**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-QSB**




(Mark
      One)





x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934





**For
      the quarterly period ended September 30, 2006**





o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
                ACT





For
      the
      transition period from ________________ to_______________





**000-50146**


(Commission
      file number)





**TORNADO
      GOLD INTERNATIONAL CORP.**


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





**Nevada**
            
            **94-3409645**(State
                or other jurisdiction
            
            (IRS
                Employerof
                incorporation or
                organization)
            
            Identification
                No.)




**3841
      Amador Way, Reno, Nevada 89502**


(Address
      of principal executive offices)





**(775)
      827-2324**


(Issuer’s
      telephone number)





**N/A**


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





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. Yes x No o





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





The
      number of shares of common stock outstanding as of November 1, 2006 was
      29,961,526.





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








**TORNADO
      GOLD INTERNATIONAL CORP.**


**Index**


PageNumberPART
                  I.FINANCIAL INFORMATION
              2Item
                  1.Financial Statements
              2Balance
                  Sheet as of September 30, 2006 (unaudited)
              2Statements
                  of Operations for the three months ended September 30, 2006 and
                  2005
                  (unaudited)
              3Statements
                  of Cash Flows for the three months ended September 30, 2006 and
                  2005
                  (unaudited)
              4Notes
                  to Financial Statements (unaudited)
              5Item
                  2. Management’s Discussion and Analysis or Plan of
                  Operation
              18Item
                  3. Controls and Procedures
              24PART
                  II.OTHER INFORMATION
              25Item
                  6.Exhibits
              25SIGNATURES
              26CERTIFICATIONS





**PART
      I.**  **FINANCIAL
      INFORMATION**





**Item
      1.**  **Financial
      Statements**


**Tornado
        Gold International Corp.** **(An
          Exploratory Stage Company)** **BALANCE
            SHEET**


**September
                    30,****2006**(Unaudited)**ASSETS**CURRENT
                  ASSETSCash
                  and cash equivalents
              
              $
              504,736Prepaid
                  expenses
              
              
              1,413TOTAL
                  CURRENT ASSETS
              
              
              506,149MINING
                  CLAIMS
              
              
              1,565,597OTHER
                  ASSETSIntangible
                  assets
              
              
              1,868TOTAL
                  ASSETS
              
              $
              2,073,614**LIABILITIES
                  AND STOCKHOLDERS' DEFICIT**CURRENT
                  LIABILITIESAccounts
                  payable - related party
              
              $
              12,875Accounts
                  payable - others
              
              
              116,962Notes
                  payable (including accrued interest of $72,218)
              
              
              1,153,034TOTAL
                  CURRENT LIABILITIES
              
              
              1,282,871COMMITMENTS
                  AND CONTINGENCIES
              
              
              -STOCKHOLDERS'
                  DEFICITCommon
                  stock; $0.001 par value; 100,000,000 sharesauthorized;
                  29,961,526 shares issued and outstanding
              
              
              29,962Additional
                  paid in capital
              
              
              1,912,307Accumulated
                  deficit
              
              
              (704,993
              )Deficit
                  accumulated during the exploratory stage
              
              
              (1,946,115
              )Subscribed
                  warrants
              
              
              1,500,000Stock
                  subscription receivable
              
              
              (418
              )TOTAL
                  STOCKHOLDERS' DEFICIT
              
              
              790,743TOTAL
                  LIABILITIES AND STOCKHOLDERS' DEFICIT
              
              $
              2,073,614




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


2





**Tornado
        Gold International Corp.** **(An
          Exploratory Stage Company)** **STATEMENTS
            OF OPERATIONS**
  **For
                    the Three Months Ended**
                
                **For
                    the Nine Months Ended**
                
                **From**
                  **March
                    19, 2004****September
                    30,**
                
                **September
                    30,**
                
                **through****2006**
                
                **2005**
                
                **2006**
                
                **2005**
                
                **September
                    30, 2006**(Unaudited)
                
                (Unaudited)
                
                (Unaudited)
                
                (Unaudited)
                
                (Unaudited)NET
                    REVENUE
                
                $
                -
                
                $
                -
                
                $
                -
                
                $
                -
                
                $
                -OPERATING
                    EXPENSESCompensation
                    expense on option grants
                
                
                11,589
                
                
                12,269
                
                
                46,356
                
                
                12,269
                
                
                68,765Mining
                    exploration expenses
                
                
                522,978
                
                
                24,983
                
                
                604,245
                
                
                45,983
                
                
                1,060,176General
                    and administrative expenses
                
                
                148,074
                
                
                28,873
                
                
                357,392
                
                
                111,452
                
                
                663,845682,641
                
                
                66,125
                
                
                1,007,993
                
                
                169,704
                
                
                1,792,786LOSS
                    FROM OPERATIONS
                
                
                (682,641
                )
                
                (66,125
                )
                
                (1,007,993
                )
                
                (169,704
                )
                
                (1,792,786
                )OTHER
                    INCOME (EXPENSE)Interest
                    expense
                
                
                (21,793
                )
                
                (4,106
                )
                
                (59,531
                )
                
                (27,344
                )
                
                (153,329
                )TOTAL
                    OTHER INCOME (EXPENSE)
                
                
                (21,793
                )
                
                (4,106
                )
                
                (59,531
                )
                
                (27,344
                )
                
                (153,329
                )LOSS
                    BEFORE PROVISION FOR INCOME TAXES
                
                
                (704,434
                )
                
                (70,231
                )
                
                (1,067,524
                )
                
                (197,048
                )
                
                (1,946,115
                )PROVISION
                    FOR INCOME TAXES
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -NET
                    LOSS
                
                $
                (704,434
                )
                $
                (70,231
                )
                $
                (1,067,524
                )
                $
                (197,048
                )
                
                (1,946,115
                )NET
                    LOSS PER SHARE - BASIC AND DILUTED
                
                $
                (0.02
                )
                $
                (0.00
                )
                $
                (0.04
                )
                $
                (0.01
                )WEIGHTED
                    AVERAGE COMMON EQUIVALENTSHARES
                    OUTSTANDING - BASIC AND DILUTED
                
                
                29,799,733
                
                
                28,166,726
                
                
                29,133,601
                
                
                38,108,139





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




3


**Tornado
        Gold International Corp.** **(An
          Exploratory Stage Company)** **STATEMENTS
            OF CASH FLOWS**
  **For
                  the
                  Nine**
              
              **From****Months
                  Ended**
              
              **March
                  19, 2004****September
                  30,**
              
              **through****2006**
              
              **2005**
              
              **September
                  30, 2006**(Unaudited)
              
              (Unaudited)
              
              (Unaudited)CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss from continuing operations
              
              $
              (1,067,524
              )
              $
              (197,048
              )
              $
              (1,946,115
              )Adjustment
                  to reconcile net loss to net cashused
                  in operating activities:Value
                  of options and warrants granted for services
              
              
              46,356
              
              
              12,269
              
              
              68,765Changes
                  in:Prepaid
                  expenses and other current assets
              
              
              3,115
              
              
              (30,875
              )
              
              1,720Accounts
                  payable and accrued expenses
              
              
              176,068
              
              
              42,993
              
              
              277,157Net
                  cash used in operating activities
              
              
              (841,985
              )
              
              (172,661
              )
              
              (1,598,473
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Purchase
                  of mining claims
              
              
              (1,041,266
              )
              
              (233,014
              )
              
              (1,565,599
              )Net
                  cash used in investing activities
              
              
              (1,041,266
              )
              
              (233,014
              )
              
              (1,565,599
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Proceeds
                  from notes payable
              
              
              649,838
              
              
              381,000
              
              
              2,105,816Proceeds
                  from issuance of common stock
              
              
              347,220
              
              
              -
              
              
              856,802Proceeds
                  from subscribed warrants
              
              
              1,500,000
              
              
              -
              
              
              1,500,000Offering
                  costs
              
              
              (173,404
              )
              
              -
              
              
              (173,404
              )Payment
                  on note payable - related party
              
              
              -
              
              
              -
              
              
              (42,500
              )Repurchase
                  of shares on common stock
              
              
              -
              
              
              (7,906
              )
              
              (577,906
              )Net
                  cash provided by financing activities
              
              
              2,323,654
              
              
              373,094
              
              
              3,668,808NET
                  CASH PROVIDED BY CONTINUING OPERATIONS
              
              
              440,403
              
              
              (32,581
              )
              
              504,736CASH
                  AND CASH EQUIVALENTS, Beginning of year
              
              
              64,333
              
              
              53,141
              
              
              -CASH
                  AND CASH EQUIVALENTS, End of year
              
              $
              504,736
              
              $
              20,560
              
              $
              504,736SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOW INFORMATION:Interest
                  paid
              
              $
              -
              
              $
              -Income
                  taxes paid
              
              $
              -
              
              $
              -


The
        accompanying notes are an integral part of these financial
        statements.
  4
  **TORNADO
          GOLD INTERNATIONAL CORP.**
 **(formerly
          Nucotec, Inc.)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **(UNAUDITED)**


**NOTE
      1 - ORGANIZATION AND BASIS OF PRESENTATION**




**Organization**




Tornado
      Gold International Corp. (formerly Nucotec, Inc.) was incorporated in the state
      of Nevada on October 8, 2001. On July 7, 2004, the name of the company was
      officially changed to Tornado Gold International Corp. (the “Company”). The
      Company is currently in the exploratory stage with its principal activity being
      the exploration of mining properties for future commercial development and
      production (See Note 3).




**Basis
      of Presentation**




The
      accompanying interim financial statements have been prepared by the Company
      pursuant to the rules and regulations of the Securities and Exchange Commission
      (the “SEC”) for interim financial reporting.  These interim financial
      statements are unaudited and, in the opinion of management, include all
      adjustments (consisting of normal recurring adjustments and accruals) necessary
      to present fairly the balance sheet, operating results, and cash flows for
      the
      periods presented in accordance with accounting principles generally accepted
      in
      the United States of America (“GAAP”).  Operating results for the nine
      months ended September 30, 2006, are not necessarily indicative of the results
      that may be expected for the year ending December 31, 2006, or for any other
      interim period during such year.  Certain information and footnote
      disclosures normally included in financial statements prepared in accordance
      with GAAP have been omitted in accordance with the rules and regulations of
      the
      SEC.  These interim financial statements should be read in conjunction with
      the audited financial statements and notes thereto contained in the Company’s
      Form 10-KSB for the year ended December 31, 2005.




**Going
      Concern**




The
      accompanying financial statements have been prepared in conformity with
      accounting principles generally accepted in the United States of America, which
      contemplate continuation of the Company as a going concern. The Company has
      no
      established source of material revenue; has incurred a net loss for the
      nine-months ended September 30, 2006, of $1,067,524; as of September 30, 2006,
      has a negative working capital of $776,722; and has an accumulated deficit
      since
      its inception of $2,651,108. These conditions raise substantial doubt as to
      the
      Company’s ability to continue as a going concern. These financial statements do
      not include any adjustments that might result from the outcome of this
      uncertainty. These financial statements do not include any adjustments relating
      to the recoverability and classification of recorded asset amounts, or amounts
      and classification of liabilities that might be necessary should the Company
      be
      unable to continue as a going concern.




Management
      plans to take the following steps that it believes will be sufficient to provide
      the Company with the ability to continue in existence: The Company plans to
      raise additional operating funds through equity or debt financing. There is
      no
      assurance that the Company will be able to arrange for financing and has not,
      to
      date, had any substantive discussions with any third parties regarding such
      financing. (See Note 4)




**Stock
      Split**




On
      April
      19, 2004, the Company authorized a 50-for-1 stock split. On August 18, 2004,
      the
      Company authorized a 6.82-for-1 stock split. On May 16, 2005, the Company
      authorized a 1.20-for-1 stock split. All references in the accompanying
      financial statements to the number of shares outstanding and per-share amounts
      have been restated to reflect the various indicated stock splits.




5




**TORNADO
      GOLD INTERNATIONAL CORP.**


**(formerly
      Nucotec, Inc.)**


**NOTES
      TO FINANCIAL STATEMENTS**


**(UNAUDITED)**




**Restatements
      to Prior Periods Financial Statements**




For
      the
      quarters ended March 31, 2006 and June 30, 2006, the Company failed to include
      in operations compensation expense attributed to its granting of stock options
      to a consultant as discussed in Note 5. A reconciliation of the net loss as
      restated for the three months ended March 31, 2006, and for the three months
      and
      six months ended June 30, 2006, are as follows:





For
                the
            
            For
                the
            
            For
                theThree
                Months
            
            Three
                Months
            
            Six
                MonthsEnded
            
            Ended
            
            EndedMarch
                31, 2006
            
            June
                30, 2006
            
            June
                30, 2006(Unaudited)
            
            (Unaudited)
            
            (Unaudited)Net
                loss as originally reported
            
            $
            (139,951
            )
            
            (188,372
            )
            
            (328,323
            )Compensation
                expense on option grant
            
            
            (17,383
            )
            
            (17,383
            )
            
            (34,766
            )Net
                loss as restated
            
            $
            (157,334
            )
            
            (205,755
            )
            
            (363,089
            )Net
                loss per shareAs
                originally reported
            
            $
            (0.00
            )
            $
            (0.01
            )
            $
            (0.01
            )Adjusted
                for increased expense
            
            
            (0.00
            )
            
            (0.00
            )
            
            (0.00
            )As
                restated
            
            $
            (0.00
            )
            $
            (0.01
            )
            $
            (0.01
            )




**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**




**Stock
      Based Compensation**




The
      Company accounts for stock-based compensation under SFAS No. 123R, “Share- based
      Payment” and SFAS No. 148, “Accounting for Stock-Based Compensation--Transition
      and Disclosure--An amendment to SFAS No. 123.” These standards define a fair
      value based method of accounting for stock-based compensation. In accordance
      with SFAS Nos. 123R and 148, the cost of stock-based employee compensation
      is
      measured at the grant date based on the value of the award and is recognized
      over the vesting period. The value of the stock-based award is determined using
      the Black-Scholes option-pricing model, whereby compensation cost is the excess
      of the fair value of the award as determined by the pricing model at the grant
      date or other measurement date over the amount an employee must pay to acquire
      the stock. The resulting amount is charged to expense on the straight-line
      basis
      over the period in which the Company expects to receive the benefit, which
      is
      generally the vesting period.


6




**TORNADO
      GOLD INTERNATIONAL CORP.**


**(formerly
      Nucotec, Inc.)**


**NOTES
      TO FINANCIAL STATEMENTS**


**(UNAUDITED)**




As
      of
      April 15, 2005, the Company adopted its 2005 stock option plan to compensate
      its
      directors. As of June 30, 2006, no options have been granted to the directors.




**Use
      of Estimates**




The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosures of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of revenue and expenses during
      the reporting periods. Actual results could differ from these estimates.




**Fair
      Value of Financial Instruments**





The
      Company’s financial instruments consist of cash and cash equivalents, accounts
      payable, accrued expenses, and notes payable. Pursuant to SFAS No. 107,
“ *Disclosures
      About Fair Value of Financial Instruments* ,”
the
      Company is required to estimate the fair value of all financial instruments
      at
      the balance sheet date. The Company considers the carrying values of its
      financial instruments in the financial statements to approximate their fair
      values.




**Cash
      and Cash Equivalents**




For
      purposes of the statements of cash flows, the Company defines cash equivalents
      as all highly liquid debt instruments purchased with a maturity of three months
      or less, plus all certificates of deposit.




**Concentration
      of Credit Risk**




Financial
      instruments, which potentially subject the Company to concentrations of credit
      risk, consist of cash. The Company places its cash with high quality financial
      institutions and at times may exceed the FDIC $100,000 insurance limit. The
      Company extends credit based on an evaluation of the customer’s financial
      condition, generally without collateral. The Company monitors its exposure
      for
      credit losses and maintains allowances for anticipated losses, as required.




**Revenue
      Recognition**




The
      Company has not generated any revenue from its mining operations.




**Mining
      Costs**




Costs
      incurred to purchase, lease, or otherwise acquire property are capitalized
      when
      incurred. General exploration costs and costs to maintain rights and leases
      are
      expensed as incurred. Management periodically reviews the recoverability of
      the
      capitalized mineral properties and mining equipment. Management takes into
      consideration various information including, but not limited to, historical
      production records taken from previous mining operations, results of exploration
      activities conducted to date, estimated future prices, and reports and opinions
      of outside consultants. When it is determined that a project or property will
      be
      abandoned or its carrying value has been impaired, a provision is made for
      any
      expected loss on the project or property.




7


**TORNADO
        GOLD INTERNATIONAL CORP.**
 **(formerly
        Nucotec, Inc.)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **(UNAUDITED)**





**Website
      Development Costs**





In
      September 2006, the Company incurred $1,868 in the development of its website.
      The Company accounts for its website development costs pursuant to SOP 98-1.
      These costs were capitalized and are being amortized over three years.
      Amortization expense for the quarter ended September 30, 2006, amounted to
      $0.
      The balance of website development costs will be amortized over the next three
      years as follows:


September
                  2007
              
              $
              622September
                  2008
              
              $
              623September
                  2009
              
              $
              623$
              1,868




**Income
      Taxes**




The
      Company accounts for income taxes in accordance with SFAS No. 109, “Accounting
      for Income Taxes.” Deferred taxes are provided on the liability method whereby
      deferred tax assets are recognized for deductible temporary differences, and
      deferred tax liabilities are recognized for taxable temporary differences.
      Temporary differences are the differences between the reported amounts of assets
      and liabilities and their tax bases. Deferred tax assets are reduced by a
      valuation allowance when, in the opinion of management, it is more likely than
      not that some portion or all of the deferred tax assets will be realized.
      Deferred tax assets and liabilities are adjusted for the effects of changes
      in
      tax laws and rates on the date of enactment.




**Loss
      Per Share**




The
      Company reports earnings (loss) per share in accordance with SFAS No. 128,
      “Earnings per Share.” Basic earnings (loss) per share is computed by dividing
      income (loss) available to common shareholders by the weighted average number
      of
      common shares available. Diluted earnings (loss) per share is computed similar
      to basic earnings (loss) per share except that the denominator is increased
      to
      include the number of additional common shares that would have been outstanding
      if the potential common shares had been issued and if the additional common
      shares were dilutive. Diluted earnings (loss) per share has not been presented
      since the effect of the assumed conversion of options to purchase common shares
      would have an anti-dilutive effect. The only potential common shares as of
      September 30, 2006, were 160,200 options, 11,795,000 warrants, and $649,838
      of
      debt convertible into 649,838 shares of the Company’s common stock that have
      been excluded from the computation of diluted net loss per share because the
      effect would have been anti-dilutive. If such shares were included in diluted
      EPS, they would have resulted in weighted-average common shares of 33,041,673
      and 28,219,079 for the three months ended September 30, 2006 and 2005,
      respectively, and 31,082,727 and 38,160,492 for the nine months ended September
      30, 2006 and 2005, respectively.




**Reclassification**




Certain
      reclassifications have been made to the 2005 balances to conform to the 2006
      presentation.


8


**TORNADO
        GOLD INTERNATIONAL CORP.**
 **(formerly
        Nucotec, Inc.)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **(UNAUDITED)**


**NOTE
      3 - Mining Claims**




**NT
      Green Property, HMD Gold Property, Goodwin Hill Gold Property, and Wilson Peak
      Property**




On
      May
      31, 2004, the Company entered into four agreements with a company wholly owned
      by Mr. Carl Pescio, a director of the Company, to lease four mining properties.
      The terms of the four leases are substantially identical and are as follows:




A
      schedule of the advanced lease payments for each of the four properties is
      as
      follows:




Due
                  Date
              
              AmountJune
                  5, 2004
              
              $
              15,000May
                  15, 2005
              
              $
              22,500February
                  5, 2006
              
              $
              30,000February
                  5, 2007
              
              $
              37,500February
                  5, 2008
              
              $
              50,000February
                  5, 2009
              
              $
              62,500February
                  5, 2010
              
              $
              75,000February
                  5, 2011 and each year thereafter until production commences
              
              $
              100,000




Upon
      completion of a bankable feasibility study and payments totaling $105,000,
      the
      Company will own 100% of the property subject to a continuing production royalty
      of 4%. Once the $105,000 is paid, all subsequent payments will convert into
      advance minimum royalty payments that are credited against the 4% production
      royalty due. A 1% royalty is also due Pescio on production on property
      consisting of a 2-mile circumference surrounding the leased property.




The
      Company will pay additional land acquisition and filling fees on the property.
      The Company is committed to drill 5,000 feet on the property in each year
      commencing on or before September 1, 2006, and continuing until the completion
      of the feasibility study. Excess footage drilled in any year will be carried
      forward to subsequent years. The Company has the option to pay Pescio $10 per
      foot committed to and not drilled.




Prior
      to
      the completion of the feasibility study, the Company has the right to purchase
      2% of the 4% production royalty for $1,500,000 for each percentage point. The
      Company also has the option to purchase 50% of the 1% royalty for $500,000.




The
      Company shall be responsible for all environmental liabilities and reclamation
      costs it creates and indemnifies Pescio against any such claims or obligations.
      The Company can terminate the lease at any time by giving 30 days notice
      provided that there are no outstanding environmental or reclamation liabilities
      and that all lease and production royalty payments are current.




**Jack
      Creek Property**




On
      October 3, 2005, the Company paid the Bureau of Land Management $30,875 as
      consideration on the Exploration License and Option to Lease Agreement entered
      into between the Company and Earl Abbott and Stanley Keith (the “owners”) to
      explore 247 claims (nearly 5,000 acres) known as the Jack Creek Property. Dr.
      Abbott is the Company’s President, and Mr. Keith is a Company Director.




9


**TORNADO
        GOLD INTERNATIONAL CORP.**
 **(formerly
        Nucotec, Inc.)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **(UNAUDITED)**




The
      Company entered into a definitive Exploration License and Option to Lease
      Agreement for the above claims for a period of twenty years Under this
      agreement, the Company is responsible to make minimum lease payments to the
      owners as follows:




Due
                  Date
              
              AmountUpon
                  signing
              
              $
              22,5001st
                  anniversary
              
              $
              30,0002nd
                  anniversary
              
              $
              37,5003rd
                  anniversary
              
              $
              50,0004th
                  anniversary
              
              $
              62,5005th
                  anniversary and each anniversary thereafter
              
              $
              100,000




If
      any
      payments due by the Company to the owners are not paid within 30 days of its
      due
      date, interest will begin to accrue on the late payment at a rate of 2% over
      the
      prime rate established by the Department of Business and Industry of the State
      of Nevada.




Upon
      completion of a bankable feasibility study and payments totaling $140,000,
      all
      subsequent payments will convert into advance minimum royalty payments that
      are
      credited against the 4% production royalty due.




The
      Company shall have the option to purchase one-half (1/2) of the royalty
      applicable to the property representing two percent (2%) of the Net Smelter
      Returns. The Company shall have the right to elect to purchase such part of
      the
      royalty in increments representing one percent (1%) of the Net Smelter Returns,
      and the purchase price for each such increment shall be $1,500,000. The Company
      shall have the option to purchase one-half (1/2) of the area-of-interest royalty
      applicable to mineral rights, mining claims, and properties which the Company
      acquires from third parties representing one-half percent (.5%) of the Net
      Smelter Returns. The purchase price for such part of the area-of-interest
      royalty shall be $500,000 for the one-half percent (.5%) of the area-of-interest
      royalty applicable to mineral rights, mining claims, and properties, which
      the
      Company acquires from any third party.




The
      Company shall be responsible for all environmental liabilities and reclamation
      costs it creates and indemnifies the owners against any such claims or
      obligations. The Company can terminate the lease at any time by giving 30 days
      notice provided that there are no outstanding environmental or reclamation
      liabilities and that all lease and production royalty payments are current.




In
      addition, on August 7, 2006, the Company acquired an option for 53 additional
      claims at the Jack Creek Property. The option was acquired from Gateway Gold
      (USA) Corp. through two of the Company’s directors, Earl Abbott and Stanley
      Keith, and is subject to the Area of Interest clause in the original Jack Creek
      agreement between the Company and those directors that the Company announced
      in
      its October 3, 2005, news release. The Company has the option to earn a 50%
      undivided interest in the 53 claims through its expenditure on the claims of
      a
      total of $500,000 in various stages by March 1, 2007, 2008, and 2009.
      Thereafter, the Company and Gateway Gold could form a joint venture; but, if
      Gateway declines to participate at its 50% level, the Company could exercise
      its
      option to earn an additional 20% in the claims through its expenditure on the
      claims of an additional $500,000 in two equal stages on or before March 1,
      2010,
      and 2011. Dr. Abbott is also an officer of the Company.




10




**TORNADO
          GOLD INTERNATIONAL CORP.**
 **(formerly
          Nucotec, Inc.)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **(UNAUDITED)**




**Additional
      Properties**




On
      October 6, 2005, the Company entered into a preliminary agreement with Mr.
      Carl
      Pescio to lease 10 mineral properties (about 1,300 claims) in Nevada. Under
      the
      term of the preliminary agreement, the Company is to make advance lease payments
      to Mr. Pescio on each property based upon the following schedule:




Due
                  Date
              
              AmountUpon
                  signing
              
              $
              35,0001st
                  anniversary
              
              $
              55,0002nd
                  anniversary
              
              $
              75,0003rd
                  anniversary
              
              $
              100,0004th
                  anniversary
              
              $
              125,0005th
                  anniversary
              
              $
              150,0006th
                  anniversary and each anniversary thereafter
              
              $
              200,000




On
      August
      23, 2006, the Company entered into an agreement to acquire the Illipah gold
      prospect consisting of 191 unpatented mining claims located in White Pine
      County, Nevada in consideration for $100,000 and 300,000 shares of its common
      stock. Under the terms of the purchase agreement, $50,000 was paid upon signing
      with $50,000 and 100,000 shares of restricted common stock payable by November
      21, 2006, with the additional 200,000 shares of restricted common stock to
      be
      issued on or before August 23, 2007. In addition, the Company assumed the
      seller’s obligations in an underlying exploration and mining lease agreement on
      the claims and granted to the seller a production royalty of two percent of
      net
      smelter returns on all rents and mineral production from the property. The
      Company also agreed to pay $48,006.50 to the United States Department of the
      Interior Bureau of Land Management for mining claim maintenance fees, and be
      responsible for future annual maintenance and filing fees on the acquired claims
      and any advanced minimum royalty payments due to Mr. Pescio and Janet Pescio
      under an August 31, 2001, agreement between the Pescios and the seller. The
      Company agreed to register all of such shares for re-sale within 60 days of
      the
      closing date but not later than 150 days after August 23, 2006. The Company
      also
      agreed to use its best efforts to cause the registration of the shares to be
      declared effective as soon as practicable thereafter, but within 120 days after
      the closing date and no later than 210 days after August 23, 2006.




The
      Company has the option, exercisable at any time prior to commercial production
      on any of the Illipah claims, to reduce production royalties due Seller from
      two
      percent to one percent by paying it $1,000,000 or its equivalent in gold bullion
      priced as of the August 24, 2006, closing price of gold on the New York
      Commodity Exchange. The Company also agreed to undertake an exploration program
      on the Illipah property and related area of interest, and incur exploration
      and
      development expenditures of at least $750,000 within two years, of which
      $250,000 is to be expended during the first year of the agreement.


11


**TORNADO
          GOLD INTERNATIONAL CORP.**
 **(formerly
          Nucotec, Inc.)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **(UNAUDITED)**


Based
      upon the actual and preliminary terms of the above leases, the Company’s
      obligation as of September 30, 2006, for the payment of minimum lease payments
      on these 16 properties is as follows:


2006
              
              $
              51,2352007
              
              $
              930,0002008
              
              $
              1,237,5002009
              
              $
              1,550,0002010
              
              $
              1,862,500Minimum
                  lease payments in Subsequent years
              
              $
              2,500,000




A
      description of the mining properties leased by the Company is as follows:




NT
      Green
      Property is located in central Lander County, Nevada about 40 miles southwest
      of
      the town of Battle Mountain. The property is within the Battle Mountain/Eureka
      (Cortez) Trend at the northern end of the Toiyabe Range.




HMD
      Gold
      Property is located in Eureka County, Nevada along the west side of the Cortez
      Range, about 30 miles southwest of the town of Carlin, and about 10 miles north
      of the Buckhorn deposit. Access to the property is gained by driving 41 miles
      west of Elko on I-80, then 20 miles south on SH-306 to the town of Crescent
      Valley. A well-maintained gravel road leads east-southeast past the Hot Springs
      Point to the vicinity of the Dean Ranch. A two-track road leads to the southeast
      and the property position is reached in about one-half mile.




Goodwin
      Hill Gold Property is located in east central Lander County, Nevada about 60
      miles south of the town of Battle Mountain and about 25 miles northeast of
      the
      town of Austin. It is positioned in grass Valley between the Simpson Park Range
      to the east and the Toiyabe Range to the west.




Wilson
      Peak property is located in Elko County, Nevada about 70 miles north of the
      town
      of Elko and about 20 miles north of the town of Tuscarora. The property area
      is
      west of the Independence Gold Trend and is part of a north-south line of
      gold-silver occurrences in Tertiary volcanic rocks.




Jack
      Creek Property is located in the northern Independence Range about 50 miles
      north of Elko, Elko County, Nevada. It is comprised of 247 lode mining claims
      (nearly 5,000 acres) adjacent to Gateway Gold Corp.’s (TSX Venture:GTQ) Big
      Springs and Dorsey Creek Properties.




Stargo
      Property is located in the Monitor Range about 45 miles southwest of the town
      of
      Eureka and about 20 miles west of the Northumberland Mine and comprises of
      a
      total of 257 lode claims (about 5,140 acres) in Nye County, Nevada.




West
      Whistler Property is located on the west flank of Whistler Mountain, about
      10
      miles northwest of the town of Eureka and comprises of a total of 103 lode
      claims (about 2,060 acres) in Eureka County, Nevada.




Brock
      Property is located in the Monitor Range about 36 miles southwest of the town
      of
      Eureka and about 24 miles northeast of the Northumberland Mine and comprises
      a
      total of 222 lode claims (about 4,440 acres) in Eureka County, Nevada .




Horseshoe
      Basin Property is located in the Fish Creek Mountains about 30 miles south
      of
      the town of Battle Mountain and about 4 miles south of the McCoy and Cove
      deposits.




12


**TORNADO
          GOLD INTERNATIONAL CORP.**
 **(formerly
          Nucotec, Inc.)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **(UNAUDITED)**


South
      Lone Mountain Property is located on the west flank of the Mountain Boy Range
      in
      Antelope Valley about 15 miles southwest of the town of Eureka and consists
      of a
      total of 140 lode claims (about 2,800 acres) in Eureka County, Nevada.




Golconda
      Property is located in Rock Creek Valley about 12 miles east of the town of
      Winnemucca and near the intersection of the Getchell Trend and the north end
      of
      the Battle Mountain-Eureka Trend and comprises of a total of 108 lode claims
      (about 2,160 acres) in Humboldt County, Nevada.




North
      Battle Mountain Property is located in the Sheep Creek Range about 4 miles
      northeast of the town of Battle Mountain near the northern extension of the
      Battle Mountain-Eureka (Cortez) Trend and comprises a total of 73 lode claims
      (about 1,460 acres) in Lander County, Nevada.




Dry
      Hills
      Property is located in the Dry Hills about 20 miles southwest of the town of
      Carlin and comprises of a total of 96 lode claims (about 1,920 acres) in Eureka
      County, Nevada.




Walti
      Property is located in Grass Valley about 62 miles south of the town of Carlin
      and consists of a total of 402 lode claims (about 8,040 acres) in Eureka and
      Lander Counties, Nevada.




Marr
      Property is located between the Fish Creek Mountains and the Ravenswood
      Mountains about 50 miles southwest of the town of Battle Mountain. The property
      is along the Western Nevada Rift and consists of a total of 93 lode claims
      (about 1,840 acres) in Lander County, Nevada.




The
      Illipah gold prospect is situated in eastern Nevada at the southern extension
      of
      the Carlin Trend (T 18N, R 58E). The property consists of one hundred ninety
      one
      unpatented federal Bureau of Land Management lode mining claims, or
      approximately 3,820 acres.




As
      of
      September 30, 2006, the Company incurred a total of $1,565,597 in acquisition
      costs. The Company has recently commenced exploration of its properties and
      has
      yet to determine whether any of its properties are commercially feasible. In
      order for the Company to complete its analysis, additional funding is required.




**NOTE
      4 - NOTES PAYABLE**




On
      July
      1, 2005, the Company borrowed $100,000 from Gatinara Holdings, Inc., an
      unrelated third party. The loan is evidenced by an unsecured promissory note.
      The note accrues interest at 8% per annum and matures on December 31, 2006.
      Accrued interest related to this note as of September 30, 2006, amounted to
      $9,973.




From
      August 9, 2005, to October 5, 2005, the Company borrowed a total of $330,978
      from Greenshoe Investment, Inc., an unrelated third party. The loans are
      evidenced by unsecured promissory notes. The notes accrue interest at 8% per
      annum and mature on December 31, 2006. Accrued interest related to these notes
      as of September 30, 2006, amounted to $28,408.




During
      the three months ended March 31, 2006, the Company borrowed a total of $649,838
      from Greenshoe Investment, Inc. The loans are evidenced by unsecured promissory
      notes. The notes accrue interest at 8% per annum and mature on December 31,
      2006. Prior to maturity, the notes may be converted at the sole discretion
      of
      the Company into shares of the Company’s common stock at a rate of $1.00 per
      share. Accrued interest related to these notes as of September 30, 2006,
      amounted to $ 33,837.


13


**TORNADO
          GOLD INTERNATIONAL CORP.**
 **(formerly
          Nucotec, Inc.)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **(UNAUDITED)**


**NOTE
      5 - STOCKHOLDERS’ DEFICIT**




**Common
      Stock**




On
      April
      19, 2004, the Company authorized a 50-for-1 stock split. On August 18, 2004,
      the
      Company authorized a 6.82-for-1 stock split. On May 16, 2005, the Company
      authorized a 1.20-for-1 stock split. In addition, the Company increased it
      authorized shares to 100,000,000. The accompanying financial statements have
      been retroactively restated to present the effect of these three stock splits.




On
      April
      15, 2005, the Company’s officers and directors agreed to redeem an aggregate of
      27,172,800 of their shares for $7,906, or $.0002909 per share. The new
      management desired to decrease their percentage ownership interest of the
      Company, as well as the number of the Company’s outstanding shares of common
      stock, so they agreed to sell their shares of common stock back to the Company
      for the amount they initially paid for them. The shares includes 13,586,400
      shares from Dr. Abbott, and 6,793,200 shares from each of Messrs. Pescio and
      Keith. Dr. Abbott’s shares were redeemed for $3,954, and Messrs. Pescio and
      Keith each received $1,976 for their shares. These amounts are the equivalent
      to
      the pre-split prices they paid for their shares when they joined the Company
      in
      March 2004. The $7,906 was paid during the three months ended September 30,
      2005.




In
      April
      15, 2005, the holders of the notes payable converted the principal amount of
      the
      notes totaling $1,025,000 and accrued interest of $79,271 into 1,325,126 shares
      of the Company’s common stock.




In
      the
      fourth quarter of 2005, the Company sold 625,000 shares of common stock to
      an
      investor for total cash proceeds of $500,000. In connection with this
      transaction, the Company also issued to this investor a warrant to purchase
      625,000 shares of common stock for $0.85 per shares. As of December 31, 2005,
      the Company received $499,582. The remaining $418 has been charged to equity
      and
      included in subscription receivable.




In
      the
      second quarter of 2006, the Company’s former management exercised some of their
      options to purchase a total of 24,800 shares of the Company’s common stock at a
      price of $.15 per share.




In
      the
      third quarter of 2006, the Company sold 1,145,000 units through a private Reg
      S
      offering for $343,500. Each unit consisted of one share of the Company’s common
      stock and one warrant to purchase one share of the Company’s common stock at
      $.60 per share. The warrant expires three years from date of issuance. The
      warrants and underlying common shares are anti-dilutive.




**Options
      and Warrants**





1)
            In
                March 2004, the Company issued 60,000 options to former employees
                of the
                Company. The fair value for these options was estimated to be $4,540
                and
                has been recorded as an expense in the accompanying statement of
                operations. The fair value was estimated using a Black-Scholes option
                pricing model with the following weighted-average assumptions: risk-free
                interest rate of 5.5%; dividend yields of 0%; volatility factors
                of the
                expected market price of the Company’s common stock of 50%; and a weighted
                average expected life of the option of 10
                years.





As
      discussed above, in June 2006, former management exercised some of their options
      to purchase a total of 24,800 shares of the Company’s common stock for
      $3,720.





2)
            In
                accordance with a consulting agreement with Access Capital Management
                Corp., the Company issued Access Capital 25,000 options in September
                2005
                to purchase shares of the Company’s common stock for $0.75 per shares.
                These options were valued using the Black-Scholes option pricing
                model
                using the following assumptions: term of 1,853 days, a risk-free
                interest rate of 3.85%, a dividend yield of 0%, and volatility
                of 63%. The value of these options of $12,075 was amortized over the
                three-month initial term of the agreement and was charged to operations
                in
                2005.




14




**TORNADO
          GOLD INTERNATIONAL CORP.**
 **(formerly
          Nucotec, Inc.)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **(UNAUDITED)**


In
      December 2005, the Company extended the term of the agreement and granted Access
      an
      additional 125,000 options to purchase shares of the Company’s common stock at a
      price of $0.75 per shares. These options were valued using the Black-Scholes
      option pricing model using the following assumptions: term of 1,762 days, a
      risk-free interest rate of 4.45%, a dividend yield of 0%, and
      volatility of 71%. These options were valued at $52,150 and are being
      amortized over the nine month remaining term of the agreement. In 2005, $5,794
      was charged to operations. During the three-months and nine-months ended
      September 30, 2006, compensation expense charged to operation in connection
      with
      this option grant totaled $17,382 and $46,356, respectively.





The
      150,000 options granted in 2005 expire on September 28, 2010, unless Access
      Capital no longer provides services for the Company, whereby the options expire
      one year from the date of termination.





3)
            As
                discussed above, in connection with the issuance of the 625,000 shares
                of
                the Company’s common stock, the Company granted 625,000 warrants to
                purchase shares of the Company’s common stock at $.85 per
                share.





4)
            In
                connection with the Company’s July 2006 private offering, the Company
                issued 1,145,000 warrants to purchase shares of the Company’s common stock
                at $.60 per share. The warrants expire three years from the date
                of
                issuance.





The
      warrant holders have the right to convert the warrants granted into shares
      of
      the Company’s common stock for no further consideration based upon a formula
      indicated in the warrant agreement.





5)
            Also
                in July 2006, the Company received $1,500,000 in exchange for the
                issuance
                of 5,000,000 warrants, which can be converted into 5,000,000 shares
                of the
                Company’s common stock at any time by the warrant holder for no further
                consideration through July 14, 2016, on which date the Company will
                issue
                the 5,000,000 shares. The warrant holder was also granted an additional
                5,000,000 warrants to purchase shares of the Company’s common stock at a
                price of $.60 per share. These additional warrants expire three years
                from
                the date of issuance.





The
      warrant holders have the right to convert the additional warrants granted into
      shares of the Company’s common stock for no further consideration based upon a
      formula indicated in the warrant agreement.


15


**TORNADO
        GOLD INTERNATIONAL CORP.**
 **(formerly
        Nucotec, Inc.)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **(UNAUDITED)**


The
      following table summarizes the options and warrants outstanding:





WeighedOptions/
            
            AverageWarrants
            
            ExerciseOutstanding
            
            PriceBalance
                - December 31, 2004
            
            
            60,000
            
            $
            .1500Granted
            
            
            775,000
            
            $
            .8306Exercised
            
            
            -Forfeited
            
            
            -Balance
                - December 31, 2005
            
            
            835,000
            
            $
            .7817Granted
            
            
            11,145,000
            
            $
            .4654Exercised
            
            
            (24,800
            )
            $
            (.1500
            )Forfeited
            
            
            -Balance
                - June 30, 2006
            
            
            11,955,200
            
            $
            .4886




**NOTE
      6 - INCOME TAXES**




Deferred
      income taxes reflect the net tax effects of temporary differences between the
      carrying amounts of assets and liabilities for financial statement purposes
      and
      the amounts used for income tax purposes. Significant components of the
      Company’s deferred tax liabilities and assets as of September 30, 2006, are as
      follows:




Deferred
                tax assets:Net
                operating loss
            
            $
            890,000Less
                valuation allowance
            
            
            (890,000
            )$
            -




At
      September 30, 2006, the Company had federal net operating loss (“NOL”)
      carryforwards of approximately $2,617,000. Federal NOLs could, if unused, begin
      to expire in 2017.




16


**TORNADO
          GOLD INTERNATIONAL CORP.**
 **(formerly
          Nucotec, Inc.)**
 **NOTES
          TO FINANCIAL STATEMENTS**
 **(UNAUDITED)**


Utilization
      of the net operating loss and tax credit carryforwards is subject to significant
      limitations imposed by the change in control under I.R.C. 382, limiting its
      annual utilization to the value of the Company at the date of change in control
      multiplied by the federal discount rate.




**NOTE
      8 - RELATED PARTY TRANSACTIONS**




During
      the nine months ended September 30, 2006 and 2005, the Company had the following
      transactions with related parties:




As
      discussed in Note 3, the Company entered into agreements with a company owned
      by
      Mr. Pescio to acquire mining claims. During the nine months ended September
      30,
      2006, the Company paid Mr. Pescio $1,020,000 related to these agreements.




As
      further discussed in Note 3, the Company entered into an agreement with Messrs.
      Abbott and Keith to acquire certain mining properties. During the nine months
      ended September 30, 2006, the Company paid Dr. Abbott $8,294 and Mr. Keith
      $12,971 related to this agreement.




During
      the nine months ended September 30, 2006 and 2005, the Company incurred
      consulting fees for services rendered by Mr. Abbott totaling $162,817 and
      $66,850, respectively. Of the $162,817 incurred in 2006, $107,714 related to
      mining exploration and $55,103 related to general administrative activities.
      Of
      the $66,850 incurred in 2005, $38,850 related to mining exploration and $28,000
      related to general administrative activities. In addition, during the
      nine-months ended September 30, 2005, the Company reimbursed Dr. Abbott $9,209
      for travel and other related expenses.




During
      the nine-months ended September 30, 2006, the Company paid Mr. George
      Drazenovic, its Chief Financial Officer, $35,000. Mr. Drazenovic was not
      affiliated with the Company until 2006.




17




**Item
      2.**  **Management’s
      Discussion and Analysis or Plan of Operations**





THIS
      FOLLOWING INFORMATION SPECIFIES CERTAIN FORWARD-LOOKING STATEMENTS OF MANAGEMENT
      OF OURS. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT ESTIMATE THE HAPPENING
      OF FUTURE EVENTS AND ARE NOT BASED ON HISTORICAL FACT. FORWARD-LOOKING
      STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, SUCH
      AS
“MAY,” “SHALL,” “COULD,” “EXPECT,” “ESTIMATE,” “ANTICIPATE,” “PREDICT,”
“PROBABLE,” “POSSIBLE,” “SHOULD,” “CONTINUE,” OR SIMILAR TERMS, VARIATIONS OF
      THOSE TERMS OR THE NEGATIVE OF THOSE TERMS. THE FORWARD-LOOKING STATEMENTS
      SPECIFIED IN THE FOLLOWING INFORMATION HAVE BEEN COMPILED BY OUR MANAGEMENT
      ON
      THE BASIS OF ASSUMPTIONS MADE BY MANAGEMENT AND CONSIDERED BY MANAGEMENT TO
      BE
      REASONABLE. OUR FUTURE OPERATING RESULTS, HOWEVER, ARE IMPOSSIBLE TO PREDICT
      AND
      NO REPRESENTATION, GUARANTY, OR WARRANTY IS TO BE INFERRED FROM THOSE
      FORWARD-LOOKING STATEMENTS.





THE
      ASSUMPTIONS USED FOR PURPOSES OF THE FORWARD-LOOKING STATEMENTS SPECIFIED IN
      THE
      FOLLOWING INFORMATION REPRESENT ESTIMATES OF FUTURE EVENTS AND ARE SUBJECT
      TO
      UNCERTAINTY AS TO POSSIBLE CHANGES IN ECONOMIC, LEGISLATIVE, INDUSTRY, AND
      OTHER
      CIRCUMSTANCES. AS A RESULT, THE IDENTIFICATION AND INTERPRETATION OF DATA AND
      OTHER INFORMATION AND THEIR USE IN DEVELOPING AND SELECTING ASSUMPTIONS FROM
      AND
      AMONG REASONABLE ALTERNATIVES REQUIRE THE EXERCISE OF JUDGMENT. TO THE EXTENT
      THAT THE ASSUMED EVENTS DO NOT OCCUR, THE OUTCOME MAY VARY SUBSTANTIALLY FROM
      ANTICIPATED OR PROJECTED RESULTS, AND, ACCORDINGLY, NO OPINION IS EXPRESSED
      ON
      THE ACHIEVABILITY OF THOSE FORWARD-LOOKING STATEMENTS. NO ASSURANCE CAN BE
      GIVEN
      THAT ANY OF THE ASSUMPTIONS RELATING TO THE FORWARD-LOOKING STATEMENTS SPECIFIED
      IN THE FOLLOWING INFORMATION ARE ACCURATE, AND WE ASSUME NO OBLIGATION TO UPDATE
      ANY SUCH FORWARD-LOOKING STATEMENTS.





We
      begin
      Management’s Discussion and Analysis or Plan of Operation with a discussion of
      our business overview. This overview is followed by a discussion of selected
      financial information line items and a detailed analysis of our plan of
      operation and results of operations. This section should be read in conjunction
      with our Consolidated Financial Statements and the Notes thereto, which are
      included elsewhere in this report.





**Business
      Overview.**




We
      are a
      junior exploration company. Our business focus is on the identification and
      acquisition of properties that exhibit the potential for gold mining operations
      by others.





We
      were
      incorporated in Nevada on October 8, 2001, initially to serve as a holding
      company for Salty’s Warehouse, Inc., which sold consumer electronics products
      and other name-brand consumer products over the Internet. On March 19, 2004,
      pursuant to a Plan of Reorganization and Acquisition, we disposed of Salty’s
      Warehouse, Inc., and under our current management, undertook our current
      business focus. In connection with that change of business focus, on July 7,
      2004, we changed our name to Tornado Gold International Corp. from Nucotec,
      Inc., which name change had been approved by our Board of Directors and the
      holders of a majority of our outstanding common stock on May 12, 2004.




18





**Critical
      Accounting Policies**




Our
      Management’s Discussion and Analysis or Plan of Operation section discusses our
      financial statements, which have been prepared in accordance with accounting
      principles generally accepted in the United States of America. The preparation
      of these financial statements requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities at the
      date of the financial statements and the reported amounts of revenues and
      expenses during the reporting period. On an on-going basis, management evaluates
      its estimates and judgments, including those related to revenue recognition,
      accrued expenses, financing operations, and contingencies and litigation.
      Management bases its estimates and judgments on historical experience and on
      various other factors that are believed to be reasonable under the
      circumstances, the results of which form the basis for making judgments about
      the carrying value of assets and liabilities that are not readily apparent
      from
      other sources. Actual results may differ from these estimates under different
      assumptions or conditions. The most significant accounting estimates inherent
      in
      the preparation of our financial statements include estimates as to the
      appropriate carrying value of certain assets and liabilities, which are not
      readily apparent from other sources, accruals for other costs, and the
      classification of net operating loss and tax credit carry-forwards between
      current and long-term assets. These accounting policies are more fully described
      in the notes to the financial statements included in our Annual Report on Form
      10-KSB/A for the fiscal year ended December 31, 2005.




**Mining
      Costs.**




Costs
      incurred to purchase, lease or otherwise acquire property are capitalized when
      incurred. General exploration costs and costs to maintain rights and leases
      are
      expensed as incurred. Management periodically reviews the recoverability of
      the
      capitalized mineral properties and mining equipment. Management takes into
      consideration various information including, but not limited to, historical
      production records taken from previous mine operations, results of exploration
      activities conducted to date, estimated future prices and reports, and opinions
      of outside consultants. When it is determined that a project or property will
      be
      abandoned or its carrying value has been impaired, a provision is made for
      any
      expected loss on the project or property.




**Liquidity
      and Capital Resources.**




We
      had
      cash and cash equivalents totaling $504,736 as of September 30, 2006, and had
      prepaid our office lease and attorney fees totaling $1,413, making our total
      current assets $506,149. We also had mining claims of $1,565,597 and intangible
      assets of $1,868, making our total assets $2,073,614 as of September 30, 2006.
      As of that date, our available cash and cash equivalents were not sufficient
      to
      pay our day-to-day expenditures or to effectuate our business plan. In July,
      we
      sold approximately $1.84 million of our equity securities in a private
      placement. We are committed to continue to seek the necessary financing needed
      to continue operating through the sale of equity or debt financing, though
      there
      is no guarantee we will be able to do so.




As
      of
      September 30, 2006, we had a net working capital deficit of $776,722.




Net
      cash
      used in operating activities was $841,985 for the nine months ended September
      30, 2006 compared to $160,392 for the nine months ended September 30, 2005.
      Net
      cash used in operating activities was $575,215 for the three months ended
      September 30, 2006, compared to $172,661 for the three months ended September
      30, 2005.




19


Since
      we
      have no current source of operating revenue, our only source of cash is from
      the
      issuance of debt or equity instruments. During the nine months ended September
      30, 2006, we borrowed $649,838, compared to the $381,000 we borrowed during
      the
      nine months ended September 30, 2005. We used $1,041,266 to make advance lease
      payments and acquisition costs on our mining claims during the nine months
      ended
      September 30, 2006 compared to $233,014 we incurred during the nine months
      ended
      September 30, 2005. As previously disclosed, in July 2006, we sold approximately
      $1.84 million of our equity securities in a private placement.




Due
      to
      numerous economic and competitive risks, any or all of which may have a material
      adverse impact upon our operations, there can be no assurance that we will
      be
      able to generate significant revenues or achieve a level of positive cash flow
      that would permit us to continue our current business plan. Our current plans
      encompass the identification and acquisition of properties exhibiting the
      potential for gold mining operations by others. However, as noted, we must
      continue to raise additional capital in order to ensure the availability of
      resources sufficient to fund all of our general and administrative expenses
      for
      the next twelve months.




No
      assurances can be given that we will be able to obtain sufficient operating
      capital through the sale of our common stock and borrowing or that the
      development and implementation of our business plan will generate sufficient
      revenues in the future to sustain ongoing operations. These factors raise
      substantial doubt with our auditor about our ability to continue as a going
      concern.





**Plan
      of Operations.**




We
      recently announced that we had closed a financing of US $1,844,000. A
      substantial portion of the funds will be devoted to the lease costs of our
      15
      properties. We will also maintain a material portion for administrative overhead
      and future acquisition opportunities. Thus, we expect to have less than $500,000
      available for exploration on its current properties over the next 12 months,
      during which period we will continue to pursue additional financing
      opportunities to further its exploration and acquisition program.





We
      begin
      our exploration process by attempting to understand the regional geology of
      our
      prospects and by progressing through the district-wide geologic setting.
      Eventually, we graduate to the geologic setting of each individual proposed
      drill hole. Before drilling, we attempt to predict our probability of success,
      and we will drill only sites that we believe have the best chance of
      encountering a gold deposit. Typically, we will engage in integrated surface
      geological, geochemical, and geophysical analysis before we begin drilling.
      Some
      of the specific methods that we will engage in include magmatic affinity, pluton
      vectoring, kinetic structural analysis, and metal dispersion.





To
      date,
      we have acquired leases in several claim blocks in the North Central Nevada
      area. In total, the property package represents 15 properties comprised of
      approximately 44,840 acres. However, in addition to our initial exploration
      program, we will need to spend significant funds to complete further in-depth
      drilling and engineering studies before we can identify whether or not we have
      a
      commercially viable mineral deposit.





Future
      funding levels will also determine the extent and number of properties that
      we
      will explore. No certainty can be ascertained on our overall exploration program
      until significant funding levels have been achieved.




While
      most properties will be examined and sampled, we will also analyze the results
      of all previous work that is publicly available for the properties. We currently
      expect that in Spring 2007, we will perform a small amount of drilling on the
      Jack Creek property. A ranking system will enable us to decide which properties
      will undergo detailed work and drill at the earliest opportunity. The remaining
      properties will be made available for farm-out or for development at a later
      date, or dropped all-together from further work.





20


The
      following is a list of projects on which, as of the date of this Registration
      Statement, we have decided to focus during the next 12 months. The
      prioritization of, and the projects themselves, are expected to change depending
      on funding levels and preliminary sampling results:




Jack
      Creek .
      We
      intend to undertake geological and structural analysis, as well as soil sampling
      and geophysical surveys, on this property, located in the Independence Mountains
      mining district about 50 miles north of Elko, Nevada. The intended work is
      in
      preparation for an intended drill program on the property currently expected
      to
      be performed in Spring 2007, which, in aggregate, is expected to cost up to
      approximately $100,000.





The
      Jack
      Creek property comprises a total of approximately 6,000 acres in Elko County,
      Nevada, and is located in the northern Independence Mountains. Management
      believes that the property is attractive because it occupies the southwest
      flank
      of a prominent gravity high, indicating the presence of relatively shallow
      Paleozoic carbonate sedimentary rocks.





Recently,
      we acquired an option for 53 additional claims at the Jack Creek Property,
      Elko
      County, Nevada. The option was acquired from Gateway Gold (USA) Corp. through
      two of our directors, Earl Abbott and Stanley Keith. We have the option to
      earn
      a 50% undivided interest in the 53 claims through our expenditure on the claims
      of a total of $500,000 in various stages by March 1, 2007, 2008, and 2009.
      Currently, however, we do not have such funds available and will need to raise
      additional funds in order to exercise the option.




NT
      Green .
      Exploration currently anticipated to occur during the Spring of 2007 will focus
      on delineating drill targets.  The property will be prospected by sampling
      and analysis of mineralized rock. We expect to perform a kinematic structural
      analysis of the property and expect to produce a more realistic geologic map
      than those made available in the past.  A soil geochemistry program will
      aid in identifying favorable fault structures and intersections, as well as
      the
      centers of the most active hydrothermal activity.  A pluton vectoring study
      is expected to be performed by analysis of all intrusive rocks and their
      interpretation.  In addition, an airborne magnetic survey is expected to be
      performed over the property to aid in the discovery of dikes and sills and
      to
      aid in the mapping and structural analysis.  It is intended that by the
      Spring of 2007, we will have identified targets for permitting and drilling.
      We
      have budgeted up to approximately $100,000 to complete this program; however,
      that amount may vary depending on preliminary results.




Goodwin
      Hill .
      Exploration on this property may include geologic mapping to identify
      prospective fault structures that can be projected under alluvium. 
Sampling of all mineralized rocks is expected to provide a vector toward the
      center of hydrothermal activity.  Gravity and magnetic geophysical studies
      are expected to be performed to define the buried shallow basement rocks
      better.  These studies are intended to provide low risk drilling targets
      for permitting and drilling in the Spring of 2007. As of the date of this
      Registration Statement, we have budgeted nearly $50,000 for this
      program.




Work
      to
      date in the area has indicated a large Carlin type system within prospective
      lower plate carbonate rocks on the flanks of a major dome and near intrusive
      bodies.




HMD .
      Exploration on this property will be directed toward delineating low-risk drill
      targets. We currently expect that we will undertake a kinematic structural
      analysis of the exposed silicified rocks along the HMD structure combined with
      careful rock sampling to locate points along the fault where hydrothermal
      activity is most intense. We intend to supplement these studies with soil
      sampling, and the resulting drill targets will be sharpened by detailed IP
      surveys.  By the Spring of 2007, we hope to have targets prepared for
      permitting and drilling. We expect to spend up to approximately $50,000 for
      this
      program over the next 12 months.




21




Wilson
      Peak .
      A
      program of kinematic structural analysis, combined with multi-element rock
      and
      soil sampling, is currently planned for Wilson Peak.  Potential drill
      targets will be sharpened by IP geophysical surveys.  Assuming we have
      raised sufficient funds, permitting and drilling are planned for Spring 2007.
      We
      expect that this program will require up to approximately $50,000 for the next
      12 months.




Other
      Properties .
      We hope
      to undertake additional exploration studies on the Stargo, West Whistler, Brock,
      Horseshoe Basin, South Lone Mountain, Golconda, North Battle Mountain, Dry
      Hills
      Property, Walti, and Marr Properties, but no detailed plans to conduct
      exploration on these properties have yet been determined. We believe that it
      could expect to spend up to approximately $150,000 on these properties, thus,
      bringing the total funds budgeted for the next 12 months to
      $500,000.




Our
      forecast for the period for which our financial resources will be adequate
      to
      support our operations involves risks and uncertainties, and actual results
      could fail as a result of a number of factors. We will need to raise additional
      capital to exploit our properties. In the event that we experience a shortfall
      in our capital, we intend to pursue capital through public or private financing
      as well as borrowings and other sources. We cannot guarantee that additional
      funding will be available on favorable terms, if at all and if adequate funds
      are not available. Our ability to continue or expand our operations may be
      significantly hindered. We have not contemplated any plan of liquidation in
      the
      event that we do not generate revenues.




As
      an
      exploration company, we are not currently conducting any research and
      development activities and we do not anticipate conducting such activities
      in
      the near future. In the event that we obtain significant funding to fully
      implement our exploration program, we will need to hire additional employees
      or
      independent contractors and possibly purchase or lease additional equipment.
      With large current demand for resource exploration equipment and human capital
      in the state of Nevada, there is no guarantee that we will be able to meet
      our
      equipment and human capital needs. However, management believes that the network
      of relationships developed over the years by our officers and directors in
      Nevada will largely mitigate any shortages that similar companies
      face.




The
      projects described above will be managed by Dr. Earl Abbott. Dr. Abbott holds
      a
      Ph.D degree in geology from Rice University where he studied the tectonics
      of the western U.S. He has spent 34 years exploring for mineral deposits, 26
      of
      them for gold in Nevada, and, with Carl Pescio, he managed an exploration
      program in Nevada in 1981 resulting in the acquisition of 3 gold orebodies
      that
      were mined profitably. Over his career, Dr. Abbott has consulted to the
      mining industry and has been an officer and director of several junior mining
      companies. Dr. Abbott is a Certified Professional Geologist by the American
      Institute of Professional Geologists (AIPG) and past President of the Nevada
      Chapter.  He is also a member and past President of the Geological Society
      of Nevada (GSN), the Nevada Petroleum Society (NPS), and the Denver Region
      Exploration Geologists Society (DREGS); and he is a member of the Society of
      Economic Geologists (SEG), the Society for Mining, Metallurgy, and Exploration
      (SME), the Geological Society of America (GSA), the Northwest Mining Association
      (NWMA), the British Columbia & Yukon Chamber of Mines, and the Prospectors
      and Developer Association of Canada (PDAC).  Dr. Abbott is a Qualified
      Person under the rules of National Instrument 43-101.




22


We
      expect
      to utilize the services of various third-party geological professionals to
      assist with the various projects. The number of consultants will depend on
      our
      initial exploratory results and funding levels. No plans are in place for a
      significant change in the number of full-time personnel.




Currently,
      we have no research and development plans and no intention to purchase or sell
      plant or significant equipment.





**Result
      of Operations.**





For
      the Nine Months Ended September 30,
      2006, compared to the Nine Months Ended September 30,
      2005.




Revenue
      -
      We have realized no revenues for the nine months ended September 30, 2006 and
      2005.




Operating
      Expenses - For the nine months ended September 30, 2006, our total operating
      expenses were $1,007,993, compared to our total operating expenses of $169,704
      in the corresponding prior period. Of the $1,007,993 incurred in 2006, $604,245
      related to our mining exploration, $357,392 related to general and
      administrative activities, and $46,356 related to our compensation expense
      on
      option grants. Of the $169,704 incurred in the first nine months of 2005,
      $45,983 related to mining exploration, $111,452 related to general and
      administrative activities, and $12,269 related to our compensation expense
      on
      options grants. During the nine months ended September 30, 2006, we accrued
      $59,531 in interest expenses on notes payable, compared to interest accruing
      during the nine months ended September 30, 2005, of $27,344. No interest has
      been paid on notes payable during either period.




For
      the Three Months Ended September 30,
      2006, compared to the Three Months Ended September 30,
      2005.




Revenue
      -
      We have realized no revenues for the three months ended September 30, 2006
      and
      2005.




Operating
      Expenses - For the three months ended September 30, 2006, our total operating
      expenses were $682,641, compared to our total operating expenses of $66,125
      in
      the corresponding prior period. Of the $682,641 incurred during the third
      quarter of 2006, $522,978 related to our mining exploration, $148,074 was
      incurred in general and administrative activities, and $11,589 related to our
      compensation expense on option grants. Of the $66,125 incurred in the third
      quarter of 2005, $24,983 related to mining exploration, $28,873 related to
      general and administrative activities, and $12,269 related to our compensation
      expense on option grants. During the three months ended September 30, 2006,
      we
      accrued $21,973 in interest expenses on notes payable, compared to interest
      accruing during the three months ended September 30, 2005, of $4,106. No
      interest has been paid on notes payable during either period.




Of
      the
      $522,978 that we incurred in our mining operations during the three months
      ended
      September 30, 2006, $522,978 relates to technical consulting services rendered
      by our President. Of the $148,074 that we incurred in general and administrative
      expenses during the three-months ended September 30, 2006, $15,000 relates
      to
      services rendered by our Chief Financial Officer. Other notable general and
      administrative expenses incurred for the third quarter in 2006 include investor
      relations fees of $37,309, accounting and auditing fees of $5,455, legal fees
      of
      $40,014, and rent expense of $4,214.


23




**Tornado
        Gold International Corp.**
 **MD&A**
  For
                  the Three Months Ended
              
              For
                  the Nine Months EndedSeptember
                  30,
              
              September
                  30,2006
              
              2005
              
              2006
              
              2005**Professional
                  fees:Legal fees**
              
              $
              40,014
              
              $
              3,541
              
              $
              89,094
              
              $
              21,436**Administrative
                  Fee: E Abbott**
              
              
              21,332
              
              
              5,599
              
              
              55,103
              
              
              28,000**Investor
                  Relations**
              
              
              37,309
              
              
              3,100
              
              
              75,122
              
              
              3,100**Professional
                  fees:Accounting fees**
              
              
              5,455
              
              
              3,942
              
              
              30,172
              
              
              19,708**Administrative
                  Fee: G. Drazenovic**
              
              
              15,000
              
              
              
              
              
              35,000**Insurance**
              
              
              4,811
              
              
              
              
              
              4,811**Employee
                  leasing ***
              
              
              -
              
              
              
              
              
              11,554**Travel**
              
              
              6,961
              
              
              8,699
              
              
              15,582
              
              
              18,281**Rent**
              
              
              4,214
              
              
              2,790
              
              
              12,614
              
              
              11,162**Consulting
                  fees**
              
              
              
              
              
              
              
              
              
              
              
              3,127**Outside
                  services**
              
              
              8,436
              
              
              483
              
              
              7,704
              
              
              1,792**Continuing
                  Education**
              
              
              
              
              
              290
              
              
              
              
              
              499**Telephone**
              
              
              1,863
              
              
              122
              
              
              2,527
              
              
              906**Website****Office
                  expense**
              
              
              2,365
              
              
              40
              
              
              5,114
              
              
              3,048**Dues
                  and subscriptions**
              
              
              240
              
              
              177
              
              
              522
              
              
              177**Bank
                  fees**
              
              
              74
              
              
              90
              
              
              144
              
              
              91**Taxes
                  and licenses**
              
              
              
              
              
              
              
              
              60
              
              
              125$
              148,074
              
              $
              28,873
              
              $
              345,123
              
              $
              111,452





**Off-Balance
      Sheet Arrangements.**




There
      are
      no off balance sheet arrangements that have or are reasonably likely to have
      a
      current or future effect on our financial condition, changes in financial
      condition, revenues or expenses, results of operations, liquidity, capital
      expenditures or capital resources that are material to investors; except for
      our
      commitment to lease certain mining property that require us to make substantial
      lease payments in the future as disclosed in Notes to the financial statements
      included elsewhere in this Proxy Statement.





**Item
      3.**  **Controls
      and Procedures**





Under
      the
      supervision and with the participation of our management, including our
      principal executive officer and the principal financial officer, we have
      conducted an evaluation of the effectiveness of the design and operation of
      our
      disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
      under the Securities Exchange Act of 1934, as of the end of the period covered
      by this report. Based on this evaluation, our principal executive officer and
      principal financial officer concluded as of the evaluation date that our
      disclosure controls and procedures were effective such that the material
      information required to be included in our Securities and Exchange Commission
      reports is recorded, processed, summarized and reported within the time periods
      specified in SEC rules and forms relating to our company, including any
      consolidating subsidiaries, and was made known to us by others within those
      entities, particularly during the period when this report was being prepared.





Additionally,
      there were no significant changes in our internal controls or in other factors
      that could significantly affect these controls subsequent to the evaluation
      date. We have not identified any significant deficiencies or material weaknesses
      in our internal controls, and therefore there were no corrective actions
      taken. ****




24


**Part
      II.**  **OTHER
      INFORMATION**





**Item
      6.**  **Exhibits**





**Exhibit
                Number**
            
            **Description
                of Document**31.1
            
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act31.2
            
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act32.1
            
            Certification
                pursuant to Section 906 of the Sarbanes-Oxley Act




25




**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.




TORNADO
              GOLD
              INTERNATIONAL CORP.November
              20, 2006
            By:
            /s/ GEORGEDRAZENOVICGeorge Drazenovic, Chief Financial
              Officer
                (Principal financial officer and
              duly authorized
                signatory)   26