---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-QSB

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
  ACT OF 1934 
  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2006

Commission file Number: 0-50915

MCNAB CREEK GOLD
CORP.(Exact name of small business issuer as specified in its
charter)

|**Nevada**                                                    
|--------------------------------------------------------------
|(State or other jurisdiction of incorporation or organization)
|                                                              
|**98-0343710**                                                
|(I.R.S. Employer Identification Number)                       
|                                                              
|**Suite 1128, 789 West Pender Street**                        
|**Vancouver, B.C. V6C 1H2**                                   
|(Address of principal executive offices)                      
|                                                              
|**(604) 669-9330**                                            
|(Issuer's telephone number)                                   

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

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

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: 35,859,200 common
shares as at June 30, 2006

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

---

MCNAB CREEK GOLD CORP.

INDEX

PART 1.

FINANCIAL INFORMATION

Item 1.     Financial
  Statements:

Balance Sheets as of March 31, 2006
and June 30, 2006

Statements of Operations for the three
months ended June 30, 2006 and 2005 and the period from February 15, 2001 to
June 30, 2006

Statement of Stockholders' Equity
(Deficiency) for the period February 15, 2001 to June 30, 2006

Statements of Cash Flows for the three
months ended June 30, 2006 and 2005 and for the period from February 15, 2001 to
June 30, 2006

Notes to Financial Statements

Item 2

Plan of Operation

Item 3

Controls and Procedures



OTHER INFORMATION

Item 1

Legal Proceedings

Item 2

Unregistered Sales of Equity
Securities and Use of Proceeds

Item 3

Defaults Upon Senior Securities

Item 4

Submission of Matters to a Vote of
Security Holders

Item 5

Other Information

Item 6

Exhibits and Reports on Form 8K

SIGNATURES

---

MCNAB CREEK GOLD CORP.(An exploration stage
company)

Interim Financial Statements(Expressed in U.S. Dollars)

June 30, 2006

**** (Unaudited)

Index

Balance Sheets

Interim Statements of Operations

Statement of Stockholders Equity (Deficiency)

Interim Statements of Cash Flows

Notes to the Interim Financial Statements

---

MCNAB CREEK GOLD CORP.(An exploration stage
company)BALANCE SHEETS(Expressed in U.S. Dollars)

|                                                                           |   | June
      30, |   |   | March
      31, |  
|-------------------------------------------------------------------------- | - | -------------- | - | - | --------------- | -
|                                                                           |   | 2006           |   |   | 2006            |  
|                                                                           |   | (Unaudited)    |   |   | (Audited)       |  
|                                                                           |   |                |   |   |                 |  
|ASSETS                                                                     |   |                |   |   |                 |  
|                                                                           |   |                |   |   |                 |  
|Current Assets                                                             |   |                |   |   |                 |  
|                                                                           |   |                |   |   |                 |  
|Cash                                                                       | $ | 13,454         |   | $ | 9,037           |  
|                                                                           |   |                |   |   |                 |  
|Equipment Note 3                                                          |   | 139            |   |   | 199             |  
|                                                                           |   |                |   |   |                 |  
|Total Assets                                                               | $ | 13,593         |   | $ | 9,236           |  
|                                                                           |   |                |   |   |                 |  
|                                                                           |   |                |   |   |                 |  
|LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                   |   |                |   |   |                 |  
|                                                                           |   |                |   |   |                 |  
|Current Liabilities                                                        |   |                |   |   |                 |  
|                                                                           |   |                |   |   |                 |  
|Accounts payables and accrued expenses                                     | $ | 3,638          |   | $ | 43,574          |  
|Due to a director - Note 4                                                 |   | 13,030         |   |   | 13,030          |  
|Total current
      liabilities                                            |   | 16,668         |   |   | 56,604          |  
|                                                                           |   |                |   |   |                 |  
|                                                                           |   |                |   |   |                 |  
|Stockholders' Deficiency                                                   |   |                |   |   |                 |  
|Common stock : $0.0001 Par Value  Note 5                                  |   |                |   |   |                 |  
|Authorized :
      100,000,000 common shares                               |   |                |   |   |                 |  
|Issued and Outstanding : 35,859,200
      common shares (2005: 35,759,200) |   | 188            |   |   | 178             |  
|Common stock subscribed  Note 5                                           |   | 49,747         |   |   | -               |  
|Additional paid in capital                                                 |   | 190,858        |   |   | 180,868         |  
|Donated capital - Note 6                                                   |   | 7,500          |   |   | 6,000           |  
|Deficit
      accumulated during the exploration stage                     |   | (251,368       | ) |   | (234,414        | )
|Total Stockholders' Deficiency                                             |   | (3,075         | ) |   | (47,368         | )
|                                                                           |   |                |   |   |                 |  
|                                                                           |   |                |   |   |                 |  
|Total
      Liabilities and Stockholders' Deficiency                       | $ | 13,593         |   | $ | 9,236           |  
|                                                                           |   |                |   |   |                 |  
|See Note 1 - Basis of Presentation and Going Concern
      Matters         |   |                |   |   |                 |  
|See Note 9  Subsequent Event                                              |   |                |   |   |                 |  

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

---

**MCNAB CREEK GOLD CORP.**(An exploration stage company)INTERIM STATEMENTS OF
OPERATIONS(Unaudited)
  (Expressed in U.S. Dollars)

|                                      |   |                    |   |   |                   |   |   | Accumulated from |  
|------------------------------------- | - | ------------------ | - | - | ----------------- | - | - | ---------------- | -
|                                      |   |                    |   |   |                   |   |   | February 15,     |  
|                                      |   | Three months ended |   |   | **2001 (date of** |  
|                                      |   | ended              |   |   | inception) to     |  
|                                      |   | June 30,           |   |   | June 30,          |  
|                                      |   | 2006               |   |   | 2005              |   |   | 2006             |  
|                                      |   |                    |   |   |                   |   |   |                  |  
|                                      |   |                    |   |   |                   |   |   |                  |  
|Expenses                              |   |                    |   |   |                   |   |   |                  |  
|Compensation expenses                 | $ | 10,000             |   | $ | -                 |   | $ | 58,960           |  
|Mineral property interests            |   | -                  |   |   | -                 |   |   | 40,078           |  
|General and administrative            |   | 5,454              |   |   | 20,404            |   |   | 144,830          |  
|Rent - Note
      6                   |   | 1,500              |   |   |                   |   |   | 7,500            |  
|Net loss for the period               | $ | (16,954            | ) | $ | (20,404           | ) | $ | (251,368         | )
|                                      |   |                    |   |   |                   |   |   |                  |  
|                                      |   |                    |   |   |                   |   |   |                  |  
|Loss per share attributable to common |   |                    |   |   |                   |   |   |                  |  
|stockholders:                         |   |                    |   |   |                   |   |   |                  |  
|Basic and
      diluted               | $ | (0.00              | ) | $ | (0.00             | ) |   |                  |  
|                                      |   |                    |   |   |                   |   |   |                  |  
|Weighted average number of            |   |                    |   |   |                   |   |   |                  |  
|common shares outstanding:            |   |                    |   |   |                   |   |   |                  |  
|Basic and
      diluted               |   | 35,815,244         |   |   | 19,284,000        |   |   |                  |  

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

---

**MCNAB CREEK GOLD CORP.**(An exploration stage
company)STATEMENT OF STOCKHOLDERS' EQUITY
(DEFICIENCY)(Unaudited)(Expressed in U.S. Dollars)

|                                                    |  |            |   |   |           |   |   |                   |  |   |            |  |   |            |  |   | Deficit         |   |   |              |  
|--------------------------------------------------- |  | ---------- | - | - | --------- | - | - | ----------------- |  | - | ---------- |  | - | ---------- |  | - | --------------- | - | - | ------------ | -
|                                                    |  |            |   |   |           |   |   |                   |  |   |            |  |   |            |  |   | Accumulated     |   |   |              |  
|                                                    |  |            |   |   | Stock     |   |   | Additional Common |  |   |            |  |   | During the |  |   | Stockholders'   |  
|                                                    |  | Common     |   |   | Amount At |   |   | Paid In           |  |   | Stock      |  |   | Donated    |  |   | pre-exploration |   |   | Equity       |  
|                                                    |  | Shares     |   |   | Par Value |   |   | Capital           |  |   | Subscribed |  |   | Capital    |  |   | stage           |   |   | (Deficiency) |  
|Issuance of common stock for services rendered      |  |            |   |   |           |   |   |                   |  |   |            |  |   |            |  |   |                 |   |   |              |  
|at $0.0001 per share, February 16, 2001             |  | 2,250,000  |   | $ | 225       |   | $ | 2,025             |  | $ | -          |  | $ | -          |  | $ | -               |   | $ | 2,250        |  
|Loss for the period                                 |  | -          |   |   | -         |   |   | -                 |  |   | -          |  |   | -          |  |   | (2,935          | ) |   | (2,935       | )
|Cancellation of common stock                        |  | (2,250,000 | ) |   | (225      | ) |   | 225               |  |   | -          |  |   | -          |  |   | -               |   |   | -            |  
|Capital stock issued for cash                       |  |            |   |   |           |   |   |                   |  |   |            |  |   |            |  |   |                 |   |   |              |  
|- at $0.10                                          |  | 420,200    |   |   | 42        |   |   | 41,978            |  |   | -          |  |   | -          |  |   | -               |   |   | 42,020       |  
|- at $0.01                                          |  | 544,000    |   |   | 54        |   |   | 54,346            |  |   | -          |  |   | -          |  |   | -               |   |   | 54,400       |  
|Loss for the year                                   |  | -          |   |   | -         |   |   | -                 |  |   | -          |  |   | -          |  |   | (78,562         | ) |   | (78,562      | )
|Balance, March 31, 2004                             |  | 964,200    |   |   | 96        |   |   | 98,574            |  |   | -          |  |   | -          |  |   | (81,497         | ) |   | 17,174       |  
|Loss for the year                                   |  | -          |   |   | -         |   |   | -                 |  |   | -          |  |   | -          |  |   | (43,381         | ) |   | (43,381      | )
|Balance, March 31, 2005                             |  | 964,200    |   |   | 96        |   |   | 98,574            |  |   | -          |  |   | -          |  |   | (124,878        | ) |   | (26,207      | )
|Issurance of common stock for debt
      settlement |  |            |   |   |           |   |   |                   |  |   |            |  |   |            |  |   |                 |   |   |              |  
|- at $0.10 on December 30, 2005                     |  | 383,760    |   |   | 38        |   |   | 38,338            |  |   | -          |  |   | -          |  |   | -               |   |   | 38,376       |  
|Capital stock issued for cash                       |  |            |   |   |           |   |   |                   |  |   |            |  |   |            |  |   |                 |   |   |              |  
|- at $0.10 from November 5, 2005 to                 |  |            |   |   |           |   |   |                   |  |   |            |  |   |            |  |   |                 |   |   |              |  
|December 31, 2005                                   |  | 440,000    |   |   | 44        |   |   | 43,956            |  |   | -          |  |   | -          |  |   | -               |   |   | 44,000       |  
|Donated services                                    |  | -          |   |   | -         |   |   | -                 |  |   | -          |  |   | 6,000      |  |   | -               |   |   | 6,000        |  
|Loss for the year                                   |  | -          |   |   | -         |   |   | -                 |  |   | -          |  |   | -          |  |   | (109,536        | ) |   | (109,536     | )
|Balance, March 31, 2006 (audited)                   |  | 1,787,960  |   |   | 178       |   |   | 180,868           |  |   | -          |  |   | 6,000      |  |   | (234,414        | ) |   | (47,368      | )
|Forward split 20:1 - April 30, 2006                 |  | 33,971,240 |   |   | -         |   |   | -                 |  |   | -          |  |   | -          |  |   | -               |   |   | -            |  
|Issurance of common stock for consulting services   |  |            |   |   |           |   |   |                   |  |   |            |  |   |            |  |   |                 |   |   |              |  
|- at $0.10 on May 10, 2006                          |  | 100,000    |   |   | 10        |   |   | 9,990             |  |   | -          |  |   | -          |  |   | -               |   |   | 10,000       |  
|Common stock subscribed                             |  | -          |   |   | -         |   |   | -                 |  |   | 49,747     |  |   | -          |  |   | -               |   |   | 49,747       |  
|Donated services                                    |  | -          |   |   | -         |   |   | -                 |  |   | -          |  |   | 1,500      |  |   | -               |   |   | 1,500        |  
|Loss for the
      period                           |  | -          |   |   | -         |   |   | -                 |  |   | -          |  |   | -          |  |   | (16,954         | ) |   | (16,954      | )
|Balance, June 30, 2006 (unaudited)                  |  | 35,859,200 |   | $ | 188       |   | $ | 190,858           |  | $ | 49,747     |  | $ | 7,500      |  | $ | (251,368        | ) | $ | (3,075       | )

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

---

**MCNAB CREEK GOLD CORP.**(An exploration stage
company)INTERIM STATEMENTS OF CASH FLOWS
  (Expressed in U.S. Dollars)

|                                                      |   |          |   |   |          |   |   | Accumulated from             |  
|----------------------------------------------------- | - | -------- | - | - | -------- | - | - | ---------------------------- | -
|                                                      |   | Three    |   |   | Three    |   |   | February 15,                 |  
|                                                      |   | months   |   |   | months   |   |   | **2001 (date
      of** **** |  
|                                                      |   | ended    |   |   | ended    |   |   | inception) to                |  
|                                                      |   | June 30, |   |   | June 30, |   |   | June 30,                     |  
|                                                      |   | 2006     |   |   | 2005     |   |   | 2006                         |  
|                                                      |   |          |   |   |          |   |   |                              |  
|Cash flows from operating activities                  |   |          |   |   |          |   |   |                              |  
|Net loss for the period                               | $ | (16,954  | ) | $ | (20,404  | ) | $ | (251,368                     | )
|Amounts not involving cash:                           |   |          |   |   |          |   |   |                              |  
|- Amortization                                        |   | 60       |   |   | 19       |   |   | 293                          |  
|- Compensation expense                                |   | -        |   |   | -        |   |   | 48,960                       |  
|- Donated service                                     |   | 1,500    |   |   | -        |   |   | 7,500                        |  
|- Shares issued for services                          |   | 10,000   |   |   | -        |   |   | 12,250                       |  
|Changes in non-cash working capital
      items:      |   |          |   |   |          |   |   |                              |  
|- Accounts payable and accrued
      liabilities      |   | (39,936  | ) |   | 15,769   |   |   | 7,470                        |  
|- Due to a director                                   |   | -        |   |   | -        |   |   | 17,574                       |  
|Net cash
      flows used in operating activities     |   | (45,330  | ) |   | (4,616   | ) |   | (157,321                     | )
|                                                      |   |          |   |   |          |   |   |                              |  
|Cash flows from investing activities                  |   |          |   |   |          |   |   |                              |  
|Additions to equipment                                |   | -        |   |   | -        |   |   | (432                         | )
|Net cash
      flows used in investing activities     |   | -        |   |   | -        |   |   | (432                         | )
|                                                      |   |          |   |   |          |   |   |                              |  
|Cash flows from financing activities                  |   |          |   |   |          |   |   |                              |  
|Proceeds from the issuance of common
      stock      |   | -        |   |   | -        |   |   | 91,460                       |  
|Common stock subscribed                               |   | 49,747   |   |   | -        |   |   | 49,747                       |  
|Proceeds from the issuance of promissory notes        |   | -        |   |   | -        |   |   | 30,000                       |  
|Net cash
      flows provided by financing activities |   | 49,747   |   |   | -        |   |   | 171,207                      |  
|                                                      |   |          |   |   |          |   |   |                              |  
|Increase (decrease) in cash                           |   | 4,417    |   |   | (4,616   | ) |   | 13,454                       |  
|                                                      |   |          |   |   |          |   |   |                              |  
|Cash -
      beginning of period                      |   | 9,037    |   |   | 21,403   |   |   | -                            |  
|                                                      |   |          |   |   |          |   |   |                              |  
|Cash - end of
      period                            | $ | 13,454   |   | $ | 16,787   |   | $ | 13,454                       |  

|Supplementary cash flow information:                                                                                                         |   |   |  |   |   |  |   |   | 
|-------------------------------------------------------------------------------------------------------------------------------------------- | - | - |  | - | - |  | - | - | 
|The Company issued Wannigan Capital Corp.
      100,000 shares at a price of $0.10/share (post forward split) of its
      $0.0001 par value
|common shares as compensation for consulting services.                                                                                       |   |   |  |   |   |  |   |   | 
|                                                                                                                                             |   |   |  |   |   |  |   |   | 
|Cash paid for interest                                                                                                                       | $ | - |  | $ | - |  | $ | - | 
|Cash paid for income taxes                                                                                                                   | $ | - |  | $ | - |  | $ | - | 

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

---

|MCNAB CREEK GOLD CORP.                   
|-----------------------------------------
|(An exploration stage company)           
|                                         
|NOTES TO THE INTERIM FINANCIAL STATEMENTS
|June 30, 2006                            
|(Expressed in U.S. Dollars)              
|(Unaudited)                              

|1. | Nature and Continuance of
  Operations
|-- | --------------------------------------

The Company was formed on February 15,
2001 under the laws of the State of Nevada, USA and commenced operations at that
time. The Companys mineral interests are in the exploration stage.

The financial statements are presented
in US dollars and have been prepared by management in accordance with generally
accepted accounting principles in the United States (US GAAP) on a going
concern basis, which contemplates the realization of assets and the discharge of
liabilities in the normal course of business for the foreseeable future.

The Company has incurred a loss of
$16,954 during the three months ended June 30, 2006 and at June 30, 2006 has an
accumulated deficit of $251,368 and has a working capital deficiency of $3,214.
The ability of the Company to continue as a going concern is uncertain and
dependant upon achieving a profitable level of operations and on the ability of
the Company to obtain necessary financing to fund ongoing operations. The
outcome of these matters cannot be predicted at this time.

These financial statements do not give
effect to any adjustments which would be necessary should the Company be unable
to continue as a going concern and therefore be required to realize its assets
and discharge its liabilities in other than the normal course of business and at
amounts different from those reflected in the accompanying financial
statements.

The Company has not generated any
operating revenues to date. Management believes that the Company has adequate
funds to carry on operations for the upcoming fiscal year but intends to obtain
additional funding by borrowing from directors and officers, who have agreed to
contribute up to $50,000 as non-interest bearing loans, and through private
placements.

Unaudited Interim Financial Statements

The accompanying unaudited interim
financial statements have been prepared in accordance with generally accepted
accounting principles in the United States (US GAAP) for interim financial
information and with the instructions to Form 10-QSB of Regulation S-B. They may
not include all information and footnotes required by US GAAP for complete
financial statements. However, except as disclosed herein, there has been no
material changes in the information disclosed in the notes to the financial
statements for the year ended March 31, 2006 included in the Companys Form
10-KSB filed with the Securities and Exchange Commission. The interim unaudited
financial statements should be read in conjunction with those financial
statements included in the Form 10-KSB. In the opinion of Management, all
adjustments considered necessary for a fair presentation, consisting solely of
normal recurring adjustments, have been made. Operating results for the period
ended June 30, 2006 are not necessarily indicative of the results that may be
expected for the year ending March 31, 2007.

---

|MCNAB CREEK GOLD CORP.                   
|-----------------------------------------
|(An exploration stage company)           
|                                         
|NOTES TO THE INTERIM FINANCIAL STATEMENTS
|June 30, 2006                            
|(Expressed in U.S. Dollars)              
|(Unaudited)                              

|2. | Significant Accounting
Policies
|-- | -------------------------------

|(a) | Principles of Accounting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | These financials statements are stated in US dollars and
      have been prepared in accordance with US GAAP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(b) | Mineral Property Interests                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Under US GAAP mineral property exploration costs are
      expensed as incurred. Mineral property acquisition costs are accounted for
      as tangible assets using the guidance in EITF 04-02 Whether Mineral
      Rights are Tangible or Intangible Assets. Management reviews the
      carrying value of mineral property costs for impairment whenever
      circumstances could indicate that the carrying amount may not be
      recoverable. To date, the Company has impaired all acquisition costs of
      exploration properties pending results of its exploration work indicating
      the existence and recoverability of mineral resources.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(c) | Accounting Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The preparation of financial statements in conformity
      with US GAAP requires management to make estimates and assumptions that
      affect the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements
      and the reported amounts of revenues and expenses during the reporting
      period. Actual results could differ from those estimates and assumptions
      reported amounts of revenues and expenses during the reporting period.
      Actual results could differ from those estimates and
assumptions.                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(d) | Loss per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Loss per share is computed using the weighted average
      number of shares outstanding during the period. Diluted loss per share is
      equivalent to basic loss per share because there are no dilutive
      securities. Loss per share for the period ended June 30, 2005 has been
      adjusted to reflect the 20:1 forward split of the Companys common shares
      effective April 30, 2006 (Note 5).                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(e) | Foreign Currency Translations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The Company considers the US dollar as its functional
      currency.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | At the transaction date, each asset, liability, revenue
      and expense is translated into US dollar equivalents by the use of the
      exchange rate in effect at that date. At period end, monetary assets and
      liabilities are re-measured by using the exchange rate in effect at that
      date. The resulting foreign exchange gains and losses are included in
      operations.                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(f) | Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Equipment consists of computer equipment, which is
      recorded at cost and is depreciated using the declining balance method at
      a rate of 30% per annum.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

---

|MCNAB CREEK GOLD CORP.                   
|-----------------------------------------
|(An exploration stage company)           
|                                         
|NOTES TO THE INTERIM FINANCIAL STATEMENTS
|June 30, 2006                            
|(Expressed in U.S. Dollars)              
|(Unaudited)                              

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

|g) | Fair Value of Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving
uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The respective carrying value of certain on-balance-sheet financial instruments approximated their fair value. These financial instruments include cash, accounts payable and accrued liabilities and due to a director. Fair values
were assumed to approximate carrying values for these financial instruments, since they are short term in nature. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial
instruments. The Company is operating outside of the United States of America and has exposure to foreign currency risk due to the fluctuation of the currency in which the Company operates and the US dollars. The Company does not use any hedging
instruments.

|(h) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns using the liability method. Under this
method, deferred tax assets and liabilities are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are
expected to reverse.                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(i) | Long-Lived Assets Impairment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The carrying value of long-lived assets with fixed or determinable lives are reviewed for impairment whenever events or changes in circumstances indicate the recoverable value may be less than the carrying amount. Recoverable
value determinations are based on managements estimates of undiscounted future net cash flows expected to be recovered from specific assets or groups of assets through use or future disposition. Impairment charges are recorded in the period in
which determination of impairment is made by management.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Assets with indefinite or indeterminable lives are not amortized and are reviewed for impairment on a reporting basis using fair value determinations through managements estimate of recoverable value.                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(j) | Asset Retirement Obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Company recognizes a liability for future retirement obligations associated with the Company's mineral properties. The estimated fair value of the assets retirement obligation is based on the current cost escalated at an
inflation rate and discounted at a credit adjusted rate. This liability is capitalized as part of the cost of the related asset and amortized over its                                                                                                                                                        

---

|MCNAB CREEK GOLD CORP.                   
|-----------------------------------------
|(An exploration stage company)           
|                                         
|NOTES TO THE INTERIM FINANCIAL STATEMENTS
|June 30, 2006                            
|(Expressed in U.S. Dollars)              
|(Unaudited)                              

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

|(j) | Asset Retirement Obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | productive life. The liability accretes until the Company settles the obligation. As of June 30, 2006 and March 31, 2006, the Company had no asset retirement obligation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(k) | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | In December 2004, the FASB issued SFAS No. 123R, Share-Based Payment, which replaced SFAS No. 123, Accounting for Stock-Based Compensation and superseded APB Opinion No. 25, Accounting for Stock
Issued to Employees. In January 2005, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 107, Share-Based Payment, which provides supplemental implementation guidance for
SFAS No. 123R. SFAS No. 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award. SFAS No. 123R was to be effective
for interim or annual reporting periods beginning on or after June 15, 2005, but in April 2005 the SEC issued a rule that will permit most registrants to implement SFAS No. 123R at the beginning of their next fiscal year, instead of the next
reporting period as required by SFAS No. 123R. The pro-forma disclosures previously permitted under SFAS No. 123 no longer will be an alternative to financial statement recognition. Under SFAS No. 123R, the Company must determine the appropriate
fair value model to be used for valuing share-based payments, the amortization method for compensation cost and the transition method to be used at date of adoption. The transition provisions include prospective and retroactive adoption methods.
Under the retroactive method, prior periods may be restated either as of the beginning of the year of adoption or for all periods presented. The prospective method requires that compensation expense be recorded for all unvested stock options and
restricted stock at the beginning of the first quarter of adoption of SFAS No. 123R, while the retroactive methods would record compensation expense for all unvested stock options and restricted stock beginning with the first period restated. The
Company has adopted the requirements of SFAS No. 123R which did not have any impact on the financial statements as, to date, the Company has not granted any stock options or any other share based payments.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with SFAS No. 123 and the conclusions reached by the Emerging Issues Task Force in Issue
No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring or in Conjunction with Selling Goods or Services (EITF 96-18). Costs are measured at the estimated fair market value of the
consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a
performance commitment or completion of performance by the provider of goods or services as defined by EITF 96-18.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

---

|MCNAB CREEK GOLD CORP.                   
|-----------------------------------------
|(An exploration stage company)           
|                                         
|NOTES TO THE INTERIM FINANCIAL STATEMENTS
|June 30, 2006                            
|(Expressed in U.S. Dollars)              
|(Unaudited)                              

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

|(l) | Risk management:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | Environmental risk:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The Company is engaged in mineral exploration and
      development and is accordingly exposed to environmental risks associated
      with mineral exploration activity. The Company is currently in the initial
      exploration stages on its property interests and has not determined
      whether significant site reclamation costs will be required. The Company
      would only record liabilities for site reclamation when reasonably
      determinable and when such costs can be reliably quantified.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The Company is not exposed to significant interest rate
      or credit risk.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(m) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | In February 2006, the FASB issued SFAS No. 155,
      Accounting for Certain Hybrid Financial Instruments-an amendment of FASB
      Statements No. 133 and 140, to simplify and make more consistent the
      accounting for certain financial instruments. SFAS No. 155 amends SFAS No.
      133, Accounting for Derivative Instruments and Hedging Activities, to
      permit fair value remeasurement for any hybrid financial instrument with
      an embedded derivative that otherwise would require bifurcation, provided
      that the whole instrument is accounted for on a fair value basis. SFAS No.
      155 amends SFAS No. 140, Accounting for the Impairment or Disposal of
      Long-Lived Assets, to allow a qualifying special-purpose entity to hold a
      derivative financial instrument that pertains to a beneficial interest
      other than another derivative financial instrument. SFAS No. 155 applies
      to all financial instruments acquired or issued after the beginning of an
      entity's first fiscal year that begins after September 15, 2006, with
      earlier application allowed. This standard is not expected to have a
      significant effect on the Companys future reported financial position or
      results of operations.                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | In March 2006, the FASB issued SFAS No. 156, "Accounting
      for Servicing of Financial Assets, an amendment of FASB Statement No. 140,
      Accounting for Transfers and Servicing of Financial Assets and
      Extinguishments of Liabilities". This statement requires all separately
      recognized servicing assets and servicing liabilities be initially
      measured at fair value, if practicable, and permits for subsequent
      measurement using either fair value measurement with changes in fair value
      reflected in earnings or the amortization and impairment requirements of
      Statement No. 140. The subsequent measurement of separately recognized
      servicing assets and servicing liabilities at fair value eliminates the
      necessity for entities that manage the risks inherent in servicing assets
      and servicing liabilities with derivatives to qualify for hedge accounting
      treatment and eliminates the characterization of declines in fair value as
      impairments or direct write-downs. SFAS No. 156 is effective for an
      entity's first fiscal year beginning after September 15, 2006. This
      adoption of this statement is not expected to have a significant effect on
      the Companys future reported financial position or results of
      operations.

---

|MCNAB CREEK GOLD CORP.                   
|-----------------------------------------
|(An exploration stage company)           
|                                         
|NOTES TO THE INTERIM FINANCIAL STATEMENTS
|June 30, 2006                            
|(Expressed in U.S. Dollars)              
|(Unaudited)                              

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

| |   |      |   | June 30, 2006 |  |   |          |  |   |      |  |   | March 31, 2006 |  |   |          | 
| | - | ---- | - | ------------- |  | - | -------- |  | - | ---- |  | - | -------------- |  | - | -------- | 
| |   |      |   | Accumulated   |  |   | Net Book |  |   |      |  |   | Accumulated    |  |   | Net Book | 
| |   | Cost |   | Amortization  |  |   | Value    |  |   | Cost |  |   | Amortization   |  |   | Value    | 
| | $ | 432  | $ | 293           |  | $ | 139      |  | $ | 432  |  | $ | 233            |  | $ | 199      | 

|4. | Due to Director                                                                                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                              
|   | The amount due to a director of $13,030 at
        June 30, 2006 and March 31, 2006 is unsecured, non- interest bearing and
        has no specific terms for repayment.                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                              
|5. | Common Stock                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                              
|   | During the three months ended June 30, 2006,
        the Company entered into the following stock related transactions:                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                              
|   | (a)                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                              
|   | (b)                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                              
|   | (c)                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                              
|   | The common shares of the Company are all
        of the same class, are voting and entitle stockholders to receive dividends.
        Upon liquidation or wind-up, stockholders are entitled to participate
        equally with respect to any distribution of net assets or any dividends
        which may be declared.                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                              
|   | Additional paid-in capital                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                              
|   | The excess of proceeds received for shares
        of common stock over their par value of $0.0001, less share issue costs,
        is credited to additional paid-in capital.                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                              
|6. | Donated Capital                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company records transactions of commercial
        substance with related parties at fair value as determined with management.
        Effective April 1, 2005, the Company recognizes donated services to officers
        of the Company for rent, valued at $500 per month, totalling $1,500 ($Nil
         June 30, 2005) for the three months ending June 30, 2006.

---

|MCNAB CREEK GOLD CORP.           
|---------------------------------
|(An exploration stage company)   
|                                 
|NOTES TO THE FINANCIAL STATEMENTS
|June 30, 2006                    
|(Expressed in U.S. Dollars)      
|(Unaudited)                      

|7. | Segmented Information                                                                                                                                                                                                                                                                                                                                                                                                
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company's business is operating in one segment, being
      the locating and exploration of mineral properties, and in one
      geographical area, the USA.                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                      
|8. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | At June 30, 2006, the Company has accumulated non-capital
      loss carry-forwards of approximately $251,000, which are available to
      reduce taxable income in future taxation years. These losses expire
      beginning 2026. Due to the uncertainty of realization of these loss carry-
      forwards, a full valuation allowance had been provided for this deferred
      tax asset.                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                      
|9. | Subsequent Event                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company entered into a consulting agreement, dated
      July 1, 2006, with Spectre Investments Inc. (Spectre), a company related
      to a family member of the President of the Company. Spectre provides
      consulting services to public companies and will be paid a fee of US
      $5,000 per month for a period of 2 years. The consulting agreement can be
      terminated within 30 days notice.

---

Item 2. Plan of Operations

We are a junior mineral exploration company. We seek to explore
our mineral interests in the SMH Property located in Eureka County, Nevada.
Subsequent to the year ended March 31, 2006, management decided to discontinue
holding an interest in the Roxy Prospect located in Pershing County, Nevada. We
will be exploring the SMH claims in phases. Our proposed work program is set out
in detail under the Plan of Operation section.

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

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

The Roxy 1-8 claims were transferred to McNab Creek Gold
Corporation by virtue of a Quitclaim Deed executed in July 2004 by Scoonover
Exploration LLC of Elko, Nevada. E.L. Hunsaker III, is a managing member of
Scoonover Exploration LLC (Scoonover Exploration a Nevada Limited Liability
Company). The claims were acquired for the consideration of $3,500; with a 2.5%
net smelter return royalty retained by Scoonover (the 2.5% net smelter return
royalty was sold to Golden Patriot Corp., of which E.L. Hunsaker III is also a
director). The Roxy quitclaim is recorded in Pershing County Nevada Book 384,
Page 740-742. Subsequent to the year ended March 31, 2006, management decided to
discontinue holding an interest in the Roxy Prospect.

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

Description of Our Exploration Properties

SMH PROSPECT

Location and Access

The SMH Prospect comprises 400 acres in 20 unpatented and
contiguous lode claims. An unpatented mining claim is a particular parcel of
Federal land, valuable for a specific mineral deposit or deposits. It is a
parcel for which an individual has asserted a right of possession. The right is
restricted to the extraction and development of a mineral deposit. The rights
granted by a mining claim are valid against a challenge by the United States and
other claimants only after the discovery of a valuable mineral deposit. The
claims are located south of the Carlin Trend, Figure 1, more specifically in
Section 23, 26 and 35 of Township 26 North and Range 52 East in Eureka County
Nevada. Subject to a 2.5% production royalty, the claims were transferred to
McNab Creek Gold Corporation by virtue of a Quitclaim Deed executed in January,
2004 by Scoonover Exploration LLC of Elko, Nevada. The name of the claims and
their BLM Serial Numbers are given in Table 1. All claims have anniversary dates
on September 1 and are in good standing until 2006.

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

---

- Erect four corner locations monuments and one location monument
- File appropriate documentation and pay appropriate fees with U.S.
  Department of the Interior-Bureau of Land Management
- File appropriate documentation and pay appropriate fees with County
  Recorder in county where claims are located.

|Table 1.   |                  
|---------- | -----------------
|Claim Name | BLM Serial Number
|           |                  
|SMH 31     | NMC925335        
|SMH 32     | NMC925336        
|SMH 33     | NMC925337        
|SMH 34     | NMC925338        
|SMH 35     | NMC925339        
|SMH 36     | NMC925340        
|SMH 37     | NMC925341        
|SMH 38     | NMC925342        
|SMH 39     | NMC925343        
|SMH 40     | NMC925344        
|SMH 41     | NMC925345        
|SMH 42     | NMC925346        
|SMH 43     | NMC925347        
|SMH 44     | NMC925348        
|SMH 45     | NMC925349        
|SMH 46     | NMC925350        
|SMH 47     | NMC925351        
|SMH 48     | NMC925352        
|SMH 49     | NMC925353        
|SMH 50     | NMC925354        

Accessibility
and Physiography

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

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

History

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

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

Following the Cominco drilling, the Dickenson-Nevada J.V.
partners made up of Reserve Industries Corporation, Precambrian Exploration and
Dickenson Mines Limited operated the WHY claims and collected 183 soil samples
of which 118 samples came from several disparate

---

lines and 65 samples came from a claim post-based soil grid
(i.e. 600 x 750 feet spacing). Assays from these samples were rather low for
gold but trace elements did identify several prospective targets.

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

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

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

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

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

Regional Setting

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

Property Geology

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

ROXY PROSPECT

Location and Access

The Roxy Prospect is located in un-surveyed Sections 5, 6, 7,
and 8, of T27N, R38E, and MDB&M as shown in Figure 1. The area is within the
southeastern portion of the Kennedy Mining District in the State of Nevada. The
land package consists of eight unpatented lode claims (NMC860160 to NMC860167)
along the eastern margin of the southern East Range.

Access is via I-80 to Winnemucca, Nevada, thence south along
Grass Valley road, approximately 55 miles through Grass Valley, past the Gold
Bank Hills, through Pleasant Valley, almost to McKinney Pass. The Property lies
approximately three miles west of the main dirt road and two miles north of
McKinney pass. Access may also be gained via I-80 to Battle Mountain. Follow

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State Road 305 southwest, turning west onto Lander County Road
that goes past Battle Mountain Gold's Copper Canyon operations. This road turns
to gravel past the mine entrance and heads thorough Buffalo and Dixie valleys,
around the south end of the Tobin Range, thence north along Spring Creek through
the Sou Hills, to the south end of Pleasant Valley, again almost to McKinney
Pass. Subsequent to the year ended March 31, 2006, management decided to
discontinue holding an interest in the Roxy Prospect

History

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

Geology

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

Mineralization and Geochemistry

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

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

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

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

Governmental Regulations

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

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

Research and Development

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

Employees

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

We employ Mr. Michael Sandidge as a consultant to our company. Mr. Sandidge is a registered professional geologist in the state of Washington with a MS degree in geology from University of Texas at El Paso and an undergraduate degree in geology from
University of Washington. His work experience includes researching and consulting from 1982 to present. He worked on several projects while an undergraduate and graduate student, they included investigating the petroleum potential of the Overthrust
Belt of southwestern United States and northern Mexico, structural interpretation of the Kootenay Arc of southern British Columbia, Canada, structural and intrusive history of the Central Coastal Plutonic Province, western British Columbia, Canada,
tectonic evaluation and metallogenic potential of the Lake Baikal and Tien Shan regions of the former Soviet Union, and the tectonic and metallogenic evolution of the Xolapa Complex of southern Mexico. He worked as a consultant in both exploration
and environmental programs in Arizona (AZCO Mining Company, 200Mt Sanchez copper deposit) and northern Mexico from 1993-1994, environmental and resource expansion in Arizona (Phelps Dodge Corporation, Morenci Mine) in 1995, precious metal potential
of northern Argentina (Homestake/Argentina Gold Corporation) in 1996, regional reconnaissance and precious metal potential of the Maricunga Belt and structural evaluation of the 1.2Bt Cerro Casale deposit (Bema Gold) in 1996, project management and
precious metal potential of the Andacollo Project (Sierra La Plata Corporation) in 1997, regional platinum group minerals (PGM) evaluation of the Kola Peninsula (Outukumpu) in 1997, epithermal precious metal potential in Far East Russian Federation
(Cyprus/AMAX/Far East Geological Institute) in 1998. Presently, Michael Sandidge is VP of Exploration for West Hawk Development Corporation, a publicly listed, Toronto Stock Exchange Venture Exchange, based in Vancouver, British Columbia, Canada.

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

3. Related Party Transactions

The amount due to a director of $13,030 at June 30, 2006 and
March 31, 2006 is unsecured, non-interest bearing and has no specific terms for
repayment.

The Company records transactions of commercial substance with
related parties at fair value as determined with management. Effective April 1,
2005, the Company recognizes donated services to officers of the Company for
rent, valued at $500 per month, totalling $1,500 ($Nil  June 30, 2005) for the
three months ending June 30, 2006.

Item 3 - Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, as of the
end of the period covered by this report, being June 30, 2006, we have carried
out an evaluation of the effectiveness of the design and operation of our
company's disclosure controls and procedures. This evaluation was carried out
under the supervision and with the participation of our management, including
our president and chief executive officer Mr. Kenneth G. Townsend. Mr. Townsend
is also the chief financial officer of our company. Based upon that evaluation,
Mr. Townsend concluded that our disclosure controls and procedures are effective
as of the end of the period covered by this report. There have been no
significant changes in our internal controls over financial reporting that
occurred during our most recent fiscal quarter that have materially affected, or
are reasonably likely to materially affect our internal controls over financial
reporting.

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

PART IIOTHER INFORMATION

Item 1.

LEGAL PROCEEDINGS

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

Item 2

UNREGISTERED SALES OF EQUITY SECURITIES
AND USE OF PROCEEDS

In December, 2005, we sold 383,760 shares at $0.10 per share to
one subscriber. This issuance of shares is a conversion of the Issuers
indebtedness owed to Kenneth Townsend, our C.E.O. and President, in the amount
of US$38,376.00 as of September 30, 2005. This purchaser is not a U.S. person as
defined in Rule 902(k) of Regulation S, and no sales efforts were conducted in
the U.S., in accordance with Rule 903(c). This subscriber acknowledged that the
securities purchased must

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come to rest outside the U.S., and the certificates contain a
legend restricting the sale of such securities until the Regulation S holding
period is satisfied in accordance with Rule 903(b)(3)(iii)(A).

Also in November and December, 2005, we sold 440,000 common
shares at $0.10 per share to four (4) subscribers under Regulation S. All of
these subscribers were friends, relatives or business associates of management
and accordingly not members of the public. None of the offerees or purchasers
are U.S. persons as defined in Rule 902(k) of Regulation S, and no sales efforts
were conducted in the U.S., in accordance with Rule 903(c). Subscribers to the
offering acknowledge that the securities purchased must come to rest outside the
U.S., and the certificates contain a legend restricting the sale of such
securities until the Regulation S holding period is satisfied in accordance with
Rule 903(b)(3)(iii)(A).

The Company completed a forward split of its common shares on a
20:1 basis as of April 30, 2006.

In April 2006 the Company sold 442,900 (post forward split)
shares of common stock at a price of $0.10 per share. The subscriber was a
friend, relative or business associates of management and accordingly not a
member of the public. The offeree or purchaser is not a U.S. person as defined
in Rule 902(k) of Regulation S, and no sales efforts were conducted in the U.S.,
in accordance with Rule 903(c). Subscribers to the offering acknowledge that the
securities purchased must come to rest outside the U.S., and the certificates
contain a legend restricting the sale of such securities until the Regulation S
holding period is satisfied in accordance with Rule 903(b)(3)(iii)(A).

Item 3

DEFAULTS UPON SENIOR SECURITIES

None

Item 4

SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS

On April 21, 2006 the Company and a majority of Shareholders
approved a 20:1 forward split of its common stock.

Item 5

OTHER INFORMATION

None

Item 6

EXHIBITS AND REPORTS ON FORM 8-K

| | (a)
      Exhibits
      31.1
        - Section 302 Certification of CEO and CFO32.1 - Section 906 Certification of CEO and
        CFO
      (b)
      Reports on Form 8-K
      March 16, 2006
        May 24, 2006
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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SIGNATURES

In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

|                       | **MCNAB CREEK GOLD
      CORP.**
|---------------------- | --------------------------------
|                      
|                      
|Dated: August 14, 2006
|                       | Per:                            
|                       |                                 
|                       |                                 
|                       |                                 
|                       |                                 

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