UNITED STATES

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, 2007



OR



|o | 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: 000-51939





BANNER RESOURCES INC.

(Exact Name of Registrant as Specified in its Charter)



|Nevada(State of other jurisdiction of incorporation  or organization) | 98-0446606(I.R.S. Employer Identification No.)
|--------------------------------------------------------------------- | ----------------------------------------------

|206 - 595 Howe Street
Vancouver, British Columbia, Canada(Address of Principal Executive Offices) | V6C 2T5(Zip Code)
|------------------------------------------------------------------------------------------------- | -----------------





(604) 681-2575

(Registrants Telephone Number, including Area Code)



SECURITIES REGISTERED PURSUANT TO
SECTION 12(b) OF THE ACT:  None

SECURITIES REGISTERED PURSUANT TO
SECTION 12(g) OF THE ACT:   Common Stock, $0.001 par value

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

Check whether the issuer (1) filed
all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 (Exchange Act) during the past 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       No

Check if there is no disclosure of
delinquent filers pursuant to Item 405 of Regulation S-B contained in this form, and no
disclosure will be contained, to the best of the 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

State 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 Rule12b-2 of the Exchange Act.) $439,500 as of June 27, 2007, based on last
sale price of the Registrants stock.

Transitional Small Business
Disclosure Format (check one):   Yes       No

Common Shares outstanding as of June
27, 2007: 7,445,000



---

TABLE OF CONTENTS

|FORWARD-LOOKING STATEMENTS                                                                     | 1 
|---------------------------------------------------------------------------------------------- | --
|PART I                                                                                         | 1 
|ITEM 1.   DESCRIPTION AND DEVELOPMENT OF BUSINESS                                              | 1 
|ITEM 2.   DESCRIPTION OF PROPERTY                                                              | 11
|ITEM 3.   LEGAL PROCEEDINGS                                                                    | 11
|ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  | 11
|PART II                                                                                        | 12
|ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                             | 12
|ITEM 6.   MANAGEMENTS DISCUSSION AND ANALYSIS                                                 | 12
|ITEM 7.   FINANCIAL STATEMENTS                                                                 | 14
|ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE | 14
|                                                                                               |   

|ITEM 8A.   CONTROLS AND PROCEDURES                                                                         | 14
|---------------------------------------------------------------------------------------------------------- | --
|ITEM 8B.   OTHER INFORMATION                                                                               | 14
|PART III                                                                                                   | 15
|ITEM 9.   DIRECTORS AND EXECUTIVE OFFICERS                                                                 | 15
|ITEM 10.   EXECUTIVE COMPENSATION                                                                          | 16
|ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS | 17
|ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE                        | 18

|ITEM 13.   EXHIBITS                               | 18
|------------------------------------------------- | --
|ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES | 19
|SIGNATURES                                        | 20





i

---



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:



| |  | the timing of regulatory and permitting matters;
| | - | ------------------------------------------------



| |  | the timing and outcome of our exploration;
| | - | ------------------------------------------



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



| |  | estimates related to costs of exploration expenditures;
| | - | -------------------------------------------------------



| |  | requirements for additional capital and our ability to raise additional capital;
| | - | --------------------------------------------------------------------------------



| |  | government regulation of mining operations, environmental risks, reclamation and rehabilitation expenses;
| | - | ---------------------------------------------------------------------------------------------------------



| |  | title disputes or claims;
| | - | -------------------------



| |  | limitations of insurance coverage;
| | - | ----------------------------------



| |  | the future price of gold, silver or other metals; and
| | - | -----------------------------------------------------



| |  | our potential acquisition of, or pursuits of new business opportunities.
| | - | ------------------------------------------------------------------------



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 1 of this
report and  Managements  Discussion and Analysis  beginning at
page 12 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.



PART I



ITEM 1.   DESCRIPTION AND DEVELOPMENT OF BUSINESS



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

1

---

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.



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. The Chita claims are in good standing until June 30, 2007.



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. We are also exploring opportunities in other industries including the technology sector, biotechnology and communications. However, we have no current plans, arrangements or intentions to acquire any specific property or to pursue any potential business opportunity. 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 explore business opportunities.



Our principal office is located at 206 - 595 Howe Street, Vancouver, British Columbia, V6C 2T5, and our phone number is (604) 681-2575.



Proposed Business



Our current 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.

2

---

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.



We may also explore other business opportunities in other industries, including technology, biotechnology, communications and manufacturing. We may abandon our existing properties to pursue such opportunities although we have no current plans to do so.



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. In order to keep the claims in good standing, we have to make minimum expenditures on the claims and filed an assessment report with the B.C. Mineral Titles Branch. 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        | June 30, 2007
|RED #1     | 1     | 358186        | June 30, 2007
|RED #2     | 1     | 358187        | June 30, 2007
|CHITA #2   | 8     | 358188        | June 30, 2007
|CHITA #3   | 12    | 358189        | June 30, 2007
|CHITA #5   | 12    | 360745        | June 30, 2007
|CHITA #6   | 18    | 360746        | June 30, 2007



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.

3

---

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.



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.



Exploration in 2006



In June and July  2006,  the same  independent  geological  consulting  services
company field crew carried out a follow-up  program of sampling on the property.
However,  the 2006 exploration season in British Columbia was unusually busy and
the independent  geological  consulting  services company was unable to initiate
its assessment report until December 2006. On December 21, 2006, we filed notice
with the BC  Ministry  of Energy  and Mines of  mineral  claim  exploration  and
development  work for Cdn$6,000 which kept the claims in good standing until May
29, 2007. We subsequently paid cash in lieu of work of $1,206 to extend the good
standing date until June 30, 2007.
Due to weather and snow pack  conditions,   the Companys exploration
program  will be  delayed  beyond  June 30,  2007.  The Company intends to file
an assessment report to keep the Chita claims in good standing once the exploration
work can be completed.



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 2007



We anticipate we will undertake field work in the summer of 2007, weather and snow pack conditions permitting. Depending on the results of the initial exploration program, if our geologist recommends a follow-up program 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 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 2007
(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

4

---

independently,  we  estimate  that the cost would be
closer  to  $50,000.   We  currently  have  sufficient  capital  to  fund  these
projects.



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). We estimate that this program will cost us approximately $100,000. We will be required to raise additional capital to fund this exploration program.



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.



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.



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 June 30, 2007. The recorded owner and beneficial owner of the claims is Banner Exploration Ltd., Banners wholly owned subsidiary. The Chita claims expire on June 30, 2007. 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

5

---

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.



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.

6

---

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



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.



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

7

---

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.



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, 2007, we had an accumulated deficit of $145,937.



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.



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

8

---

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, 2007, we had cash in the amount of $61,254, and a working capital of $21,324. We currently do not have any operations and we have no income. We do not have sufficient funds to satisfy our projected working capital requirements for our fiscal year ending March 31, 2008. 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, or our acquisition of a new business opportunity. 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 June 30, 2007, unless extended by providing notice to the BC Ministry of Energy and Mines and paying fees. 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, we have to complete and file assessment reports detailing the equivalent of approximately $11,600 (Cdn$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 with the Company. We have authorized the indemnification of our officers and directors to the full extent available under the Nevada Revised Statutes.

9

---

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 our sole director and officer in British Columbia. Accordingly, non-U.S. and non-Canadian resident shareholders may be forced to bring actions against the Company and its sole director and officer 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.



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

10

---

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.



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 206-595 Howe Street, Vancouver, British Columbia, Canada V6C 2T5. 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.



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.



11

---

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, 2007.



Use of Proceeds



We filed a registration statement on Form SB-2 and a post-effective amendment on July 19, 2006, in connection with the offer and sale of up to 8,445,000 shares of our common stock, of which 5,445,000 shares are offered by the persons named in the prospectus under the caption selling shareholders. Up to 3,000,000 shares of our common stock were being sold by us, at a price of $0.10 per share on a self-underwritten, best efforts basis, with no minimum. On September 15, 2006, we accepted subscriptions from two investors and issued 500,000 shares of common stock at $0.20 per share for gross proceeds of $100,000. Our offering ended on or about December 1, 2006.



For the offering of 5,445,000 shares by the selling shareholders, the Company plans to periodically update the registration statement.



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, 2007 we had cash on hand of $61,254 and working capital of $21,324. 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 satisfy our on-going working capital requirements for the fiscal year ending March 31, 2008.



Our  director,  in  consultation  with our  consulting  geologist,  is assessing
whether to proceed to any further  exploration  of the Chita  claims.  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.
We may also pursue business  opportunities in other industries  although we have
no current plans or arrangements to do so.

12

---

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 exploring opportunities to raise additional funding in the form of equity or debt.  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 or acquire or pursue new business opportunities. 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 and administrative expenses.
| | --- | --------------------------------------------------



We had cash in the amount of $61,254 as of March 31, 2007 and a working capital of $21,324. 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 $61,254 as of March 31, 2007. We had a working capital surplus of $21,324 as of March 31, 2007.



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.



In September 2006, we sold 500,000 shares of common stock in our registered offering to raise $100,000.



Our sole officer and director, Robert Krause, donated services and rent in the amount of $13,500 during the fiscal year ended March 31, 2007. During the fiscal year ended March 31, 2007, we used net cash of $45,089 for operating activities.



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.

13

---

Contractual Obligations



As of March 31, 2007, we had no non-cancelable contractual obligations.





ITEM 7.   FINANCIAL STATEMENTS



All financial information required by this Item is attached hereto at the end of this report.



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

NONE.



ITEM 8A.  CONTROLS AND
PROCEDURES

Disclosure Controls and Procedures



At the end of the period covered by this report, an evaluation was carried out under the supervision of and with the participation of the Companys management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operations of the Companys disclosure controls and procedures (as defined in Rule 13a  15(e) and Rule 15d  15(e) under the Exchange Act). Based on that evaluation the CEO and the CFO have concluded that as of the end of the period covered by this report, the Companys disclosure controls and procedures were adequately designed and effective in ensuring that: (i) information required to be disclosed by the Company in reports that it files or submits to the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in applicable rules and forms and (ii) material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.



Managements Report on Internal Control over Financial Reporting



The Companys management, including the CEO and CFO, does not expect that its disclosure controls and procedures or internal controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.



As a non-accelerated filer as defined in Rule 12b-2 of the Exchange Act of 1934, as amended, the Company is not required to provide managements report on internal control over financial reporting until its annual report for the year ended March 31, 2008. Further, the Companys independent registered public accounting firm is not required to provide an attestation on managements report on internal control over financial reporting until the Companys annual report for the fiscal year ended March 31, 2009.



Changes in Internal Controls 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.





14

---





PART III



ITEM 9.   DIRECTORS AND EXECUTIVE OFFICERS



Executive Officers And Directors



The following table sets forth, as of June 27, 2007, 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.



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 | Positions                                                                                  
|---------------- | --- | -------------------------------------------------------------------------------------------
|                 |     |                                                                                            
|Robert Krause    | 47  | President, Secretary, Treasurer (since June 9, 2006) and Director (since January 24, 2005).



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



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 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



Mr. Krause is not independent under Exchange Act Rule 10A-3 or the rules of any national exchange. Mr. Krause would not be considered a financial expert under Item 401(e) or Regulation S-B. The Company does not currently have sufficient resources to maintain an independent board or financial expert.





15

---





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.



Section 16(a) Beneficial Ownership Reporting Compliance



Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Companys officers, directors, and persons who beneficially own more than 10% of the Companys common stock (10% Stockholders), to file reports of ownership and changes in ownership with the Securities and Exchange Commission (SEC). Such officers, directors and 10% Stockholders are also required by SEC rules to furnish us with copies of all Section 16(a) forms that they file. Based solely upon information provided to us by individual officers, directors and 10% Stockholders, we believe that all of these filing requirements were satisfied by our officers, directors, and 10% Stockholders in the fiscal year ended March 31, 2007.



ITEM 10.   EXECUTIVE COMPENSATION



The following table sets forth compensation paid to each of the individuals who served as our Chief Executive Officer and our other most highly compensated executive officers (the named executive officers) for the fiscal year ended March 31, 2007.



Summary Compensation Table

|                                             |      |         |        |               |                  |                                          |                                                |                        |      
|-------------------------------------------- | ---- | ------- | ------ | ------------- | ---------------- | ---------------------------------------- | ---------------------------------------------- | ---------------------- | -----
|Name andPrincipal Position                   | Year | Salary$ | Bonus$ | StockAwards
$ | Options Awards
$ | Non-Equity Incentive Plan Compensation $ | Non-Qualified Deffered Compensation Earnings $ | All Other Compensation | Total
|                                             |      |         |        |               |                  |                                          |                                                |                        |      
|Robert Krause,                               | 2007 |        |       |              |                 |                                         |                                               |                       |     
|President, Secretary, Treasurer and Director |      |         |        |               |                  |                                          |                                                |                        |      



We paid no compensation to our executive officer or director.



Executive Compensation Agreements and Summary of Executive Compensation



Report on Executive Compensation



We do not currently compensate our executive officer.



Executive Compensation Agreements



None.



Outstanding Equity Awards At Fiscal Year-End



None.



Retirement, Resignation or Termination Plans



We sponsor no plan, whether written or verbal, that would provide compensation or benefits of any type to an executive upon retirement, or any plan that would provide payment for retirement, resignation, or termination as a result of a change in control of our Company or as a result of a change in the responsibilities of an executive following a change in control of our Company.





16

---





Director Compensation

None.

Director Compensation Agreements

None.

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



Security Ownership Of Certain Beneficial Owners And Management



The following table sets forth as of June 29, 2007,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:



|Name and Address                                                                                                                | Title of Class | Amount and Nature of Beneficial Ownership | Percentage of Class (1)
|------------------------------------------------------------------------------------------------------------------------------- | -------------- | ----------------------------------------- | -----------------------
|                                                                                                                                |                |                                           |                        
|Robert Krause (2)
Vancouver, B.C.
President, Treasurer,
Secretary and Director                                                  | Common         | 500,000 shares                            | 6.7%                   
|                                                                                                                                |                |                                           |                        
|Magellan Management Company
Vancouver, B.C.
(beneficial owner: Gavin Roy)
Holder of more than 5% of
outstanding stock           | Common         | 650,000 shares                            | 8.7%                   
|                                                                                                                                |                |                                           |                        
|Tranquility Bay Investments Ltd.
Vancouver, B.C.
(beneficial owner: Ping Phuan Siu)
Holder of more than 5% of
outstanding stock | Common         | 400,000 shares                            | 5.3%                   
|                                                                                                                                |                |                                           |                        
|All officers & directors as a group                                                                                             | Common         | 500,000 shares                            | 6.7%                   



|(1) | The percentage of class is based on 7,445,000 shares of common stock outstanding as of March 31, 2007.
|--- | ------------------------------------------------------------------------------------------------------



|(2) | Appointed 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.



17

---





As of June 27, 2007, we had approximately 33 shareholders of record of our common stock.



ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE



Certain Relationships and Related Transactions



In connection with the organization of Banner, James 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.



As at March 31, 2007, the Company has an amount owing of $5,231 to Mr. Disher for rent and management services incurred on behalf of the Company. The amount owing is non-interest bearing, unsecured, and due on demand.



As at March 31, 2007, the Company has an amount owing of $2,603 (2006 - $nil) to directors of the Company for expenses incurred on behalf of the Company. The amount owing is non-interest bearing, unsecured, and due on demand.



ITEM 13.   EXHIBITS



(a)   Exhibits



|Number |    | Name 
|------ | -- | -----
|       | 3  | .1(1)
|       | 3  | .2(1)
|       | 4  | .1(1)
|       | 10 | .1(1)

18

---







|Number |    | Name 
|------ | -- | -----
|       | 10 | .2(1)
|       | 10 | .3(1)
|       | 23 | .3(1)
|       | 31 | .1   
|       | 32 | .1   
|       | 99 | .1(1)

_________________

|(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:



None.



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 2007 and reviews of the consolidated financial statements included in the Companys Forms 10-KSB for fiscal 2007, 2006 and 2005 were $12,741, $14,500 and $NIL,respectively.



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 2007 and 2006 were $NIL.



Tax Fees



NONE.



All Other Fees



NONE.







19

---





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.                                                                                                             
|------------------- |  | --- |  | ----------------------------------------------------------------------------------------------------------------------------------
|                    |  |     |  |                                                                                                                                   
|Date:  July 2, 2007 |  | By: |  | /s/ Robert Krause
Robert Krause
President and Treasurer
Principal Executive Officer and
Principal Accounting and Financial Officer











20

---

Banner Resources Inc.

(An Exploration Stage Company)



March 31, 2007



|Report of Independent Registered Public Accounting Firm | Index

  F2
|------------------------------------------------------- | ------------



|Consolidated Balance Sheets | F3
|--------------------------- | ---



|Consolidated Statements of Operations | F4
|------------------------------------- | ---



|Consolidated Statements of Cash Flows | F5
|------------------------------------- | ---



|Consolidated Statements of Stockholders Deficit | F6
|------------------------------------------------ | ---



|Notes to the Consolidated Financial Statements | F7
|---------------------------------------------- | ---





F-1

---



















Report of Independent Registered Public Accounting Firm



To the Directors and Stockholders of

Banner Resources Inc. (An Exploration Stage Company)



We have audited the accompanying consolidated balance sheets of Banner Resources Inc. (An Exploration Stage Company) as of March 31, 2007 and 2006 and the related consolidated statements of operations, cash flows and stockholders equity (deficit) for the years then ended and accumulated for the period from January 24, 2005 (Date of Inception) to March 31, 2007. These consolidated 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 audits provide 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 March 31, 2007 and 2006, and the results of its operations and its cash flows for the years then ended and accumulated for the period from January 24, 2005 (Date of Inception) to March 31, 2007, in conformity with accounting principles generally accepted in the United States.



The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has never generated revenues 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 consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s/ MANNING ELLIOTT LLP



CHARTERED ACCOUNTANTS

Vancouver, Canada

June 12, 2007





F-2

---



Banner Resources Inc.(An Exploration Stage Company) 
Consolidated Balance Sheets 
(Expressed in U.S. dollars)

|                                                             | March 31,
2007
$ | March 31,
2006
$
|------------------------------------------------------------ | ---------------- | ----------------
|ASSETS                                                       |                  |                 
|Current Assets                                               |                 
|Cash                                                         |                  | 61,254          
|Prepaid expenses                                             |                  | 1,000           
|                                                            
|Total Assets                                                 |                  | 62,254          
|                                                            
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)               |                 
|Current Liabilities                                          |                 
|Accounts payable                                             |                  | 17,846          
|Accrued liabilities                                          |                  | 610             
|Due to related parties (Notes 4(c) and (d))                  |                  | 7,834           
|Loans payable (Note 5)                                       |                  | 14,640          
|                                                            
|Total Liabilities                                            |                  | 40,930          
|                                                            
|Contingencies and Commitments (Notes 1 and 3)                |                 
|Stockholders Equity (Deficit)                               |                 
|Common Stock                                                 |                 
|Authorized: 75,000,000 shares, par value $0.001              |                 
|Issued: 7,445,000 shares (March 31, 2006 - 6,945,000 shares) |                  | 7,445           
|Additional Paid-in Capital                                   |                  | 136,250         
|Donated Capital (Note 4(a))                                  |                  | 23,766          
|Accumulated Other Comprehensive Loss                         |                  | (200            
|Deficit Accumulated During the Exploration Stage             |                  | (145,937        
|                                                            
|Total Stockholders Equity (Deficit)                         |                  | 21,324          
|                                                            
|Total Liabilities and Stockholders Equity (Deficit)         |                  | 62,254          
|                                                            

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

F-3

---

Banner Resources Inc.(An Exploration Stage Company) 
Consolidated Statements of Operations 
(Expressed in U.S. dollars)

|                                        | Accumulated    
       From        
 January 24, 2005  
(Date of Inception)
   to March 31,    
       2007        
         $ | For the  
 Year Ended 
  March 31, 
    2007    
      $ | For the    
 Year Ended  
 March 31,   
    2006     
     $
|--------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------- | ------------------------------------------------------------
|                                       
|Revenue                                 |                                                                                                                                | -                                                        |                                                             
|                                       
|Expenses                                |                                                                                                                               
|Consulting                              |                                                                                                                                | 1,919                                                    |                                                             
|General and administrative              |                                                                                                                                | 5,548                                                    |                                                             
|Management fees (Notes 4(a) and b))     |                                                                                                                                | 26,000                                                   |                                                             
|Mineral property costs                  |                                                                                                                                | 26,366                                                   |                                                             
|Professional services                   |                                                                                                                                | 64,485                                                   |                                                             
|Rent (Note 4(a))                        |                                                                                                                                | 16,354                                                   |                                                             
|Travel                                  |                                                                                                                                | 5,265                                                    |                                                             
|                                       
|Total Expenses                          |                                                                                                                                | 145,937                                                  |                                                             
|                                       
|Net Loss                                |                                                                                                                                | (145,937                                                 | )                                                           
|Other Comprehensive Loss                |                                                                                                                               
|Foreign currency translation adjustment |                                                                                                                                | (200                                                     | )                                                           
|                                       
|Comprehensive Loss                      |                                                                                                                                | (146,137                                                 | )                                                           
|                                       
|Net Loss Per Share - Basic and Diluted  |                                                                                                                                |                                                          |                                                             
|                                       
|Weighted Average Shares Outstanding     |                                                                                                                                |                                                          |                                                             
|                                       

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

F-4

---

Banner Resources Inc.(An Exploration Stage Company) 
Consolidated Statements of Cash Flows 
(Expressed in U.S. dollars)

|                                                     | Accumulated    
       From        
 January 24, 2005  
(Date of Inception)
   to March 31,    
       2007        
         $ | For the  
 Year Ended 
  March 31, 
    2007    
      $ | For the    
 Year Ended  
 March 31,   
    2006     
     $
|---------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------- | ------------------------------------------------------------
|                                                    
|Operating Activities                                 |                                                                                                                                |                                                          |                                                             
|Net loss for the year                                |                                                                                                                                | (145,937                                                 | )                                                           
|Adjustment to reconcile net loss to net cash used in |                                                                                                                               
|operating activities:                                |                                                                                                                               
|Donated services                                     |                                                                                                                                | 23,766                                                   |                                                             
|Issuance of shares to acquire mineral property       |                                                                                                                                | 320                                                      |                                                             
|Changes in operating assets and liabilities:         |                                                                                                                               
|Prepaid expenses                                     |                                                                                                                                | (1,000                                                   | )                                                           
|Accounts payable and accrued liabilities             |                                                                                                                                | 18,456                                                   |                                                             
|Due to related parties                               |                                                                                                                                | 7,834                                                    |                                                             
|                                                    
|Net Cash Used in Operating Activities                |                                                                                                                                | (96,561                                                  | )                                                           
|                                                    
|Financing Activities                                 |                                                                                                                               
|Loans payable                                        |                                                                                                                                | 14,640                                                   |                                                             
|Proceeds from issuance of common shares              |                                                                                                                                | 143,375                                                  |                                                             
|                                                    
|Net Cash Provided by Financing Activities            |                                                                                                                                | 158,015                                                  |                                                             
|                                                    
|Effect of Exchange Rate Changes on Cash              |                                                                                                                                | (200                                                     | )                                                           
|                                                    
|Increase (Decrease) in Cash                          |                                                                                                                                | 61,254                                                   |                                                             
|                                                    
|Cash - Beginning of Period                           |                                                                                                                                | -                                                        |                                                             
|                                                    
|Cash - End of Period                                 |                                                                                                                                | 61,254                                                   |                                                             
|                                                    
|Supplemental Disclosures:                            |                                                                                                                               
|                                                    
|Interest paid                                        |                                                                                                                                | -                                                        |                                                             
|Income taxes paid                                    |                                                                                                                                | -                                                        |                                                             
|                                                    

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

F-5

---

Banner Resources Inc.(An Exploration Stage Company) 
Consolidated Statements of Stockholders Equity (Deficit)
Period from January 24, 2005 (Date of Inception) to March 31, 2007 
(Expressed in U.S. dollars)

|                                   | Shares
  # | Common 
 Stock  
  $ | Additional
  Paid-In  
  Capital  
     $ | Stock     
Subscription 
 Receivables
     $ | Donated 
Capital 
        $ | Accumulated  
    Other     
Comprehensive 
    Loss      
      $ | Deficit   
 ccumulated 
ADuring the 
Exploration 
  Stage    
     $ | Total  
   $
|---------------------------------- | ---------- | -------------------- | ----------------------------------------- | -------------------------------------------- | --------------------------- | ------------------------------------------------------------------ | -------------------------------------------------------------------- | ------------
|                                  
|Balance - January 24, 2005         |            |                      |                                           |                                              |                             |                                                                    |                                                                      |             
|(Date of Inception)                |            |                     |                                           |                                             |                             |                                                                   |                                                                      |            
|Shares issued for cash at $0.001   |           
|per share                          |            | 5,875,000            |                                           | 5,875                                        |                             |                                                                   |                                                                      | (650        
|Shares issued for mineral property |           
|at $0.001 per share                |            | 320,000              |                                           | 320                                          |                             |                                                                   |                                                                      |            
|                                  
|Donated services                   |            |                     |                                           |                                             |                             |                                                                   |                                                                      |            
|                                  
|Foreign currency translation       |            |                     |                                           |                                             |                             |                                                                   |                                                                      |            
|                                  
|Net loss for the period            |            |                     |                                           |                                             |                             |                                                                   |                                                                      |            
|                                  
|Balance - March 31, 2005           |            | 6,195,000            |                                           | 6,195                                        |                             |                                                                   |                                                                      | (650        
|Shares issued for cash at          |           
|$0.05 per share                    |            | 750,000              |                                           | 750                                          |                             | 36,750                                                             |                                                                      |            
|                                  
|Shares subscriptions received      |            |                     |                                           |                                             |                             |                                                                   |                                                                      | 650         
|                                  
|Donated services                   |            |                     |                                           |                                             |                             |                                                                   |                                                                      |            
|                                  
|Foreign currency translation       |            |                     |                                           |                                             |                             |                                                                   |                                                                      |            
|                                  
|Net loss for the year              |            |                     |                                           |                                             |                             |                                                                   |                                                                      |            
|                                  
|Balance - March 31, 2006           |            | 6,945,000            |                                           | 6,945                                        |                             | 36,750                                                             |                                                                      |            
|Shares issued for cash at          |           
|$0.20 per share                    |            | 500,000              |                                           | 500                                          |                             | 99,500                                                             |                                                                      |            
|                                  
|Donated services                   |            |                     |                                           |                                             |                             |                                                                   |                                                                      |            
|                                  
|Foreign currency translation       |            |                     |                                           |                                             |                             |                                                                   |                                                                      |            
|                                  
|Net loss for the year              |            |                     |                                           |                                             |                             |                                                                   |                                                                      |            
|                                  
|Balance - March 31, 2007           |            | 7,445,000            |                                           | 7,445                                        |                             | 136,250                                                            |                                                                      |            
|                                  

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

F-6

---



Banner Resources Inc.(An Exploration Stage Company) 
Notes to the Consolidated Financial Statements 
(Expressed in U.S. dollars)

|1. | Exploration Stage Company
|-- | -------------------------



Banner Resources (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, 2007, the Company has accumulated losses
of $145,937 since inception.  These  consolidated 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 is offering, by way of an amended SB-2 Registration Statement (SB-2) which was declared effective on August 1, 2006, up to 3,000,000 common shares at a price of $0.10 per share for gross proceeds of up to $300,000. The offering was open for a nine-month period ended April 30, 2007, and the Company issued 500,000 common shares at $0.20 per share for proceeds of $100,000. As at March 31, 2007, the Company did not issue any common shares with respect to the SB-2. The amended SB-2 also registered up to 5,445,000 common shares for resale by existing shareholders of the Company. The Company did not receive any proceeds from the resale of common shares by the selling stockholders.



|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 consolidated 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 consolidated financial statements in conformity with US 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to valuation of donated services, stock based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the
accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Companys estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

| | 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.





F-7

---



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)
|-- | ------------------------------------------------------

| | 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 consolidated statements of operations. 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.

| | e) | Financial Instruments
| | -- | ---------------------

The fair values of cash, accounts payable, accrued liabilities, amounts due to related parties, and loans payable approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest, currency, or credit risks arising from financial instruments.

| | f) | Foreign Currency Transactions/Balances
| | -- | --------------------------------------

The Companys functional currency is the United States dollar. The consolidated 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 consolidated 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 financial 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 gains (losses) are recorded in accumulated other comprehensive income (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, 2007 and 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 consolidated 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.





F-8

---



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)
|-- | ------------------------------------------------------

| | j) | Donated Services
| | -- | ----------------

The Company recognizes professional services donated to the Company based upon their fair value. During the fiscal year ended March 31, 2007, the Company recognized donated management services of $12,000 (2006 - $3,000), and donated rent of $6,000 (2006 - $1,500).

| | k) | Stock-based Compensation
| | -- | ------------------------

Prior to April 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 April 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.

| | l) | Recent Accounting Pronouncements
| | -- | --------------------------------

In February 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities  Including an Amendment of FASB Statement No. 115. This statement permits entities to choose to measure many financial instruments and certain other items at fair value. Most of the provisions of SFAS No. 159 apply only to entities that elect the fair value option. However, the amendment to SFAS No. 115 Accounting for Certain Investments in Debt and Equity Securities applies to all entities with available-for-sale and trading securities. SFAS No. 159 is effective as of the beginning of an entitys first fiscal year that begins after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provision of SFAS No. 157, Fair Value Measurements.The adoption of this statement is not expected to have a material effect on the Companys financial statements.

In September 2006, the SEC issued Staff Accounting Bulletin (SAB) No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. SAB No. 108 addresses how the effects of prior year uncorrected misstatements should be considered when quantifying misstatements in current year financial statements. SAB No. 108 requires companies to quantify misstatements using a balance sheet and income statement approach and to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative an qualitative factors. SAB No. 108 is effective for fiscal years ending after November 15, 2006. The adoption of SAB No. 108 did not have a material effect on the Companys financial statements.

In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106, and 132(R). This statement requires employers to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. This statement also requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions.
The provisions of SFAS No. 158 are effective for employers with publicly traded equity securities as of the end of the fiscal year ending after December 15, 2006. The adoption of this statement did not have a material effect on the Companys financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. The objective of SFAS No. 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The adoption of this statement is not expected to have a material effect on the Companys
future reported financial position or results of operations.





F-9

---



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)
|-- | ------------------------------------------------------

| | l) | Recent Accounting Pronouncements
| | -- | --------------------------------

In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48,Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statements No. 109. FIN 48 clarifies the accounting for uncertainty in income taxes by prescribing a two-step method of first evaluating whether a tax position has met a more likely than not recognition threshold and second, measuring that tax position to determine the amount of benefit to be recognized in the financial statements. FIN 48 provides guidance on the presentation of such positions within a classified statement of financial position as well as on derecognition, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The
adoption of this statement did not have a material effect on the Companys future reported financial position or results of operations.

In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. This statement requires all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable, and permits for subsequent measurement using either fair value measurement with changes in fair value reflected in earnings or the amortization and impairment requirements of Statement No. 140. The subsequent measurement of separately recognized servicing assets and servicing liabilities at fair value eliminates the necessity for entities that manage the risks inherent in servicing assets and servicing liabilities with
derivatives to qualify for hedge accounting treatment and eliminates the characterization of declines in fair value as impairments or direct write-downs. SFAS No. 156 is effective for an entitys first fiscal year beginning after September 15, 2006. The adoption of this statement did not have a material effect on the Companys future reported financial position or results of operations.

In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments-an amendment of FASB Statements No. 133 and 140, to simplify and make more consistent the accounting for certain financial instruments. SFAS No. 155 amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, to permit fair value re-measurement for any hybrid financial instrument with an embedded derivative that otherwise would require bifurcation, provided that the whole instrument is accounted for on a fair value basis. SFAS No. 155 amends SFAS No. 140, Accounting for the Impairment or Disposal of Long-Lived Assets, to allow a qualifying special-purpose entity to hold a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. SFAS No. 155 applies to all financial instruments acquired or issued after the beginning of an entitys first fiscal year that begins after September 15, 2006, with earlier application allowed. The adoption of this statement did not have a material effect on the Companys future reported financial position or results of operations.



|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 $0.001 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 21⁄2% Net Smelter Royalty upon commencement of commercial production. However, the Company can acquire 11⁄2% 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. During the fiscal year ended March 31, 2007, the Company incurred $11,366 (2006 - $13,703) of mineral property costs.





F-10

---



Banner Resources Inc.(An Exploration Stage Company) 
Notes to the Consolidated Financial Statements 
(Expressed in U.S. dollars)

|4. | Related Party Transactions
|-- | --------------------------

| | a) | During the fiscal year ended March 31, 2007, the Company recognized a total of $12,000 (2006 $3,000) for donated services at $1,000 per month and $6,000 (2006 $1,500) for donated rent at $500 per month provided by the President of the Company.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | c) | As at March 31, 2007, the Company has an amount owing of $5,231 (2006 - $5,231) to the former President of the Company for rent and management services incurred on behalf of the Company. The amount owing is non-interest bearing, unsecured, and due on demand.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | d) | As at March 31, 2007, the Company has an amount owing of $2,603 (2006 - $nil) to directors of the Company for expenses incurred on behalf of the Company. The amount owing is non-interest bearing, unsecured, and due on demand.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|5. | Loans Payable
|-- | -------------

As at March 31, 2007, the Company owes $14,640 (2006 - $14,640) of outstanding loans. Under the terms of the loans, the amounts owing are unsecured, non-interest bearing, and due on demand.



|6. | Common Stock
|-- | ------------

| | a) | On September 13, 2006, the Company issued 500,000 common shares at $0.20 per share for cash proceeds of $100,000.
| | -- | -----------------------------------------------------------------------------------------------------------------

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

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



|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, 2007, the Company has a net operating loss to carry forward of approximately $98,000 for US tax purposes and a non-capital loss of approximately $38,000 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 consolidated 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, 2007 and 2006, the valuation allowance established against the deferred tax assets increased by $15,300 and $27,600.



The components of the net deferred tax asset at March 31, 2007 and 2006 and the statutory tax rate, the effective tax rate and the elected amount of the valuation allowance are scheduled below:



|                             |  | March 31,
2007
$ |  | March 31,
2006
$
|---------------------------- |  | ---------------- |  | ----------------
|                             |  |                  |  |                 
|Net Tax Losses               |  | 136,500          |  | 93,000          
|                             |  |                  |  |                 
|Statutory Tax Rate  blended |  | 35%              |  | 35%             
|                             |  |                  |  |                 
|Effective Tax Rate           |  |                 |  |                
|                             |  |                  |  |                 
|Deferred Tax Asset           |  | 47,800           |  | 32,500          
|                             |  |                  |  |                 
|Valuation Allowance          |  | (47,800)         |  | (32,500)        
|                             |  |                  |  |                 
|Net Deferred Tax Asset       |  |                 |  |                







F-11

---