UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM
        10-QSB



x
        QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934



For the
        quarterly period ended: December 31, 2007



o
        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934



Commission file number: 000-51939



BANNER RESOURCES INC.

(Exact
        name of small business issuer as specified in its charter)



|Nevada                                                  | 98-0446606         
|------------------------------------------------------- | -------------------
|(State or other jurisdiction of                         | (I.R.S. Employer   
|incorporation or organization)                          | Identification No.)
|                                                        |                    
|206-595 Howe Street                                     |                    
|Vancouver, British Columbia,
                    Canada | V6C 2T5            
|(Address of principal executive offices)                | (zip code)         



Issuer's
        Telephone Number: (604) 681-2575



Check
        whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the
        Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period
        that the registrant was required to file such reports), and (2) has been subject to such
        filing requirements for the past 90 days.



Yes x
        No o



Indicate by
        check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
        Exchange Act).



Yes x No
        o



State the
        number of shares outstanding of each of the issuer’s classes of common equity, as of
        the latest practicable date: As of February 14, 2008, there were 7,445,000 shares of common
        stock issued and outstanding.



Transitional Small Business Disclosure Format (check one)



Yes
        o No
        x

---

PART I -
        FINANCIAL INFORMATION



|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------



The accompanying unaudited financial statements have been prepared in
        accordance with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B, and,
        therefore, do not include all information and footnotes necessary for a complete
        presentation of financial position, results of operations, cash flows, and
        stockholders’ equity in conformity with generally accepted accounting principles. In
        the opinion of management, all adjustments considered necessary for a fair presentation of
        the results of operations and financial position have been included and all such
        adjustments are of a normal recurring nature. Operating results for the three months and
        nine months ended December 31, 2007 are not necessarily indicative of the results that can
        be expected for the fiscal year ending March 31, 2008.



As used in this Quarterly Report, the terms “we”,
        “us”, “our”, “the Company” and “Banner”
        mean Banner Resources Inc., unless otherwise indicated. All dollar amounts in this
        Quarterly Report are in U.S. dollars unless otherwise stated.





---

Banner
        Resources Inc.

(An
        Exploration Stage Company)



December
        31, 2007

> Index

|Consolidated Balance Sheets | F–1
|--------------------------- | ---



|Consolidated Statements of Operations | F–2
|------------------------------------- | ---



|Consolidated Statements of Cash Flows | F–3
|------------------------------------- | ---



|Notes to the Consolidated Financial Statements | F–4
|---------------------------------------------- | ---







---

Banner
        Resources Inc.

(An
        Exploration Stage Company)

Consolidated Balance Sheets

(Expressed
        in U.S. dollars)

(unaudited)





|                                                                                                                                                                           | December 31,

                    2007

                    $ | March 31,

                    2007

                    $
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------- | ----------------------------------------------------------
|ASSETS                                                                                                                                                                     |                                                               |                                                           
|                                                                                                                                                                           |                                                               |                                                           
|Current Assets                                                                                                                                                             |                                                               |                                                           
|                                                                                                                                                                           |                                                               |                                                           
|Cash                                                                                                                                                                       | 2,266                                                         | 61,254                                                    
|Prepaid expenses                                                                                                                                                           | -                                                             | 1,000                                                     
|                                                                                                                                                                           |                                                               |                                                           
|Total Assets                                                                                                                                                               | 2,266                                                         | 62,254                                                    
|                                                                                                                                                                           |                                                               |                                                           
|                                                                                                                                                                           |                                                               |                                                           
|LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)                                                                                                                             |                                                               |                                                           
|                                                                                                                                                                           |                                                               |                                                           
|Current Liabilities                                                                                                                                                        |                                                               |                                                           
|                                                                                                                                                                           |                                                               |                                                           
|Accounts payable                                                                                                                                                           | 25,375                                                        | 17,846                                                    
|Accrued liabilities                                                                                                                                                        | 1,969                                                         | 610                                                       
|Due to related parties (Note 4)                                                                                                                                            | 8,295                                                         | 7,834                                                     
|Loans payable (Note 5)                                                                                                                                                     | 9,640                                                         | 14,640                                                    
|                                                                                                                                                                           |                                                               |                                                           
|Total Liabilities                                                                                                                                                          | 45,279                                                        | 40,930                                                    
|                                                                                                                                                                           |                                                               |                                                           
|Contingencies and Commitments (Notes 1 and 3)                                                                                                                              |                                                               |                                                           
|                                                                                                                                                                           |                                                               |                                                           
|Stockholders’ Equity (Deficit)                                                                                                                                             |                                                               |                                                           
|                                                                                                                                                                           |                                                               |                                                           
|Common Stock

                    Authorized: 75,000,000 common shares, par value
                    $0.001

                    Issued and outstanding: 7,445,000 shares | 7,445                                                         | 7,445                                                     
|                                                                                                                                                                           |                                                               |                                                           
|Additional Paid-in Capital                                                                                                                                                 | 136,250                                                       | 136,250                                                   
|                                                                                                                                                                           |                                                               |                                                           
|Donated Capital (Note 4(a))                                                                                                                                                | 37,266                                                        | 23,766                                                    
|                                                                                                                                                                           |                                                               |                                                           
|Accumulated Other Comprehensive Loss                                                                                                                                       | (3,236)                                                       | (200)                                                     
|                                                                                                                                                                           |                                                               |                                                           
|Deficit Accumulated During the Exploration Stage                                                                                                                           | (220,738)                                                     | (145,937)                                                 
|                                                                                                                                                                           |                                                               |                                                           
|Total Stockholders’ Equity (Deficit)                                                                                                                                       | (43,013)                                                      | 2 1,324                                                   
|                                                                                                                                                                           |                                                               |                                                           
|Total Liabilities and Stockholders’ Equity
                    (Deficit)                                                                                                   | 2,266                                                         | 62,254                                                    
|                                                                                                                                                                           |                                                               |                                                           



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



F-1



---

Banner
        Resources Inc.

(An
        Exploration Stage Company)

Consolidated Statements of Operations

(Expressed
        in U.S. dollars)

(unaudited)





|                                        |  | Accumulated

                    From

                    January 24, 2005

                    (Date of Inception)

                    to December 31, | For the

                    Three Months

                    Ended

                    December 31, | For the

                    Three Months

                    Ended

                    December 31, | For the

                    Nine Months

                    Ended

                    December 31, | For the

                    Nine Months

                    Ended

                    December 31,
|--------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------
|                                        |  | 2007                                                                                                                                                      | 2007                                                                                                   | 2006                                                                                                   | 2007                                                                                                  | 2006                                                                                                 
|                                        |  | $                                                                                                                                                         | $                                                                                                      | $                                                                                                      | $                                                                                                     | $                                                                                                    
|                                        |  |                                                                                                                                                           |                                                                                                        |                                                                                                        |                                                                                                       |                                                                                                      
|Revenue                                 |  | -                                                                                                                                                         | -                                                                                                      | -                                                                                                      | -                                                                                                     | -                                                                                                    
|                                        |  |                                                                                                                                                           |                                                                                                        |                                                                                                        |                                                                                                       |                                                                                                      
|                                        |  |                                                                                                                                                           |                                                                                                        |                                                                                                        |                                                                                                       |                                                                                                      
|Expenses                                |  |                                                                                                                                                           |                                                                                                        |                                                                                                        |                                                                                                       |                                                                                                      
|                                        |  |                                                                                                                                                           |                                                                                                        |                                                                                                        |                                                                                                       |                                                                                                      
|General and administrative              |  | 19,742                                                                                                                                                    | 1,838                                                                                                  | 897                                                                                                    | 7,010                                                                                                 | 961                                                                                                  
|Management fees (Note 4(a))             |  | 35,000                                                                                                                                                    | 3,000                                                                                                  | 3,000                                                                                                  | 9,000                                                                                                 | 9,000                                                                                                
|Mineral property costs                  |  | 29,289                                                                                                                                                    | 89                                                                                                     | 7,657                                                                                                  | 2,923                                                                                                 | 11,415                                                                                               
|Rent (Note 4(a))                        |  | 20,854                                                                                                                                                    | 1,500                                                                                                  | 1,500                                                                                                  | 4,500                                                                                                 | 4,500                                                                                                
|Professional services                   |  | 115,853                                                                                                                                                   | 21,477                                                                                                 | 8,422                                                                                                  | 51,368                                                                                                | 25,489                                                                                               
|                                        |  |                                                                                                                                                           |                                                                                                        |                                                                                                        |                                                                                                       |                                                                                                      
|Total Expenses                          |  | 220,738                                                                                                                                                   | 27,904                                                                                                 | 21,476                                                                                                 | 74,801                                                                                                | 51,365                                                                                               
|                                        |  |                                                                                                                                                           |                                                                                                        |                                                                                                        |                                                                                                       |                                                                                                      
|Net Loss                                |  | (220,738)                                                                                                                                                 | (27,904)                                                                                               | (21,476)                                                                                               | (74,801)                                                                                              | (51,365)                                                                                             
|                                        |  |                                                                                                                                                           |                                                                                                        |                                                                                                        |                                                                                                       |                                                                                                      
|Other Comprehensive Loss                |  |                                                                                                                                                           |                                                                                                        |                                                                                                        |                                                                                                       |                                                                                                      
|                                        |  |                                                                                                                                                           |                                                                                                        |                                                                                                        |                                                                                                       |                                                                                                      
|Foreign Currency Translation Adjustment |  | (3,236)                                                                                                                                                   | (144)                                                                                                  | 640                                                                                                    | (3,036)                                                                                               | 157                                                                                                  
|                                        |  |                                                                                                                                                           |                                                                                                        |                                                                                                        |                                                                                                       |                                                                                                      
|Comprehensive Loss                      |  | (223,974)                                                                                                                                                 | (28,048)                                                                                               | (20,836)                                                                                               | (77,837)                                                                                              | (51,208)                                                                                             
|                                        |  |                                                                                                                                                           |                                                                                                        |                                                                                                        |                                                                                                       |                                                                                                      
|                                        |  |                                                                                                                                                           |                                                                                                        |                                                                                                        |                                                                                                       |                                                                                                      
|Net Loss Per Share – Basic and Diluted  |  |                                                                                                                                                           | -                                                                                                      | -                                                                                                      | (0.01)                                                                                                | (0.01)                                                                                               
|                                        |  |                                                                                                                                                           |                                                                                                        |                                                                                                        |                                                                                                       |                                                                                                      
|Weighted Average Shares Outstanding     |  |                                                                                                                                                           | 7,445,000                                                                                              | 7,445,000                                                                                              | 7,445,000                                                                                             | 7,143,000                                                                                            
|                                        |  |                                                                                                                                                           |                                                                                                        |                                                                                                        |                                                                                                       |                                                                                                      



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



F-2



---

Banner
        Resources Inc.

(An
        Exploration Stage Company)

Consolidated Statements of Cash Flows

(Expressed
        in U.S. dollars)

(unaudited)





|                                                                                               |  | For the

                    Nine Months

                    Ended

                    December 31, | For the

                    Nine Months

                    Ended

                    December 31,
|---------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------
|                                                                                               |  | 2007                                                                                                  | 2006                                                                                                 
|                                                                                               |  | $                                                                                                     | $                                                                                                    
|                                                                                               |  |                                                                                                       |                                                                                                      
|Operating Activities                                                                           |  |                                                                                                       |                                                                                                      
|                                                                                               |  |                                                                                                       |                                                                                                      
|Net loss for the period                                                                        |  | (74,801)                                                                                              | (51,365)                                                                                             
|                                                                                               |  |                                                                                                       |                                                                                                      
|Adjustment to reconcile net loss to net cash used in operating
                    activities: |  |                                                                                                       |                                                                                                      
|                                                                                               |  |                                                                                                       |                                                                                                      
|Donated services                                                                               |  | 13,500                                                                                                | 13,500                                                                                               
|                                                                                               |  |                                                                                                       |                                                                                                      
|Changes in operating assets and liabilities:                                                   |  |                                                                                                       |                                                                                                      
|                                                                                               |  |                                                                                                       |                                                                                                      
|Prepaid expenses                                                                               |  | 1,000                                                                                                 | (1,000)                                                                                              
|Accounts payable and accrued liabilities                                                       |  | 8,888                                                                                                 | 5,104                                                                                                
|Due to related parties                                                                         |  | 461                                                                                                   | 2,580                                                                                                
|                                                                                               |  |                                                                                                       |                                                                                                      
|Net Cash Used in Operating Activities                                                          |  | (50,952)                                                                                              | (31,181)                                                                                             
|                                                                                               |  |                                                                                                       |                                                                                                      
|Financing Activities                                                                           |  |                                                                                                       |                                                                                                      
|                                                                                               |  |                                                                                                       |                                                                                                      
|Repayment of loans payable                                                                     |  | (5,000)                                                                                               | -                                                                                                    
|Proceeds received from issuance of common stock                                                |  | -                                                                                                     | 100,000                                                                                              
|                                                                                               |  |                                                                                                       |                                                                                                      
|Net Cash Provided By (Used In) Financing Activities                                            |  | (5,000)                                                                                               | 100,000                                                                                              
|                                                                                               |  |                                                                                                       |                                                                                                      
|Effect of Exchange Rate Changes on Cash                                                        |  | (3,036)                                                                                               | 157                                                                                                  
|                                                                                               |  |                                                                                                       |                                                                                                      
|Increase (Decrease) in Cash                                                                    |  | (58,988)                                                                                              | 68,976                                                                                               
|                                                                                               |  |                                                                                                       |                                                                                                      
|Cash – Beginning of Period                                                                     |  | 61,254                                                                                                | 6,383                                                                                                
|                                                                                               |  |                                                                                                       |                                                                                                      
|Cash – End of Period                                                                           |  | 2,266                                                                                                 | 75,359                                                                                               
|                                                                                               |  |                                                                                                       |                                                                                                      
|                                                                                               |  |                                                                                                       |                                                                                                      
|Supplemental Disclosures:                                                                      |  |                                                                                                       |                                                                                                      
|                                                                                               |  |                                                                                                       |                                                                                                      
|Interest paid                                                                                  |  | -                                                                                                     | -                                                                                                    
|Income taxes paid                                                                              |  | -                                                                                                     | -                                                                                                    



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



F-3



---

Banner
        Resources Inc.

(An
        Exploration Stage Company)

Notes to
        the Consolidated Financial Statements

(Expressed
        in U.S. dollars)

(unaudited)



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

Banner
        Resources (“the Company”) was incorporated in the State of Nevada on January
        24, 2005. The Company is an Exploration Stage Company, as defined by Statement of Financial
        Accounting Standard (“SFAS”) No.7 “Accounting
        and Reporting by Development Stage Enterprises”. The
        Company’s principal business is the acquisition and exploration of mineral resources.
        The Company does not currently have any property interests, as explained in Note
        3.

These
        consolidated financial statements have been prepared on a going concern basis, which
        implies the Company will continue to realize its assets and discharge its liabilities in
        the normal course of business. The Company has never generated revenue and has never paid
        any dividends and is unlikely to pay dividends or generate earnings in the immediate or
        foreseeable future. The continuation of the Company as a going concern is dependent upon
        the continued financial support from its shareholders, the ability of the Company to obtain
        necessary equity financing to continue operations and to determine the existence, discovery
        and successful exploitation of economically recoverable reserves in resource properties,
        confirmation of the Company’s interests in the underlying properties, and the
        attainment of profitable operations. As at December 31, 2007, the Company has a working
        capital deficit of $43,013 and accumulated losses of $220,738 since inception. These
        consolidated financial statements do not include any adjustments to the recoverability and
        classification of recorded asset amounts and classification of liabilities that might be
        necessary should the Company be unable to continue as a going concern. These factors raise
        substantial doubt regarding the Company’s ability to continue as a going
        concern.

| | 2. | Summary of Significant Accounting Policies
| | -- | ------------------------------------------

a)     Basis of Presentation

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

| |  | b)     Interim Consolidated Financial
                    Statements
| |  | --------------------------------------------------------------------

The unaudited interim consolidated financial statements have been prepared
        in accordance with accounting principles generally accepted in the United States for
        interim financial information and with the instructions for Securities and Exchange
        Commission (“SEC”) Form 10-QSB. They do not include all of the information
        and footnotes required by generally accepted accounting principles for complete financial
        statements. Therefore, these interim consolidated financial statements should be read in
        conjunction with the Company’s audited financial statements and notes thereto for the
        year ended March 31, 2007, and Auditor's Report dated June 12, 2007, included in the
        Company’s Annual Report on Form 10-KSB filed with the SEC on July 2,
        2007.

The interim consolidated financial statements included herein are unaudited;
        however, they contain all normal recurring accruals and adjustments that, in the opinion of
        management, are necessary to present fairly the Company’s financial position at
        December 31, 2007, and the results of its operations and cash flows for the nine months
        ended December 31, 2007 and 2006. The results of operations for the nine months ended
        December 31, 2007 are not necessarily indicative of the results to be expected for future
        quarters or the full year.

| |  | c)     Use of Estimates
| |  | -----------------------

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



F-
        4



---

Banner
        Resources Inc.

(An
        Exploration Stage Company)

Notes to
        the Consolidated Financial Statements

(Expressed
        in U.S. dollars)

(unaudited)



|2. |  | Summary of Significant Accounting Policies
                    (continued)
|-- |  | --------------------------------------------------------------------------

d)     Cash and Cash Equivalents

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

| |  | e)     Basic and Diluted Net Income (Loss)
                    Per Share
| |  | ------------------------------------------------------------------------

The Company computes net income (loss) per share in accordance with SFAS No.
        128, "Earnings per Share" (SFAS 128).
        SFAS 128 requires presentation of both basic and diluted earnings per share (EPS) on the
        face of the income statement. Basic EPS is computed by dividing net income (loss) available
        to common shareholders (numerator) by the weighted average number of shares outstanding
        (denominator) during the period. Diluted EPS gives effect to all dilutive potential common
        shares outstanding during the period including stock options, using the treasury stock
        method, and convertible preferred stock, using the if-converted method. In computing
        diluted EPS, the average stock price for the period is used in determining the number of
        shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS
        excludes all dilutive potential shares if their effect is anti-dilutive. As at December 31,
        2007, there are no dilutive potential common shares.

| |  | f)     Financial Instruments
| |  | ----------------------------

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

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

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

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

| |  | h)     Mineral Property Costs
| |  | -----------------------------

The Company has been in the exploration stage since its inception on January
        24, 2005, and has not yet realized any revenues from its planned operations. It is
        primarily engaged in the acquisition and exploration of mining properties. Mineral property
        exploration costs are expensed as incurred. Mineral property acquisition costs are
        capitalized in accordance with EITF 04-2 “Whether Mineral
        Rights Are Tangible or Intangible Assets” when management
        has determined that probable future benefits consisting of a contribution to future cash
        inflows have been identified and adequate financial resources are available or are expected
        to be available as required to meet the terms of property acquisition and budgeted
        exploration and development expenditures. Mineral property acquisition costs are expensed
        as incurred if the criteria for capitalization are not met. In the event that a mineral
        property is acquired through the issuance of the Company’s shares, the mineral
        property will be recorded at the fair value of the respective property or the fair value of
        common shares, whichever is more readily determinable.

When mineral properties are acquired under option agreements with future
        acquisition payments to be made at the sole discretion of the Company, those future
        payments, whether in cash or shares, are recorded only when the Company has made or is
        obliged to make the payment or issue the shares. Because option payments do not meet the
        definition of tangible property under EITF 04-2, all option payments are expensed as
        incurred.

When it has been determined that a mineral property can be economically
        developed as a result of establishing proven and probable reserves and pre feasibility, the
        costs incurred to develop such property are capitalized.



F-
        5



---

Banner
        Resources Inc.

(An
        Exploration Stage Company)

Notes to
        the Consolidated Financial Statements

(Expressed
        in U.S. dollars)

(unaudited)





|2. |  | Summary of Significant Accounting Policies
                    (continued)
|-- |  | --------------------------------------------------------------------------

h)    Mineral Property Costs (continued)

Estimated future removal and site restoration costs, when determinable are
        provided over the life of proven reserves on a units-of-production basis. Costs, which
        include production equipment removal and environmental remediation, are estimated each
        period by management based on current regulations, actual expenses incurred, and technology
        and industry standards. Any charge is included in exploration expense or the provision for
        depletion and depreciation during the period and the actual restoration expenditures are
        charged to the accumulated provision amounts as incurred.

As of the date of these interim consolidated financial statements, the
        Company has incurred only acquisition and exploration costs which have been
        expensed.

To date, the Company has not established any proven or probable reserves on
        its mineral properties.

| |  | i)     Comprehensive Loss
| |  | -------------------------

SFAS No. 130, “Reporting Comprehensive
        Income” establishes standards for the reporting and display
        of comprehensive loss and its components in the financial statements. As at December 31,
        2007 and March 31, 2007, the Company’s only component of comprehensive loss was
        foreign currency translation adjustments.

| |  | j)     Income Taxes
| |  | -------------------

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

| |  | k)     Donated Services
| |  | -----------------------

The Company recognizes professional services donated to the Company based
        upon their fair value. During the nine-month period ended December 31, 2007, the Company
        recognized donated management services of $9,000 (2006 - $9,000), and donated rent of
        $4,500 (2006 - $4,500).

| |  | l)     Stock-based Compensation
| |  | -------------------------------

The Company records stock-based compensation in accordance with SFAS No.
        123R “Share Based Payments”,
        using the fair value method. The Company has not issued any stock options since its
        inception.

| |  | m)    Recently Issued Accounting
                    Pronouncements
| |  | -------------------------------------------------------------------

In December 2007, the FASB issued SFAS No. 141R,
        “Business Combinations”. This
        statement replaces SFAS 141 and defines the acquirer in a business combination as the
        entity that obtains control of one or more businesses in a business combination and
        establishes the acquisition date as the date that the acquirer achieves control. SFAS 141R
        requires an acquirer to recognize the assets acquired, the liabilities assumed, and any
        noncontrolling interest in the acquiree at the acquisition date, measured at their fair
        values as of that date. SFAS 141R also requires the acquirer to recognize contingent
        consideration at the acquisition date, measured at its fair value at that date. This
        statement is effective for fiscal years, and interim periods within those fiscal years,
        beginning on or after December 15, 2008 and earlier adoption is prohibited. The adoption of
        this statement is not expected to have a material effect on the Company's financial
        statements.

In December 2007, the FASB issued SFAS No. 160,
        “Noncontrolling Interests in Consolidated Financial
        Statements Liabilities –an Amendment of ARB No. 51”.
        This statement amends ARB 51 to establish accounting and reporting standards for the
        noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This
        statement is effective for fiscal years, and interim periods within those fiscal years,
        beginning on or after December 15, 2008 and earlier adoption is prohibited. The adoption of
        this statement is not expected to have a material effect on the Company's financial
        statements.



F-
        6



---

Banner
        Resources Inc.

(An
        Exploration Stage Company)

Notes to
        the Consolidated Financial Statements

(Expressed
        in U.S. dollars)

(unaudited)





|2. |  | Summary of Significant Accounting Policies
                    (continued)
|-- |  | --------------------------------------------------------------------------

m)    Recently Adopted Accounting
        Pronouncements (continued)

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

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

| | 3. | Mineral Property
| | -- | ----------------

On February 1, 2005, the Company acquired a 100% interest in seven mineral
        claims consisting of 70 mineral claim units located in Clinton Mining Division, British
        Columbia, Canada, in consideration for the issuance of 320,000 common shares at a fair
        value price of $0.001 per share or $320 in total. The fair value of these common shares was
        determined to be $0.001 per share based on the cash sale of common stock on February 28,
        2005 being the closest date shares were issued. The purchase price of $320 was charged to
        operations as mineral property costs as proven or probable reserves have not been
        established on the mineral property. In order to maintain the Chita claims in good
        standing, the Company was required to make minimum expenditures on the claims or pay
        renewal fees. The Company maintained the Chita claims through July 31, 2007. On July 31,
        2007, we attempted to pay the renewal fees prior to the expiration on the B.C. Ministry of
        Energy and Mines – Mineral Titles Online system; however, due to technical problems,
        the system was not available to process payments. Section 35(1) of the Mineral Tenure Act
        operates such that a mineral or placer claim forfeits automatically when exploration and
        development work or payment instead of work has not been registered by the end of the
        expiry date of the claim. We have been informed that this statutory provision is not set
        aside due to the unavailability of Mineral Titles Online system and our claims expired. We
        will be filing a lawsuit against the Ministry of Energy, Mines and Petroleum Resources, Her
        Majesty the Queen in Right of the Province of British Columbia, Mineral Titles Branch,
        Mineral Titles Online and the Chief Gold Commissioner for the Province of British Columbia
        and for the loss of our assets and the Banner Claims as they were subsequently claimed by
        another party. The Chita claims were registered in the name of our wholly owned subsidiary,
        Banner Exploration Ltd.

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

| | a) | During the nine-month period ended December 31, 2007, the
                    Company recognized a total of $9,000 (2006– $9,000) for donated services
                    at $1,000 per month and $4,500 (2006 –$4,500) for donated rent at $500
                    per month provided by the President of the Company.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | c) | As at December 31, 2007, the Company has an amount owing of
                    $3,064 (March 31, 2007 - $2,603) to directors of the Company for expenses
                    incurred on behalf of the Company. The amount is non-interest bearing,
                    unsecured, and due on demand.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

As at December 31, 2007, the Company has $9,640 (March 31, 2007 - $14,640)
        of outstanding loans payable. These loans are unsecured, non-interest bearing, and due on
        demand.



F-
        7



---

FORWARD
        LOOKING STATEMENTS



Certain statements contained in this Quarterly Report on Form 10-QSB
        constitute “forward-looking statements”. These statements, identified by words
        such as “plan”, “anticipate”, “believe”,
        “estimate”, “should,” “expect” and similar expressions
        include our expectations and objectives regarding our future financial position, operating
        results and business strategy. These statements reflect the current views of management
        with respect to future events and are subject to risks, uncertainties and other factors
        that may cause our actual results, performance or achievements, or industry results, to be
        materially different from those described in the forward-looking statements. Information
        concerning the interpretation of drill results and mineral resource estimates also may be
        deemed to be forward-looking statements, as such information constitutes a prediction of
        what mineralization might be found to be present if and when a project is actually
        developed. You are cautioned that any such forward-looking statements are not guarantees
        and may involve risks and uncertainties. Our actual results may differ materially from
        those in the forward-looking statements due to risks facing us or due to actual facts
        differing from the assumptions underlying our predictions. Some of these risks and
        assumptions include:



| | • | general economic and business conditions, including changes in
                    interest rates, fluctuations in the prices for base metals, fluctuations in
                    prices for securities in the resource sector, demand for base metals and other
                    economic and business conditions;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | natural phenomena or disasters that may affect completion of
                    drill programs, exploration work, completion of feasibility studies or
                    development, if warranted;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | actions by government authorities, including changes in
                    government regulation, permitting requirements or environmental
                    legislation;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | the Company’s ability to raise sufficient financing to
                    complete its planned exploration work on its properties and to place its
                    properties into development, if warranted;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | future decisions by management in response to changing
                    conditions, and
| | - | ------------------------------------------------------------------------------------------

| | • | misjudgments, inaccurate assumptions or changes in conditions
                    related to forward-looking statements.
| | - | ------------------------------------------------------------------------------------------------------------------------

Certain risks and uncertainties include those set forth under the caption
        “Management’s Discussion and Analysis or Plan of Operation” and elsewhere
        in this Form 10-QSB. We advise you to carefully review the reports and documents we file
        from time to time with the Securities and Exchange Commission (the “SEC”),
        particularly our annual reports on Form 10-KSB and our current reports on Form
        8-K.



We advise you that these cautionary remarks expressly qualify in their
        entirety all forward-looking statements attributable to us or persons acting on our behalf.
        The Company assumes no obligation to update its forward-looking statements to reflect
        actual results, changes in assumptions or changes in other factors affecting such
        statements. You should not place undue reliance on such forward-looking
        statements.



As used in this Annual Report, the terms “we”, “us”,
        “our”, “Banner Resources” and the “Company” mean Banner
        Resources, Inc., unless otherwise indicated. All dollar amounts in this Annual Report are
        expressed in U.S. dollars unless otherwise indicated.



|ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
                    OPERATION
|------- | -----------------------------------------------------------------------------



Overview



Banner Resources Inc. was incorporated under the laws of the state of Nevada
        on January 24, 2005. We have commenced limited business operations and we are considered an
        exploration stage company.



On February 1, 2005, the Company acquired a 100% interest in seven mineral
        claims consisting of 70 mineral claim units located in Clinton Mining Division, British
        Columbia, Canada (the “Chita claims”), in consideration for the issuance of
        320,000 common shares at a fair value price of $0.001 per share or $320 in total. The fair
        value of these common shares was determined to be $0.001 per share based on the cash sale
        of common

---

stock on
        February 28, 2005 being the closest date shares were issued. The purchase price of $320 was
        charged to operations as mineral property costs as proven or probable reserves have not
        been established on the mineral property. In order to maintain the Chita claims in good
        standing, the Company was required to make minimum expenditures on the claims or pay
        renewal fees. The Company maintained the Chita claims through July 31, 2007. On July 31,
        2007, we attempted to pay the renewal fees prior to the expiration on the B.C. Ministry of
        Energy and Mines – Mineral Titles Online system; however, due to technical problems,
        the system was not available to process payments. Section 35(1) of the Mineral Tenure Act
        operates such that a mineral or placer claim forfeits automatically when exploration and
        development work or payment instead of work has not been registered by the end of the
        expiry date of the claim. We have been informed that this statutory provision is not set
        aside due to the unavailability of Mineral Titles Online system and our claims expired. We
        will be filing a lawsuit against the Ministry of Energy, Mines and Petroleum Resources, Her
        Majesty the Queen in Right of the Province of British Columbia, Mineral Titles Branch,
        Mineral Titles Online and The Chief Gold Commissioner for the Province of British Columbia
        for the loss of our assets and the Chita claims as they were subsequently claimed by
        another party. The Chita claims were registered in the name of our wholly owned subsidiary,
        Banner Exploration Ltd.



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



We are actively reviewing additional natural resources properties in Canada,
        USA and Africa. We are also exploring opportunities in other industries including the
        technology sector, biotechnology and communications. However, we have no current plans,
        arrangements or intentions to acquire any specific property or to pursue any potential
        business opportunity. We have no current plans, arrangements or intentions to enter into a
        joint venture with any specific party. However, we are always open to speak to third
        parties to explore business opportunities.



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



Plan of
        Operation



Our current business plan is to acquire exploration stage resource
        properties or other projects our board of directors may determine are commercially viable.
        We currently have no property interests.



If we acquire exploration stage properties, we will have to engage qualified
        geologists to conduct the mineral exploration program under industry standards. We
        anticipate that they will be responsible for hiring personnel and for all appropriate
        worker-related costs and will bill us for their services. This work is applicable to
        assessment requirements for the claims.



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



On December 31, 2007, we had cash on hand of $2,266 and a working capital
        deficit of $43,013. Current liabilities at December 31, 2007 were $45,279, which included
        (1) unsecured loans payable to two shareholders of $9,640, (2) $5,231 payable to a former
        officer and director for rent and management services and (3) $3,064 to directors of the
        Company for expenses incurred on behalf of the Company.



During the nine-month period ended December 31, 2007, we recognized a total
        of $9,000 for services and a total of $4,500 for rent donated by Robert Krause, our
        President and Treasurer. We anticipate that Mr. Krause will continue to donate
        services and rent until we have sufficient working capital to pay his salary and rent. We
        do not have sufficient funds to satisfy our on-going working capital requirements for the
        fiscal year ending March 31, 2008.



7



---

We
        anticipate that we will be required to raise additional financing during the fiscal year
        ending March 31, 2008 to fund our on-going working capital requirements.



We are currently evaluating our options for acquiring exploration properties
        or other commercial opportunities, which will require us to raise additional capital beyond
        our working capital requirements.



We are presently exploring opportunities to raise additional funding in the
        form of equity or debt. However, we cannot provide investors with any assurance that we
        will be able to raise sufficient funding from the sale of our common stock to fund
        properties acquisitions or to pursue new business opportunities. We do not have any
        arrangements in place for any future equity financing.



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



| | (1) | $15,000 in connection with due diligence and examination of
                    new properties and business opportunities depending on our ability to raise
                    additional financing; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | $60,000 for operating and administrative expenses.
| | --- | --------------------------------------------------



We do not have plans to purchase any significant equipment or change the
        number of our employees during the next 12 months. We may also pursue business
        opportunities in other industries or acquire other properties although we have no current
        plans or arrangements to do so.



Results of Operations for the Quarter and Nine Months Ending on
        December 31, 2007



During the quarter ended December 31, 2007, we had total expenses of $27,904
        ($21,476 – 2006), which included management fees of $3,000 ($3,000 - 2006), rent of
        $1,500 ($1,500 – 2006), professional service fees of $21,477 ($8,422 – 2006),
        mineral property costs of $89 ($7,657 – 2006) and general and administrative expenses
        of $1,838 ($897 – 2006). Total expenses increased by $6,428 from $21,476 for the
        quarter ended December 31, 2006 to $27,904 for the quarter ended December 31, 2007, due
        primarily to our SEC reporting obligations and legal, accounting and auditing expenses. We
        anticipate total expenses to increase during the remainder of the fiscal year ending March
        31, 2008.



During the quarter ended December 31, 2007, we had a comprehensive loss of
        $27,904, compared to $21,476 for the same period in 2006. During the nine month period
        ending December 31, 2007, we had a net loss of $74,801 compared to $51,365 for the same
        period in 2006.



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



Off-Balance Sheet Arrangements



The Company does not have any off-balance sheet arrangements that have or
        are reasonably likely to have a current or future effect on our financial condition,
        changes in financial condition, revenues or expenses, results of operations, liquidity,
        capital expenditures or capital resources that is material to investors.



Contractual Obligations



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



CRITICAL
        ACCOUNTING POLICIES



The preparation of financial statements in conformity with generally
        accepted accounting principles requires our management to make estimates and assumptions
        that affect the reported amount 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. Our management routinely makes judgments and estimates about
        the effects of matters that are inherently uncertain.



8



---

We have identified certain accounting policies, described below, that are
        most important to the portrayal of our current financial condition and results of
        operations. Our significant accounting policies are disclosed in Note 2 to the financial
        statements included in this Quarterly Report.

| | Exploration Stage Enterprise
| | ----------------------------

The Company’s financial statements are prepared using the accrual
        method of accounting and according to the provisions of Statement of Financial Accounting
        Standards No. 7 (“SFAS 7”), “Accounting and
        Reporting for Development Stage Enterprises”, as it devotes
        substantially all of its efforts to acquiring and exploring mineral properties. Until such
        properties are acquired and developed, the Company will continue to prepare its financial
        statements and related disclosures in accordance with entities in the exploration
        stage.



| | Mineral Property Costs
| | ----------------------

The Company has been in the exploration stage since its inception on January
        24, 2005, and has not yet realized any revenues from its planned operations. It is
        primarily engaged in the acquisition and exploration of mining properties. Mineral property
        exploration costs are expensed as incurred. Mineral property acquisition costs are
        capitalized in accordance with EITF 04-2 “Whether Mineral Rights Are Tangible or
        Intangible Assets” when management has determined that probable future benefits
        consisting of a contribution to future cash inflows have been identified and adequate
        financial resources are available or are expected to be available as required to meet the
        terms of property acquisition and budgeted exploration and development expenditures.
        Mineral property acquisition costs are expensed as incurred if the criteria for
        capitalization are not met. In the event that a mineral property is acquired through the
        issuance of the Company’s shares, the mineral property will be recorded at the fair
        value of the respective property or the fair value of common shares, whichever is more
        readily determinable.

When mineral properties are acquired under option agreements with future
        acquisition payments to be made at the sole discretion of the Company, those future
        payments, whether in cash or shares, are recorded only when the Company has made or is
        obliged to make the payment or issue the shares. Because option payments do not meet the
        definition of tangible property under EITF 04-2, all option payments are expensed as
        incurred.

When it has been determined that a mineral property can be economically
        developed as a result of establishing proven and probable reserves and pre feasibility, the
        costs incurred to develop such property are capitalized.

Estimated future removal and site restoration costs, when determinable are
        provided over the life of proven reserves on a units-of-production basis. Costs, which
        include production equipment removal and environmental remediation, are estimated each
        period by management based on current regulations, actual expenses incurred, and technology
        and industry standards. Any charge is included in exploration expense or the provision for
        depletion and depreciation during the period and the actual restoration expenditures are
        charged to the accumulated provision amounts as incurred.

As of the date of the interim consolidated financial statements, the Company
        has incurred only acquisition and exploration costs which have been expensed.

To date, the Company has not established any proven or probable reserves on
        its mineral properties.

| | Use of Estimates
| | ----------------

The
        preparation of financial statements in conformity with US generally accepted accounting
        principles requires management to make estimates and assumptions that affect the reported
        amounts of assets and liabilities and disclosure of contingent assets and liabilities at
        the date of the financial statements and the reported amounts of revenues and expenses
        during the reporting period. The Company regularly evaluates estimates and
        assumptions



9



---

related to
        valuation of long-lived assets, donated services, stock based compensation and deferred
        income tax asset valuation allowances. The Company bases its estimates and assumptions on
        current facts, historical experience and various other factors that it believes to be
        reasonable under the circumstances, the results of which form the basis for making
        judgments about the carrying values of assets and liabilities and the accrual of costs and
        expenses that are not readily apparent from other sources. The actual results experienced
        by the Company may differ materially and adversely from the Company’s estimates. To
        the extent there are material differences between the estimates and the actual results,
        future results of operations will be affected.



ITEM 3. CONTROLS AND
        PROCEDURES



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



There were no changes in our internal control over financial reporting (as
        defined in Rule 13(a)-15(f) or 15(d)-15(f)) that occurred during the Company’s the
        period covered by this quarterly report that have materially affected, or are reasonably
        likely to materially affect, our internal control over financial reporting.



PART
        II – OTHER INFORMATION



ITEM 1.
        LEGAL PROCEEDINGS



On February 1, 2005, the Company acquired a 100% interest in seven mineral
        claims consisting of 70 mineral claim units located in Clinton Mining Division, British
        Columbia, Canada (the “Chita claims”), in consideration for the issuance of
        320,000 common shares at a fair value price of $0.001 per share or $320 in total. The fair
        value of these common shares was determined to be $0.001 per share based on the cash sale
        of common stock on February 28, 2005 being the closest date shares were issued. The
        purchase price of $320 was charged to operations as mineral property costs as proven or
        probable reserves have not been established on the mineral property. In order to maintain
        the Chita claims in good standing, the Company was required to make minimum expenditures on
        the claims or pay renewal fees. The Company maintained the Chita claims through July 31,
        2007. On July 31, 2007, we attempted to pay the renewal fees prior to the expiration on the
        B.C. Ministry of Energy and Mines – Mineral Titles Online system; however, due to
        technical problems, the system was not available to process payments. Section 35(1) of the
        Mineral Tenure Act operates such that a mineral or placer claim forfeits automatically when
        exploration and development work or payment instead of work has not been registered by the
        end of the expiry date of the claim. We have been informed that this statutory provision is
        not set aside due to the unavailability of Mineral Titles Online system and our claims
        expired. We will be filing a lawsuit against the Ministry of Energy, Mines and Petroleum
        Resources, Her Majesty the Queen in Right of the Province of British Columbia, Mineral
        Titles Branch, Mineral Titles Online and The Chief Gold Commissioner for the Province of
        British Columbia for the loss of our assets and the Chita claims as they were subsequently
        claimed by another party. The Chita claims were registered in the name of our wholly owned
        subsidiary, Banner Exploration Ltd.



ITEM 2.
        UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS



None.

ITEM 3.
        DEFAULT UPON SENIOR SECURITIES



None.



10



---

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



None.



ITEM 5.
        OTHER INFORMATION



None.



ITEM 6.
        EXHIBITS



Exhibit
        32.1         Certification of Robert Krause,
        President and Treasurer, of Banner Resources Inc., pursuant to Section 302 of the
        Sarbanes-Oxley Act of 2002.



Exhibit
        32.1         Certification of Robert Krause,
        President and Treasurer, of Banner Resources Inc., pursuant to 18
        U.S.C. 1350.





SIGNATURES



In accordance with the Securities Exchange Act of 1934, as amended, this
        annual report has been signed below by the following persons on behalf of the Company and
        in the capacities and on the dates indicated.

|Date:  February 19, 2008 | BANNER RESOURCES, INC.By: /s/ Robert
                    KrauseRobert KrausePresident and Treasurer(Principal Executive Officer and Principal Financial and
                    Accounting Officer)
|------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11

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