UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

             [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                    For the fiscal year ended June 30, 2006
                                 -------------

             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

     For the transition period from _________________ to __________________

                       Commission file number: 333-120382
                                   ----------


                              MATRIX VENTURES, INC.
                             ----------------------
                 (Name of small business issuer in its charter)



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

                             2640 Tempe Knoll Drive
                      North Vancouver. B.C., Canada V7N 4K6
                      -------------------------------------
                    (Address of principal executive offices)

                                 (604) 986-9633
                            -------------------------
                            Issuer's telephone number

Securities to be registered pursuant to Section 12(b) of the Act:

  Title of each class                       Name of each exchange on which
  to be so registered                       each class is to be registered

       None                                          None

Securities to be registered pursuant to Section 12(g) of the Act:

                                  Common Stock
                                ----------------
                                (Title of Class)

Check  whether the Issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  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
                    ---------                             ---------

<page>

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.

              Yes      X                               No
                  -----------                             ----------

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

State issuer's revenues for its most recent fiscal year:          Nil
                                                          ----------------------

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was sold,  or the average bid and asked  price of such  common  equity,  as of a
specified  date within the past 60 days.  (See  definition  of affiliate in Rule
12b-2 of the Exchange Act.)

      $230,900 as at September 28, 2006 based on the last sale price of our
                                  common stock
 -------------------------------------------------------------------------------

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

            7,309,000 shares of common stock as at September 28, 2006
            ---------------------------------------------------------


<page>

                                TABLE OF CONTENTS
<table>
<caption>
                                                                                                               Page

      <c>                                                                                                   <c>
ITEM 1:  DESCRIPTION OF BUSINESS..................................................................................4
ITEM 2:  DESCRIPTION OF PROPERTY.................................................................................13
ITEM 3:  LEGAL PROCEEDINGS.......................................................................................13
ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.....................................................13
ITEM 5:  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS................................................13
ITEM 6:  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION...............................................13
ITEM 7:  FINANCIAL STATEMENTS....................................................................................15
ITEM 8:  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND   FINANCIAL DISCLOSURES.................25
ITEM 8A:  CONTROLS AND PROCEDURES............................................................................... 25
ITEM 9:  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS............................................26
ITEM 10:  EXECUTIVE COMPENSATION.................................................................................28
ITEM 11:  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.........................................28
ITEM 12:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.........................................................29
ITEM 13:  EXHIBITS AND REPORTS...................................................................................29
ITEM 14:  PRINCIPAL ACCOUNTANT FEES AND SERVICES.................................................................30
</table>

                                      -3-
<page>

PART I

ITEM 1:  DESCRIPTION OF BUSINESS

In General

We are an exploration  stage company  engaged in the acquisition and exploration
of mineral properties with a view to exploiting any mineral deposits we discover
that demonstrate economic feasibility.  We have the sole and exclusive option to
acquire a 100%  interest  in one  mineral  claim  known as the  Wanapitei  River
property.

Our plan of  operation  is to undertake  exploration  programs on the  Wanapitei
River property in order to ascertain whether it possesses economic quantities of
gold,  copper,  nickel and platinum-group  metals.  There is no assurance that a
commercially viable mineral deposit exists on this property. Further exploration
will be  required  before  a  final  evaluation  as to the  economic  and  legal
feasibility of the Wanapitei River property is determined.

We are not a "blank check  company" as the term is defined in Regulation C, Rule
419.  We do  not  intend  to  merge  with  or  acquire  another  company  in the
foreseeable future.

Wanapitei River Property Option Agreement

On April 21, 2004, we entered into an agreement with Mr. Terry Loney, of Garson,
Ontario,  whereby he granted us the sole and exclusive  option to acquire a 100%
interest in the Wanapitei River property which is located in Scadding  Township,
approximately 18 miles northeast of the City of Sudbury,  Ontario,  Canada.  The
exploration  expenditure  deadlines were extended by an agreement dated December
31, 2005 in  consideration  of us paying  $2,000 to Mr.  Loney.  The area of the
property is approximately 164 hectares.

In order to acquire a 100%  interest in the  Wanapitei  River  property from Mr.
Loney, we must:

o    pay him $7,200 (we paid this amount to him upon the execution of the option
     agreement);

o    incur exploration expenditures on the property of at least $115,000 as
     follows:

     o    at least $5,000 by December 31, 2004 (completed);
     o    at least an additional $10,000 by December 31, 2006; and
     o    at least an additional $100,000 by December 31, 2007.

We have incurred a total of $5,000 in exploration  expenditures on the Wanapitei
River  property.  If we fail to  incur  an  additional  $10,000  in  exploration
expenditures on the property by December 31, 2006, or an additional  $100,000 by
December 31, 2007,  our option to acquire the 100% interest in the property will
terminate and we will not own any interest in the property.

Mr. Loney holds title to the Wanapitei River claim. Our option agreement with
him requires that he transfer the claim to us if we successfully exercise the
option. Mr. Loney is at arm's length to us and has no relationship to us other
than as the owner of the Wanapitei River property.

                                      -4-
<page>


Description, Location and Access

The Wanapitei  River property is located in Scadding  Township in Sudbury Mining
Division,  approximately  18 miles  northeast  of the City of Sudbury,  Ontario,
Canada. The claim is approximately  centered on at 46(Degree) 39' North latitude
and 80(Degree) 41' West longitude. The property consists of one mining claim and
is registered as claim number 3018926.

Access to the  claims  is via  Regional  Road 86 (the  Falconbridge  Highway  or
Airport  Road) by following the abandoned  railway  right-of-way  that now forms
part of the Trans-Canada Trail, traveling north to the claim.

The region of the Wanapitei  River property is classified as having a humid high
cool  temperature  ecoclimate.  The average  mean annual  temperature  is 3.5(0)
Celsius.  The  average  daily  temperature  range in summer is from  11.8(0)  to
23.1(0)  Celsius,  while in winter the average range is from -16.8(0) to -6.9(0)
Celsius.  Average annual  precipitation  for the area is 872 millimeters and the
month-end  snow cover is deepest in January and  February  with an average of 40
centimeters.  The Wanapitei River property may be explored year round,  although
it is easier to conduct  exploration  during the spring,  summer and autumn when
there is no snow accumulation on the property surface.

The  dominant  land cover is mixed wood  forest of sugar  maple,  yellow  birch,
poplar,  eastern hemlock and eastern white pine. Wetter sites support red maple,
black ash, white spruce, tamarack and eastern white cedar.

Infrastructure and Condition of the Property

The  property is free of mineral  workings  as only  initial  sampling  has been
conducted  on the  Wanapitei  River  property.  There is no  equipment  or other
infrastructure  facilities  located on the  property.  There is no power  source
located on the property. We will need to use portable generators if we require a
power source for exploration of the property.

Rock Formation and Mineralization

The Wanapitei  property  area is underlain by rocks of the Huronian  Supergroup.
The Huronian  Supergroup is a belt of rocks that is 320  kilometers  long and 64
kilometers  wide that is located in the  vicinity of Lake  Huron's  north shore.
They  consist of  sedimentary  rocks,  which are rocks  formed by the deposit of
layers of materials laid down by rivers and streams. In the southwestern part of
the  Wanapitei  River  property,  these  Huronian  sediments  are  predominantly
represented by arkoses and quartzites.  Arkoses are course sandstone rocks while
quartzites are formed  through the  transformation  of sandstone  resulting from
volcanic heat and pressure.  Gold anomalies are often found in areas with arkose
and  quartzite.  Wackes,  soft  dark-colored  rocks or clay,  and limestones are
present in the remainder of the property area.

Exploration History

Occurrences  of gold in the area of the property  have been  reported  since the
late  1800's.  However,  the only  recorded  work over the  current  area of the
Wanapitei  River  property is an airborne  geophysical  survey that the Canadian
Nickel Company Ltd. conducted in 1981.  Geophysical  surveying is the search for
mineral deposits by measuring the physical  property of near-surface  rocks, and
looking  for  unusual  responses  caused  by  the  presence  of  mineralization.
Electrical, magnetic, gravitational,  seismic and radioactive properties are the
ones most commonly measured.  The survey on the Wanapitei River property did not
result in the discovery of any  significant  anomalies  that would  indicate the
potential presence of mineralization.

                                      -5-
<page>

Falconbridge  Limited and Inco Limited conducted  undocumented  exploration work
over the property. The results of this work are not in the public domain.

Geological Assessment Report:   Wanapitei River Property

We retained Mr. John M. Siriunas,  a professional  engineer from Milton Ontario,
to  conduct  an  independent  review of the  Wanapitei  River  property.  He has
concluded  that  additional  exploration  is  recommended  on  the  property  to
determine  whether  or not it has the  potential  to host  an  economic  mineral
deposit.  He  recommends  a three  phase  exploration  program to  evaluate  the
Wanapitei River property.

Phase  one  consisted  of  prospecting  the  area  to  establish  the  preferred
orientation  of the grid  emplacement.  Grid  emplacement  involves  dividing  a
portion of the  property  being  explored  into  small  sections.  Results  from
exploration are recorded according to the area of the grid that was explored.

Based on the results of the phase one  exploration,  several target zones on the
property were identified for phase two exploration.

Phase two involved trenching of the target zones to supply critical  information
at an early stage of exploration. Trenching involved removing surface soil using
a backhoe or  bulldozer.  Samples were then taken from the bedrock below and are
being analysed for mineral content.

Phase three consists of line cutting,  magnetic and VLF-EM  surveys,  geological
mapping and geochemical analysis.

Line  cutting  involves  removing  bush from the  property  in order to  produce
straight clearings. This provides grid boundaries for exploration work.

A magnetic survey is used to measure the strength of the earth's magnetic field.
Variations  in the magnetic  readings on the property may indicate the increased
likelihood of precious or base minerals in the area.

VLF-EM surveys  consist of two separate  surveys:  the very low frequency  (VLF)
survey and the  electromagnetic  survey.  Very low  frequency  surveys use radio
waves to determine  whether  rocks on a mineral  property  conduct  electricity.
Electromagnetic  surveys use electricity and magnets to determine  conductivity.
Almost all of the  precious  and base metals  that the  Company  seeks are above
average  conductors of electricity  and will affect the VLF and  electromagnetic
readings.

Geological  mapping involves plotting previous  exploration data relating to the
Wanapitei  River  Property  on a map in order  to  determine  the best  property
locations to conduct subsequent exploration work.

Geochemical  analysis  consists of a geologist and his assistant  gathering grab
samples with the most potential to host economically significant  mineralization
based on their  observation of any surface rocks.  All samples gathered are sent
to a laboratory where they are crushed and analysed for metal content.

Proposed Budget

Phase I   Prospecting     -Field Work and analysis                    $  5,000


Total Phase I Costs                                                   $  5,000

                                      -6-
<page>

Phase II  Trenching       -Equipment                                 $   4,500
                          -supervision, fieldwork, analysis          $   5,500


Total Phase II Costs                                                   $10,000


Phase III Linecutting                                                 $  5,200

          Geophysics      -Magnetics, VLF-EM                          $  3,000
                          -consulting and interpretation              $  2,800

          Geology         -Mapping, analysis, interpretation           $38,000

          Geochemistry    -Sampling, analysis, interpretation          $26,000

          Bonding and reclamation costs                               $  5,000


Total Phase III Costs                                                  $80,000

                               Total Program Costs                     $95,000
                               -------------------                     -------

We will make a decision  whether to proceed  with each  successive  phase of the
exploration  program upon completion of the previous phase and upon our analysis
of the results that program.  At the  completion of each phase,  the  consulting
geologist who conducts the program will review the results of  exploration  with
our directors. Based upon this review, the directors will then determine whether
to proceed with the next phase of  exploration.  In making their  decision,  the
directors will heavily rely upon the advice of the consulting  geologist.  If no
further  exploration is  recommended  on the Wanapitei  River property after the
completion of any phase, we will likely allow the option respecting the property
to lapse. If this occurs, we will not own any interest in the property.

Following  completion  of the phase three  exploration  program,  provided  that
further exploration is recommended by our consulting  geologist,  we will ensure
that we complete at least an additional  $20,000 in exploration  expenditures on
the  Wanapitei  River  property  by  December  31,  2007 in  order  to meet  our
obligations  under  our  property  option  agreement  with  Terry  Loney.  These
exploration expenditures will form part of a phase four program on the Wanapitei
River  property  to  be  recommended  by  our  consulting   geologist  following
completion of the phase three exploration program and a review of the results.

If our interest in the Wanapitei River property lapses, we will attempt to raise
additional  funds in order to  acquire an  interest  in an  alternative  mineral
property  that  has the  potential  to  contain  economic  mineralization.  Such
property may or not be in the area of the Wanapitei  River  property.  We do not
currently have any confirmed source of financing or specific mineral  properties
in mind if this occurs.  We would likely contact  property  owners or geologists
who are  involved  in the  mineral  exploration  business  in order to  identify
potential properties for acquisition.

Our  president,  Lori  Bolton,  has agreed to lend us funds in order to complete
this exploration phase, as well as future expenses. She has agreed to loan up to
$150,000 to us from time to time upon our  request in order to fund  operations.
Amounts loaned will be unsecured, will bear simple interest of 10% per annum and
will be payable upon demand.


                                      -7-
<page>

We will  require  additional  funding  in  order to  complete  the  phase  three
exploration  program  on  the  Wanapitei  River  property.  We  anticipate  that
additional  funding  will be required in the form of equity  financing  from the
sale of our common stock or through director loans.

Compliance with Government Regulation

We will be required to conduct all mineral exploration  activities in accordance
with the Mining Act of Ontario.  While we do not require  any  authorization  to
proceed with the initial two phases of the recommended  exploration  program, we
will be required to obtain work  permits  from the Ontario  Ministry of Northern
Development  and Mines for the Phase III  drilling  program  and any  subsequent
exploration  work that  results  in a  physical  disturbance  to the land if the
program  calls for the  disturbance  of more than  10,000  square  meters of the
property  surface,  or such areas that would total that amount when combined.  A
work permit is also  required for the erection of  structures  on the  property.
There is no charge to obtain a work permit under the Mining Act.

When our exploration  program  proceeds to the drilling stage we may be required
to post small bonds if the rights of a private  land owner may be  affected.  We
anticipate  that the cost of a bond for the phase three  drilling  program would
not exceed $5,000.

We may also be required to file statements of work with the Ministry of Northern
Development and Mines.  Such statements  would be filed following the completion
of the exploration and would cost  approximately  $500. The filing of statements
of work would not have any impact on the timing or completion of our exploration
program.  We  will  also  be  required  to  undertake  remediation  work  on any
exploration  that  results  in  physical  disturbance  to the land.  The cost of
remediation work will vary according to the degree of physical disturbance.

We did not  incur any  regulatory  compliance  costs in the first two  phases of
proposed  exploration.  We have budgeted for regulatory  compliance costs in the
proposed phase three exploration program. The amount of these costs is not known
at this time as we do not know the extent of the  exploration  program that will
be undertaken beyond completion of the recommended exploration programs. Because
there is presently no information on the size, tenor, or quality of any minerals
or reserve at this time,  it is  impossible  to assess the impact of any capital
expenditures on earnings or our competitive position.

An environmental  review is not required under the Environmental  Assessment Act
to proceed with the recommended exploration program on our mineral claims.

Employees

We have no  employees  as of the date of this annual  report  other than our two
directors.

Research and Development Expenditures

We have not incurred any other  research or development  expenditures  since our
incorporation.

Subsidiaries

We do not have any subsidiaries.

Patents and Trademarks

We do not own, either legally or beneficially, any patents or trademarks.

                                      -8-
<page>

Risk Factors

An  investment  in our common stock  involves a high degree of risk.  You should
carefully  consider the risks described below and the other  information in this
annual  report  before  investing in our common  stock.  If any of the following
risks occur, our business,  operating  results and financial  condition could be
seriously harmed.

IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUT BUSINESS WILL FAIL.

Our current  operating  funds are less than  necessary  to complete all intended
exploration  of the  Wanapitei  River  property,  and  therefore we will need to
obtain  additional  financing in order to complete our business plan. As of June
30, 2006,  we had cash in the amount of $5,317.  In order to exercise our option
to acquire the Wanapitei River property, we need to incur $10,000 in exploration
expenditures by December 31, 2006 and an additional  $100,000 in expenditures by
December 31, 2007. We will need additional funds in order to exercise the option
respecting the Wanapitei River property.

We will also require  additional  financing  in order to  determine  whether the
property  contains  economic  mineralization.  Even if we complete the currently
recommended  exploration  programs on the Wanapitei  River property and they are
successful,  we will  need to spend  substantial  additional  funds  on  further
drilling  before  we will ever know if there is a  commercially  viable  mineral
deposit on the property.  We will also require additional financing if the costs
of the exploration of the Wanapitei River property are greater than anticipated.

As well, we will require additional financing to sustain our business operations
if we are not successful in earning revenues once exploration is complete. We do
not  currently  have  any  arrangements  for  financing.   Obtaining  additional
financing  would be subject to a number of factors,  including  the market price
for metals,  investor  acceptance of our property and general market conditions.
These  factors may make the timing,  amount,  terms or  conditions of additional
financing unavailable to us.

The most likely source of future funds presently  available to us is through the
sale of equity  capital.  Any sale of share  capital  will result in dilution to
existing shareholders.  As well, our president,  Lori Bolton, has agreed to loan
up to  $150,000  to us from  time to time  upon  our  request  in  order to fund
operations.  Amounts loaned will be unsecured,  will bear simple interest of 10%
per annum and will be payable upon demand.

The only other anticipated  alternative for the financing of further exploration
would be our sale of a partial  interest in the  Wanapitei  River  property to a
third  party in  exchange  for cash or  exploration  expenditures,  which is not
presently contemplated.

BECAUSE WE HAVE ONLY RECENTLY COMMENCED BUSINESS OPERATIONS, WE FACE A HIGH RISK
OF BUSINESS FAILURE.

Because we have only  recently  commenced  exploration  on the  Wanapitei  River
property,  we have no way to evaluate the  likelihood  that our business will be
successful.  We were  incorporated  on  February  2,  2004 and to date have been
involved primarily in organizational activities,  securing the option to acquire
the mineral  exploration  rights to the Wanapitei  River property and conducting
preliminary  exploration work. We have not earned any revenues as of the date of
this annual report.

Potential  investors  should be aware  that new  mineral  exploration  companies
typically  incur  losses  without  realizing  any revenue  for many  years.  The
likelihood of success must be  considered  in light of the  problems,  expenses,
difficulties,  complications  and  delays  encountered  in  connection  with the
exploration of the mineral properties that we plan to undertake. These potential
problems  include,  but are not limited to,  unanticipated  problems relating to
exploration,   and  additional  costs  and  expenses  that  may  exceed  current
estimates.

                                      -9-
<page>

Prior to completion of our  exploration  stage, we anticipate that we will incur
increased operating expenses without realizing any revenues. We therefore expect
to incur significant losses into the foreseeable future. We recognize that if we
are unable to generate  significant  revenues from  development of the Wanapitei
River  property and the  production of minerals from the claims,  we will not be
able to earn profits or continue operations.

There is no history upon which to base any assumption as to the likelihood  that
we will prove successful, and we can provide investors with no assurance that we
will generate any operating revenues or ever achieve profitable  operations.  If
we are  unsuccessful  in addressing  these risks,  our business will most likely
fail.

BECAUSE  MANAGEMENT  HAS NO TECHNICAL  EXPERIENCE  IN MINERAL  EXPLORATION,  OUR
BUSINESS HAS A HIGHER RISK OF FAILURE.

None of our  directors  has any  technical  training in the field of geology and
specifically in the areas of exploring for,  starting and operating a mine. As a
result,  we may  not be  able to  recognize  and  take  advantage  of  potential
acquisition  and  exploration  opportunities  in the sector  without  the aid of
qualified  geological   consultants.   As  well,  with  no  direct  training  or
experience,  our management may not be fully aware of the specific  requirements
related to working in this industry. Their decisions and choices may not be well
thought out and our  operations,  earnings  and ultimate  financial  success may
suffer irreparable harm as a result.

BECAUSE OF THE INHERENT DANGERS INVOLVED IN MINERAL EXPLORATION, THERE IS A RISK
THAT WE MAY INCUR LIABILITY OR DAMAGES AS WE CONDUCT OUR BUSINESS.

The search for valuable minerals involves numerous hazards.  As a result, we may
become subject to liability for such hazards, including pollution,  cave-ins and
other  hazards  against which we cannot insure or against which we may elect not
to insure. The payment of such liabilities may have a material adverse effect on
our financial  position.  We do not have a liability insurance policy respecting
these risks.

EVEN IF WE DISCOVER  COMMERCIAL  RESERVES OF  PRECIOUS  METALS ON THE  WANAPITEI
RIVER  PROPERTY,  WE  MAY  NOT  BE  ABLE  TO  SUCCESSFULLY  COMMENCE  COMMERCIAL
PRODUCTION.

The   Wanapitei   River   property   does  not  contain  any  known   bodies  of
mineralization.  If our  exploration  programs are  successful  in  establishing
copper of  commercial  tonnage and grade,  we will require  additional  funds in
order to place the property into commercial production.  At this time, we cannot
assure investors that we will be able to obtain such financing.

WE NEED TO CONTINUE AS A GOING CONCERN IF OUR BUSINESS IS TO SUCCEED.

The Independent  Auditors'  Report to our audited  financial  statements for the
periods  ended  June 30,  2006 and 2005  indicates  that  there  are a number of
factors  that raise  substantial  doubt about our ability to continue as a going
concern.  Such factors  identified in the report are our net loss position,  our
failure  to attain  profitable  operations  and our  dependence  upon  obtaining
adequate  financing.  If we are not able to continue as a going  concern,  it is
likely investors will lose their investments.

                                      -10-
<page>

IF WE DO NOT INCUR AN ADDITIONAL  $100,000 IN  EXPLORATION  EXPENDITURES  ON THE
WANAPITEI RIVER  PROPERTY,  WE WILL NOT ACQUIRE ANY INTEREST IN THE PROPERTY AND
OUR BUSINESS WILL FAIL.

In order to exercise the option relating to the Wanapitei River property, we are
obligated to incur exploration  expenditures of $10,000 by December 31, 2006 and
an additional  $100,000 by December 31, 2007. We will require additional capital
to fund the continued exploration and exercise the option. If we do not meet the
exploration  expenditures  required by the option agreement,  we will not obtain
any interest in the Wanapitei River property.

BECAUSE  WE CANNOT  HOLD  TITLE TO THE  WANAPITEI  RIVER  PROPERTY  UNTIL WE ARE
REGISTERED AS A CORPORATION IN ONTARIO,  WE MAY INCUR SIGNIFICANT LEGAL EXPENSES
IN ENFORCING OUR INTEREST IN THE CLAIMS.

Before we can hold title to the  Wanapitei  River  property in our name, we must
register as an  extra-provincial  corporation in Ontario.  We intend to complete
this registration process following completion of the third phase of recommended
exploration on the property.

In the meantime,  if Terry Loney, the current  registered  holder of the claims,
who holds them in trust for us,  becomes  bankrupt or transfers  the claims to a
third party, we may incur  significant  legal expenses in enforcing our interest
in the claims in Ontario courts.

IF WE  BECOME  SUBJECT  TO  BURDENSOME  GOVERNMENT  REGULATION  OR  OTHER  LEGAL
UNCERTAINTIES, OUR BUSINESS WILL BE NEGATIVELY AFFECTED.

There are several  governmental  regulations  that materially  restrict  mineral
property  exploration  and  development.  Under Ontario mining law, to engage in
certain types of  exploration  will require work permits,  the posting of bonds,
and the  performance  of  remediation  work for any physical  disturbance to the
land. While these current laws do will not affect our current exploration plans,
if we proceed to commence  drilling  operations on the Wanapitei River property,
we will incur modest regulatory compliance costs.

In  addition,  the  legal  and  regulatory  environment  that  pertains  to  the
exploration of ore is uncertain and may change.  Uncertainty and new regulations
could increase our costs of doing business and prevent us from exploring for ore
deposits.  The growth of demand for ore may also be significantly  slowed.  This
could  delay  growth in  potential  demand for and limit our ability to generate
revenues.  In addition to new laws and regulations being adopted,  existing laws
may be applied to mining that have not as yet been  applied.  These new laws may
increase our cost of doing business with the result that our financial condition
and operating results may be harmed.

BECAUSE OUR DIRECTORS OWN 68.4% OF OUR OUTSTANDING  COMMON STOCK, THEY WILL HAVE
SIGNIFICANT  INFLUENCE OVER CORPORATE  DECISIONS THAT MAY BE  DISADVANTAGEOUS TO
OTHER MINORITY SHAREHOLDERS.

Our directors own  approximately  68.4% of the outstanding  shares of our common
stock.  Accordingly,  they will have  significant  influence in determining  the
outcome of all  corporate  transactions  or other  matters,  including  mergers,
consolidations,  and the sale of all or  substantially  all of our  assets.  The
interests  of  our  directors  may  differ  from  the  interests  of  the  other
stockholders and thus result in corporate  decisions that are disadvantageous to
other shareholders.

Although our directors have a fiduciary duty to act in the best interests of the
corporation and shareholders in making corporate decisions,  they may vote their
shares as they wish in respect of any shareholder resolution.

                                      -11-
<page>

BECAUSE  OUR  PRESIDENT  HAS OTHER  BUSINESS  INTERESTS,  SHE MAY NOT BE ABLE OR
WILLING  TO  DEVOTE A  SUFFICIENT  AMOUNT  OF TIME TO OUR  BUSINESS  OPERATIONS,
CAUSING OUR BUSINESS TO FAIL.

Our president,  Ms. Lori Bolton, and our  secretary/treasurer,  Ms. Erika Kumar,
only respectively  spend  approximately 30% (or 12 hours per week) and 10% (four
hours per week) of their business time providing their services to us. While Ms.
Bolton  and  Ms.  Kumar  presently  possesses  adequate  time to  attend  to our
interests,  it is possible that the demands on them from their other obligations
could  increase  with the  result  that  they  would no longer be able to devote
sufficient time to the management of our business.

OUR COMMON STOCK CONSTITUTES  PENNY STOCK WHICH LIMITS AN INVESTOR'S  ABILITY TO
SELL THE STOCK.

Our issued  common stock  constitutes  penny stock under the  Exchange  Act. The
shares will remain penny stock for the foreseeable future. The classification of
penny stock makes it more difficult for a broker-dealer to sell the stock into a
secondary market, thus limiting investment liquidity.  Any broker-dealer engaged
by the  purchaser  for the  purpose of selling  his or her shares in our company
will be subject to rules 15g-1 through  15g-10 of the Exchange Act.  Rather than
creating a need to comply with those rules, some  broker-dealers  will refuse to
attempt to sell penny stock.

Forward-Looking Statements

This annual report  contains  forward-looking  statements that involve risks and
uncertainties.  We use words such as anticipate,  believe, plan, expect, future,
intend and similar expressions to identify such forward-looking  statements. You
should not place too much  reliance  on these  forward-looking  statements.  Our
actual results are most likely to differ  materially  from those  anticipated in
these forward-looking  statements for many reasons, including the risks faced by
us described in the "Risk Factors" section and elsewhere in this annual report.

ITEM 2:  DESCRIPTION OF PROPERTY

We have the sole and exclusive  option to acquire a 100% interest in the mineral
claim known as the Wanapitei River property.  We do not own or lease an interest
in any other property.

ITEM 3:  LEGAL PROCEEDINGS

There are no legal proceedings pending or threatened against us. Our address for
service of process in Nevada is 1802 N Carson  Street,  Suite 212,  Carson City,
Nevada, 89701

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

No matters were submitted during the fourth quarter of our fiscal year to a vote
of security holders, through the solicitation of proxies or otherwise.

                                      -12-
<page>

PART II

ITEM 5: MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

Our  shares of common  stock are quoted for  trading on the OTC  Bulletin  Board
under the symbol  MXVI.  However,  no trades of our shares of common  stock have
occurred  through the  facilities of the OTC Bulletin  Board to the date of this
annual report.

We have 34 shareholders of record as at the date of this annual report.

Dividends

There are no  restrictions  in our  articles  of  incorporation  or bylaws  that
prevent us from declaring  dividends.  The Nevada Revised Statutes,  however, do
prohibit  us  from  declaring  dividends  where,  after  giving  effect  to  the
distribution of the dividend:

     1.   we would not be able to pay our debts as they become due in the usual
          course of business; or

     2.   our total assets would be less than the sum of our total liabilities
          plus the amount that would be needed to satisfy the rights of
          shareholders who have preferential rights superior to those receiving
          the distribution.

We have not declared any dividends,  and we do not plan to declare any dividends
in the foreseeable future.

ITEM 6: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

To date, we have completed the first phase of exploration on the Wanapitei River
property.
Our plan of operation  for the twelve  months  following the date of this annual
report  is to  complete  the  phase two and  three  exploration  program  on the
Wanapitei  River property  recommended by John Siriunas.  We anticipate that the
phase two and three programs will cost about $10,000 and $80,000 respectively.

We will then have our consulting geologist provide us with recommendations and a
budget  for a  proposed  phase four  exploration  program.  We will not know the
details and potential  costs of this program until we complete the phase two and
three programs.

Subject to availability,  we intend to retain Mr. John Siriunas,  to oversee the
proposed  exploration of the Wanapitei River property given his familiarity with
the  property  area and his  involvement  with the  completion  of the phase one
program.  We do not have any verbal or written agreement regarding the retention
of Mr.  Siriunas,  though he has indicated  that he will be available to provide
his  services.  We  will  not  have  to  rent  or  purchase  any  equipment  for
exploration.  All required equipment is provided by the consulting geologist who
oversees the programs.

In addition to exploration  costs, we anticipate  spending an additional $20,000
on administrative  fees, including fees payable in connection with the filing of
this annual report,  our  compliance  with  reporting  obligations  and covering
general administrative costs.

Total  expenditures  over  the  next 12  months  are  therefore  expected  to be
$110,000.  We will require  additional  funding in order to complete  additional
exploration  programs on the  Wanapitei  River  property and for  administrative
costs.  We anticipate  that  additional  funding will be required in the form of
equity financing from the sale of our common stock.  However,  we cannot provide
investors  with any assurance that we will be able to raise  sufficient  funding
from the sale of our common  stock to fund the second  phase of the  exploration
program.

                                      -13-
<page>

As well,  our  president,  Lori Bolton,  has agreed to loan up to $150,000 to us
from time to time upon our request in order to fund  operations.  Amounts loaned
will be  unsecured,  will  bear  simple  interest  of 10% per  annum and will be
payable upon demand.

We believe  that debt  financing  will not be an  alternative  for  funding  the
complete  exploration  program. We do not have any arrangements in place for any
future equity financing.

Results Of Operations For The Period From Inception Through June 30, 2006

We did not earn any revenues from our  incorporation on February 2, 2004 to June
30,  2006.  We do not  anticipate  earning  revenues  until such time as we have
entered into  commercial  production on the Wanapitei  River  property.  We have
recently  commenced  the  exploration  stage of our  business and can provide no
assurance that we will discover economic  mineralization on the property,  or if
such minerals are discovered, that we will enter into commercial production.

We incurred  operating expenses in the amount of $96,797 for the period from our
inception on February 2, 2004 to June 30, 2006.  These  operating  expenses were
comprised of professional  fees of $48,416,  mineral  property costs of $14,200,
management  services  donated by our  president,  Ms. Lori  Bolton,  recorded at
$21,750,  rent costs donated by Ms. Bolton  recorded at $7,250,  and general and
administration  expenses of $5,181.  The  recorded  amounts for donated rent and
donated services recorded were charged to operations,  but will not be paid. The
balance of our operating expenses was paid from cash on hand.

We have not attained  profitable  operations  and are dependent  upon  obtaining
financing  to pursue  exploration  activities.  For these  reasons our  auditors
believe  that there is  substantial  doubt that we will be able to continue as a
going concern.

                                      -14-
<page>


ITEM 7:  FINANCIAL STATEMENTS




                              MATRIX VENTURES, INC.

                         (An Exploration Stage Company)

                              FINANCIAL STATEMENTS

                                  June 30, 2006

                                      -14-
<page>


MANNINNG  ELLIOTT                           11th floor, 1050 West Pender Street,
                                            Vancouver, BC,Canada V6E 3S7

CHARTERED ACCOUNTANTS                       Phone: 604.714.3600 Fax:604.714.3669
                                            Web: manningelliott.com





             Report of Independent Registered Public Accounting Firm

To the Board of Directors  and   Stockholders   of   Matrix   Ventures, Inc. (An
Exploration Stage Company) We have audited  the   accompanying balance sheets of
Matrix Ventures, Inc. (An Exploration Stage Company) as   of   June 30, 2006 and
2005 and the related statements of operations, cash  flows   and   stockholders'
deficit for the years then ended and for the period from  February 2, 2004 (Date
of   Inception) to   June 30,   2006. These   financial   statements   are   the
responsibility of the Company's management. Our  responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Matrix  Ventures,  Inc. (An
Exploration  Stage  Company),  as of June 30,  2006  and  2005  and the  related
statements  of  operations  and cash  flows for the years then ended and for the
period from February 2, 2004 (Date of Inception) to June 30, 2006, in conformity
with generally accepted accounting principles used in the United States.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  discussed  in Note 1 to the  financial
statements,  the Company is in the early  exploration  stage,  has not generated
revenues,  and has accumulated  operating losses since inception.  These factors
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern.  Management's  plans in regard to these  matters are also  discussed in
Note 1. The  financial  statements  do not  include any  adjustments  that might
result from the outcome of this uncertainty.

MANNING ELLIOTT LLP

CHARTERED ACCOUNTANTS

Vancouver, Canada

August 24, 2006

                                      -15-
<page>


Matrix Ventures, Inc.
(An Exploration Stage Company)
Balance Sheets
(Expressed in U.S. Dollars)

<table>
<caption>
                                                                                 June 30,              June 30,
                                                                                   2006                  2005
                                                                                     $                     $

                                                                              <c>                   <c>
ASSETS

Current Assets
   Cash                                                                                5,317                9,330
----------------------------------------------------------------------------------------------------------------------

Total Assets                                                                           5,317                9,330
======================================================================================================================


LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
   Accounts payable                                                                    1,764                1,221
   Accrued liabilities                                                                24,500               29,642
   Due to a related party (Note 4(a))                                                 15,700                   50
----------------------------------------------------------------------------------------------------------------------

Total Liabilities                                                                     41,964               30,913
----------------------------------------------------------------------------------------------------------------------


Commitments (Notes 1 and 3)

STOCKHOLDERS' DEFICIT

Common Stock
   75,000,000 shares authorized, with a $0.001 par value, 7,309,000
   shares issued and outstanding                                                       7,309                7,309

Additional Paid-in Capital                                                            23,841               23,841

Donated Capital (Note 4(b))                                                           29,000               17,000

Deficit Accumulated During the Exploration Stage                                    (96,797)             (69,733)
----------------------------------------------------------------------------------------------------------------------

Total Stockholders' Deficit                                                         (36,647)             (21,583)
----------------------------------------------------------------------------------------------------------------------

Total Liabilities and Stockholders' Deficit                                            5,317                9,330
======================================================================================================================
</table>


   The accompanying notes are an integral part of these financial statements

                                      -16-
<page>



Matrix Ventures, Inc.
(An Exploration Stage Company)
Statements of Operations
(Expressed in U.S. Dollars)


<table>
<caption>
                                                                                                    Accumulated From
                                                              Year                     Year         February 2, 2004
                                                              ended                    ended          (Inception) to
                                                             June 30,                 June 30,           June 30,
                                                              2006                     2005               2006
                                                                $                        $                   $

                                                         <c>                     <c>              <c>
Revenue
                                                                  -                        -                 -
---------------------------------------------------------------------------------------------------------------------

Expenses
   Donated rent (Note 4(b))                                   3,000                     3,000            7,250
   Donated services (Note 4(b))                               9,000                     9,000           21,750
   General and administration                                 4,951                     1,613            5,181
   Impairment loss on mineral property costs (Note 3)         2,000                         -            9,200
   Mineral property costs                                         -                     5,000            5,000
   Professional fees                                          8,113                     9,956           48,416
---------------------------------------------------------------------------------------------------------------------

Total Expenses                                               27,064                    28,569           96,797
---------------------------------------------------------------------------------------------------------------------

Net Loss for the Period                                     (27,064)                  (28,569)         (96,797)
=====================================================================================================================

Basic and Diluted Loss Per Share                                  -                         -
=====================================================================================================================

Weighted Average Number of Shares Outstanding             7,309,000                 7,309,000
=====================================================================================================================
</table>

    The accompanying notes are an integral part of these financial statements

                                      -17-
<page>


Matrix Ventures, Inc.
(An Exploration Stage Company)
Statements of Cash Flows
(Expressed in U.S. Dollars)


<table>
<caption>
                                                                                   Year                 Year
                                                                                   Ended                Ended
                                                                                 June 30,             June 30,
                                                                                   2006                 2005
                                                                                     $                    $

                                                                            <c>                   <c>
Operating Activities

   Net loss for the year                                                         (27,064)             (28,569)

   Adjustments to reconcile net loss to cash used in operating activities

     Donated services and rent                                                    12,000              12,000
     Impairment loss on mineral property costs                                     2,000                   -

   Changes in operating assets and liabilities

     Accounts payable                                                                543                 856
     Accrued liabilities                                                          (5,142)              1,107
     Due to a related party                                                          650                   -
--------------------------------------------------------------------------------------------------------------------
Net Cash Used in Operating Activities                                            (17,013)            (14,606)
--------------------------------------------------------------------------------------------------------------------
Investing Activities

   Mineral property costs                                                         (2,000)                  -
--------------------------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities                                             (2,000)                  -
--------------------------------------------------------------------------------------------------------------------
Financing Activities

   Advances from a related party
                                                                                   15,000                  -
--------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Financing Activities                                          15,000                  -
--------------------------------------------------------------------------------------------------------------------
Decrease in Cash                                                                   (4,013)           (14,606)

Cash - Beginning of Year                                                            9,330             23,936
--------------------------------------------------------------------------------------------------------------------
Cash - End of Year                                                                  5,317              9,330
====================================================================================================================


Supplemental Disclosures
   Interest paid                                                                        -                  -
   Income taxes paid                                                                    -                  -
====================================================================================================================
</table>


    The accompanying notes are an integral part of these financial statements

                                      -18-
<page>

Matrix Ventures, Inc.
(An Exploration Stage Company)
Statement of Stockholders' Deficit
(Expressed in U.S. Dollars)


<table>
<caption>
                                                                                              Deficit
                                                                                            Accumulated
                                                                    Additional               During the
                                                 Common Shares        Paid-in     Donated   Exploration
                                               Number    Par Value    Capital     Capital      Stage       Total
                                                 #           $           $           $           $           $

                                           <c>        <c>        <c>           <c>       <c>           <c>
Balance, February 2, 2004 (Date of
Inception)                                             -        -         -            -             -           -
Common stock issued for cash
 - March 23, 2004 at $0.001                    5,000,000    5,000         -            -             -       5,000
 - April 2-30, 2004 at $0.01                   2,275,000    2,275     20,475           -             -      22,750
 - April 30, 2004 at $0.10                        34,000       34      3,366           -             -       3,400
Donated services and rent                              -        -          -       5,000             -       5,000
Net loss for the period                                -        -          -           -       (41,164)    (41,164)
--------------------------------------------------------------------------------------------------------------------

Balance, June 30, 2004                         7,309,000    7,309     23,841       5,000       (41,164)     (5,014)
Donated services and rent                              -        -          -      12,000             -      12,000
Net loss for the year                                  -        -          -           -       (28,569)    (28,569)
--------------------------------------------------------------------------------------------------------------------
Balance, June 30, 2005                         7,309,000    7,309     23,841      17,000       (69,733)    (21,583)
Donated services and rent                              -        -          -      12,000             -      12,000
Net loss for the year                                  -        -          -           -       (27,064)    (27,064)
--------------------------------------------------------------------------------------------------------------------

Balance, June 30, 2006                         7,309,000    7,309     23,841      29,000       (96,797)    (36,647)
====================================================================================================================
</table>

   The accompanying notes are an integral part of these financial statements

                                      -19-
<page>

Matrix Ventures, Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
June 30, 2006 and 2005
(Expressed in U.S. Dollars)


1.       Nature and Continuance of Operations


     The  Company was  incorporated  in the State of Nevada on February 2, 2004.
     The Company is an  Exploration  Stage  Company as defined by  Statement  of
     Financial  Accounting  Standard  ("SFAS") No. 7. The Company has acquired a
     mineral property located in the Province of Ontario, Canada and has not yet
     determined  whether this property  contains  reserves that are economically
     recoverable.  The  recoverability  of  amounts  from the  property  will be
     dependent  upon  the  discovery  of  economically   recoverable   reserves,
     confirmation  of the Company's  interest in the  underlying  property,  the
     ability  of the  Company  to obtain  necessary  financing  to  satisfy  the
     expenditure  requirements  under the property agreement and to complete the
     development  of the  property  and upon  future  profitable  production  or
     proceeds for the sale thereof.


     These financial statements have been prepared on a going concern basis. The
     Company has a working capital deficiency of $36,647 and has incurred losses
     since inception resulting in an accumulated deficit of $96,797. The Company
     expects  further  losses  in  the  development  of  its  business   raising
     substantial  doubt  about the  Company's  ability  to  continue  as a going
     concern.  Its ability to continue as a going concern is dependent  upon the
     ability of the  Company to  generate  profitable  operations  in the future
     and/or to obtain the necessary  financing to meet its obligations and repay
     its liabilities arising from normal business operations when they come due.

     The  Company  filed an amended  SB-2  Registration  Statement  ("SB-2")  to
     register   2,309,000   shares  of  common  stock  for  resale  by  existing
     shareholders of the Company with the United States  Securities and Exchange
     Commission.  The amended SB-2 was  declared  effective on January 30, 2006.
     The Company did not receive any  proceeds on the resale of shares of common
     stock by existing shareholders.


2.       Summary of Significant Accounting Policies

a)       Basis of Presentation

         The  financial   statements  of  the  Company  have  been  prepared  in
         accordance with generally accepted accounting  principles in the United
         States and are expressed in U.S. dollars. The Company's fiscal year end
         is June 30.

b)       Use of Estimates

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

c)       Cash and Cash Equivalents

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

                                      -20-
<page>

Matrix Ventures, Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
June 30, 2006 and 2005
(Expressed in U.S. Dollars)

2.       Summary of Significant Accounting Policies (continued)

d)       Mineral Property Costs

         The Company has been in the  exploration  stage since its  formation on
         February 2, 2004 and has not yet realized any revenues from its planned
         operations.  It is primarily engaged in the acquisition and exploration
         of mining properties.  Mineral property  exploration costs are expensed
         as  incurred.   Mineral  property   acquisition   costs  are  initially
         capitalized  when incurred  using the guidance in EITF 04-02,  "Whether
         Mineral Rights Are Tangible or Intangible Assets". The Company assesses
         the  carrying  costs for  impairment  under SFAS 144,  "Accounting  for
         Impairment  or  Disposal of Long Lived  Assets" at each fiscal  quarter
         end.  When  it has  been  determined  that a  mineral  property  can be
         economically  developed as a result of establishing proven and probable
         reserves,  the costs  then  incurred  to  develop  such  property,  are
         capitalized. Such costs will be amortized using the units-of-production
         method over the  estimated  life of the  probable  reserve.  If mineral
         properties  are  subsequently  abandoned or impaired,  any  capitalized
         costs will be charged to operations.

e)       Long-lived Assets

         In  accordance  with SFAS No. 144,  "Accounting  for the  Impairment or
         Disposal of Long-Lived Assets", the carrying value of long-lived assets
         is  reviewed  on  a  regular  basis  for  the  existence  of  facts  or
         circumstances  that may  suggest  impairment.  The  Company  recognizes
         impairment when the sum of the expected  undiscounted future cash flows
         is less than the carrying amount of the asset.  Impairment  losses,  if
         any,  are  measured as the excess of the  carrying  amount of the asset
         over its estimated fair value.

f)       Foreign Currency Translation


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

g)       Financial Instruments

         The carrying values of cash, accounts payable,  accrued liabilities and
         due to a related  party  approximate  their fair values  because of the
         short maturity of these  instruments.  The Company's  operations are in
         Canada and virtually all of its assets and  liabilities are giving rise
         to  significant  exposure  to market  risks  from  changes  in  foreign
         currency  rates.  The  financial  risk  is the  risk  to the  Company's
         operations that arise from  fluctuations in foreign  exchange rates and
         the degree of  volatility of these rates.  Currently,  the Company does
         not use  derivative  instruments  to reduce  its  exposure  to  foreign
         currency risk.

h)       Concentration of Credit Risk

         Financial  instruments that  potentially  subject the Company to credit
         risk  consist  principally  of  cash.  Cash was  deposited  with a high
         quality credit institution.

i)       Income Taxes

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

                                      -21-
<page>

Matrix Ventures, Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
June 30, 2006 and 2005
(Expressed in U.S. Dollars)


2.       Summary of Significant Accounting Policies (continued)

j)       Stock-based Compensation

         The Company  records  stock-based  compensation in accordance with SFAS
         No. 123, "Accounting for Stock-Based Compensation". All transactions in
         which goods or services are provided to the Company in exchange for the
         issuance  of equity  instruments  are  accounted  for based on the fair
         value of the  consideration  received  or the fair  value of the equity
         instrument  issued,  whichever  is  more  reliably  measurable.  Equity
         instruments  issued to employees and the cost of the services  received
         as consideration are measured and recognized based on the fair value of
         the equity  instruments  issued.  The Company does not currently have a
         stock option plan.

k)       Basic and Diluted Net Loss Per Share

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

l)       Comprehensive Loss

         SFAS No. 130, "Reporting  Comprehensive  Income," establishes standards
         for the reporting and display of comprehensive  loss and its components
         in the financial statements.  As at June 30, 2006 and 2005, the Company
         has no items that represent a comprehensive  loss and,  therefore,  has
         not  included  a  schedule  of  comprehensive  loss  in  the  financial
         statements.

m)       Recent Accounting Pronouncements

         In February,  2006, the Financial  Accounting  Standards Board ("FASB")
         issued  SFAS  No.  155   "Accounting   for  Certain  Hybrid   Financial
         Instruments"   and  in  March  2006,  the  FASB  issued  SFAS  No.  156
         "Accounting for Servicing of Financial Assets",  but they will not have
         any  relationship  to  the  operations  of  the  Company.  Therefore  a
         description  and its impact for each on the  Company's  operations  and
         financial position have not been disclosed.

         In May 2005,  the Financial  Accounting  Standards  Board (FASB) issued
         SFAS No. 154, "Accounting Changes and Error Corrections - A Replacement
         of  APB  Opinion  No.  20  and  SFAS  No.  3".  SFAS  154  changes  the
         requirements  for the  accounting  for and  reporting  of a  change  in
         accounting principle and applies to all voluntary changes in accounting
         principle.  It  also  applies  to  changes  required  by an  accounting
         pronouncement in the unusual instance that the  pronouncement  does not
         include specific transition provisions. SFAS 154 requires retrospective
         application  to prior  periods'  financial  statements  of  changes  in
         accounting  principle,  unless it is  impracticable to determine either
         the period-specific effects or the cumulative effect of the change. The
         provisions  of SFAS No. 154 are effective  for  accounting  changes and
         correction of errors made in fiscal years  beginning after December 15,
         2005.  The adoption of this standard is not expected to have a material
         effect on the Company's results of operations or financial position.

                                      -22-
<page>

Matrix Ventures, Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
June 30, 2006 and 2005
(Expressed in U.S. Dollars)

2.       Summary of Significant Accounting Policies (continued)

     m)  Recent Accounting Pronouncements (continued)

         In  June  2006,  the  FASB  issued  FASB   Interpretation   Number  48,
         "Accounting for Uncertainty in Income Taxes - an interpretation of FASB
         Statement No. 109." This  Interpretation  clarifies the  accounting for
         uncertainty  in income taxes  recognized in an  enterprise's  financial
         statements in accordance  with FASB Statement No. 109,  "Accounting for
         Income  Taxes."  This  Interpretation  is  effective  for fiscal  years
         beginning  after December 15, 2006. The company is currently  assessing
         the effect of this Interpretation on its financial statements.

n)       Reclassifications

         Certain   reclassifications  have  been  made  to  the  prior  period's
         financial statements to conform to the current period's presentation.


3.       Mineral Properties

         Pursuant to a Mineral  Property Option  Agreement  ("Agreement")  dated
         April 21,  2004,  as amended on  December  31,  2005,  the  Company was
         granted the right to acquire a 100% undivided right, title and interest
         in 16 mineral  claims,  located in the Scadding  Township,  District of
         Sudbury,  Ontario, Canada. The Company paid $7,200 to the Optionor upon
         the execution of the Agreement.  The Company is obligated to pay $2,000
         (paid) to the Optionor upon  execution of the amended  Agreement  dated
         December 31, 2005. In order to keep the Agreement in good standing, the
         Company must incur  exploration  expenditures  on the mineral claims of
         $115,000 as follows:

          (a)      $5,000 by December 31, 2004 (incurred);
          (b)      $10,000 by December 31, 2006; and
          (c)      $100,000 by December 31, 2007.

         As at June 30,  2006,  the  Company  has  incurred  $5,000  of  mineral
         exploration expenditures in relation to the Agreement.


4.       Related Party Transactions

     (a)  For the year ended June 30, 2006, the Company owed $15,700 (2005 -
          $50) to the President of the Company for a cash advance of $15,000 and
          payment of operating expenditures of $700. The cash advance and
          payment of operating expenditures are unsecured, bears interest at 10%
          per annum, and are due on demand.

     (b)  The President of the Company provides management services and office
          premises to the Company. The services are valued at $750 per month and
          the office premises are valued at $250 per month. During the year
          ended June 30, 2006, donated services of $9,000 (2005 - $9,000) and
          donated rent expense of $3,000 (2005 - $3,000) were charged to
          operations.

5.       Income Taxes

         Potential  benefits  of income  tax losses  are not  recognized  in the
         accounts until realization is more likely than not. As at June 30, 2006
         the Company has incurred  cumulative  net operating  losses of $66,000,
         which expires commencing in 2024.  Pursuant to SFAS No. 109 the Company
         is required  to compute tax asset  benefits  for net  operating  losses
         carried forward. The potential benefit of net operating losses have not
         been  recognized  in these  financial  statements  because  the Company
         cannot be assured it is more  likely  than not it will  utilize the net
         operating losses carried forward in future years.

                                      -23-
<page>

5.       Income Taxes (continued)

         For the years ended June 30,  2006 and 2005,  the  valuation  allowance
         established  against the  deferred  tax assets  increased by $4,760 and
         $5,810,  respectively.  The components of the net deferred tax asset at
         June 30, 2006 and 2005,  and the statutory tax rate,  the effective tax
         rate and the elected  amount of the  valuation  allowance are indicated
         below:

                                                    2006               2005
                                                     $                  $

Cumulative net operating losses                   66,000             52,400

Statutory Tax Rate                                 35%                35%

Effective Tax Rate                                  -                  -

Deferred Tax Asset                                23,100             18,340

Valuation Allowance                              (23,100)           (18,340)
--------------------------------------------------------------------------------
Net Deferred Tax Asset                              -                  -
================================================================================

                                      -24-
<page>


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

None.

ITEM 8A:  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls

We evaluated the  effectiveness of our disclosure  controls and procedures as of
the end of the  2006  fiscal  year.  This  evaluation  was  conducted  with  the
participation  of our  chief  executive  officer  and our  principal  accounting
officer.

Disclosure  controls  are  controls  and other  procedures  that are designed to
ensure that  information that we are required to disclose in the reports we file
pursuant  to  the  Securities  Exchange  Act of  1934  is  recorded,  processed,
summarized and reported.

Limitations on the Effective of Controls

Our  management  does not expect that our  disclosure  controls or our  internal
controls over  financial  reporting  will prevent all error and fraud. A control
system, no matter how well conceived and operated,  can provide only reasonable,
but no absolute,  assurance  that the  objectives  of a control  system are met.
Further, any control system reflects limitations on resources,  and the benefits
of a control system must be considered  relative to its costs. These limitations
also include the realities that judgments in  decision-making  can be faulty and
that  breakdowns  can occur  because of simple  error or mistake.  Additionally,
controls  can be  circumvented  by the  individual  acts  of  some  persons,  by
collusion of two or more people or by management override of a control. A design
of a control  system is also  based upon  certain  assumptions  about  potential
future conditions;  over time, controls may become inadequate because of changes
in conditions,  or the degree of compliance  with the policies or procedures may
deteriorate.  Because of the inherent  limitations in a  cost-effective  control
system, misstatements due to error or fraud may occur and may not be detected.

Conclusions

Based upon their  evaluation of our controls,  the chief  executive  officer and
principal  accounting  officer have concluded  that,  subject to the limitations
noted  above,  the  disclosure  controls  are  effective  providing   reasonable
assurance that material  information  relating to us is made known to management
on a timely basis during the period when our reports are being  prepared.  There
were no  changes in our  internal  controls  that  occurred  during the  quarter
covered by this report that have materially  affected,  or are reasonably likely
to materially affect our internal controls.

                                    PART III

ITEM 9:  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Our executive officer and director and his respective age as of the date of this
annual report is as follows:

                                      -25-
<page>

Directors:

Name of Director                    Age

Lori Bolton                         38
Erika Kumar                         29

Executive Officers:

Name of Officer                     Age             Office
---------------------              -----            -------
Lori Bolton                         38              President, CEO
                                                    and Director

Erika Kumar                         29              Secretary, Treasurer,
                                                    Chief accounting officer,
                                                    principal financial officer
                                                    and Director

Biographical Information

Set forth below is a brief description of the background and business experience
of our executive officer and director for the past five years.

Ms. Lori Bolton has acted as our  president,  chief  executive  officer and as a
director since our  incorporation.  Ms. Bolton is a graduate of Capilano College
where she earned her legal secretary  certificate in August of 1987. From August
1987 to January 2001,  Mrs. Bolton was employed as a legal secretary with Ardagh
Hunter Turner,  a North  Vancouver  based law firm involved in residential  real
estate practice.  From January 2001 to present, she has taken a leave of absence
to raise her son.

Ms. Bolton does not have any professional training or technical credentials in
the exploration, development or operation of mines.

Ms.Bolton intends to devote 30% of her business time to our affairs.

Ms. Erika Kumar has acted as our secretary, treasurer, chief accounting officer,
prinicipal  financial  officer and as a director  since our  incorporation.  Ms.
Kumar is a graduate of Simon Fraser  University where she earned her Bachelor of
Arts degree,  majoring in  communication in June 2003. From May 2004 to present,
Ms. Kumar has been employed as an administrative  assistant with Adbusters Media
Foundation,  a non-profit magazine publisher and advocacy group, where she deals
predominantly  with  client  communications  and  assists  with  book  ordering,
copyright, and research.

Ms. Kumar does not have any professional training or technical credentials in
the exploration, development or operation of mines.

Ms. Kumar intends to devote approximately 10% of her business time to our
affairs.

Term of Office

Our  directors  are  appointed for a one-year term to hold office until the next
annual  general  meeting of our  shareholders  or until  removed  from office in
accordance with our bylaws. Our officers are appointed by the board of directors
and will hold office until removed by the board.

                                      -26-
<page>

Significant Employees

We have no significant employees other than the officers and directors described
above.

Section 16(A) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our executive officers and directors,
and persons who beneficially own more than 10% of our equity securities, to file
reports of ownership and changes in ownership  with the  Securities and Exchange
Commission.  Officers,  directors and greater than 10% shareholders are required
by SEC  regulation  to furnish us with  copies of all  Section  16(a) forms they
file.  Based on our review of the copies of such forms we  received,  we believe
that during the fiscal  year ended June 30,  2006 all such  filing  requirements
applicable to our officers and  directors  were  complied  with  exception  that
reports were filed late by the following persons:

                                 Number       Transactions   Known Failures
                                 Of  late     Not Timely     To File a
Name and principal position      Reports      Reported       Required Form
-----------------------------    -----------  -------------  ------------------
Lori Bolton                          0              0                0
(President CEO and director)

Erika Kumar                          0              0                0
(Secretary and director)


ITEM 10:  EXECUTIVE COMPENSATION

Summary Compensation Table

The table below  summarizes all  compensation  awarded to, earned by, or paid to
our executive officers by any person for all services rendered in all capacities
to us for the fiscal periods ended June 30, 2005 and June 30, 2006.


                               Annual Compensation

                                  Other  Restricted  Options/  LTIP     Other
                                         Stock  *    SARs       payouts Comp
Name     Title  Year Salary Bonus Comp.  Awarded     (#)         ($)
--------------------------------------------------------------------------------
Lori     Pres., 2006   $0     0     0        0         0          0        0
Bolton   CEO &  2005   $0     0     0        0         0          0        0
         Dir.

Erika    Sec.,  2006   $0     0     0        0         0          0        0
Kumar    & Dir. 2006   $0     0     0        0         0          0        0


Stock Option Grants

We have not  granted  any  stock  options  to the  executive  officer  since our
inception.

Consulting Agreements

We do not have any employment or consulting  agreement with Lori Bolton or Erika
Kumar, our directors and officers.

                                      -27-
<page>

ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

The following  table provides the names and addresses of each person known to us
to own  more  than 5% of our  outstanding  common  stock  as of the date of this
annual  report,  and by the officer and director,  individually  and as a group.
Except as otherwise indicated, all shares are owned directly.

                                                    Amount of
Title of          Name and address                  beneficial       Percent
Class             of beneficial owner               ownership        of class
--------------------------------------------------------------------------------

Common            Lori Bolton                        2,500,000        34.20%
Stock             President, Chief
                  Executive Officer
                  And Director
                  2640 Tempe Knoll Drive
                  North Vancouver, B.C.
                  Canada




Common            Erika Kumar                       2,500,000        34.20%
Stock             Secretary, Treasurer,
                  chief accounting officer,
                  principal financial officer
                  and Director
                  1344 Coleman Street
                  North Vancouver, B.C.
                  Canada

Common            All Officers and Directors        5,000,000        68.40%
Stock             as a Group that consists of                        shares
                  two people

The percent of class is based on  7,309,000  shares of common  stock  issued and
outstanding as of the date of this annual report.

ITEM 12:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Our president,  Ms. Lori Bolton, provided us with a cash advance of $50 in order
to  facilitate  the  opening  of our  corporate  bank  account.  The  amount  is
unsecured, non-interest bearing and has no specific terms of repayment.

Ms.  Bolton  provides  management  services  and office  premises  to us free of
charge.  The services  are valued at $750 per month and the office  premises are
valued at $250 per month. During the fiscal year ended June 30, 2006, Ms. Bolton
loaned $15,000 to us and paid $700 of our operating expenditures.  Both payments
are unsecured, bear interest at 10% per annum and are due on demand.

Otherwise,  none of the following  parties has, since our date of incorporation,

                                      -28-
<page>

had any material interest,  direct or indirect, in any transaction with us or in
any presently proposed transaction that has or will materially affect us:

  *  Any of our directors or officers;
  *  Any person proposed as a nominee for election as a director;
  *  Any person who beneficially owns, directly or indirectly, shares carrying
     more than 10% of the voting rights attached to our outstanding shares of
     common stock;
  *  Our sole promoter, Lori Bolton.
  *  Any  relative  or spouse of any of the  foregoing  persons who has the same
     house as such person.


ITEM 13:  EXHIBITS AND REPORTS

Exhibits

Exhibit
Number            Description

  3.1 *           Articles of Incorporation
  3.2 *           Bylaws
 10.1*            Mineral Property Purchase Agreement dated May 14, 2005
 31.1             Certification pursuant to Rule 13a-14(a) under the Securities
                  Exchange Act of 1934
 31.2             Certification pursuant to Rule 13a-14(a) under the Securities
                  Exchange Act of 1934
 32.1             Certification pursuant to 18 U.S.C. Section 1350, as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 32.2             Certification pursuant to 18 U.S.C. Section 1350, as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of  2002
 99.1*            Claims location map


*  filed as an exhibit to our registration statement on Form SB-2, as amended

Reports on Form 8-K

We did not file any reports on Form 8-K during the last fiscal quarter of 2006.

ITEM 14:  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our principal  accountants,  Manning Elliott,  Chartered  Accountants,  rendered
invoices to us during the fiscal  periods  indicated for the following  fees and
services:

                          Period from February 2,          Fiscal year ended
                          2004 to June 30, 2005             June 30, 2006

Audit fees                        o                                 o
Audit-related fees               Nil                               Nil
Tax fees                         Nil                               Nil
All other fees                   Nil                               Nil

Audit  fees  consist  of fees  related  to  professional  services  rendered  in
connection with the audit of our annual financial statements,  the review of the
financial statements included in each of our quarterly reports on Form 10-QSB.

                                      -29-
<page>

Our  policy  is to  pre-approve  all audit and  permissible  non-audit  services
performed by the  independent  accountants.  These  services  may include  audit
services,  audit-related  services,  tax services and other services.  Under our
audit  committee's  policy,  pre-approval  is generally  provided for particular
services or categories of services,  including planned  services,  project based
services  and  routine  consultations.  In  addition,  we may  also  pre-approve
particular  services on a case-by-case  basis. We approved all services that our
independent accountants provided to us in the past two fiscal years.

SIGNATURES

Pursuant to the requirements of Section 13 and 15 (d) of the Securities Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Matrix Ventures, Inc.


By          /s/ Lori Bolton
            -------------------------
            Lori Bolton
            President, CEO & Director
            Date: September 28, 2006

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


By          /s/ Erika Kumar
            --------------------------------------
            Erika Kumar
            Secretary, Treasurer, Director and CFO
            Date: September 28, 2006


                                      -30-