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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB /A

[ x ] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
  EXCHANGE ACT OF 1934 FOR THE FISCAL PERIOD ENDED MARCH 31, 2006

[]TRANSITION
  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR
  THE TRANSITION PERIOD FROM ____ TO ____

Commission file Number: 000-50915

MCNAB CREEK GOLD CORP.(Name of small business issuer in its charter)

Nevada
  (State or other jurisdiction of incorporation or organization)

98-0434710
  (I.R.S. Employer Identification Number)

Suite 1128, 789 West Pender Street Vancouver, B.C. V6C
  1H2 
  (Address of principal executive offices)

(604) 669-9330
  (Issuer's telephone number)

Securities registered under Section 12(b) of the Exchange Act:
  None

Securities registered under Section 12(g) of the Exchange Act:
  Common Shares

Check whether the Issuer (1) filed all reports required to
  be filed by Section 13 or 15(d) of the 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. [
  x ] Yes []
  No

Check if there is no disclosure of delinquent filers in response
  to Item 405 of Regulation S-B contained in this form, and no disclosure will
  be contained, to the best of Issuer'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. [ x ]

The Issuer's revenues for its fiscal period ended March 31,
  2006 were $0.00.

State the aggregate market value of the voting and non-voting
  common equity held by non-affiliates computed by reference to the price at which
  the common equity was sold, or the average bid and asked price of such common
  equity, as of a specified date within the past 60 days. (See definition of affiliate
  in Rule 12b-2 of the Exchange Act.): Not Applicable

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING
  FIVE YEARS)

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Check whether the issuer has filed all documents and reports
  required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
  distribution of securities under a plan confirmed by a court. Yes []
  No []

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer's
  classes of equity stock, as of the latest practicable date.

35,859,200 common shares issued and outstanding as of June
  7, 2006.

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly
  describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II,
  etc.) into which the document is incorporated: (1) any annual report to security
  holders; (2) any proxy or information statement; and (3) any prospectus filed
  pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act").
  The listed documents should be clearly described for identification purposes
  (e.g., annual report to security holders for fiscal year ended December 24,
  1990).

No.

Transitional Small Business Disclosure Format (Check one):
  Yes [];
  No [ x ]

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PART I

Item 1. Description of Business

This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks,
uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our company's or our industry's actual results, levels of activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common shares" refer to the common shares in our capital stock.

As used in this annual report, the terms "we", "us", "our", the Company and "McNab" mean McNab Creek Gold Corp. and our subsidiaries, unless otherwise indicated.

Overview

We are a junior mineral exploration company. We seek to explore our mineral interests in the SMH Property located in Eureka County, Nevada .  Subsequent to year end management decided to discontinue holding an interest in the Roxy Prospect located
in Pershing County, Nevada. We will be exploring the SMH claims in phases. Our proposed work program is set out in detail under the Plan of Operation section.

The Companys acquisition of its SMH Property and Roxy Property were negotiated at arms length with Mr. E.L. Hunsaker III before he became a director of the Company. However, in view of a potential conflict of interest in Mr. Hunsaker
remaining as a director of the Company, he has resigned his position as a director of the Company and has been replaced by Mr. Christopher R. Verrico.

The SMH 31-50 claims were transferred to McNab Creek Gold Corporation by virtue of a Quitclaim Deed executed in January 2004 by Scoonover Exploration LLC of Elko, Nevada. E.L. Hunsaker III, is a managing member of Scoonover Exploration LLC
(Scoonover Exploration a Nevada Limited Liability Company). The claims were acquired for the consideration of $3,500; with a 2.5% net smelter return royalty retained by Scoonover (the 2.5% net smelter return royalty was sold to Golden Patriot
Corp., of which E.L. Hunsaker III is also a director). The SMH quitclaim is recorded in Eureka County Nevada Book 374, Page 001-003.

The Roxy 1-8 claims were transferred to McNab Creek Gold Corporation by virtue of a Quitclaim Deed executed in July 2004 by Scoonover Exploration LLC of Elko, Nevada. E.L. Hunsaker III, is a managing member of Scoonover Exploration LLC (Scoonover
Exploration a Nevada Limited Liability Company). The claims were acquired for the consideration of $3,500; with a 2.5% net smelter return royalty retained by Scoonover (the 2.5% net smelter return royalty was sold to Golden Patriot Corp., of
which E.L. Hunsaker III is also a director). The

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Roxy quitclaim is recorded in Pershing County Nevada Book 384, Page 740-742. Subsequent to year end management decided to discontinue holding an interest in the Roxy Prospect.

There is no assurance that a commercially viable mineral deposit exists on any one of our properties. Extensive exploration will be required before we can make a final evaluation as to the economic and legal feasibility of any potential deposit.

Corporate History

We were incorporated on February 15, 2001 as "Parthenon Development Corporation" under the laws of the State of Nevada. We acquired our mineral exploration properties in January, 2004 and July, 2004. We raised seed capital to finance our mineral
exploration activities during the period September, 2003 to March, 2004. We changed our name to "McNab Creek Gold Corp." on August 1, 2003 when management determined that our company would explore gold and silver deposits in the vicinity of the
Carlin Trend and Kennedy District in the State of Nevada.

We have not been involved in any bankruptcy, receivership or similar proceedings. We have not undergone any material reclassification, merger, consolidation or sale of significant assets not in the ordinary course of business. Our purchase of the
SMH and Roxy mineral exploration properties described under Plan of Operation was, for our company, a purchase of significant assets not in the ordinary course of business.

Our Current Business

We are a junior mineral exploration company. We have acquired two blocks of lode mineral claims in Pershing County and Eureka County in the State of Nevada. We will be exploring these claims in phases. There is no guarantee that a producing mine
that is economically feasible to explore can be located and identified nor can we guarantee that our property is economically feasible to explore. Our proposed work program is set out in detail under the Plan of Operation.

Description of Our Exploration Properties

SMH PROSPECT

Location and Access

The SMH Prospect comprises 400 acres in 20 unpatented and contiguous lode claims. An unpatented mining claim is a particular parcel of Federal land, valuable for a specific mineral deposit or deposits. It is a parcel for which an individual has
asserted a right of possession. The right is restricted to the extraction and development of a mineral deposit. The rights granted by a mining claim are valid against a challenge by the United States and other claimants only after the discovery of a
valuable mineral deposit. The claims are located south of the Carlin Trend, Figure 1, more specifically in Section 23, 26 and 35 of Township 26 North and Range 52 East in Eureka County Nevada. Subject to a 2.5% production royalty, the claims were
transferred to McNab Creek Gold Corporation by virtue of a Quitclaim Deed executed in January, 2004 by Scoonover Exploration LLC of Elko, Nevada. The name of the claims and their BLM Serial Numbers are given in Table 1. All claims have anniversary
dates on September 1 and are in good standing until 2005.

Unpatented mining claims consist of U.S. Federal controlled ground for which the proprietary mineral rights have been claimed; one claim covers approximately 20.7 acres and is obtained by completing a proscribed set of monumentation, postings and
filings (described by Nevada law) generally described as:

- Erect four corner locations monuments and one location monument

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- File appropriate documentation and pay appropriate fees with U.S.
  Department of the Interior-Bureau of Land Management
- File appropriate documentation and pay appropriate fees with County
  Recorder in county where claims are located.

Table 1.

|Claim Name | BLM Serial Number
|---------- | -----------------
|           |                  
|SMH 31     | NMC925335        
|SMH 32     | NMC925336        
|SMH 33     | NMC925337        
|SMH 34     | NMC925338        
|SMH 35     | NMC925339        
|SMH 36     | NMC925340        
|SMH 37     | NMC925341        
|SMH 38     | NMC925342        
|SMH 39     | NMC925343        
|SMH 40     | NMC925344        
|SMH 41     | NMC925345        
|SMH 42     | NMC925346        
|SMH 43     | NMC925347        
|SMH 44     | NMC925348        
|SMH 45     | NMC925349        
|SMH 46     | NMC925350        
|SMH 47     | NMC925351        
|SMH 48     | NMC925352        
|SMH 49     | NMC925353        
|SMH 50     | NMC925354        

Accessibility and Physiography

The SMH Prospect is reached by driving approximately 22 miles
west on U.S. Interstate Highway 80 to Carlin, Nevada, then 41 miles south on
Nevada State Highway 278 to Mineral Hill Road then approximately 4.8 miles east
to the Aiken Canyon access road and 3.4 miles southeast to the property.

The SMH Property is accessible by a combination of paved roads
and all weather gravel roads from Carlin in the north and from Eureka in the
south. Both towns are the nearest population centers. Exploration trails abound
in and around the Carlin and Battle Mountain areas while in areas of moderate
and rolling topography, most places are negotiable by 4x4 vehicles even in the
absence of roads. Within the property itself, the topography is moderate, rising
from 6,650 ft on the southwestern part of the property to 7,000 ft on the
northeastern part of the property. The climate is arid giving rise to sparse
vegetation and generally stunted plant growth.

History

Most previous work completed on the SMH Property involved
geologic mapping, soil and rock chip sampling, trenching, test pitting and
reverse circulation drilling. The latest work carried out on the property was
rock chip sampling by both Newmont Explorations and later by Independence Mining
in 1999.

Cominco owned a large block of land in the Sulphur Spring range
that included the SMH ground. Of four drill holes completed by Cominco in the
area in 1988, two holes, MHS-1 and MHS-4 were located on the SMH Property. Only
the data on MHS-4 is available which shows no detectable gold.

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Following the Cominco drilling, the Dickenson-Nevada J.V. partners made up of Reserve Industries Corporation, Precambrian Exploration and Dickenson Mines Limited operated the WHY claims and collected 183 soil samples of which 118 samples came from
several disparate lines and 65 samples came from a claim post-based soil grid (i.e. 600 x 750 feet spacing). Assays from these samples were rather low for gold but trace elements did identify several prospective targets.

Asamera leased the WHY claims from Dickenson - Nevada J.V. in August, 1990 and initiated a ten-hole AIRTRAC drilling program along with backhoe trenching, geochemical rock chip sampling and sagebrush biogeochemical sampling. Asamera to 36 rock chip
samples in three trenches and drilled a 500-foot drill hole on the eastern side of the property. Data from this hole is not available.

All of the Asamera AIRTRAC drill holes were shallow, from 35 to 50 feet. Only one of the holes (WHY -2) intersected any significant mineralisation - 0.013opt Au from 5-35 feet in jasperoid along the north-south fault.

Sagebrush sampling identified three low-grade multi element and gold anomalies in the south central part of the WHY claim group. Two of the anomalies trend east-west across the roughly north-south stratigraphic trend of the lithologies and cut
across several lithologic units.

In August, 1992, AUR leased the WHY claims from Reserve Industries who was acting on behalf of the Dickenson - Nevada J.V. partners. In the same year of acquisition, AUR completed three trenches and an unspecified number of test pits. A total of 61
rock chip and 9 soil samples were collected. No significant assays resulted from the trench and test pit sampling.

Between July and August, 1993, AUR drilled 3,935 feet in nine
  reverse circulation drill holes using a tire-mounted Ingersol-Rand TH100 rig.

Regional Setting

The SMH Property is situated between the Carlin and the Battle
  Mountain - Eureka structural trends. The rocks that host gold in the Carlin
  and Battle Mountain areas are present in the SMH Property. The Carlin and Battle
  Mountain trends are parallel northwesterly alignments of gold and silver deposits
  stretching between 60 to 70 kilometers. Geophysical studies indicate that both
  trends lie along ancient zones of crustal weaknesses resulting in fault zones
  extending deep into the earth's mantle providing conduits for sustained hydrothermal
  gold mineralisation. In most deposits, microscopic gold is hosted in Paleozoic
  carbonate rocks, most particularly, the upper units of the Roberts Mountains
  Formation.

Property Geology

Units of the Vinini Formation primarily underlie the SMH property. Previous work has subdivided the formation into separate sedimentary units comprising laminated silty limestone (Ovll), massive limestone (Ovl), black thinly bedded chert (Ovc), grey
siliceous shale, siltstone and chert (Ovs), Quartzite (Ovq) and argillaceous mudstone and siltstone (Ovm). The Vinini Formation (western assemblage rocks) is the fault contact with the Robert Mountains Formation of the (eastern assemblage rocks).
Previous drilling and sampling close to the fault returned anomalous gold values.

ROXY PROSPECT

Location and Access

The Roxy Prospect is located in un-surveyed Sections 5, 6, 7, and 8, of T27N, R38E, and MDB&M as shown in Figure 1. The area is within the southeastern portion of the Kennedy Mining District in the State of Nevada. The

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land package consists of eight unpatented lode claims (NMC860160 to NMC860167) along the eastern margin of the southern East Range.

Access is via I-80 to Winnemucca, Nevada, thence south along
  Grass Valley road, approximately 55 miles through Grass Valley, past the Gold
  Bank Hills, through Pleasant Valley, almost to McKinney Pass. The Property lies
  approximately three miles west of the main dirt road and two miles north of
  McKinney pass. Access may also be gained via I-80 to Battle Mountain. Follow
  State Road 305 southwest, turning west onto Lander County Road that goes past
  Battle Mountain Gold's Copper Canyon operations. This road turns to gravel past
  the mine entrance and heads thorough Buffalo and Dixie valleys, around the south
  end of the Tobin Range, thence north along Spring Creek through the Sou Hills,
  to the south end of Pleasant Valley, again almost to McKinney Pass. Subsequent
  to year end management decided to discontinue holding an interest in the Roxy
  Prospect

History

Discovery of silver-gold ore occurred in what would become
  the Kennedy District in 1891. The discovery and development, in 1893, of the
  Imperial and Gold Note mines brought around 500 hopeful prospectors to the area.
  The Kennedy District produced almost 85,000 ounces of silver, more than 3,900
  ounces of gold, plus 62,439 pounds of copper and 101,479 pounds of lead, between
  1903 and 1950. Production came primarily from north and northwest trending quartz
  veins. The early mines in the district produced free-milling gold-silver ores
  from oxidized portions of the veins. Ores were processed through a 20-stamp
  mill. Subsequent production came from lessees who produced small shipments of
  gold-silver ore. According to NBM&G Bulletin 89 Geology and Mineral Deposits
  of Pershing County, Nevada (Johnson, 1977), mines of the district ". . . operated
  intermittently until 1950, but the greatest period of development and productivity
  was between 1893 and 1905."

Geology

A large Triassic granitic pluton, cut on its northern margin
  by a Tertiary granodiorite, dominates the geology of the Kennedy District. These
  stocks intrude Paleozoic Pumpernickel and Havallah formations and Mesozoic Koipato
  Group rocks. Mapping compiled by Johnson (1977) reveals a north verging thrust
  emplacing undifferentiated Pennsylvanian-Permian Pumpernickel Formation westward
  over Triassic metavolcanics of the Koipato Group. Carbonates may also comprise
  part of the lower plate of the thrust.

Mineralization and Geochemistry

The north-central Nevada region, around the SMH Properties, has a long history of mining activity. The majority of the jobs in the northern Nevada counties (Lander, Humboldt, Eureka, and Elko) are associated with the mining industry. Heavy equipment
and operators are available from several sources in the local area. The nearby towns have extensive support and equipment availability. Skilled and experienced manpower is readily available in the local area.

Competitors

Historically, the State of Nevada has been rich in mineral reserves. Areas of Nevada have been explored and in some cases staked through mineral exploration programs. Large areas remain unstaked and areas reopen as claims expire. The cost of staking
and re-staking new mineral claims and the costs of most phase one exploration programs are relatively modest. In many more prospective areas, extensive literature is readily available with respect to previous exploration and development activities.
These facts make it possible for a junior mineral exploration company such as ours to be very competitive with other similar companies. In the case of the properties which we currently own, we purchased them inexpensively from another junior mineral
exploration company. We are in competition with hundreds of other junior exploration companies who are evaluating and reevaluating prospective mineral properties in the State of Nevada.

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In effect, we are also competitive with senior companies who are doing grass roots exploration. In the event our exploration activities uncover prospective mineral showings, we anticipate being able to attract the interest of better financed
industry partners to assist on a joint venture basis in more extensive exploration. We are at a competitive disadvantage compared to established mineral exploration companies when it comes to being able to complete extensive exploration programs on
claims which we hold or may hold in the future. If we are unable to raise capital to pay for extensive claim exploration, we will be required to enter into joint ventures with industry partners which will result in our interest in our claims being
substantially diluted.

Unless we conclude an aggressive property acquisition program which carries work commitments, we will be able to continue operating on modest cash reserves for the next 18 months. We currently have cash on hand of $9,037. Management of the
Company has committed up to $50,000 in loan proceeds to ensure that the Company is able to continue its operations for at least the next 12 months.

Governmental Regulations

We are not in a business which requires government approval for principal products or services. In the event mining claims which we own or which we acquire in the future prove to host viable ore bodies, we would be required to apply for numerous
government approvals in order to commence mining. All costs to obtain the necessary government approvals would be factored into technical and viability studies in advance of a decision being made to proceed with development of an ore body.

The mining industry in the United States is highly regulated. We have hired Mr. Michael H. Sandidge as a mining exploration consultant. Mr. Sandidge has extensive industry experience and is familiar with all government regulations respecting the
initial acquisition early exploration of mining claims in Nevada. The mining consultants who we retain have extensive industry experience and are familiar with all government regulations respecting the initial acquisition and early exploration of
mining claims in Nevada. We are unaware of any proposed or probable government regulations which would have a negative impact on the mining exploration industry in Nevada. We propose to adhere strictly to the regulatory framework which governs
mining operations in Nevada.

Research and Development

We have not expended any funds on research and development activities and do not expect to do so in the foreseeable future.

Employees

We currently have one full time employee, namely Kenneth Townsend, our President, C.F.O. and director. The time spent by this employee on our business is directly proportional to our level of activity on a month to month basis. Mr. Townsend
typically spends 50 to 100 hours per month on our business.

We employ Mr. Michael Sandidge as a consultant to our company. Mr. Sandidge is a registered professional geologist in the state of Washington with a MS degree in geology from University of Texas at El Paso and an undergraduate degree in geology from
University of Washington. His work experience includes researching and consulting from 1982 to present. He worked on several projects while an undergraduate and graduate student, they included investigating the petroleum potential of the Overthrust
Belt of southwestern United States and northern Mexico, structural interpretation of the Kootenay Arc of southern British Columbia, Canada, structural and intrusive history of the Central Coastal Plutonic Province, western British Columbia, Canada,
tectonic evaluation and metallogenic potential of the Lake Baikal and Tien Shan regions of the former Soviet Union, and the tectonic and metallogenic evolution of the Xolapa Complex of southern Mexico. He worked as a consultant in both exploration
and environmental programs in Arizona (AZCO Mining Company, 200Mt Sanchez copper deposit) and northern Mexico from 1993-1994, environmental and resource expansion in Arizona (Phelps Dodge

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Corporation, Morenci Mine) in 1995, precious metal potential of northern Argentina (Homestake/Argentina Gold Corporation) in 1996, regional reconnaissance and precious metal potential of the Maricunga Belt and structural evaluation of the 1.2Bt
Cerro Casale deposit (Bema Gold) in 1996, project management and precious metal potential of the Andacollo Project (Sierra La Plata Corporation) in 1997, regional platinum group minerals (PGM) evaluation of the Kola Peninsula (Outukumpu) in 1997,
epithermal precious metal potential in Far East Russian Federation (Cyprus/AMAX/Far East Geological Institute) in 1998. Presently, Michael Sandidge is VP of Exploration for West Hawk Development Corporation, a publicly listed, Toronto Stock Exchange
Venture Exchange, based in Vancouver, British Columbia, Canada.

On May 10, 2006 the Company entered into a six- month Consulting Agreement with Wannigan Capital Corp. to provide assistance in its day-to-day operations. Specifically, they assist in interaction with the Companys auditors, transfer agent and
regulatory authorities. Wannigan Capital Corp received 100,000 common shares of the Company as remuneration.

RISK FACTORS

Much of the information included in this annual report includes or is based upon estimates, projections or other "forward looking statements". Such forward looking statements include any projections or estimates made by us and our management in
connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will
almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outline below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual
results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements".

Item 2. Description of Property

Office Premises

We operate from our offices at Suite 1128, 789 West Pender Street, Vancouver, British Columbia, Canada. We do not own any real property or significant assets. Office space is provided to us on a nominal rent basis by Mr. Kenneth Townsend, our
President and Director, which is recorded as donated capital in the amount of $500 per month totalling $6,000 for the year. We are not a party to any lease. It is anticipated that this arrangement will remain until we are able to
generate revenue from operations and require additional office space for new employees. Management believes that this space will meet our needs for the foreseeable future.

Item 3. Legal Proceedings

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates,
or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

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

There were no matters submitted to a vote of our security holders either through solicitation of proxies or otherwise in the fourth quarter of the fiscal year ended March 31, 2006.



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PART II

Item 5. Market for Common Equity and Related Stockholder Matters

There is no trading market for our common stock. There has been no trading market to date. Management has entered into discussion with a market maker to initiate application for a listing on the NASD OTC BB, however the company cannot guarantee that
a trading market will ever develop or if a market does develop, that it will continue.

The Company has no outstanding options or warrants to purchase its common shares or securities convertible into common shares of the Company.

Market Price

Our common stock is not quoted at the present time. The Securities and Exchange Commission has adopted a rule that established the definition of a "penny stock," as any equity security that has a market price of less than $5.00 per share or with
an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

|* | that a broker or dealer approve a person's account for transactions in penny stocks; and                                                                          
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                   
|* | the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the broker or dealer must

|* | obtain financial information and investment experience and objectives of the person; and                                                                                                                                                              
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                       
|* | make a reasonable determination that the transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions
in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule relating to the penny stock market, which, in highlight form,

|* | sets forth the basis on which the broker or dealer made the suitability determination; and                
|- | ----------------------------------------------------------------------------------------------------------
|  |                                                                                                           
|* | that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Disclosure also has to be made about the risks of investing in penny stock in both public offering and in secondary trading, and about commissions payable to both the broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on
the limited market in penny stocks.

7,804,000 of our issued and outstanding common shares, as of June 7, 2006, owned by non-affiliates are eligible for sale pursuant to Rule 144 under the Securities Act of 1933. Rule 144, as currently in effect, allows a non-affiliated person who has
beneficially owned shares of a company's common stock for at least one year to sell within any three month period a number of shares that does not exceed the greater of:

| | (1) | 1% of the number of shares of the subject company's
        common stock then outstanding which, in our case, will equal approximately
        358,592 shares as of the date of this registration statement; or
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                
| | (2) | the average weekly trading volume of the subject company's
        common stock during the four calendar weeks preceding the filing of a
        notice on Form 144 with respect to the sale.                  

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Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about the subject company.

Under Rule 144(k), a person who is not one of the subject company's affiliates at any time during the three months preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, is entitled to sell shares
without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.

As of the date of this registration statement, June 7, 2006, persons who are our affiliates hold 28,055,200 shares that may be sold pursuant to Rule 144 after two years from the date of purchase. Accordingly, Rule 144 applies to the 28,055,200
shares except for subparagraph (k) of Rule 144 which does not apply to affiliate shares as described in the preceding paragraph. All shares owned by affiliates will continue to be subject to the resale limitations imposed by Rule 144 for so long as
the shareholder remains an affiliate of our company. Three months after such persons cease to be affiliates of our company, sales may be made after the two year period from the issue date without 144 limitations under Rule 144(k).

Recent Sales of Unregistered Securities

On January 9, 2004, we sold and issued 544,000 shares at $0.10 per share, of which $0.01 is for cash and $0.09 is for compensation to management, to one subscriber. During the period September, 2003 to March, 2004, we sold 420,200 common
shares at $0.10 per share to 49 subscribers under Regulation S. None of the offerees or purchasers are U.S. persons as defined in Rule 902(k) of Regulation S, and no sales efforts were conducted in the U.S., in accordance with Rule 903(c).
Subscribers to the offering acknowledge that the securities purchased must come to rest outside the U.S., and the certificates contain a legend restricting the sale of such securities until the Regulation S holding period is satisfied in accordance
with Rule 903(b)(3)(iii)(A).

On December 30, 2005, the Company issued 383,760 common shares to Kenneth G Townsend, a director of the Company and its sole Officer in full satisfaction of loans made to the Company. The Company also sold and issued 440,000 shares at $0.10 to 3
subscribers under Regulation S. None of these offerees are U.S. persons as defined in Rule 902(k) of Regulation S. On April 21, 2006 the Company authorized the expansion of its common stock by way of a forward split of its shares on a basis of 20:1.

Equity Compensation Plan Information

As at March 31, 2006, we did not have any compensation plans in place.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We did not purchase any of our shares of common stock or other securities during the year ended March 31, 2006.

Item 6. Plan of Operation.

During the period September, 2003 to March, 2006, we obtained subscriptions for 1,787,960 shares under Regulation S to raise proceeds of approximately $140,421. We have received additional loan proceeds from our management of approximately
$30,000. The proceeds obtained from these financings are allowing us to complete our stage one exploration programs on the SMH Property Prospect. On December 30, 2005, the Company issued 383,760 common shares to Kenneth G Townsend, a director of
the Company and its sole Officer in full satisfaction of the loans totalling $30,000 plus interest, made to the Company.

It is unlikely that we will need to raise additional funds in the next 12 months. Our existing funds will also cover our general and administrative expenses for at least the next 12 months. In the event additional funds are required, management will
seek private placement subscriptions or will loan additional proceeds to the Company.

---

- 12 -

Even if our company completes our planned exploration programs on the SMH Properties and is successful in identifying a mineral deposit, the Company will be required to spend substantial additional funds on drilling and engineering studies before it
can determine whether the mineral deposit is commercially viable. Currently, the Company does not have the funds required to complete a substantial drilling program and engineering studies. In the event it is unable to raise additional funds for
this work, it would be unable to proceed even if a mineral deposit is discovered.

Exploration on the SMH Properties will be conducted in phases. We have not yet started Phase One of our exploration program. If Stage1 results are sufficiently encouraging, we will proceed with continued exploration in a Phase Two program.
Typically, exploration results which warrant Phase 2 work include:

- Surface geochemical sample results with values that are suggestive of a mineral deposit, when considered in the context of the geologic setting of the property.
- Geophysical anomalies that are suggestive of a mineral deposit, when considered in the context of the geologic setting of the property.
- Interpretation of geological results that is indicative of a favorable setting for a mineral deposit.

These results are usually interpreted in conjunction with current metal-market conditions, managements corporate goals, and the potential for Stage 2 plans to facilitate the discovery process.

Our company has incurred operating losses and will not be able to exist indefinitely without the receipt of additional operating funds. In the view of our companys auditors, our company requires additional funds to maintain our operations and
these conditions raise substantial doubt about our ability to continue as a going concern.

The SMH 31-50 claims were transferred to McNab Creek Gold Corporation by virtue of a Quitclaim Deed executed in January 2004 by Scoonover Exploration LLC of Elko, Nevada. The claims were acquired at arms length for consideration of $3,500,
with a 2.5% net smelter return royalty retained by Scoonover.

The SMH quitclaim (recorded in Eureka County Nevada Book 374, Page 001-003) is included as Exhibit 10.1 to our Form 10 SB.

The Roxy 1-8 claims were transferred to McNab Creek Gold Corporation by virtue of a Quitclaim Deed executed in July 2004 by Scoonover Exploration LLC of Elko, Nevada. The claims were acquired at arms length for consideration of $3,500,
with a 2.5% net smelter return royalty retained by Scoonover. Subsequent to year end management decided to discontinue holding an interest in the Roxy Prospect

The Roxy quitclaim (recorded in Pershing County Nevada Book 384, Page 740-742) is included as Exhibit 10.2 to our Form 10 SB.

We will not be conducting any product research or development over the next 12 months. We do not expect to purchase any plant or significant equipment over the next 12 months.

We do not expect any significant changes in the number of our employees over the next 12 months. Our current management team will satisfy our requirements for the foreseeable future.

Our specific plans of operation for our exploration property
  is set out below.

---

- 13 -

SMH PROPERTY - Plan of Operation

We propose to complete the first stage of our two stage
exploration program on our SMH property by the end of July of 2006. Stage two
will be contingent upon positive exploration results being obtained in stage one
of our program.

Stage 1

|(a) | Soil and rock chip sampling to be concentrated in the
      vicinity of drill hole 93TELE 9 and on the southeast corner of the
      property.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                               
|(b) | VLF-EM survey to locate and define
  faults.                                                                                                  

Proposed Budget

| | Soil and rock chip sampling including analyses,
      200 samples at |  | $4,000
| | -------------------------------------------------------------------- |  | ------
| | $20/sample                                                           |  |       
| | VLF-EM survey, 20 line kilometers at 150/km                          |  | 3,000 
| | Sub-total                                                            |  | 7,000 
| | All 10% contingencies                                                |  | 700   
| | Total                                                                |  | 7,700 

Stage 2 - Contingent Upon Stage 1 Results

|(a) | Reverse-circulation drilling depending on the results of
      Stage 1. Deep holes of not less than 1,200 feet would be employed to
      explore for gold mineralisation beneath the Roberts Mountains
    Thrust.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Proposed Budget

| | Reverse-Circulation Drilling 4800ft or 1464m
      at $25/metre |  | 36,600
| | --------------------------------------------------------------- |  | ------
| | Engineering and supervision                                     |  | 6,000 
| | Transportation, Accommodations and meals                        |  | 4,000 
| | Sub-total                                                       |  | 46,600
| | All 10% contingencies                                           |  | 4,660 
| | Total                                                           |  | 51,260

We have engaged Michael Sandidge P.Geo. to assess each phase of
our proposed exploration and determine whether the results warrant further work.
Our company may pay finders fees to individuals who locate exploration
properties on our behalf. No finders fees will be paid to any affiliated
parties who may locate exploration properties on our behalf.

If the exploration results on the Company's initial phases on
its two properties do not warrant drilling or further exploration, the Company
will suspend operations on these properties. The Company will then seek
additional exploration properties and additional funding with which to do work
on the new properties. In the event that the Company is unable to obtain
additional financing or additional properties, it may not be able to continue as
a going concern.

Management of the Company has committed up to $50,000 in loan
proceeds to ensure that the Company is able to continue its operations for at
least the next 12 months.

---

- 14 -

Item 7. Financial Statements

Our audited financial statements are stated in United States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

The following audited financial statements are filed as part of this annual report:

---

- 15 -

MCNAB CREEK GOLD CORP.
  (An exploration stage company)

Financial Statements 
  (Expressed in US Dollars)

March 31, 2006



|Index                                                          
|---------------------------------------------------------------
|                                                               
|Report of Independent
      Registered Public Accounting Firm  
|                                                               
|Balance Sheets                                                 
|                                                               
|Statements of Operations                                       
|                                                               
|Statement of Changes
      in Stockholders Equity (Deficiency)
|                                                               
|Statements of Cash Flows                                       
|                                                               
|Notes to the Financial
      Statements                        

---

- 16 -



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of McNab Creek
  Gold Corp.
  (an exploration stage company)

We have audited the accompanying balance sheet of McNab
  Creek Gold Corp. (an exploration stage company) as of March 31, 2006 and the
  statements of operations, changes in stockholders equity (deficiency)
  and cash flows for the year then ended. These financial statements are the responsibility
  of the Company's management. Our responsibility is to express an opinion on
  these financial statements based on our audit. The Companys financial
  statements as at March 31, 2005 were audited by other auditors whose report
  dated June 26, 2005, included an explanatory paragraph regarding the Companys
  ability to continue as a going concern. The financial statements for the period
  from February 15, 2001 (date of inception) to March 31, 2005 reflect a total
  net loss of $124,878 of the related cumulative totals. The other auditors
  reports have been furnished to us, and our opinion, insofar as it relates to
  amounts included for such prior periods, is based solely on the reports of such
  other auditors.

We conducted our audit in accordance with the standards of
  the Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform an audit to obtain reasonable assurance whether
  the financial statements are free of material misstatement. The Company is not
  required to have, nor were we engaged to perform, an audit of its internal controls
  over financial reporting. Our audit included consideration of internal controls
  over financial reporting as a basis for designing audit procedures that are
  appropriate in the circumstances, but not for the purpose of expressing an opinion
  on the effectiveness of the Companys internal controls over financial
  reporting. Accordingly, we express no such opinion. An audit also includes examining,
  on a test basis, evidence supporting the amounts and disclosures in the financial
  statements. An audit also includes assessing the accounting principles used
  and significant estimates made by management, as well as evaluating the overall
  financial statement presentation. We believe that our audit provides a reasonable
  basis for our opinion.

In our opinion, these financial statements present fairly,
  in all material respects, the financial position of McNab Creek Gold Corp. as
  of March 31, 2006 and the results of its operations and its cash flows and the
  changes in stockholders equity (deficiency) for the year then ended in
  accordance with accounting principles generally accepted in the United States
  of America.

The accompanying financial statements have been prepared assuming
  that the Company will continue as a going concern. As discussed in Note 1 to
  the financial statements, the Company has not generated revenues since inception,
  has incurred losses in developing its business, and further losses are anticipated.
  The Company requires additional funds to meet its obligations and the costs
  of its operations. These factors raise substantial doubt about the Companys
  ability to continue as a going concern. Managements plans in this regard
  are described in Note 1. The financial statements do not include any adjustments
  that might result from the outcome of this uncertainty.

|“Dale Matheson Carr-Hilton LaBonte”
|-----------------------------------
|                                   
|CHARTERED ACCOUNTANTS              
|Vancouver, Canada                  
|June 16, 2006                      



---

- 17 -

MCNAB CREEK GOLD CORP.(An exploration stage company)

BALANCE SHEETS
  (Expressed in US Dollars)

|                                                           |   | March 31, |   |   | March 31, |  
|---------------------------------------------------------- | - | --------- | - | - | --------- | -
|                                                           |   | 2006      |   |   | 2005      |  
|                                                           |   |           |   |   |           |  
|ASSETS                                                     |   |           |   |   |           |  
|                                                           |   |           |   |   |           |  
|Current Assets                                             |   |           |   |   |           |  
|Cash                                                       | $ | 9,037     |   | $ | 21,403    |  
|                                                           |   |           |   |   |           |  
|Equipment Note 3                                          |   | 199       |   |   | 257       |  
|                                                           |   |           |   |   |           |  
|Total Assets                                               | $ | 9,236     |   | $ | 21,660    |  
|                                                           |   |           |   |   |           |  
|                                                           |   |           |   |   |           |  
|LIABILITIES AND STOCKHOLDERS' DEFICIENCY                   |   |           |   |   |           |  
|                                                           |   |           |   |   |           |  
|Current Liabilities                                        |   |           |   |   |           |  
|Accounts payables and accrued liabilities                  | $ | 43,574    |   | $ | 13,324    |  
|Due to a director  Note 5                                 |   | 13,030    |   |   | 4,544     |  
|Promissory notes payable to related parties - Note
      5 |   | -         |   |   | 30,000    |  
|Total current liabilities                                  |   | 56,604    |   |   | 47,868    |  
|                                                           |   |           |   |   |           |  
|Stockholders' Deficiency                                   |   |           |   |   |           |  
|Common Stock : $0.0001 Par Value
      - Note 6            |   |           |   |   |           |  
|Authorized : 100,000,000                                   |   |           |   |   |           |  
|Issued and Outstanding : 1,787,960
      (2005: 964,200)   |   | 178       |   |   | 96        |  
|Additional Paid In Capital                                 |   | 180,868   |   |   | 98,574    |  
|Donated Capital - Note 7                                   |   | 6,000     |   |   | -         |  
|Deficit accumulated
      during the exploration stage     |   | (234,414  | ) |   | (124,878  | )
|Total Stockholders' Deficiency                             |   | (47,368   | ) |   | (26,208   | )
|                                                           |   |           |   |   |           |  
|Total Liabilities and Stockholders' Deficiency             | $ | 9,236     |   | $ | 21,660    |  

Note 1  Basis of Presentation and Going Concern Matters
  
  Note 10  Subsequent Events

(The accompanying notes are an integral part of these financial
  statements)

---

- 18 -

MCNAB CREEK GOLD CORP.(An exploration stage company)

STATEMENTS OF OPERATIONS
  (Expressed in US Dollars)

|                                      |   |           |   |   |                        |   |   | February 15, |  
|------------------------------------- | - | --------- | - | - | ---------------------- | - | - | ------------ | -
|                                      |   | Years     |   |   | **2001 (date of** **** |  
|                                      |   | ended     |   |   | inception) to          |  
|                                      |   | March 31, |   |   | March 31,              |  
|                                      |   | 2006      |   |   | 2005                   |   |   | 2006         |  
|                                      |   |           |   |   |                        |   |   |              |  
|                                      |   |           |   |   |                        |   |   |              |  
|Expenses                              |   |           |   |   |                        |   |   |              |  
|Compensation expenses                 | $ | -         |   | $ | -                      |   | $ | 48,960       |  
|Mineral property interests - Note 4   |   | 17,060    |   |   | 3,750                  |   |   | 40,078       |  
|General and administrative            |   | 86,476    |   |   | 39,631                 |   |   | 139,376      |  
|Rent - Note
      7                   |   | 6,000     |   |   | -                      |   |   | 6,000        |  
|Net loss                              | $ | (109,536  | ) | $ | (43,381                | ) | $ | (234,414     | )
|                                      |   |           |   |   |                        |   |   |              |  
|                                      |   |           |   |   |                        |   |   |              |  
|Loss per share attributable to common |   |           |   |   |                        |   |   |              |  
|stockholders:                         |   |           |   |   |                        |   |   |              |  
|Basic and diluted                     | $ | (0.09     | ) | $ | (0.04                  | ) |   |              |  
|                                      |   |           |   |   |                        |   |   |              |  
|Weighted average number of            |   |           |   |   |                        |   |   |              |  
|common shares outstanding:            |   |           |   |   |                        |   |   |              |  
|Basic and diluted                     |   | 1,220,206 |   |   | 964,200                |   |   |              |  

(The accompanying notes are an integral part of these financial
  statements)

---

- 19 -

MCNAB CREEK GOLD CORP.(An exploration stage company)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
  (Expressed in US Dollars)

|                                        |  |            |   |   |                 |   |   |            |  |   |         |  |   | Deficit     |   |   |               |  
|--------------------------------------- |  | ---------- | - | - | --------------- | - | - | ---------- |  | - | ------- |  | - | ----------- | - | - | ------------- | -
|                                        |  |            |   |   |                 |   |   |            |  |   |         |  |   | Accumulated |   |   |               |  
|                                        |  |            |   |   | Stock           |   |   | Additional |  |   |         |  |   | During the  |   |   | Stockholders' |  
|                                        |  | Common     |   |   | Amount At       |   |   | Paid In    |  |   | Donated |  |   | exploration |   |   | Equity        |  
|                                        |  | Shares     |   |   | Par
      Value |   |   | Capital    |  |   | Capital |  |   | stage       |   |   | (Deficiency)  |  
|Issuance of common stock for services   |  |            |   |   |                 |   |   |            |  |   |         |  |   |             |   |   |               |  
|rendered                                |  |            |   |   |                 |   |   |            |  |   |         |  |   |             |   |   |               |  
|at $0.0001 per share, February 16, 2001 |  | 2,250,000  |   | $ | 225             |   | $ | 2,025      |  | $ | -       |  | $ | -           |   | $ | 2,250         |  
|Loss for the period                     |  | -          |   |   | -               |   |   | -          |  |   | -       |  |   | (2,935      | ) |   | (2,935        | )
|Cancellation of common stock            |  | (2,250,000 | ) |   | (225            | ) |   | 225        |  |   | -       |  |   | -           |   |   | -             |  
|Capital stock issued for cash           |  |            |   |   |                 |   |   |            |  |   |         |  |   |             |   |   |               |  
|- at $0.10                              |  | 420,200    |   |   | 42              |   |   | 41,978     |  |   | -       |  |   | -           |   |   | 42,020        |  
|- at $0.10                              |  | 544,000    |   |   | 54              |   |   | 54,346     |  |   | -       |  |   | -           |   |   | 54,400        |  
|Loss for the year                       |  | -          |   |   | -               |   |   | -          |  |   | -       |  |   | (78,562     | ) |   | (78,562       | )
|                                        |  |            |   |   |                 |   |   |            |  |   |         |  |   |             |   |   |               |  
|Balance, March 31, 2004                 |  | 964,200    |   |   | 96              |   |   | 98,574     |  |   | -       |  |   | (81,497     | ) |   | 17,173        |  
|Loss for the
      year                 |  | -          |   |   | -               |   |   | -          |  |   | -       |  |   | (43,381     | ) |   | (43,381       | )
|                                        |  |            |   |   |                 |   |   |            |  |   |         |  |   |             |   |   |               |  
|Balance, March 31, 2005                 |  | 964,200    |   |   | 96              |   |   | 98,574     |  |   | -       |  |   | (124,878    | ) |   | (26,208       | )
|Issuance of common stock for debt       |  |            |   |   |                 |   |   |            |  |   |         |  |   |             |   |   |               |  
|settlement                              |  |            |   |   |                 |   |   |            |  |   |         |  |   |             |   |   |               |  
|- at $0.10 on December 30, 2005         |  | 383,760    |   |   | 38              |   |   | 38,338     |  |   | -       |  |   | -           |   |   | 38,376        |  
|Capital stock issued for cash           |  |            |   |   |                 |   |   |            |  |   |         |  |   |             |   |   |               |  
|- at $0.10 from November 5, 2005 to     |  |            |   |   |                 |   |   |            |  |   |         |  |   |             |   |   |               |  
|December 31, 2005                       |  | 440,000    |   |   | 44              |   |   | 43,956     |  |   | -       |  |   | -           |   |   | 44,000        |  
|Donated services                        |  | -          |   |   | -               |   |   | -          |  |   | 6,000   |  |   | -           |   |   | 6,000         |  
|Loss for the
      year                 |  | -          |   |   | -               |   |   | -          |  |   | -       |  |   | (109,536    | ) |   | (109,536      | )
|                                        |  |            |   |   |                 |   |   |            |  |   |         |  |   |             |   |   |               |  
|Balance, March 31,
      2006           |  | 1,787,960  |   | $ | 178             |   | $ | 180,868    |  | $ | 6,000   |  | $ | (234,414    | ) | $ | (47,368       | )

(The accompanying notes are an integral part of these financial
  statements)

---

- 20 -

MCNAB CREEK GOLD CORP.(An exploration stage company)

STATEMENTS OF CASH FLOWS 
  (Expressed in US Dollars)

|                                                                                                                                             |   |                |   |   |                |   |   | February 15, 2001       |  
|-------------------------------------------------------------------------------------------------------------------------------------------- | - | -------------- | - | - | -------------- | - | - | ----------------------- | -
|                                                                                                                                             |   | Year ended     |   |   | Year ended     |   |   | (date of inception)     |  
|                                                                                                                                             |   | March 31, 2006 |   |   | March 31, 2005 |   |   | to
      March 31, 2006 |  
|                                                                                                                                             |   |                |   |   |                |   |   |                         |  
|Cash flows from operating activities                                                                                                         |   |                |   |   |                |   |   |                         |  
|Net loss                                                                                                                                     | $ | (109,536       | ) | $ | (43,381        | ) | $ | (234,414                | )
|Amounts not involving cash:                                                                                                                  |   |                |   |   |                |   |   |                         |  
|- Amortization                                                                                                                               |   | 58             |   |   | 110            |   |   | 233                     |  
|- Compensation expense                                                                                                                       |   | -              |   |   | -              |   |   | 48,960                  |  
|- Donated service                                                                                                                            |   | 6,000          |   |   | -              |   |   | 6,000                   |  
|- Shares issued for services                                                                                                                 |   | -              |   |   | -              |   |   | 2,250                   |  
|                                                                                                                                             |   |                |   |   |                |   |   |                         |  
|Changes in non-cash working capital items:                                                                                                   |   |                |   |   |                |   |   |                         |  
|- Accounts payable and accrued
      liabilities                                                                                             |   | 34,082         |   |   | 8,442          |   |   | 47,406                  |  
|- Due
      to director                                                                                                                      |   | 13,030         |   |   | 1,218          |   |   | 17,574                  |  
|Net cash used in operating activities                                                                                                        |   | (56,366        | ) |   | (33,611        | ) |   | (111,991                | )
|                                                                                                                                             |   |                |   |   |                |   |   |                         |  
|Cash flows from investing activities                                                                                                         |   |                |   |   |                |   |   |                         |  
|Additions to
      equipment                                                                                                                 |   | -              |   |   | -              |   |   | (432                    | )
|Net cash flows used in investing activities                                                                                                  |   | -              |   |   | -              |   |   | (432                    | )
|                                                                                                                                             |   |                |   |   |                |   |   |                         |  
|Cash flows from financing activities                                                                                                         |   |                |   |   |                |   |   |                         |  
|Proceeds from the issuance of common stock                                                                                                   |   | 44,000         |   |   | -              |   |   | 91,460                  |  
|Proceeds from the issuance of promissory notes                                                                                               |   | -              |   |   | -              |   |   | 30,000                  |  
|Net cash flows
      provided by financing activities                                                                                        |   | 44,000         |   |   | -              |   |   | 121,460                 |  
|                                                                                                                                             |   |                |   |   |                |   |   |                         |  
|Increase (decrease) in cash                                                                                                                  |   | (12,366        | ) |   | (33,611        | ) |   | 9,037                   |  
|                                                                                                                                             |   |                |   |   |                |   |   |                         |  
|Cash - beginning
      of year                                                                                                               |   | 21,403         |   |   | 55,014         |   |   | -                       |  
|                                                                                                                                             |   |                |   |   |                |   |   |                         |  
|Cash - end of
      year                                                                                                                     | $ | 9,037          |   | $ | 21,403         |   | $ | 9,037                   |  
|                                                                                                                                             |   |                |   |   |                |   |   |                         |  
|Supplementary cash flow information:                                                                                                         |   |                |   |   |                |   |   |                         |  
|During the current year, the Company
      settled indebtedness of $38,376 through the issuance of 383,760 common shares
      at a price of |  
|$0.10 per share - Note 5.                                                                                                                    |   |                |   |   |                |   |   |                         |  
|                                                                                                                                             |   |                |   |   |                |   |   |                         |  
|Cash paid for
      interest                                                                                                                 | $ | -              |   | $ | -              |   | $ | -                       |  
|Cash paid for income taxes                                                                                                                   | $ | -              |   | $ | -              |   | $ | -                       |  

(The accompanying notes are an integral part of these financial
  statements)

---

|- 21 -                           
|---------------------------------
|                                 
|MCNAB CREEK GOLD CORP.           
|(An exploration stage company)   
|                                 
|NOTES TO THE FINANCIAL STATEMENTS
|March 31, 2006                   
|(Expressed in
      US Dollars)  

|1. | Nature and Continuance of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company was formed on February 15, 2001 under
        the laws of the State of Nevada, USA and commenced operations at that
        time. The Companys mineral interests are in the exploration stage.                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The financial statements are presented in US dollars
        and have been prepared by management in accordance with generally accepted
        accounting principles in the United States (US GAAP) on a
        going concern basis, which contemplates the realization of assets and
        the discharge of liabilities in the normal course of business for the
        foreseeable future.                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company has incurred a loss of $109,536 (2005:
        $43,381) during the year ended March 31, 2006 and at March 31, 2006
        has an accumulated deficit of $234,414 (2005: $124,878) and a
        working capital deficiency of $47,567 (2005: $26,465). The ability
        of the Company to continue as a going concern is uncertain and dependant
        upon achieving a profitable level of operations and on the ability of
        the Company to obtain necessary financing to fund ongoing operations.
        The outcome of these matters cannot be predicted at this time.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | These financial statements do not give effect to any
        adjustments which would be necessary should the Company be unable to continue
        as a going concern and therefore be required to realize its assets and
        discharge its liabilities in other than the normal course of business
        and at amounts different from those reflected in the accompanying financial
        statements.                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company has not generated any operating revenues
        to date. Management believes that the Company has adequate funds to carry
        on operations for the upcoming fiscal year but intends to obtain additional
        funding by borrowing from directors and officers, who have agreed to contribute
        up to $50,000 as non- interest bearing loans, and through private
        placements.                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2. | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

|(a) | Principles of Accounting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | These financials statements are stated in US dollars
        and have been prepared in accordance with US GAAP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(b) | Mineral Property Interests                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Under US GAAP mineral property exploration costs are
        expensed as incurred. Mineral property acquisition costs are accounted
        for as tangible assets using the guidance in EITF 04-02 “Whether
        Mineral Rights are Tangible or Intangible Assets”. Management
        reviews the carrying value of mineral property costs for impairment whenever
        circumstances could indicate that the carrying amount may not be recoverable.
        To date, the Company has impaired all acquisition costs of exploration
        properties pending results of its exploration work indicating the existence
        and recoverability of mineral resources.

---

|- 22 -                           
|---------------------------------
|                                 
|MCNAB CREEK GOLD CORP.           
|(An exploration stage company)   
|                                 
|NOTES TO THE FINANCIAL STATEMENTS
|March 31, 2006                   
|(Expressed in
      US Dollars)  

|2. | Significant Accounting Policies (contd)
|-- | -----------------------------------------

|(c) | Accounting Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The preparation of financial statements in conformity
        with US GAAP requires management to make estimates and assumptions that
        affect the reported amounts of assets and liabilities and disclosure of
        contingent assets and liabilities at the date of the financial statements
        and the reported amounts of revenues and expenses during the reporting
        period. Actual results could differ from those estimates and assumptions
        and reported amounts of revenues and expenses during the reporting period.
        Actual results could differ from those estimates and assumptions.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(d) | Loss per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Loss per share is computed using the weighted average
        number of shares outstanding during the period. Diluted loss per share
        is equivalent to basic loss per share because there are no dilutive securities.                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(e) | Foreign Currency Translations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Company considers the US dollar as its functional
        currency.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | At the transaction date, each asset, liability, revenue
        and expense is translated into US dollar equivalents by the use of the
        exchange rate in effect at that date. At year end, monetary assets and
        liabilities are re-measured by using the exchange rate in effect at that
        date. The resulting foreign exchange gains and losses are included in
        operations.                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(f) | Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Equipment consists of computer equipment, which is
        recorded at cost and is depreciated using the declining balance method
        at a rate of 30% per annum.                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(g) | Fair Value of Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Fair value estimates of financial instruments are
        made at a specific point in time, based on relevant information about
        financial markets and specific financial instruments. As these estimates
        are subjective in nature, involving uncertainties and matters of significant
        judgment, they cannot be determined with precision. Changes in assumptions
        can significantly affect estimated fair values.                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The respective carrying value of certain on-balance-sheet
        financial instruments approximated their fair value. These financial instruments
        include cash, accounts payable and accrued liabilities and due to a director.
        Fair values were assumed to approximate carrying values for these financial
        instruments, since they are short term in nature. Management is of the
        opinion                                                                                                                                                                                                         

---

|- 23 -                           
|---------------------------------
|                                 
|MCNAB CREEK GOLD CORP.           
|(An exploration stage company)   
|                                 
|NOTES TO THE FINANCIAL STATEMENTS
|March 31, 2006                   
|(Expressed in
      US Dollars)  

|2. | Significant Accounting Policies (contd)
|-- | -----------------------------------------

|(g) | Fair Value of Financial Instruments (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | that the Company is not exposed to significant interest
        or credit risks arising from these financial instruments. The Company
        is operating outside of the United States of America and has exposure
        to foreign currency risk due to the fluctuation of the currency in which
        the Company operates and the US dollars. The Company does not use any
        hedging instruments.                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(h) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The Company recognizes deferred tax liabilities and
        assets for the expected future tax consequences of events that have been
        recognized in the Company's financial statements or tax returns using
        the liability method. Under this method, deferred tax liabilities and
        assets are determined based on the temporary differences between the financial
        statement and tax bases of assets and liabilities using enacted tax rates
        in effect in the years in which the differences are expected to reverse.                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(i) | Long-Lived Assets Impairment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The carrying value of long-lived assets with fixed
        or determinable lives are reviewed for impairment whenever events or changes
        in circumstances indicate the recoverable value may be less than the carrying
        amount. Recoverable value determinations are based on managements
        estimates of undiscounted future net cash flows expected to be recovered
        from specific assets or groups of assets through use or future disposition.
        Impairment charges are recorded in the period in which determination of
        impairment is made by management.         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Assets with indefinite or indeterminable lives are
        not amortized and are reviewed for impairment on a reporting basis using
        fair value determinations through managements estimate of recoverable
        value.                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(j) | Asset Retirement Obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The Company recognizes a liability for future retirement
        obligations associated with the Company's mineral properties. The estimated
        fair value of the assets retirement obligation is based on the current
        cost escalated at an inflation rate and discounted at a credit adjusted
        rate. This liability is capitalized as part of the cost of the related
        asset and amortized over its productive life. The liability accretes until
        the Company settles the obligation. As of March 31, 2006 and 2005, the
        Company had no asset retirement obligation.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(k) | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | In December 2004, the FASB issued SFAS No. 123R, Share-Based
        Payment, which replaced SFAS No. 123, Accounting for Stock-Based
        Compensation and superseded APB Opinion No. 25, Accounting
        for Stock Issued to Employees. In January 2005, the Securities and
        Exchange Commission (SEC) issued Staff Accounting Bulletin
        (SAB) No. 107, Share-Based Payment,                                                                                                                                                                                                  

---

|- 24 -                           
|---------------------------------
|                                 
|MCNAB CREEK GOLD CORP.           
|(An exploration stage company)   
|                                 
|NOTES TO THE FINANCIAL STATEMENTS
|March 31, 2006                   
|(Expressed in
      US Dollars)  

|2. | Significant Accounting Policies (contd)
|-- | -----------------------------------------

|(k) | Stock-based Compensation (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | which provides supplemental implementation guidance
        for SFAS No. 123R. SFAS No. 123R requires all share- based payments to
        employees, including grants of employee stock options, to be recognized
        in the financial statements based on the grant date fair value of the
        award. SFAS No. 123R was to be effective for interim or annual reporting
        periods beginning on or after June 15, 2005, but in April 2005 the SEC
        issued a rule that will permit most registrants to implement SFAS No.
        123R at the beginning of their next fiscal year, instead of the next reporting
        period as required by SFAS No. 123R. The pro-forma disclosures previously
        permitted under SFAS No. 123 no longer will be an alternative to financial
        statement recognition. Under SFAS No. 123R, the Company must determine
        the appropriate fair value model to be used for valuing share-based payments,
        the amortization method for compensation cost and the transition method
        to be used at date of adoption. The transition provisions include prospective
        and retroactive adoption methods. Under the retroactive method, prior
        periods may be restated either as of the beginning of the year of adoption
        or for all periods presented. The prospective method requires that compensation
        expense be recorded for all unvested stock options and restricted stock
        at the beginning of the first quarter of adoption of SFAS No. 123R, while
        the retroactive methods would record compensation expense for all unvested
        stock options and restricted stock beginning with the first period restated.
        The Company has adopted the requirements of SFAS No. 123R which did not
        have any impact on the financial statements as, to date, the Company has
        not granted any stock options or any other share based payments..
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | The Company accounts for equity instruments issued
        in exchange for the receipt of goods or services from other than employees
        in accordance with SFAS No. 123 and the conclusions reached by the Emerging
        Issues Task Force in Issue No. 96-18, Accounting for Equity Instruments
        That Are Issued to Other Than Employees for Acquiring or in Conjunction
        with Selling Goods or Services (EITF 96-18). Costs are
        measured at the estimated fair market value of the consideration received
        or the estimated fair value of the equity instruments issued, whichever
        is more reliably measurable. The value of equity instruments issued for
        consideration other than employee services is determined on the earlier
        of a performance commitment or completion of performance by the provider
        of goods or services as defined by EITF 96-18.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(l) | Risk management:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | Environmental risk:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | The Company is engaged in mineral exploration and
        development and is accordingly exposed to environmental risks associated
        with mineral exploration activity. The Company is currently in the initial
        exploration stages on its property interests and has not determined whether
        significant site reclamation costs will be required. The Company would
        only record liabilities for site reclamation when reasonably determinable
        and when such costs can be reliably quantified.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

---

|- 25 -                           
|---------------------------------
|                                 
|MCNAB CREEK GOLD CORP.           
|(An exploration stage company)   
|                                 
|NOTES TO THE FINANCIAL STATEMENTS
|March 31, 2006                   
|(Expressed in
      US Dollars)  

|2. | Significant Accounting Policies (contd)
|-- | -----------------------------------------

|(l) | Risk management (contd):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Interest rate and credit risk:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | The Company is not exposed to significant interest
        rate or credit risk.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(m) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | In May 2005, the FASB issued SFAS No. 154, Accounting
        for Changes and Error Corrections - A Replacement of APB Opinion No. 20
        and FASB Statement No. 3. Under the provisions of SFAS No. 154,
        a voluntary change in accounting principle requires retrospective application
        to prior period financial statements, unless it is impracticable to determine
        either the period-specific effects or the cumulative effect of the change.
        A change in depreciation, amortization, or depletion method for long-lived,
        non-financial assets must be accounted for as a change in accounting estimate
        affected by a change in accounting principle. The guidance contained in
        APB No. 20 for reporting the correction of an error in previously issued
        financial statements and a change in accounting estimate was not changed.
        The Company implemented this new standard beginning January 1, 2006. This
        standard is not expected to have a significant effect on the Companys
        future reported financial position or results of operations.                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | In March 2005, the FASB issued FASB Interpretation
        (FIN) No. 47, Accounting for Conditional Asset Retirement
        Obligations. Under the provisions of FIN No. 47, the term conditional
        asset retirement obligation as used in SFAS No. 143, Accounting
        for Asset Retirement Obligations, refers to a legal obligation to
        perform an asset retirement activity in which the timing and/or method
        of settlement are conditional on a future event that may or may not be
        within the control of the entity while the obligation to perform the asset
        retirement activity is unconditional. Accordingly, an entity is required
        to recognize a liability for the fair value of a conditional asset retirement
        obligation if the fair value of the liability can be reasonably estimated.
        The fair value of a liability for the conditional asset retirement obligation
        is required to be recognized when incurred - generally upon acquisition,
        construction, or development and/or through the normal operation of the
        asset. The Company has adopted FIN No. 47 as of December 31, 2005. Adoption
        of this pronouncement did not have a significant effect on the 2005 financial
        statements, and management does not expect this pronouncement to have
        a significant effect on the Companys future reported financial position
        or earnings.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | 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 remeasurement 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                                                                                                                                                                                                                                                                                                                                                                                                                      

---

|- 26 -                           
|---------------------------------
|                                 
|MCNAB CREEK GOLD CORP.           
|(An exploration stage company)   
|                                 
|NOTES TO THE FINANCIAL STATEMENTS
|March 31, 2006                   
|(Expressed in
      US Dollars)  

|2. | Significant Accounting Policies (contd)
|-- | -----------------------------------------

|(m) | Recent Accounting Pronouncements (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | entity's first fiscal year that begins after September
        15, 2006, with earlier application allowed. This standard is not expected
        to have a significant 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. This adoption of this statement is not expected
        to have a significant effect on the Companys future reported financial
        position or results of operations.

|3. | Equipment
|-- | ---------

| |   |      |  |   | 2006         |  |   |          |  |   |      |  |   | 2005         |  |   |          | 
| | - | ---- |  | - | ------------ |  | - | -------- |  | - | ---- |  | - | ------------ |  | - | -------- | 
| |   |      |  |   | Accumulated  |  |   | Net Book |  |   |      |  |   | Accumulated  |  |   | Net Book | 
| |   | Cost |  |   | Amortization |  |   | Value    |  |   | Cost |  |   | Amortization |  |   | Value    | 
| | $ | 432  |  | $ | 233          |  | $ | 199      |  | $ | 432  |  | $ | 175          |  | $ | 257      | 

|4. | Mineral Property Interests                                           
|-- | ---------------------------------------------------------------------
|   |                                                                      
|   | A summary of acquisition and exploration costs is as
        follows:

| |                 |   | 2006   |  |   | 2005  | 
| | --------------- | - | ------ |  | - | ----- | 
| |                 |   |        |  |   |       | 
| | Acquisition     | $ | -      |  | $ | 3,500 | 
| | Assays          |   | 2,103  |  |   | -     | 
| | Consulting fees |   | 11,300 |  |   | -     | 
| | Supplies        |   | 430    |  |   | 250   | 
| | Travel          |   | 3,227  |  |   | -     | 
| |                 |   |        |  |   |       | 
| |                 | $ | 17,060 |  | $ | 3,750 | 

---

|- 27 -                           
|---------------------------------
|                                 
|MCNAB CREEK GOLD CORP.           
|(An exploration stage company)   
|                                 
|NOTES TO THE FINANCIAL STATEMENTS
|March 31, 2006                   
|(Expressed in
      US Dollars)  

|4. | Mineral Property Interests (contd)                                                                                                                                                                                                                                                                                                                                                       
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                            
|   | During the year ended March 31, 2004, the Company acquired
        certain mineral claim units located in Eureka County, Nevada for $3,500.
        This amount was determined to be impaired in 2004. The mineral claims
        are subject to a production royalty of 2.5% of net smelter returns (NSR).                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                            
|   | During the year ended March 31, 2005, the Company acquired
        certain mineral claim units located in Pershing County, Nevada for $3,500.
        This amount was determined to be impaired in 2005. The mineral claims
        are subject to a production royalty of 2.5% NSR. Subsequent to year end,
        management decided to discontinue holding an interest in these claims.
|   |                                                                                                                                                                                                                                                                                                                                                                                            
|5. | Due to Director and Promissory Notes Payable                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                            
|   | The amount due to a director of $13,030 (2005: $4,544)
        is unsecured, non-interest bearing and has no specific terms for repayment.                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                            
|   | The promissory notes payable is comprised of the following:                                                                                                                                                                                                                                                                                                                                

| |                                        |   | 2006 |  |   | 2005   | 
| | -------------------------------------- | - | ---- |  | - | ------ | 
| |                                        |   |      |  |   |        | 
| |                                        |   |      |  |   |        | 
| | Promissory note payable to a director  |   |      |  |   |        | 
| | of the Company, unsecured, interest at |   |      |  |   |        | 
| | 8% per annum, due January 9, 2006      | $ | -    |  | $ | 10,000 | 
| |                                        |   |      |  |   |        | 
| | Promissory note payable to a director  |   |      |  |   |        | 
| | of the Company, unsecured, interest at |   |      |  |   |        | 
| | 8% per annum, due March 19, 2006       |   | -    |  |   | 20,000 | 
| |                                        |   |      |  |   |        | 
| |                                        | $ | -    |  | $ | 30,000 | 

|   | As at March 31, 2006, accrued interest of $Nil (2005:
        $2,632) is included in accounts payable.                                                                                                                                                                                                                             
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                    
|   | During the current year, the Company issued 383,760
        shares of common stock at a price of $0.10 per share to settle indebtedness
        in the amount $38,376 comprised of amount due to a director of $4,544,
        promissory notes payable of $30,000 and accrued interest of $3,832.                                 
|   |                                                                                                                                                                                                                                                                                                                                    
|6. | Common Stock                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                    
|   | During the year ended March 31, 2006, the Company issued
        440,000 shares of common stock at a price of $0.10 per share for total
        proceeds of $44,000. The Company also issued 383,760 shares of common
        stock at a price of $0.10 per share to settle indebtedness in the amount
        of $38,376 (Note 5).
|   |                                                                                                                                                                                                                                                                                                                                    
|   | During the year ended March 31, 2005, the Company did
        not issue any shares of common stock.                                                                                                                                                                                                                                

---

|- 28 -                           
|---------------------------------
|                                 
|MCNAB CREEK GOLD CORP.           
|(An exploration stage company)   
|                                 
|NOTES TO THE FINANCIAL STATEMENTS
|March 31, 2006                   
|(Expressed in
      US Dollars)  

|6. | Common Stock (contd)                                                                                                                                                                                                                                                                                                    
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                           
|   | Common shares                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                           
|   | The common shares of the Company are all of the same
        class, are voting and entitle stockholders to receive dividends. Upon
        liquidation or wind-up, stockholders are entitled to participate equally
        with respect to any distribution of net assets or any dividends which
        may be declared.
|   |                                                                                                                                                                                                                                                                                                                           
|   | Additional paid-in capital                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                           
|   | The excess of proceeds received for shares of common
        stock over their par value of $0.0001, less share issue costs, is credited
        to additional paid-in capital.                                                                                                                                            

|7. | Donated Capital
|-- | ---------------

The Company records transactions of commercial substance with
  related parties at fair value as determined with management. The Company recognized
  donated services to officers of the Company for rent, valued at $500 per month,
  totalling $6,000 at March 31, 2006 (2005: $Nil).

|8. | Segmented Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company's business is operating in one segment,
        being the locating and exploration of mineral properties, and in one geographical
        area, the USA.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|9. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | As at March 31, 2006, the Company has estimated net
        operating losses carryforward for tax purposes of $234,000, which will
        expire starting 2022 through 2026. This amount may be applied against
        future federal taxable income. The Company evaluates its valuation allowance
        requirements on an annual basis based on projected future operations.
        When circumstances change and this causes a change in management's judgment
        about the realizability of deferred tax assets, the impact of the change
        on the valuation allowance is generally reflected in current income.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The tax effects of temporary differences that give rise
        to the Company's deferred tax asset are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| |                        |   | 2006    |   |   | 2005    |  
| | ---------------------- | - | ------- | - | - | ------- | -
| | Tax loss carryforwards | $ | 35,000  |   | $ | 27,000  |  
| | Valuation allowance    |   | (35,000 | ) |   | (27,000 | )
| | Net future tax assets  | $ | -       |   | $ | -       |  

---

|- 29 -                           
|---------------------------------
|                                 
|MCNAB CREEK GOLD CORP.           
|(An exploration stage company)   
|                                 
|NOTES TO THE FINANCIAL STATEMENTS
|March 31, 2006                   
|(Expressed in
      US Dollars)  

|10. | Subsequent Events                                                                         
|--- | ------------------------------------------------------------------------------------------
|    |                                                                                           
|    | Subsequent to March 31, 2006, the Company entered
        into the following transactions:

|(a) | The Company completed a forward split of its common
        shares on a 20:1 basis as of April 30, 2006.                                                                                                                                                                        
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                 
|(b) | The Company retained Wannigan Capital Corp. (Wannigan)
        to provide consulting services. The Company will issue Wannigan 100,000
        (post forward split) of its $0.0001 par value common shares as compensation,
        once the forward split has been completed.
|    |                                                                                                                                                                                                                                                                                 
|(c) | The Company received $44,290 as advance proceeds
        towards the issuance of 442,900 (post forward split) shares of common
        stock at a price of $0.10 per share.                                                                                                     

---

- 30 -

Item 8. Changes In and Disagreements With Accountants on
  Accounting and Financial Disclosure

McNab Creek Gold Corp. (the Registrant) has engaged new
auditors as its independent accountants to audit its financial statements. The
Registrants board of directors dismissed the former auditors and approved the
change of auditors to Dale Matheson Carr-Hilton Labonte, Chartered Accountants
effective on March 13, 2006.

During the years ended March 31, 2004, March 31, 2005, for the
nine month period ended December 31, 2005 and for the period January 1, 2006 to
March 13, 2006, there were no disagreements with the Registrant's former
accountants, Ernst & Young LLP, on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure.

Item 8A. Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, as of the
end of the period covered by this report, being March 31, 2006, we have carried
out an evaluation of the effectiveness of the design and operation of our
company's disclosure controls and procedures. This evaluation was carried out
under the supervision and with the participation of our management, including
our president and chief executive officer. Based upon that evaluation, our
president and chief executive officer concluded that our disclosure controls and
procedures are effective as of the end of the period covered by this report.
There have been no significant changes in our internal controls over financial
reporting that occurred during our most recent fiscal quarter that have
materially affected, or are reasonably likely to materially affect our internal
controls over financial reporting.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our company's reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our reports filed under the
Exchange Act is accumulated and communicated to management, including our
president and chief executive officer as appropriate, to allow timely decisions
regarding required disclosure.

PART III

Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act.

All directors of our company hold office until the next annual
meeting of the stockholders or until their successors have been elected and
qualified. The officers of our company are appointed by our board of directors
and hold office until their death, resignation or removal from office. Our
directors, executive officers and significant employees, their ages, positions
held, and duration as such, are as follows:

|                       | Position Held              |     | Date First Elected or
|---------------------- | -------------------------- | --- | ---------------------
|Name                   | With the Company           | Age | Appointed            
|                       |                            |     |                      
|Kenneth G. Townsend    | President, C.E.O., C.F.O., | 71  | August 11, 2003      
|                       | Secretary and Director     |     |                      
|                       |                            |     |                      
|Christopher R. Verrico | Director                   | 48  | February 11, 2005    

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- 31 -

Business Experience

The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee, indicating the principal occupation during that period, and the name and principal
business of the organization in which such occupation and employment were carried out.

Kenneth G. Townsend  President, C.E.O., C.F.O., Secretary and Director

Mr. Townsend was appointed to his positions with our company on August 11, 2003. Mr. Townsend has been employed full time in this capacity. For the period May, 1994 through August, 2003, Mr. Townsend was a franchise owner and distributor for Ecofuel
Diesel Saver in the Provinces of British Columbia and Alberta. Mr. Townsend is not an officer or director of any other publicly listed companies.

Christopher R. Verrico  Director

Mr. Verrico was appointed a director of our company on February
  11, 2005. During the period 2003 to 2004, Mr. Verrico was employed as project
  manager and superintendent with JJM Construction Ltd. of Delta, British Columbia.
  Mr. Verrico was principally responsible for managing utility and road improvement
  projects operated by JJM Construction Ltd. for the Municipalities of Richmond,
  Surrey and North Vancouver. During the period 1995 to 2003, Mr. Verrico was
  President of Mopass Ventures Ltd. Mopass Ventures Ltd. was Mr. Verrico’s
  private operating company and through this company, Mr. Verrico participated
  as a contract consultant to Cumberland Resources and Candente Resource Corp.
  in the development and construction of a new exploration base camp in the Canadian
  Arctic for a gold mining operation. Mr. Verrico has extensive experience in
  the civil/heavy-industrial construction and mining industry. Mr. Verrico is
  Director and CEO of West Hawk Development Corp. (WHD) on the TSX Venture Exchange
  and is a Director but not an Officer of Lateegra Gold Corp. (LRG) on the TSX
  Venture Exchange.

Family Relationships

There are no family relationships among our directors and officers

Board and Committee Meetings

The Board of Directors of the Company held informal meetings during the year ended March 31, 2006. All proceedings of the Board of Directors were conducted by resolutions consented to in writing by all the directors and filed with the minutes of the
proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Nevada General Corporate Law and the By-laws of the Company, as valid and
effective as if they had been passed at a meeting of the directors duly called and held.

For the year ended March 31, 2006 our only standing committee of the Board of Directors was our audit committee.

Audit Committee

Currently our audit committee consists of our entire Board of Directors. We currently do not have nominating, compensation committees or committees performing similar functions. There has not been any defined policy or procedure requirements for
shareholders to submit recommendations or nomination for directors.

During fiscal 2005/2006, there were informal meetings held
  by this Committee. The business of the Audit Committee was conducted by resolutions
  consented to in writing by all the members and filed with the minutes of the
  proceedings of the Audit Committee.

---

- 32 -

Audit Committee Financial Expert

Our board of directors has determined that it does not have a member of its audit committee that qualifies as an "audit committee financial expert" as defined in Item 401(e) of Regulation S-B, and is "independent" as the term is used in Item
7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.

We believe that the members of our board of directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. In addition, we believe that retaining an
independent director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have not generated any
material revenues to date.

Involvement in Certain Legal Proceedings

Our directors, executive officers and control persons have not been involved in any of the following events during the past five years:

|1. | any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                        
|2. | any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences);                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                        
|3. | being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking activities; or
|   |                                                                                                                                                                                                                                                                                                        
|4. | being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been
reversed, suspended, or vacated.                                     

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the Securities and
Exchange Commission and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year ended March 31,
2006, all filing requirements applicable to its officers, directors and greater than 10% percent beneficial owners were complied with.

Code of Ethics

Effective June 1, 2005, our company's board of directors adopted a Code of Business Conduct and Ethics that applies to, among other persons, our company's President and Secretary (being our principal executive officer, principal financial officer
and principal accounting officer), as well as persons performing similar functions. As adopted, our Code of Business Conduct and Ethics sets forth written standards that are designed to deter wrongdoing and to promote:

|1. | honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;                                                    
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                            
|2. | full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications made by us;

---

- 33 -

|3. | compliance with applicable governmental laws, rules and
      regulations;                                                                                                                       
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                  
|4. | the prompt internal reporting of violations of the Code
      of Business Conduct and Ethics to an appropriate person or persons
      identified in the Code of Business Conduct and Ethics; and
|   |                                                                                                                                                                                                  
|5. | accountability for adherence to the Code of Business
      Conduct and Ethics.                                                                                                                   

Our Code of Business Conduct and Ethics requires, among other
things, that all of our company's Senior Officers commit to timely, accurate and
consistent disclosure of information; that they maintain confidential
information; and that they act with honesty and integrity.

In addition, our Code of Business Conduct and Ethics emphasizes
that all employees, and particularly Senior Officers, have a responsibility for
maintaining financial integrity within our company, consistent with generally
accepted accounting principles, and federal and state securities laws. Any
Senior Officer who becomes aware of any incidents involving financial or
accounting manipulation or other irregularities, whether by witnessing the
incident or being told of it, must report it to our company. Any failure to
report such inappropriate or irregular conduct of others is to be treated as a
severe disciplinary matter. It is against our company policy to retaliate
against any individual who reports in good faith the violation or potential
violation of our company's Code of Business Conduct and Ethics by another.

Our Code of Business Conduct and Ethics is filed with the
Securities and Exchange Commission as Exhibit 14.1 to our annual report. We will
provide a copy of the Code of Business Conduct and Ethics to any person without
charge, upon request. Requests can be sent to: McNab Creek Gold Corp., Suite
1128, 789 West Pender Street, Vancouver, B.C., V6C 1H2.

Item 10. Executive Compensation

No other executive officer of our company received annual
salary and bonus in excess of $100,000 for the year ended March 31, 2006.

|SUMMARY COMPENSATION TABLE 
|---------------------------
|                           
|                           
|(a)                        
|Name and Principle Position
|                           
|Kenneth G. Townsend,       
|President, C.E.O.,         
|C.F.O., Secretary and      
|Director                   
|E.L. Hunsaker III,         
|Director                   
|Christopher R. Verrico,    
|Director                   

Long-Term Incentive Plans

There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers, except that
our directors and executive officers may receive stock options at the discretion
of our board of directors. We do not have any material bonus or profit sharing
plans pursuant to which cash or non-

---

- 34 -

cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our board of directors.

We have no plans or arrangements in respect of remuneration received or that may be received by our executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control)
or a change of responsibilities following a change of control, where the value of such compensation exceeds $60,000 per executive officer.

Compensation Of Directors

We reimburse our directors for expenses incurred in connection with attending board meetings. We did not pay director's fees or other cash compensation for services rendered as a director in the year ended March 31, 2006.

We have no formal plan for compensating our directors for their service in their capacity as directors, although such directors are expected in the future to receive stock options to purchase common shares as awarded by our board of directors or (as
to future stock options) a compensation committee which may be established. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors.
Our board of directors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director. No director received and/or accrued any compensation for their services as a
director, including committee participation and/or special assignments.

Employment Contracts

During the period ended March 31, 2006, we paid consulting fees of $nil for consulting services to our company.  On May 10, 2006 the Company entered into a six- month Consulting Agreement with Wannigan Capital Corp. to provide assistance in its
day-to-day operations. Specifically, they assist in interaction with the Companys auditors, transfer agent and regulatory authorities. Wannigan Capital Corp received $100,000 common shares of the Company as remuneration.

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive stock options at the discretion of our board of directors in the
future. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our board of
directors.

We have no plans or arrangements in respect of remuneration received or that may be received by our executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control)
or a change of responsibilities following a change of control, where the value of such compensation exceeds $60,000 per executive officer.

Item 11. Security Ownership of Certain Beneficial Owners and Management and Related StockholderMatters

The following table sets forth, as of June 7, 2006 certain
  information with respect to the beneficial ownership of our common stock by
  each stockholder known by us to be the beneficial owner of more than 5% of our
  common stock and by each of our current directors and executive officers. Each
  person has sole voting and investment power with respect to the shares of common
  stock, except as otherwise indicated. Beneficial ownership consists of a direct
  interest in the shares of common stock, except as otherwise indicated.

---

- 35 -

|               | Name and Address       | Amount and Nature   | Percent 
|-------------- | ---------------------- | ------------------- | --------
|Title of Class | of Beneficial Owner    | of Beneficial Owner | of Class
|               |                        |                     |         
|Common         | Kenneth G. Townsend    | 20,155,200 shares   | 56.20%  
|               | Director               | Direct Ownership    |         
|               | 2028 West 53rdAvenue   |                     |         
|               | Vancouver, B.C.        |                     |         
|               | V6P 1L4                |                     |         
|               |                        |                     |         
|Common         | Christopher R. Verrico | No shares held      | 0%      
|               | Director               |                     |         
|               | 6511 Granville Street  |                     |         
|               | Vancouver, B.C.        |                     |         
|               | V6C 1L6                |                     |         

Changes in Control

We are unaware of any contract or other arrangement the
operation of which may at a subsequent date result in a change in control of our
company.

Item 12. Certain Relationships and Related
Transactions

In fiscal year 2004, our company paid $1,852 to our director,
Mr. Kenneth Townsend, and $4,000 in management fees to Mr. Michael Townsend. Mr.
Michael Townsend is the son of Mr. Kenneth Townsend.

The Company has issued two promissory notes payable to Mr.
Kenneth Townsend, a director of our company. The first promissory note is
unsecured and bears interest at 8% per annum. This note is for $10,000 and is
due January 9, 2006. The second promissory note has also been issued to Mr.
Kenneth Townsend, is unsecured and bears interest at 8% per annum. This note is
for $20,000 and is due March 19, 2006. On December 30, 2005, the Company issued
383,760 common shares to Kenneth G Townsend, a director of the Company and its
sole Officer in full satisfaction of all loans made to the Company.

The Companys acquisition of its SMH Property were negotiated
at arms length with Mr. E.L. Hunsaker III before he became a director of the
Company. However, in view of a potential conflict of interest in Mr. Hunsaker
remaining as a director of the Company, he has resigned his position as a
director of the Company and has been replaced by Mr. Christopher R. Verrico.

The SMH 31-50 claims were transferred to McNab Creek Gold
Corporation by virtue of a Quitclaim Deed executed in January 2004 by Scoonover
Exploration LLC of Elko, Nevada. E.L. Hunsaker III, is a managing member of
Scoonover Exploration LLC (Scoonover Exploration a Nevada Limited Liability
Company). The claims were acquired for the consideration of $3,500; with a 2.5%
net smelter return royalty retained by Scoonover (the 2.5% net smelter return
royalty was sold to Golden Patriot Corp., of which E.L. Hunsaker III is also a
director). The SMH quitclaim is recorded in Eureka County Nevada Book 374, Page
001-003.

The Roxy 1-8 claims were transferred to McNab Creek Gold
Corporation by virtue of a Quitclaim Deed executed in July 2004 by Scoonover
Exploration LLC of Elko, Nevada. E.L. Hunsaker III, is a managing member of
Scoonover Exploration LLC (Scoonover Exploration a Nevada Limited Liability
Company). The claims were acquired for the consideration of $3,500; with a 2.5%
net smelter return royalty retained by Scoonover (the 2.5% net smelter return
royalty was sold to Golden Patriot Corp., of which E.L. Hunsaker III is also a
director). The Roxy quitclaim is recorded in Pershing County Nevada Book 384,
Page 740-742. Subsequent to year end management decided to discontinue holding
an interest in the Roxy Prospect

---

- 36 -

Item 13. Exhibits

Exhibits required by Item 601 of Regulation S-B:

|Exhibit |                                                                                                         
|------- | --------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                             
|        |                                                                                                         
|(3)     | (i) Articles of Incorporation; and (ii) Bylaws                                                          
|        |                                                                                                         
|3.1     | Articles of Incorporation (incorporated by reference from our
      Form 10-SB filed on August 25, 2004)
|        |                                                                                                         
|3.2     | Bylaws (incorporated by reference from our Form 10-SB filed
      on August 25, 2004)                   
|        |                                                                                                         
|(14)    | Code of Ethics                                                                                          
|        |                                                                                                         
|14.1*   | Code of Business Conduct and Ethics                                                                     
|        |                                                                                                         
|(31)    | Rule 13a-14(a)/15d-14(a) Certifications                                                                 
|        |                                                                                                         
|31.1*   | Section 302 Certification under Sarbanes-Oxley
      Act of 2002 of Kenneth G. Townsend                 
|        |                                                                                                         
|(32)    | Section 1350 Certifications                                                                             
|        |                                                                                                         
|32.1*   | Section 906 Certification under Sarbanes-Oxley
      Act of 2002                                        

* Filed herewith.

Item 14. Principal Accountant

The Companys board of directors dismissed the former auditors
and approved the change of auditors to Dale Matheson Carr-Hilton Labonte,
Chartered Accountants effective on March 13, 2006.

During the years ended March 31, 2004, March 31, 2005, for the
nine month period ended December 31, 2005 and for the period January 1, 2006 to
March 13, 2006, there were no disagreements with the Registrant's former
accountants, Ernst & Young LLP, on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure.

We do not use Dale Matheson Carr-Hilton Labonte for financial
information system design and implementation. These services, which include
designing or implementing a system that aggregates source data underlying the
financial statements or generates information that is significant to our
financial statements, are provided internally or by other service providers. We
do not engage Dale Matheson Carr-Hilton Labonte to provide compliance
outsourcing services.

Effective May 6, 2003, the Securities and Exchange Commission
adopted rules that require that before Dale Matheson Carr-Hilton Labonte is
engaged by us to render any auditing or permitted non-audit related service, the
engagement be:

- approved by our audit committee (which consists of our entire board of directors);
    or
- entered into pursuant to pre-approval policies and procedures established
    by the board of directors, provided the policies and procedures are detailed
    as to the particular service, the board of directors is informed of each service,
    and such policies and procedures do not include delegation of the board of
    directors' responsibilities to management.

---

- 37 -

The board of directors pre-approves all services provided by
our independent auditors. All of the above services were reviewed and approved
by the board of directors either before or after the respective services were
rendered.

The board of directors has considered the nature and amount of
fees billed by Dale Matheson Carr-Hilton Labonte and believes that the provision
of services for activities unrelated to the audit is compatible with maintaining
Dale Matheson Carr-Hilton Labontes independence.

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.

|                       | MCNAB CREEK GOLD CORP.
|---------------------- | ----------------------
|                       |                       
|                       |                       
|                       |                       
|Dated: August 21, 2006 | Per:                  
|                       |                       
|                       |                       
|                       |                       

In accordance with the Exchange Act, this report has been
signed below by the following person on behalf of the Registrant and in the
capacities and on the dates indicated.

|Dated: August 21, 2006 | Per: | /s/ Kenneth G. Townsend                   
|---------------------- | ---- | ------------------------------------------
|                       |      | Kenneth G. Townsend,                      
|                       |      | President, C.E.O., C.F.O., Secretary      
|                       |      | and Director (Principal Executive Officer)

---