Pacific North West Capital 20F 2006 Annual report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 20-F

JULY 24, 2006


		Registration Statement Pursuant to Section 12(b) Or (g) of the Securities Exchange Act of 1934
OR
X		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		FOR THE FISCAL YEAR ENDED			APRIL 30, 2006
OR
		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
		SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF EVENT REQUIRING THIS SHELL COMPANY REPORT

		FOR THE TRANSITION PERIOD FROM ______________ TO _________________
COMMISSION FILE NUMBER:			0-29928

Pacific North West Capital Corp.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Not Applicable
(TRANSLATION OF REGISTRANT’S NAME INTO ENGLISH)
British Columbia, Canada
(JURISDICTION OF INCORPORATION OR ORGANIZATION)
2303 West 41^st Avenue, Vancouver, British Columbia V6M 2A3
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT.
	TITLE OF EACH CLASS			NAME ON EACH EXCHANGE ON WHICH REGISTERED
	None			Not Applicable

SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT.
Common Shares Without Par Value
(TITLE OF CLASS)

SECURITIES FOR WHICH THERE IS A REPORTING OBLIGATION PURSUANT

TO SECTION 15(d) OF THE ACT.

None

(TITLE OF CLASS)

INDICATE THE NUMBER OF OUTSTANDING SHARES OF EACH OF THE ISSUER’S CLASSES OF CAPITAL OR COMMON SHARES AS OF THE CLOSE OF THE PERIOD COVERED BY THE ANNUAL REPORT.

35,112,452Shares

Indicate by check mark whether the registrant is a well known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

YES

Note – Checking the box above will not relieve any registrant required to filed reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

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

YES

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchanage Act (Check one):

Large accelerated filer

Accelerated filer

Non-accelerated filer

Indicate by check mark which financial statement item the registrant has elected to follow.

Item 17

Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of this Exchange Act).

YES

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

YES

TABLE OF CONTENTS


	Page
Glossary of Mining Terms
PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS	8
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE	8
ITEM 3. KEY INFORMATION	8
A. Selected Financial Data	8
B. Capitalization and Indebtedness	9
C. Reasons for the Offer and Use of Proceeds	9
D. Risk Factors	9
ITEM 4. INFORMATION ON THE COMPANY	13
A. History and Development of the Company	13
B. Business Overview	14
C. Organizational Structure	14
D. Property, Plants, and Equipment	14
Ontario, Canada	14
I. River Valley Farm-In and Joint Venture Project	14
a) River Valley Property	15
b) Goldwright Property	15
c) Frontier Property	15
d) Washagami Lake Property	15
e) Razor Property	15
f) Western Front Property	15
II. Agnew Lake Property	26
III. ProAm Property	26
IV. Agnew Lake Farm-In	27
V. Sargesson Lake and Kelly-Davis Properties	27
VI. West Timmins Nickel Project	27
Quebec, Canada	29
I. Glitter Lake Property	29
Newfoundland and Labrador, Canada	30
I. Konrad Mineral License 972M	30
Alaska, USA	30
I. Union Bay Platinum Property	30
II. Kane Property	32
III. Goodnews Bay Property	32
New Zealand	33
I. New Zealand Property	33
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS	34
A. Operating Results	34
Twelve Months Ended April 30, 2006 Compared to Twelve Months Ended April 30, 2005	34
Twelve Months Ended April 30, 2005 Compared to Twelve Months Ended April 30, 2004	38
Twelve Months Ended April 30, 2004 Compared to Twelve Months Ended April 30, 2003	43
B. Liquidity and Capital Reserves	48
Twelve Months Ended April 30, 2006 Compared to Twelve Months Ended April 30, 2005	48
Twelve Months Ended April 30, 2005 Compared to Twelve Months Ended April 30, 2004	49
Twelve Months Ended April 30, 2004Compared to Twleve Months Ended April 30, 2003	49
C. Research and Development, Patents and Licenses, etc.	49
D. Trend Information	49
E. Off-Balance Sheet Arrangements	49
F. Tabular Disclosure of Contractual Obligations	50
G. Safe Harbour	50


ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	50
A. Directors and Senior Management	50
B. Compensation	53
C. Board Practices	57
D. Employees	60
E. Share Ownership	60
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	65
A. Major Shareholders	65
B. Related Party Transactions	65
C. Interests of Experts and Counsel	65
ITEM 8. FINANCIAL INFORMATION	65
A. Consolidated Statements and Other Financial Information	65
B. Significant Changes	66
ITEM 9. THE OFFER AND LISTING	66
A. Offer and Listing Details	66
B. Plan of Distribution	68
C. Markets	68
D. Selling Shareholders	68
E. Dilution	68
F. Expense of the Issue	68
G. Performance Graph	68
ITEM 10. ADDITIONAL INFORMATION	69
A. Share Capital	69
B. Memorandum and Articles of Association	69
C. Material Contracts	69
D. Exchange Controls	69
E. Taxation	70
F. Dividends and Paying Agents	76
G. Statements by Experts	76
H. Documents on Display	77
I. Subsidiary Information	77
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	77

PART II

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	77
ITEM 13. DEFAULTS, DIVIDEND ARREARS AND DELINQUENCIES	77
ITEM 14. MATERIAL MODIFICIATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	77
ITEM 15. CONTROLS AND PROCEDURES	77
ITEM 16. (RESERVED)	78
ITEM 16A. AUDIT COMMITTEE FINANCIAL REPORT	78
ITEM 16B. CODE OF ETHICS	81
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES	81
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	82
ITEM 16E. PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	82
PART III

ITEM 17. FINANCIAL STATEMENTS	82
ITEM 18. FINANCIAL STATEMENTS	82
ITEM 19. EXHIBITS	82
EXHIBIT 1. Financial Statements
EXHIBIT 2. Management Discussion and Analysis
EXHIBIT 3. CEO Certification of Annual Filings During Transition Period


EXHIBIT 4. CFO Certification of Annual Filings During Transition Period
EXHIBIT 5. Certification of CEO and CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
EXHIBIT 6. CEO Certification pursuant to 18 USC Section 1350, adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002
EXHIBIT 7. CFO Certification pursuant to 18 USC Section 1350, adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002
EXHIBIT 8. Pacific North West Capital Corp. Code of Business Conduct and Ethics
EXHIBIT 9. Certificate of Ethics for the Chief Executive Officer and the Chief Financial Officer
SIGNATURES	83

GLOSSARY

The following are definitions of mining terms and certain other terms used in this Statement.


Anglo Platinum	Anglo American Platinum Corporation Limited
Au	The chemical symbol for gold.
Assay	A chemical test performed on a sample of ores or core to determine the amount of valuable metals contained.
Assessment Work	The amount of work, specified by mining law, that must be performed each year in order to retain legal control of mining claims.
Breccia	A rock in which angular fragments are surrounded by a mass of fine-grained minerals.
Chalcopyrite	A sulphide mineral of copper and iron; the most important ore mineral of copper.
Channel Sample	A sample composed of pieces of vein or mineral deposit that have been cut out of a small trench or channel, usually about 5-10 cm wide and 2 cm deep.
Chip Sample	A method of sampling a rock exposure whereby a regular series of small chips of rock is broken off along a line across the face.
Diabase	A common basic igneous rock usually occurring in dykes or sills.
Diamond Drill	A rotary type of rock drill that cuts a core of rock that is recovered in long cylindrical sections, two cm or more in diameter.
Diorite	An intrusive igneous rock composed chiefly of plagioclase, hornblende, biotite or pyroxene
Geophysical Surveys	The use of one or more geophysical techniques in geophysical exploration.
EM Survey	A geophysical survey method which measures the electromagnetic properties of rocks.
Exploration	Prospecting, sampling, mapping, diamond drilling and other work involved in searching for ore
Falconbridge	Falconbridge Limited
Grab Samples	A sample of rock or sediment taken more or less indiscriminately at any place.
Granite	A coarse-grained intrusive igneous rock consisting of quartz, feldspar and mica.
gpt or g/t	Grams per tonne.
Induced Polarization	A geophysical survey method which measures the properties of rocks.
g/t Au	Grams per tonne gold.
Km	A measure of distance known as a kilometre.
Mineralization	The concentration of metals and their chemical compounds within a body of rock.
Ni	The chemical symbol for nickel
Nickel	A hard white silver metallic chemical element
NSR	Net Smelter Returns.
opt	Ounce per tonne


Ore	A natural aggregate of one or more minerals, which at a specified time and place, may be mined and sold at a profit, or which from some part may be profitably separated.
Oz	A measure of weight known as an ounce.
Pd	The chemical symbol for Palladium.
PGM	Platinum Group Metals.
PGE	Platinum Group Elements.
ppm	Parts per million.
Pt	The chemical symbol for Platinum.
RVI	River Valley Intrusion
SIC	Sudbury Igneous Complex
Sample	A small portion of rock or a mineral deposit taken so that the metal content can be determined by assaying.
Sampling	Selecting a fractional but representative part of a mineral deposit for analysis.
Strike	The coarse or bearing of a bed or layer of rock
Vein	A fissure, fault or crack in a rock filled by minerals that have traveled upwards from some deep source.

PART I

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.

ITEM 3.

KEY INFORMATION

Selected Financial Data

Pacific North West Capital Corp. ("PFN" or the "Company") has a limited history of operations and has not generated any operating revenues. The following table sets forth, for the periods and the dates indicated, selected financial and operating data for the Company. This information should be read in conjunction with the Company's financial statements and notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere herein. The selected financial data provided below are not necessarily indicative of the future results of operations or financial performance of the Company. To date the Company has not paid any dividends on the common shares and it does not expect to pay dividends in the foreseeable future.

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in Canada ("Canadian GAAP"). There are material differences between Canadian GAAP and the United States Generally Accepted Accounting Principles ("U.S. GAAP") as applied to the Company including disclosure items. For a comparison of these differences, refer to footnote No. 13 to the April 30, 2006 Audited Financial Statements.

Selected Financial Data

Canadian GAAP

(In Canadian Dollars)


	April 2006	April 2005	April 2004	April 2003	April 2002

Cash	3,091,847	4,473,027	5,523,315	1,173,605	3,026,952
Restricted Cash	140,359	-	903,800	-	115,102
Total Assets	5,681,742	6,070,616	7,202,319	1,785,530	3,614,678
Current Liability	64,895	136,008	126,863	298,044	1,432,000
Total Administration Expenses	1,413,531	1,893,818	1,473,225	1,364,612	1,177,225
Mineral Costs Written Off	416,766	270,083	123,707	327,471	528,190
Investments Written Down	-	66,332	60,028	16,500	55,500
Interest Income	115,571	112,423	73,513	47,597	93,046
Project Management Fees	140,474	317,329	280,354	237,207	245,734
Future Income Tax Recovery	387,649	-	-	-	-
Net Loss	1,732,471	1,894,297	1,276,008	1,323,658	1,422,135
Deficit	9,766,960	8,422,138	6,527,841	5,251,833	3,928,175

Weighted Avg # Shares	34,553,930	31,733,575	25,151,992	20,811,158	19,806,417
Loss per Share	(0.04)	(0.06)	(0.05)	(0.06)	(0.07)

Selected Financial Data

US GAAP

(In Canadian Dollars)


	April 2006	April 2005	April 2004	April 2003	April 2002
Restricted funds – flow through shares	140,359	-	903,800	-	115,012
Cash	3,091,847	4,473,027	5,523,315	1,173,605	3,026,952
Total Assets	3,609,359	4,734,268	6,667,790	1,455,358	3,327,862
Current Liability	64,895	136,008	126,863	298,044	1,432,000
Total Administration Expenses	1,830,297	2,230,233	1,656,960	1,708,983	1,760,915
Exploration Properties	736,035	801,819	204,357	43,356	(176,757)
Project Management Fees	140,474	317,329	280,354	237,207	245,734
Interest Income	115,571	112,423	73,513	47,597	93,046
Net Loss	2,080,857	2,696,116	1,480,365	1,367,014	1,245,378
Deficit	11,809,453	9,728,596	7,032,480	5,552,115	4,185,101

Weighted Avg # Shares	34,553,930	31,733,575	25,151,992	20,811,158	19,806,417
Basic Earnings (loss) per share	(0.06)	(0.08)	(0.05)	(0.07)	(0.06)

Capitalization and Indebtedness

This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.

Reasons for the Offer and Use of Proceeds

This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.

Risk Factors

As resource exploration is a speculative business, which is characterized by a number of significant risks including, among other things, unprofitable efforts resulting from the failure to discover mineral deposits. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection, the combination of which factors may result in the Company not receiving an adequate return of investment capital.

To date, the Company’s properties have no proven commercially viable reserves and are currently at the exploration stage and as such prospective purchasers of the Company’s common shares should consider carefully, among other things, that the Company’s exploration of its properties involves significant risks. Our current Management while considerably experienced in managing exploration projects has limited production experience and as such is dependent upon the production expertise of our joint venture partners.

(i)

Exploration Risks

Mineral exploration involves a high degree of risk and few properties which are explored are ultimately developed into producing mines. There is no assurance that the Company’s mineral exploration activities will result in any discoveries of commercial bodies of mineralization. The long-term profitability of the Company’s operations will be in part directly related to the cost and success of its exploration programs, which may be affected by a number of factors.

Substantial expenditures are required to establish reserves through drilling, metallurgical processes to extract the metal from the ore and, in the case of new properties, to build the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities and grades to justify commercial operations or that the funds required for further expansion can be obtained on a timely basis. All of the Company’s projects are currently in exploration stages. Estimates and mineral projects can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors and unforeseen technical difficulties, as well as unusual or unexpected geological formations and work interruptions. In addition, the grade of ore ultimately mined may differ from that indicated by drilling results.

(ii)

Lack of Cash Flow and Non Availability of Additional Funds

The Company's properties are currently being explored or assessed for exploration and as a result, the Company has no source of operating cash flow. The Company has limited financial resources and there is no assurance that if additional funding were needed, that it would be available to the Company on terms and conditions acceptable to it. Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and the possible, partial or total loss of the Company's interest in current properties. The Company presently has sufficient financial resources to undertake all of its currently planned exploration programs. The Company’s joint venture partner Kaymin Resources Limited (Kaymin), a fully owned subsidiary of Anglo American Platinum Corporation Limited (Anglo Platinum), is currently funding the exploration program on the River Valley property. The Company i s also currently exploring the West Timmins Nickel Project in conjunction with joint venture partner Falconbridge Limited (Falconbridge).

The exploration of any ore deposits found on the Company's exploration properties depends upon the Company's ability to obtain financing through debt financing, equity financing or other means. There is no assurance that the Company will be successful in obtaining the required financing. Failure to obtain additional financing on a timely basis could cause the Company to forfeit all or parts of its interests in some or all of its properties or joint ventures and reduce or terminate its operations.

None of the Company's properties has commenced commercial production and the Company has no history of earnings or cash flow from its operations. As a result there can be no assurance that the Company will be able to develop any of its property profitably or that its activities will generate positive cash flow. The Company has not declared or paid dividends on its shares since incorporation and does not anticipate doing so in the foreseeable future. The only present source of funds available to the Company is through the sale of its common shares. Even if the results of exploration are encouraging, the Company may not have sufficient funds to conduct the further exploration that may be necessary to determine whether or not a commercially mineable deposit exists on any property. While the Company may generate additional working capital through the operation, sale or possible joint venture expansion of its prope rties, there is no assurance that any such funds will be available for operations.

(iii)

Operating Hazards and Risks

Mineral exploration involves many risks, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Operations in which the Company has a direct or indirect interest will be subject to all the hazards and risks normally incidental to exploration, of PGMs and other metals, such as unusual or unexpected formations, cave-ins, pollution, all of which could result in work stoppages, damage to property, and possible environmental damage. The Company does have $5,000,000 commercial general liability insurance covering its operations. Payment of any liabilities in excess of its insurance could have a materially adverse effect upon the Company's financial condition.

(iv)

No Proven Reserves

All of the properties in which the Company holds an interest are considered to be in the exploration stage only and do not contain a known body of commercial ore.

(v)

Title Risks

Due to the large number and diverse legal nature of the mineral properties described herein, full investigation of legal title to each such property has not been carried out at this time. Much of the River Valley property was covered by the Temagami Land Caution and was not in fact open for staking and as such was closed for mineral exploration and development for twenty or more years. In June 1996, the Ontario Government passed legislation allowing the area open for staking mineral claims and on September 17, 1996, the area was re-opened for staking. Consequently, management believes that the area will not be substantially impacted by native land claim issues. However, the Company cannot be certain that land claim issues may not arise.

Many of the Company's properties may be subject to prior unregistered agreements of transfer or native land claims (including Innu land claims which are currently outstanding against all properties in the Labrador Region of Newfoundland), and title may be affected by undetected defects. The Company's properties consist of recorded mineral claims which have not been surveyed, and therefore the precise area and location of such claims is undefined.

While the Company has reviewed and is satisfied with the title for any claim in which it has a material interest and, to the best of its knowledge, such title is in good standing, there is no guarantee that title to such claim will not be challenged or impugned. The properties may be subject to prior unregistered agreements of transfer or native land claims and title may be affected by undeeded claims.

(vi)

Uncertainty or Contestation of Contract Rights

The Company owns or has the right to earn interests in properties under contract with a number of individuals and corporations. Although the Company believes these individuals or corporations have the full legal right to enter into an agreement, the Company has no control should any legal action be taken against the vendors of the properties. As well, should the Company not be able be meet its financial commitments to the vendor of a property this may result in the forfeiture of Company’s right to earn an interest in the property.

(vii)

Conflicts of Interest

Certain of the directors of the Company are directors of other mineral resource companies and, to the extent that such other companies may participate in ventures in which the Company may participate, the directors of the Company may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. In the event that such a conflict of interest arises at a meeting of the directors of the Company, a director who has such a conflict will abstain from voting for or against the approval of such a participation or such terms. In appropriate cases the Company will establish a special committee of independent directors to review a matter in which several directors, or management, may have a conflict. From time to time several companies may participate in the acquisition, exploration and development of natural resource properties thereby allowing for their participating in larger programs , permitting involvement in a greater number of programs and reducing financial exposure in respect of any one program. It may also occur that a particular company will assign all or a portion of its interest in a particular program to another of these companies due to the financial position of the company making the assignment. In accordance with the laws of the Province of British Columbia, the directors of the Company are required to act honestly, in good faith and in the best interest of the Company. In determining whether the Company will participate in a particular program and the interest therein to be acquired by it, the directors will primarily consider the potential benefits to the Company, the degree of risk to which the Company may be exposed and its financial position at that time. Other than as indicated, the Company has no other procedures or mechanisms to deal with conflicts of interest. The Company is not aware of the existence of any conflict of interest as des cribed herein.

(viii)

Competition and Agreements with Other Parties

The mineral resources industry is intensely competitive and the Company competes with many companies that have greater financial resources and technical facilities than itself. Significant competition exists for the limited number of mineral acquisition opportunities available in the Company's sphere of operations. As a result of this competition, the Company's ability to acquire additional attractive mining properties on terms it considers acceptable may be adversely affected.

The Company may, in the future, be unable to meet its share of costs incurred under agreements to which it is a party and the Company may have its interests in the properties subject to such agreements reduced as a result. Furthermore, if other parties to such agreements do not meet their share of such costs, the Company may be unable to finance the costs required to complete the recommended programs.

(ix)

Fluctuating Mineral Prices

The mining industry in general is intensely competitive and there is no assurance that, even if commercial quantities of mineral resources are developed, a profitable market will exist for the sale of same. Factors beyond the control of the Company may affect the marketability of any minerals discovered. There is no assurance that commodity prices will remain at current levels; significant price movements over short periods of time may be affected by numerous factors beyond the control of the Company, including international economic and political trends, expectations of inflation, currency exchange fluctuations (specifically, the U.S. dollar relative to other currencies), interest rates and global or regional consumption patterns, and speculative activities. The effect of these factors on the price of minerals and therefore the economic viability of any of the Company's exploration projects cannot accurately be predicted . As the Company is in the exploration stage, the above factors have had no material impact on operations or income.

(x)

Shares Reserved for Future Issuance; Potential Dilution

As of April 30, 2006, the Company had reserved, 7,793,645 common shares for issuance upon the exercise of warrants, incentive stock options and performance shares. Such common shares represent a potential equity dilution of approximately 22% based upon the number of outstanding common shares at April 30, 2006, of 35,112,452. Furthermore, the Company may enter into commitments in the future which would require the issuance of additional common shares and may grant additional stock options and/or issue additional warrants. As at April 30, 2006, the Company had unlimited authorized but unissued and unreserved number of common shares. Issuance of additional shares would be subject to stock exchange regulatory approval and compliance with applicable securities legislation. The Company currently has no plans to issue common shares other than for the purposes of raising funds for property acquisition, property explor ation and general working capital requirements which issuances would be subject to regulatory approval.

(xi)

Environmental Regulation

All phases of the Company's operations in Canada are subject to environmental regulations. It is the Company's belief that if environmental legislation in Canada evolved and required stricter standards and enforcement, in conjunction with increased fines and penalties for non-compliance, including more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees, the cost of compliance therewith may substantially increase and thereby effect the Company's operations. However, the Company is not aware of any pending environmental litigation or amendments to existing environmental litigation which will affect the Company's current or prepared operations or which would otherwise have a material adverse effect on the Company or its operations. There is no assurance that future changes in environmental regulation, if any, will not adversel y affect the Company's operations.

(xii)

Compliance with Applicable Canadian Laws and Regulations

Exploration in the Sudbury area shall be conducted in accordance with the Mining Act of Ontario. The Mining Act of Ontario sets out the guidelines by which exploration can and should be conducted, highlights of which include the notification of the intent to perform work on mineral claims, and the obligation to perform valid assessment work to keep the claims in good standing.

Legislation and implementing regulations implemented by the Newfoundland Department of Natural Resources directly affect the mining industry in the Province of Newfoundland and Labrador where the Company holds mineral claims. In particular, the Company must provide prior notice and a description of the planned exploration work before the commencement of the work.

Work on the Union Bay property is carried out in accordance with the necessary permits from the US Forest Service.

Work on the Good News Bay property is carried out in accordance with the necessary permits and under agreements with local land and native corporations.

(xiii)

Canadian Jurisdictional and Enforceability of Judgments, Risks

The Company is a Canadian corporation and is governed in its conduct by the Laws of Canada. Three of its directors are residents of Canada and one director is a resident of the United Kingdom and all its assets are located in Canada, United States and New Zealand.

(xiv)

Adequate Labor and Dependence Upon Key Personnel

The Company will depend upon recruiting and maintaining other qualified personnel to staff its operations. The Company believes that such personnel currently are available at reasonable salaries and wages in the geographic areas in which the Company intends to operate. There can be no assurance, however, that such personnel will always be available in the future. In addition, it cannot be predicted whether the labor staffing at any of the Company's projects will be unionized. The success of the operations and activities of the Company is dependent to a significant extent on the efforts and abilities of its management. The loss of services of any of its management could have a material adverse effect on the Company.

(xv)

South African Reserve Bank

The export by Kaymin of the funds required to participate in the Farm-In agreement on the River Valley Properties may, pursuant to the South African Exchange Control Regulations, require the approval of the Exchange Control Department of the South African Reserve Bank.

(xvi)

Forward Looking Statements

This document contains forward looking statements concerning the Company's operations, economic performance and financial condition, including in particular, the likelihood of the Company's success in operating as an independent company and developing and expanding its business. These statements are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company, and reflect future business decisions which are subject to change. Some of these assumptions inevitably will not materialize, and unanticipated events will occur which will affect the Company's future results.

ITEM 4.

INFORMATION OF THE COMPANY

History and Development of the Company

The Company was incorporated pursuant to the provisions of the Business Corporations Act (Alberta) on May 29, 1996. The Company amended its articles by certificate of amendment dated October 22, 1997 to remove the private company restrictions. On July 13, 2004 the Company continued out of the Province of Alberta into the Province of British Columbia.

The Company's registered and executive office is located at 2303 West 41st Avenue, Vancouver, British Columbia Canada V6M 2A3, telephone number (604) 685-1870. The Company is a reporting issuer in the Province of Alberta, British Columbia and Ontario, Canada. The Company’s common shares have traded on the Toronto Venture Exchange since December 19, 1997 under the trading symbol “PFN” and on the Toronto Stock Exchange from June 8, 2001 under the trading symbol “PFN” and on the OTCBB from August 30, 2001 under the trading symbol “PAWEF” and on the Frankfurt Stock Exchange, Open Market under the trading symbol P7J.

Business Overview

PFN primarily explores for platinum group metals (PGM) and Nickel in North America.

The Company’s primary business is exploration as such there is no assurance that a commercially viable deposit exists on any of the Company’s projects. Further exploration is necessary in order to determine if such a deposit may exist. In the event that a viable economic deposit is delineated considerable addition funds, drilling and engineering studies will need to be completed in order to determine the project’s economic viability.

The Company’s main material property is the River Valley PGM property on which it is currently in a joint venture with Anglo Platinum. Anglo Platinum is currently funding a $1.1 million exploration program on the property. An updated Mineral Resource Estimate was recently completed on the property. Exploration on the property is generally not affected by seasonal change, with drill programs being carried out year round and surface bedrock exploration limited only by snow cover and spring thaw conditions. Exploration activities are dependent upon the availability of subcontractors, in particular drilling activities. These sub-contractors are generally available, however, may vary in price depending upon availability. The material effects of government regulations on the Company’s business are disclosed in Item 3 – Risk Factors.

Organizational Structure

PFN New Zealand Limited is a wholly-owned New Zealand subsidiary.

Property, Plants, and Equipment

ONTARIO, CANADA

(I)

River Valley Farm-In and Joint Venture Project

Property Description and Location

Ownership

By agreement dated 14 July 1999, the Company granted to Kaymin Resources Limited (“Kaymin”), a wholly owned subsidiary of Anglo American Platinum Corporation Ltd., an option to earn up to a 65% interest in the Company’s portion of certain properties, including the River Valley property, the Goldwright property, the Frontier property, the Washagami property, the Razor property and the Western Front property(Notes 4b(i) - 4b(vi) respectively), in the Sudbury Region of Ontario. During a prior year, Kaymin elected to vest obtaining a 50% interest in the properties upon having paid the Company $300,000 (received in a prior year) and advanced and spent in excess of $4,000,000 for exploration on the properties.

A joint venture is now in force. Under this joint venture agreement Kaymin is responsible for funding all exploration until a feasibility study is completed, which earns Kaymin an additional 10% interest. In addition, if Kaymin arranges financing for a mine it receives an additional 5% interest, increasing its ownership up to a possible 65% interest. As Kaymin controls all financing, investing and operating decisions during this second earn-in phase, the consolidated financial statements of the River Valley Joint Venture have not been incorporated on a proportionate basis into these consolidated financial statements. As at 30 April 2006, $104,734 (2005 - $26,060) is receivable from the joint venture for an unsecured advance ($100,000) payable on demand and management fees ($4,734).

The above agreement is subject to various Net Smelter Return (“NSR”) royalties under the terms of the underlying agreements ranging from 2% to 3%.

River Valley Property. By an agreement dated January 15, 1999 and amended March 11, 1999, the Company has acquired a 100% interest in the Luhta Bailey-Orchard property for the following consideration: 600,000 shares over four years (issued) and cash payments of $265,000 (paid). These claims are subject to a total 3% net smelter royalty (NSR) to the three vendors; 2% of the NSR can be purchased outright by PFN for $2 million cash. Under the joint venture with Kaymin, both PFN and Kaymin hold a 50% interest in these claims.

In addition to the main Luhta, Bailey, Orchard agreement the Company holds various other properties which together comprise the River Valley joint venture property as follows:

Goldwright Property. By agreement dated June 30, 1998 and subsequently amended, the Company earned a 25% interest in certain mineral claims known as the Janes property, located in the Janes Township, Sudbury Mining District, Ontario, by incurring in excess of $350,000 of exploration expenditures on the properties by May 31, 2001. Certain of the above claims are subject to a 2% NSR.

Frontier Property. The Company acquired a 100% interest in certain properties located in the Kelly and Davis Townships, Sudbury Mining District, Ontario for consideration of $30,000. The property is subject to a 2% NSR.

Washagami Lake Property consists of 16 unpatented mining claim units (256 ha) located in the Janes Township, Sudbury Mining District, Ontario immediately south of the Frontier property. On February 23, 1999, the Company and Brian Wright, Michael Loney and Scott Jobin-Bevans (the “Vendors”) entered into an Option to Purchase agreement whereby the Company can earn a 100% interest by making cash payments of $28,200. The original agreement was amended and the payment structure is summarized after taking into account the amendments. The Company has relinquished several of these claims. The Company has made these payments and holds a 100% ownership interest in the property The property is subject to a 2% NSR. There are no plans to expend monies on this portion of the property at this time.

Razor Property. The Company acquired a 100% interest in certain mineral claims located in the McWilliams Township, Sudbury Mining District for a consideration of $30,000. The property is subject to a 2% NSR.

Western Front Property. By agreement dated November 16, 2001, the Company has acquired a 70% interest in certain mineral claims from a company (the Optionor) with certain directors in common. As consideration the Company, paid $55,000 and issued 20,000 common shares to the Optionors. In addition an exploration expenditure of $50,000 was completed. The Company has the right to purchase an additional 30% interest in the property by paying $750,000 to the Optionor. The property is subject to a 3% NSR the first 1% of which the Company can purchase for $1,000,000 the second 1% can be purchased for $2,000,000. The Company and the Optionor will share the NSR buyout privileges in proportion to their respective interest.

The following “italicized text” has been excerpted from technical reports titled "Review of Exploration Results River Valley property & Agnew property for Pacific North West Capital Corp. (as of January 31, 2001 with revisions to March 22, 2001)" and dated March 26, 2001 was completed by Derry, Michener, Booth & Wahl Consultants Limited and “Mineral Resource Estimate of the Dana Lake and Lismer’s Ridge Deposits on the River Valley PGM property, Ontario for Pacific North West Capital Corp (as of September 26, 2001) dated October 15, 2001 and was completed by Derry Michener Booth and Wahl Consultants Ltd.). and a “Revised Mineral Resource Estimate, Dana Lake and Lismer’s Ridge Deposits incorporating the Phase VI Drilling, River Valley PGM Project, Ontario for Pacific North West Capital Corp”, dated June 10, 2004, by Derry, Michener, Booth and Wahl Consultants Ltd.

Property Location and Access

The River Valley property lies within Dana and Pardo Townships and is located about 100 road kilometres (50 km direct) northeast of the City of Sudbury, Ontario. The coordinates of the centre of the property are approximately 555356mE and 5172290mN (UTM 17, NAD 27).

The River Valley property claim group consists of 333 unpatented mining claim units that cover 5688 hectares (56.8 km2). The majority of the claims are located in Dana Township with 4 of the 30 blocks located immediately to the north in Pardo Township. The claim group is contiguous, with the exception of claim S-1229380, located south of the main group in Dana Township. Both Dana and Pardo Townships are in the Sudbury Mining District. The townships are unsurveyed.

The property is road accessible.

The claims have not been fully legally surveyed; however, a survey is now in its final stages.

In May 2004, Anglo Platinum approved a $3.0 million exploration budget which was used to fund a minimum 20,740 metre drill and surface exploration program aimed at increasing the existing River Valley property Resource Estimate.

To the best of PFN’s knowledge there are no environmental liabilities against the mining claims.

All exploration to date has been carried out with appropriate work permits from the MNR permits. For the future drilling phases a more elaborate permit may be applied for but to PFN’s knowledge there is no impediment to receiving one.

Expiration Date of Claims


Township/Area	Claim Number	Claim Due Date	# of Units


DANA	1227988	2011-Oct-13	8	LBO
DANA	1227989	2011-Oct-19	8	LBO
DANA	1227990	2011-Oct-19	12	LBO
DANA	1227991	2011-Oct-19	10	LBO
DANA	1229216	2011-Oct-19	6	LBO
DANA	1229217	2011-Oct-19	16	LBO
DANA	1229218	2011-Oct-19	16	LBO
DANA	1229219	2011-Oct-19	12	LBO
DANA	1229220	2011-Oct-19	16	LBO
DANA	1229221	2011-Oct-19	16	LBO
DANA	1229222	2011-Oct-19	16	LBO
DANA	1229223	2011-Oct-19	12	LBO
DANA	1229224	2011-Oct-19	10	LBO
DANA	1229230	2011-Sep-21	16	LBO
DANA	1229231	2011-Sep-21	16	LBO
DANA	1229232	2011-Sep-21	14	LBO
PARDO	1229233	2011-Sep-21	16	LBO
PARDO	1229234	2011-Sep-21	16	LBO
DANA	1229380	2006-Jul-26	3	PFN
DANA	1229542	2011-May-07	6	PFN
DANA	1230038	2011-May-07	12	PFN
DANA	1237228	2011-May-25	8	PFN
DANA	1237304	2011-Apr-13	12	PFN
DANA	1237305	2011-Apr-13	8	PFN
DANA	1244338	2011-Jun-14	6	PFN
DANA	1244427	2011-Jun-05	7	PFN
DANA	1244435	2011-Jun-05	4	PFN
DANA	1244444	2011-Jun-05	16	PFN
PARDO	1244445	2011-May-07	8	PFN
PARDO	1244332	2011-May-07	8	PFN
PARDO	3017059c	2006-Apr-08	16	PFN
PARDO	3017060	2006-Apr-08	16	PFN
PARDO	3017061	2006-Apr-08	16	PFN
PARDO	3017062	2006-Apr-08	16	PFN
PARDO	3017085	2006-Apr-08	16	PFN
DANA	3004262	2010-Aug-29	2	PFN
DANA	3010281	2011-Oct-29	1	RAZOR
DANA	3010282	2011-Oct-29	1	RAZOR
DANA	1191268	2011-Oct 13	1	RAZOR
MCWILLIAMS	1229840	2011-Feb 12	3	RAZOR
JANES	1231107	2005-Dec-17	6	Western Front
JANES	1235822	2005-Dec-10	12	Western Front
JANES	1235888	2006-Jan-06	12	Western Front
JANES	1235889	2006-Jan-04	16	Western Front
JANES	1235891	2006-Jan-04	7	Western Front
JANES	1235892	2006-Jan-04	16	Western Front
JANES	1235893	2006-Jan-04	7	Western Front
JANES	1235894	2006-Jan-06	9	Western Front
JANES	1235895	2006-Jan-06	8	Western Front
JANES	1235896	2006-Jan-06	2	Western Front


	Township/Area	Claim Number			Claim Due Date	# of Units


DANA	1246498	2006-Jan-12	8	Western Front
JANES	1229744	2006-Dec-09	16	Washagami
KELLY	1229732	2006-Dec-09	16	Frontier
KELLY	1229733	2006-Dec-09	16	Frontier

Accessibility, Climate, Local Resources Infrastructure and Physiography

Accessibility

The River Valley property lies within Dana, Pardo Janes and McWilliams Townships and is located about 100 road kilometres (50 km direct) northeast of the City of Sudbury, Ontario.

Climate and Local Resources

Climate is temperate, with four distinct seasons, typical of the Southern Shield, and moderated by the proximity to the Great Lakes. Other than over small lakes drilling and geophysical surveys can be carried out year round from skidder roads. Drilling water is sufficient. Surface bedrock exploration can be done for about 7-8 months of the year. An environmental base line study has not been necessary to date.

Sudbury, a major mining and manufacturing city, can provide all of the infrastructure and technical needs for any exploration work.

Physiography

The property lies at a mean elevation of about 325 metres ASL. Relief is moderate and typical of upland Precambrian Shield topography. The eastern part around Azen Creek is lower and marshy. Forest cover is mainly poplar with about 25-33% white pine regrowth.

Outcrop exposure on the property is limited to about 20% with the remaining areas covered mostly by a thin (<1 m) veneer of glacial till; locally gravel, outwash sand and silt reach 10’s of metres in thickness. Most of the area around the Dana Lake and Azen Creek areas has been logged within the past 10 years and new logging took place in the Azen Creek Area during the summer of 2000.

History and Previous Work

Introduction

In 1973, the Province of Ontario placed more than 110 Townships in a withdrawn area referred to as the “Temagami Land Caution” – this region was excluded from any type of resource exploration and/or development until June 1996. The River Valley Property was covered by this withdrawn area and as a result, most of the River Valley Intrusion was never explored for its PGM-Cu-Ni potential.

The earliest recorded work on the River Valley property was by Kennco Explorations (Canada) Ltd. in 1968, at which time they conducted an airborne Mag-EM survey over Janes, Davis, Henry and Dana Townships.

Prospecting in the Dana Lake area by prospectors L. Luhta, R. Bailey and R. Orchard, (August 1998) resulted in the initial discovery of mineralization in the Dana Lake and Azen Creek areas.

Property Geology

Geological Setting

Regional Geology

The River Valley property is primarily underlain by rocks of the River Valley Intrusion (RVI), a large Paleoproterozoic (ca. 2.56 to 2.47 Ga) intrusion that forms part of the Huronian-Nipissing Magmatic Province (HNMP) or the Huronian Metallogenic Province (HMP)

Local Geology

The RVI covers more than 100 km2 and lies adjacent to, and straddles the Grenville Front within the Grenville Province and the Grenville Front Tectonic Zone (GFTZ). The GFTZ represents a complex zone, several kilometres wide and consisting of generally southeast-dipping imbricate thrust faults. In the area of the River Valley property, the GFTZ is located along the westernmost edge of the claims where it is represented by a system of eastward-dipping (10-25°) thrust faults. This fault system separates the intrusive rocks of the RVI from younger sedimentary and intrusive rocks of the Huronian Supergroup (includes Nipissing Diabase). It is likely that intrusive rocks of the RVI interdigitated within Huronian rocks along the fault-bound western contact.

Within Pardo Township, a north-trending apophysis of the RVIappears to be in fault contact with older (Archean Superior Province) mylonitic granitic rocks. In Dana Township the western boundary is in fault contact with rocks of the Southern Province, and the eastern and northern boundaries are in igneous contact with Archean migmatite and paragneiss of the Superior Province. The eastern and northern boundaries were previously mapped as being in contact with rocks of the Grenville Province (cf. Lumbers, 1973).

The RVI can be separated into two main areas on the basis of structural coherence and preservation of primary igneous features such as contacts and layering. The eastern part of the RVI, located primarily in Dana and Crerar Townships, is represented by the best preserved portions of the intrusion and as such the most prospective areas for discovery. PFN’s River Valley property covers about 40% of this area including about 10 km of highly prospective northern igneous contact. Further to the west, in Henry, Janes, Loughrin, Street and Awrey Townships, the geology of the western part of the RVI is complicated by the effects of Grenville metamorphism. In this area the rocks are attenuated, folded and structurally modified such that most of the primary features are absent.

Property Geology

The River Valley property as mapped by PFN, includes three main mineralized areas with anomalous PGM-Cu-Ni sulphide mineralization: the Dana Lake Area, Lismer’s Ridge, and Azen Creek Area.

The Dana Lake Area of the River Valley property lies within a north-trending portion of the River Valley Intrusion (RVI). This region of the RVI likely represents an offshoot of the main intrusive body and appears to be an up-thrust and rotated portion of the intrusion. In its current position, the Dana Lake Area represents a lower stratigraphic position in the intrusion that is now oriented sub-vertical relative to its original, near-horizontal position. The basal contact of the intrusion undulates in both the horizontal and vertical direction and this undulation is probably a primary igneous contact feature. However, the area has been structurally disturbed with evidence for dip-slip, strike-slip and rotational displacement on the centimetre to metre scale. Steeply dipping (>80°), decimetre- to metre-scale, modally layered rocks of the River Valley intrusion over ly the contact-related, mineralized breccia unit and are truncated along the western edge of the intrusion by the Grenville Front Fault.

Located about 1.3 km southeast of the Dana Lake Area, Lismer’s Ridge appears to be located within a similar geological setting to that of the Dana Lake Area with the major geological units dipping steeply (70-90°) to the southwest. However, unlike the Dana Lake Area, a much thicker stratigraphic section exists above (south to southwest) the mineralized breccia unit. In contrast to the Dana Lake Area, the rocks that are exposed at Lismer’s Ridge are generally more foliated and contain a higher proportion of chlorite-actinolite.

The Azen Creek Area, located about 6 km southeast of the Dana Lake Area appears to be situated stratigraphically higher (south) in the intrusion than the mineralized breccia at the Dana Lake Area and at Lismer’s Ridge. In general, the rocks of the RVI in this area appear to dip shallowly (<60°) toward the south-southeast.

Exploration - Current and Future

In 1999, Pacific North West Capital Corp. (PFN) optioned the Luhta, Bailey and Orchard claims and with joint-venture partners Anglo American Platinum Corporation Ltd. (Amplats) subsequently completed an approximately $350,000 surface exploration program. An exploration program consisting of detailed and regional work was undertaken and samples were assayed for PGE, Ni, Cu and Au.

In 2000, Pacific North West Capital Corp. and joint-venture partners Anglo American Platinum Corporation Ltd. completed an approximately $1,650,000 Phase II surface exploration program which included an expansion of the previously completed detailed and regional work, geological mapping and sampling. In addition geophysical surveys were undertaken which included both induced polarization and magnetometer surveys. A total of 6778 metres of diamond drilling was undertaken in three phases. A total of 40 holes were completed with the majority of holes being drilled in the Dana Lake area. Samples were assayed for for Au, Pt, Pd, Ni, Cu and selected ones for Rh and 30 element ICP analysis was carried out on many of the samples.

Following consultation with Anglo Platinum, a $2 million CDN Phase IV exploration program was implemented for the project budget year November 1, 2000 - October 31, 2001. The majority of the program was focused on drilling and targeted the Dana North, Dana South and Lismer's Ridge Zones.

The majority of the exploration work conducted in 2002 and 2003 was drilling. Please see the drilling section of this annual report for a continued discussion of Exploration History for exploration conducted in the ensuing years. PFN believes that the data generated from the work conducted on its property to be reliable. The 2004/2005 program consisted of additional drilling in conjunction with surface mapping and sampling.

In 2005-2006 (Phase 8), additional mapping and drilling was carried out. In 2006 (Phase 9), further mapping is underway.

Mineralization

The River Valley project includes three main areas of PGM-Cu-Ni sulphide mineralization: Dana Lake Area, Lismer’s Ridge, and Azen Creek. Dana Lake, located within the northwest corner of the claim group, consists of 7 main areas from north to southThese seven zones of PGM-Cu-Ni mineralization extend intermittently over a strike length of >900 m. The first six are now combined as Dana North Zone and seventh as Dana South Zone. At Lismer’s Ridge, surface mineralization is intermittently exposed over a NW-SE strike length of greater than 800 m, where it occurs within a similar geological environment to the Dana Lake Area.

At the Azen Creek Area, located about 6 km southeast of the Dana Lake Area, breccia-hosted mineralization is exposed in outcrop, located about 200 m south of the intrusive contact. The mineralization at the Azen Creek Main showing represents a different style of mineralization than at Dana Lake Area or Lismer’s Ridge in the hanging wall in a setting akin to Mustang Minerals Ltd. / Implats mineralization on the adjacent property to the south.

Exploration of the River Valley property from 1999 to 2001 has shown that PGM mineralization (Pt+Pd+Au±Rh) exceeding 200 ppb PGE occurs extensively within a sequence of felsic to mafic magmatic breccias and fragment-bearing units that have been intermittently exposed and drill-tested along a prospective +10 km long intrusive contact.

The following italicized text was excerpted from a report entitled, “Revised Mineral Resource Estimate, Dana Lake and Lismer’s Ridge Deposits incorporating the Phase VI Drilling, River Valley PGM Project, Ontario for Pacific North West Capital Corp”, dated June 10th, 2004, by Derry, Michener, Booth and Wahl Consultants Ltd. In March 2006, The mineral resources table was updated by Mr Ron Simpson of GeoSim services. Mr Simpson was responsible for the calculation of the resources estimate in the Derry Mitchener and Wahl report. The March 2006 report included all of the drill holes from the phase 7 program.

Drilling

Drilling of 416 holes, totalling 83,838 metres, was been carried out in six phases between February 28, 2000 and April 30, 2004.

NDS Drilling of Timmins, Ontario, supplied drilling services under contact to PFN for Phases I-IV. Bradley Bros. Drilling of Noranda was used for Phase V and VI. All core produced was of NQ diameter.

Phase I to V and early Phase VI drilling was focussed primarily on the Dana Lake and the Lismer’s Ridge Area. Phase VI drilling was later expanded to include several new zones in the central and south-eastern parts of the property including the Varley area.

A summary of each phase of drilling is as follows:

Phase I: This was completed between February 28 and March 19, 2000. It consisted of 2000 metres in 13 holes and was designed to test the strike and depth of the known surface mineralization at the Dana Lake Area. In addition, the drill program was aimed at testing the correlation between induced polarisation anomalies and subsurface sulphide mineralization.

Phase II: This was completed between June 12 and July 18, 2000. 2820.8 metres were drilled in 14 holes to further test the strike and depth of known surface mineralization at the Dana Lake Area.

Phase III: This was completed between September 6 and 25, 2000 and consisted of 1958.50 metres in 13 holes. The program was designed to further test the strike and depth of known surface mineralization at the Dana Lake Area, and to provide an initial test of subsurface mineralization at Lismer’s Ridge.

Phase IV: 31 drill holes were completed between February 1 and March 22, 2001 when the program was temporarily shut down for data consolidation. The program resumed May 14th and 67 more holes were completed by July 25th. Assay results for the last 14 holes of the total of 98 holes (16012.44 metres) were released September 26, 2001. This program was designed to increase drill density on the Dana North, Dana South and Lismer’s Ridge Zones, thus improving the confidence level, so that an indicated mineral resource could be estimated.

Phase V: A total of 43 holes were completed on Dana South and Lismer’s Ridge between February 28,2002 and March 2, 2002 in the first stage. The program resumed on April 22,2002 and 33 additional holes were completed by July 16, 2002. A total of 7 holes (1302 metres) were drilled in an initial test of the Banshee Zone, located about 600 metres south of the Dana Lake South Zone.

Phase VI: A total of 107 holes were completed at Dana Lake and Lismer’s Ridge between November 7, 2002 and June 26, 2003. Total metres drilled amounted to 25,365. Phase VI drilling continued elsewhere on the property until May, 2004

Phase VII: A total of 103 holes were completed in the Pardo, Banshee, Lismer Extension, Lismer, Casson, Drop, Varley, Azen South, Azen North and Jackson Flats areas. Drilling in these areas was largely reconnaissance in nature and based on the sampling, mapping and geophysical surveys carried out on the property during the Phase VII exploration program, and resulted in the discovery of the zones outlined.

Phase VIII (2005): A program of detailed surface mapping was undertaken across the eastern half of the property, and followed up by drill holes to test the RVI stratgraphy.

Phase IX (2006): A further program of detailed surface mapping has commenced on the western and southern portions of the property to further define geological features of interest for future drilling.

Sampling and Analysis

A rigorous program of sampling and analysis was undertaken. The core samples are taken continuously from drilling at widths with a maximum of 1.0 metres. The samples taken are based on the following criteria, geology and sulphide content. In cases where mineralised is non existent or weakly mineralised the sample interval is increased to 1.5 metres. In general core recovery is excellent with recoveries on average exceeding 95%.

“At XRAL laboratory all shipments are unpacked and arranged in numeric order. All drill core samples are first crushed such that 90% of the sample passes a -10 mesh (coarse) screen; all crushed rejects are stored for the client. The crushing equipment is cleaned with air and/or a brush between samples. After crushing, a 500g riffle-split sample is collected and pulverized such that 90% passes a -200 mesh (74mm openings) screen. As before, all equipment is cleaned with air and/or brush between samples. A 30g sample is then taken from this fine-grained pulp material.

Core samples are analyzed for Pt-Pd-Au using standard lead fire assay, followed by dissolution with aqua regia, and measurement with an ICP finish. Lower limits of detection (30g sample) are 1ppb for Au and Pd and 10 ppb for Pt; upper limits are 10,000 ppb for Au-Pt-Pd by ICP. Concentrations of Cu-Ni are determined by aqua regia / ICP methods and generally have lower limits of detection of 0.5 ppm for Cu and 1 ppm for Ni; upper limit for both Cu and Ni is 10,000 ppm (1%).”

Security of Samples

Samples are logged initially in the field by a field geologist and secured for transport and driven to the PFN core shack. The core is then logged by a geologist and the data is entered into a drill core logging program. The core is cut in even sections and then rinsed to remove any excess material. Half of the core is placed in a plastic bag with a tag to be sent for assay.. The samples are trucked to X-Ral Labs, Mississauga, Ontario for preparation and then shipped to XRAL Labs in Rouyn- Noranda, where they are assayed for Pt, Pd, Au, Cu, and Ni; from time to time a limited number of specified samples are analyzed for Rh.

The remaining section is placed into a core box and is duly tagged as well. The outside of the core box has metal tag stapled to it which indicates the hole number and meter interval. Lids are then strapped tightl closed and then are stored at the core storage compound located on the grounds of the Fielding Road core shack; the main building itself is secured via a monitored alarm system (motion and door detectors).”

DMBW observed the core handling and transportation from the field to the secure core shack and fenced compound, and the core sampling process and found that all procedures were carried out in a proper and workmanlike manner.

It should be stressed that all technical work is also reviewed by Anglo Platinum personnel who visit the property periodically and provide insight into interpretation and drill targets.

Mineral Resource and Mineral Reserve Estimation – Mineral Deposits

Mineral Resource, the terms “mineral resource”, “inferred mineral resource”, “indicated mineral resource” and “measured mineral resource” have the meanings ascribed to those terms by the Canadian Institute of Mining, Metallurgy and Petroleum, as the CIM Standards on Mineral Resources and Reserves Definitions and Guidelines adopted by CIM Council on August 20, 2000, as those definitions may be amended from time to time by the Canadian Institute of Mining, Metallurgy and Petroleum.

Measured Mineral Resource

A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.

Indicated Mineral Resource

An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

Cautionary Note to US Investors concerning estimates of Inferred Resources. This section uses the terms “inferred resources”. We advise US investors while those terms are recognized and required by Canadian regulations, the US Securities and Exchange Commission does not recognize it. “Inferred Resourcs” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category orwill ever be converted into reserves. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or prefeasibility studies, except in rare cases. US investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally minable.

Inferred Mineral Resource

An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

The following is a summary of the March 2006 Resources update, prepared by Geosim Services Inc.:

Table 1: Measured and Indicated Resources of 30.5 million tonnes containing 953,900 ounces of palladium (0.97 g/t), 329,500 ounces of platinum (0.34 g/t) and 59,500 ounces of gold (0.061g/t) with an additional 2.3 million tonnes containing 67,000 ounces of palladium (0.87g/t), 23,800 ounces of platinum (0.31g/t) and 4,000 ounces of gold (0.05 g/t) of Inferred Resources using a 0.7 g/t cut off (pt/pd).

Table 2: Containing Higher Grade Measured and Indicated Resources of 19.3 million tonnes containing 733,000 ounces palladium (1.18 g/t), 245,100 ounces of platinum (0.39 g/t) and 43,600 ounces of gold (0.07 g/t) with an additional 881,000 tonnes containing 38,400 ounces of palladium (1.36 g/t), 13,100 ounces of platinum (0.46 g/t) and 2,100 ounces of gold (0.07 g/t) of Inferred Resources using a 1.0 g/t cut off (pt/pd).

The updated mineral resource estimate was completed by Ron Simpson of Geosim Services Inc., in conjunction with John Londry, VP Exploration for PFN. Resource block modeling was carried out by Geosim based upon geological modeling conducted in-house by PFN, and incorporated all diamond drilling to March 31^st, 2005 (86,557 metres of drilling and 422 drill holes).

A summary of the mineral resources follows. The summary uses a 0.7 g/t cut off grade. Table 2 uses a significantly higher cut off of 1.0 g/t.

Table 1: 2006 River Valley Updated Resource Estimate (cut-off grade 0.70 g/t Pt+Pd)

Measured Resource

COMPARATIVE 3E

DEPOSIT

Tonnes

Pt+Pd

Contained Ounces (000's)

2004 Resource Estimate

(0.7g/t cutoff)

000s

g/t

Pt+Pd

Oz (000)

Dana North

2,623

0.080

0.428

1.327

0.12

0.02

1.755

1.835

6.8

36.1

111.9

148.0

154.8

Dana South

1,496

0.100

0.625

2.122

0.16

0.03

2.747

2.847

4.8

30.1

102.0

132.1

136.9

Lismer's Ridge

4,411

0.062

0.357

0.982

0.10

0.02

1.339

1.401

8.8

50.6

139.2

189.8

198.6

Lismer North

0.0

Varley

0.0

Total

8,530

0.074

0.426

1.288

0.12

0.02

1.714

1.788

20.4

116.8

353.2

470.0

490.4

Table 1: 2006 River Valley Updated Resource Estimate (cut-off grade 0.70 g/t Pt+Pd) - Continued

Indicated Resource

COMPARATIVE 3E

DEPOSIT

Tonnes

Pt+Pd

Contained Ounces (000's)

2004 Resource Estimate

(0.7g/t cutoff)

000's

g/t

Pt+Pd

Dana North

5,881

0.054

0.278

0.777

0.09

0.02

1.055

1.109

10.2

52.6

146.9

199.5

209.6

Dana South

3,516

0.071

0.380

1.229

0.11

0.02

1.609

1.680

8.0

42.9

138.9

181.9

189.9

Lismer's Ridge

7,439

0.046

0.255

0.667

0.08

0.02

0.922

0.968

11.1

61.0

159.4

220.5

231.5

Lismer North

1,333

0.058

0.316

0.911

0.11

0.03

1.227

1.285

2.5

13.5

39.0

52.6

55.0

0.0

Varley

3,855

0.059

0.345

0.939

0.07

0.02

1.283

1.342

7.3

42.7

116.3

159.1

166.3

0.0

Total

22,024

0.055

0.300

0.848

0.09

0.02

1.149

1.204

39.0

212.8

600.7

813.4

852.4

631.0

Measured + Indicated

COMPARATIVE

DEPOSIT

Tonnes

Pt+Pd

Contained Ounces (000's)

2004 Resource Estimate

(0.7g/t cutoff)

000's

g/t

Pt+Pd

Dana North

8,504

0.062

0.324

0.947

0.10

0.02

1.271

1.333

17.0

88.6

258.9

347.4

364.4

Dana South

5,012

0.079

0.453

1.496

0.13

0.02

1.949

2.028

12.8

73.0

241.1

314.1

326.8

Lismer's Ridge

11,850

0.052

0.293

0.784

0.09

0.02

1.077

1.129

19.9

111.7

298.6

410.3

430.2

Lismer North

1,333

0.058

0.316

0.911

0.11

0.03

1.227

1.285

2.5

13.5

39.0

52.6

55.0

0.0

Varley

3,855

0.059

0.345

0.939

0.07

0.02

1.283

1.342

7.3

42.7

116.3

159.1

166.3

0.0

Total

30,554

0.061

0.335

0.971

0.10

0.02

1.306

1.367

59.5

329.5

953.9

1283.3

1342.8

1121.4

Inferred

COMPARATIVE

DEPOSIT

Tonnes

Pt+Pd

Contained Ounces (000's)

2004 Resource Estimate n

(0.7g/t cutoff)

000's

g/t

Pt+Pd

Dana North

0.035

0.209

0.559

0.07

0.02

0.769

0.803

0.0

0.3

0.7

1.0

1.1

Dana South

552

0.047

0.229

0.648

0.08

0.02

0.876

0.923

0.8

4.1

11.5

15.5

16.4

Lismer's Ridge

330

0.039

0.219

0.529

0.08

0.02

0.748

0.788

0.4

2.1

5.1

7.2

7.7

Lismer North

546

0.073

0.419

1.224

0.12

0.03

1.644

1.717

1.3

7.4

21.5

28.9

30.2

0.0

Varley

948

0.050

0.326

0.925

0.07

0.02

1.251

1.301

1.5

9.9

28.2

38.1

39.6

102.0

Total

2,389

0.053

0.309

0.873

0.09

0.02

1.182

1.235

4.0

23.8

67.0

90.8

94.9

127.1

Table 2: 2006 River Valley Updated Resource Estimate (cut-off grade 1.0 g/t Pt+Pd)

Measured Resource

DEPOSIT

Tonnes

Pt+Pd

Contained Ounces (000s)

000s

g/t

Dana North

2,523

0.082

0.435

1.354

0.12

0.02

1.790

1.871

6.6

35.3

109.8

151.8

Dana South

1,495

0.100

0.626

2.122

0.16

0.03

2.748

2.848

4.8

30.1

102.0

136.9

Lismer's Ridge

3,976

0.064

0.368

1.018

0.10

0.02

1.385

1.449

8.2

47.0

130.1

185.3

Lismer North

Varley

Total

7,994

0.076

0.437

1.331

0.12

0.02

1.768

1.844

19.6

112.4

342.0

474.0

Indicated Resource

DEPOSIT

Tonnes

Pt+Pd

Contained Ounces (000s)

000s

g/t

Dana North

3,067

0.061

0.320

0.920

0.09

0.02

1.240

1.301

6.0

31.5

90.7

128.3

Dana South

3,304

0.072

0.389

1.266

0.11

0.02

1.655

1.727

7.6

41.3

134.5

183.4

Lismer's Ridge

2,140

0.054

0.302

0.824

0.09

0.02

1.127

1.180

3.7

20.8

56.7

81.2

Lismer North

716

0.071

0.394

1.183

0.13

0.03

1.577

1.648

1.6

9.1

27.2

37.9

Varley

2,082

0.075

0.448

1.224

0.09

0.02

1.671

1.747

5.1

30.0

81.9

117.0

Total

11,309

0.066

0.365

1.076

0.10

0.02

1.441

1.506

24.0

132.6

391.1

547.7

Measured + Indicated

DEPOSIT

Tonnes

Pt+Pd

Contained Ounces (000s)

000s

g/t

Dana North

5,590

0.070

0.372

1.116

0.11

0.02

1.488

1.558

12.6

66.8

200.6

280.0

Dana South

4,800

0.080

0.463

1.533

0.13

0.02

1.995

2.076

12.4

71.4

236.5

320.3

Lismer's Ridge

6,116

0.060

0.345

0.950

0.10

0.02

1.295

1.356

11.9

67.8

186.8

266.6

Lismer North

716

0.071

0.394

1.183

0.13

0.03

1.577

1.648

1.6

9.1

27.2

37.9

Varley

2,082

0.076

0.448

1.224

0.08

0.02

1.672

1.747

5.1

30.0

81.9

117.0

Total

19,303

0.070

0.395

1.181

0.11

0.02

1.576

1.646

43.6

2451

733.0

1021.7

Inferred

DEPOSIT

Tonnes

Pt+Pd

Contained Ounces (000s)

000s

g/t

g/t

Dana North

Dana South

104

0.053

0.276

0.819

0.09

0.02

1.094

1.147

0.2

0.9

2.7

3.8

Lismer's Ridge

Lismer North

345

0.091

0.524

1.586

0.14

0.03

2.110

2.201

1.0

5.8

17.6

24.4

Varley

432

0.063

0.464

1.301

0.07

0.01

1.765

1.828

0.9

6.4

18.1

25.4

Total

881

0.073

0.465

1.356

0.10

0.02

1.821

1.894

2.1

13.1

38.4

53.6

The new resource estimate includes results only from the North Lismer and Varley Zone.

Resource estimation was constrained by 3 dimensional solid models using Surpac^© Vision software, developed from geological and analytical data. Block estimation was carried out by ordinary kriging and inverse distance to the third power using 2 metre downhole composites. For the North Lismer model, one high outlier was capped at 3 g/5 Pt and 9 g/t Pd and for Varley, one high assay interval was capped at 10 g/t Pd prior to compositing.

Cut-off Parameters

The cut off parameter used for reporting block model statistics within mineralized zone constraints is a combined Pt+Pd grade. The resources within each zone are reported for cutoffs ranging from 0.0 to 1.5 g/t Pt+Pd (PGE). The cutoffs used for the summary resources are 0.7 g/t and 1.0 g/t PGE. This values are based on historical resource estimates for the Lac des Iles Mine 0o.7 g/tPGE) which is the only active Pt/Pd producer in the Canada. In the estimation no allowance has been made for the respective precious metal prices, or recoveries.

(In the estimation no allowance has been made for the respective precious metal prices or recoveries).

Exploration

A Phase 7 exploration program was completed on the property during 2004 and mid 2005. The program completed 20,740 metres of diamond drilling, metallurgical testing and the collection of a 40 tonne bulk sample for metallurgical testing on the Dana North and Dana South Zones. The budget was set at $3.0 million dollars.

In the Phase 7 program particular emphasis was placed on expanding targets identified by reconnaissance drilling, geophysics, and geological mapping especially along the northern contact of the intrusive. The known platinum, palladium mineralization has been identified within the contact breccia zone over a strike length in excess of 15 kilometers. The mineral resource estimates have been primarily concentrated in the Dana Lake and Lismer’s Ridge Zones over a 3 kilometer strike length.

In 2005 a $1.5 million budget (Phase 8) was approved by the joint venture. The program included the processing of the bulk sample at Anglo Platinum’s facilities in South Africa, and additional surface detailed mapping and geophysical work. A series of drill holes were completed at the end of 2005 to test geological interpretations for the mapping programs. A series of these drill holes located south of the Azen zone intercepted mineralized breccias and horizons within the River Valley Intrusive.

In 2006 the Joint Venture has authorized a further $1.1 million (phase 9) lease survey and mapping program to determine the controls on mineralization within the intrusive complex. At the end of 2006 it is expected that the JV will be in a position to receive a lease on the property from the Ontario Government.

(II)

Agnew Lake Property

Ownership

By agreement dated August 15, 2000 and amended August 16, 2001 and December 2, 2003, the Company could have acquired a 50% interest in certain mineral claims, known as the Agnew Lake property, located in the Shakespeare, Dunlop, Shibananing and Gough Townships, Sudbury Mining District, Ontario. As consideration the Company, at its option, was required to incur $500,000 exploration expenditures on the property, issue 350,000 shares, that have been issued, and make option payments of $200,000 which payments have been made.

During the year the Company terminated this agreement. Accordingly, all acquisition and exploration costs previously incurred have been written off.

(III)

ProAm Property

Ownership

By agreement dated 12 October 2001, the Company and a third party (collectively “the optionees”) can acquire a 100% interest (50% each) in certain mineral claims, known as the ProAm property, located in the Dunlop and Shakespeare Townships, Sudbury Mining District, Ontario. As consideration, the optionees, at their option, must collectively incur $400,000 ($35,198 incurred as of 30 April 2005) of exploration expenditures on the property by 12 October 2005. In addition, the Company has paid cash payments of $30,000 and issued 21,000 of the Company’s shares.

During the year, the Company terminated this agreement. Accordingly, all acquisition and exploration costs previously incurred have been written off.

(IV)

Agnew Lake Farm-In

Ownership

By agreement dated 25 May 2001 and amended 10 October 2003, the Company and the underlying optionor collectively optioned to Kaymin up to a 60% interest (30% related to the Company’s interest) in the Agnew Lake property and the ProAm property, located in the Sudbury region, Ontario.

Kaymin may, at its option, earn a 49.5% interest in the properties by making cash payments to the Company and the underlying optionor of $200,000 each (received), and advancing funds for exploration and development expenditures as follows:


			Cumulative Amounts
By 31 December 2001	(advanced)	$	1,400,000
By 31 December 2002	(advanced)	$	2,650,000
By 31 December 2004	($3,299,349 advanced)	$	4,150,000
By 31 December 2005		$	6,000,000

Although the Company has received the full amount of these funds from Kaymin, the Company, as Manager of the project, has not yet incurred the full amount in exploration expenditures on the property. As at 30 April 2006, the funds advanced by Kaymin less the exploration expenditures incurred, has been recorded as a cash call payable of $1,238 (2005 - $24,267).

During the year, Kaymin terminated this agreement.

(V)

Sargesson Lake and Kelly-Davis Properties

Ownership

The Sargesson Lake property comprises 15 unpatented mining claim units (240 ha) located in the Janes Township. The Kelly-Davis Township property comprises 16 unpatented mining claim units (256 ha) located in the Kelly and Davis Townships and 12 unpatented mining claim units (192 ha) located in the Kelly Township (the 12 unit claim block is held 100% by the Company). The properties are 100% owned by the Company. As consideration, the Company paid $68,400 and incurred $30,000 in exploration expenditures. The property is subject to a 2% NSR. The Company can purchase 1% of the NSR from the vendors for $400,000 and has the right of first refusal on the remaining 1% NSR. The Company has no further plans to expend money on the property at this time.

(VI)

West Timmins Nickel Project

Ownership

By agreement dated 28 October 2004, the Company may earn up to a 100 % interest in the West Timmins Nickel Project from Falconbridge Inc. (“Falconbridge”). The project is located in the Timmins region of Ontario.

Under the terms of the agreement, the Company, at its option, will spend $4,000,000 over a four-year period in order to vest with a 100% interest in the project. Falconbridge, for its part, will retain a 2% NSR and may, under certain circumstances, back in and earn a 50% interest by spending two and a half times the aggregate expenditure incurred by the Company within four years. Falconbridge may further elect to earn an additional 10% interest by completing a feasibility study or incurring $20,000,000 expenditures on the property. Under the agreement, the Company will act as operator effective 1 January 2005.

Minimum aggregate exploration expenditures of $4,000,000 must be completed by 31 December 2008, as follows:


On or before 31 December 2005	(completed)	$	750,000
On or before 31 December 2006	(completed)	$	1,500,000
On or before 31 December 2007	($1,564,865 incurred)	$	2,500,000
On or before 31 December 2008		$	4,000,000

Under the agreement with Falconbridge, PFN may earn up to a 100% interest in the West Timmins Project. Under the terms of the agreement PFN will spend $4 million over a 4-year period in order to vest with a 100% interest in the Project. Falconbridge will retain a 2 % NSR and may, under certain circumstances, back in and earn up to a 65% interest by completing a feasibility study or spending $20 million on a feasibility study, whichever occurs first. Under the agreement PFN acts as Project Operator.

PFN’s exploration activities on the West Timmins Nickel Project are focused on nickel and associated metals. In addition to airborne geophysical surveys completed in late 2004, a detailed compilation of the historical work in the MFI was completed and has been used to help evaluate and prioritize conductors identified by the AeroTEM survey. In cooperation with Falconbridge, seven priority conductor anomalies have been identified based on geophysical responses, relation to the Montcalm deposit, geological settings and previous work over the conductors.

Follow up linecutting and EM surveys were initiated. Drill testing of the stronger geophysical and geochemical targets was carried out in early 2006. The most significant drill results were received in an area 5km southwest of the Montcalm mine, where large zones of sulphide mineralization were intercepted in intrusive breccia. Trace nickel and copper mineralization was intercepted in parts of the zone. Prior to spring breakup PFN initiated a program of geophysical surveys to cover the extensive area between the successful drill holes and the mine area, and Falconbridge agreed to continue the surveys on and over the mine on their property. The surveys have been laid out to look for sulphide mineral zones at depth associated with magnetic anomalies identified from the recent airborne surveys.

The Company has fulfilled the requirements of year 1&2 of the property option with the current work programs.

The West Timmins Project covers 355 square kilometres (87,720 acres) approximately 60kms west of Timmins, Ontario, Canada.

QUEBEC, CANADA

(I)

Glitter Lake Property, Quebec, Canada

Ownership

By agreement dated August 15, 2003, as amended April 30, 2005 and further amended on April 30, 2006, the Company can acquire, from CanAlaska Ventures Ltd. (CanAlaska), a company with directors in common, a 50% interest in certain mineral claims known as the Glitter Lake property, located in the province of Quebec.

As consideration, the Company, at its option, must issue shares, make payments and incur exploration expenditures as follows:


				Payments		Shares		Exploration Expenditures
On or before 15 April 2003	(completed)	$	-		-		$		50,000
Upon execution of agreement	(paid)		10,000		-				-
On or before 4 June 2004	(issued)		-		20,000				-
On or before 15August 2004	(paid)		15,000		-				-
On or before 28 May 2005	(issued)		-		20,000				-
On or before 15August 2005	(paid)		20,000		-				-
On or before 28 May 2006	(issued)*		-		20,000				-
On or before 15 April 2007			-		-				150,000
On or before 15 April 2008			-		-				200,000
On or before 15 April 2009			-		-				300,000
Total		$	45,000		60,000		$		700,000

*Issued subsequent to year-end

Upon the Company having vested with a 50% interest by completing the aforementioned payments and obligations, the Company may elect within 45 days to increase its interest to 60% by completing a bankable Feasibility Study within 24 months of having vested. In the event the Company does not complete a bankable feasibility study within two years, the Company agrees to make cash payments in the amount of $50,000 per annum for each year the Feasibility Study is not completed. Upon vesting with a60% interest the Company may elect within 90 days to earn a 70% interest in the property by placing the property into commercial production within 2 years from the date of this election. In the event that the bankable feasibility study indicates an Internal Rate of Return (IRR) in excess of 15%, the Company agrees to make annual cash payments of $50,000 to the Optionor for each year the project is not placed into comm ercial production.

In the event that a major mining company elects to participate in the project before the Company vests with a 50% interest, the Company will issue shares to the value of $100,000 to CanAlaska, within 15 days of the Company becoming vested, or such amount which will result in having the Company spent $1 million in exploration expenditures.

The property is subject to 1.5% NSR payable to a third party. The Company and CanAlaska will share the NSR buyout privileges in proportion to their respective interests.

In 2006 PFN negotiated a one year extension to the property option to enable negotiations to be carried out with an adjacent landowner.

The Glitter Lake Project is located in northeastern Quebec, approximately 135 km north –northeast of the town of Matagami. The property lies at the southwest end of a 40km long, north east trending belt of metavolcanic and sedimentary rocks intruded by a gabbroic body. The exploration target is PGM mineralization associated with copper-nickel sulphide mineralization.

NEWFOUNDLAND AND LABRADOR, CANADA

(I)

Konrad Mineral License 972M

Property

The Company holds a 50% direct and indirect interest in mineral license 972M which consist of 112 unpatented mining claim units located 70 km southwest of Nain, 2 km north of Konrad Brook and 40 km west of the Voiseys Bay Cu-Ni-Co deposit in Labrador, Newfoundland. As consideration, the Company issued 300,000 common shares. Access to the property is by helicopter from Nain. The properties are subject to a 2% NSR.

ALASKA, USA

(I)

Union Bay Platinum Property

The project is located 20 miles west of Ketchikan, Alaska. The exploration target is an enriched platinum bearing zone within or peripheral to a dunite core.

FIGURE 1: Location map for the Union Bay PGE prospect, Craig C1 and D1 quadrangles, Alaska

Ownership

By agreement dated October 1, 2002 and amended April 2, 2003, and February 4, 2004, the Company can acquire, from Freegold Ventures Limited (Freegold), up to a 50% interest in 785 claim units known as the Union Bay property, located in South East Alaska. As consideration, the Company, at its option, must subscribe to purchase a private placement of $165,000 (completed) and must issue shares and make payments as follows:


			Option Payments	Shares
Within 5 days of approval by regulatory authorities	(issued)	$	-		30,000
On or before the first anniversary of regulatory approval	(issued)		-		30,000
On or before 1 July 2003	(paid)		20,000		-
On or before 1 July 2004	(paid)		20,000		-
On or before 1 July 2005	(paid)		30,000		-
On or before 1 July 2006			30,000		-
Total		$	100,000		60,000

In addition to the above, minimum aggregate exploration expenditures of $1,000,000 must be completed by 1 July 2006, as follows:


On or before 1 July 2003	(completed)	$	30,000
On or before 1 July 2004	(completed)	$	30,000
Minimum aggregate on or before 1 July 2005	(completed)	$	400,000
Minimum aggregate on or before 1 July 2006	(completed)	$	1,000,000

The Company is responsible for the annual rents due on the property. These rental payments shall be made on or before August 1 of each year the agreement is in effect. In the Spring of 2003 an additional 394 claims were staked. An amendment dated February 4, 2004 was executed which deferred to rental payment until August 15 from the original August 1 deadline.

Upon the Company having vested with a 50% interest by completing the aforementioned payments and obligations, the Company may elect within 45 days to increase its interest to 60% by completing a feasibility study within 12 months of becoming vested. Upon vesting with a 60% interest, the Company may within 90 days elect to increase its interest to 70% by placing the property into commercial production.

Under an amendment dated April 2, 2003, in the event a major mining company elects to participate in the project before the Company vests with a 50% interest and subsequently vests with an interest in the property, the Company and the optionor shall each, at the time of vesting, be deemed to hold a 50% interest in the property and the Company shall relinquish its right to earn a 60% or 70% interest. The Company will issue shares to the value of $100,000 to Freegold within 15 days of the Company becoming vested. In addition, the Company will receive 100% of the first U.S. $60,000 received in cash payments from any third party agreement.

By joint venture agreement dated May 21, 2003 with Lonmin Plc (a major mining company), the Company and Freegold granted an option to Lonmin Plc for up to a 70% interest in the Union Bay platinum project. To earn a 60% interest, Lonmin Plc must incur, at its option, exploration expenditures of U.S. $815,000 (completed) in 2003 and a minimum of U.S. $1,000,000 per year in 2004, 2005 and 2006 and U.S. $750,000 for each year thereafter. Lonmin Plc may earn an additional 10% interest in the project by delivering a full feasibility study. Upon the decision, by the management committee to proceed to place the project into commercial production, Lonmin Plc will arrange 100% of the required financing on terms acceptable to all parties. Following commencement of commercial production, the Company and Freegold will each repay their share of the exploration costs and contribute pro rata to operating costs. The Company wa s the operator of the project during the exploration phase with Lonmin Plc.

In August 2005, Lonmin notified the Company of it intention to drop the exploration option. Since that time PFN has reduced the landholdings, but has maintained the project option, and presented exploration opportunities to other parties.

(II)

Kane Property

Ownership

The Company acquired 30 claims by staking in Alaska. No work is planned for the properties at this time.

(III)

Goodnews Bay Property

By agreement dated January 1, 2006, the Company can acquire, from Calista Corporation (“Calista”), a 100% interest in certain mineral claims knows as the Goodnews Bay property, located on the west coast of Alaska.

As consideration, the Company, at its option, must make payments and incur expenditures as follows:


			Payments		Exploration Expenditures
Upon execution of agreement	(paid)	US$	25,000	US$	-
On or before 31 December 2006			45,000		200,000
On or before 31 December 2007			55,000		250,000
On or before 31 December 2008			75,000		350,000
On or before 31 December 2009*			100,000		450,000
On or before 31 December 2010			-		700,000
Total		US$	300,000	US$

*US $100,000 annual payments to be made until completion of a feasibility study

US $250,000 annual payments to be made following completion of a feasibility study.

The Company has elected to expend the required US$200,000 - 2006 exploration expenditures. The Company shall have until December 1^st of each year the lease is in effect to commit to the following year's exploration expenditures.

After the Company has completed US$1.95 million expenditures on the property, it shall have a grace period of two years without obligation to perform additional work commitments, after which it will be required to expend a minimum of US$700,000 per annum, until a feasibility study is completed.

Once the Company completes a feasibility study the Company shall have no further work obligations for a subsequent period of four years in addition to the time remaining of the grace period of two years. After five years, the Company will continue to make cash payments of US $100,000 until such time as the feasibility study is completed. Upon completion of a feasibility study and until such time as the commencement of commercial production the Company will make cash payments of US $250,000 per annum. In addition, the Company will donate US$3,000 to the Calista Corporation Scholarship Fund each year the lease is in effect, until such time as a feasibility study is completed at which time the donation shall increase to US$5,000 per year. Following commencement of commercial production, the Company will provide $10,000 per annum to the scholarship fund.

The Company will pay a NSR to Calista of 1.5% or $100,000 per annum whichever is the greater from the commencement of commercial production for a period of five years or until payback of all capital expenditure on the project whichever is shorter; thereafter the royalty shall be tied to the price of platinum. Upon receipt of the feasibility study, Calista shall have one hundred and eighty (180) days in which to elect to acquire up to fifteen percent (15%) but in no event less than five percent (5%) operating interest in the project. At the time Calista elects to acquire an operating interest Calista shall pay the joint venture an initial contribution of two hundred percent (200%) of the agreed-upon pro-rata portion of exploration costs incurred by the Company, minus anniversary cash payments and scholarship contributions paid to Calista.

The property is located on the west coast of Alaska, south of Kuskokwin Bay on the Bering Sea, approximately 550 air miles south-southwest of Anchorage. The project is located near year round ice free tide water and the village of Platinum, which has a public airstrip. The mining lease encompasses an area of interest comprising about 82 square miles (212 square kilometers).

NEW ZEALAND

(I)

NEW ZEALAND PROPERTY

Ownership

The Company was granted an exploration permit in Longwoods and Takitimu, New Zealand. The Company has carried out detailed property compilation for both projects, but has not carried out extensive field work. The project review culminated with the recommended termination of the Takitimu licence in June 2006.

ITEM 5: OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Operating Results

The following discussion and analysis should be read in conjunction with the Company’s consolidated audited financial statements and related notes thereto included herein. The Company’s financial statements have been prepared in accordance with Canadian GAAP. Reference should be made to Note 13 to the financial statements for a discussion of the material differences from the amounts presented in Canadian GAAP to US GAAP.

Twelve Months Ended April 30, 2006 Compared to Twelve Months Ended April 30, 2005

Overview

River Valley, Ontario

In conjunction with our joint venture partner, Anglo Platinum, Pacific North West Capital is working diligently as the operator to further explore the River Valley PGM Project. Over $19 million has been committed to date by our partner on the 50/50 joint venture project, on which Anglo Platinum may earn an additional 10% interest by providing a feasibility study and an additional 5% by providing production financing. Over the last year we were pleased to report to you, an increase in the mineral resources, the completion of our Phase 8 program which indicated at least two new PGM zones, and the commencement of our Phase 9 $1.1 million field exploration program, while a shipment of a 40-tonne bulk sample was sent to Anglo Platinum's facilities in Johannesburg for metallurgical testing.

With the recent upward trends in platinum and palladium prices, we continue to remain encouraged with the results and progress achieved to date.

Goodnews Bay, Alaska

On April 12, 2006, the Company acquired a 100% working interest in a long-term lode exploration and mining lease on the Goodnews Bay ultramafic Platinum Complexes located on the west coast of Alaska. The Goodnews Bay Project is located near year round ice free tidewater and the village of Platinum, which has a public airstrip.

Under the Agreement, Pacific North West Capital is required to make cash payments of US$300,000 and incur exploration expenditures of US$1.95 million over the next five years.

The mining lease, with Calista Corporation, encompasses an area of 82 square miles (212 square kilometres). Previous placer operations in the streams draining the project area produced approximately 600,000 troy ounces of platinum.

Pacific North West Capital’s exploration program will focus on the search for economic lode platinum mineralization in the ultramafic intrusive complex which is believed to be the source of platinum placer deposits. The evaluation program will include the establishment of a base camp, checking and extending previous soil sampling, and sampling the Susie Mountain complex to determine the extent of PGM mineralization. Current drill targets will be evaluated in order to prioritize a proposed drill program.

West Timmins, Ontario

The West Timmins Nickel Project represents a significant initiative on the part of Pacific North West Capital to expand its exploration profile to nickel and associated metals. Covering 355 sq. km (87,720 acres) and located approximately 60 km west of Timmins, Ontario, the project is situated within the Montcalm Mafic Intrusive Complex (MFI), immediately adjacent to Falconbridge's new Montcalm nickel mine (proven and probable resources of 4.5 mil. tonnes grading 1.46% nickel and 0.68% copper). Your Company holds an option/joint venture from Falconbridge Ltd. on the West Timmins property to earn up to a 100% ownership interest by undertaking $4 million in expenditures. Under certain circumstances, Falconbridge Limited may back-in and earn up to a 65% interest by completing a feasibility study or spending $20 million towards a feasibility study, whichever occurs first.

Major Acquisition Program Underway

In late 2005, we took advantage of the strong market fundamentals and lunched an aggressive acquisition program to acquire new projects in Alaska, Ontario, Quebec, Manitoba and Latin America in order to add shareholder value.

Selected Annual Information

Unless otherwise noted, all currency amounts are stated in Canadian dollars.

The following table summarizes selected financial data for Pacific North West Capital Corp for each of the three most recently completed financial years. The information set forth below should be read in conjunction with the audited financial statements, prepared in accordance with Canadian generally accepted accounting principles, and related notes.


	Years Ended April 30,(audited)
	2006	2005	2004
Total Revenues	$264,895	$468,730	$380,952
General and administrative expenses	1,413,531	1,893,818	1,473,225
Mineral property cash costs incurred	2,317,567	3,121,092	1,899,117
Mineral property cash costs recovered	(1,233,212)	(2,180,484)	(1,585,714)
Income (loss) before other items Ø In total Ø Basic and diluted loss per share	(1,413,531) (0.04)	(1,893,818) (0.06)	(1,473,225) (0.06)
Net income (loss) from continuing operations Ø In total Ø Basic and diluted loss per share	(1,344,822) (0.04)	(1,894,297) (0.06)	(1,276,008) (0.05)
Totals Assets	5,681,742	6,070,616	7,202,319
Total long term liabilities	Nil	Nil	Nil
Cash dividends declared	Nil	Nil	Nil

Selected Quarterly Financial Information

The following selected financial information is derived from the unaudited interim financial statements of the company prepared in accordance with Canadian generally accepted accounting principles (“GAAP”).


			For the Quarters Ended (unaudited)
	April 30	Jan. 31	Oct. 31	July 31	April 30	Jan. 31	Oct. 31	July 31
	2006	2006	2005	2005	2005	2005	2004	2004
Total revenues	$69,122	$64,088	$82,239	$49,446	$211,651	$96,644	$110,944	$49,491
Net loss	448,228	370,747	210,839	315,008	805,495	532,268	297,395	259,139
Net loss per share	0.01	0.01	0.01	0.01	0.03	0.01	0.01	0.01
Total assets	5,681,742	6,339,675	6,509,615	6,688,929	6,070,616	6,508,816	6,802,520	7,015,719

Results of Operation

The year ended April 30, 2006 resulted in a net loss of $1,344,822 which compares with a loss of $1,894,297 for the same period in 2006. The loss for 2006 has been reduced by $387,649 which is the tax benefit associated with the renounciation of flow-through shares. Even though the full amount of $387,649 has been recorded as a future income tax recovery, the Company will probably never realize this benefit. General and administrative expenses for the year ended April 30, 2006 were $1,413,531 a decrease of $480,287 over the same period in 2005. The aggregate stock-based compensation of $204,879 was recorded as compared to $582,434 in the previous year. The stock-based compensation is broken down on the income statement according to the applicable expense category. Interest and bank charges increased by $35,015 as the Company settled a dispute with the Canada Revenue Agency over the treatment of flow-through expenditures. Mineral property costs of $416,766 were written off as the Agnew Lake and ProAm projects were terminated. All other general and administrative costs were relatively the same compared to the previous year. A foreign exchange loss of $167,069 was reported as the Company had approximately $1,000,000 in US funds for which the exchange rate was detrimental during the year. Project management fees of $140,474 were earned during the year as compared to $317,329 in the previous year. This decrease in management fees was the result of the termination of the Union Bay Joint Venture and the Agnew Lake Farm-in agreement. Interest income was $115,571, an increase of $3,148 over the same period in 2005 as the interest rate on deposits increased even though the Company had less funds on deposit.

During the year ended April 30, 2006, the Company incurred mineral property cash costs of $2,317,567 with $1,233,212 being funded by joint venture partners. A exploration program on the mineral property option agreement with Falconbridge in the Timmins area of Ontario cost $964,358 for cumulative expenditures of $1,621,461.

Shareholder relations and promotional activities undertaken by the Company, which included attendance at various trade shows, cost $194,637 for the period ended April 30, 2006, a decrease of $45,801 over the same period in 2005.

Contractual commitments

By agreement effective 1 December 2005, the Company entered into a five-year management agreement with a Company controlled by a director and chairman. Compensation is $7,350 per month for the first year, with a 5% increase on each anniversary date plus benefits. The chairman and director is also entitled to receive up to 20% of all stock options granted during the period that the agreement is in place. This agreement is automatically renewable for two-year periods. The Company may terminate the agreement at any time but will be responsible to pay the greater of the remaining amount under the contract or two years compensation.

The Company is committed under an operating lease with a Company controlled by Harry Barr for its office premises with the following minimum basic lease payments to the expiration of the lease on June 30, 2010. The Company is also responsible for its proportionate share of property taxes and operating costs. See “related party transactions” for details.

No mineral option payments have been included as they are being funded by various joint venture partners or may be terminated with appropriate notice. Further information on mineral option payments are disclosed in note 4 of the April 30, 2006 financial statements.


Year ended April 30,	2007	2008	2009	2010	2011	Thereafter

Management agreement	$90,040	$94,546	$99,273	$104,233	$62,538	-
Office lease	$32,760	$32,760	$32,760	$32,760	$5,460	-
Total	$122,800	$127,306	$132,033	$136,993	$67,998

Off-balance sheet arrangements

The Company has no off-balance sheet arrangements.

Critical accounting estimates

A detailed summary of all of the Company’s significant accounting policies is included in note 1 to the financial statements for the year ended April 30, 2006.

Significant estimates used in the preparation of these consolidated financial statements include, amongst other things, depreciation, determination of net recoverable value of assets, determination of fair value on taxes, and share compensation.

Changes in Accounting Policies

Variable interest entities

The Accounting Standards Board (AcSB) issued Accounting Guideline AcG 15 “Consolidation of Variable Interest Entities,” to harmonize the Guideline with the equivalent FASB Interpretation No. 46R, “Consolidation of Variable Interest Entities” (“VIE”). The Guideline provides criteria for identifying VIEs and further criteria for determining what entity, if any, should consolidate them. The Guideline is effective for annual and interim periods beginning on or after November 1, 2005, and upon adoption, will not materially impact the Company’s results of operations and financial position.

Financial Instruments and Other Instruments

Pacific North West Capital Corp.’s financial instruments consist of cash, accounts receivable, investments, amount due from River Valley Joint Venture, restricted cash – flow-through, accounts payable and cash call payable. Unless otherwise noted, it is management’s opinion that Pacific North West Capital Corp is not exposed to significant interest, currency or credit risks arising from the financial instruments. The fair value of these financial instruments approximates their carrying value unless otherwise noted.

Outstanding share data

The Company is authorized to issue unlimited common shares without par value. As at April 30, 2006, there were 35,112,452 outstanding common shares compared to 31,817,404 outstanding shares at April 30, 2005.

Directors, officers, employees and contractors are granted options to purchase common shares under the Company stock option plan. The terms and outstanding balance are disclosed in the table below.

A summary of the Company’s options at 30 April 2006 and the changes for the year are as follows:


Number outstanding 30 April 2005	Granted	Exercised	Expired/ Cancelled	Number outstanding 30 April 2006	Exercise price per share	Expiry date

214,000	-	-	(214,000)	-	$0.60	15 December 2005
40,000	-	-	(40,000)	-	$0.80	18 March 2006
200,000	-	-	-	200,000	$0.60	21 December 2006
90,000	-	-	-	90,000	$1.00	10 February 2007
150,000	-	-	-	150,000	$0.60	1 July 2007
795,000	-	-	-	795,000	$0.60	31 December 2007
585,000	-		-	585,000	$0.76	10 September 2008
1,980,000	-	-	(145,000)	1,835,000	$0.60 - $0.70	5 November 2007 5 November 2009
419,500	-	-	-	419,500	$0.83	28 February 2010
380,000	-	-	-	380,000	$0.60	3 May 2010
-	100,000		-	100,000	$0.40	13 July 2010
-	350,000		-	350,000	$0.40	3 February 2011
-	440,000		-	440,000	$0.40	19 April 2011
4,853,500	890,000	-	(399,000)	5,344,500

During the year ended April 30, 2006, 2,697,990 performance shares were reserved for issue. At the discretion of the Board, these shares may be issued to such arm’s length parties as the Board considers desirable to attract to the Company. To date, 350,000 performance shares have been issued at $0.01 per share.

Related party transactions

During the year ended April 30, 2006, the below related parties were paid the following: A total of $92,026 was paid to a Company controlled by Harry Barr, a Director and President of the Company for management services; pursuant to an office lease agreement dated July 1, 2005, a total of $53,746 was paid to a Company controlled by Harry Barr for office rent; a total of $30,648 was paid to a Company controlled by Taryn Downing, the Corporate Secretary of the Company for consulting services; a total of $38,970 was paid to a Company controlled by Gord Steblin, the Chief Financial Officer of the Company for accounting services; a total of $45,300 was paid to a Company controlled by Peter Dasler, the Vice-President of Business Development of the Company for engineering and consulting fees; a total of $50,500 was paid to a Company controlled by John Londry, the Vice-President of Exploration of the Company for engineering and consult ing services; and $36,450 in wages to Jag Sandhu, the Vice-President, Corporate Finance. Effective February 1, 2005, the outside directors are entitled to receive $500 per month, $500 per directors meeting and $500 per committee meeting. During the year, $16,000 was paid to directors.

Twelve Months Ended April 30, 2005 Compared to Twelve Months Ended April 30, 2004

Overview

In the fiscal year ended April 30, 2005, the Company undertook one of the most aggressive platinum group metals (PGM) exploration programs in North America, and firmly established Pacific North West Capital as a leader in platinum-palladium exploration.

In late 2004, we expanded our focus to include nickel exploration, capitalizing on strong market fundamentals and our in-house expertise in base metals exploration and development.

Our commitment towards aggressive exploration has been achievable through the financial support of our joint venture partners, Anglo American Platinum Corporation Limited (“Anglo Platinum”), the world’s largest primary producer of Platinum and Lonmin Plc., the world’s third largest primary Platinum producer. To date, these two joint venture partners alone have committed a total of $21.9 million in exploration funding, enabling your Company to achieve significant progress in both delineating mineral resources and reinforcing it’s track record of platinum/palladium exploration track record.

River Valley, Ontario

Developments at our joint venture with Anglo Platinum continue to progress most favourably. The $3.0 million Phase 7 program, completed in March 2005, comprised a total of 20,740 metres of diamond drilling, metallurgical testing and bulk sample collection. Extensive mineralization was reported in the newly discovered Lismer’s Extension zone and additional drilling, geophysics and geological mapping in the Varley, Varley Extension, and Pardo zones have demonstrated that the prospective target breccia extends intermittently 15kms along the intrusive contact. We are now working to compile the final results of the Phase 7 program, following which, a revised resource estimate incorporating new mineralization results from the Lismer Extension and Varley zones will be prepared.

In June 2005, a Phase 8 exploration budget of $1.5 million was approved by Anglo Platinum. This budget represents a significant new phase for the River Valley project. A portion of the newly approved budget is allocated towards third party economic modelling to assist the joint venture in its allocation of exploration resources as the project moves forward. The budget includes for the shipment of a 40-tonne bulk sample to Anglo Platinum’s facilities in Johannesburg for metallurgical testing. Further expenditures will be allocated towards an environmental baseline study, reclamation, property surveys and geological and geochemical studies.

Agnew Lake, Ontario

The Agnew Lake property is also subject to a joint venture with Anglo Platinum. The property overlies the Agnew Lake layered mafic intrusion, which is of comparable age and composition to the River Valley Intrusion and also carries substantial PGM values in magmatic breccias close to the intrusive contact.

Work on the project to date has included five phases of surface exploration, consisting of prospecting, stripping, rock sampling, geological mapping, and three phases of diamond drilling (37 holes, totalling 8,954.50 metres). Airborne and ground geophysics have also been completed. A final report is in progress and is expected to be released in the near future.

Union Bay, Alaska

Pacific North West Capital completed 5,973 feet of diamond drilling and 744 kms of airborne geophysical surveys as part of its 2004 exploration program.

In June, a budget of US$1.1 million has announced by the Company and joint venture partners Lonmin Plc and Freegold Ventures Limited to extend exploration activities for a third season. A total of 10,000 feet of diamond drilling as well as fieldwork are budgeted in this phase, which will test five separate targets identified from the 2004 drill program, airborne geophysical surveys and fieldwork.

West Timmins, Ontario

In November 2004, Pacific North West Capital established a new Nickel Division and entered into an agreement with Falconbridge whereby it may earn up to a 100% interest by undertaking exploration on the West Timmins nickel property. This broadening of focus into nickel is seen as a natural progression for the Company and is compatible with its principal PGM exploration business as many nickel deposits contain associated PGMs. The West Timmins Project is located adjacent to Falconbridge's new Montcalm Mine, which just recently received mine permit approval.

Pacific North West Capital recently completed a high-resolution airborne geophysical survey over the property holdings that surround the Montcalm Mine. The survey aimed at identifying similar style targets. A number of new targets were identified from this work and ground surveys are now being conducted to allow drill testing later this year.

Pacific North West Capital presently has over $5 million in working capital. We remain committed to developing our existing projects by way of joint venture agreements. In addition, your Company is now entering into an aggressive phase of new acquisitions whereby we will use internal funding to finance projects and add shareholder value.

Results of Operation

Business of Pacific North West Capital Corp

Pacific North West Capital Corp is an exploration stage company engaged in the acquisition, exploration and development of mineral properties of merit in Canada, the United States and New Zealand with the aim of developing them to a stage where they can be exploited at a profit or to arrange joint ventures whereby other companies provide funding for development and exploitation.

Selected Annual Information

Unless otherwise noted, all currency amounts are stated in Canadian dollars.


	Years Ended April 30,(audited)
	2005	2004	2003
Total Revenues	$468,730	$380,952	$284,804
General and administrative expenses	1,893,818	1,473,225	$1,364,612
Mineral property costs incurred	3,184,584	1,891,318	1,395,570
Mineral property costs recovered	(2,180,484)	(1,585,714)	(999,122)
Income (loss) before other items Ø In total Ø Basic and diluted loss per share	(1,893,818) (0.06)	(1,473,225) (0.06)	(1,364,612) (0.07)
Net income (loss) from continuing operations Ø In total Ø Basic and diluted loss per share	(1,894,297) (0.06)	(1,276,008) (0.05)	(1,323,658) (0.06)
Totals Assets	6,070,616	7,202,319	1,785,530
Total long term liabilities	Nil	Nil	Nil
Cash dividends declared	Nil	Nil	Nil

Selected Quarterly Financial Information


			For the Quarters Ended (unaudited)
	April 30	Jan. 31	Oct. 31	July 31	April 30	Jan. 31	Oct. 31	July 31
	2005	2005	2004	2004	2004	2004	2003	2003
Total revenues	$211,651	$96,644	$110,944	$49,491	$99,920	$96,092	$130,418	$54,522
Net loss	805,495	532,268	297,395	259,139	503,953	205,335	363,197	203,523
Net loss per share	0.03	0.02	0.01	0.01	0.02	0.01	0.01	0.01
Total assets	6,070,616	6,508,816	6,802,520	7,015,719	7,202,319	5,680,659	3,193,241	1,980,803

Results of Operations

The year ended April 30, 2005 resulted in a net loss of $1,894,297 which compares with a loss of $1,276,008 for the same period in 2004. General and administrative expenses for the year ended April 30, 2005 were $1,893,818 an increase of $420,593 over the same period in 2004. Stock-based compensation of $582,434 were recorded as compared to $223,000 in the previous year. The company adopted the new recommendations of CICA Handbook Section 3870, stock-based compensation and other stock-based payments, effective to all awards granted on or after May 1, 2002. Mineral property costs of $270,083 were written off while all other general and administrative costs were relatively the same compared to the previous year. A foreign exchange loss of $130,514 was reported as the company had approximately $1,000,000 in US funds for which the exchange rate was detrimental during the year. Project management fees of $317,329 were earned during the ye ar as compared to $280,354 in the previous year. Interest income was $112,423, an increase of $38,910 over the same period in 2004 as the company had more funds on deposit.

During the year ended April 30, 2005, the company incurred mineral property costs of $3,184,584 with $2,180,484 being funded by joint venture partners. A exploration program consisting of an airborne geophysical survey cost $625,112 over the newly acquired option agreement with Falconbridge in the Timmins area of Ontario.

Shareholder relations and promotional activities undertaken by the company, which included attendance at various trade shows, cost $240,438 for the period ended April 30, 2005, a decrease of $75,405 over the same period in 2004.

Critical Accounting Estimates

The preparation of the Company’s consolidated financial statements requires management to use estimates and assumptions that affect the reported amounts of assets and liabilities, as well as revenues and expenses. The most significant accounting estimates for the Company relate to the carrying value of its mineral property assets and accounting for stock-based compensation. The Company’s accounting policies are set out in full in Note 1 of the annual financial statements.

Mineral Property Costs

One of the most critical areas where estimates are used is in the area of the valuation of its carrying value of its mineral property costs. Under Canadian GAAP, the Company records its interests in mineral properties at cost. The costs of acquiring mineral properties and related exploration and development expenditures are deferred and would be amortized against future production following commencement of commercial production or are written off if the properties are sold, allowed to lapse or abandoned. General exploration, overhead and administration costs are expensed in the period incurred.

The estimated values of all properties are assessed by management on a continual basis. This assessment may be estimated by quantifiable evidence of a geological resource or reserve or the Company’s assessment of its ability to sell the property for an amount greater or less than the carrying value. If the carrying values exceed estimated recoverable values, then the costs are written down to the estimated recoverable values.

Management’s estimates of mineral prices, recoverable resources, and operating, capital and reclamation costs are subject to certain risks and uncertainties that may affect the recoverability of mineral property costs. Although management has made its best estimate of these factors, it is possible that changes could occur in the near term that could adversely affect management’s estimate of the net cash flows to be generated from its properties. The Company presently has no proven or probable reserves.

Option payments received are treated as a reduction of the carrying value of the related mineral property and deferred costs until the payments are in excess of costs incurred, at which time they are then credited to income.

Stock-Based Compensation

Another significant estimate relates to accounting for stock-based compensation. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in the subjective input assumptions can materially affect the fair value estimate, and therefore, the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s stock options granted/vested during the year.

Changes in Accounting Policies

Flow through shares

During the year ended April 30, 2005, the company adopted the new accounting pronouncement relating to flow through shares effective for all flow through agreements after March 19, 2004. Canadian Income Tax Legislation permits an enterprise to issue securities referred to as flow through shares whereby the investor can claim the tax deductions arising from the related resources expenditures. When resource expenditures are renounced to the investors and the company has reasonable assurance that the expenditures will be completed, future income tax liabilities are recognized (renounced expenditures multiplied by the effective tax rate) thereby reducing share capital.

If a company has sufficient unused tax losses and deductions (“losses”) to offset all or part of the future income tax liabilities and no future income tax assets have been previously recognized on such losses, a portion of such unrecognized losses (losses multiplied by the effective corporate tax rate) is recorded as income up to the amount of the future income tax liability that was previously recognized on the renounced expenditures.

Asset retirement

The CICA issued a new standard relating to asset retirement obligations effective for fiscal years beginning on January 1, 2004. The standard requires the recognition in the financial statements of the liability associated with the net present value of future site reclamation costs when the liability is incurred. These obligations are initially measured at fair value and subsequently adjusted for the accretion of discount and any changes to the underlying costs. The asset retirement cost is to be capitalized and amortized into operations over time. The company is currently assessing these requirements to ensure its complies with the new standards starting on May 1, 2004.

Financial Instruments and Other Instruments

Pacific North West Capital Corp’s financial instruments consist of cash and cash equivalents, accounts receivable, investments, amount due from River Valley joint venture, restricted cash – flow-through, accounts payable and cash call payable. Unless otherwise noted, it is management’s opinion that Pacific North West Capital Corp is not exposed to significant interest, currency or credit risks arising from the financial instruments. The fair value of these financial instruments approximates their carrying value unless otherwise noted.

Outstanding Share Data

The company is authorized to issue unlimited common shares without par value. As at April 30, 2005, there were 31,817,404 outstanding common shares compared to 31,551,004 outstanding shares at April 30, 2004.

Directors, officers, employees and contractors are granted options to purchase common shares under the company stock option plan. The terms and outstanding balance are disclosed in the below table.

A summary of the company’s options at 30 April 2005 and the changes for the year are as follows:


Number outstanding 30 April 2004	Granted	Exercised	Expired/ Cancelled	Number outstanding 30 April 2005	Exercise price per share	Expiry date
100,000	-	-	(100,000)	-	$0.46	1 July 2004
75,000	-	-	(75,000)	-	$0.76	1 September 2004
13,000	-	(13,000)	-	-	$0.44	20 October 2004
249,000	-	-	(35,000)	214,000	$0.60	15 December 2005
80,000	-	-	(40,000)	40,000	$0.80	18 March 2006
320,000	-	-	(120,000)	200,000	$0.60	21 December 2006
110,000	-	-	(20,000)	90,000	$1.00	10 February 2007
-	150,000	-	-	150,000	$0.60	1 July 2007
900,000	-	(5,000)	(100,000)	795,000	$0.60	31 December 2007
655,000	-		(70,000)	585,000	$0.76	10 September 2008
-	2,000,000	-	(20,000)	1,980,000	$0.60 $0.70	5 November 2007 5 November 2009
456,500	-	-	(37,000)	419,500	$0.83	28 February 2010 *
400,000	-	-	(20,000)	380,000	$0.60	3 May 2010 **
3,358,500	2,150,000	(18,000)	(637,000)	4,853,500

* During the year, the company extended the exercise date of these options from the original expiry date of 28 February 2005 to 28 February 2010.

** During the year, the company extended the exercise date of these options from the original expiry date of 3 May 2005 to 3 May 2010.

During the year ended April 30, 2005, 2,697,990 performance shares were reserved for issue. At the discretion of the Board, these shares may be issued to such arm’s length parties as the Board considers desirable to attract to the company. To date, 150,000 performance shares have been issued at $0.01 per share for total proceeds of $1,500. During the year ended April 30, 2005, a further 50,000 performance shares were allotted but not issued.

Related Party Transactions

During the year ended April 30, 2005, the below related parties were paid the following: A total of $101,240 was paid to a company controlled by Harry Barr, a Director and President of the company for management services; pursuant to an office lease agreement dated October 11, 2000, a total of $53,746 was paid to a company controlled by Harry Barr for office rent; a total of $42,538 was paid to a company controlled by Taryn Downing, an Officer of the company for corporate secretarial services; a total of $46,100 was paid to a company controlled by Gord Steblin, a Director and Officer of the company for accounting services; a total of $39,800 was paid to a company controlled by Peter Dasler, an Officer of the company for engineering and consulting fees; a total of $76,226 was paid to a company controlled by John Londry, an Officer of the company for engineering and consulting services; and $2,350 to Lindsay Bottomer, a Director of the company for consulting fees. Effective February 1, 2005, the outside directors are entitled to receive $500 per month, $500 per directors meeting and $500 per committee meeting. During the year, $4,500 has been accrued to directors.

The significant differences between Canadian and U.S. GAAP on the financial statements for the twelve months ended April 30, 2005 are as follows:

US GAAP requires that mineral property acquisition costs and deferred exploration expenditures be written off as incurred, or until economically recoverable proven and probable reserves are identified, at which time further costs incurred may be deferred. Mineral acquisition costs and deferred exploration expenditures during the year was $801,819.

The loss under Canadian GAAP for the year was $1,894,297. After adding mineral costs of $801,819 a loss under US GAAP of $2,696,116 is reported. The loss per share under Canadian GAAP is $0.06 as compared to a $0.08 loss per share under US GAAP.

Twelve Months Ended April 30, 2004 Compared to Twelve Months Ended April 30, 2003

Overview

During the year, PFN continued to explore the River Valley and Agnew Lake properties near Sudbury, Ontario with joint venture partner Anglo American Platinum Corporation Limited, and entered into a joint venture with Lonmin Plc, the third largest primary producer of platinum in the world, to explore the Union Bay Platinum project in Southeast Alaska. These programs, combined with expenditures on PFN’s other exploration programs represented one of the largest platinum group metal exploration company budgets in North America. Last years success has generated equally impressive exploration budgets and programs for 2004.

PFN believes its ability to joint venture its projects with the largest platinum group metal producers in the world is a testament to its exploration success and expertise.

River Valley-Anglo Platinum

During 2003 and early 2004 (to April 30th), a $5.3 million exploration program was carried out. The program included a 45,000 metre diamond drill program, which not only resulted in significantly upgraded mineral resources but also delineated numerous new PGM enriched targets for follow up in 2004. Nearly 5 additional kilometres of prospective strike length were delineated as a result of the Phase 6 program, which included diamond drilling, a SPECTREM geophysical survey and a surface exploration program. Anglo Platinum recently approved an additional $3.0 million budget to follow up on these new targets. This new Phase 7 program will include 15,000 metres of diamond drilling, follow up ground work, and bulk sampling. Additional drilling to the south of the existing resource zones is slated for 2004 and is expected to continue to delineate additional resources.

River Valley is the third stand-alone discovery of platinum group metals in North America in the last 20 years.

Union Bay – Lonmin Plc

In 2003, PFN as Operator carried out a US$900,000 mapping, drilling and sampling program funded by Lonmin, on the Union Bay property in Southeast Alaska, which resulted in the discovery of a significant new platinum-bearing zone, the Continental Zone. In May 2004, Lonmin committed to an additional US $1.2 million exploration program to further explore this promising property. Exploration will include airborne geophysics, diamond drilling, mapping and sampling.

Agnew Lake-Anglo Platinum

Exploration is currently in progress on the Agnew Lake project, which PFN is also jointly exploring with Anglo Platinum. Similar to the River Valley project, Anglo Platinum is providing all exploration funding for this project. A $250,000 budget has been approved for the 2004 Summer program.

General

All of the existing joint venture agreements designate PFN as Operator, and allow PFN to participate fully in the projects until commercial production is achieved with no equity dilution. PFN; however, remains fully conscious that in order to maintain its pre-eminent position in the industry it needs to continue to identify and explore additional significant platinum group metal projects through out North America. In keeping with this philosophy, the company is fully funding two independent programs, (Lac Manitou and Glitter Lake) this year in order to advance them to a joint venture stage. The projects are both located in Quebec, a mining-friendly jurisdiction, which will allow PFN to fully capitalize on its exploration expenditures due to the generous mineral exploration incentive programs offered by the Quebec government. PFN is currently funding a reconnaissance exploration program on its newly acquired Lac Manitou project, which has a number of mineralogical similarities to the River Valley project. A mapping and sampling program will be carried out in the summer of 2004.

Over the last year, our exploration success garnered the attention of several institutional investment funds. PFN is now held approximately 25% by institutional investors. Our balance sheet is strong with a treasury in excess of $6 million, giving the Company ample resources to fund exploration projects. In addition to our exploration and financing activities last year, we also strengthened our core technical team with the addition of both Mr. Peter Dasler, P.Geo as VP Business Development, replacing Mr. John Royall who resigned in October, 2003 and Mr. John Londry, P.Geo as VP Exploration. These two veteran explorationists are key additions to an experienced technical and financial team.

Results of Operation

Business of the Company

The Company is an exploration stage company engaged in the acquisition, exploration of mineral properties of merit in Canada, the United States and New Zealand with the aim of exploring them to a stage where they can be exploited at a profit or to arrange joint ventures whereby other companies provide funding for additional exploration.

Selected Annual Information

Unless otherwise noted, all currency amounts are stated in Canadian dollars.

The following table summarizes selected financial data for PFN for each of the three most recently completed financial years. The information set forth below should be read in conjunction with the audited financial statements, prepared in accordance with Canadian generally accepted accounting principles, and related notes.


	Years Ended April 30, (audited)
	2004	2003	2002
Total Revenues	$380,952	$284,804	$338,780
General and administrative expenses	1,473,225	$1,364,612	$1,177,225
Mineral property costs	1,891,318	1,395,570	3,869,593
Income (loss) before other items Ø In total Ø Basic and diluted loss per share	(1,473,225) (0.06)	(1,364,612) (0.07)	(1,177,225) (0.06)
Net income (loss) from continuing operations Ø In total Ø Basic and diluted loss per share	(1,276,008) (0.05)	(1,323,658) (0.06)	(1,422,135) (0.07)
Totals Assets	7,202,319	1,785,530	3,614,678
Total long term liabilities	Nil	Nil	Nil
Cash dividends declared	Nil	Nil	Nil

Selected quarterly financial information


			For the Quarters Ended (unaudited)
	Apr. 30/04	Jan. 31/04	Oct. 31/03	Jul. 31/03	Apr. 30/03	Jan. 31/03	Oct. 31/02	Jul. 31/02
Total revenues	$99,920	$96,092	$130,418	$54,522	$176,848	$88,886	$117,957	$1,234
Net loss	503,953	205,335	363,197	203,523	375,105	352,418	359,701	236,434
Net loss per share	0.01	0.01	0.01	0.01	0.02	0.02	0.02	0.01
Total assets	7,202,319	5,680,659	3,193,241	1,980,803	1,785,530	1,699,724	2,639,520	2,981,908

Results of operations

The year ended April 30, 2004 resulted in a net loss of $1,276,008 which compares with a loss of $1,323,658 for the same period in 2003. General and administrative expenses for the year ended April 30, 2004 were $1,473,225 an increase of $108,613 over the same period in 2003. Stock-based compensation fees of $223,000 were recorded as compared to $151,725 in the previous year. The Company adopted the new recommendations of CICA Handbook Section 3870, stock-based compensation and other stock-based payments, effective to all awards granted on of after 1 May 2002. As encouraged by CICA Handbook Section 3870, the Company has enacted prospectively early adoption of the fair value based method of accounting for awards issued to employees and non-employees for the fiscal year beginning 1 May 2003. The new standard requires that all stock-based awards made to employees and non-employees be measured and recognized using a fair value based meth od. In prior years, stock-based compensation expense was only recognized when stock-based compensation awards were made to non-employees, while pro-forma disclosure was acceptable for awards made to employees. Mineral property costs of $123,707 were written off while all other general and administrative costs were relatively the same when compared to the previous year. A $27,085 capital gain was realized on the sale of investments as compared to $Nil over the same period in 2003. Project management fees of $280,354 were earned during the year as compared to $237,207 the previous year. Interest income was $73,513, an increase of $25,916 over the same period in 2003 as the Company had significantly more funds on deposit.

During the year ended April 30, 2004, the Company incurred mineral property costs of $1,891,318 with $1,585,714 being funded by joint venture partners.

Shareholder relations and promotional activities undertaken by the Company, which included attendance at various trade shows, cost $315,843 for the period ended April 30, 2004, a decrease of $14,247 over the same period in 2003.

Critical Accounting Estimates

Mineral Property Costs

Stock-Based Compensation

Changes in Accounting Policies

Stock-based compensation

During the prior year, the Company adopted the new recommendations of CICA Handbook Section 3870, stock-based compensation and other stock-based payments, effective to all awards granted on of after 1 May 2002. As encouraged by CICA Handbook Section 3870, the Company has enacted prospectively early adoption of the fair value based method of accounting for awards issued to employees and non-employees for the fiscal year beginning 1 May 2003. The new standard requires that all stock-based awards made to employees and non-employees be measured and recognized using a fair value based method. In prior years, stock-based compensation expense was only recognized when stock-based compensation awards were made to non-employees, while pro-forma disclosure was acceptable for awards made to employees.

Flow through shares

During the year, the Company adopted the new accounting pronouncement relating to flow through shares effective for all flow through agreements after 19 March 2004. Canadian Income Tax Legislation permits an enterprise to issue securities referred to as flow through shares whereby the investor can claim the tax deductions arising from the related resources expenditures. When resource expenditures are renounced to the investors and the Company has reasonable assurance that the expenditures will be completed, future income tax liabilities are recognized (renounced expenditures multiplied by the effective tax rate) thereby reducing share capital.

If a Company has sufficient unused tax losses and deductions (‘losses”) to offset all or part of the future income tax liabilities and no future income tax assets have been previously recognized on such losses, a portion of such unrecognized losses (losses multiplied by the effective corporate tax rate) is recorded as income up to the amount of the future income tax liability that was previously recognized on the renounced expenditures.

Asset retirement

The CICA issued a new standard relating to asset retirement obligations effective for fiscal years beginning on January 1, 2004. The standard requires the recognition in the financial statements of the liability associated with the net present value of future site reclamation costs when the liability is incurred. These obligations are initially measured at fair value and subsequently adjusted for the accretion of discount and any changes to the underlying costs. The asset retirement cost is to be capitalized and amortized into operations over time. The Company is currently assessing these requirements to ensure its complies with the new standards starting on 1 May 2004.

Financial Instruments and Other Instruments

PFN’s financial instruments consist of cash, accounts receivable, investments, amount due from River Valley joint venture, restricted cash – flow-through, accounts payable and cash call payable. Unless otherwise noted, it is management’s opinion that PFN is not exposed to significant interest, currency or credit risks arising from the financial instruments. The fair value of these financial instruments approximates their carrying value unless otherwise noted.

Outstanding Share Data

The Company is authorized to issue unlimited common shares without par value. As at April 30, 2004, there were 31,551,004 outstanding common shares compared to 21,165,701 outstanding shares at April 30, 2003.

Directors, officers, employees and contractors are granted options to purchase common shares under the Companys stock option plan. This plan and its terms and outstanding balance are disclosed in notes 7e to the annual audited financial statements to April 30, 2004.

During the year, 1,116,940 performance shares were reserved for issue. At the discretion of the Board, these shares may be issued to such arm’s length parties as the Board considers desirable to attract to the company. During the year, 50,000 performance shares were issued at $0.01 per share for total proceeds of $500.

Related Party Transactions

During the year ended April 30, 2004, the below related parties were paid the following: A total of $75,713 was paid to a Company controlled by Harry Barr, a Director and President of the company for management services. Mr. Barr currently receives a management fee of $5,760 per month; pursuant to an office lease agreement dated July 11, 2000, a total of $53,746 was paid to a Company controlled by Harry Barr for office rent; a total of $50,842 was paid to a Company controlled by Taryn Downing, a Director and Officer of the company for corporate secretarial services; a total of $50,523 was paid to a Company controlled by Gord Steblin, a Director and Officer of the company for accounting services; a total of $45,440 was paid to a Company controlled by Peter Dasler, an Officer of the company for engineering and consulting fees; a total of $21,600 was paid to a Company controlled by John Londry, an Officer of the Company for engineering and consulting services; a total of $50,842 was paid to John Royall, a Director and Officer for engineering and consulting fees before his resignation in October 2003; and $1,740 to Lindsay Bottomer, a Director of the Company for consulting fees.

The significant differences between Canadian and U.S. GAAP on the financial statements for the twelve months ended April 30, 2004 are as follows:

The loss under Canadian GAAP for the year was $1,276,008. After adding mineral costs of $204,357 a loss under US GAAP of $1,480,365 is reported. The loss per share under Canadian GAAP is $0.05 as compared to a $0.05 loss per share under US GAAP.

Liquidity and Capital Resources

The Company expects that its existing capital requirements arising from the evaluation of its existing mineral properties and fulfilling its exploration commitments will be met from the company's existing cash position. The Sudbury projects have no internal exploration funds budgeted as these are being funded by various third parties and further joint ventures with third parties are continually being negotiated to further explore these properties.

The Company's future profitability is dependent on the successful definition of geological resources on its mining properties and the establishment of positive comprehensive feasibility studies on these geological resources. Upon completion of positive feasibility studies, the Company's success is dependent on the successful construction, financing and operation of a facility to extract the minerals from the geological resource located. The Company will continue to seek new mining opportunities. The Company presently has no producing properties, and the Company's material properties contain no known mineral reserves; the limited activities on such properties to date have been exploratory in nature. Except as disclosed herein, the Company does not possess reliable information concerning the history of previous operations including the names of previous operators, if any, on any of its properties.

Future profitability will also be affected by the level of taxes imposed by the jurisdiction in which the Company operates. Furthermore, the Company's operations may be affected by regulatory authorities in the jurisdictions in which the Company operates. The Company is not currently aware of any factors or current recommendations by the taxation or regulatory authorities in Canada that may have a material impact on the Company's operations.

Twelve Months Ended April 30, 2006 Compared to Twelve Months Ended April 30, 2005

At April 30, 2006, the Company’s working capital, defined as current assets less current liabilities, was $3,333,963 compared with working capital of $4,518,026 at April 30, 2005. Flow-through funds of $140,359 must be spent before Dec. 31, 2006 on qualified Canadian mineral exploration, and is not included in working capital because it is classified as restricted cash on the balance sheet.

During the year, the Company issued 2,956,000 flow-through shares for gross proceeds of $1,136,800 and 200,000 performance shares for proceeds of $2,000 with a fair value of $70,250. A further 139,048 shares were issued for mineral properties at a value of $113,800.

The Company has a portfolio of investments with a book value of $115,772 and a market value of $373,474 as at April 30, 2006. The main investments consist of 485,688 shares of Freegold Ventures Limited and 196,600 shares of CanAlaska Ventures Ltd. which both have certain directors in common. These amounts are included in the above working capital. The Company has total issued and outstanding of 35,112,452 shares at April 30, 2006.

Outlook

Pacific North West Capital Corp. currently has one joint venture agreement in which other companies are earning on interest in the Company’s projects by carrying all costs and making significant exploration expenditures. The Company ended April 30, 2006 with a strong cash position that will enable it to continue its own exploration effects in the United States, Canada and New Zealand seeking to identify new projects through early stage grass roots exploration and managing risk by forming joint ventures in which partner companies explore and develop such projects in return for the right to earn an interest in them.

Twelve Months Ended April 30, 2005 Compared to Twelve Months Ended April 30, 2004

Liquidity and capital resources

At April 30, 2005, the company’s working capital, defined as current assets less current liabilities, was $4,518,026 compared with working capital of $5,566,082 at April 30, 2004. Subsequent to year end, the company issued 2,500,000 flow-through shares for gross proceeds of $1,000,000. These flow-through funds must be spent before Dec. 31, 2006 on qualified Canadian mineral exploration.

During the year, the company issued 100,000 performance shares for proceeds of $1,000 and a fair value of $51,500. A further 56,400 shares were issued on the exercise of options and warrants for proceeds of $27,920.

The company has a portfolio of investments with a book value of $101,356 and a market value of $132,986 as at April 30, 2005. The main investments consist of 390,188 shares of Freegold Ventures Limited and 226,600 shares of CanAlaska Ventures Ltd. which both have certain directors in common. These amounts are included in the above working capital. The company has total issued and outstanding of 31,817,404 shares at April 30, 2005.

Outlook

PFN currently has three joint venture agreements in which other companies are earning an interest in PFN projects by carrying all costs and making significant exploration expenditures. The Company ended April 30, 2005 with a strong cash position that will enable it to continue its own exploration effects in the United States, Canada and New Zealand seeking to identify new projects through early stage grass roots exploration and managing risk by forming joint ventures in which partner companies explore such projects in return for the right to earn an interest in them.

Twelve Months Ended April 30, 2004 Compared to Twelve Months Ended April 30, 2003

At April 30, 2004, the Company’s working capital, defined as current assets less current liabilities, was $5,566,082 compared with working capital of $1,085,456 at April 30, 2003. Flow-through funds of $703,800 must be spent before Dec. 31, 2004 and $200,000 must be spent before Dec. 31, 2005 on qualified Canadian mineral exploration, and is not included in working capital because it is classified as restricted cash on the balance sheet.

During the year, the Company completed private placements of 9,344,444 units for gross proceeds of $6,400,000. A further 864,134 shares were issued on the exercise of options and warrants for proceeds of $546,871.

The Company has a portfolio of investments with a market value of $124,556 as at April 30, 2004. The main investment consists of 390,188 shares of Freegold Ventures Limited which has certain directors in common. These amounts are included in the above working capital. The company has total issued and outstanding of 31,551,004 shares at April 30, 2004.

Research and Development, Patents and Licenses, etc.

As the Company is a mineral exploration company with no research and development, the information required by this section is inapplicable.

Trend Information

As the Company is a mineral exploration company with no producing properties, the information required by this section is inapplicable.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Tabular Disclosure of Contractual Obligations

Contractual commitments


Contractual Obligations⁽¹⁾		Payments Due By Period
	Total		Less than 1 yr	1-3 yrs	3-5 yrs	More than 5 yrs
Management Agreement⁽²⁾	450,630		90,040	298,052	62,538	-
Office Lease⁽³⁾	136,500		32,760	98,280	5,460	-
Total	$587,130		$122,800	$396,332	$67,998	$ -

¹⁾

No mineral property payments or exploration expenditures are included in the above table as they are considered option payments solely exercisable at the option of the Company.

²⁾

By agreement effective December 1, 2005, the Company entered into a five-year management agreement with a Company controlled by a director and chairman. Compensation is $7,350 per month for the first year, with a 5% increase on each anniversary date plus benefits. The chairman and director is also entitled to receive up to 20% of the stock options granted during the period that the agreement is in place. This agreement is automatically renewable for two-year periods. The Company may terminate the agreement at any time but will be responsible to pay the greater of the remaining amount under the contract or two years compensation.

³⁾

The Company is also responsible for its estimated proportionate share of property taxes and operating costs.

Safe Harbor

The Registration Statement includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be "forward looking statements". Such s tatements are included, among other places in this Registration Statement, in the sections entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations. Forward-looking statements are based on expectations, estimated and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. These include, but are not limited to, the risks of mining industry (for example, operational risks of exploring for, developing and producing crude oil and natural gas, risks and uncertainties involving geology of mineral deposits, the uncertainty of reserve estimates and estimates relating to production volumes, cost and expense projections, potential cost overruns and health, safety and environmental risks), risks relating to the Company's properties (for example, lack of operating history and transportation), fluctuations in mineral prices and exchang e rates and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures (collectively "Cautionary Statements"). Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct.

ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Directors and Senior Management

The following table states the name, province or state, and country of residence of each of the directors and executive officers of the Company, the positions and offices presently held by them and the period or periods of time during which each has served as a director of the Company.

Name, Position in Company and Province or State and Country of Residence

Period(s) a Director of the Company

Harry Barr

Vancouver, BC, Canada

President, CEO & Director

Since 1996

Name, Position in Company and Province or State and Country of Residence

Period(s) a Director of the Company

Bernard Barlin

Hampshire, UK

Director

Since 2000

Alexander Walcott

Vancouver , BC, Canada

Director

Since 2004

Steve Oakley

Vancouver, BC, Canada

Director

Since 2006

Peter Dasler

Delta, BC, Canada

VP, Business Development

Since 2003

John Londry

Ontario, Canada

VP, Exploration

Since 2004

Jag Sandhu

Surrey, BC

VP, Corporate Finance

Since 2005

Gordon Steblin

Richmond , BC, Canada

Chief Financial Officer

Since 2003

Taryn Downing

North Vancouver, BC, Canada

Corporate Secretary & VP, Administration

Since 1998

Additional details including principal occupation for the past five years of the above directors and executive officers are as follows:

HARRY BARR – President, CEO and Director

Mr. Barr has been involved in the mining industry for over 25 years and has an extensive background in business management, corporate finance, and marketing. Mr. Barr is currently President, CEO, & Director (1996-present) of Pacific North West Capital Corp.; Director (1989-present), President and CEO (1989-2004), Chairman & COO (2004-present), of CanAlaska Ventures Ltd.; President and CEO (1985-1999), Chairman and COO (1999-present), and Director (1985-present) of Freegold Ventures Limited; Director (1999-present), President & CEO (2003-2006), and Chairman and CEO (2006-present) of El Nino Ventures Inc.

BERNARD BARLIN - Director

Mr. Barlin has over 40 years experience in the mining industry and worked as a consulting metallurgist with Hudson Bay Mining and Smelter Company. He has a degree in Engineering from the University of Witwatersrand in Johannesburg, and is a registered professional engineer in Manitoba and the U.K. From 1986 – 1989. Mr. Barlin is currently Director of CanAlaska Ventures Ltd. (1989-present); Pacific North West Capital Corp. (2000-present); El Nino Ventures Inc. (2004-present) and Freegold Ventures Limited (1985-present).

ALEXANDER WALCOTT - Director

Mr. Walcott has been active in the mineral exploration industry for the past 15 years. He most recently attended the University of Alberta in the field of exploration geophysics while maintaining an active client base.

STEVE OAKLEY - Director

Mr. Oakley is currently the Managing Director of Opticom Technologies Inc., a leading manufacturer, developer and marketer of video security products. He has been involved in the security industry since 1998 and has consulted on numerous projects for companies both domestically and internationally.

Prior to his involvement in the security industry, Mr. Oakley spent eight years as an independent contractor in the mineral exploration industry. He also worked for BHP Minerals in the engineering department for two years prior to the closure of the Island Copper Mine on Vancouver Island.

PETER DASLER – Vice President, Business Development

Mr. Dasler has 30 years of experience in exploration geology including twenty years of geological consulting and contracting for junior and senior companies based out of Vancouver, BC. Mr. Dasler is a graduate of the University of Canterbury, Christchurch, New Zealand with a Masters degree in exploration and engineering geology and is a member of the Professional Engineers and Geoscientists Association of BC. His background includes senior geological positions in New Zealand, and Mine Manager of the 10 million ton per annum Taharoa Ironsand Mine, as well as management of junior exploration companies in Canada. Mr. Dasler currently holds the positions of Vice President, Business Development for Pacific North West Capital Corp. (2003-present); and President & CEO of CanAlaska Ventures Ltd. (2004-present).

JOHN LONDRY – Vice President, Exploration

Mr. Londry received his BSc and MSc degrees in Geology from the University of Windsor. For the past 25 years Mr. Londry has been active in the mineral exploration and mining industry. Mr. Londry’s considerable experience encompasses both grass roots and advanced stage exploration projects throughout Canada, the United States and South America. Mr Londry has held senior positions with Camflo, Noranda Exploration, Hemlo Gold Mines, and Battle Mountain Gold. Mr. Londry currently holds the position of Vice President, Exploration for Pacific North West Capital Corp. (2004-present).

JAG SANDHU – VP, Corporate Finance

Mr. Sandhu is the Vice President of Corporate Finance for Pacific North West Capital Corp. For the past 10 years he has been involved in the capital markets. From March 2002 to October 2004 Mr. Sandhu was Vice President of Corporate Finance and Director of Nicer Canada Corp. From February 2000 to November 2001 Mr. Sandhu was the Chief Financial Officer and Director of Network Technology Professionals Inc. From September 1998 to January 2000, Mr. Sandhu was the Vice President of Corporate Development for Group West Systems Ltd. He holds a Bachelor of Arts Degree from Simon Fraser University with a major in Economics.

GORDON STEBLIN – Chief Financial Officer

Mr. Steblin, B. Comm., CGA, is currently the Chief Financial Officer of Pacific North West Capital Corp. Freegold Ventures Limited, El Nino Ventures Inc. and CanAlaska Ventures Ltd. (2002-present) and accountant of Pacific North West Capital Corp. (1996-2002), Freegold Ventures Limited and CanAlaska Ventures Ltd. (1994-2002); and El Nino Ventures Inc. (1999-2002).

TARYN DOWNING – Corporate Secretary/VP, Administration

Ms Downing is an administrator with over 25 years experience in both the public and private sectors. Ms. Downing is currently the Corporate Secretary and VP, Administration for Pacific North West Capital Corp. (1998-present), CanAlaska Ventures Ltd. (1995-present), Freegold Ventures Limited (1995–present) and El Nino Ventures Inc. (1999-present).

Compensation

Executive Compensation

The following terms have the meanings set out below:

Chief Executive Officer (“CEO”) means each individual who served as chief executive officer of your company or acted in a similar capacity during the most recently completed financial year.

Chief Financial Officer (“CFO”) means each individual who served as chief financial officer of your company or acted in a similar capacity during the most recently completed financial year.

Long Term Incentive Plan (“LTIP”) means a plan providing compensation intended to motive performance over a period greater than one financial year. LTIPs do not include option or SAR plans or plans for compensation through shares or units that are subject to restrictions on resale.

Named Executive Officers (“NEOs”) means the following individuals:

(a) each CEO; (b) each CFO; (c) each of the Company’s three most highly compensated executive officers, other than the CEO, who were serving as executive officers at the end of the most recently completed financial year and whose total salary and bonus exceeds $150,000; and (d) any additional individuals for whom disclosure would have been provided under (c) except that the individual was not serving as an officer of the Company at the end of the most recently completed financial year.

Stock Appreciation Rights (“SARs”) means a right, granted by a company or any of its subsidiaries as compensation for employment services or office to receive cash or an issue or transfer of securities based wholly or in part on changes in the trading price of publicly traded securities.

Summary Compensation Table

The following table sets forth all compensation for all years indicated in respect of the individuals who were, the NEOs as of April 30, 2006.

Annual Compensation

Long Term Compensation

Awards

Payouts

Name and Principal Position

(a)

Year

Ended

(b)

Salary⁽¹⁾

($)

(c)

Bonus

($)

(d)

Other Annual Compen-sation

($)

(e)

Securities Under Options/

SARs Granted

(#)

(f)

Restricted Shares or Restricted Share Units

($)

(g)

LTIP

Payouts

($)

(h)

All Other Compen-sation

($)

(i)

Harry Barr,

President & CEO

2006

2005

2004

85,750

80,280

69,120

6,276

20,960

6,593

Nil

340,000⁽²⁾

53,334

Nil

106,666

Nil

Gordon Steblin, CFO

2006

2005

2004

35,400

34,700

43,930

3,570

11,400

6,593

Nil

118,000

40,000

Nil

26,666

Nil

Notes

⁽¹⁾

Fees paid through a service company.

⁽²⁾

Of the 340,000 stock options granted in the financial year ended April 30, 2005, 170,000 were granted to Mr. Barr directly and 170,000 were granted to Canadian Gravity Recovery Inc., a wholly owned company of Mr. Barr.

Compensation of Executive Officers

See above summary compensation table.

The following table sets out the options granted to Directors and Executive Officers during the Company's most recently completed financial year.


Name of Director and/or Executive Officer	Securities Under Option	Exercise Price	Value of Unexercised in the Money Options at April 30, 2006⁽¹⁾	Expiry Date

Alex Walcott	100,000	$0.40	$4,000	Feb 3/11
Bernard Barlin	50,000	$0.40	$2,000	Feb 3/11
Steve Oakley	60,000	$0.40	$2,400	Feb 3/11
John Londry	50,000	$0.40	$2,000	Apr 19/11
TOTAL	260,000		$10,400

⁽¹⁾

Value of Unexercised Options is equal to the difference between the closing price of the common shares of the Company on the TSX on April 30, 2006 of $0.44 and the exercise price of options outstanding, multiplied by the number of shares purchasable under such options.

Aggregated Option\SAR Exercises During the Most Recently Completed Financial Year and Financial Year End Option\SAR Values

The table below sets out, on an aggregate basis, the number of common shares of the Company acquired through stock options by the NEOs under the Company’s Stock Option Plan during the financial year ended April 30, 2006 and the number and value of unexercised options as at April 30, 2006.

Name

(a)

Securities Acquired on Exercise

(#)

(b)

Aggregate

Value Realized⁽¹⁾

($)

(c)

Unexercised

Options/SARs at FY-End (#)

Exercisable/Unexercisable

(d)

Value of Unexercised

in-the-Money Options/SARs at FY-End ($)⁽²⁾

Exercisable/Unexercisable

(e)

Harry Barr, CEO

Nil

948,000/0

Nil

Gordon Steblin, CFO

Nil

269,000/0

Nil

⁽¹⁾

Aggregate Value Realized is the difference between the market price of the Company’s common shares on the date of exercise and the option exercise price, multiplied by the number of common shares acquired.

⁽²⁾

Option and SARs Cancelled/Expired to NEOs During the Most Recently Completed Financial Year.

The table below sets out the number of common shares of the Company cancelled/expired through stock options by the NEOs under the Company’s Stock Option Plan during the financial year ended April 30, 2006.

Name

Date of Grant

Number Cancelled/Expired

Exercise Price

Expiry Date

Canadian Gravity Recovery Inc.⁽¹⁾

December 15, 2000

39,000

$0.60

December 15, 2005

⁽¹⁾

A private company wholly-owned by Harry Barr.

Options Granted to NEOs During the Most Recently Completed Financial Year

During the financial year ended April 30, 2006 no stock options were granted to NEOs.

Option Repricings to NEOs During the Most Recently Completed Financial Year

During the financial year ended April 30, 2006 no options to NEOs were repriced.

LTIPs – Awards in Most Recently Completed Financial Year

Other than the grant of stock options pursuant to the Company’s share option plan, the Company made no LTIP awards during the most recently completed financial year.

Termination of Employment, Change in Responsibilities and Employment Contracts

The NEOs do not have agreements with respect to their employment with the Company. Refer to Compensation of Directors below disclosing the payments made by the Company.

During the year ended April 30, 2006, Harry Barr received $92,026 for management services and Gordon Steblin received $38,970 for accounting services.

Composition of the Compensation Committee

The Compensation Committee is comprised of Steve Oakley, Bernard Barlin, and Alexander Walcott. None of these directors are officers or employees of the Company. The Compensation Committee periodically reviews the compensation paid to directors, management, and employees based on such factors as time commitment, comparative fees paid by other companies in the industry in North America and level of responsibility and the Company’s current position as an exploration company with limited operating revenue.

Report on Executive Compensation

The Company’s executive compensation program is administered by the Board of Directors and is designed to provide incentives for the enhancement of shareholder value. The overall objectives are to attract and retain qualified executives critical to the success of the Company, to provide fair and competitive compensation, to align the interest of management with those of shareholders and to reward corporate and individual performance. The compensation package has been structured so as to link shareholder return, measured by the change in the share price, with executive compensation through the use of stock options as the primary element of variable compensation. The Company does not currently offer long-term incentive plans or pension plans to its executive officers.

The relative emphasis of the Company on cash compensation options, SARs securities purchase programs, shares or units that are subject to restrictions on resale and other incentive plans is variable. The Company’s cash compensation to NEO’s tends to remain more or less constant, while any options, SARs security purchase programs are left to the discretion of the Board of Directors and therefore may fluctuate from year to year.

The Company takes into consideration the issuance of options, SARs, shares and units, the grants made in previous years, and the number that remain outstanding along with the amount of options remaining issuable under the Company’s stock option plan.

The Company bases the compensation for the Company’s executive officers on the years of service with the Company, responsibilities of each officer and their duties in that position. The Company also bases compensation on the performance of each officer. The Company believes that stock options can create a strong incentive to the performance of each officer and is intended to recognize extra contributions and achievements towards the goals of the Company.

The Company’s Board of Directors, when determining cash compensation to the President and CEO takes into consideration the extensive experience in the mining industry, responsibilities and duties as President and CEO, as well as personal risks and contributions to the Company’s success. The President and CEO receive a base cash compensation that the Company feels is in line with that paid by similar companies in North America; however no formal survey was completed by the Compensation Committee or the Board of Directors.

Securities Authorized for Issuance Under Equity Compensation Plans

During the fiscal year ended 2006, the Company maintained three incentive stock option compensation plans: a Stock Option Plan Amended August 23, 2004, a Stock Option and Incentive Plan dated August 24, 2005 and a Performance Share Plan, all of which have been previously approved by the shareholders of the Company and by the TSX. The following table sets forth information with respect to the securities outstanding under these incentive and stock option compensation plans as at April 30, 2006.

Equity Compensation Plan Information

Plan Category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

(a)

Weighted-average exercise price of outstanding options, warrants and rights

(b)

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

(c)

Equity compensation plans approved by securityholders

5,695,655

0.58

6,149,096

Equity compensation plans not approved by securityholders

Nil

N/A

Total

5,695,655

N/A

6,149,096

Indebtedness of Directors and Executive Officers

None of the current or former directors, executive officers or employees of the Company or persons who were directors, executive officers or employees of the Company at any time during the Company’s last completed financial year, none of the proposed nominees for election of directors of the Company and none of the associates or affiliates of such persons are or have been indebted to the Company (or its subsidiaries) at any time since the beginning of the last completed financial year ending April 30, 2006. Furthermore, none of such persons were indebted to a third party during such period where their indebtedness was the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Company or its subsidiaries.

Interest of Informed Persons in Material Transactions

None of the Directors, executive officers or other informed persons of the Company, nor any proposed nominee for election as a Director of the Company, nor any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to all outstanding shares of the Company, nor any associate or affiliate of such person or company, has any material interest, direct or indirect, in any transaction since the commencement of the Company’s last completed financial year, or in any proposed transaction which, in either case, has or will materially affect the Company or any of its subsidiaries, except as disclosed herein.

Re-appointment of Auditors

Staley Okada & Partners, Chartered Accountants will be nominated at the Company’s annual general meeting for re-election as the Company’s auditors for the ensuing year. Remuneration of Staley Okada & Partners is to be determined by the Company’s Board of Directors.

Management Contracts

No management functions of the reporting issuer or any subsidiary of the reporting issuer are to any substantial degree performed by a person other than the directors or executive officers of the Company.

Board Practices

Statement of Corporate Governance Practices

Corporate governance relates to activities of the Board, the members of which are elected by and are accountable to the shareholders, and takes into account the role of the individual members of management who are appointed by the Board and who are charged with the day to day management of the Company. The Board is committed to sound corporate governance practices which are both in the interest of its shareholders and contribute to effective and efficient decision making. National Instrument 58-101 –Disclosure of Corporate Governance Practices (“NI 58-101”) requires that each reporting company disclose its corporate governance practices on an annual basis. The Company’s general approach to corporate governance is summarized below.

Board of Directors

The Board is currently composed of four directors. All the proposed nominees are current directors.

Independence

Section 1.4 of Multilateral Instrument 52-110 –Audit Committees (“MI 52-110”) sets out the standard for director independence. Under MI 52-110, a director is independent if he has no direct or indirect material relationship with the Company. A material relationship is a relationship which could, in the view of the Board, be reasonably expected to interfere with the exercise of a director’s independent judgment. MI 52-110 also sets out certain situations where a director will automatically be considered to have a material relationship to the Company.

Applying the definition set out in section 1.4 of MI 52-110, three of the four members of the Board are independent. The members who are independent are Bernard Barlin, Alexander Walcott and Steve Oakley. Harry Barr is not independent by virtue of the fact that he was, within the past 3 years, an executive officer of the Company (Mr. Barr is the CEO of the Company from November 29, 1996 to present).

In order to facilitate its exercise of independent judgment in carrying out the responsibilities of the Board of Directors, the Board ensures that a majority of independent Directors sit on all Board committees.

Other Directorships

In addition to their positions on the Board, the following Directors also serve as Directors of the following reporting issuers or reporting issuer equivalents:

Name of Director

Reporting Issuer(s) or Equivalent(s)

Harry Barr

CanAlaska Ventures Ltd.

Freegold Venture Limited

El Nino Ventures Inc.

Bernard Barlin

CanAlaska Ventures Ltd.

Freegold Ventures Limited

El Nino Ventures Inc.

Alexander Walcott

Nil

Steve Oakley

Nil

Meetings of Directors

The Board holds a minimum of four regular meetings each year, as well as additional meetings as required. Since the beginning of the Company’s most recently completed financial year, the independent Directors have not held a meeting at which non-independent Directors were not in attendance.

Chairman

In the year ended April 30, 2006, Harry Barr was the President and CEO. Under MI 52-110, Mr. Barr is not independent by virtue of the fact that he is the President and CEO of the Company (November 29, 1996 to Present) (in order to be independent, Mr. Barr must not have been an executive officer of the Company in the last three years).

The Board has a written mandate which ensures that the Board discharges its responsibilities in an effective manner and that the Board understands the boundaries between Board and management responsibilities.

Attendance Record

In the year ended April 30, 2006, the Board held five meetings and passed resolutions by way of consent resolutions on 22 different occasions. All of the Directors attended all meetings and executed all consent resolutions.

Mandate of the Board of Directors

The mandate of the Board, as prescribed by applicable corporate law, is to manage or supervise the management of the business and affairs of the Company and to act with a view to the best interests of the Company. In doing so, the Board oversees the management of the Company’s affairs directly and through its committees. In fulfilling its mandate, the Board, among other matters, is responsible for reviewing and approving the Company’s overall business strategies and its annual business plan, reviewing and approving the annual corporate budget and forecast, reviewing and approving significant capital investments outside the approved budget; reviewing major strategic initiatives to ensure the Company’s proposed actions accord with shareholder objectives; reviewing succession planning; assessing management’s performance against approved business plans and industry standards; reviewing and approving the reports and other disclosure issued to shareholders; ensuring the effective operation of the Board; and safeguarding shareholders’ equity interests through the optimum utilization of the Company’s capital resources.

Position Description for President and CEO

The Board is in the process of developing a written position description for the Chairman and President of the Board. The Board is also in the process of developing a written position description for the CEO.

Orientation and Continuing Education

Board turnover is relatively rare and, accordingly, the Company has not adopted a formalized process of orientation for new Board members. Orientation of new directors is conducted on an ad hoc basis.

Directors are kept informed as to matters impacting, or which may impact, the Company’s operations through reports and presentations at the Board meetings. Directors are also provided the opportunity to meet with senior management and other employees, advisors and Directors, who can answer any questions that may arise.

Ethical Business Conduct

The Board has adopted a Code of Business Conduct and Ethics, a copy of which is attached hereto as Exhibit 8.

Nomination of Directors

Board turnover is relatively rare and accordingly the Board does not have a nominating committee or a formal procedure with respect to the nomination of directors. The nominees are generally the result of recruitment efforts by the Board members, including both formal and informal discussions among Board members.

Board Committees

Committees of the Board are in integral part of the company’s governance structure. There are three standing committees (the“Committees”), established to devote the necessary expertise and resources to particular areas, and to enhance the quality of discussion at Board meetings. The Committees facilitate effective Board decision-making by providing recommendations to the Board on matters within their respective responsibilities. The Board believes that the Committees assist in the effective functioning of the Board and that the composition of the Committees should ensure that the views of unrelated and independent directors are effectively represented.

A summary of the responsibilities and activities and the membership of each of the Committees is set out below:

Audit Committee

The Audit Committee is comprised of Steve Oakley, Chairman of the Audit Committee, Alexander Walcott and Bernard Barlin who are financially literate in accordance with national securities legislation. Mr. Oakley is currently the Managing Director of Opticom Technologies Inc. and in such capacity is responsible for overseeing the financial affairs of the company; Mr. Alexander Walcott has extensive experience in the mineral resource sector. For the past 15 years, Mr. Walcott has been conducting exploration geophysics throughout North, South and Central Americas. Mr. Walcott attended the University of Alberta specializing in geophysics. Mr. Bernard Barlin, B.Sc. (Eng.), P. Eng., C. Eng was a director or executive officer of public companies for over 30 years.

All of these directors are independent in accordance with the standards of director independence set out under MI 52-110.

The Audit Committee reviews and recommends to the Board for approval the annual financial statements and the annual report of the Company. The quarterly financial statements of the Company are reviewed by the Audit Committee and the Board. In addition, the Audit Committee is charged with the responsibility of monitoring the integrity of the Company’s internal controls and management information systems. For the purposes of performing these duties, the members of the Audit Committee have the right, at all times, to inspect all of the books and financial records of the Company and to discuss with management and the auditors of the Company any accounts, records and matters relating to the financial statements of the Company.

Audit Fees

The Audit Committee must pre-approve any engagement of the external auditors for any non-audit services to the Company in accordance with applicable law and policies and procedures to be approved by the Board. The engagement of non-audit services will be considered by the Company's Board of Directors on a case by case basis.

In the following table, “audit fees” are fees billed by the Company's external auditors for services provided in auditing the Company's annual financial statements for the subject year. “Audit-relatedfees” are fees not included in audit fees that are billed by the auditors for assurance and related services that are reasonably related to the performance of the audit or review of the Company's financial statements. “Tax fees” are fees billed by the auditors for professional services rendered for tax compliance, tax advice and tax planning. “All other fees” are fees billed by the auditors for products and services not included in the foregoing categories.

The fees paid by the Company to its auditors for each of the last two fiscal years, by category, are as follows:


Financial Year Ending	Audit Fees	Audit Related Fees	Tax Fees	All Other Fees
April 30, 2006	$25,725	Nil	$6,915	Nil
April 30, 2005	$26,958	Nil	$4,204	Nil

Compensation Committee

In fiscal year ended 2006, the Board of Directors appointed a Compensation Committee composed of three directors: Steve Oakley, Alexander Walcott, and Bernard Barlin. Please see the section above entitled “Composition of the Compensation Committee” for further information on this Committee.

Corporate Governance Committee

In fiscal 2006, the Board of Directors appointed a Corporate Governance Committee composed of three directors: Steve Oakley, Alexander Walcott, and Bernard Barlin. The Corporate Governance Committee is responsible for reviewing matters relating to corporate governance and making recommendations to the Board with respect thereto.

Assessments

The Board monitors but does not formally assess the performance of individual Board members or committee members or their contributions.

Employees

During the fiscal year ended April 30, 2006, the Company had no employees and 10 consultants.

Share Ownership

The following table sets forth the share ownership of those persons listed in subsection 6.A above and the consultants of the Company. The table below includes details of all options and warrants to purchase shares of the Company held by such persons:


	Grant Date	Expiry Date	Exercise Price	Number of Options

Directors and Officers	Feb 29/00	Feb 29/10	$0.83	140,000
	May 3/00	May 3/10	$0.60	285,000
	Dec 21/01	Dec 21/06	$0.60	60,000
	Dec 31/02	Dec 31/07	$0.60	320,000
	Sept 10/03	Sept 10/08	$0.76	295,000
	Feb 10/04	Feb 10/07	$1.00	40,000
	Nov 5/04	Nov 5/09	$0.60 / $0.70	932,000
	Feb 3/06	Feb 3/11	$0.40	210,000
	Apr 19/06	Apr 19/11	$0.40	50,000
				2,332,000
Employees and Consultants	Feb 29/00	Feb 29/10	$0.83	279,500
	May 3/00	May 3/10	$0.60	95,000
	Dec 21/01	Dec 21/06	$0.60	140,000
	Dec 31/02	Dec 31/07	$0.60	475,000
	Sept 10/03	Sept 10/08	$0.76	290,000
	Feb 10/04	Feb 10/07	$1.00	50,000
	Jul 1/04	Jul 1/07	$0.60	150,000
	Nov 5/04	Nov 5/09	$0.60 / $0.70	903,000
	Jul 13/05	Jul 13/10	$0.40	100,000
	Feb 3/06	Feb 3/11	$0.40	140,000
	Apr 19/06	Apr 19/11	$0.40	390,000
				3,012,500
				5,344,500

As at April 30, 2006, there were no Directors, Officers or Consultants that beneficially owned any warrants outstanding of the Company.

Description of Existing Incentive and Stock Compensation Plans

The Company has three existing incentive and stock compensation plans which have previously been approved by the shareholders: the 2004 Stock Option Plan, the 2005 Stock Option Plan and the Performance Share Plan. These plans, which are detailed below, are maintained separate and apart from each other.

(a)

Stock Option Plan Amended August 23, 2004

The Company’s existing stock option plan, as amended August 23, 2004 (the “2004 Plan”) provides that the aggregate number of shares of the Company that may be issued under the 2004 Plan shall not exceed 6,324,200 shares.


		Percentage of Issued and Outstanding Shares as of June 27, 2006


Shares issued upon exercise of incentive stock options	617,334	1.8%
Shares reserved for issuance pursuant to unexercised incentive stock options	5,464,500	15.5%
Unallocated shares available for future grants of incentive stock options	242,366	0.7%
TOTAL	6,324,200	18.0%

The 2004 Plan was adopted to advance the interests of the Company and its shareholders by affording key personnel, upon whose judgment, initiative and effects the Company rely for the successful conduct of the Company’s business, an opportunity for investment in the Company and the incentive advantages inherent in the share ownership in the Company. The 2004 Plan authorizes the Board to grant options to key personnel selected by the Board, upon considering criteria such as employment position or other relationship with the Company, duties and responsibilities, ability, productivity, length of service or association, morale, interest in the Company, recommendations by supervisors and other matters.

The 2004 Plan is administered by the Board in accordance with the terms of the 2004 Plan. Pursuant to the 2004 Plan, the Board may grant options to key personnel upon such terms and conditions as the Board may determine in accordance with the terms of the 2004 Plan. The Board will determine the option price (which must comply with TSX policies) and the term of the options, which may be up to 10 years in length. Vesting provisions may be included at the discretion of the Board. The total number of options granted to insiders may not exceed 10% of the issued and outstanding shares of the Company in any 12 month period and no insider may be granted options exceeding 5% of the issued and outstanding shares of the Company in any 12 month period. Pursuant to the 2004 Plan, the maximum number of shares reserved for any on individual may not exceed 5% of the issued and outstanding share capital of t he Company at the date of grant. If an optionee’s relationship with the Company is terminated for cause, then such person’s options will terminate on the same day that the relationship ceases. If an optionee’s relationship with the Company is terminated for any reason other than cause or death, then such person’s options will terminate on the same day that the relationship ceases unless the Board specifically allows an additional 30 day exercise period. Upon death of an optionee, such optionee’s options may be exercised by the estate of the optionee for one year from the date of death or such longer period as the Board may determine at the time of grant of the options.

The 2004 Plan may be amended by the Board as it may deem proper and in the best interests of the Company, subject to prior approval of the TSX, provided that no such amendment shall impair any option previously granted under the 2004 Plan.

The Company intends to continue with the 2004 Plan until all allowable options have been granted. Thereafter, the Company shall grant options pursuant to the 2005 SOI Plan.

(b)

August 24, 2005Stock Option and Incentive Plan

The Company’s 2005 Stock Option and Incentive Plan (the “2005 SOI Plan”) provides that the aggregate number of shares of the Company that may be issued under the 2005 SOI Plan shall not exceed 10% of the issued and outstanding capital of the Company, as such may be from time-to-time. No securities have been granted or issued under the 2005 SOI Plan as at the date of this Circular.

2005 SOI Plan - General

The purpose of the 2005 SOI Plan is to attract and retain the best available personnel for positions with the Company, to provide incentives and awards to eligible persons under the plan, and to promote the success of the Company’s business. Incentive benefits that may be granted under the 2005 SOI Plan include: stock options (tax qualified and non-tax qualified); stock awards, restricted stock, stock appreciation rights, performance shares/units; grant or sale of compensation related restricted shares or deferred shares, cash awards or other incentives that may be determined by the Board in future.

The 2005 SOI Plan will be administered by the Board in accordance with the terms of the 2005 SOI Plan.

The 2005 SOI Plan provides that the maximum aggregate number of shares of the Company which may be awarded under the 2005 SOI Plan will be 10% of the issued and outstanding capital of the Company, as such may be from time-to-time. The 2005 SOI Plan will take effect August 24, 2005 and terminate on August 24, 2015.

Incentives under the 2005 SOI Plan may be granted only to such directors, officers, employees, consultants, advisors or other eligible participants as determined by the Board (collectively, the “Participants”). No individual may receive incentive grants exceeding 5% of issued and outstanding capital of the Company, unless specifically authorized by the Board and permitted by applicable laws and exchange policies.

The 2005 SOI Plan may be amended by the Board at any time, without shareholder approval subject to the following amendments requiring shareholder approval, as required by law or exchange policies: an increase in the fixed percentage of shares subject to the 2005 SOI Plan and any change in the definition of Participant (i.e., persons that may receive options or awards under the 2005 SOI Plan).

The Board may make amendments such as repricing and extending non-insider options.

If required by TSX policy to which the Company is subject, repricing or extension of Incentive agreements to insiders shall require shareholder approval.

Stock Options

The Board may grant options to Participants to purchase common shares of the Company upon such terms and conditions as the Board may determine. The option price will be at fair market value, as determined by the Board in accordance with applicable laws and exchange policies. Unless otherwise specified, the term of each option will be five years from the date of grant with any vesting provisions being set at the discretion of the Board. In most circumstances, an option will be exercisable for a period of three months after an employee ceases to be an employee, where such termination of employment is voluntary, (only with respect to options that are vested on such date of termination of employment). The options will terminate on the date an employee’s employment by the Company is terminated, if such termination is for cause. Where employment has been terminated due to disability or death, the options will be exercisable for six months from the date of termination of employment or death with respect only to options that are vested on the date of termination of employment or death, as the case may be.

Any grant of option may provide for payment to the optionee of dividend equivalents or accretions thereon in cash or shares on a current, deferred or contingent basis or the Board may provide that any dividend equivalent may be credited against the option price. Any grant of an option may provide that payment of the option price may be made in the form of restricted shares or other shares that are not subject to risk of forfeiture or restrictions on transfer in the manner determined by the Board. Any grant may allow for deferred payment of the option price through a sale and remittance procedure whereby the Participant will sell the common shares through a Company-designated brokerage firm, which firm then will forward directly to the Company from the proceeds of sale of the shares, the aggregate option price payable for the purchased shares.

Subject to applicable laws and exchange policies, the Board may, in its discretion, assist any Participant in the exercise of awards under the 2005 SOI Plan by authorizing the Company to provide a loan to the Participant (not to exceed the exercise price plus tax liability incurred in connection therewith), permitting the Participant to pay the exercise price in installments, authorizing the Company to guarantee a loan obtained by the Participant from a third party, or granting a cash bonus to the Participant to enable the Participant to pay tax obligations arising from an award. Any such loans may be forgiven by the Company at the discretion of the Board.

Restricted Shares

Restricted shares will be sold or transferred by the Company to a Participant at a price which may be below fair market value or for no payment at all, but are subject to restriction on their sale or other transfer by the Participant and such shares will be escrowed until such time as the restrictions are removed. The number of restricted shares that may be transferred or sold by the Company, the sale price, and the restrictions set on such shares will all be determined by the Board at the time of grant.

Deferred Shares

Deferred shares are an award of the right to receive shares at the end of a specified deferral period, upon fulfillment during the deferral period of pre-set performance conditions, all of which terms and conditions will be determined by the Board at the time of grant or sale of the deferral shares.

Performance Shares

Performance shares or units may be issued to a Participant upon the achievement of specified objectives set by the Board upon terms and conditions set by the Board.

(c)

Previously Approved Performance Shares

In 2003 and 2004, the shareholders approved the issuance of an aggregate of 2,697,990 nominal value performance shares (1,116,940 in 2003; 1,581,050 in 2004). To date 350,000 of those performance shares have been issued. At the time of shareholder approval in 2003, the 1,116,940 shares represented 4.8% of the Company’s then issued and outstanding shares. At the time of shareholder approval in 2004, the 1,581,050 shares represented 5% of the Company’s then issued and outstanding shares. As at June 27, 2006 the 2,697,990 performance shares represent 7.7% of the Company’s issued and outstanding shares.

These performance shares shall be issued at the discretion of the Board to such arm’s length parties as the Board considers desirable to attract to the Company particular expertise, management experience, operations experience, financial capacity, industry profile and other such characteristics in the discretion of the Board. Vesting provisions may be imposed at the discretion of the Board at the date of issuance. The value of the performance shares shall be determined by the Board in its sole discretion at the date of issuance. The total number of performance shares granted to any one individual may not exceed 5% of the Company’s issued and outstanding shares at the date of issuance. As at June 27, 2006, 250,000 performance shares have been allotted but not issued, which shares shall vest as to every six months the following may be issued; 50,000 shares; 50,000 shares; 75,000 shares; and 75,000 shares. These 250,000 performance shares represent 0.7% of the Company’s issued and outstanding shares as at June 27, 2006.

The above 2,697,990 performance shares are separate from any performance shares that may be issued under the 2005 SOI Plan.

Options and Other Rights to Purchase Shares

The following table summarizes the issued and outstanding options as at April 30, 2006.


Number outstanding April 30/05	Granted	Exercised	Expired / Cancelled	Number Outstanding April 30/06	Exercise Price per Share	Expiry Date
419,500	-			419,500	$0.83	Feb 28/10
380,000	-			380,000	$0.60	May 3/10
214,000	-	-	(214,000)	-	$0.60	Dec 15/05
200,000	-			200,000	$0.60	Dec 21/06
795,000	-			795,000	$0.60	Dec 31/07
585,000	-			585,000	$0.76	Sept 10/08
90,000	-			90,000	$1.00	Feb 10/07
40,000	-		(40,000)	-	$0.80	Mar 18/06
150,000				150,000	$0.60	Jul 1/07
1,980,000			(145,000)	1,835,000	$0.60	Nov 5/09
-	100,000	-	-	100,000	$0.40	July 13/10
	350,000	-	-	350,000	$0.40	Feb 3/11
	440,000	-	-	440,000	$0.40	Apr 19/11
4,853,500			(399,000)	5,344,500

Stock Options

During the year ended April 30, 2006, there were 890,000 options granted and 399,000 cancelled or expired to directors, officers, consultants, and employees pursuant to the Company’s 2004 Plan. As of April 30, 2006 there were 5,344,500 outstanding options issued under the Company’s 2004 Plan.

(i)

Options Granted During the Fiscal Year Ended April 30, 2006

The following table sets out the options granted to directors, executive officers and others during the Company’s most recently completed financial year.


Optionees	Number of Shares Subject to Option	Date of Grant	Exercise Price ($/Security)	Expiration Date
Employees/Consultants	100,000	July 13/05	0.40	July 13/10
Directors/Officers	210,000	Feb 3/06	0.40	Feb 3/11
Employees/Consultants	140,000	Feb 3/06	0.40	Feb 3/11
Directors/Officers	50,000	Apr 19/06	0.40	Apr 19/11
Employees/Consultants	390,000	Apr 19/06	0.40	Apr 19/11
TOTAL	890,000

(ii)

Options Exercised During the Fiscal Year Ended April 30, 2006

The following table sets out the financial value of options exercised during the Company’s most recently completed financial year by directors, executive officers and others.

During the year ended April 30, 2006, there were no options exercised by directors, executive officers or others.

(iii)

Options/SARs cancelled or expired by directors, executive officers, non-executive insiders and others in the financial year.

The following table sets out the options cancelled or expired during the Company’s most recently completed financial year by directors, executive officers and others.


Optionee	Number of Shares Cancelled	Date of Grant	Exercise Price ($/Security)	Expiration Date

Employees/Consultants	40,000	Mar 18/04	$1.00	Mar 18/06
Directors/Officers	79,000	Dec 15/00	$0.60	Dec 15/05
Employees/Consultants	135,000	Dec 15/00	$0.60	Dec 15/05
Employees/Consultants	145,000	Nov 5/04	$0.60/0.70	Nov 5/09
TOTAL	399,000

(iv)

Options/SARs amendments by directors, executive officers, non-executive insiders and others in the financial year.

During the year ended April 30, 2006, there were no stock option amendments to directors, executive officers, non-executive insiders or others.

ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Major Shareholders

The following table sets forth the share ownership of those persons holding greater than 5% of the Company’s shares held by such persons as at June 27, 2006:

Shareholder

Name And Address

Number Of

Shares Held⁽¹⁾

Percentage Of

Issued Shares

CDS & Company

25^th Esplanade

Toronto, Ontario M5E 1W5

31,118,490

88.6%

Notes

⁽¹⁾

CDS & Co. is a depository, the Company has no knowledge as to the beneficial ownership of these shares.

⁽²⁾

The information as to the shares beneficially owned by CDS is not within the knowledge of the Company and has been extracted from the registrar of shareholders maintained by the registrar and transfer agent for the Company’s shares.

Related Party Transactions

There were no material transactions in the fiscal year ended April 30, 2006, or proposed material transactions between the Company or any of its subsidiaries, except as previously disclosed in the audited year-ended April 30, 2006 financial statements.

Interests of Experts and Counsel

This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this section.

ITEM 8.

FINANCIAL INFORMATION

Consolidated Statements and Other Financial Information

This annual report contains the consolidated financial statements for the Company for the fiscal year ended April 30, 2006 which contain an Audit Report dated June 7, 2006.

Significant Changes

No significant change has occurred since the date of the annual financial statements included in this Annual Statement.

ITEM 9.

THE OFFER AND LISTING

Offer and Listing Details

The annual high and low market prices for the shares of the Company on the TSX Exchange for each of the last five full financial years are as follows:

The high and low market prices for the shares of the Company on the TSX Exchange for the five (5) most recent full financial years:


Year Ended	High	Low
May 2005 – April 2006	0.51	0.255
May 2004 – April 2005	0.71	0.33
May 2003 – April 2004	1.40	0.40
May 2002 – April 2003	0.75	0.40
May 2001 – April 2002	1.14	0.40

The high and low market prices for the shares of the Company on the TSX Exchange for each full financial quarter for the two (2) most recent full financial years:


Year Ended	High	Low
First Quarter July 2005	0.41	0.28
Second Quarter October 2005	0.34	0.255
Third Quarter January 2006	0.40	0.255
Fourth Quarter April 2006	0.51	0.31

First Quarter July 2004	0.71	0.48
Second Quarter October 2004	0.53	0.40
Third Quarter January 2005	0.49	0.39
Fourth Quarter April 2005	0.54	0.33

The high and low market prices for the shares of the Company on the TSX Exchange for the most recent six months:


Month Ended	High	Low
June 2006	0.50	0.33
May 2006	0.47	0.365
April 2006	0.51	0.34
Mar 2006	0.38	0.31
February 2006	0.42	0.33
January 2006	0.40	0.30

The high and low market prices for the shares of the Company on the TSX Exchange on the first trading day in the most recent six months:


Month Ended	High	Low
June 2006	0.46	0.425
May 2006	0.40	0.365
April 2006	0.38	0.35
Mar 2006	0.35	0.31
February 2006	0.42	0.385
January 2006	0.33	0.30

On April 30, 2006 the closing sale price of the common shares on the TSX Exchange was$0.44 per share.

Since October 31, 2001, the common shares of the Company have been listed on the OTC Bulletin Board.

The high and low market prices for the shares of the Company on the OTC Bulletin Board for the five (5) most recent full financial years:


Year Ended	High	Low
May 2005– April 2006	0.50	0.20
May 2004 – April 2005	0.52	0.26
May 2003 – April 2004	1.025	0.70
May 2002 – April 2003	0.55	0.21

The high and low market prices for the shares of the Company on the OTC Bulletin Board for each full financial quarter for the two (2) most recent full financial years:


Year Ended	High	Low
First Quarter July 2005	0.335	0.236
Second Quarter October 2005	0.30	0.206
Third Quarter January 2006	0.50	0.20
Fourth Quarter April 2006	0.45	0.255

First Quarter July 2004	0.52	0.36
Second Quarter October 2004	0.44	0.315
Third Quarter January 2005	0.45	0.315
Fourth Quarter April 2005	0.45	0.26

The high and low market prices for the shares of the Company on the OTC Bulletin Board for the most recent six months:


Month Ended	High	Low
June 2006	0.50	0.292
May 2006	0.47	0.3294
April 2006	0.45	0.255
Mar 2006	0.335	0.29
February 2006	0.395	0.29
January 2006	0.50	0.27

The high and low market prices for the shares of the Company on the OTC Bulletin Board for the first trading day in the most recent six months:


Month Ended	High	Low
June 2006	0.405	0.38
May 2006	0.40	0.3294
April 2006	0.35	0.3054
Mar 2006	0.30	0.30
February 2006	0.395	0.3477
January 2006	0.27	0.27

On April 30, 2006 the closing sale price of the common shares on the OTCBB was$0.4114 per share.

The Company has not, since the date of its incorporation, declared or paid any dividends on its common shares and does not currently intend to pay dividends. Earnings will be retained to finance further exploration.

The following table indicates the approximate number of record holders of common shares at June 27, 2006, the number of record holders of common shares with United States addresses and the portion and percentage of common shares so held in the United States. On June 27, 2006, 35,132,452 common shares were outstanding.

Total Number of Registered Holders

Number of Registered

U.S. Holders

Number of Common Shares

Held in the U.S.

Percentage of Common Shares As at June 27, 2006

1,190,600

3.4 %

A substantial number of shares are held by depositaries, brokerage firms and financial institutions in "street names".

The computation of the number and percentage of shares held in the United States is based upon the number of shares held by record holders with United States addresses. United States residents may beneficially own shares held of record by non-United States residents.

Plan of Distribution

This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this section.

Markets

The Company’s common shares have traded on the TSX (and it’s predecessors, the Canadian Venture Exchange and the Vancouver Stock Exchange) since December 19, 1997 under the trade symbol “PFN” and the OTCBB from August 30, 2001 under the trade symbol PAWEF and on the Frankfurt Stock Exchange, Open Market under the symbol P7J.

Selling Shareholders

This Form 20F is being filed as an annual report under the Exchange Act and as such, there is no requirement to provide any information under this section.

Dilution

This Form 20F is being filed as an annual report under the Exchange Act and as such, there is no requirement to provide any information under this section.

Expense of the Issue

This Form 20F is being filed as an annual report under the Exchange Act and as such, there is no requirement to provide any information under this section.

Performance Graph

The following graph illustrates the Company’s five year cumulative total shareholder return considering a $100 Investment – April 30, 2001 to April 30, 2006.


Price	30-Apr-2001	30-Apr-2002	30-Apr-2003	30-Apr-2004	30-Apr-2005	30-Apr-2006
PFN	0.94	0.71	0.42	0.60	0.335	0.44
%	100.00	75.53	44.68	63.83	35.64	46.81
TSX Composite Index	7946.63	7663.39	6586.07	8243.97	9369.30	12204.17
%	100.00	96.44	82.88	103.74	117.90	153.58

ITEM 10.

ADDITIONAL INFORMATION

Share Capital

As of June 27, 2006, the Company has 35,132,452 common shares without par value issued and outstanding which are fully paid.

Memorandum and Articles of Association

The Company’s Articles of Association and Memorandum are registered with the British Columbia Registrar of Companies under corporation number 262963. A copy of these Articles of Association and Memorandum were filed as an exhibit with the Company’s initial registration statement on Form 20F.

The Company was incorporated pursuant to the provisions of theBusiness Corporations Act (Alberta) on May 29, 1996. The Company amended its articles by certificate of amendment dated October 22, 1997 to remove the private company restrictions. On July 13, 2004 the Company continued out of the Province of Alberta into the Province of British Columbia.

Material Contracts

Except for contracts entered into during the ordinary course of business, the have been no material contracts entered into by the Company in the two fiscal years immediately preceding this annual report.

Exchange Controls

There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other payments to a non-resident holder of common shares, other than withholding tax requirements.

There is no limitation imposed by Canadian law or by the constituent documents of the Company on the right of a non-resident to hold or vote common shares, other than are provided in the Investment Canada Act (Canada). The following summarizes the material features of the Investment Canada Act (Canada).

The Investment Canada Act (Canada) requires certain "non-Canadian" individuals, governments, corporations or other entities who wish to acquire a "Canadian business" (as defined in the Investment Canada Act), or establish a "new Canadian business" (as defined in the Investment Canada Act) to file either a notification or an application for review with a governmental agency known as "Investment Canada". The Investment Canada Act requires that certain acquisitions of control by a Canadian business by a "non-Canadian" must be reviewed and approved by the Minister responsible for the Investment Canada Act on the basis that the Minister is satisfied that the acquisition is "likely to be of net benefit to Canada", having regard to criteria set forth in the Investment Canada Act. Only acquisitions of control are reviewable under the Investment Canada Act; however, the Investm ent Canada Act provides detailed rules for the determination of whether control has been acquired and, pursuant to those rules, the acquisition of one-third or more of the voting shares of a corporation may, in some circumstances, be considered to constitute an acquisition of control. Certain reviewable acquisitions of control may not be implemented before being approved by the Minister; if the Minister does not ultimately approve a reviewable acquisition which has been completed, the acquired Canadian business be divested. Failure to comply with the review provisions of the Investment Canada Act could result in, among other things, an injunction or a court order directing disposition of assets or shares.

Taxation

Material United States Federal Income Tax Consequences

The following is a general discussion of certain possible United States federal income tax consequences, under current law, generally applicable to a U.S. Holder (as hereinafter defined) of common shares of the Company. This discussion does not address all potentially relevant federal income tax matters and it does not address consequences peculiar to persons subject to special provisions of federal income tax law, such as those described below as excluded from the definition of a U.S. Holder. In addition, this discussion does not cover any state, local or foreign tax consequences. (See “Canadian Federal Income Tax Consequences” below).

The following discussion is based upon the sections of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations, published Internal Revenue Service (“IRS”) rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time and which are subject to differing interpretations. This discussion does not consider the potential effects, both adverse and beneficial, of any recently proposed legislation, which, if enacted, could be applied, possibly on a retroactive basis, at any time. This discussion is for general information only and it is not intended to be, nor should it be construed to be, legal or tax advice to any holder or prospective holder of common shares of the Company and no opinion or representation with respect to United States federal income ta x consequences to any such holder or prospective holder is made. Accordingly, holders and prospective holders of common shares of the Company should consult their own tax advisors about the federal, state, local, and foreign tax consequences of purchasing, owning and disposing of common shares of the Company.

U.S. Holders

As used herein, a “U.S. Holder” means a holder of common shares of the Company who is a citizen or individual resident of the United States, a corporation or partnership created or organized in or under the laws of the United Sates or of any political subdivision thereof, an estate whose income is taxable in the United States irrespective of source or a trust subject to the primary supervision of a court within the United States and control of a United States fiduciary as described in Section 7701(a)(30) of the Code. This summary does not address the tax consequences to, and U.S. Holder does not include, persons subject to specific provisions of federal income tax law, such as tax-exempt organizations, qualified retirement plans, individual retirement accounts and other tax-deferred accounts, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, nonresident ali en individuals, or foreign corporations whose ownership of common shares of the Company is not effectively connected with conduct on a trade or a business in the United States, persons or entities that have a “functional currency” other than the U.S. dollar, shareholders who hold common shares as part of a straddle, hedging or a conversion transaction, and shareholders subject to the alternative minimum tax, and shareholders who acquired their common shares through the exercise of employee stock options or otherwise as compensation for services. This summary is limited to U.S. Holders who own common shares as capital assets. This summary does not address the consequences to a person or entity holding an interest in a shareholder or the consequences to a person of the ownership, exercise or disposition of any options, warrants or other rights to acquire common shares.

Distribution on Common Shares of the Company

U.S. Holders receiving dividend distributions (including constructive dividends) with respect to shares of the Company are required to include in gross income for United States federal income tax purposes the gross amount of such distributions, equal to the U.S. dollar value of such distributions on the date of receipt (based on the exchange rate on such date), to the extent that the Company has current or accumulated earnings or profits, without reduction for any Canadian income tax withheld from such distributions. Such Canadian tax withheld may be credited, subject to certain limitations, against the U.S. Holder’s federal income tax liability or, alternatively, may be deducted in computing the U.S. Holder’s federal taxable income by those who itemize deductions. (See more detailed discussion at “Foreign Tax Credit” below.) To the extent that distributions exceed current or accumulated earnings and profits of the Company, they will be treated first as a return of capital up to the U.S. Holder’s adjusted basis in the common shares and thereafter as gain from the sale or exchange of the common shares. Preferential tax rates for long-term capital gains are applicable to a U.S. Holder, which is an individual, estate or trust. There are currently no preferential tax rates for long-term capital gains for a U.S. Holder, which is a corporation.

In the case of foreign currency received as a dividend that is not converted by the recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Generally any gain or loss recognized upon a subsequent sale or other disposition of the foreign currency, including the exchange for U.S. dollars, will be ordinary income or loss. However, an individual whose realized gain does not exceed $200 will not recognize that gain, to the extent that there are no expenses associated with the transaction that meet the requirement for deductibility as a trade or business expense (other than travel expenses in connection with a business trip) or as an expense for the production of income.

Dividends paid on the common shares of the Company generally will not be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations. A U.S. Holder which is a corporation may, under certain circumstances, be entitled to a 70% (or 80%) deduction of the United States source portion of dividends received from the Company (unless the Company qualifies as a “foreign personal holding company” or a “passive foreign investment company,” as defined below) if such U.S. Holder owns shares representing at least 10% (or 20%) of the voting power and value of the Company. The availability of this deduction is subject to several complex limitations that are beyond the scope of this discussion.

Information Reporting and Backup Withholding

Under current Treasury Regulations, dividends paid on the Company’s common shares, if any, generally will not be subject to information reporting and generally will not be subject to U.S. backup withholding tax. However, dividends and the proceeds from a sale of the Company’s common shares paid in the U.S. through a U.S. or U.S. related paying agent (including a broker) will be subject to U.S. information reporting requirements and may also be subject to the 30% U.S. backup withholding tax, unless the paying agent is furnished with a duly completed and signed Form W-9. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a refund or a credit against the U.S. Holder’s U.S. federal income tax liability, provided the required information is furnished to the IRS.

Foreign Tax Credit

A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of common shares of the Company may be entitled, at the option of the U.S. Holder, to either receive a deduction or a tax credit for such foreign tax paid or withheld. Generally, it will be more advantageous to claim a credit because a credit reduces United States federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayer’s income subject to tax. This election is made on a year-by-year basis and applies to all foreign taxes paid by (or withheld from) the U.S. Holder during that year. There are significant and complex limitations which apply to the credit, among which is the general limitation that the credit cannot exceed the proportionate share of the U.S. Holder’s United States income tax liability that the U.S. Holder’s foreign source income bears to his or its worldwide taxab le income. In the determination of the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources. Complex rules govern this classification process. In addition, this limitation is calculated separately with respect to specific classes of income such as “passive income”, “high withholding tax interest”, “financial services income”, “shipping income,” and certain other classifications of income. Dividends distributed by the Company will generally constitute “passive income” or, in the case of certain U.S. Holders, “financial services income” for these purposes. The availability of the foreign tax credit and the application of the limitations on the credit are factspecific, and U.S. Holders of common shares of the Company should consult their own tax advisors regarding their individual circumstances.

Disposition of Common Shares of the Company

A U.S. Holder will recognize gain or loss upon the sale of common shares of the Company equal to the difference, if any, between (i) the amount of cash plus the fair market value of any property received, and (ii) the shareholder’s tax basis in the common shares of the Company. Preferential tax rates apply to long-term capital gains of U.S. Holders which are individuals, estates or trusts. This gain or loss will be capital gain or loss if the common shares are a capital asset in the hands of the U.S. Holder, which will be long-term capital gain or loss if the common shares of the Company are held for more than one year. Deductions for net capital losses are subject to significant limitations. For U.S. Holders who are not corporations, any unused portion of such net capital loss may be carried over to be used in later tax years until such net capital loss is thereby exhausted. For U.S. Holders which are corporations (other than corpora tions subject to Subchapter S of the Code), an unused net capital loss may be carried back three years from the loss year and carried forward five years from the loss year to be offset against capital gains.

Currency Exchange Gains or Losses

U.S. Holders generally are required to calculate their taxable incomes in United States dollars. Accordingly, a U.S. Holder who purchases common shares of the Company with Canadian dollars will be required to determine the tax basis of such shares in United States dollars based on the exchange rate prevailing on the settlement date of the purchase (and may be required to recognize the unrealized gain or loss, if any, in the Canadian currency surrendered in the purchase transaction). Similarly, a U.S. Holder receiving dividends or sales proceeds from common shares of the Company in Canadian dollars will be required to compute the dividend income or the amount realized on the sale, as the case may be, in United States dollars based on the exchange rate prevailing at the time of receipt in the case of dividends and on the settlement date in the case of sales on an established securities exchange. Gain or loss, if any, recognized on a disposit ion of Canadian currency in connection with the described transaction generally will be treated as ordinary gain or loss.

Other Considerations

In the following circumstances, the above sections of this discussion may not describe the United States federal income tax consequences resulting from the holding and disposition of common shares:

Foreign Personal Holding Company

If at any time during a taxable year more than 50% of the total combined voting power or the total value of the Company’s outstanding shares is owned, directly or indirectly, by five or fewer individuals who are citizens or residents of the United States and 60% or more of the Company’s gross income for such year was derived from certain passive sources (e.g., from dividends received from its subsidiaries), the Company may be treated as a “foreign personal holding company”. In that event, U.S. Holders that hold common shares would be required to include in gross income for such year their allocable portions of such passive income to the extent the Company does not actually distribute such income. The Company does not believe that it currently qualifies as a foreign personal holding company. However, there can be no assurance that the Company will not be considered a foreign personal holding company for the current or an y future taxable year.

Foreign Investment Company

If 50% or more of the combined voting power or total value of the Company’s outstanding shares are held, directly or indirectly, by citizens or residents of the United States, United States domestic partnerships or corporations, or estates or trusts other than foreign estates or trusts (as defined by the Code Section 7701(a)(31)), and the Company is found to be engaged primarily in the business of investing, reinvesting or trading in securities, commodities, or any interest therein, it is possible that the Company may be treated as a “foreign investment company” as defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S. Holder selling or exchanging common shares to be treated as ordinary income rather than capital gain. The Company does not believe that it currently qualifies as a foreign investment company. However, there can be no assurance that the Company will not be considered a foreign investment company for the current or any future taxable year.

Passive Foreign Investment Company

The Code contains rules governing “passive foreign investment companies” (“PFIC”) which can have significant tax effects on U.S. Holders of foreign corporations. These rules do not apply to non-U.S. Holders. Section 1297 of the Code defines a PFIC as a corporation that is not formed in the United States and, for any taxable year, either (i) 75% or more of its gross income is “passive income”, which includes interest, dividends and certain rents and royalties or (ii) the average percentage, by fair market value (or, if the Company is not publicly traded and either is a controlled foreign corporation or makes an election, by adjusted tax basis), of its assets that produce or are held for the production of “passive income” is 50% or more. The Company believes that it qualified as a PFIC for the fiscal year ended April 30,1997 and the fiscal years ended from April 30,1998 through April 30,2002 and April 30, 2006. There can be no assurance that the Company’s determination concerning its PFIC status will not be challenged by the IRS, or that it will be able to satisfy record keeping requirements which will be imposed on a qualified electing fund (“QEF”). Each U.S. Holder of the Company is urged to consult a tax advisor with respect to how the PFIC rules affect their tax situation.

A U.S. Holder who holds stock in a foreign corporation during any year in which such corporation qualifies as a PFIC is subject to United States federal income taxation under one of two alternative tax regimes at the election of each such U.S. Holder. The following is a discussion of such two alternative tax regimes applied to such U.S. Holders of the Company. In addition, special rules apply if a foreign corporation qualifies as both a PFIC and a “controlled foreign corporation” (as defined below) and a U.S. Holder owns, actually or constructively, 10% or more of the total combined voting power of classes of stock entitled to vote of such foreign corporation (See more detailed discussion at “Controlled Foreign Corporation” below).

A U.S. Holder who elects in a timely manner to treat the Company as a QEF (an “Electing U.S. Holder”) will be subject, under Section 1293 of the Code, to current federal income tax for any taxable year in which the Company qualifies as a PFIC on his pro rata share of the Company’s (i) “net capital gain” (the excess of net long-term capital gain over net short-term capital loss), which will be taxed as long-term capital gain to the Electing U.S. Holder and (ii) “ordinary earnings” (the excess of earnings and profits over net capital gain), which will be taxed as ordinary income to the Electing U.S. Holder, in each case, for the shareholder’s taxable year in which (or with which) the Company’s taxable year ends, regardless of whether such amounts are actually distributed.

The effective QEF election also allows the Electing U.S. Holder to (i) generally treat any gain realized on the disposition of his Company common shares (or deemed to be realized on the pledge of his shares) as capital gain; (ii) treat his share of the Company’s net capital gain, if any, as long-term capital gain instead of ordinary income; and (iii) either avoid interest charges resulting from PFIC status altogether, or make an annual election, subject to certain limitations, to defer payment of current taxes on his share of the Company’s annual realized net capital gain and ordinary earnings subject, however, to an interest charge. If the Electing U.S. Holder is not a corporation, such an interest charge would be treated as “personal interest” that is not deductible.

The procedure a U.S. Holder must comply with in making an effective QEF election will depend on whether the year of the election is the first year in the U.S. Holder’s holding period in which the Company is a PFIC. If the U.S. Holder makes a QEF election in such first year, i.e., a timely QEF election, then the U.S. Holder may make the QEF election by simply filing the appropriate documents at the time the U.S. Holder files his tax return for such first year. If, however, the Company qualified as a PFIC in a prior year, then in addition to filing documents, the U.S. Holder must elect to recognize under the rules of Section 1291 of the Code (discussed herein), any gain that he would otherwise recognize if the U.S. Holder sold his stock on the qualification date or if the Company is a controlled foreign corporation, the U.S. Holder’s pro rata share of the Company’s post-1986 earnings and profits as of the qualification date. T he qualification date is the first day of the Company’s first tax year in which the Company qualified as a QEF with respect to such U.S. Holder. The elections to recognize such gain or earnings and profits can only be made if such U.S. Holder’s holding period for the common shares of the Company includes the qualification date. By electing to recognize such gain or earnings and profits, the U.S. Holder will be deemed to have made a timely QEF election. A U.S. Holder who made elections to recognize gain or earnings and profits after May 1, 1992 and before January 27, 1997 may, under certain circumstances, elect to change such U.S. Holder’s qualification date to the first day of the first QEF year. U.S. Holders are urged to consult a tax advisor regarding the availability of and procedure for electing to recognize gain or earnings and profits under the foregoing rules. In addition, special rules apply if a foreign corporation qualifies as both a PFIC and a “controlled foreign corporation (as defined below) and a U.S. Holder owns, actually or constructively, 10% or more of the total combined voting power of classes of stock entitled to vote of such foreign corporation. (See more detailed discussion at “Controlled Foreign Corporation” below).

If the Company is a PFIC for any taxable year during which a Non-Electing U.S. Holder holds Company common shares, then the Company will continue to be treated as a PFIC with respect to such Company common shares, even if it is no longer definitionally a PFIC. A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules discussed above for Non-Electing U.S. Holders) as if such Company common shares had been sold on the last day of the last taxable year for which it was a PFIC.

Effective for tax years of U.S. Holders beginning after December 31, 1997, U.S. Holders who hold (actually or constructively) marketable stock of a foreign corporation that qualifies as a PFIC, may annually elect to mark such stock to the market (a “mark-to-market election”). If such an election is made, such U.S. Holder will not be subject to the special taxation rules of Section 1291 discussed above. However, if the mark-to-market election is made by a Non-Electing U.S. Holder after the beginning of the holding period for the PFIC stock, then the Section 1291 rules will apply to certain dispositions of, distributions on and other amounts taxable with respect to the Company’s common shares. A U.S. Holder who makes the mark-to-market election will include in income for the taxable year for which the election was made an amount equal to the excess, if any, of the fair market value of the common shares of the Company as of the close of such tax year over such U.S. Holder’s adjusted basis in such common shares. In addition, the U.S. Holder is allowed a deduction for the lesser of (i) the excess, if any, of such U.S. Holder’s adjusted tax basis in common shares over the fair market value of such shares as of the close of the tax year, or (ii) the excess, if any, of (A) the mark-to-market gains for the common shares in the Company included by such U.S. Holder for prior tax years, including any amount which would have been included for any prior tax year but for the Section 1291 interest on tax deferral rules discussed above with respect to Non-Electing U.S. Holders, over (B) the mark-to-market losses for shares that were allowed as deductions for prior tax years. A U.S. Holder’s adjusted tax basis in the common shares of the Company will be adjusted to reflect the amount included in or deducted from income as a result of a mark-to-market election. A mark-to-market election applies to the taxable year in which the elec tion is made and to each subsequent taxable year, unless the Company’s common shares cease to be marketable, as specifically defined, or the Secretary of the IRS consents to revocation of the election. Because the IRS has not established procedures for making a mark-to-market election, U.S. Holders should consult their tax advisor regarding the manner of making such an election.

Under Section 1291(f) of the Code, the IRS has issued Proposed Treasury Regulations that, subject to certain exceptions, would treat as taxable certain transfers of PFIC stock by Non-Electing U.S. Holders that are generally not otherwise taxed, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death. Generally, in such cases the basis of the Company common shares in the hands of the transferee and the basis of any property received in exchange for those common shares would be increased by the amount of gain recognized. Under the Proposed Treasury Regulations, an Electing U.S. Holder would not be taxed on certain transfers of PFIC stock, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death. The transferee’s basis in this case will depend on the manner of transfer. In a transfer at death, for example, the transferee’s basis is equal to (i) the fair market value of the Electing U.S. Holder’s common shares reduced by the U.S. Holder’s adjusted basis in these common shares at death. The specific tax effect to the U.S. Holder and the transferee may vary based on the manner in which the common shares are transferred. Each U.S. Holder of the Company is urged to consult a tax advisor with respect to how the PFIC rules affect their tax situation.

Certain special, generally adverse, rules will apply with respect to the Company common shares while the Company is a PFIC whether or not it is treated as a QEF. For example, under Section 1298(b)(6) of the Code, a U.S. Holder who uses PFIC stock as security for a loan (including a margin loan) will, except as may be provided in regulations, be treated as having made a taxable disposition of such shares.

If the Company is classified as a PFIC, U.S. Holders who do not make timely QEF Elections (as discussed above) will be subject to a number of special tax rules. For example, gains recognized on disposition of the Company stock or the receipt of an “excess distribution” from the Company is (i) treated as if it were ordinary income earned ratably on each day of the period the U.S. Holder owns shares of the Company at the highest marginal rate in effect during the period in which it was deemed included and (ii) subject to an interest charge as if the resulting tax had actually been due in such earlier year or years (An excess distribution is the amount of any distribution received by the U.S. Holder during the taxable year that exceeds 125% of the immediately preceding three year average of distributions received from the Company, subject to certain adjustments.) Proposed Regulations broadly define a disposition to include any trans action or event that constitutes an actual or deemed transfer of property for any purpose under the Code, including (but not limited to) a sale, exchange, gift, transfer at death, and the pledging of PFIC stock to secure a loan. If the tax described above is not imposed on transfer at death, the recipient of the PFIC stock receives a basis in the transferred stock equal to the lessor of the fair market value or the adjusted basis of the stock in the hands of the U.S. Holder immediately before death. Finally, the foregoing rules will continue to apply with respect to a U.S. Holder who held the stock of the Company while the Company met the definition of a PFIC even if the Company ceases to meet the definition of a PFIC.

Controlled Foreign Corporation

If more than 50% of the total combined voting power of all classes of shares entitled to vote or the total value of the shares of the Company is owned, actually or constructively, by citizens or residents of the United States, United States domestic partnerships and corporations or estates or trusts other than foreign estates or trusts (as defined by the Code Section 7701 (a)(31), each of which own, actually or constructively, 10% or more of the total combined voting power of all classes of shares of the Company (“United States Shareholder”), the Company could be treated as a controlled foreign corporation (“CFC”) under Subpart F of the Code. This classification would effect many complex results, one of which is the inclusion of certain income of a CFC which is subject to current U.S. tax. The United States generally taxes United States Shareholders of a CFC currently on their pro rata shares of the Subpart F income of the CFC. Such United States Shareholders are generally treated as having received a current distribution out of the CFC’s Subpart F income and are also subject to current U.S. tax on their pro rata shares of the CFC’s earnings invested in U.S. property. The foreign tax credit described above may reduce the U.S. tax on these amounts. In addition, under Section 1248 of the Code, gain from the sale or exchange of shares by a U.S. Holder of common shares of the Company which is or was a United States Shareholder at any time during the five-year period ending with the sale or exchange is treated as ordinary income to the extent of earnings and profits of the Company attributable to shares sold or exchanged. If a foreign corporation is both a PFIC and a CFC, the foreign corporation generally will not be treated as a PFIC with respect to United States shareholders of the CFC. This rule generally will be effective for taxable years of United States Shareholders beginning after 1997 and for taxable years of foreign corporations ending with or within such taxable years of United States Shareholders. Special rules apply to United States Shareholders who are subject to the special taxation rules under Section 1291 discussed above with respect to a PFIC. Because of the complexity of Subpart F, a more detailed review of these rules is outside the scope of this discussion. The Company does not believe that it currently qualifies as a CFC. However, there can be no assurance that the Company will not be considered a CFC for the current or any future taxable year.

Material Canadian Federal Income Tax Consequences

The summary below is restricted to the case of a holder (a “Holder”) of one or more common shares who for the purposes of the Income Tax Act (Canada) (the “Act”) is a non-resident of Canada, holds his common shares as capital property and deals at arm’s length with the Company.

The following is a general discussion of certain possible Canadian federal income tax consequences, under current law, generally applicable to a non-resident of Canada (as hereinafter defined) of common shares of the Company. This discussion does not address all potentially relevant federal income tax matters and it does not address consequences peculiar to persons subject to special provisions of federal income tax law, such as those described above as excluded from the definition of a U.S. Holder. In addition, this discussion does not cover any provincial, local or foreign tax consequences.

Dividends

A Holder will be subject to Canadian withholding tax (“Part XIII Tax”) equal to 25%, or such lower rate as may be available under an applicable tax treaty, of the gross amount of any dividend paid or deemed to be paid on his common shares. Under the 1995 Protocol amending the Canada-US Income Tax Convention (1980) (the “Treaty”) the rate of Part XIII Tax applicable to a dividend on common shares paid to a Holder who is a resident of the United States is, if the Holder is a company that beneficially owns at least 10% of the voting stock of the Company, 5% and in any other case, 15% of the gross amount of the dividend. The Company will be required to withhold the applicable amount of Part XIII Tax from each dividend so paid and remit the withheld amount directly to the Receiver General for Canada for the account of the Holder.

Capital Gains

A Holder who disposes of a common share, including by deemed disposition on death, will not be subject to Canadian tax on any capital gain (or capital loss) thereby realized unless the common share constituted “taxable Canadian property” as defined by the Act. Generally, a common share will not constitute taxable Canadian property of a Holder unless he held the common shares as capital property used by him carrying on a business (other than an insurance business) in Canada, or he or persons with whom he did not deal at arm’s-length alone or together held or held options to acquire, at any time within the five years preceding the disposition, 25% or more of the shares of any class of the capital stock of the Company.

A Holder who is resident of the United States and realizes a capital gain on disposition of a common share that was taxable Canadian property will nevertheless, by virtue of the Treaty, generally be exempt from Canadian tax thereon unless (a) more than 50% of the value of the common share is derived from, or forms an interest in, Canadian real estate, including Canadian mineral resource properties, (b) the common share formed part of the business property of a permanent establishment that the Holder has or had in Canada within the 12 months preceding disposition, or ( c) the Holder (i) was a resident of Canada at any time within the ten years immediately the disposition and for a total of 120 months during the 20 years, preceding the disposition, and (ii) owned the common share when he ceased to be a resident of Canada.

A Holder who is subject to Canadian tax in respect of a capital gain on disposition of a common share must include one-half of the capital gain (taxable capital gain) in computing his taxable income earned in Canada. This Holder may, subject to certain limitations, deduct one half of any capital loss (allowable capital loss) arising on disposition of taxable Canadian property from taxable capital gains realized in the year of disposition in respect of taxable Canadian property and, to the extent not so deductible, from such taxable capital gains of any of the three preceding years or any subsequent year.

Dividends and Paying Agents

The Company has not declared or paid any dividends on its outstanding common shares since its inception and does not anticipate that it will do so in the foreseeable future. The declaration of dividends on the common shares of the Company is within the discretion of the Company's Board of Directors and will depend upon the assessment of, among other factors, earnings, capital requirements and the operating and financial condition of the Company. At the present time the Company's anticipated capital requirements are such that it intends to follow a policy of retaining earnings in order to finance the further development of its business.

Statements by Experts

This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this section.

Documents on Display

Any documents referred to in this annual report may be inspected at the head office of the Company, 2303 West 41st Avenue, Vancouver, British Columbia V6M 2A3, during normal business hours.

Subsidiary Information

There is no information relating to the Company’s subsidiaries which must be provided in Canada and which is not otherwise called for by the body of generally accepted accounting principles used in preparing the financial statements.

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company anticipates its primary market risk, if any, to be related to fluctuations in exchange rates. Exchange rate risk may arise if the Company is required to use different currencies for various aspects of its operations. At present, the functional currency for the Company is the Canadian dollar. Based on the Company’s overall exchange rate risk as at April 30, 2006, the Company believes that a ten percent change in exchange rates would not have a material adverse effect on its financial position, results of operations, or changes in financial position. The Company intends to monitor its exchange rate risk and take reasonable steps to reduce its exposure. The Company does not intend to purchase or sell derivative instruments for speculative purposes.

PART II

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

This Form 20F is being filed as an annual report under the Exchange Act and as such there is no requirement to provide information under this item.

ITEM 13.

DEFAULTS, DIVIDEND ARREARS AND DELINQUENCIES

There has not been a material default in the payment of principal, interest, a sinking or purchase fund installment, or any other material default not cured within thirty days, relating to indebtedness of the Company of any of its significant subsidiaries. There are no payments of dividends by the Company in arrears, nor has there been any other material delinquency relating to any class of preference shares of the Company.

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not Applicable

ITEM 15.

CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange Act”), the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of April 30, 2006, being the date of the Company’s most recently completed fiscal year end. This evaluation was carried out under the supervision and the participation of the Company’s Chief Executive Officer, Harry Barr and the Company’s Chief Financial Officer, Gordon Steblin. Based upon the evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting management to material information relating to it required to be included in the Company’s period SEC filings. There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date the Company carried out the evaluation.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’ s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company’s reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

During the Company’s most recently completed financial year ended April 30, 2006, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to affect, its internal control over financial reporting.

The term “internal control over finanacial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use of disposition of the registrant’s assets that could have a material effect on the financial statements.

ITEM 16.

[Reserved]

ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT

Charter of the Audit Committee of the Board of Directors

Purpose

The purpose of the Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of Pacific North West Capital Corp. (“PFN”) is to provide an open avenue of communication between PFN’s management (“Management”), the independent Auditors (“Auditors”) and the Board and to assist the Board in its oversight of the following: integrity, adequacy and timeliness of PFN’s financial reporting and disclosure practices; process for identifying the principal financial risks of PFN and the control systems in place to monitor them; compliance with legal and regulatory requirements related to financial reporting; and independence and performance of PFN’s Auditors.

The Committee shall also perform any other activities consistent with the Charter, PFN’s by-laws and governing laws as the Committee or Board deems necessary or appropriate.

The Committee’s role is one of oversight. It is not the responsibility of the Committee to determine that PFN’s financial statements are complete and accurate and in accordance with generally accepted accounting principles or to plan or conduct audits. The financial statements are the responsibility of Management. The Auditors are responsible for performing an audit and expressing an opinion on the fair presentation of PFN’s financial statements in accordance with generally accepted accounting principles.

Authority

The Committee has the authority to conduct any investigation appropriate to its responsibilities, and it may request the Auditors as well as any officer of PFN, or PFN’s outside counsel, to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. The Committee shall have unrestricted access to PFN’s books and records and has the authority to retain, at PFN’s expense, special legal, accounting, or other consultants or experts to assist in the performance of the Committee’s duties. Subject to Board approval, the Committee has the authority to set and pay the compensation of the advisors employed by the Committee. The Chairperson of the Committee (“Chairperson”) or other member of the Committee so designed by the Committee may represent the Committee to the extent permitted by applicable legal and listing requirements.

The Committee shall review and assess the adequacy of this Charter annually and submit any proposed revisions to the Board for approval.

Composition of Meetings

The Committee and its membership shall meet all applicable legal, regulatory and listing requirements.

Members of the Committee and the Chairperson shall be appointed by the Board and may be removed by the Board in its discretion. The Committee will be elected annually at the first Board meeting following the annual general meeting.

The Committee shall be comprised of three or more directors, one of whom shall serve as Chairperson.

Each member of the Committee shall be independent, non-executive director, free from any relationship that, in the opinion of the Board, could reasonably be expected to interfere with the exercise of his or her independence from management, PFN, or the Auditors.

All members of the Committee shall be, or promptly after appointment, shall become financially literate as determined by the Board. Preferably at least one member of the Committee shall have accounting or related financial management expertise as determined by the Board.

The Committee shall meet, at the discretion of the Chairperson or a majority of its member, as circumstances dictate or as may be required by applicable legal or listing requirement, and a majority of the members of the Committee shall constitute a quorum.

If and whenever a vacancy shall exist, the remaining members of the Committee may exercise all powers and responsibilities so long as quorum remains in office.

Any matters to be determined by the Committee shall be decided by a majority of votes cast at a meeting of the Committee called for such purpose; actions of the Committee may be taken by an instrument or instruments in writing signed by all of the members of the Committee, and such actions shall be effective as though they had been decided by a majority of votes cast at a meeting of the Committee called for such purpose. In the case of a tie the Chairperson shall have a second or tie-breaking vote.

The Committee shall maintain minutes of meetings and periodically report to the Board on significant results of the Committee’s activities.

The Committee may invite such other persons to its meetings as it deems appropriate.

The Auditors will have direct access to the Committee on their own initiative.

Responsibilities

With respect to the Interim and Annual Financial Statements, the MD&A, and the AIF

The Committee shall review PFN’s interim financial statements for approval of same prior to their being filed with the appropriate regulatory authorities. The Committee shall review PFN’s annual audited financial statements and report thereon to prior to their being filed with the appropriate regulatory authorities. With respect to the annual audited financial statements, the Committee shall discuss significant issues regarding accounting principles, practices, and judgements of Management with Management and the Auditors and when the Committee deems it appropriate to do so.

The Committee shall review Management’s Discussion and Analysis relating to annual and interim financial statements, the Annual Information Form and any other public disclosure documents that are required to be reviewed by the Committee under any applicable laws prior to their being filed with the appropriate regulatory authorities.

The Committee shall review Management’s earnings releases relating to annual and interim financial statements and any other public disclosure documents that are required to be reviewed by the Committee under any applicable laws prior to their being filed with the appropriate regulatory authorities.

The Committee shall review the post-audit or management letter containing the recommendations of the Auditors and Management’s response and subsequent follow-up to any identified weaknesses.

The Committee shall review the evaluation of internal controls by the Auditors, together with Management’s response.

The Committee shall meet no less frequently than annually separately with the Auditors and the Chief Financial Officer to review PFN’s accounting practices, internal controls and such other matters as the Committee or Chief Financial Officer deems appropriate.

With Respect to the Auditors

The Auditors are ultimately accountable to the Board of Directors. The Board has the ultimate authority and responsibility to select, evaluate and, where appropriate, replace the Auditors (or nominate the Auditors to be proposed for shareholder approval in any proxy statement).

The Committee shall review the performance of the Auditors.

The Committee shall annually recommend to the Board the appointment of the Auditor, or, as appropriate, the discharge or replacement of the Auditors when circumstances warrant. The Board will set the compensation for the Auditors.

The Committee shall be responsible for ensuring that the Auditors submit on a periodic basis to the Committee a formal written statement delineating all relationships between the Auditors and PFN. The Committee is responsible for discussing with the Auditors any disclosed relationships or services that may impact the objectivity and independence of the Auditors and for recommending that the Board take appropriate action in response to the Auditor’s report to satisfy itself of the Auditor’s independence.

PFN considers the core services provided by the Auditors to include the annual audit, tax planning and tax compliance. The Committee shall review any engagements for non-audit services beyond the core services proposed to be provided by the Auditors or any of their affiliates, together with estimated fees, and consider the impact on the independence of the Auditors.

The Committee shall review the Auditor’s audit plan, including scope, procedures and timing of the audit.

Other Committee Responsibilities

The Committee shall perform any other activities consistent with the Charter and governing law, as the Committee or the Board deems necessary or appropriate including:

Establishing and reviewing PFN’s procedures for the receipt, retention and treatment of complaints regarding accounting, financial disclosure, internal controls or auditing matters.

Establishing and reviewing PFN’s procedures for confidential, anonymous submissions by employees regarding questionable accounting, auditing and financial reporting and disclosure matters.

Conducting or authorizing investigations into any matters that the Committee believes is within the scope of its responsibilities.

Making inquiries of management and the Auditors to identify significant business, political, financial and control risks and exposures and assess the steps management has taken to minimize such risk.

Composition of the Audit Committee

The following are members of the audit committee:

Steve Oakley, Bernard Barlin and Alexander Walcott.

Mr. Oakley is an independent member of the audit committee and is financially literate.

Mr. Oakley is currently the Managing Director of Opticom Technologies Inc. and in such capacity is responsible for overseeing the financial affairs of the company

Bernard Barlin is an independent member of the audit committee and is financially literate.

With Mr. Barlin’s extensive work history working with private and public companies as a director, Mr. Barlin has an understanding of internal controls and procedures for financial reporting.

Alex Walcott is an independent member of the audit committee and is financially literate.

Mr. Walcott has an understanding of internal controls and procedures for financial reporting.

ITEM 16B:

CODE OF ETHICS

The Company has adopted a code of ethics that applies to the Company’s principal executive officer and principal financial officer and will provide to any person without charge, upon request by mail but may also be made by telephone, telecopier or other electronic means of communication, a copy of such code of ethics a copy of which is attached hereto as Exhibit 8.

ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table discloses the aggregate fees billed for each of the last two financial years for professional services rendered by the Company’s audit firm for various services.


Services		Year ended April 30, 2006		Year ended April 30, 2005

Audit Services	$	25,725	$	26,958
Audit – and review – related services	$	-	$	-
Tax services	$	6,915	$	4,204
All other services	$	-	$	-
	$	32,640	$	31,162

From time to time, management of the Company recommends to and requests approval from the audit committee for non-audit services to be provided by the Company’s auditors. The audit committee routinely considers such requests at committee meetings, and if acceptable to a majority of the audit committee members, pre-approves such non-audit services by a resolution authorizing management to engage the Company’s auditors for such non-audit services, with set maximum dollar amount for each itemized service. During such deliberations, the audit committee assesses, among other factors, whether the services requested would be considered “prohibited services” as contemplated by the US Securities and Exchange Commission, and whether the services requested and the fees related to such services could impair the independence of the auditors.

ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not Applicable

ITEM 16E.

PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

None

PART III

ITEM 17.

FINANCIAL STATEMENTS

See the Financial Statements and Exhibits listed in Item 19 hereof and filed as part of this Annual Report.

ITEM 18.

FINANCIAL STATEMENTS

Not applicable

ITEM 19.

EXHIBITS

The following exhibits are filed as part of this Form 20F Annual Report for the year ended April 30, 2006.

Exhibit 1:

Financial Statements

Cover Sheet

Management’s Responsibility for Financial Reporting

Auditor’s Report dated June 7, 2006.

Consolidated Balance Sheet as at April 30, 2006 and 2005

Consolidated Statements of Changes in Shareholders’ Equity for the Fiscal Years Ended

April 30, 2006, 2005 and 2004

Consolidated Statement of Loss for the Fiscal Years Ended

April 30, 2006, 2005 and 2004, and cumulative amounts since inception to April 30, 2006

Consolidated Statement of Cash Flows for the Fiscal Years Ended

April 30, 2006, 2005 and 2004, and cumulative amounts since inception to April 30, 2006

Consolidated Schedule of Mineral Property Costs for the Fiscal Years Ended

April 30, 2006 and 2005

Notes to Consolidated Financial Statements

Exhibit 2:

Management Discussion and Analysis

Exhibit 3:

CEO Certification of Annual Filings During Transition Period

Exhibit 4:

CFO Certification of Annual Filings During Transition Period

Exhibit 5:

Certification of CEO and CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 6:

CEO Certification pursuant to 18 USC Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 7:

CFO Certification pursuant to 18 USC Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 8:

Pacific North West Capital Corp. Code of Business Conduct and Ethics

Exhibit 9:

Certificate of Ethics for the Chief Executive Officer and the Chief Financial Officer

Exhibit 10:

Notice of Meeting and Information Ciruclar

Exhibit 11:

Annual Report for the year ended April 30, 2006

Exhibit 12:

Proxy

Exhibit 13:

Supplemental

SIGNATURES

The Company hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Dated July 24, 2006

PACIFIC NORTH WEST CAPITAL CORP.

“Gordon Steblin”

Gordon Steblin

Chief Financial Officer

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	H.S. freshman Avg

Pacific North West Capital Inactive 20-F2006 FY Annual report (foreign)

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