmed the extent of these shear zones

with numerous grab samples in excess of 5 gpt gold.

Four diamond drillholes completed subsequent to year

end resulted in three of the holes returning four gold

intercepts over significant widths (NR S.9 R.3). Additional

drilling will focus on reconnaissance work through the

spring of 2008 before follow-up drillholes are completed.

Numerous gold bearing shear zones with individual widths

exceeding the average width of the Con Shear Zone in

Yellowknife have been identified. They are hosted in

similar rocks with similar alterations. With just four

drillholes completed, gold values have been encountered

that approach economic concentrations over minimum

mining widths.

The proximity of the BigSky Property to power and allweather

roads, and the size of the mineralized zones

makes this an appealing target.

Future Plans

A Preliminary Assessment is planned to be completed

this year. It will evaluate the economic viability of the

Yellowknife Gold Project as it stands today, and will guide

its development in the future. Resource development

continues on the Nicholas Lake Main, Bruce Lake,

and Ormsby Zones with additional grassroots projects

showing some initial promise. The goal is to examine

the potential to develop mine and mill centre near the

Ormsby Zone, with initial feed coming from open pit

mines on the three zones currently identified. Additional

underground potential exists in these three zones that

may be considered at some point in the future.

On behalf of my fellow directors I would like to

convey our sincere thanks and appreciation to our

dedicated team members, past and present, for

their contributions and to our shareholders for

investing in our exciting future.