U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

|X|  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934

                    For the fiscal year ended March 31, 2006

                                       OR

|_|  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: 333-128586

                              Banner Resources Inc.
             (Exact name of registrant as specified in its charter)

                  NEVADA                              92-0185596
      (State or other jurisdiction of              (I.R.S. Employer
      incorporation or organization)             Identification No.)

            902 Kings Avenue
     West Vancouver, British Columbia                  V7T 2B7
                  Canada
 (Address of principal executive offices)             (Zip Code)

                                 (604) 926-0508
              (Registrant's telephone number, including area code)

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


           Securities registered pursuant to Section 12(b) of the Act:

        Title of each class            Name of each exchange on which registered
----------------------------------     -----------------------------------------


           Securities registered pursuant to Section 12(g) of the Act:

                                 Title of Class
                                 --------------

                    Common Stock, $0.001 par value per share

     Check whether the  registrant  is not required to file reports  pursuant to
Section 13 or Section 15(d) of the Exchange Act. [ ]

     Check whether the issuer (1) has filed all reports  required to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
12 months (or for such shorter  period that the  registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.
                                                             Yes [X] No [ ]


<PAGE>

     Check if there is no disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-B contained herein, and no such disclosure will be contained, to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [ ]

     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rule 12b-2 of the Exchange Act).             Yes [ ] No [X]

     State the issuer's revenues for its most recent fiscal year: nil

     State the aggregate market value of the voting and non-voting common equity
held by  non-affiliates  computed by  reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as of
a specified date within the past 60 days.  (See  definition of affiliate in Rule
12b-2 of the Exchange  Act.)  $439,500 as of June 28,  2006,  based on last sale
price of the Registrant's stock.

     State the number of shares outstanding of each of issuers classes of common
equity, as of the latest practicable date:  6,945,000 shares of common stock, as
of June 28, 2006.

DOCUMENTS INCORPORATED BY REFERENCE

Not Applicable

Transition Small Business Disclosure Format (Check One)

         Yes               No     X
               --------        ------


<PAGE>

                                TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS.....................................................2

PART I.........................................................................3

ITEM 1.-DESCRIPTION AND DEVELOPMENT OF BUSINESS................................3

ITEM 2- DESCRIPTION OF PROPERTY...............................................14

ITEM 3- LEGAL PROCEEDINGS.....................................................15

ITEM 4- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...................15

ITEM 5- MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS..............15

ITEM 6- MANAGEMENT'S DISCUSSION AND ANALYSIS..................................16

ITEM 7- FINANCIAL STATEMENTS............................................17 to 26

ITEM 8- CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE..........................................................27

ITEM 8A- CONTROLS AND PROCEDURES..............................................27

ITEM 8B- OTHER INFORMATION....................................................27

ITEM 9- DIRECTORS AND EXECUTIVE OFFICERS......................................27

ITEM 10- EXECUTIVE COMPENSATION...............................................29

ITEM 11- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
 RELATED STOCKHOLDERS MATTERS.................................................29

ITEM 12- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................31

ITEM 13- EXHIBITS AND REPORTS ON FORM 8-K.....................................31

ITEM 14- PRINCIPAL ACCOUNTANT FEES AND SERVICES...............................32

SIGNATURES....................................................................33


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                           FORWARD-LOOKING STATEMENTS

     We use words like "expects," "believes," "intends," "anticipates," "plans,"
"targets,"  "projects" or "estimates" in this report. When used, these words and
other,  similar words and phrases or statements that an event,  action or result
"will,"  "may,"  "could," or "should"  occur,  be taken or be achieved  identify
"forward-looking" statements. This report contains "forward-looking information"
which may  include,  but is not  limited  to,  statements  with  respect  to the
following:

     o    the timing of regulatory and permitting matters;

     o    the timing and outcome of our exploration;

     o    the  estimation of mineral  resources and the  realization  of mineral
          reserves, if any, based on mineral resource estimates;

     o    estimates related to costs of exploration expenditures;

     o    requirements   for  additional   capital  and  our  ability  to  raise
          additional capital;

     o    government  regulation  of  mining  operations,  environmental  risks,
          reclamation and rehabilitation expenses;

     o    title disputes or claims;

     o    limitations of insurance coverage; and

     o    the future price of gold, silver or other metals.

     Such  forward-looking  statements reflect our current views with respect to
future events and are subject to certain risks,  uncertainties  and assumptions,
including,  the risks and  uncertainties  outlined  under  the  sections  titled
"Description and Development of Business" beginning at page 3 of this report and
"Management's  Discussion  and  Analysis"  beginning  at page 16 of this report.
Should  one or more of  these  risks or  uncertainties  materialize,  or  should
underlying assumptions prove incorrect,  actual results may vary materially from
those anticipated, believed, estimated or expected.

     Our management has included projections and estimates in this report, which
are based primarily on management's  experience in the industry,  assessments of
our results of operations, discussions and negotiations with third parties and a
review of information  filed by our competitors with the Securities and Exchange
Commission  or otherwise  publicly  available.  We caution  readers not to place
undue reliance on any such  forward-looking  statements,  which speak only as of
the  date  made.  We  disclaim  any  obligation   subsequently   to  revise  any
forward-looking  statements to reflect events or circumstances after the date of
such  statements or to reflect the occurrence of  anticipated  or  unanticipated
events.

     We qualify all the forward-looking  statements  contained in this report by
the foregoing cautionary statements.


<PAGE>


                                     PART I
                                     ------

                ITEM 1 - DESCRIPTION AND DEVELOPMENT OF BUSINESS

                             NAME AND INCORPORATION


                                    Business

History and Organization

Banner Resources Inc. was incorporated  under the laws of the state of Nevada on
January 24, 2005.  We have  commenced  limited  business  operations  and we are
considered  an  exploration  stage  company.  To date,  our  activities  include
organizational matters, preliminary property investigations on the Chita claims,
negotiating and purchasing those claims, obtaining a geology report on the Chita
claims and the  preparation  and filing of the  registration  statement of which
this prospectus is a part. In connection  with the  organization of our Company,
the founding  shareholders  of our Company  contributed an aggregate of US$5,875
cash in exchange  for a total of  5,875,000  shares.  As  consideration  for the
acquisition  of the Chita claims,  we issued  320,000  shares of common stock to
Valor Mines Inc. We have no significant assets.

In July 2005, we hired an independent  geological  consulting  services  company
whose field crew  carried out a program of mapping and  sampling on the property
and filed an  assessment  report  with the BC Ministry of Energy and Mines which
keeps the Chita claims in good standing until July 25, 2006. In connection  with
these activities, we spent $14,000.

We own a 100% interest in seven mineral claims (Chita  claims)  consisting of an
aggregate  of 70 units,  subject to a 2.5% Net Smelter  Return  royalty.  We can
acquire 1.5% of the Net Smelter  Return for $1.0  million  within 12 months from
commencement  of  commercial  production.  We agreed to pay Valor Mines  advance
royalties of approximately  $25,000 annually  commencing February 1, 2008. If we
fail to pay  these  advance  royalties  by  February  1,  2008,  we will have to
transfer  ownership  of the Chita  claims back to Valor.  We acquired  the Chita
claims by issuing  320,000  shares of common stock to Valor Mines Inc. The Chita
claims  are  registered  in the  name of our  wholly  owned  subsidiary,  Banner
Exploration Ltd.

Between April and July 2005, we raised  $22,500 cash from the sale of restricted
stock and  converted  $15,000 of loans  payable  into  stock by issuing  750,000
restricted stock to 10 persons at $0.05 per share.

During  our  present   exploration   stage,   Mr.  Krause,   our  president  and
secretary-treasurer, will only be devoting approximately 8 hours per week of his
time to our business.  We do not foresee this limited  involvement as negatively
impacting our company over the next 12 months as all  exploratory  work is being
performed by an outside  consultant.  If,  however,  the demands of our business
require  more  time  of Mr.  Krause,  such  as  raising  additional  capital  or
addressing  unforeseen issues with regard to our exploration  efforts,  they are
prepared  to  adjust  their  timetables  to devote  more  time to our  business.
However, they may not be able to devote sufficient time to the management of our
business, as and when needed.

We are actively reviewing additional natural resources properties in Canada, USA
and Africa.  However,  we have no current plans,  arrangements  or intentions to
acquire  any  specific  property.  We have no  current  plans,  arrangements  or
intentions to enter into a joint venture with any specific  party.  However,  we
are  always  open to speak to third  parties to see if we would be  inclined  to
enter into a joint venture.

Our principal  office is located at 902 Kings Avenue,  West  Vancouver,  British
Columbia, V7T 2B7, and our phone number is (604) 926-0508.


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Proposed Business

Our plan of operations is to carry out exploration  work on the Chita claims and
to ascertain the quantities of base and precious metals.  We will not be able to
determine  whether  or not our  mineral  claims  contain a mineral  deposit,  or
reserve,  until appropriate  exploratory work is done and an economic evaluation
based  on that  work  concludes  economic  viability.  We are  presently  in the
exploration stage and there is no assurance that a mineral deposit exists on the
mineral  claims until  appropriate  geological  exploration  is done and a final
comprehensive  evaluation is concluded.  There are no proven mineral reserves on
the mineral claims and our proposed  exploration program is entirely exploratory
in nature.

The property that is the subject of our mineral claims is undeveloped and do not
contain any open-pit or underground mines. There is no mining plant or equipment
located on the property.

We will have to engage qualified  geologists to conduct the mineral  exploration
program under industry standards.  They will be responsible for hiring personnel
and for  all  appropriate  worker-related  costs  and  will  bill  us for  their
services. This work is applicable to assessment requirements for the claims. The
work  outlined  in the budget set out above  will  cover an  additional  year of
tenure maintenance.

The  exploration  program  proposed by Banner is designed to  determine  whether
mineralization  (minerals of value occurring in rocks) exists to the extent that
further  exploration is recommended to outline any such  discovered  mineralized
zones.  It is  uncertain  at this time the  precise  quantity of minerals in the
property that would justify  actual mining  operations.  If we decide to abandon
our mineral claims at any stage of our exploration program, we intend to acquire
other properties and conduct similar exploration programs.  Other properties may
be located in the same mining  district or we may decide to seek  properties  in
other locations in the Province of British Columbia,  the United States,  Africa
or another part of the world.

Interest in Mineral Claims

We spent  $14,000 on the Chita  claims and filed an  assessment  report with the
B.C. Ministry of Energy and Mines,  which keeps the claims in good standing with
the Ministry  until July 25, 2006.  In order to keep the claims in good standing
until July 25, 2007, we have to spend approximately  $11,600 (Cad$14,000) on the
claims  prior to July  25,  2006 and  file an  assessment  report  with the B.C.
Mineral  Titles  Branch  before July 25,  2006,  or we will lose our claims.  We
anticipate  that we will be required to raise  additional  financing  to satisfy
this obligation. The mineral claims are recorded in the name of our wholly owned
subsidiary, Banner Exploration Ltd.

Acquisition of Chita claims

Pursuant to the Property  Acquisition  Agreement dated February 1, 2005,  Banner
acquired a 100% undivided  mineral interest in the Chita claims from Valor Mines
Inc.  ("Valor")  and as  consideration  Banner issued  320,000  common shares to
Valor.  Valor retained a 2.5% Net Smelter Return Royalty on the mineral  claims,
but Banner has a right to  repurchase  1.5% of the Net  Smelter  Return  Royalty
interest  at a price  of  $1,000,000  within  12  months  from  commencement  of
commercial production. Under the Property Acquisition Agreement, we will have to
pay Valor $25,000 per year as advance royalties  commencing February 1, 2008. If
we fail to pay Valor the $25,000 by February 1, 2008, we must transfer ownership
of the  mineral  claims  back to Valor.  Valor has agreed to provide  geological
consulting services for the claims at standard commercial prices if requested by
us.

The Chita claims  consist of seven  mineral  claims  representing  a total of 70
units that has been staked and recorded as a four post claim. In the Province of
British Columbia,  each unit equals 25 hectares.  The following table sets forth
the details of the claim.

       Claim Name         Units        Record Number              Expiry Date
       CHITA              18           358185                     July 25, 2006
       RED #1             1            358186                     July 25, 2006


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<PAGE>

       Claim Name         Units        Record Number              Expiry Date
       RED #2             1            358187                     July 25, 2006
--------------------------------------------------------------------------------

      Claim Name          Units        Record Number             Expiry Date
      CHITA #2            8            358188                    July 25, 2006
      CHITA #3            12           358189                    July 25, 2006
      CHITA #5            12           360745                    July 25, 2006
      CHITA #6            18           360746                    July 25, 2006

Net Smelter Return means  generally the gross  proceeds  received by the Company
from the sale of  minerals  produced  from the Chita  claims to a party  that is
arm's length to the Company,  less all amounts previously paid by the Company to
Valor before commencement of commercial  production of minerals,  and less costs
related to insurance, transportation, sales, marketing, taxes and charges.

Geology Report

In February 2005, Mr. Glen Macdonald,  P.Geo.  was hired by Banner to provide an
initial  Geology  Report on the  Chita  claims  (the  "Macdonald  Report").  Mr.
Macdonald has 29 years experience as a consulting  geologist.  He graduated from
the University of British  Columbia,  Canada,  with degrees in Economics in 1971
and Geology in 1973. He is a member of the Association of Professional Engineers
and  Geoscientists  of the Province of British Columbia (No. 20464) and a member
of the Association of Professional  Engineers,  Geologists and  Geophysicists of
Alberta (No. 36214).  The purpose of this report was to evaluate the area of the
claim group,  and the prior  exploration  work  conducted on the claims,  and to
recommend an exploration program.

Exploration in 2005

Mr.  Macdonald   recommended  an  initial   exploration  program  consisting  of
geological sampling and mapping program on the property.  In July 2005, we hired
an independent  geological  consulting services company whose field crew carried
out a program of mapping and sampling on the  property  and filed an  assessment
report with the BC Ministry of Energy and Mines which keeps the Chita  claims in
good  standing  until July 25,  2006.  We have  concluded  the field work of our
initial  exploration program and we expect to receive sample analysis and report
in the second half of 2006.

Rock  samples  were  selected  from  various  rock units to be  analyzed by thin
section and whole rock chemical  analysis.  Several copper  mineralized  breccia
samples were collected to be tested for gold content.

Further work is required to acquire  additional samples from the anomalous areas
and to trace  them out along  strike.  Geological  mapping  of the rock units is
required. It will be necessary to determine if the geological trend is going off
the property and, if so, whether additional claims will be required.

The decision to conduct additional exploration on the Chita claims will be based
on the  results  of the  exploration  program.  The full  scope and cost of this
additional  work  will not be known  until  the  completion  of the  recommended
exploration program.

Recommended Exploration Program for 2006/2007

Depending on the results of the initial  exploration  program,  if our geologist
recommends  a follow-up  program in late 2006 or in 2007,  we plan to  follow-up
with more detailed mapping and sampling at an estimated minimum cost of $15,000,
assuming  adequate  financing  is  available.   We  may  conduct  more  detailed
geophysical surveys utilizing more sensitive  geophysical  techniques to enhance
the data that  currently  exists on the claims and focus  specifically  upon the
presently known mineralized areas. We will do


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<PAGE>


more  prospecting to better  understand the  significance  of the results of the
earlier exploration programs and guide future work.

Additionally, we have been reviewing a potentially expanded field season in 2006
(subject   to   final   analysis,    budget   availability,    and   independent
recommendations). We have been approached by our neighboring mineral tenure

Recommended Exploration Program for 2006/2007

Depending on the results of the initial  exploration  program,  if our geologist
recommends a follow-up  program in  2006/2007,  we plan to  follow-up  with more
detailed mapping and sampling at an estimated minimum cost of $15,000,  assuming
adequate  financing  is  available.  We may conduct  more  detailed  geophysical
surveys utilizing more sensitive geophysical techniques to enhance the data that
currently exists on the claims and focus  specifically  upon the presently known
mineralized  areas.  We  will do  more  prospecting  to  better  understand  the
significance of the results of the earlier exploration programs and guide future
work.

Additionally, we have been reviewing a potentially expanded field season in 2006
(subject   to   final   analysis,    budget   availability,    and   independent
recommendations).  We have been  approached by our  neighboring  mineral  tenure
holders  to join  them in a  regional  airborne  survey  (dighem  em /  magnetic
geophysical survey). The advantage to the Company is significant in that being a
part of a large regional program is extremely cost effective (overall program in
excess of $145,000) with our share being  approximately  $30,000.  If we were to
contract the same survey  independently the cost would be closer to $50,000.  We
do not currently have sufficient capital to fund these projects, and we would be
required to raise additional financing.

Further,  we are also  reviewing a program  (subject to final  analysis,  budget
availability,  and independent  recommendations)  for a trenching  program which
would allow geologists to sample "fresh rock" as the surface rocks are extremely
weathered and leached  (cretaceous period between 65 and 135 million years old).
This program  will cost us  approximately  $100,000.  We do not  currently  have
sufficient capital to fund this program.

In February 2006, we filed a registration statement to register 3,000,000 shares
of our  common  stock for offer and sale by us at $0.10 per share to raise up to
$300,000 on a best efforts basis. As of the date of this report we have not sold
any shares in the registered offering.  We anticipate we will successfully raise
financing  during the third quarter of 2006 to finance our proposed  exploration
programs.

Canadian Mining Law

Work on the claim is governed by the laws of British Columbia.  Title to mineral
claims are issued and  administered  by the Mineral Titles  Branch,  Ministry of
Energy and Mines,  and title must comply with all  provisions  under the Mineral
Tenure  Act  (British  Columbia).  A  mineral  claim  acquires  the right to the
minerals  which were  available  at the time of  location  and as defined in the
Mineral Tenure Act (British Columbia). There are no surface rights included, but
the title  holder  has the  right to use the  surface  of the  claim for  mining
proposes  only.  All work  carried out on a claim that  disturbs  the surface by
mechanical  means  requires a Notice of Work and must receive  written  approval
from the District Inspector of Mines prior to commencement.

The following disclosure is from the Macdonald Report.

Location and Access

The  Chita  claims  are  located  in  south-western  British  Columbia,  located
southwest  of the town of  Williams  Lake,  on the  east  side of  Taseko  Lake,
southwest British Columbia, Canada.

The Chita claims are located at approximately 50 (degree) 15' north latitude and
123 (degree) 31' west longitude,  on NTS map sheet no. 920/4 and 920/5,  Clinton
Mining Divisions, British Columbia, see Location Map below. The Chita claims are
situated  along  the east  shore  of Lower  Taseko  Lake,  southwestern  British
Columbia,   approximately  60  kilometers  northwest  of  Gold  Bridge  and  140
kilometers  southwest  of  Williams  Lake.  Road  access is via  Highway 20 from
Williams Lake,  west 100 kilometers to the village of Hanceville.  From there, a
well  maintained dirt road leads south for  approximately  120 kilometers to the
subject claims.  A number of 4x4 roads cross the property.  Winter access is via
helicopter from bases at Gold Bridge, Pemberton, Lillooet, or Williams Lake.


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The property is on moderate  terrain with slopes dipping south and west to Chita
Creek and Lower Taseko Lake.  Elevations  vary from 7,500 feet (2,286 meters) at
the  northern  boundary  of the Chita 1 claim to 4,348  (1,325  meters) at Lower
Taseko Lake,  for a total relief of 3,152 (961 meters).  Drainage is north along
the  Taseko  River,  then east along the  Chilko  River  into the Fraser  River.
Approximately  30% of the  claims  are  above  treeline.  The  remainder  of the
property is alpine to subalpine vegetation consisting mainly of pine and spruce.

The recommended field season is from mid-May to early November.

























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Claim Status

The Chita  claims  consist  of seven  mineral  claims  with a total of 70 units,
covering  1,750  hectares  (4324  acres).  Claim  title  is  recorded  with  the
Provincial Ministry of Energy,  Mines and Petroleum  Resources.  The anniversary
date for the Chita claims is July 25, 2006.  The recorded  owner and  beneficial
owner  of  the  claims  is  Banner  Exploration  Ltd.,   Banner's  wholly  owned
subsidiary. The Chita claims expire on July 25, 2006. If we are unable to extend
the  expiration  date, we will lose our mineral  claims.  We agreed to pay Valor
Mines advance Net Smelter Return Royalty of $25,000 annually commencing February
1, 2008. If we fail to make the advance Net Smelter  Return  Royalty  payment of
$25,000 per year  commencing  February 1, 2008,  the Company must transfer title
back to Valor.

Summary

The Chita  prospect  occurs in a region  with other  similar  occurrences  being
actively  explored  by  other  groups,   and  other  deposits  with  significant
historical  development.  Banner's  property  has  an  intermittent  history  of
exploration  by a variety of  owners,  including  major  mining  companies.  The
extensive  programs  completed  between  1962 and 1998  have  demonstrated  that
classic porphyry hosted copper  mineralization  occurs at the Chita property. In
addition,  some of the late exploration work detected  anomalous amounts of gold
from wide-spaced  stream silt geochemical  sampling.  During most of the earlier
programs, where the most detailed work was completed, gold was not analyzed for,
and  consequently,  gold  content  in the  porphyry  system  is not  known.  The
anomalous  gold  reported in streams fact is  reflecting a distinct  source area
peripheral to the porphyry itself.

Further  work is  warranted  at the Chita  property to locate the source for the
gold   anomalies,   to  determine  the  gold  content  in  the  porphyry  copper
mineralization  itself,  and to identify the various intrusive rock units in the
complex, and determine their alteration stage.

History of the Claims

The  economic  potential  for  copper  in  the  area  was  first  identified  by
prospectors  E. Calep and C.M. Vick in the early 1930's,  who followed  float to
exposures  of narrow  veins of pyrite,  chalcopyrite  and gold  associated  with
feldspar porphyry dikes. The Fish Lake copper-gold deposit was discovered in the
1960's.  Since then, several other prospects have been identified in the region,
including Taseko Empress, Chita and Northwest Copper.

Previous  work has been  limited to  approximately  25% of the total area of the
claims.  This work has focused primarily on the feldspar porphyry intrusives and
breccias on the Chita 2 claim. Magnetic and induced polarization surveys,  which
are  proven   methods  of   establishing   drill  targets  in  porphyry   copper
environments,  have identified a donut-shaped anomalous region approximately 2.5
km by 2.0 km in size. This target includes known mineralized breccia occurrences
and is partially coincident with a copper soil geochemical anomaly.

Gold is anomalous in several stream silt  geochemical  sample sites west of, and
down slope from, the induced polarization halo anomaly.

Geology

The Chita prospect is one of several  localities of economic interest which have
enticed the  geological  industry  for the past seventy  years.  The geology and
tectonic  history  of the  area  is  quite  complex  and has  provided  academic
geologists  with the  possible  key to  explaining  the  formation,  timing  and
accretion of the Intermontane and Insular  Superterraines to the western edge of
North America.

A total of three  geochemical  soil surveys have completed on the property since
1962.  Each of these surveys has indicated the presence of a substantial  copper
anomaly associated with the  mineralization of the Chita property.  This anomaly
can be  described  as  large,  covering  an area of 2.5  square  kilometers  and
intense, with maximum values exceeding 1,000 part per million Cu.


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These  same  geochemical   surveys  failed  to  indicate  the  presence  of  any
significant gold anomaly. However, when considering arsenic as a proxy for gold,
the geochemical  data show anomalous  concentrations  and continuity  across the
south and southwest sections of the grid.

Stream  sediment  sampling  completed  in 1998 by Jaguar with the  objective  of
assessing  local  drainages  for  signs of  precious  metal  mineralization  was
successful in indicating the presence of gold  downstream from the Chita surface
showing and the  interpreted  induced  polarization  halo.  As with the arsenic,
these results were strongest on the west flank of the Chita porphyry system.

The 1998 Lloyd Geophysics survey, on behalf of Jaguar,  successfully  defined an
induced   polarization   response   surrounding   the  exposed   mineralization,
encompassing an area of 5 square kilometers.  The anomalous induced polarization
and  magnetic  response  are  attributed  to the  presence of a central  plug of
feldspar-hornblende-biotite  porphyry  corresponding to an area of high magnetic
response  and high  resisitivity,  surrounded  by a pyritic halo as indicated by
high chargeability, low resistivity and low magnetic response.

This  geophysical  response  is typical  of the  classic  porphyry  model in the
Canadian   Cordillera.   Significantly,   in  other  copper-gold   systems,  the
concentrated  pyrite in halo zones often has the strongest gold  mineralization.
In the case of the Chita prospect, this part of the system remains unexplored to
date, but is located peripheral to gold stream sediment geochemical anomalies.

Previous  drill  programs   conducted   between  1963  and  1970  have  reported
significant copper intercepts.

Recommendations

Depending on the results of the initial  exploration  program,  if our geologist
recommends a follow-up  program in 2006, we plan to follow-up with more detailed
mapping and  sampling at an estimated  minimum  cost of $15,000.  We may conduct
more  detailed   geophysical   surveys  utilizing  more  sensitive   geophysical
techniques  to enhance  the data that  currently  exists on the claims and focus
specifically  upon  the  presently  known  mineralized  areas.  We  will do more
prospecting to better  understand the significance of the results of the earlier
exploration programs and guide future work.

Additionally, we have been reviewing a potentially expanded field season in 2006
(subject   to   final   analysis,    budget   availability,    and   independent
recommendations).  We have been  approached by our  neighboring  mineral  tenure
holders  to join  them in a  regional  airborne  survey  (dighem  em /  magnetic
geophysical survey). The advantage to the Company is significant in that being a
part of a large regional program is extremely cost effective (overall program in
excess of $145,000) with our share being  approximately  $30,000.  If we were to
contract the same survey independently the cost would be closer to $50,000.

Further,  we are also  reviewing a program  (subject to final  analysis,  budget
availability,  and independent  recommendations)  for a trenching  program which
would allow geologists to sample "fresh rock" as the surface rocks are extremely
weathered and leached  (cretaceous period between 65 and 135 million years old).
This program will cost us approximately $100,000.

Geological and Technical Staff

We are unable to name the geologists  and engineers who will be performing  work
for Banner because they have not been retained.  At the right time, we will hire
from the available pool of contract geologists depending on the time of the year
and  availability  of  experience.   Presently,   there  are  no  agreements  or
understandings to hire such geologists or engineers.


                                        9


<PAGE>


Competitive Factors

The mineral industry is fragmented.  We compete with other exploration companies
looking  for a variety of  mineral  resources.  We are a very small  exploration
company compared to many of our competitors.  Although we will be competing with
other  exploration  companies,  there is no competition  for the  exploration of
minerals  on our  mineral  claim.  We  intend  to  explore  and find  sufficient
mineralization  (minerals of value occurring in rocks) to a point in which major
mining companies or mining financial  groups would seriously  consider  pursuing
the mineral claim as a valuable and significant acquisition.

Location Challenges

We do not expect any major  challenges  in  accessing  the  property  during the
initial exploration stages.

Regulations

Our mineral  exploration  program will comply with the British  Columbia Mineral
Tenure Act. This act sets forth rules for:

          * locating claims
          * posting claims
          * working claims
          * reporting work performed

We also have to comply with the British Columbia Mineral  Exploration Code which
tells us how and where we can  explore for  minerals.  We must comply with these
laws to operate our business.  Compliance with these rules and regulations  will
not adversely affect our operations.

We will be required to obtain  additional work permits from the British Columbia
Ministry of Energy and Mines for any exploration work that results in a physical
disturbance to the land. Accordingly, we may be required to obtain a work permit
if  we  proceed  beyond  the  exploration  work  contemplated  by  our  proposed
exploration  program.  There is a charge  of  approximately  $1,500  in order to
obtain a work permit  under the Mining Act.  The time  required to obtain a work
period is approximately four weeks. We will incur the expense of our consultants
to prepare the required submissions to the Ministry of Energy and Mines. We will
be required  by the Mining Act to  undertake  remediation  work on any work that
results in physical  disturbance to the land. The cost of remediation  work will
vary according to the degree of physical  disturbance.  No  remediation  work is
anticipated as a result of completion of the exploration program.

We have budgeted for  regulatory  compliance  costs in the proposed  exploration
program  recommended by the summary report.  As mentioned above, we will have to
sustain  the  cost  of  reclamation  and   environmental   remediation  for  all
exploration   and  other  work   undertaken.   The  amount  of  reclamation  and
environmental remediation costs are not known at this time as we do not know the
extent of the exploration  program that will be undertaken  beyond completion of
the recommended  exploration program.  Because there is presently no information
on the size,  tenor,  or quality of any  mineral  resource  at this time,  it is
impossible to assess the impact of any capital  expenditures  on earnings or our
competitive position in the event a potential mineral deposit is discovered.

If we enter into substantial exploration,  the cost of complying with permit and
regulatory  environment  laws will be greater  than in our  exploration  program
because the impact on the project area is greater.  Permits and regulations will
control  all  aspects of any  program  if the  project  continues  to that stage
because  of the  potential  impact on the  environment.  We may be  required  to
conduct an environmental review process under the British Columbia Environmental
Assessment  Act if we  determine  to  proceed  with a  substantial  project.  An
environmental  review is not required under the Environmental  Assessment Act to
proceed with the recommended exploration program on our Chita claims.


                                       10


<PAGE>


Environmental Factors

We  will  also  have  to  sustain  the  cost of  reclamation  and  environmental
remediation for all work undertaken which causes sufficient surface  disturbance
to necessitate reclamation work. Both reclamation and environmental  remediation
refer  to  putting  disturbed  ground  back as close  to its  original  state as
possible.  Other  potential  pollution or damage must be cleaned-up  and renewed
along  standard  guidelines  outlined in the usual  permits.  Reclamation is the
process  of  bringing  the land  back to a natural  state  after  completion  of
exploration  activities.   Environmental  remediation  refers  to  the  physical
activity of taking  steps to  remediate,  or remedy,  any  environmental  damage
caused,  i.e.  refilling trenches after sampling or cleaning up fuel spills. Our
exploration  program does not require any reclamation or remediation  other than
minor  clean up and removal of supplies  because of minimal  disturbance  to the
ground.  The  amount of these  costs is not known at this time as we do not know
the extent of the exploration  program we will undertake,  beyond  completion of
the  recommended  program  described  above.   Because  there  is  presently  no
information  on the size,  tenor,  or quality of any resource or reserve at this
time, it is impossible to assess the impact of any capital  expenditures  on our
earnings or competitive position in the event a potentially-economic  deposit is
discovered.

Employees

Initially,  we intend to use the services of  contractors  and  consultants  for
exploration work on our properties.  At present,  we have no paid employees.  We
believe in keeping a low number of full-time  employees  will  conserve cash and
allow greater flexibility in the future.

                                  Risk Factors

There is no assurance  that our  business  will be  profitable.  We must conduct
exploration to determine what amount, type and tenure of minerals, if any, exist
on our property. We do not claim to have any reserves whatsoever at this time on
any of our claims.  An investment in our common stock  involves a high degree of
risk.  You should  carefully  consider the risks  described  below and the other
information in this prospectus  before  investing in our common stock. If any of
the  following  risks  occur,  our  business,  operating  results and  financial
condition could be seriously harmed.

We are a recently  organized  business and you cannot  evaluate  the  investment
merits of our Company because we have no operating history.
-----------------------------------------------------------

Our Company is only recently  organized with no operating history which makes it
difficult to evaluate  the  investment  merits of our  Company.  Our Company was
recently  organized  on January 24, 2005 and is a start-up  company.  We have no
operating history and we do not have any business prior to our organization.  As
of March 31, 2006, we incurred expenses of $76,193.

We may not be able to continue as a going concern if we do not obtain additional
financing.
----------

Due to our lack of funds and short  operating  history  incurring only expenses,
our independent accountants' audit report states that there is substantial doubt
about our  ability to  continue  as a going  concern.  Our  independent  auditor
pointed out that we incurred only losses since our inception raising substantial
doubt about our ability to continue as a going concern.  Therefore,  our ability
to continue as a going concern is highly  dependent  upon  obtaining  additional
financing  for our planned  operations.  Because our officers and  directors are
unwilling to loan or advance any additional capital to us, with the exception of
advancing  funds for filing  reports  with the SEC, we believe that if we do not
raise at least  $60,000,  we may have to suspend or cease  operations  within 12
months.

If we do not obtain  additional  financing,  our  business  will fail because we
cannot fund our planned exploration program.
--------------------------------------------


                                       11


<PAGE>


We are in the very  early  exploration  stage  and need  the  proceeds  from our
offering to  continue  exploring  for  mineralized  material.  Since there is no
minimum and no refunds on sold  shares,  you may be  investing in a company that
will not have the funds necessary to continue its operations.  If that occurs we
will have to delay or cease operations.

As of March 31, 2006, we had cash in the amount of $6,383, and a working capital
deficit of  $35,166.  We  currently  do not have any  operations  and we have no
income.  We do not have sufficient funds to carry out our follow-up  exploration
program in 2006, if the results of our initial exploration program is favorable.
Other than the proposed  offering to raise up to  $300,000,  we currently do not
have any  arrangements  for financing and we may not be able to obtain financing
when required.  Obtaining  additional  financing would be subject to a number of
factors, including the market price for base and precious metals and the cost of
exploring for these minerals.  These factors may make the timing,  amount, terms
or conditions of additional financing unavailable to us.

We have no known mineral  resources and if we cannot find any mineral  resources
we may have to cease operations.
--------------------------------

We have no measured  mineral bodies.  If we do not find a mineral body or bodies
containing  valuable  minerals  or  metals  or  if  we  cannot  conduct  further
exploration of any discovered  minerals,  either because we do not have money to
do it or because it is not economically  feasible to do it, we may have to cease
operations and you will loose your investment.

If we are unable to extend the expiration  date for our mineral  claim,  we will
lose our mineral interest.
--------------------------

The  Chita  claims  expire on July 25,  2006.  If we are  unable  to extend  the
expiration  date, we will lose our mineral claim.  In order to renew our mineral
claims and keep it in good  standing to July 25,  2007,  we have to complete and
file an assessment  report  detailing the  equivalent of  approximately  $11,600
(Cad$14,000)  in work on the claims for each year prior to the expiry  date.  We
currently do not have sufficient capital to fund this obligation.

If we do not pay advance  royalties to the vendor of the Chita  claims,  we will
lose our mineral property.
--------------------------

Under the Property Acquisition  Agreement,  we are required to pay Valor $25,000
per year as advance royalties commencing February 1, 2008, to be applied towards
the 2.5% Net Smelter Return royalty.  If we fail to pay these advance  royalties
by February 1, 2008, we will have to transfer ownership of the Chita claims back
to Valor. If we are required to do this, we will lose our only asset.

Because our sole Officer and Director has other business  interests,  he may not
be able or  willing  to  devote  a  sufficient  amount  of time to our  business
operations, causing our business to fail.
-----------------------------------------

Mr. Krause presently spends  approximately  20% of his business time on business
management services for our Company. While Mr. Krause presently possess adequate
time to attend to our interests, it is possible that future demands on them from
their other obligations could increase with the result that they would no longer
be  able to  devote  sufficient  time  to the  management  of our  business.  In
addition,  Mr.  Krause may not possess  sufficient  time for our business if the
demands of managing our business increased  substantially beyond current levels.
Competing  demands  on their  business  time may  cause  them to have  differing
interest in approving  significant  corporate  transactions  from those of other
stockholders.

Our sole  director and officer  shall be  indemnified  for any monies he pays in
settlement of actions  performed while a director or officer.  This may hurt our
profitability.
--------------

Sections  78.7502  and  78.751  of  the  Nevada  Revised  Statutes  provide  for
indemnification  of our officers and directors in certain  situations where they
might otherwise  personally incur  liability,  judgments,  penalties,  fines and
expenses in  connection  with a proceeding or lawsuit to which they might become
parties because of their position


                                       12


<PAGE>


with the Company.  We have  authorized the  indemnification  of our officers and
directors to the full extent available under the Nevada Revised Statutes.

As the Province of British  Columbia owns the land covered by our mineral claims
and  native  land  claims  might  affect our title to the  mineral  claims or to
British Columbia's title to the property, our business plan may fail.
---------------------------------------------------------------------

We are  unaware  of any  outstanding  native  land  claims on the Chita  claims.
However,  it is  possible  that a native land claim could be made in the future.
The federal and provincial government policy at this time is to consult with all
potentially  affected  native  bands and other  stakeholders  in the area of any
potential mining. Should we encounter a situation where a native person or group
claims an interest in our claims, we may be able to provide  compensation to the
affected  party in order to continue  with our  exploration  work, or if such an
option is not available, we may have to relinquish our interest in these claims.
In either  case,  the costs and/or  losses  could be greater than our  financial
capacity and our business would fail.

You may not be able to resell your  shares  because  there is no public  trading
market for our common stock.
----------------------------

Our Company plans to have its shares quoted on the NASD's OTC Bulletin Board. To
be quoted on the OTC Bulletin  Board,  we must rely on a market maker to file an
application  on our  behalf  with NASD in order to make a market  for our common
stock.  There are no assurances  that we will be successful in having our shares
quoted on the OTC Bulletin  Board.  There is currently no public  trading market
for our  common  stock.  Therefore,  there  is no  central  place,  like a stock
exchange or electronic  trading system, to resell your shares. If you do want to
resell your shares, you will have to locate a buyer and negotiate your own sale.
Therefore, you may not be able to resell your shares.

Non-U.S.  and non-Canadian  Shareholders may have problems enforcing their legal
rights.
-------

Those  shareholders  who are  not  resident  of  U.S.  and/or  Canada  may  have
difficulties  enforcing  legal rights and effect service upon the Company in the
United  States  or  upon  the   directors  or  officers  in  British   Columbia.
Accordingly,  non-U.S. and non-Canadian  resident  shareholders may be forced to
bring  actions  against the Company and its directors  and  respective  officers
under U.S.  and/or  Canadian laws or courts in order to enforce claims that they
may have against the Company or its directors or officers. This may be difficult
or expensive and materially  affect the  shareholders'  ability to enforce their
legal rights.

Re-sale Restrictions for British Columbia Residents
---------------------------------------------------

Subscribers who bought shares from the private offering of 3,000,000 shares from
Banner who are  residents of British  Columbia are relying on an exemption  from
prospectus  and  registration  requirements  of  B.C.  securities  laws  for the
purchase of the Company's  securities and may only resell their shares  pursuant
to another prospectus and registration  exemption under B.C.  securities laws or
pursuant  to  B.C.  Securities  Commission's  BC  Instrument  72-502  "Trade  In
Securities of U.S.  Registered  Issuers".  BC Instrument 72-502 requires,  among
other conditions, that B.C. residents hold the shares for 4 months and limit the
volume of shares  sold in a 12-month  period.  (See  "Resale  Restrictions  B.C.
Securities  Laws").  These  restrictions  will  limit  the  ability  of the B.C.
residents  to resell the  securities  in the United  States and  therefore,  may
materially affect the market value of your shares.

Selling  shareholders  who are resident of British  Columbia have to comply with
additional BC policies
----------------------

Selling shareholders,  who are residents of British Columbia, have to rely on an
exemption from prospectus and registration  requirements of B.C. securities laws
to sell their shares which are being  registered for resell by this  prospectus.
Selling  shareholders  have to  comply  with  B.C.  Securities  Commission's  BC
Instrument  72-502 "Trade In Securities  of U.S.  Registered  Issuers" to resell
their shares. BC Instrument 72-502 requires,  among other conditions,  that B.C.
residents  hold the shares for 4 months and limit the volume of shares sold in a
12-month  period.  (See  "Resale  Restrictions  B.C.  Securities  Laws").  These
restrictions  will  limit  the  ability  of the B.C.  residents  to  resell  the
securities in the United States and therefore,  may materially affect the market
value of your shares.


                                       13


<PAGE>


Selling  shareholders who are resident of Alberta have to comply with additional
Alberta policies
----------------

Selling shareholders, who are residents of Alberta, have to rely on an exemption
from prospectus and registration requirements of Alberta securities laws to sell
their  shares  which are being  registered  for resell by this  prospectus.  One
prospectus  exemption is set out in section 2.14 of National  Instrument  45-102
"Resale of Securities" promulgated by the Canadian Securities Administrators. NI
45-102  requires,  among other  conditions,  that residents of Canada do not own
more than 10% of our stock and the trade is made  through an  exchange or market
outside of Canada.  See "Resale  Restrictions  Alberta  Securities Laws".  These
restrictions  will limit the  ability  of the  Alberta  residents  to resell the
securities in the United States and therefore,  may materially affect the market
value of your shares.

Possible depressive effect of future sales of common stock.
-----------------------------------------------------------

As of the date hereof,  we have  1,500,000  restricted  securities  outstanding.
These  restricted  stock may be sold in compliance Rule 144 under the Securities
Act or pursuant to a registration statement filed under the Securities Act. When
these  restricted  stock become freely  tradable,  the sale of these  additional
restricted stock may have a depressive  effect on the market price of our common
stock.

Our shares are  considered  penny stock and any investment in our shares will be
considered  a  high-risk   investment  and  are  subject  to   restrictions   on
marketability.
--------------

If the bid price of our  shares is less than  $5.00 per  share,  our  shares are
considered "penny stock" for purposes of the Securities Exchange Act of 1934, as
amended.  Brokers  effecting  transactions  in a  penny  stock  are  subject  to
additional  customer disclosure and record keeping  obligations.  The additional
obligations  include  disclosure of the risks  associated with low price stocks,
stock quote  information and broker  compensation.  In addition,  brokers making
transactions   in  penny  stocks  are  subject  to  additional   sales  practice
requirements  under the Exchange  Act.  These  additional  requirements  include
making  inquiries  into the  suitability  of  penny  stock  investment  for each
customer or obtaining the prior written  agreement of the customer for the penny
stock purchase.  Because of these additional obligations,  some brokers will not
effect  transactions in penny stocks.  If our shares trade below $5.00 per share
when  our  Company  is  quoted  for  trading  on the OTC  Bulletin  Board,  this
designation would have an adverse effect on the liquidity of our shares and your
ability to sell our shares.

Our  shareholders  could experience  dilution of their ownership  interest if we
issue shares that are purchased by third parties.
-------------------------------------------------

Under  Nevada  corporate  law,  shareholders  of Banner  do not have  preemptive
rights. This means that our shareholders do not have the legal right to purchase
shares in a new issue before they are offered to third parties. In addition, our
board of directors may approve the issuance of shares in many instances  without
shareholder approval. As a result, our shareholders would experience dilution of
their ownership  interest if we decide to raise additional funds by issuing more
shares and these shares are purchased by third parties.

                        ITEM 2 - DESCRIPTION OF PROPERTY

                                EXECUTIVE OFFICES

     We lease our  principal  executive  office at Suite 302, 2484 Haywood Ave.,
West Vancouver,  British Columbia,  Canada V7V 1Y1. We do not currently maintain
any investments in real estate,  real estate  mortgages or securities of persons
primarily  engaged in real estate  activities,  nor do we expect to do so in the
foreseeable future.


                                       14


<PAGE>


                           ITEM 3 - LEGAL PROCEEDINGS

     Neither we nor any of our  property are  currently  subject to any material
legal proceedings or other regulatory proceedings,  and to our knowledge no such
proceedings are contemplated.

     Our agent for service of process is Business First  Formations,  Inc., 3990
Warren Way, Reno, Nevada 89509.

           ITEM 4- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                                      NONE

                                     PART II
                                     -------

        ITEM 5- MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

No Public Market for Common Stock

     There is presently no public market for our common stock.  We anticipate an
application  for trading of our common  stock on the OTCBB will be  submitted to
NASD. However, we can provide no assurance that our shares will be traded on the
bulletin  board or, if traded,  that a public  market  will  materialize.  To be
quoted on the OTCBB,  we must rely on a market maker to file an  application  on
our behalf with NASD in order to make a market for our common stock.

                                 DIVIDEND POLICY

     We anticipate that we will retain any earnings to support operations and to
finance the growth and development of our business.  Therefore, we do not expect
to pay cash dividends in the foreseeable  future.  Any further  determination to
pay cash  dividends will be at the discretion of our board of directors and will
be dependent on the financial condition, operating results, capital requirements
and other  factors  that our board  deems  relevant.  We have  never  declared a
dividend.

   PURCHASES OF EQUITY SECURITIES BY THE SMALL BUSINESS ISSUER AND AFFILIATES

     There  were  no  purchases  of our  equity  securities  by us or any of our
affiliates during the year ended March 31, 20065.

                                 USE OF PROCEEDS

     We filed a registration  statement to offer and sell up to 3,000,000 shares
at a public  offering  price of $0.10 per share.  The use of proceeds  will vary
depending  upon the total  number of shares  sold.  Regardless  of the number of
shares  sold,  we expect to incur  offering  expenses  estimated  at $16,500 for
legal, accounting, printing and other costs in connection with the offering. The
first  $16,500  raised  will be used  for  offering  expenses.  The  balance  is
anticipated to be used for general exploratory and administrative expenses.

     As of the date of this report we have not sold any shares in the registered
offering.


                                       15


<PAGE>


                  ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS

                               Plan Of Operations

Our  business  plan is to proceed  with the  exploration  of the Chita claims to
determine whether there are commercially  exploitable  reserves of gold or other
base and precious  metals.  We have decided to embark upon the initial  phase of
the exploration program recommended by Glen Macdonald,  P.Geo. The initial phase
of the recommended program costs approximately $15,000. On March 31, 2006 we had
cash on hand of $6,383 and working  capital  deficiency of $35,166.  In February
2006, two  shareholders  loaned us total cash of $10,000,  which is non-interest
bearing,  unsecured and repayable on demand.  We do not have sufficient funds to
carry out our  follow-up  exploration  program  in 2006,  if the  results of our
initial exploration program is favorable.

We have  concluded  the field work of our  initial  exploration  program  and we
expect to receive  sample  analysis  and  report by the spring of 2006.  Once we
receive the results of our initial exploration  program, our board of directors,
in consultation with our consulting geologist, will assess whether to proceed to
any further exploration phases. In making this determination to proceed, we will
make an  assessment as to whether the results of the initial  exploration  phase
are  sufficiently  positive to enable us to  proceed.  This  determination  will
include an  assessment  of our cash  reserves  after  completion  of the initial
phase, the price of minerals and the market for financing of mineral exploration
projects  at the time of our  assessment.  Should  the  results  of our  initial
exploration  program  prove not to be  sufficiently  positive  to  proceed  with
further exploration on the Chita claims, we intend to seek out and acquire other
mineral  exploration   properties  which,  in  the  opinion  of  our  consulting
geologist, offer attractive mineral exploration opportunities.

If results are favorable,  we plan to start our exploration program in spring of
2006,  and we have budgeted  $15,000  towards that program.  We currently do not
have sufficient funds to finance this program.

During   this    exploration    stage,    Mr.   Krause,    our   president   and
secretary-treasurer, will only be devoting approximately 8 hours per week of his
time to our business.  We do not foresee this limited  involvement as negatively
impacting our company over the next 12 months as all  exploratory  work is being
performed by an outside  consultant.  If,  however,  the demands of our business
require  more  time  of Mr.  Krause,  such  as  raising  additional  capital  or
addressing  unforeseen  issues with  regard to our  exploration  efforts,  he is
prepared to adjust his timetables to devote more time to our business.  However,
he may not be able to devote  sufficient time to the management of our business,
as and when needed.

We are presently raising additional funding in the form of equity financing from
the sale of our common stock  registered by a registration  statement filed with
the SEC. However, we cannot provide investors with any assurance that we will be
able to raise  sufficient  funding  from the  sale of our  common  stock to fund
additional  phases of the  exploration  program should we decide to proceed.  We
believe that debt financing  will not be an alternative  for funding any further
phases in our exploration  program. The risky nature of this enterprise and lack
of tangible assets places debt financing beyond the  credit-worthiness  required
by most  banks or  typical  investors  of  corporate  debt until such time as an
economically viable mine can be demonstrated. We do not have any arrangements in
place for any future equity financing.

We anticipate that we will incur the following expenses over the next 12 months:

     (1)  $15,000 in connection with the 2006 geological work program; and

     (2)  $60,000  for  operating  expenses  and $16,500 for payment of offering
          expenses related to this Registration Statement.


                                       16


<PAGE>


We had cash in the amount of $6,383 as of March 31,  2006 and a working  capital
deficit of $35.166.  We do not have plans to purchase any significant  equipment
or change the number of our  employees  during the next 12 months.  Accordingly,
after the 12 months has passed, we will need to obtain additional  financing for
any significant new operational or exploratory expenses.

Liquidity and Capital Resources

We had cash of $6,383 as of March 31, 2006. We had a working capital  deficiency
of $35,166 as of March 31, 2006.

In February 2005, we raised $5,875 from issuing 5,875,000 shares of common stock
at a price of $0.001  per  share,  to 23 non-US  persons,  who are  friends  and
business associates of our directors and officers.

In May 2005, we raised $10,000 cash and converted  $15,000 of loans payable into
stock by issuing  500,000  shares of common stock at a price of $0.05 per share,
to six non-US persons,  who are friends and business associates of our directors
and officers.

In July 2005, we raised $12,500 from issuing 250,000 shares of common stock at a
price of $0.05 per share, to four non-US  persons,  who are friends and business
associates of our directors and officers.

In February 2006,  two  shareholders  loaned us total cash of $10,000,  which is
non-interest bearing, unsecured and repayable on demand.

We have not attained  profitable  operations  and are dependent  upon  obtaining
financing  to pursue  exploration  activities.  For these  reasons our  auditors
stated  in their  report  that they  have  substantial  doubt we will be able to
continue as a going concern.

Off-Balance Sheet Arrangements

The Company does not have any 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.

Contractual Obligations

     As of March 31, 2006, we had no non-cancelable contractual obligations.

                          ITEM 7 - FINANCIAL STATEMENTS

                             BANNER RESOURCES INC.
                         (An Exploration Stage Company)

                                 March 31, 2006


                                      INDEX

Report of Independent Registered Public Accounting Firm......................19

Consolidated Balance Sheets..................................................20

Consolidated Statements of Operations........................................21

Consolidated Statements of Cash Flows........................................22

Consolidated Statements of Stockholders' Deficit.............................23

Notes to the Consolidated Financial Statements...............................24



                                       17
<PAGE>






            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders of
Banner Resources Inc. (An Exploration Stage Company)



We have audited the accompanying  consolidated balance sheet of Banner Resources
Inc.  (An  Exploration  Stage  Company)  as of March  31,  2006 and 2005 and the
related  consolidated  statements of  operations,  cash flows and  stockholders'
equity for the years then ended and  accumulated for the period from January 24,
2005 (Date of Inception) to March 31, 2006.  These financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted  our audits in  accordance  with  standards  of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the financial  position of Banner Resources
Inc. (An Exploration Stage Company) as of May 31, 2006 and 2005, and the results
of its operations and its cash flows for the period for the years then ended and
accumulated  for the period from January 24, 2005 (Date of  Inception)  to March
31, 2006, in conformity with  accounting  principles  generally  accepted in the
United States.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  discussed  in Note 1 to the  financial
statements, the Company has a working capital deficiency and has incurred a loss
from operations since inception. These factors raise substantial doubt about the
Company's ability to continue as a going concern.  Management's  plans in regard
to these matters are also  discussed in Note 1. The financial  statements do not
include any adjustments that might result from the outcome of this uncertainty.


/s/ Manning Elliot LLP
CHARTERED ACCOUNTANTS

Vancouver, Canada
June 26, 2006


                                       18

<PAGE>

BANNER RESOURCES INC.
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. dollars)


<TABLE>
                                                                        March 31,         March 31,
                                                                          2006              2005
                                                                           $                  $
<S>                                                                       <C>              <C>
ASSETS

Current Assets

   Cash                                                                   6,383            9,147
   Prepaid expenses                                                           -            1,000
-----------------------------------------------------------------------------------------------------
Total Assets                                                              6,383           10,147
-----------------------------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities

   Accounts payable                                                      16,148            1,402
   Accrued liabilities                                                    5,530            2,750
   Due to related party (Note 4(c))                                       5,231                -
   Loans payable (Note 5)                                                14,640           15,000
-----------------------------------------------------------------------------------------------------
Total Liabilities                                                        41,549           19,152
-----------------------------------------------------------------------------------------------------

Contingencies and Commitments (Notes 1 and 3)

Stockholders' Deficit

   Common Stock (Note 6)
         Authorized: 75,000,000 shares, par value $0.001
         Issued: 6,945,000 and 6,195,000 shares respectively              6,945            6,195

   Additional Paid-in Capital                                            36,750                -

   Stock Subscriptions Receivable                                             -            (650)

   Donated Capital                                                        5,766            1,266

   Accumulated Other Comprehensive Loss                                   (160)             (52)

   Deficit Accumulated During the Exploration Stage                    (84,467)         (15,764)
-----------------------------------------------------------------------------------------------------
Total Stockholders' Deficit                                            (35,166)          (9,005)
-----------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Deficit                               6,383           10,147
-----------------------------------------------------------------------------------------------------
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements


                                       19


<PAGE>


BANNER RESOURCES INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in U.S. dollars)


<TABLE>
                                                            Accumulated
                                                               From                                  From
                                                          January 24,2005        For the        January 24,2005
                                                         (Date of Inception)    Year Ended     (Date of Inception)
                                                            to March 31,         March 31,        to March 31,
                                                               2006               2006               2005
                                                                 $                  $                  $
<S>                                                      <C>                   <C>              <C>
Revenue                                                          --                 --                 --
-------------------------------------------------------------------------------------------------------------

Expenses

Consulting (Note 4(b))                                        1,919                419              1,500
General and administrative                                    3,543              1,964              1,579
Management fees (Notes 4(a) and (d))                         14,000             12,000              2,000
Mineral property costs                                       15,000             13,703              1,297
Rent (Notes 4(a) and (d))                                    10,354              9,354              1,000
Professional services                                        34,386             28,120              6,266
Travel                                                        5,265              3,143              2,122
-------------------------------------------------------------------------------------------------------------
Total Expenses                                               84,467             68,703             15,764
-------------------------------------------------------------------------------------------------------------

Net Loss                                                   (84,467)           (68,703)           (15,764)

Other Comprehensive Loss

  Foreign Currency Translation Adjustment                     (160)              (108)               (52)
-------------------------------------------------------------------------------------------------------------

Comprehensive Loss                                         (84,627)           (68,811)           (15,816)
-------------------------------------------------------------------------------------------------------------

Net Loss Per Share - Basic and Diluted                                          (0.01)             (0.01)
-------------------------------------------------------------------------------------------------------------

Weighted Average Shares Outstanding                                          6,637,000          2,905,000
-------------------------------------------------------------------------------------------------------------
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements


                                       20


<PAGE>


BANNER RESOURCES INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. dollars)


<TABLE>
                                                            Accumulated
                                                               From                                  From
                                                          January 24,2005        For the        January 24,2005
                                                         (Date of Inception)    Year Ended     (Date of Inception)
                                                            to March 31,         March 31,        to March 31,
                                                               2006               2006               2005
                                                                 $                  $                  $
<S>                                                      <C>                   <C>              <C>

Operating Activities

Net loss                                                      (84,467)           (68,703)           (15,764)

Adjustment to reconcile net loss to net cash used in
operating activities

Donated services                                                5,766              4,500              1,266
Stock issued for mineral property                                 320                  -                320

Changes in operating assets and liabilities

Prepaid expenses                                                   --              1,000            (1,000)
Accounts payable and accrued liabilities                       21,678             17,526              4,152
Due to related parties                                          5,231              5,231                  -
---------------------------------------------------------------------------------------------------------------------
Net Cash Used in Operating Activities                         (51,472)           (40,446)           (11,026)
---------------------------------------------------------------------------------------------------------------------

Financing Activities

Loans payable                                                  14,640              (360)             15,000
Common stock issued for cash                                   43,375             38,150              5,225
---------------------------------------------------------------------------------------------------------------------

Net Cash Provided by Financing Activities                      58,015             37,790             20,225
---------------------------------------------------------------------------------------------------------------------

Effect of Exchange Rate Changes on Cash                          (160)              (108)               (52)
---------------------------------------------------------------------------------------------------------------------

Increase (Decrease) in Cash                                     6,383            (2,764)              9,147

Cash - Beginning of Period                                         --              9,147                  -
---------------------------------------------------------------------------------------------------------------------

Cash - End of Period                                            6,383              6,383              9,147
---------------------------------------------------------------------------------------------------------------------

Non-cash Financing Activities:
         Stock issued for mineral property                        320                  -                320
---------------------------------------------------------------------------------------------------------------------

Supplemental Disclosures:
         Interest paid                                             --                  -                  -
         Income taxes paid                                         --                  -                  -
---------------------------------------------------------------------------------------------------------------------
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements


                                       21


<PAGE>


BANNER RESOURCES INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
Period from January 24, 2005 (Date of Inception) to March 31, 2006
(Expressed in U.S. dollars)



<TABLE>
                                                                                                                Deficit
                                                                                               Accumulated    Accumulated
                                                       Additional       Stock                     Other        During the
                                                Common   Paid-In    Subscription   Donated    Comprehensive   Exploration
                                     Shares     Stock    Capital     Receivable    Capital        Loss            Stage      Total
                                        #         $         $            $            $             $               $          $

<S>                                <C>          <C>       <C>         <C>          <C>          <C>            <C>          <C>
Balance - January 24, 2005
  (Date of Inception)                     --        -         --          --           --            --             --          --

Stock issued for cash at $0.001
  per share                        5,875,000    5,875         --        (650)          --            --             --       5,225

Stock issued for mineral
  property at $0.001 per share       320,000      320         --          --           --            --             --         320

Donated services                          --       --         --          --        1,266            --             --       1,266

Foreign currency translation              --       --         --          --           --           (52)            --        (52)

Net loss for the period                   =-       --         --          --           --            --        (15,764)    (15,764)
------------------------------------------------------------------------------------------------------------------------------------
Balance - March 31, 2005           6,195,000    6,195         --        (650)       1,266           (52)       (15,764)     (9,005)

Stock issued for cash at
  $0.05 per share                    750,000      750     36,750          --           --            --             --      37,500

Stock subscriptions received              --       --         --         650           --            --             --         650

Donated services                          --       --         --          --        4,500            --             --       4,500

Foreign currency translation              --       --         --          --           --          (108)            --        (108)

Net loss for the year                     --       --         --          --           --            --        (68,703)    (68,703)
------------------------------------------------------------------------------------------------------------------------------------
Balance - March 31, 2006           6,945,000    6,945     36,750          --        5,766          (160)       (84,467)    (35,166)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>



              The accompanying notes are an integral part of these
                       consolidated financial statements


                                       22


<PAGE>


BANNER RESOURCES INC.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)



1.   Exploration Stage Company

     Banner  Resources  Inc. (the  "Company") was  incorporated  in the State of
     Nevada on January 24, 2005.  The Company has acquired a 100% interest in 70
     mineral  claim  units  located  in the  Clinton  Mining  Division,  British
     Columbia.

     The Company is an  Exploration  Stage  Company,  as defined by Statement of
     Financial  Accounting  Standard  ("SFAS") No.7 "Accounting and Reporting by
     Development Stage  Enterprises".  The Company's  principal  business is the
     acquisition  and  exploration  of mineral  resources.  The  Company has not
     presently  determined  whether its properties contain mineral reserves that
     are economically recoverable.

     These  consolidated  financial  statements  have been  prepared  on a going
     concern  basis,  which  implies  the Company  will  continue to realize its
     assets and discharge its liabilities in the normal course of business.  The
     Company has never generated revenue and has never paid any dividends and is
     unlikely  to  pay  dividends  or  generate  earnings  in the  immediate  or
     foreseeable  future.  The continuation of the Company as a going concern is
     dependent upon the continued  financial support from its shareholders,  the
     ability of the Company to obtain  necessary  equity  financing  to continue
     operations  and  to  determine  the  existence,  discovery  and  successful
     exploitation   of  economically   recoverable   reserves  in  its  resource
     properties,  confirmation  of the  Company's  interests  in the  underlying
     properties,  and the attainment of profitable  operations.  As at March 31,
     2006,  the  Company  has a working  capital  deficit  of  $35,166,  and has
     accumulated losses of $84,467 since inception.  These financial  statements
     do not include any adjustments to the  recoverability and classification of
     recorded  asset amounts and  classification  of  liabilities  that might be
     necessary  should the  Company be unable to  continue  as a going  concern.
     These factors raise  substantial  doubt regarding the Company's  ability to
     continue as a going concern.

     The Company filed an SB-2 Registration  Statement  ("SB-2") with the United
     States  Securities and Exchange  Commission that was declared  effective on
     April 18, 2006.  Pursuant to the SB-2, the Company  offered up to 3,000,000
     common  shares in a public  offering,  and the resale of  5,445,000  common
     shares by existing shareholders of the Company.


2.   Summary of Significant Accounting Policies

     a)   Basis of Presentation

          These  consolidated   financial   statements  and  related  notes  are
          presented in accordance with accounting  principles generally accepted
          in the United States, and are expressed in US dollars. These financial
          statements  include  accounts  of the  Company  and  its  wholly-owned
          subsidiary,  Banner  Exploration  Ltd, a company  incorporated  in the
          Province  of British  Columbia,  Canada,  on  January  26,  2005.  All
          intercompany  transactions  and  balances  have been  eliminated.  The
          Company's fiscal year end is March 31.

     b)   Use of Estimates

          The  preparation  of  financial  statements  in  conformity  with U.S.
          generally accepted  accounting  principles requires management to make
          estimates and assumptions  that affect the reported  amounts 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.

     c)   Cash and Cash Equivalents

          The Company  considers all highly liquid  instruments with maturity of
          three months or less at the time of issuance to be cash equivalents.

     d)   Basic and Diluted Net Income (Loss) Per Share

          The Company  computes net income (loss) per share in  accordance  with
          SFAS No.  128,  "Earnings  per Share"  (SFAS 128).  SFAS 128  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  shareholders  (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 including stock options,  using
          the treasury stock method, and convertible  preferred stock, using the
          if-converted 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.  Diluted
          EPS  excludes  all  dilutive  potential  shares  if  their  effect  is
          anti-dilutive.


                                       23
<PAGE>


BANNER RESOURCES INC.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)



2.   Summary of Significant Accounting Policies (continued)

     e)   Financial Instruments

          The fair values of cash, prepaid expenses,  accounts payable,  accrued
          liabilities  and amounts  due to a related  party,  approximate  their
          carrying  values due to the immediate or short-term  maturity of these
          financial instruments.

     f)   Foreign Currency Transactions/Balances

          The Company's  functional  currency is the United States  dollar.  The
          financial  statements  of the Company are  translated to United States
          dollars in accordance with SFAS No. 52 "Foreign Currency  Translation"
          ("SFAS No. 52). Monetary assets and liabilities denominated in foreign
          currencies  are translated  using the exchange rate  prevailing at the
          balance  sheet  date.  Gains and  losses  arising  on  translation  or
          settlement of foreign  currency  denominated  transactions or balances
          are  included  in  the  determination  of  income.   Foreign  currency
          transactions are primarily undertaken in Canadian dollars. The Company
          has not,  to the date of these  financials  statements,  entered  into
          derivative  instruments  to  offset  the  impact of  foreign  currency
          fluctuations.

          The functional currency of the wholly-owned subsidiary is the Canadian
          dollar.  The financial  statements of the subsidiary are translated to
          United States dollars in accordance with SFAS No. 52 using  period-end
          rates of exchange  for assets and  liabilities,  and average  rates of
          exchange for the year for revenues and  expenses.  Translation  losses
          are recorded in accumulated other comprehensive loss as a component of
          stockholders'  equity.  Foreign currency  transaction gains and losses
          are included in current operations.

     g)   Mineral Property Costs

          The Company has been in the  exploration  stage since its inception on
          January 24,  2005,  and has not yet  realized  any  revenues  from its
          planned  operations.  It is primarily  engaged in the  acquisition and
          exploration of mining properties.  Mineral property  exploration costs
          are  expensed as  incurred.  Mineral  property  acquisition  costs are
          initially  capitalized when incurred using the guidance in EITF 04-02,
          "Whether  Mineral  Rights Are  Tangible  or  Intangible  Assets".  The
          Company  assesses the carrying  costs for  impairment  under SFAS 144,
          "Accounting  for  Impairment or Disposal of Long Lived Assets" at each
          fiscal  quarter  end.  When  it has  been  determined  that a  mineral
          property can be  economically  developed  as a result of  establishing
          proven and probable reserves,  the costs then incurred to develop such
          property,  are  capitalized.  Such costs will be  amortized  using the
          units-of-production  method over the  estimated  life of the  probable
          reserve. If mineral properties are subsequently abandoned or impaired,
          any capitalized costs will be charged to operations.

     h)   Comprehensive Loss

          SFAS No. 130, "Reporting  Comprehensive  Income" establishes standards
          for the reporting and display of comprehensive loss and its components
          in the financial statements.  As at March 31, 2006, the Company's only
          component  of  comprehensive  loss was  foreign  currency  translation
          adjustments.

     i)   Income Taxes

          Potential  benefits  of income tax losses  are not  recognized  in the
          accounts  until  realization  is more likely than not. The Company has
          adopted  SFAS  No.  109  "Accounting  for  Income  Taxes"  as  of  its
          inception. Pursuant to SFAS No. 109 the Company is required to compute
          tax asset benefits for net operating losses carried forward. Potential
          benefit of net  operating  losses  have not been  recognized  in these
          financial  statements because the Company cannot be assured it is more
          likely  than not it will  utilize  the net  operating  losses  carried
          forward in future years.

     j)   Donated Services

          The Company  recognizes  professional  services donated to the Company
          based upon their fair value.  During the period from date of inception
          on January 24, 2005 to March 31, 2006, the Company  recognized donated
          professional fees of $1,266,  donated  management  services of $3,000,
          and donated rent of $1,500.

     k)   Stock-based Compensation

          Prior to January 1, 2006, the Company accounted for stock-based awards
          under  the  recognition  and  measurement   provisions  of  Accounting
          Principles  Board  Opinion  No. 25,  "Accounting  for Stock  Issued to
          Employees" using the intrinsic value method of accounting, under which
          compensation  expense was only recognized if the exercise price of the
          Company's employee stock options was less than the market price of the
          underlying  common  stock on the date of grant.  Effective  January 1,
          2006,  the Company  adopted the fair value  recognition  provisions of
          SFAS No. 123R "Share Based Payments", using the modified retrospective
          transition  method.  The Company  has not issued any stock  options or
          share based payments since its  inception.  Accordingly,  there was no
          effect on the Company's  reported loss from operations,  cash flows or
          loss per share as a result of adopting SFAS No 123R.



                                       24

<PAGE>

BANNER RESOURCES INC.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)


2.   Summary of Significant Accounting Principles (continued)

     l)   Recent Accounting Pronouncements

          In May 2005, the Financial  Accounting  Standards  Board (FASB) issued
          SFAS  No.  154,   "Accounting   Changes  and  Error  Corrections  -  A
          Replacement  of APB  Opinion  No. 20 and SFAS No. 3". SFAS 154 changes
          the  requirements  for the accounting for and reporting of a change in
          accounting   principle  and  applies  to  all  voluntary   changes  in
          accounting  principle.  It also  applies  to  changes  required  by an
          accounting   pronouncement   in  the   unusual   instance   that   the
          pronouncement does not include specific  transition  provisions.  SFAS
          154 requires  retrospective  application to prior  periods'  financial
          statements   of  changes  in  accounting   principle,   unless  it  is
          impracticable to determine either the  period-specific  effects or the
          cumulative  effect of the change.  The  provisions of SFAS No. 154 are
          effective  for  accounting  changes and  correction  of errors made in
          fiscal years  beginning  after December 15, 2005. The adoption of this
          standard is not  expected to have a material  effect on the  Company's
          results of operations or financial position.

          In  December  2004,  the FASB  issued  SFAS  No.  153,  "Exchanges  of
          Nonmonetary Assets - An Amendment of APB Opinion No. 29". The guidance
          in APB Opinion No. 29, "Accounting for Nonmonetary  Transactions",  is
          based on the principle that exchanges of nonmonetary  assets should be
          measured based on the fair value of the assets exchanged. The guidance
          in  that  Opinion,   however,  included  certain  exceptions  to  that
          principle.  SFAS No.  153  amends  Opinion  No.  29 to  eliminate  the
          exception for nonmonetary  exchanges of similar  productive assets and
          replaces it with a general  exception  for  exchanges  of  nonmonetary
          assets that do not have commercial  substance.  A nonmonetary exchange
          has  commercial  substance  if the future cash flows of the entity are
          expected  to change  significantly  as a result of the  exchange.  The
          provisions  of  SFAS  No.  153 are  effective  for  nonmonetary  asset
          exchanges  occurring in fiscal periods  beginning after June 15, 2005.
          Early  application  is permitted and companies must apply the standard
          prospectively.  The adoption of this  standard did not have a material
          effect on the Company's results of operations or financial position.

          The FASB has also issued SFAS No. 155  "Accounting  for Certain Hybrid
          Financial  Instruments"  and SFAS No. 156 "Accounting for Servicing of
          Financial  Assets",  but they  will not have any  relationship  to the
          operations of the Company.  Therefore a description and its impact for
          each on the Company's  operations and financial position have not been
          disclosed.


3.   Mineral Property

     On February 1, 2005, the Company  acquired a 100% interest in seven mineral
     claims  consisting  of 70 mineral  claim  units  located in Clinton  Mining
     Division,  British  Columbia,  Canada, in consideration for the issuance of
     320,000  common  shares at a fair value price of $.001 per share or $320 in
     total.  The fair value of these common  shares was  determined to be $0.001
     per share based on the cash sale of common stock on February 28, 2005 being
     the closest date shares were issued. The purchase price of $320 was charged
     to operations as mineral property costs as proven or probable reserves have
     not been  established  on the mineral  property.  The Company  must pay the
     former  owner  of the  mineral  claims a 2 1/2% Net  Smelter  Royalty  upon
     commencement of commercial  production.  However, the Company can acquire 1
     1/2% of the Net  Smelter  Return  for  $1,000,000  within  12  months  from
     commencement  of  commercial  production.  An  advance  royalty  payment of
     $25,000 will be payable  annually  commencing  on February 1, 2008.  If the
     Company does not make the advance  royalty payment on February 1, 2008, the
     claims will be returned to the vendor. If the royalty of $25,000 is paid on
     February  1, 2008 this amount  will be charged to  operations  if proven or
     probable reserves have not been found.


4.   Related Party Transactions

     a)   For the year ended March 31, 2006, the Company incurred rent of $4,500
          (2005 - $1,000)  and  management  services  of $9,000  (2005 - $2,000)
          provided by a private  company  controlled by the former  President of
          the Company.

     b)   For the year ended March 31,  2006,  the Company  incurred  consulting
          fees of $419  provided  by a company  controlled  by a relative of the
          former President of the Company.

     c)   As at March 31, 2006, the Company has an amount owing of $5,231 to the
          former  President of the Company for rent,  management  services,  and
          expenses incurred on behalf of the Company. The amount is non-interest
          bearing, unsecured, and due on demand.

     d)   During the year ended March 31, 2006,  the Company  recognized a total
          of $3,000  for  donated  services  at $1,000  per month and $1,500 for
          donated  rent at $500  per  month  provided  by the  President  of the
          Company.



                                       25

<PAGE>


BANNER RESOURCES INC.
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)


5.   Loans Payable

     a)   In  February  2005,  the  Company  received  unsecured  cash  loans of
          $15,000.  These  loans were  non-interest  bearing and had no specific
          terms of repayment.  On May 25, 2005,  these loans were converted into
          300,000 common shares at a fair value of $0.05 per share.

     b)   During the year ended March 31, 2006, the Company  received  unsecured
          cash loans of $14,640.  These loans are non-interest bearing, and have
          no specific terms of repayment.


6.   Common Stock

     a)   On July 20, 2005,  the Company  issued  250,000 common shares at $0.05
          per share for cash proceeds of $12,500.

     b)   On May 25, 2005, the Company issued 500,000 common shares at $0.05 per
          share for cash proceeds of $25,000.

     c)   On March 1, 2005,  the Company  issued 320,000 common shares at a fair
          value of $0.001  per share for  acquisition  of the  mineral  property
          described in Note 3.

     d)   On February 28, 2005, the Company issued  5,875,000 common shares at a
          fair value of $0.001 per share for cash  proceeds of $5,875.  At March
          31, 2005,  stock  subscriptions  receivable  of $650 was recorded as a
          reduction of stockholder's  equity.  These funds were received in full
          during the year ended March 31, 2006.


7.   Income Taxes

     Potential  benefits of income tax losses are not recognized in the accounts
     until  realization  is more likely  than not.  For the year ended March 31,
     2006,   the  Company  has  a  net  operating   loss  to  carry  forward  of
     approximately  $67,000  for US  tax  purposes  and a  non-capital  loss  of
     approximately  $26,000 for Canadian tax purposes,  which expire starting in
     2025 and  2012,  respectively.  Pursuant  to SFAS No.  109 the  Company  is
     required to compute tax asset  benefits for net  operating  losses  carried
     forward. Potential benefit of net operating losses have not been recognized
     in these financial  statements  because the Company cannot be assured it is
     more  likely  than not it will  utilize the net  operating  losses  carried
     forward in future years.  For the years ended March 31, 2006 and 2005,  the
     valuation  allowance  established against the deferred tax assets increased
     by $27,600 and $4,900.

     The components of the net deferred tax asset at March 31, 2006 and 2005 and
     the  statutory tax rate,  the effective tax rate and the elected  amount of
     the valuation allowance are scheduled below:

                                                March 31,            March 31,
                                                  2006                 2005
                                                    $                    $

     Net Tax Losses                               93,000               14,000

     Statutory Tax Rate - blended                     35%                  35%

     Effective Tax Rate                               --                   --

     Deferred Tax Asset                           32,500                4,900

     Valuation Allowance                         (32,500)              (4,900)
     --------------------------------------------------------------------------
     Net Deferred Tax Asset                           --                   --
     --------------------------------------------------------------------------


8.   Subsequent Event

     On June 9, 2006,  the  former  President  of the  Company  resigned  as the
     President,  Secretary,  Treasurer, and Director of the Company. The Company
     has appointed a Director to serve as the Company's  interim President until
     such time as the  Company  locates and hires an  individual  on a permanent
     basis.




                                       26



<PAGE>


            ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                      ACCOUNTING AND FINANCIAL DISCLOSURE

                                      NONE


                        ITEM 8A - CONTROLS AND PROCEDURES

                       DISCLOSURE CONTROLS AND PROCEDURES

     The  Company  maintains   disclosure  controls  and  procedures  which  are
adequately  designed to ensure that  information  required  to be  disclosed  in
reports  filed  under  the  Securities  Exchange  Act of 1934,  as  amended,  is
recorded,  processed,  summarized and reported within the time periods specified
in the applicable  rules and forms.  As of the end of the period covered by this
report,  the  Company's  principal  executive  officer and  principal  financial
officer evaluated the  effectiveness of our disclosure  controls and procedures.
Based on the evaluation, which disclosed no significant deficiencies or material
weaknesses,  the Company's  principal  executive officer and principal financial
officer  concluded  that the Company's  disclosure  controls and  procedures are
effective  to ensure that  information  required to be  disclosed in the reports
that we file or submit under the Exchange Act is accumulated and communicated to
our  management,  including  our Chief  Executive  Officer  and Chief  Financial
Officer, to allow timely decisions regarding required disclosure.

                    INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in the Company's internal control over financial reporting
that  occurred  during the Company's  most recent fiscal  quarter and the period
covered by this annual report that have materially  affected,  or are reasonably
likely to materially  affect,  the  company's  internal  control over  financial
reporting.

                           ITEM 8B - OTHER INFORMATION

                                      NONE


                                    PART III
                                    --------

                    ITEM 9 - DIRECTORS AND EXECUTIVE OFFICERS

          Directors, Executive Officers, Promoters And Control Persons

Executive Officers And Directors

The following table sets forth, as of June 30, 2006, the directors and executive
officers of our Company,  their ages, term served and all officers and positions
with our Company.  A director is elected by stockholders and serves until his or
her successor is duly elected by the  stockholders  and qualifies.  Officers and
other employees serve at the will of the Board of Directors.


                                       27


<PAGE>


There are no  arrangements  or  understandings  regarding  the  length of time a
director of our company is to serve in such a capacity.  Our  director  holds no
directorships  in any  other  company  that has to  comply  with  the  reporting
requirements of the Securities Exchange Act of 1934.

Name of Director    Age       Term Served        Positions
----------------    ---       -----------        ---------

James H. Disher(1)   54     Since inception      Former President, Secretary,
                                                 Treasurer and Director

Robert Krause(2)     46     Since inception      President, Secretary, Treasurer
                                                 and Director
----------------------
(1)  Resigned effective June 9, 2006.

(2)  Appointed as interim President, Treasurer and Secretary on June 9, 2006.


A brief  description of the background and business  experience of our executive
officers:

Mr. Disher served as our President,  Secretary, Treasurer and Director since our
Company's  inception  on  January  24,  2005 to  June 9,  2006.  Mr.  Disher,  a
self-employed businessman,  has been actively involved in managing and financing
both  private and public  companies  for the past 10 years and was  previously a
licensed registered  representative with the largest independent  brokerage firm
in Canada.  Mr. Disher ceased to be a registered  representative 10 years ago to
join a junior mining exploration company, International Jaguar Equities Inc., as
Vice President and rising to President.  In 2002, the company  changed  business
and was renamed to Advectus Life Sciences Inc.,  having  acquired a license to a
technology  to treat  brain  tumors.  The  company was listed on the TSX Venture
Exchange (Canada).  Pre-clinical  trials on the technology were inconclusive and
the company  voluntarily  delisted in July 2004. Mr. Disher  resigned on June 9,
2006 to pursue other professional interests.

Mr. Krause has been Director since our Company's  inception on January 24, 2005.
Mr. Krause was appointed as President,  Secretary and Treasurer on June 9, 2006.
Mr.  Krause is an  exploration  geologist  who has been  actively  involved as a
consulting geologist since 1985 with international exploration experience. He is
president of R.G. Krause & Associates Inc. of Vancouver,  British Columbia.  Mr.
Krause has a Bachelor of Science  (geology major) from the University of British
Columbia,   Canada.  From  1999  to  2003  Mr.  Krause  was  Vice  President  of
Exploration, acting as senior geologist, of Starfield Resources (which is listed
on the TSX  Venture  Exchange).  From  May  2003 to July  2005  Mr.  Krause  was
president and director of Chilco River Holdings Inc. (which became listed on the
OTCBB in February  2005).  From 2003 to present,  Mr.  Krause is a director  and
chief  geologist  of  Wyn  Development  (which  is  listed  on the  TSX  Venture
Exchange).  Mr. Krause will continue to serve in his present  positions with the
Company until the next annual meeting of shareholders and devote 20% (or 8 hours
per week) of his business time to Banner.

Conflicts of Interest

We believe that Mr.  Krause could have conflict of interest  relationships  with
other mineral exploration companies.  Mr. Krause will continue to be involved in
the mineral  exploration  business for other entities and his involvement  could
create conflicts of interest.  At the present time, we do not foresee any direct
conflicts  because we intend to explore  and  develop  our own  mineral  claims.
However,  in the  future,  we may enter into joint  venture  relationships  with
companies which Mr. Krause is affiliated.  The only conflicts that we foresee is
Mr. Krause's devotion to time to other mineral exploration  projects that do not
involve us.

Audit Committee

The Company does not have a formally  constituted  Audit  Committee as the Board
considers  the Company's  size and operation  does not warrant such a committee.
The Board acts as a de facto Audit  Committee  in  conjunction  with its



                                       28


<PAGE>


regular Board  meetings.  The Board  regularly  reviews the Company's  financial
statements  and  evaluates  the scope and  effectiveness  of the external  audit
function on an annual basis.

Ethical Standards

The Company is aware of its corporate  governance  responsibilities and seeks to
operate to the highest  ethical  standards.  The Company  does not have a formal
Code of Ethics.

                             Executive Compensation

The following table sets forth all  compensation  awarded to, earned by, or paid
for services  rendered to us in all capacities  from inception to March 31, 2005
and for the year  ended  March  31,  2006,  by Mr.  Disher,  our sole  executive
officer.

                        ITEM 10 - EXECUTIVE COMPENSATION

Summary Compensation Table Long-Term Compensation Awards

<TABLE>
                                                                                                   ($) Number of shares
                                    Fiscal                                    ($) Other Annual      Underlying Options
Name and Principal Position          Year          Salary      ($) Bonus        Compensation                (#)
---------------------------          ----          ------      ---------        ------------                ---
<S>                                              <C>                             <C>
James H. Disher                  Inception to    $2,000(1)        None           $1,000(1)                 None
President, Secretary and         Mar. 31, 2005
Treasurer
                                  Year ended    $12,000(1)        None           $4,500(1)                 None
                                   March 31,
                                     2006
</TABLE>

     (1) We paid our former president and sole executive officer,  James Disher,
     $1,000  per month  for  consulting  services  and $500 per month for use of
     office facilities.

We do not presently  have a stock option plan but intend to develop an incentive
based stock  option plan for our  officers  and  directors in the future and may
reserve up to 20% of our outstanding shares of common stock for that purpose.

Report on Repricing of Options/SARs

     None.


          ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT AND RELATED STOCKHOLDERS MATTERS

         Security Ownership Of Certain Beneficial Owners And Management



                                       29


<PAGE>


The following  table sets forth as of June 30, 2006,  certain  information  with
respect to the beneficial  ownership of our company's  common stock with respect
to each named director and executive  officer of our Company,  each person known
to our Company to be the beneficial owner of more than five percent (5%) of said
securities, and all directors and executive officers of our Company as a group:

<TABLE>
                                                                 Amount and Nature of
        Name and Address                        Title of Class   Beneficial Ownership       Percentage of Class(1)
        ----------------                        --------------   --------------------       -----------------------
<S>                                                              <C>                                 <C>
        James H. Disher(2)                          Common         1,000,000 shares                 14.4%
        Vancouver, B.C.
        Former President, Secretary,
        Treasurer and Director

        Robert Krause(3)                            Common           500,000 shares                  7.2%
        Vancouver, B.C.
        President, Treasurer Secretary
        and Director

        Magellan Management Company                 Common           650,000 shares                  9.4%
        Vancouver, B.C.
        (beneficial owner: Gavin Roy)
        Holder of more than 5% of outstanding
        stock

        Tranquility Bay Investments Ltd.            Common           400,000 shares                  5.8%
        Vancouver, B.C.
        (beneficial owner: Ping Phuan Siu)
        Holder of more than 5% of outstanding
        stock

        All officers & directors as a group         Common         1,500,000 shares                    21.6%
        (2 persons)
</TABLE>

     (1)  The  percentage of class is based on 6,945,000  shares of common stock
          outstanding as of March 31, 2006.

     (2)  Resigned effective June 9, 2006.

     (3)  Appointed interim President, Treasurer and Secretary on June 9, 2006.


The persons  named above have full voting and  investment  power with respect to
the shares indicated. Under the rules of the Securities and Exchange Commission,
a person  (or  group of  persons)  is  deemed  to be a  "beneficial  owner" of a
security if he or she,  directly or indirectly,  has or shares the power to vote
or to direct  the  voting of such  security,  or the power to  dispose  of or to
direct the disposition of such security.  Accordingly,  more than one person may
be deemed to be a beneficial owner of the same security. A person is also deemed
to be a  beneficial  owner of any  security  which that  person has the right to
acquire  within 60 days,  such as options or  warrants  to  purchase  our common
stock.

     We have no  knowledge  of any  arrangements,  including  any  pledge by any
person of our securities, the operation of which may at a subsequent date result
in a change in our control.

     We are not, to the best of our knowledge,  directly or indirectly  owned or
controlled by another corporation or foreign government.

     As of June 30, 2006, we had  approximately 32 shareholders of record of our
common stock.


                                       30


<PAGE>


            ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                 Certain Relationships and Related Transactions

In connection with the organization of Banner, Mr. Disher, our former President,
Secretary,  Treasurer and Director,  (resigned June 9, 2006) and Mr. Krause, our
current President,  Secretary,  Treasurer and Director,  respectively  purchased
1,000,000 shares and 500,000 shares at a price of $0.001 per share.

In April 2002, Chita Creek Exploration Ltd., a company of which Mr. Disher,  our
former President, is also president,  sold the beneficial interests to the Chita
claims to Valor Mines Ltd.,  Valor is at arm's length to Chita Creek. As part of
that transaction  Chita Creek agreed to hold title to the Chita claims for Valor
as long as the claims are in good  standing.  When we acquired  the Chita claims
from Valor in February 2005, Valor directed Chita Creek to transfer title to the
Chita  claims to Banner  Exploration  Ltd.,  our wholly  owned  subsidiary.  Our
acquisition  of the  Chita  claims  from  Valor  is a  negotiated  arm's  length
transaction.  Chita  Creek no longer  has any  interest  or  further  obligation
regarding the Chita claims.

We entered  into an agreement  on February 1, 2005 with Blue  Frontier  Ventures
Inc., a private company controlled by Mr. Disher, our former President,  for Mr.
Disher to  provide  consulting  services  for $1,000 per month and use of office
facilities  for an  additional  $500 per month,  on a month to month  basis.  We
believe this is comparable  to terms we could have  obtained  from  unaffiliated
third parties.

From  inception to March 31,  2006,  we incurred  rent of $1,000 and  management
services of $2,000  provided by Mr. Disher through Blue  Frontier.  At March 31,
2005,  we had  prepaid  $1,000 for  management  services,  which is  included in
prepaid expenses.

For the year  period  ended  March 31,  2005,  we  incurred  rent of $6,000  and
management services of $12,000 provided by Mr. Disher through Frontier.

For the year period ended March 31, 2006,  we incurred  consulting  fees of $415
provided by a company controlled by a relative of our former President.

At March 31,  2006,  we had an amount of $5,231  owing to Mr.  Disher  for rent,
management  services,   and  expenses.   The  amount  is  non-interest  bearing,
unsecured, and payable on demand.


                   ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K

     (a)  EXHIBITS

      No.    Exhibit Name
      ---    ------------

     3.1(1)  Articles of Incorporation
     3.2(1)  Bylaws
     4.1(1)  Specimen Stock Certificate
     10.1(1) Property Acquisition Agreement dated February 1, 2005 between Valor
             Mines Inc., Banner Exploration Ltd. and the Company
     10.2(1) Bill of Sale Absolute dated March 18, 2005  transferring  the Chita
             claims from Chita Creek Exploration Ltd. to Banner Exploration Ltd.


                                       31


<PAGE>

      No.    Exhibit Name
      ---    ------------
     10.3(1) Consulting  Agreement  dated February 1, 2005 between Blue Frontier
             Ventures Inc. and the Company.
     23.3(1) Consent of Glen Macdonald, P.Geo, Geologist
     31.1    Certification  Required  Pursuant to  Section  302 of the Sarbanes-
             Oxley Act of 2002
     32.1    Certification  Required  Pursuant to  Section 906  of the Sarbanes-
             Oxley Act of 2002
     99.1(1) Subscription Agreement

          (1) Incorporated by reference to same exhibit filed with the Company's
          Form SB-2 Registration Statement on September 26, 2005.

          (2) Incorporated by reference to same exhibit filed with the Company's
          Form SB-2 Amendment No. 2 Registration Statement on January 18, 2006.

All other  Exhibits  called for by Rule 601 of Regulation S-B are not applicable
to this filing.  Information  pertaining to our common stock is contained in our
Articles of Incorporation and Bylaws.

     (b)  FORM 8-K

During the last quarter, 8-K current reports were filed on the following dates:

     (1) June 16, 2006

                ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

The aggregate fees billed by the Company's  auditors for  professional  services
rendered  in  connection  with the audit of the  Company's  annual  consolidated
financial  statements for fiscal 2006 and reviews of the consolidated  financial
statements  included in the Company's Forms 10-KSB for fiscal 2006 and 2005 were
$14,000.

Audit-Related Fees

The aggregate fees billed by the Company's  auditors for any additional fees for
assurance and related services that are reasonably related to the performance of
the  audit or review  of the  Company's  financial  statements  including  costs
related to the initial  public  offering and are not reported under "Audit Fees"
above for fiscal 2006 were $NIL.

Tax Fees

None

All Other Fees

None


                                       32





                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized:

BANNER RESOURCES INC.


/s/ Robert Krause     President, Treasurer and Director
-----------------     (Principal Executive Officer;             June 30, 2006
                      Principal Financial and Accounting
                      Officer)











                                       33